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Johnstown’s Pension Plan Liability Continues To Grow

Carolyn Kaster


  Johnstown’s public pension plans are in bad shape and, according to the latest Pennsylvania Auditor General’s report, continue to get worse.

The city’s pension plans — for firefighters, police, non-uniformed city workers, and Bureau of Sewage employees — have a liability of $26 million as of 2013, the latest data available. That's $5 million higher than it was in 2009. Each of the four plans saw a decrease in funding levels from 2009 to 2013 as well, the Bureau of Sewage plan slipping by more than eight percent in that time. 

Johnstown has a shrinking population and tax base, something reflected in the pension funds, as well. The number of people receiving pension payments is double the number of workers currently paying into the funds.

Taken together, the plans are just 45 percent funded, which qualifies them as severely distressed under state rules.

That status requires the city to amend benefits for new hires and implement a recovery plan, neither of which Johnstown has done in full, according to the Auditor General's report. At the same time, the firefighters’ pension plan, which has the lowest funding level at 32 percent, offers benefits in excess of what is allowed by the state’s third class city code.

But Johnstown is not alone. Nearly half of Pennsylvania municipalities that administer pension plans have funds that are at some level of distress, with a total liability nearing $8 billion. 

Irina Zhorov was WESA’s reporter for Keystone Crossroads, a statewide public media initiative focused on issues in older Pennsylvania communities.