Although the county is scheduled to fork over about $260 million on July 1, the officials have asked the county’s retirement board to let them slash the payment to about $180 million, according to the San Diego Union Tribune. The county wants to use the savings to help make up for getting less revenue from the state, which faces its own deficit of up to $35 billion. Officials said the proposed reduction would not affect benefits or pensions being paid to retirees.
The move would allow “financial flexibility,” county Chief Financial Officer Bill Kelly told the newspaper. “It’s also good business sense,” Kelly said. The San Diego County Employees Retirement Association board is scheduled to vote on the proposal May 1.
Attorney Mike Conger, who has sued the county retirement system on behalf of retirees before, argued that letting the county contribute less to the fund would set a “dangerous precedent” that could affect pensions and benefits later. At a meeting two weeks ago, Conger told retirement board members they should not take on the role of solving the county’s budget problems.
“You’re being asked to let them contribute less,” he said, according to the Union Tribune. “How does that benefit members?”
In urging retirement officials not to take a lower contribution, Conger cited the city of San Diego’s pension woes (See Extra Pension Contribution Clouds San Diego ). The city’s retirement system has been rocked by a series of problems, including a $720-million deficit fueled by years of city underfunding, losses in the markets and the practice of increasing benefits for workers without relieving the resulting financial strains on the pension fund.
The county retirement fund has $3.7 billion in assets. It has lost $625 million over the past two fiscal years because of losses in the stock market. The system is underfunded, but not to the levels of the city’s system, county officials say.