In a 274-page report made public on the Internet Friday afternoon Navigant Consulting of Los Angeles, the consultant also recommended that the pension fund’s actuary should generate an annual report based on its actuarial valuation. The report, which the consultant said should be made public. “…should also provide for projected assets, liabilities and contributions, based on the assumptions then being used by the Retirement System,” Navigant wrote.
Specifically, the report should also include the effects of any benefit increases scheduled to go into effect within five years.
Further, the consultant said that the board should be prohibited from setting benefit levels or conditioning contributions on those levels; the San Diego City Council is the only body that can legally perform that function, Navigant said.
Navigant said that the city may be able to amortize the system’s current shortfalls for up to 30 years under current accounting rules and that it should consult with its actuary and legal counsel to explore that option. The board should also explore whether it can develop a plan to close the shortfall as part of US Bankruptcy Court proceedings, while, at the same time, making certain that any such move would protect the fund and its members.
Navigant was hired in August to investigate the actions of current and former board members who have been accused of criminal conflicts of interest (See San Diego Pension Board Agrees To Turn Over Documents ).
Board president Peter Preovolos said in a news report, “Our determination to operate this institution in an open and transparent manner required that we have no oversight of Navigant Consulting’s work and that we hear in open session, the results of their exhaustive effort. We will be hearing these results for the first time along with the public and every other interested party.”
Four former SDCERS officials and its current lawyer were charged January 6 with wire fraud, mail fraud, and conspiracy to commit wire and mail fraud in a 20-count indictment issued by a federal grand jury (See Five Indicted in San Diego City Pension Case), and six former SDCERS trustees were bound over for trial this week for criminal conflicts of interest (See Six ex-SD pension Officials Bound Over for Trial ).
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