The city of San Diego’s retirement board decided today to leave the prices employees pay for service credits unchanged despite a recent study showing the controversial benefit amounted to $146 million of the city’s $1 billion shortfall.

In a statement, San Diego City Employees’ Retirement System board president Tom Hebrank said that it was more prudent legally to allow the pension trust fund to make up the deficit over time than to try to bill the employees and pensioners for the difference in the price they paid and the benefit’s actual cost. SDCERS earns money through contributions from the city government, the employees and profits it earns through the trust’s investments.

Under the “purchase of service credits” program, an employee could pay 15 percent of their annual salary in order to receive a year’s worth of credit. If, for example, that worker retired after working for 20 years, the employee who purchased one year would get credit for 21 years for the purposes of figuring his or her retirement pay. The program allowed workers to purchase up to five years of service credits, thereby boosting one of the three figures used to calculate their pension checks.

City Attorney Mike Aguirre has tried to rescind the program through both litigation and legislation. He claims employees who purchased service credits should only receive a benefit that’s equal with what they paid in. Aguirre has not won significant support from the council on the issue.

EVAN McLAUGHLIN

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