According to Philly.com, after $1 BILLION in investment losses, Philadelphia’s municipal pension fund has sunk into its biggest hole yet – about $5 billion short of the assets it should be holding to pay future retirement benefits to thousands of city employees.

An actuarial report prepared for the city pension board says that the system’s assets, valued at $4 billion in mid-2009, amounted to just 45 percent of its liabilities – significantly weaker than the pension funds in most of the nation’s big cities.

The deficit will force city taxpayers to come up with $1.7 billion for the pension system over the next three years – more than $1,000 for every man, woman and child in Philadelphia, according to projections that the city has put into its five-year financial plan.

City Finance Director Rob Dubow describes the escalating pension costs as “perhaps the biggest financial challenge we face.”

They also could lead to a fight between the Nutter administration and municipal unions over reducing pension benefits for future employees.

Source: Philly.com