In a testament to fiscal responsibility and reform, Controller Christy Brady announced that the City of Philadelphia's Municipal Pension Fund is on pace to be fully funded by the year 2033, per the latest Municipal Money Matters report. Over the last seven years, the City, in collaboration with the municipal workforce and the executive board and staff of the Pension Board, adopted the Revenue Recognition Policy, which has contributed to the pension fund's funding level, increasing from 49.7% in 2019 to 62.2% at the beginning of Fiscal Year 2024, it also managed to exceed the Minimum Municipal Obligation with these policy changes.
Controller Brady, who serves on the Pension Board, remarked, as per the City of Philadelphia, "The City has made significant strides in securing the financial stability of its Pension Fund," emphasizing the value of a robust pension fund for attracting and retaining skilled workers. Alongside contribution policy reforms, pensions' health also got a boost from strong investment returns, with the Pension Board reporting an 8.7% return in fiscal year 2024, which tops the expected 7.35% rate of return.
The fund, which currently distributes approximately $72 million monthly to retirees, equating to about $877 million yearly, has seen a generous municipal contribution from the City of Philadelphia. In Fiscal Year 2024, these contributions reached $742.8 million, accounting for nearly 12% of the City's General Fund expenditures, according to the data provided by the City Controller's office.
Philadelphia's taxpayers stand to benefit from this upswing in pension fund health, as noted by Controller Brady, who said, "As the funding level rises, the City’s required contributions to the pension fund decline, freeing up resources to invest in other initiatives." In addition to city contributions, the fund draws from three sources: a sales tax revenue portion, tiered member contributions based on salaries for current and future municipal employees, and additional contributions for members in Plan 87 for Police and Fire.
