In a decisive legal maneuver, Allegheny County District Attorney Stephen Zappala has taken legal action against the county's retirement board over a pension fund that is significantly underfunded, a measure aimed at averting what he terms a "looming crisis" for current and future retirees. According to WPXI, the lawsuit filed in the Allegheny County Court of Common Pleas targets the Board of Allegheny County's fiscal strategies after it was found that the pension's liabilities outstripped its assets by roughly $1.27 billion, rendering the system merely 42% funded.
Zappala, alarmed by the menacing shadow of insolvency that looms over the retirement system's horizon, initiated the legal proceedings following an investigation that had begun months ago sparked by a complaint alleging fraud within the Allegheny County Employees’ Retirement System. This alarm was driven by his office's discovery of the pension's unbalanced sheets and skyrocketing employee contribution rates, which are among the highest in the nation, jumping from 9% in 2016 to 11% in 2024. So, it was upon these grounds that the lawsuit was instigated. "Allegheny County is facing one of the most serious unfunded pension crises in the history of the Commonwealth Pennsylvania," Zappala said, according to WTAE, emphasizing the vested interests at risk and his urgent call for a concerted effort to rectify the fiscal shortfall.
The lawsuit seeks to hold both Allegheny County and the Retirement Board accountable. It demands a declaration of actuarial instability, a mandated blueprint for achieving full funding status, and an injunction against what Zappala describes as deceptive practices undermining the retirement system's integrity. The legal complaint details allegations that the Retirement Board's risky investment strategies to meet a 7.75% expected return rate have led to volatility and, ultimately, substantial losses that threaten the future sustainability of the pension.
Zappala's lawsuit highlights that despite warnings from the Retirement Board's actuary and the county's accountant since 2016 about the pension fund running out in 15 years, no plan has been made to fix the problem. The lawsuit seeks actions to ensure the system's financial stability for future beneficiaries. While current retirees are not at immediate risk of nonpayment, they could face financial problems when they retire if the system isn't addressed. Zappala calls for accountability and better management of public funds.
