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The Baltimore Sun had an article this weekend on how Baltimore, which is currently dealing with a massive pension debt, is looking at how San Diego has dealt with its pension mess.
Investment losses have decimated Baltimore’s pension fund and the city is facing a $110 million payment during the 2011 fiscal year for its police and fire pensions, according to the newspaper. The story quotes April Boling, an accountant who headed San Diego’s Pension Reform Committee:
“We are not out of the woods,” Boling said, noting that stock market declines mean San Diego’s pension obligations are once again threatening the city’s budget. But the sacrifices made now would be far more severe if the city hadn’t acted then, she said.
The most important step San Diego took was pouring hundreds of millions of additional dollars into the pension account — something Baltimore can ill-afford.
Other reforms included ending some benefits, creating a less-generous plan for new employees and adopting more realistic expectations for the return rate on investments. San Diego also reorganized its pension board so members no longer had incentives to hide the health of the fund, a change that some experts say is sorely needed in Baltimore.
Of course, San Diego is bracing for the impact of a large pension payment in the 2010-11 budget year, which has prompted talk about how to lessen the payments.