S.D. City Council Grapples with ‘Excess Earnings’
Tuesday, May 27, 2008
San Diego City Council continues to grapple with the pension deficit. Today the council votes on a charter change that could affect benefits awarded with so-called "excess earnings.” KPBS reporter Alison St John explains.
The trouble with paying extra benefits with "excess earnings" during good years, was that when the city hit bad years, there was no money in the kitty to pay them -- but the benefits continued.
Stan Keller is the city's Independent Monitor.
Keller: It has contributed to the deficit, because it historically put a skew on the city's level of assets available to meet benefits.
The excess earnings weren't really excesses at all but the city used them to avoid paying its own fair share into the retirement plan. That resulted in underfunding.
The city has stopped using this funding source but continues to pay the benefits.
But now City Attorney Mike Aguirre wants to phase out some of those extra benefits, affecting almost a thousand city retirees.
City Council President Scott Peters, who is running for city attorney, wants to maintain them
Alison St John, KPBS News.
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