That pension tab will eat nearly $1 of every $5 the city raises from real estate, wage, business, and sales taxes. That's up from $1 of every $16 a decade ago, noted city Finance Director Rob Dubow.
"Philadelphia has done more than most large cities to get its pension costs under control," said James L. McAneny, who runs the Pennsylvania Employee Retirement Commission, which tracks the state's 3,000 local pension plans, most of them underfunded.
But it's not enough.
The Philadelphia pension system isn't bankrupt, exactly. It is funded partly by employee contributions held back from each city worker's paycheck.
But with more retired workers and other beneficiaries collecting benefits than people paying into the fund, that's not nearly enough to replace payments and future obligations.
So the pension system also invests a pile of assets it has built over the decades - currently more than $4.2 billion - to add the profits to employee contributions.
The city hopes to collect 8.1 percent profit off that money each year - and has beaten that target in two of the last three years, thanks to the markets' recovery since the 2008 financial collapse.
But that's not enough, either. The city's future pension liabilities - the total it expects to have to pay current and future retired workers - is supposed to be nearly balanced by its investment assets. Instead, liabilities have grown to nearly $9.7 billion, more than double the assets.
Ten years ago, Philadelphia had about 70 cents invested in stocks, bonds, and other investments for every dollar it expects to owe to pay future pensions. This year it's less than 49 cents.
Under state law, as that gap gets wider, city taxpayers have to make up more of the difference.
Pension systems fall behind for familiar reasons. Bosses promised higher benefits, but didn't commit the money to fund them. Unions didn't insist on better funding, knowing higher pension funding likely meant lower pay and fewer jobs - and that pensions were legally guaranteed whether they were fully funded or not.
But as cities lost industries, residents, and taxes, and investment markets slipped, local governments developed a problem also faced by automakers and other shrinking employers: Old pension promises compete with today's operations for scarce dollars.
Philadelphia's pensions once made tough or low-status government jobs more attractive. But they began to appear generous as private employers cut guaranteed-pension programs and replaced them with 401(k)-type retirement savings, in which falling investment values become the problem of the worker, not the boss.
"The pension liability presents the greatest risk to the city's fiscal health," Fran Burns, executive director of the Pennsylvania Intergovernmental Cooperation Authority, which monitors Philadelphia finances, wrote in a report last fall, citing government and private data.
A study Burns cited from pension consultants Milliman Inc. found benefits in Philadelphia to be generally higher than other cities - at least for nonuniformed employees.
Milliman also found that despite recent increases for new hires, Philadelphia city workers contributed less than 2 percent of their wages to their pension system, on average. That's less than half of what is done in Phoenix or San Diego, though more than Baltimore or Houston, where workers didn't directly contribute.
A 2009 report by the Pew Charitable Trusts and the Economy League of Greater Philadelphia noted that, during the administrations of Mayors Frank L. Rizzo, Bill Green, and W. Wilson Goode in the 1970s and 80s, "the city made minimal contributions to the pension fund."
Philadelphia's pension burden was increased by its poorly timed $1.25 billion Pension Obligation Bond of 1999, when Mayor Ed Rendell's administration borrowed money to boost pension investments. The sale enriched bond lawyers and bankers, but newly invested cash vanished in the stock-market collapse of 2001.
In the mid-2000s, when John F. Street was mayor, the pension plan hobbled along with minimal city contributions, as permitted by state law at the time.
Then came the 2008 financial crash. By 2011, Philadelphia's pension system, ranked by assets compared with liabilities, came in a dismal 90th of 97 cities compared by the Center for Retirement Research at Boston College.
Philadelphia pensions, Burns concluded, "are generally more than competitive and they are not financially sustainable."
Nutter hasn't just continued to pump more cash into the pension system, as state law requires.
Nutter is trying to sell the Philadelphia Gas Works, for an estimated $496 million, and use the proceeds for pensions. But the whole sale value would fund less than a year of taxpayer contributions, leaving a $5 billion-plus gap.
(Pittsburgh's pension system, in much worse shape than Philadelphia's, tried a similar fix two years ago when it committed 30 years of future parking fees to its pensions. That tightened the asset-liability gap - but it's already spreading again.)
The city couldn't unilaterally slash pensions, even if it wanted to: The Pennsylvania constitution limits changes to state contracts. Judges have interpreted that to prevent promised public pension benefits from being cut.
Instead, for new hires, Nutter wants to switch to a hybrid retirement system. Workers would get smaller, slower-growing guaranteed pensions, plus 401(k)-style plans with $1 in city contributions for every $2 workers invest.
If the city tried to freeze its pension fund at current levels and go to an all-401(k)-type plan, the law would force the city to pay the pension deficit faster, notes McAneny. A hybrid plan lets the city continue to pay down its deficit over many years.
The Nutter administration added a voluntary 401(k)-style retirement choice for police, which Fraternal Order of Police leaders accepted with a shrug, then advised their members not to choose it. Not one officer has, choosing instead the guaranteed pension, though new hires now pay more from their paychecks, up to 6 percent, to make those pensions more sustainable.
In labor arbitration hearings, the city has also won the right to impose a hybrid pension-plus-401(k)-style plan for hundreds of new prison and court workers. Dubow says Nutter would like to see all city hires in similar programs, eventually. The city plans to do the same for its nonunion staff.
But those new plans haven't started yet because no one in City Council has introduced legislation to enact such a plan - pending yet another pension study.
Contact Joseph N. DiStefano at 215-854-5194, JoeD@phillynews.com, @PhillyJoeD