Financial blob that is.
We just got off a conference call about the Pew report. According to co-author Katherine Barrett things aren’t looking good.
“It would be comforting to think
Philadelphia is in the same boat as other cities, but it’s not,” she said. “It was in worth shape than all 50 states.”
A few facts:
- Unchecked, by 2012 benefits will consume 28 percent of the city budget.
- Philadelphia has more retired claimants than active workers.
- Philadelphia employees put less of their own money – only 1.85 percent of salaries – into the pension fund. Other cities contributed from four to nine percent.
- Very little information on how the pension fund is invested is available to the public.
- City health care costs rose 80 percent from 2002 to 2007.
- The city has no direct control over health care funds, instead providing money to each labor union, which negotiates it’s own coverage plan.
- Three of the city’s four unions do not require any monthly contribution for health care.
Pay attention to this stuff because the benefits issue will be a sticking point in the labor negotiations this year.
The report says the city should consider taking more control of health spending and suggests employees should make contributions to the plan. It also recommends a review of the pension investments and suggests raising the retirement age or re-examining the Deferred Retirement Option Plan to see if it is cost-effective.
We doubt proposals like those will be well received by the unions...