Audit: Scranton Pension Funds Could Soon Run Out of Money

Audit: Scranton Pension Funds Could Soon Run Out of Money

The Pennsylvania Auditor General stopped in Scranton Wednesday with a dire warning about the city's pension funds.
The Pennsylvania Auditor General stopped in Scranton Wednesday with a dire warning.

Eugene DePasquale says the city's pension situation is so bad, the money to pay police and fire retirees could run out within the next three to five years.

A consultant hired on behalf of Scranton recently told city leaders the pension issue is the single biggest problem that Scranton has.

The Pennsylvania Auditor General says while Scranton is not alone, its situation is the worst in the state and could possibly force the city into bankruptcy.

DePasquale came to Scranton to sound the alarm about the pension issue after his office completed a routine audit.

"This is the first time that we have seen this in any municipal pension audit that literally we see the clock running out," DePasquale said.

Within three to five years, DePasquale says if nothing is done the city's pension funds could go broke.

Members of the Scranton Composite Pension Board, who coincidentally also met Wednesday, listened to the Auditor General's findings.

They don't think taxpayers get how bad the situation is.

"I didn't understand it in the beginning but no, they don't understand how bad it is," president John O'Shea said.

While city leaders recently passed a commuter tax in hopes of raising up to $5 million a year for city pensions, DePasquale says that won't solve the crisis alone.

"Five million does not fix a $13 million problem but without that you are at zero," DePasquale said.

Many say statewide reform from state lawmakers is needed.

"We cannot kick this can down the road anymore. We have some smart people on both sides of the issue. They need to run, not walk, to the table and make this happen," Scranton city councilman Wayne Evans said.

If nothing is done, the future for Scranton and other cities may be bleak.

"If this isn't solved we're heading towards bankruptcy and that's not an option," Evans said.

The Pennsylvania Auditor General says while Scranton's case is severe the city is not alone in its challenges.

DePasquale says nearly half of municipalities that administer pension plans are distressed and underfunded.
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