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City’s Focus Shifts To Retiree Health Liability

Audio

Aired 9/7/10

San Diego’s increasing pension payments get a lot of attention. But the city’s retiree health care liability may be more of a problem. The city council will get a full report on the issue Tuesday from the Joint Committee on Retiree Health.

— San Diego’s increasing pension payments get a lot of attention. But the city’s retiree health care liability may be more of a problem. The city council will get a full report on the issue Tuesday from the Joint Committee on Retiree Health.

San Diego is facing a $1.3 billion unfunded retiree health care liability. That’s larger than the city’s annual general fund budget.

Rachel Laing is with the mayor’s office. She said the report offers several options for modifying the benefits.

"Any one of the options can put a huge dent in the liability," she said.

The study says completely eliminating benefits for existing city employees could reduce the liability by nearly $1 billion. But city unions say the liability should be viewed like a mortgage, not something San Diego has to pay all at once.

Labor groups also argue the benefits are vested, meaning they can’t be changed. The city attorney disagrees with that position.

The city and unions will soon begin negotiations on the issue.

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