Key Takeaways
- • A Armstrong County Common Pleas Senior Judge Kenneth Valasek ruled Thursday that Allegheny County is legally required to keep its underfunded employee pension system actuarially sound, but did not order specific action to shrink the roughly $1.4 billion deficit.
- • Valasek gave county and state officials 12 months to devise a solution and said he would not enforce the ruling before September 2027.
- • The judge rejected the District Attorney's argument that the county code imposes additional financial duties beyond matching employee contributions, declining to order extra payments.
- • The working group's report calls for $140 million to $150 million in combined annual contributions from the county and its Airport Authority over 20 years, roughly $90 million to $100 million more than currently paid.
- • The system is projected to become insolvent by 2043 unless its funding trajectory changes, and it has operated at a deficit for more than 20 years.
Summary
A judge ruled Thursday that Allegheny County is legally required to keep its deeply underfunded employee pension system actuarially sound, but stopped short of ordering action to reduce the fund's roughly $1.4 billion deficit, according to TribLIVE.com. In a 16-page opinion, Armstrong County Common Pleas Senior Judge Kenneth Valasek gave county and state officials 12 months to devise a solution and said he would not enforce the ruling before September 2027. Valasek said the restoration would take a substantial number of years, "with perhaps the exception of a bond issue by the county raising the necessary amount of money all at once," and that the General Assembly and governor would likely need to intervene to give the county additional funding mechanisms.
The decision is a partial victory for Allegheny District Attorney Stephen A. Zappala Jr., who sued the pension fund in December 2024 on behalf of his chief of staff, Rebecca Spangler, a contributor since 1995. Zappala sought a determination that the county has a legal obligation to maintain a financially sound system and a finding that state law requires additional payments beyond existing matching contributions. Valasek declined the latter. Attorney Thomas S. Biemer, representing the DA's office, argued at a June hearing that the county must appropriate whatever funds are necessary to restore actuarial soundness. Valasek rejected the idea that the county code "currently imposes any additional financial duties on the county over and above matching the employees' contributions," instead requiring officials to budget each year enough to cover administrative costs, benefit commitments and legal obligations if existing funds prove insufficient.
The county employs more than 6,300 people, and the Allegheny County Employees' Retirement System had more than 6,600 active members and more than 5,700 inactive members or beneficiaries last year. Allegheny County Treasurer Erica Rocchi Brusselars, who chairs the Retirement Board, established a pension working group in 2024. Its July report attributed the crisis primarily to insufficient contributions relative to the number of beneficiaries. The Retirement Board raised the contribution rate to 22% in 2024, with employees contributing 11% of salary and the county matching. Valasek said the board already has statutory authority to raise employee contribution percentages and stressed that board members are fiduciaries obligated to act in the system's best interests. He quipped in the opinion that "A $1.4 billion tax increase for a single year could cause a problem or two!"
To pay down the debt, the working group estimated the county and Airport Authority would need to dedicate $140 million to $150 million annually for 20 years. The report identified possible revenue sources including a payroll tax, earned income tax, sales tax or property tax, a prospect likely to face public opposition amid existing concerns over a court-mandated property reassessment. It was unclear whether either party would appeal. A spokeswoman for the county treasurer's office, Maria Montaño, said the office received the ruling and was reviewing it. The District Attorney's Office did not respond to a request for comment.
The decision is a partial victory for Allegheny District Attorney Stephen A. Zappala Jr., who sued the pension fund in December 2024 on behalf of his chief of staff, Rebecca Spangler, a contributor since 1995. Zappala sought a determination that the county has a legal obligation to maintain a financially sound system and a finding that state law requires additional payments beyond existing matching contributions. Valasek declined the latter. Attorney Thomas S. Biemer, representing the DA's office, argued at a June hearing that the county must appropriate whatever funds are necessary to restore actuarial soundness. Valasek rejected the idea that the county code "currently imposes any additional financial duties on the county over and above matching the employees' contributions," instead requiring officials to budget each year enough to cover administrative costs, benefit commitments and legal obligations if existing funds prove insufficient.
The county employs more than 6,300 people, and the Allegheny County Employees' Retirement System had more than 6,600 active members and more than 5,700 inactive members or beneficiaries last year. Allegheny County Treasurer Erica Rocchi Brusselars, who chairs the Retirement Board, established a pension working group in 2024. Its July report attributed the crisis primarily to insufficient contributions relative to the number of beneficiaries. The Retirement Board raised the contribution rate to 22% in 2024, with employees contributing 11% of salary and the county matching. Valasek said the board already has statutory authority to raise employee contribution percentages and stressed that board members are fiduciaries obligated to act in the system's best interests. He quipped in the opinion that "A $1.4 billion tax increase for a single year could cause a problem or two!"
To pay down the debt, the working group estimated the county and Airport Authority would need to dedicate $140 million to $150 million annually for 20 years. The report identified possible revenue sources including a payroll tax, earned income tax, sales tax or property tax, a prospect likely to face public opposition amid existing concerns over a court-mandated property reassessment. It was unclear whether either party would appeal. A spokeswoman for the county treasurer's office, Maria Montaño, said the office received the ruling and was reviewing it. The District Attorney's Office did not respond to a request for comment.
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