Allegheny County Has a $1.4 Billion Pension Shortfall — Officials May Raise Taxes to Fill the Gap

Allegheny County, Pennsylvania officials say they may need to raise taxes to help close a $1.4 billion unfunded pension liability — a shortfall The Center Square investigative reporter Mark Stricherz reporting traces partly to the fund's own investment strategy. Stricherz joins The States to break down his findings. The pension fund, which was fully funded roughly 20-25 years ago, is now estimated at 30-40% funded depending on the metric used. Of the $1.4 billion deficit accumulated from 2009-2024, a county report attributes about $295.9 million to inadequate employer contributions and $273.9 million to "experience" losses — largely tied to heavy allocation in private equity investments, including underwater positions like the Draper Triangle Ventures III fund (down roughly $5 million from its $13 million investment) and the PLSG Accelerator fund. The county employed more than 80 investment managers last year, costing roughly $4 million in fees regardless of fund performance. County Executive Sara Innamorato has indicated tax increases — potentially to property, earned income, or sales taxes, or new taxes such as marijuana legalization and taxation — may be needed once current private equity holdings mature, with the pension's insolvency otherwise projected around 2043. The airport authority and county together may need to contribute an additional $140-150 million annually to address the shortfall. Read the full investigation at thecentersquare.com.