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San Diego City Debates How To Cover Investment Losses To Pension Fund

Audio

Aired 3/9/10

San Diego city is at odds with its pension board over who is responsible for covering hundreds of million of dollars in investment losses to its pension fund.

San Diego city is at odds with its pension board over who is responsible for covering hundreds of million of dollars in investment losses to its pension fund.

The city’s annual contribution to its pension fund this year will be close to $250 million, up almost 100 million from last year. That’s because of investment losses.

Investment losses may be even steeper this year. In fact the retirement fund has already lost $800 million this year. That could mean the city ends up paying a third of its General Fund in 2011, just to cover its pension obligations.

Council members raised the question of whether the city is responsible for covering those investment losses, or whether city employees should share the burden with their pension contributions.

The city’s pension board argues the city charter says the city i.e. the taxpayers, should cover the unfunded liability. But city attorney Jan Goldsmith argued that it is not the pension board’s job to interpret the charter.

Goldsmith says there is room to negotiate bigger employee contributions with the city’s labor unions.

City council members generally support Goldsmith’s arguments, and urged the parties to try to reach an agreement.

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