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Pew Report Documents Challenges Faced by Philadelphia in Paying for City Workers' Pensions and Health Care
Date:6/29/2009

PHILADELPHIA, June 29 /PRNewswire-USNewswire/ -- A new study by The Pew Charitable Trusts' Philadelphia Research Initiative reports that Philadelphia's city pension fund now has less than half the money it needs to make good on its obligation to past and current city workers. The fund has not been this severely underfunded since 1996, and there is little prospect that the picture will brighten appreciably in the next few years.

The report, Quiet No More: Philadelphia Confronts the Cost of Employee Benefits, looks at the finances of pensions and health care for city workers at a time when the two topics are front and center both in Harrisburg and in City Hall. In the state legislature, the city is seeking approval of a plan that would help balance its budget over the next several years by delaying some contributions to the pension fund. In Philadelphia, contracts expire June 30 for the four unions representing city workers, and both pensions and health care are key issues in the renewal talks.

"Quiet No More paints the background against which the events in Philadelphia and Harrisburg will be played out--and lays out what is at stake," says Larry Eichel, director of Pew's Philadelphia Research Initiative. "The outcome of these proposals and negotiations will be pivotal for the city's fiscal future, for the workers and retirees who rely on these benefits and for the taxpayers who foot the bill."

If the city gets approval from the legislature, Philadelphia's total general-fund spending on pensions and health care, now at $830 million, is set to decline over the next two years before rising dramatically. By

2013, costs for the two items will approach $1.1 billion, including over $700 million in pension-related payments alone. At that point,
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SOURCE Pew Charitable Trusts
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