City of Atlanta pension hole is millions deeper

The city of Atlanta — already playing catch-up to get its three pension funds back on track — is not getting much help from Wall Street and the national economic crisis.

The city’s largest pension fund lost nearly $64 million last month, according to an unaudited review of the account. The city’s General Employees fund ended August with slightly more than $1 billion in investments, according to fund manager Gray & Co. As of Sept. 30, the estimated total was $947 million.

“The city is already in a pinch,” said Gwelda Swilley-Burke, a senior consultant for Gray & Co. “This is going to cost the city more money moving forward.”

The pension fund for city firefighters went from $408.2 million as of June 30 to $377.2 million by Sept. 30, said Kelen Evans, chairman of that fund. Those numbers are estimates and haven’t been audited, he noted. In three months, that fund lost an estimated $31 million.

“I’m concerned, but I haven’t been in panic mode,” said Evans, an Atlanta Fire Department lieutenant.

Others, like Tony Viello, a retired Atlanta police lieutenant, are more worried.

“I’m scared to death,” said Viello, chairman of the police pension fund. “It’s just a volatile time.”

Viello did not have estimates Wednesday of the latest earnings or losses in the police fund.

Pensions are a big issue for the city government. None of Atlanta’s three pension funds are at or above 80 percent fully funded, the threshold considered by some national retirement benefit experts to indicate a healthy account.

For the 12-month period ending June 30, the city invested about $118.2 million toward employee pensions. That amounts to about 20 percent of Atlanta’s general fund budget. The $118.2 million is more than triple what Atlanta spent on pensions in 2002.

City officials have blamed rising pension costs for much of the $65 million budget deficit Atlanta had for the fiscal year that ended June 30. City Council members and aides to Mayor Shirley Franklin have said they are looking into reforms that will reduce Atlanta’s pension obligations.

Pension leaders and city officials say Atlanta’s funds could benefit if they were allowed to invest in international funds. State law does not allow Atlanta to make such investments.

“Without that change, conditions like this are going to hit municipal pension funds in Georgia harder than they would in other states,” said Greg Giornelli, the city’s chief operating officer. “We just can’t diversify as well as other funds.”