July 1 2010

(July 2010) According to a recent report by the state Public Employee Retirement Commission, pension plans in many municipalities in Pennsylvania are financially distressed. 

A pension plan’s funding ratio indicates how severely distressed a plan is and shows the plan’s ability to meet the future costs of local pensions. Recent legislation has mandated that municipalities with even moderately distressed plans must create an action plan to improve the status of the pension plan.

You may check the status of your local municipal pension with this report. It is important to remember that while a pension plan may be listed as severely distressed, there is no enforcement provision to require that the local plans be funded to a level necessary to pay its obligations. Therefore, public knowledge and involvement of each municipality is needed to ensure that local governments are adequately funding their employee pensions to avoid sudden demand for increased local taxes in the future.

To review the status of your municipality’s pension fund, click here.