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Published on February 27, 2024
Philadelphia's Pension Fund Surpasses 60% Funded Mark, Projected to Reach Full Funding by 2033Source: Google Street View

The City of Philadelphia’s pension pot is looking healthier than it has in almost two decades, managing to claw its way past the 60% funded mark for the first time since 2003. This financial milestone, announced by the Philadelphia Board of Pensions & Retirement, is a significant leap considering the fund’s dire state just seven years ago when it was below 45% funded. According to the city's announcement on Thursday, a Preliminary Actuarial Report by Cheiron, an independent actuarial firm, shows a forecast for the fund to potentially hit 80% by fiscal year 2029 and reach full funding by 2033.

Mayor Cherelle L. Parker was quick to give props to the various players in this financial bounce-back. "I am very pleased with the progress we are making and will continue to make to increase the health of the Pension Fund for the dedicated retirees of our city government," she was quoted saying on the city's official website. This progress has not been a solo effort but the result of a concerted push from the Board, mayoral administrations, unions, City Council, and State legislators.

The journey to this financial rebound involved a three-pronged strategy: more cash pumped into the fund from both the city and its workforce, flattening the curve of future liabilities, and shifting the asset management to a more conservative approach. The significant moves include a slice of Sales Tax revenue getting funneled directly into the pension pot and a shift towards a "stacked hybrid" plan for new non-uniformed hires, as reported by the city.

These are more than mere numbers in a ledger; they represent the livelihoods of Philadelphia's retired civil servants, dependent on a promise made to them during their years of service. "The hard work and dedication shown by the administration, the unions, and the Board has led to this remarkable increased funding level," City Controller Christy Brady said, evidencing a commitment to seeing this upward trend continue.

The rigorous efforts haven't gone unnoticed on the national stage, either. Philadelphia bagged the 2020 Award for Excellence in Government Finance by the Government Finance Officers Association (GFOA), a hat tip to the city's comprehensive pension reform strategy.