Philly, Scranton municipal pensions severely distressed

The Allegheny Institute for Public Policy's latest municipal pension system report, released on Sept. 18, showed that the pension programs in Philadelphia and Scranton are in severe distress.

Since the state enacted Act 47 in 1999, municipal pensions in the 10 largest Pennsylvania cities based on population have been assigned distress levels according to the ratio of assets divided by liabilities by the state's Public Employee Retirement Commission.

This year, Philadelphia slipped seven percentage points from 2012, falling into the severe distress level put forth by Act 47, the severe level being any ratio lower than 50 percent. Scranton — on the verge of potential bankruptcy, according to the Pennsylvania Department of the Auditor General — dropped from 47 percent to a 23 percent funding ratio.

It is not known what caused the negative fluxes for the two cities.

Pittsburgh experienced the greatest upswing in percentage points from 2010 to 2014, going from a 34 percent funding ratio to 58 percent to bring the city up from a severe distress level to a moderate distress level.

Harrisburg showed a funding ratio over 100, and the Reading and Altoona municipalities have shown to be minimally distressed based on the scale.