Taxpayers in most of San Diego County's cities will be paying more this year to help support its future retirees.
A majority of city retirement plans in San Diego County are currently underfunded, according to a report set to be released Tuesday by the San Diego County Taxpayers Association.
Unfunded liabilities throughout the county’s pension funds are on the rise, with 10 out of 17 cities paying more to feed the unfunded systems. Most of the cities' plans are just 60 percent funded, the report found.
While most cities are used to this kind of pension debt, the report shows the problem worsening, and points to a desperate need for reform, said the association’s Vice President Chris Cate.
“These cities are in some precarious positions,” Cate said.
The 17 cities surveyed are part of a state administered retirement system—the California Public Employees’ Retirement System (CalPERS). That system is also in debt. To help pay it off, the group is asking local cities for about $16.3 million.
The City of San Diego’s unfunded liability – though not included in this report -- is about $2.1 billion. The city’s liability provides a stark contrast to even the most starved of all systems in the county. Chula Vista’s unfunded liability, for example, is nearly $120 million this financial year. Next year, it will exceed $120 million, the report found.
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The cities that will see a drop in contributions are the ones who have already made cuts to their pension systems. Escondido is one of only two cities that won’t have to pay more in fiscal year 2013. But the city sacrificed 40 employees to salvage a no-cost pension for its remaining employees, Cate said.
Other cities are asking their employees to contribute more and more of their paycheck to their own pensions. This may become a fairly common means of reform.
Del Mar taxpayers will have to pay 15 percent more to fund their pension system this year. San Marcos is the city with the second highest rate of increase, but at a much lower rate of 3 percent.
The association claims a silver lining in their report: Residents in a handful of San Diego’s cities will contribute less to their city’s pension funds this fiscal year. Taxpayers in cities like Solana Beach, Imperial Beach and Lemon Grove will be paying less to fund future retirees.
However, paying less either means employees will have to contribute more of their own paycheck to their pension, or cities will have to cut jobs.
“It’s fantastic news to see that these cities took a hard look at where they are financially, and are implementing reforms now,” Cate said. “It’s a positive step forward.”