San Diego city officials today acknowledged that the San Diego City Employees’ Retirement System is now only 58 percent funded — down from nearly 80 percent funded in 2007.
As of Oct. 31 the pension system was $2.78 billion underfunded, with $3.78 billion in assets and $6.56 billion in liabilities, according to figures released by City Attorney Michael Aguirre. This brings the funding ratio — which is based on the estimated market value of the pension fund’s assets — to a lower point than it was during the height of the pension crisis. In 2007, the pension deficit was $1.2 billion.
If the pension fund does not recover the 20 percent loss in market value it has suffered this year, it will cost the city nearly $200 million a year by 2011 and $228.8 million by 2014 to fund the system.
It will cost the city’s day-to-day budget, which covers such expenses as public safety, libraries and parks, between $15 million and $25 million more by fiscal year 2011 than it does now, according to a five-year financial outlook released today by Mayor Jerry Sanders. Currently, the city pays $161 million — $126 million out of the general fund — to the pension fund each year.
The news came during a special City Council hearing this morning on the city’s $43 million budget deficit. The hearing is expected to go on all day.
Aguirre said this morning that the funding ratio is bad enough that city and pension system officials should consider bankruptcy reorganization.
“We are creating liabilities faster than we are creating assets,” Aguirre said.
Aguirre also said that David Wescoe, the pension system’s administrator and CEO, refused an invitation to appear before council today. And that he refused to answer any questions about the pension fund’s health that weren’t in writing.
City Council is expected to talk more about the pension system this afternoon.