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Politics

San Diego Will Take A $40 Million Hit On Pension Costs

A summary of San Diego's pension plan gains and losses over FY 2012.
SDCERS
A summary of San Diego's pension plan gains and losses over FY 2012.

San Diego will have to fork over at least an additional $40 million to cover its pension costs next fiscal year. The San Diego City Employees Retirement System reports investment returns that fell well below projections account for a little more than $8 million of that. About $27 million is associated with the cost of implementing Proposition B, the voter-approved measure that switches most new city employees to a 401(k) retirement plan.

San Diego Will Take A $40 Million Hit On Pension Costs
The numbers are in and the city of San Diego is facing a significant jump in its pension payment next year.

Council President Todd Gloria said the news was expected and that he tried to prepare people for it.

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"As a vocal opponent of Prop B, I tried to make clear to voters that this would happen if this was approved," he said. "It was approved and we will deal with it."

Proposition B is expected to cost San Diego money for the next six years, then the costs are expected to drop. Councilman Kevin Faulconer, a co-author of the measure, said it represents the will of the voters.

“San Diego voters overwhelmingly approved Proposition B to end the broken pension system and usher in an affordable and fair government employee retirement plan,” he said in a statement. “The facts are clear. Comprehensive pension reform will save taxpayers nearly $1 billion.”

The city's required pension contribution next year is $275 million. Gloria said the size of the payment may lead to more cuts to city services.

Corrected: February 1, 2023 at 4:02 AM PST
City News Service contributed to this report.