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Is This The End Of San Diego’s Pension Fiasco?

Video unavailable. Read transcript below.

Video published September 17, 2010 | Download MP4 | View transcript

Above: San Diego City Attorney Jan Goldsmith joins us to talk about the next steps in the city pension case.

Transcript

This is a rush transcript created by a contractor for KPBS to improve accessibility for the deaf and hard-of-hearing. Please refer to the media file as the formal record of this interview. Opinions expressed by guests during interviews reflect the guest’s individual views and do not necessarily represent those of KPBS staff, members or its sponsors.

THIS WEEK THE U.S. ATTORNEY DECIDED NOT TO APPEAL A CASE THAT DROPPED CRIMINAL CHARGES AGAINST FIVE FORMER CITY PENSION BOARD MEMBERS. CITY ATTORNEY JAN GOLDSMITH JOINS ME NOW TO SEE IF THIS IS THE END OF THE STORY. THANKS FOR BEING HERE.

ALWAYS A PLEASURE.

IS THIS THE END OF THE STORY?

NO. WE WEREN'T INVOLVED IN THE CRIMINAL CHARGES AND THEY HAD TO DO WITH INTERPRETATION OF FEDERAL AND SOME STATE CRIMINAL LAWS. THIS PENSION STORY, HOWEVER, ISN'T OVER BECAUSE WE HAVEN'T ADDRESSED AND RESOLVED THE PROBLEM.

THE PROBLEM OF?

OF THE UNDERFUNDING OF THE PENSION BENEFITS.

HOW MUCH IS THAT NOW?

IT'S ABOUT 2.1 BILLION TOTAL. AND OUR ANNUAL REQUIRED CONTRIBUTION FOR THE PENSION IS AT 225 MILLION ABOUT THIS YEAR. IT IS PROJECTED TO GO UP EACH YEAR FOR THE NEXT 15 YEARS TO PEAK IN ABOUT 15 YEARS AT A LITTLE OVER $500 MILLION A YEAR.

YOU'VE SET THE CONTEXT FOR IT.

YES.

AND I'M REALLY ASKING YOU WHETHER IS THIS THE END OF THE STORY FOR THE CITY ATTORNEY'S OFFICE? ARE YOU NOT GOING TO BE INVOLVED IN ANY MORE LITIGATION REGARDING THESE FIVE PEOPLE?

WE ARE INVOLVED IN A LOT OF LITIGATION. WE STILL HAVE MATTERS THAT WERE INITIATED BY MIKE, GARY WHICH ARE STILL PENDING. WE HAVE CHALLENGED THE CONSTRUCTIONS --CONTRIBUTIONS BY THE BOARD. IN REGARD TO THESE INDIVIDUALS, WE LOOK AT INDIVIDUAL BENEFITS TO DETERMINE WHETHER THEY WERE PROPERLY ADOPTED AND GRANTED. AND WE HAVE BEEN CHALLENGING THE CALCULATION OF BENEFITS FOR SOME OF THE FORMER UNION PRESIDENTS.

YOU TALKED ABOUT RON SATOV WHO HEADED UP THE FIREFIGHTERS?

RIGHT. AND THERE WERE SOME OTHERS. THESE ARE ALL CIVIL CASES IN WHICH OUR OFFICE IS INVOLVED. WE HAVE CHALLENGED THEIR RIGHT TO USE THEIR UNION SALARY TO CALCULATE THEIR PENSION BENEFITS AS OPPOSED TO THEIR MUCH LOWER CITY SALARY AND WE HAVE BEEN WINNING THOSE CASES. FOUR OF THOSE CASES ARE BEING APPEALED AND THERE IS ONE THAT IS STILL OUT FOR A DECISION. WE'RE GOING TO BE CHALLENGING AND PROBABLY GOING TO TRIAL.

YOU HAD AN IDEA OF ASKING ALL CITY EMPLOYEES TO EITHER PAY MORE INTO THEIR PENSION FUND OR REDUCE THE AMOUNT OF THEIR PENSIONS. ARE YOU GOING TO FOLLOW UP ON THAT?

IT'S NOT REDUCING THE AMOUNT OF THEIR PENSIONS. PENSION BENEFITS ARE VESTED AS LONG AS THEY'RE PROPERLY GRANTED. LET'S BE CAREFUL ON THAT. BENEFITS ARE VESTED. SUPREME COURT HAS SAID THAT OVER AND OVER AGAIN IN CALIFORNIA. BUT WHAT'S NOT VESTED IS THE WAY YOU CONTRIBUTE TO THE PLAN. AND WE HAVE AN EXPENSIVE PLAN. OUR CHARTER SAYS THAT THE EMPLOYEES AND THE EMPLOYER ARE SUPPOSED TO CONTRIBUTE SUBSTANTIALLY EQUAL AMOUNTS UNLESS THE CITY AGREES TO PICK UP SOME OF THE EMPLOYEE'S CONTRIBUTIONS WHICH HAS BEEN DONE. BUT THE GENERAL RULE HAS NOT BEEN ENFORCED BY THE PENSION BOARD. THERE WILL BE A KEY HEARING ON THAT ISSUE ON SEPTEMBER 24.

YOU ARE GOING TO FOLLOW UP ON HAVING THEM --GO AHEAD.

WE'RE GOING TO ENFORCE THE LAW. WE HAVE A --KEY HEARING ON SEPTEMBER 24. WE'RE OPEN TO NEGOTIATIONS WITH THE UNION ON CREATING A LESS EXPENSIVE OPTION FOR EMPLOYEES. SO IF THE CONTRIBUTIONS GO TOO HIGH, NEITHER SIDE CAN AFFORD IT. MAYBE THERE'S SOMETHING THAT'S LESS EXPENSIVE, PUTS MORE MONEY IN OUR POCKETS, AND EMPLOYEE'S POCKETS AND GIVE THEM THAT CHOICE.

WE HAVE SECONDS LEFT BUT I HAVE TO ASK YOU HOW CAN WE BE SURE THAT THE CITY IS BETTER PROTECTED IN THE FUTURE FROM THIS KIND OF RISK?

COUPLE THINGS. FIRST OF ALL, THERE'S A PROVISION OF THE CHARTER NOW YOU CAN'T INCREASE PENSION BENEFITS WITHOUT A VOTE OF THE PEOPLE. THE PENSION BOARD HAS BEEN RECONSTITUTED TO BE MORE BALANCED. THE MOST IMPORTANT THING IN OUR GOVERNMENT AND I'VE SEEN IT FOR ABOUT 20 YEARS, PEOPLE NEED TO KEEP INFORMED AND MAKE THEIR VOICES HEARD. THIS IS HIGH MAINTENANCE. IT'S DEMOCRACY. BACK WHEN IT STARTED, THERE WAS NOT MUCH TALK ABOUT IT. IT WASN'T DISCUSSED. TODAY PEOPLE ARE MORE MOTIVATED. KEEP THAT UP. FULL-TIME.

OKAY 37 37. THANK YOU VERY MUCH.

THANK YOU.

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