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WILKES-BARRE — State Auditor General Eugene DePasquale announced this week that his office is working on an audit of Wilkes-Barre’s pension plans.
In a news release, DePasquale said state auditors began their review Oct. 18. The purpose of the audit, the release says, is in part to determine if officials are operating the city’s pension plans in a legal manner, and if they took corrective action to address findings from a January 2017 audit.
DePasquale has been warning since that report that the continued payout of “unauthorized service buybacks” would lead to further issues with the city’s five pension plans: two each for the city’s police and fire departments, and a fifth for non-uniformed employees.
“The continuing challenges facing the City of Wilkes-Barre’s municipal pension plans demonstrate the growing need for statewide pension reform,” DePasquale said in the release. “Until such legislation is enacted, it is essential that plans take steps to ensure they have the necessary resources to meet future obligations.”
This comes as the latest in a series of audits largely focused on the service buyback provision in the city’s plans, where employees would be able to buy back all the time they put into a previous city pension and put it into their current pension. That would increase payouts.
DePasquale refers to these as “unauthorized” benefits, and recommended scrapping them in at least the two most recent audits.
In the 2017 report, DePasquale points to a worsening funding ratio over time in the city’s budget. In 2011, the city had a value of assets of $83,704,642 and an accrued liability of $115,389,957, leading to a funding ratio of 72.5 percent.
But by 2015, the city’s value of assets was $80,985,791 and the accrued liability was $130,436,535, leading to a funding ratio of just 62.1 percent.
DePasquale said then the city is in “Level II moderate distress” status.
This new audit will look at the period between Jan. 1, 2016, and Dec. 31, 2017. It will likely be done by early 2019.