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San Diego City Attorney Jan Goldsmith filed suit today against the city’s pension system in an effort to get employees to pay down some of the $2.1 billion pension deficit.
The city attorney has maintained that the city charter could force employees to help cover investment losses and other debts to the pension fund. Goldsmith announced the suit today following a unanimous vote of the City Council.
He wants the retirement board to consider how much employees should pay to make sure their contributions to the pension system are, as the city charter prescribes, “substantially equal” to the city’s. The debts include losses in the stock market that contributed to the record $231.7 million payment the city made to the retirement system this year.
The issue is esoteric and the impacts are unclear, but the lawsuit could change fundamentally how the city’s pension plan functions. If employees could be on the hook for swings in the market, it could push more of the pension burden onto them and off of taxpayers. Those particulars, though, Goldsmith said, aren’t part of his suit.
“The pension board should apply the law as it is written and allow the parties to negotiate different contribution levels if they choose to do so,” Goldsmith said in a statement.
Elaine Regan, legal counsel for the retirement system, declined to comment on the lawsuit. She said the retirement board was still studying the issue.
— LIAM DILLON