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Tuesday, Dec. 18, 2007 | If you have not yet had the pleasure of reading the latest diatribe from Mike Aguirre; “San Diego City Attorney Report to the People of San Diego Regarding the San Diego City Employee’s Retirement System” dated Dec. 14, it is a must read. I was appalled by the lies, misleading and gross inaccuracies contained in this so called “Report.” Mr. Aguirre is fixated on the Retirement System and I can now see why. He has it in his mind the information he is putting forth is true and accurate. If I did not know anything about the system and how it works and what the benefits truly are, I too would be up in arms if all I had to go on was what Mike thinks. The only thing I agree with in this report is the first eight words of the first sentence on page one of the report; “San Diego Taxpayers have the right to know.” To finish this sentence I would have said; “the facts facing the city related to the City’s Retirement System.”
Mr. Aguirre plays a lot of games with numbers and dollar figures in his report. In discussing the “Present Value Lump Sum” benefit as he calls them, Mr. Aguirre inflames people with these numbers. There is not one benefit a city employee can receive that if taken in a lump sum (cash value) today that would exceed one million dollars. If you take the monthly retirement payment, multiply it by 12, then multiply again by the person’s life expectancy and portray this as the “PV Benefit Lump Sum” yes you could show this as the amount a person could receive. BUT, this is inaccurate. This is not an option under the City Retirement System.
Mr. Aguirre misleads again when discussing the “Present Value of Future Benefits.” His assertion is akin to those who have a mortgage for the home they live in; owing the full amount with compounded interest; expressed in today’s dollars; and lacking that money in your checking account today; you are in a crisis and headed to bankruptcy court.
Mr. Aguirre’s BIGGEST lies come when describing, “DROP Operating Above Cost.” He implies a participating employee receives their normal salary, their retirement benefit and a guaranteed 8 percent interest on their retirement fund compounded quarterly; each month. This is untrue and he knows it. A DROP participant retires from the City. The retirement is fixed at the level they have earned to this point. Their monthly retirement is placed in a separate account. The money comes from the Retirement System, NOT the City. This is money earned during their employment. The money earns “up to 8 percent.” The current system is earning well over 11 percent. The “system” is making money from these funds. The employee receives ONLY their “normal” pay as a “contract” type employee. They no longer contribute to the Retirement System, no longer earn service credits and the City no longer pays into the Retirement System for the employee. This is a savings for the City. For Mr Aguirre to say DROP is costing the City $400 million dollars is an out-and-out lie.