San Diego isn't the only city with a pension problem. Here's a look at what the city faces in the coming year, and how that compares to six other troubled cities.
San Diego's pension investments tumbled nearly 20 percent in 2009, raising its unfunded pension liability from $1.3 billion to $2.11 billion.
The city's pension woes made headlines in 2004 when a whistleblower exposed how officials had agreed to boost benefits even as the city put less money into the system. The city laid off 14 percent of its workforce over the next several years as it was forced to pump more money into its pension system.
In June, San Diegans voted to impose a five-year freeze on pay levels used to determine pension benefits and put new hires, except police officers, into 401(k)-style plans.
Going into 2013, Mayor Bob Filner warns that the measure has costly implications. The city’s retirement service will see a decreased rate of return for next year due to fewer people contributing to the pension fund, Filner said at a press conference last month.
While last year the city’s annual pension payment was projected to be about $231 million, the city could in fact pay up to $276 million, Filner said.
In an email statement, a spokesperson for the San Diego City Employees’ Retirement System said the rate of return is based on how the relative mix of investments perform in the public and private markets. It is independent of how big or small system's fund is.
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"As for contributions" the spokesperson said, "there will actually be more dollars flowing into the retirement system next year due to the plan being closed - an extra $27 million than would otherwise be the case had the pension plan not been closed to new hires. That’s far more than the contributions SDCERS will not receive next year from those hired after July 20, 2012, who will instead contribute to a 401(k) not managed by SDCERS."
Atlanta: The city faces an unfunded pension liability of $1.5 billion at last estimate. In 2011, the city announced changes that increased worker contributions to their retirement accounts and, for new police and firefighters, a hybrid retirement plan that merges a traditional pension with a 401(k)-style plan. The plan is intended to save more than $500 million over 30 years.
Baltimore: Mayor Stephanie Rawlings Blake called her city's $1.2 billion pension liability a "crisis" in 2010 that had the potential to bankrupt the city. She ended a decades-old practice of awarding retirees pension increases based on investment earnings, replacing them with cost-of-living increase based on the retiree's age. In September a U.S. District Court judge struck down the change. The city plans to appeal.
Chicago: The city's six pension funds are about 50 percent funded, and have a current unfunded liability of $26.8 billion. In Illinois, state law sets retirement benefits for Chicago workers and teachers. Mayor Rahm Emanuel has asked lawmakers to suspend pension increases, raise retirement rates and increase employee retirement contributions but no action has been taken.
Cincinnati: The pension fund for most city employees and retiree health care was underfunded by about $713 million at the end of 2011. The city took steps in 2011 to raise retirement ages, reduce pension increases and eliminate a burial benefit for future retirees.
Philadelphia: The city's unfunded pension liability was $4.5 billion as of July 1, 2012. The city has shifted some workers to a hybrid system with 401(k)-style portion and given others the option of joining the new plan or contributing more of their own pay to stay with their current benefits.
Providence, R.I.: Saying a $900 million pension liability was threatening to put the city in bankruptcy, Mayor Angel Taveras negotiated concessions with unions and retirees to save the city $178 million in future years. Taveras says the successful talks avoided not only insolvency but also a costly legal battle with unions and retirees.
Ed. Note: An earlier version of this article did not include SDCERS' response to Filner's press conference remarks.
