Puttering on Pensions
But if you think all the pension issues in the city are... if not say 'solved' but even if you would go so far as to say 'stable' there is a new iceberg in the water.
There are about to be some big new major changes in the pension accounting rules put out by the Government Accounting Standards Board (GASB). And when I say major there are some that would conceivably shift the debate in the City of Pittsburgh to a new plain.
As an aside... is the pledge ('pledge'... sounds like a public television pseudo advertisment doesn't it? About the same thing in context) of future parking revenue even a GASB compliant investment vehicle in the first place? Nevermind that.
The rules being proposed have lots in them, but the biggest things that will hit the city of Pittsburgh are these two. Per the Bond Buyer article in the first link....
state and local governments, for the first time, to report unfunded pension liabilities on their balance sheets.
That one in itself if bad, but bad on paper. Hopefully nobody thinks the unfunded liability is not there so it will not really change anything at the end of the day even if it gives ratings agencies pause. The really big thing is that the new rules are being reported to require pension actuaries to use a 3.5% rate of return assumption for their investments. I'd do the math on what I think it means if they used the 3.5% assumption here, but it is too scary.
yes, that was the short pithy version. Or from my days on Capital Hill there is the this Senator summary which for this is: Bad.