Philadelphia could save $170 million in the next five years if the Pennsylvania legislature approves measures to alter the city's retirement fund and extend paying down its $3.8 billion pension liability over 40 years instead of the current 20-year plan.

Mayor Michael Nutter Friday announced the proposed pension changes and said the $170 million of savings would help close an estimated $1 billion, five-year budget deficit, due in part to rising retirement costs. Without Nutter's pension changes, officials expect Philadelphia's annual pension contribution costs to increase by $358 million from fiscal 2010 to fiscal 2014.

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