PITTSBURGH - The city's actuaries on Thursday found a mathematical problem in the City Council's pension bailout plan, forcing officials to redo the legislation with little more than a day left to forestall a state takeover of the plan.
The council approved the plan Wednesday to dedicate about $414.7 million in parking tax revenues over 31 years to the pension fund, which officials believed would be enough to avert state takeover.
But the actuaries, brought in Thursday morning, thought otherwise, said firefighters union president Joe King, a city pension board member.
Instead of voting to override Mayor Luke Ravenstahl's veto of the plan, King said, the council must redo the plan, submit it to Ravenstahl again, and then override the new expected veto.
Under state law, the pension fund, now 29.3 percent funded, must be 50 percent funded by 12:01 a.m. Saturday to avoid a state takeover.
In passing the plan, King said, the council miscalculated the "net present value" of the future stream of parking tax revenues. If the calculation was not accurate, state officials have said, the 50 percent funding level would be missed and the fund would pass to state takeover.
According to information from King, the council will revise the bailout plan to take about $735.7 million in parking revenues over 31 years instead of the $414.7 million.
A pension takeover which would lead to drastically higher pension payments and the threat of tax hikes, layoffs, and service cuts.