DePasquale Is Looking Into Wilkes-Barre Pension Plans

November 1, 2018 GMT

WILKES-BARRE — Pennsylvania Auditor General Eugene DePasquale announced he is taking a look at the City of Wilkes-Barre’s pension plans to see if officials have made any progress curbing employee benefits that exceed what’s allowed under the Third Class City Code.

The problem, city officials say, is those benefits were negotiated into union contracts and would have to be reduced through negotiation.

“Trying to negotiate them out is a challenge for sure. That’s not an easy thing but the city is working on it,” City Administrator Ted Wampole said. “In respect to what came out in previous audits, we are trying to address that.”

Wampole said the new audit appears to be routine.

In his 2017 audit, DePasquale said some of the city’s calculations used to determine benefits and a pension buyback clause aren’t consistent with the Third Class City Code. He also conceded that the city did try to amend the pension plans to comply, but the Pennsylvania Labor Relations Board ordered the city to continue the benefits that were negotiated into contracts.

The city is still fighting the issue in court, Wampole said.

The city has five pension plans, two each for the police and fire departments and one for other employees.

The continued payout of “unauthorized benefits” will increase pension plan costs and will reduce the amount of funds available to invest or pay out proper expenses, DePasquale warned in his 2017 audit.

As of May 1, 2015, the city’s pension plans had $80,985,791 in assets and $130,436,535, in liabilities, a funding ratio of 62.1 percent. The plans were in “moderate distress’ and the auditor general said he was “extremely concerned” with the trend.

Just four years earlier, the plans had a 72.5 percent funding ratio and were in “minimal distress,” according to the audit.

In a news release Wednesday, DePasquale said the audit will be completed in early 2019.

“The continuing challenges facing the City of Wilkes-Barre’s municipal pension plans demonstrate the growing need for statewide pension reform,” DePasquale said. “Until such legislation is enacted, it is essential that plans take steps to ensure they have the necessary resources to meet future obligations.”

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