The City of Philadelphia just wants its pension costs to be normal. Not normal as in “typical” or “average” – Philadelphia’s pension costs are in line with other large cities. In pension parlance, the normal cost is the Pension Fund contribution required to cover future benefits earned by employees in a given year. In FY24, the normal cost for the City’s pension contribution is projected to be $205 million. Instead of contributing just the normal cost, the City will contribute nearly $833 million. Philadelphia's pension costs are four times higher than the normal cost because the City is working diligently to resolve decades of underfunding (and bad timing) that has created a high level of unfunded pension liabilities. Since implementing the Revenue Recognition Policy starting in FY16, the City has made increased contributions aimed at reducing unfunded liabilities. Read our fact sheet to learn more about how sticking to the RRP will free up hundreds of millions of dollars in the City's budget in the coming decade.

Fact Sheet: Philadelphia's Pension Fund