Philadelphia's Pension Nightmare

Rob Dubow, Director of Finance for the City of Philadelphia, discusses the state of his city's pension fund and how it might be saved. He says Philly's pension fund is the worst in the country--worse than those of Chicago and Detroit.

ROB DUBOW: What's happened to us is pensions have gone up and up as a percent of our budget--gone from about five percent to 16 percent. So really what happens is pensions wind up squeezing out other parts of the budget and give us fewer resources to provide core resources to our residents.

MICHELLE CARUSO-CABRERA: Can I be clear about that? So 10 years ago, Philadelphia used to spend five percent of its revenues paying off pensions. Now, it's up to 16 percent, you said, at this point?

DUBOW: That's correct.

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The long-term problem for us is we have more receiving benefits than we have active employees. Of our unfunded liability, about 80 percent of it relates to a plan that no one's been able to enter since the late 1980s.