L.A. is a bright spot among underfunded city pensions
Cities across the country have badly underfunded pensions and retiree health plans, although Los Angeles is doing far better than most, according to a study released Wednesday.
The report by the Pew Charitable Trusts found that 61 U.S. cities had a collective gap of more than $217 billion in looming pension and health obligations that they will owe to retiring workers in coming years. The shortfall was $99 billion for pensions and $118 billion for healthcare and related benefits.
The study examined the most populous city in each state as well as municipalities with more than 500,000 residents. The data are for 2009, the most recent year for which statistics were available.
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A relative bright spot was Los Angeles, whose pension is 89% funded. Collectively, the cities had enough money for about 74% of the pension money they need.
The report found that 37 cities were less than 80% funded. The worst – Charlotte, N.C. – was only 24% funded.
Los Angeles has set aside only 55% of the money it will need to pay retiree healthcare costs in coming years, but that was the best among the cities surveyed. More than half of the cities had not saved a dime for retiree health costs.
San Francisco’s pension is 97% funded, but it has saved less than 1% of what it will owe in healthcare costs, the survey found. San Diego’s pension is 66% funded, but it has put away only 3% for healthcare.
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