The latest shortfalls mark new troubling heights for each pension fund, surpassing levels that rocked the city during the pension scandal of the early 2000s.
San Diego county and city pension funds have nearly $7 billion less in the bank than they need to cover benefits already earned by current and former employees, a deficit that’s risen 90 percent in just two years, new reports show.
Assets held by the county pension fund topped $10.2 billion last fiscal year, but are more than $4 billion short of the money needed to fulfill retirement promises in the coming years. Despite county reforms in 2009 and state reforms in 2012 that lowered retirement payouts for new employees, the funding gap is growing.
Meanwhile, the pension fund for city employees topped $6.3 billion in assets – $2.7 billion below what it needs to satisfy pension obligations. Another $21.8 million is lacking in the city pension fund for airport employees, and $136.6 million is lacking for Port of San Diego employees, according to market numbers reported in actuarial valuations for the San Diego City Employees’ Retirement System.
The imbalance persists despite major reforms in the city of San Diego. Voters eliminated guaranteed pensions for all new city employees – except police officers – in 2012. This followed a previous decrease of new employee pensions. Employee salaries were also frozen for several years to keep pension liabilities from spiking. But that has ended and several employee groups expect across-the-board raises.
Pensions are calculated based on salaries, so any increase in across-the-board wages beyond what is expected by pension trustees increases the long-term liability.