San Diego Lawmakers Ponder Retirement Savings Options

January 11, 2007 ( - A new report about the city of San Diego's municipal pension mess examined the possibility of offering a defined contribution instead of a defined benefit plan to employees.

The San Diego Union-Tribune said the report – the second of two issued by the city analyst’s office – was greeted with questions from local lawmakers who wanted to know how it would impact the program’s $1.4 billion deficit.

The Union-Tribune news report said Councilwoman Donna Frye argued it was not possible to evaluate the options without being told of each option’s fiscal impact. “It’s very difficult to look at these and make assumptions without numbers,” Frye said, according to the newspaper. “I can’t really tell which one is better or worse.”

Frye and Council President Scott Peters also noted that it is unclear which, if any, of the alternatives might be embraced by the city’s labor groups.

The latest report also asserted that pension plans “operate effectively if they are administered properly and the managing entity diligently contributes to the plan.”

The first city analyst report explored strategies to pay off the debt, while noting that officials have moved slowly in tackling the problem. The council’s Rules Committee heard the first report in November.

The city has pumped more than $550 million into the pension system in the past three fiscal years. The mayor’s financial office estimated in the city’s five-year outlook that payments for the each of the next three years would range from $156 million to $164 million.