For those asking, I can't really decipher the news today on the status of Pittsburgh's pension system
. It is all quite odd.
All I know is this. The statute at hand, Act 44 of 2009
, defines a procedure for distressed systems to follow in order to avoid being taken over by the state. What is the issue today? On page 64 you will see this simple requirement embedded in the Act:
THE BIENNIAL ACTUARIAL VALUATION REPORTS FOR THE PLAN YEAR BEGINNING ON JANUARY 1, 2011, SHALL BE FILED BY THE CITY WITH THE COMMISSION BY SEPTEMBER 1, 2011.
The immediate (possibly the only) question is whether the news today means that said 'valuation report' was filed with the state. The news says a 'letter' was sent out today (via carrier pigeon I presume) and that "....some backup documentation, which will be provided to the commission in coming days". The 'coming days' part is just where we begin to diverge from normal circumstances. Does any of that comply with the spirit or letter of the law? For the lawyers to decide I guess, but if you want to see what the state considers a "Biennial Actuarial Valuation Report" it is not ambiguious. Since you can't find them on any City of Pittsburgh web page you can check out my iPension page and over on the right are all the old Act 205 reports the city has filed with the state. Coincidentially enough these are also explicitly named 'ACTUARIAL VALUATION REPORT's and are normally submitted every other year (that would be the 'biennial' part). So call me simple, but it all comes down to whether the state expects such a report to be submitted to comply with Act 44, and whether in fact such a report exists and was sent to Harrisburg.
Then there is this interesting question of how they fit the notional future pledge of revenue into the specific boxes provided on the form. Then the new issue of who will sign it. The form has space for a single official to sign the report, yet the news last week was that the Mayor wants the entire pension board to sign the report. They will have to write in cursive really small for that to work, but it is unclear to me if the pension board could sign the Act 205 report in the first place. It is a city official who has to certify it I think. So I think some one official needs to stand behind the report which I suspect is going to have some interesting disclaimers from the actuary tucked in there somewhere. This may become one of those B-School case studies in accounting for the next decade. Deep down, I suspect the issue of who is signing, and what they are signing is the issue at hand down on the 5th floor today. No reason to think the actual actuarial report is going to be any more done tomorrow if it is not done yet. Getting someone to put their professional career on the line to stand by it all would be an interesting decision for some.
On this forthcoming supplemental information being provided to the state. There is this long weekend coming up. While I doubt your normal actuary is going to be working over the Labor Day weekend, I am absolutely sure nobody in Harrisburg is going to stay open in anticipation of some low-probability potential submission from the city. So this delay in complying with the Act 44 requirement quickly becomes a week I bet by the time anything really is provided.. and that assumes they get their act together quickly. When you consider the state was asking for information months ago because the timeline here for them to review what was going to be sent in was so short... the timing here takes on a bigger role. Whatever.