$31 million in pension bonus checks mailed out

Philadelphia's severely underfunded pension fund mailed out $31 million in retiree bonuses on Friday.

Next year, the pension board will mail out another set of checks worth about the same, for a total of $62 million in pension bonuses, city officials said Friday.

The bonuses are part of a deal that mayoral candidate James Kenney struck as a city councilman and one for which he has been criticized.

The Pension Adjustment Fund was created in 1999 as a way of providing cost-of-living boosts to retirees when the overall pension fund exceeded investment goals. But the bonuses were only to be given out if the pension fund was healthy, with at least 76.7 percent funding level.

As a councilman in 2007, Kenney sponsored a bill that did away with a safeguard that required the pension fund to be at least 76.7 percent solvent before bonuses could be paid.

The pension fund is only 46 percent solvent and has a deficit of $5.7 Billion, making it one of the worst funded pension systems among the largest cities in the country.

Kenney has defended his bill and said that as mayor, he would not reverse it.

The bonuses mailed out on Friday (and next year) will go to 23,000 former city employees who have been retired for at least 10 years or their beneficiaries.

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