Description
Philadelphia Pension Fund: Progress, Reform, and the Path to Full Funding
Funding Overview
The Pension Fund pays an average of $72 million per month and approximately $877 million annually to its current retirees. These benefits are paid by the Pension Fund using four main revenue sources:
– Contributions from the city in accordance with the Revenue Recognition Policy (RRP).
– Tiered contributions from employees based on salary level.
– Earnings from investments on fund assets.
– A portion of the sales tax revenue according to state legislature.
100% Funding Timeline
Actuarial projections show continued improvement in the Pension Fund’s financial position. Under the RRP, the Pension Fund is expected to reach 80% funding by FY28, and full (100%) funding by FY33. Before the implementation of the RRP, and assuming the city had only contributed the Minimum Municipal Obligation (MMO), the Pension Fund would not have reached 80% funding until 2032 and would not have achieved full funding until 2040.
Through collaboration, discipline, and a shared commitment across stakeholders, the Philadelphia pension fund has made meaningful progress. The Pension Board, comprised of city officials, elected trustees, and the City Controller, continues to strengthen the Fund’s financial position while evaluating opportunities to responsibly enhance benefits for retirees. As funding levels improve, maintaining long-term stability will remain the foundation for any decisions that support those who dedicated their careers to public service.
Pension Reforms Over Time
Click here to view the accompanying press release.