Friday, April 29, 2005 | City Attorney Mike Aguirre urged six City Council members and the mayor to refigure their personal pension accounts in a memo Thursday, noting that a benefit they purchased came as a subsidy from the city and contributes to the pension system’s $1.37 billion deficit.

A similar letter will go to the estimated 2,900 employees that purchased years of service credits at what has been determined to be a significant discount subsidized by taxpayers.

Aguirre, who estimates the benefit has cost the pension system $120 million, wants the mayor and council to serve as an example for all city employees in voluntarily forgoing or refinancing pension benefits that were not adequately funded. Although the years of service credits and a number of other benefits were legally available to employees at the time, Aguirre determined them to be illegal and void earlier this month in a non-binding opinion.

In concert with this request, Aguirre is also asking the council to raise the city’s revenue stream in order to finance those benefits that are legal but unfunded.

Retirement checks are based on a formula consisting of three figures, one of which is time worked at the city. By purchasing years of service, employees can add years to this formula that they haven’t actually worked.

Legal and financial woes stemming from San Diego City Employees’ Retirement System have left the city with a suspended credit rating, federal and local investigations and severe budget problems for years to come.

Read Voice‘s story from April 22 describing the service credit benefit and the financial interests of the city’s elected officials.

– ANDREW DONOHUE, Voice Political Writer

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