A city retirement plan could have planned much better for city employees' retirement, a report says.
Over a period of 11 years, the city spent an annual average of $21 million more than it had available, according to the report by consulting firm Cheiron. The report will be presented to city council Monday.
Underestimated demographics contributed to the shortfall. The report cites a greater rate of retirements than expected, lower disability incidence, more safety terminations, longer lives and higher salaries.
The report also found that San Diego City Employees’ Retirement System’s investment portfolio had an average investment portfolio shortfall of $102.2 million.
Councilmembers and government officials are aware of the shortfall. Some have developed plans to combat it, including the Comprehensive Pension Reform initiative, which would end promised pensions for new city hires except for police officers – opting for a 401-(k) plan instead. The plan would also put a five-year freeze on pensionable pay.
Supporters of the initiative, such as Mayor Jerry Sanders and Councilman Kevin Faulconer, say it will save the city at least $1.2 billion through 2040.
Monday’s meeting will put retiree and public testimony on the record for the contentious issue.
Labor unions are among the opponents of the initiative, which they say will not save as much as planners estimate.