Pennsylvania Auditor General Eugene DePasquale has begun an audit of Pittsburgh's public pension plan.
DePasquale coupled his announcement with another call for statewide municipal pension overhaul.
"Pittsburgh, as with many other Pennsylvania municipalities, struggles with a hefty pension burden, and that burden grows even heavier the longer Harrisburg fails to act on substantive municipal pension reform," DePasquale said in a statement on Wednesday.
DePasquale's latest statewide municipal pension report found that nearly half the plans are in distress. He pegged the overall municipal liability at $8 billion. DePasquale last year, at Gov. Tom Wolf's request, chaired a task force on the matter.
State lawmakers are scheduled to reconvene later this month for a truncated fall session.
DePasquale's previous audit of the City of Pittsburgh Comprehensive Municipal Pension Trust Fund, released in March 2015, showed that despite "laudable actions" by Mayor Bill Peduto's administration to shore up pension plans and amid an improving stock market, the fund's overall funding ratio dropped from 62% in 2011 to 58% in 2013.
"Mayor Peduto welcomes the audit, as well as the auditor general's ongoing leadership seeking statewide municipal pension reform," said Peduto's communications manager, Timothy McNulty.
According to DePasquale, the fund as of Jan. 1, 2013, had assets of $675 million and liabilities of $1.2 billion. He attributed part of the funding drop to the city having lowered its assumed rate of investment return from 8% to 7.5%. His staff expects to update asset and liability figures in the new audit.
DePasquale, a Pittsburgh native and former state representative from that region, said the audit will determine whether pension fund administration is complying with state laws and whether municipal officials took "appropriate corrective action" on the findings of the previous audit.
The new audit will cover Jan. 1, 2014, to Dec. 31, 2015, he said.
Pittsburgh is in Pennsylvania's Act 47 workout program for distressed municipalities, and also operates under Intergovernmental Cooperation Authority oversight. In early August, the city ended its lawsuit with ICA, which had withheld casino revenue unless the city implemented an in-house payroll system.
Under the agreement, the pension fund will receive $11 million, with a further $7 million earmarked for the city's general funds.
Moody's Investors Service rates Pittsburgh's general obligation bonds A1 with a positive outlook. S&P Global Ratings and Fitch Ratings assign A-plus and A ratings, respectively, each with a stable outlook. Pittsburgh's bonds were junk in the mid-2000s.
"Pittsburgh's credit position is sound," said Moody's, which noted that its A1 rating is slightly weaker than the U.S. city median of Aa3.
Fitch noted Pittsburgh's successful transition from steel to an "eds and meds" economy.
"The strong presence of health care, education and financial services anchors Pittsburgh's economy and has offset the decline of the manufacturing sector, the city's economic base, over the past few decades," said Fitch.
