The boring stuff: government job pensions | Boring but an obligation that overwhelms many governments

San Diego went bankrupt over pension liabilities.  Chicago keeps doing budgetary dancing wrt their pension liabilities ("Chicago's Pension Debt Decreases $1.3B in 2024 to $35.9B," WTTW, "A new bill would force Chicago Public Schools to pay into municipal retirement fund," Chalkbeat), as does the State of Illinois.  As part of getting DC out of bankruptcy, the federal government took over the city's pension obligations.  Etc.

To get away with not necessarily paying market rate wages for jobs, government agencies have provided good benefits packages including lifetime pensions.  But mostly cities never put away enough money to cover fully these obligations and now pension overhang is a serious problem in many cities ("What a $1.48 trillion pension gap means for cities and states," SmartCities Dive).

Oddly, Philadelphia, not known for being best practice in municipal management, is on track to have its pension obligations fully funded ("A decade ago, Philly’s pension fund looked like it could sink the city. Now it’s on pace to be fully funded by 2032," Philadelphia Inquirer).

A decade ago, the pension fund was only 45% funded and appeared to pose a significant threat to the city’s fiscal health. But a series of reforms carried about by successive mayors, state and city legislators, and municipal labor leaders have fostered a remarkable turnaround.

The city’s pension system pays for retirement benefits for city workers. Benefits vary based on when employees were hired. About 35,000 people are currently receiving benefits, according to the pension board’s most recent newsletter. That includes retirees, their beneficiaries, and disability claimants.

“The fiscal health of the Pension Fund continues its relentless upward climb since many reforms were put in place 10 years ago,” Brady, who sits on the city Board of Pensions and Retirement, said in a statement. “We’ve made smart investments, doubled our assets, reduced investment manager fees — resulting in a large reduction of the overall liability for taxpayers."

The reforms included increasing annual contributions from the city budget to the pension fund beyond the minimum amount required by state law; negotiating union contracts with higher employee retirement contributions; moving away from high-fee investment managers; and dedicating revenue from a 1% sales tax in Philadelphia to the pension fund.

Basically, they used all the tools at their disposal to make it work.  They made it a priority.  And the priority stayed a priority even as Mayoral administrations changed.