Auditor General DePasquale Encouraged by Scranton Excessive Pension Benefits Settlement Saving More Than $600,000
Auditor General DePasquale Encouraged by Scranton Excessive Pension Benefits Settlement Saving More Than $600,000
Says more work by city officials needed to avoid bankruptcy and economic collapse
HARRISBURG (Sept. 25, 2015) – Auditor General Eugene DePasquale today applauded a settlement by Scranton’s pension board this week that, stemming in part from his special report issued in June, will save the city more than $600,000.
“I am pleased that our special report on the Scranton pension situation has – at least in part – contributed to the move by Scranton officials to halt unauthorized retirement payments and save the city more than half of a million dollars,” DePasquale said.
“While this settlement is a start, Scranton is still facing a huge pension challenge. Scranton city officials must continue to do everything in their power to avoid bankruptcy and protect the economic interests of all the people in the region.”
The special report issued by DePasquale showed that Scranton city leaders’ failure to properly authorize the doubling of pension benefits to certain retirees cost the city approximately $2.9 million over the last 12 years — and at least partially contributed to the dire financial condition of the city’s non-uniformed pension plan.
The special report noted that the City of Scranton neglected to properly analyze, document, and implement the retirement benefit incentive provided to its non-uniformed employees who retired in 2002 and others in 2007.
In addition to the special report, an audit released in 2014 of Scranton’s pension plans found the city could be facing bankruptcy because as of 2013, the city’s three pension plans could run out of money in three to five years:
• The non-uniformed pension plan was 23 percent funded and could be exhausted in less than 3 years.
• The firefighter’s pension plan was 16.7 percent funded and could be exhausted in less than 3 years.
• The police pension plan was 28.8 percent funded and could be exhausted in less than 5 years.
The latest City of Scranton Aggregate Pension Fund audit report from August 2014 is available here.
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