By James R. Riffel City News Service
By James R. Riffel
City News Service
Improved investment performance and lower pay increases for municipal workers could mean that the city of San Diego's retirement pay contribution will be smaller in the next fiscal year, leaving more money available for public safety, parks and libraries, pension system officials said Monday.
San Diego City Employees Retirement System General Manager Mark Hovey and Actuary Gene Kalwarski said the city's pension contribution for the next fiscal year will probably not come near the $255 million originally projected.
The city paid $231 million into retirement pay costs in the current fiscal year. Just how much next year's city contribution will be won't be known until January, Hovey said.
The information was revealed when they presented a report to the City Council on the actual financial experience of the pension system, compared to economic and demographic assumptions made over the years.
Study of Plan Experience,'' put together by the consulting firm Cheiron, recommended that the assumptions be revised to reflect more difficult economic times and to more closely match actual experience with employee retirement rates and longevity, among other factors.
Hovey said the retirement system board has adopted the adjusted formulas.
The new assumptions do not include a five-year freeze on pay that would be calculated in the future when current employees retire, part of a proposed pension reform ballot measure, Kalwarski said.
Kalwarski said the provision was not
a done deal,'' and no one with SDCERS asked him to include the idea.Petition signatures in support of the ballot measure are being tallied at the Registrar of Voters Office.The new set of assumptions are designed to help SDCERS overcome a record of missing the mark eight of the last 11 years in estimating the amount of retirements, salaries and longevity of retirees, with an average annual shortfall of $21 million.Cheiron also said SDCERS' investment portfolio fell short of projections in six of the last 11 years, with an average shortfall of $102.2 million. Investments came up $863.2 million short in 2009 alone, skewing the annual average.Making reasonably accurate economic assumptions is critical for pension systems, which need to project revenue and expenses decades in advance for planning purposes. If projections come up short, the city has to kick in more money to make up the difference.The experience reports are conducted every three years, Hovey said.SDCERS, with debt estimated by city officials at more than $2 billion because of previous underfunding, is made up of employees of the city of San Diego, Port of San Diego and San Diego County Regional Airport Authority.