Philadelphia's pension fund - which covers 65,883 current and retired workers - has now sunk to a level under 50 percent, making it even more underfunded than it was a year ago, the report said. Most experts consider a fund healthy when it is 80 percent funded.

Meanwhile, the city's total spending on pensions and health care, now at $830 million, is projected to rise to almost $1.1 billion by 2013 - or a jump from 21 percent to 26 percent of general-fund spending. The city's budget that year is expected to be $4 billion.

Titled, "Quiet No More: Philadelphia Confronts the Cost of Employee Benefits," the report is an update of a similar study released in January 2008, three weeks into Mayor Nutter's term.

Like the first study, it was issued by Pew's Philadelphia Research Initiative, which the Pew Charitable Trusts created last year to study Philadelphia issues.

"As these expenses go up, they threaten to take up resources that are needed for vital city services, especially if you can't raise taxes anymore," Larry Eichel, director of the research initiative, said.

The new report was based on interviews with two dozen employee-benefits experts and city officials, as well as information provided by three of the city's four municipal unions. Pew said the fourth union, blue-collar District Council 33, which with 9,400 members is the largest, refused to participate.

Bob Wolper, a spokesman for DC 33, declined to comment yesterday.

Calling the report a "more balanced update," Bob Bedard, a spokesman for DC 47, noted several findings found that Philadelphia was in line with other cities. For example, the average city employee pension check matches what retirees receive elsewhere.

With no union near reaching a new deal, both labor and city officials have said they expected tonight's deadline to pass with little fanfare. If that happens, current contract terms would be extended.

The Pew report offered few new findings and no recommendations. Rather, it outlined legislative steps under way in the city and state - and pointed to ongoing labor negotiations - as critical in determining the city's financial future.

"Philadelphia's benefits system, particularly its pension fund, appears to be at a crossroads," the report said. "One thing is certain: the city's employee benefits crisis is not quiet anymore. . . . Today, city, union and state officials are giving the situation all the attention it deserves, and then some."

Given the national downturn, other municipalities are also battling expensive employee benefits. "But the city's pension fund itself is deeper in the hole than many public pension funds - due largely to past underpayments by the city, and may be beyond the city's ability to fix without dramatic changes," the report said.

As of March 31, the market value of Philadelphia's pension fund's holdings declined 30 percent, from $4.66 billion to $3.26 billion.

Exactly how much the funding level has dropped here - it was at 55 percent a year ago - won't become known until the city releases its annual report on the fund's status.

And while an improvement in the economy could brighten the picture, the report says that city officials nonetheless project that the funding level will remain below 50 percent through at least 2013 - a reflection of the city's decades-long practice of not putting sufficient dollars into the fund to cover employee benefits.

The report noted as well that Philadelphia employees contribute less to their pensions than workers in many other cities. Police and firefighters here, for instance, contribute 5 percent or 6 percent, and nonuniformed employees give 1.85 percent or 3.75 percent. (It varies based on a worker's hire date.)

By contrast, San Francisco workers pay 7 percent to 8 percent, and Chicago workers pay 8.5 percent to 9.1 percent.

As part of a partial fix, Nutter is pursuing efforts to place new city hires into a pension plan similar to a 401(k). He forwarded City Council legislation to do so two weeks ago.

At the same time, Pennsylvania's Public Employee Retirement Commission is seeking broader change that would call for a permanent state takeover of about 75 distressed municipal pension funds, including Philadelphia's. According to the report, if that happened, pension benefits would be decided by state officials and no longer be settled through collective bargaining with the unions - a monumental change.

In terms of health care, costs actually fell since last year, but that is because of one-time payments the city made to settle arbitration cases with the police and firefighters. When compared with two years ago, costs were 11 percent higher this year, and 45 percent higher than five years ago, matching trends nationwide.

As in the first Pew study, the updated report points out that Philadelphia's health-care system stands out from those of other cities in that the city negotiates a flat amount of money per employee to give to the unions' health and welfare trusts funds.

Last year, the city spent $1,270 per firefighter each month, $1,165 per police officer, and $976 per each DC 33 and DC 47 worker. While the report said, "It is not clear whether or how much this structure increases costs," past city administrations have proposed consolidating the health-care funds.

Also, most Philadelphia unionized workers don't contribute toward insurance premiums through their paychecks. (Only District Council 47 requires employees to do so.) On the other hand, Philadelphia retirees also get fewer health-care benefits, the report said.

Among the recommendations made in last year's study was one to create a joint labor-management committee on health-care costs. That happened, but no findings have been publicly released.