Following a scathing report, Scranton’s mayor wants to transfer all of the city’s pension funds to the Pennsylvania Municipal Retirement System.
Following a scathing Auditor General’s report about Scranton’s management of the city’s non-uniform pension plan, Mayor William Courtright today called for all of the city’s pension funds to be handed over to the Pennsylvania Municipal Retirement System (PMRS). That includes the police and firefighter plans.
PMRS is a state agency that manages nearly 1,000 municipal pension funds. By combining the assets of many smaller plans the agency is able to compile large sums, which allows for smarter, more effective investing. Participation is voluntary and each individual municipality can continue to offer the specific benefits it promised workers.
“Moving to the Pennsylvania Municipal Retirement System will provide professional management expertise and it will also bring our pension plans in line with the best practices recognized by the Commonwealth,” Courtright said.
Scranton had a different mayor, council, and pension board when the city offered longtime workers the opportunity to retire with double-pension payments, in 2002.
Plan administrators failed to do a timely cost review of the pension modification, to pass ordinances allowing the change, and to review eligibility according to proper procedures, yesterday’s report said.
Auditor General Eugene DePasquale said the 2002 incentive contributed to the non-uniform plan’s low funding level. It is only 23 percent funded.
Scranton’s non-uniform pension plan is not the only fund that’s struggling in the city; its police pension plan is only 29 percent funded, and the firefighters’ plan is at 17 percent.
“We must do everything we can to fix this and we can never let this happen again,” Courtright said. “We must take all necessary measures to secure this City’s financial future and put this squarely behind us.”
DePasquale has previously called for the consolidation of Pennsylvania’s thousands of municipal pension plans into a statewide system, like PMRS.
In order to join PMRS, 75 percent of plan members need to vote to make the change.
Learn more about Pennsylvania’s pension problems in Keystone Crossroads series.