Administration December 12, 2008

San Diego Pension Costs Down in New Year

December 12, 2008 (PLANSPONSOR.com) - The city of San Diego learned Thursday it must pay $154 million into its debt-ridden employee pension system to cover retiree benefit costs in the fiscal year that begins July 1.
Reported by

The San Diego Union Tribune reports that the bill is down slightly from the current fiscal year’s payment of $161.7 million. System officials say the decrease is due to a higher assumed rate of employee turnover and a smaller city payment to meet its interest payments on the debt, according to the news report.

The annual snapshot of the status of the pension system shows the city’s pension deficit stood at $1.3 billion as of June 30, up 9.8% from a nearly $1.2 billion deficit the prior year. However, projections for 2009 show the deficit could be as high as $2.7 billion, which will require much higher pension payments from the city starting in 2010.

Former members of the city’s pension board still face legal challenges regarding decisions that led to the underfunding of the pension system (See Prosecutors Tack on New Fraud Charges in SD Pension Case ).

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