Pittsburgh is “going out” for proposals for companies to lease their garages. Seems they are a quarter of a billion or so underfunded in their pension plan for their employees and this would be a way to get that little liability off the books.
Cities are continuing to sell off their assets for short term solutions to their financial problems. My biggest question, and probably not appropriate for here, is “How did they get in that situation?”
We have a 401K plan for our employees. They put money in to defer taxes, and we put money in if we have any at the end of the year. If we don’t we don’t. We are audited constantly, and can’t “out of balance.” There is no way we can be behind or underfunded.
Now I understand that a pension plan is different. It’s a way of deferring compensation downstream for employees. However it seems to me that prudent conservative investment should, even in down times like this, make these things money makers, not “underfunded.”
I had a boss once that didn’t believe in Christmas Bonuses. He said that if you give them, people expect them. However matching in a 401k or profit sharing when available makes a lot of sense. It means that the employee is “vested” (to coin a phrase) in the process and is interested in their future. They don’t just show up and expect to live the life of Riley forever.
I wonder how Pittsburgh, and I’m sure they aren’t alone, got into this mess. If they don’t fix it now, they will be in exactly the same place in a few years and not have any parking garages to lease out.