Towers Perrin Quits SD Pension Work
City Manager Lamont Ewell made the announcement about Towers Perrin earlier this week, saying that the firm had notified the city with a phone call asking for a quick departure, according to the San Diego Daily Transcript.
Troy Dahlberg, consultant for the city’s audit committee, said the company’s resignation stems from concerns over a series of new assignments that would pit its work against the work of other consultants. “In Towers Perrin situation, there is a sensitivity about doing work against other professionals,” Dahlberg said, according to the newspaper. “A lot of professionals have concerns about if they begin to do work where they think it can be used against other professionals.”
Towers Perrin was instrumental in the production of the city’s “pension solution” plan aiming to help boost the funded ratio to the San Diego City Employees’ Retirement System (SDCERS). The plan suggested pumping $600 million into the retirement system over three years to pay down the city’s ballooning pension deficit.
The city’s pension system is battling an estimated $1.37 billion shortfall, and, as a result of a proposition passed by the voters in the November 2004 election, that debt will have to be paid off in 15 years. If no additional funding is paid to the retirement system, Towers Perrin’s report said, the required payment would jump to $323 million in fiscal year 2014, compared to $167 million in fiscal year 2006.
Towers Perrin will continue work with the city’s risk management department, according to the report.
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