One hopeful sign for Philadelphia’s pension fund amid coronavirus economic havoc

PHILADELPHIA (KYW Newsradio) — Among the non-medical damage the coronavirus is doing is the toll it’s taking on Philadelphia city finances. The mayor says he can’t yet calculate its impact on the budget, but there’s at least one hopeful sign for the recovery of its pension fund. 

Philadelphia’s pension fund has $11 billion in future obligations and only about half of that on hand. But, through a number of tough steps, the city had gotten on track to be 80 percent funded by 2035, until the coronavirus outbreak. 

The good news is the Pew Trusts’ Philadelphia Research Initiative tested a similar scenario about a year and a half ago to see how strong the plan was, and found it could withstand a sudden market drop if the city maintains current benefits and contributions. 

Director Larry Eichel says what it didn’t test was the simultaneous loss of revenue the virus has brought, but he thinks even that would be a temporary problem. 

“The city is scheduled under the budget as written to put in $760 million. If the city decides not to put that much in, that would change the projection somewhat but not a tremendous amount as long as the city sticks with this plan in the long term,” Eichel said.

That’s the plan, according to Mayor Kenney. 

But as with everything about the virus, the question is how long until it subsides. 

“We’d like to get back on track for 80 percent funded by a certain date but we only don’t have the ability to tell you now definitively,” Kenney said.