The DA went so far as to call for a state-led takeover of the fund. County Executive Sara Innammorato refused to help Zappala work towards a solution.
Allegheny County District Attorney Stephen A. Zappala, Jr. recently sent a public letter accusing the county’s pension board of being politically compromised. The letter calls on the state legislature to take over the pension system before it becomes insolvent.
The Allegheny County Retirement Board recently released a report showing that the county’s pension system is underfunded by $1.4 billion. The county would have to spend up to $100 million annually for decades to continue paying its retirees.
Zappala wrote that the seven person-board contains five politicians or political appointees, which causes a conflict of interest. Members include a county executive, controller, treasurer, a member appointed by the county executive, and a member appointed by County Council.
“It is important for the taxpayers of Allegheny County, the employees of Allegheny County who are contributing 11% of their wages to the pension fund, and the retirees who rely on the pension fund, to have the complete picture. It’s not pretty,” he wrote in his letter.
To solve the issue and properly fund the county’s pension system, board members would need to divert public funding from other projects and departments to the pension system. Zappala wrote that these unpopular decisions would “imperil personal political careers,” creating a conflict of interest.
“That’s why they ‘kicked the can down the road,’” Zappala wrote. “It’s just not good politics to ask taxpayers for more money, even if it’s to meet fiduciary obligations.”
This was not the first time Zappala expressed his concerns and frustrations over the county’s mismanagement of the pension system.
In May of 2024, his office received a whistleblower complaint alleging misappropriation of the pension funds. Zappala says he met with County Executive Sara Innamorato on the issue.
“I asked that we work together to fix it. My offer was ignored,” Zappala said.
Innamorato responded in a recent statement, saying, “He has had ample time to suggest a holistic solution. Apparently, it took the first woman County Executive for him to be motivated to speak up. Those of us who are actually working on this issue in a timely manner will continue to do what is right for our workers and our retirees.”
In December 2024, Zappala filed a lawsuit against the county and retirement board after the issue was not raised in the budget process and “it became clear that [Innamorato] did not want a public discussion.”
The filed lawsuit seeks to compel a judge to force the county to fund its retirement system in an “actuarially sound manner” required by law.
In Innamorato’s proposed 2025 budget, she did not include any additional funding for the pension system. She also recently told County Council that she does not anticipate asking for another tax increase to remedy the issue.
In the recently released report, several options were laid out. These include increasing sales taxes, earned income taxes, and payroll taxes.
The only tax increase that the county could pass that does not require approval from state lawmakers would be property taxes. The county raised those by a historic 36% last year.
“[County officials] allowed the deficit to grow and become a crushing liability for future generations of Allegheny County taxpayers, which in and of itself is an unlawful act,” Zappala wrote in his letter.
“We have a long road ahead in order to repair the ‘kicking the can down the road’ damage done over two decades by the retirement board. In the end, the taxpayers of Allegheny County will be on the hook for this continuing wasteful mess.”
