Weeks after extending the length of time Pittsburgh’s parking tax revenues are directed to the pension fund, City Council on Monday approved a measure to extend it by another five years.
City Council recently removed a pension offset for nonunion city employees. In doing so, they dedicated an additional 10 years of parking tax revenue to the pension fund to cover the cost of removing the offset. Now, that jumps to 15 years.
Adding the extra five years was necessary to adjust for an accounting error, Councilman R. Daniel Lavelle, chair of the finance and law committee, said.
The pension offset — which impacted city employees hired after June 30, 2004, with exceptions for firefighters, police and EMTs — called for a reduction in pension payments by 50% once a city employee reached maximum Social Security retirement age.
When Council voted to remove the pension offset for nonunion employees, City Council Budget Director Bill Urbanic said that adding another 10 years would bring in an additional $45 million. That — along with increasing the amount that affected employees would pay into the pension plan from 4% of their wages to 6% — was expected to cover the cost of removing the offset, he said.
“It was just a mistake,” Urbanic said, explaining that they were performing calculations using a “corrupted” spreadsheet.
They did not realize the error until after City Council passed the initial measure, Urbanic said.
“We want to pay for what we’re doing with the offset with the pension,” he said.
Removing the pension offset impacted about 400 city employees. It did not affect union workers, who would need to go through a separate process to have their pension offsets changed.
