The city of San Diego will owe nearly $12 million less to the pension system next year than it did this year, according to a San Diego City Employees' Retirement System (SDCERS) report.
The city's Actuarially Determined Contribution (ADC) will decrease in Fiscal Year 2015 from $275.4 million to $263.6 million.
“Next year, the city of San Diego’s bill for retirement costs will be almost $12 million less than we paid this year, which is great news for our budget," San Diego Interim Mayor Todd Gloria said in a statement. "The city intends to pay our bill in full and on time, as we have for past nine years.
“The funded ratio has also improved from 68.6 percent to 70.4 percent, demonstrating we continue to strengthen the retirement system for our current and past employees.”
Employees’ contribution rates will decline due to the changes in the discount rate, the negotiated pay freeze, and the reduction in the assumed inflationary increase to future employee pay, meaning they will notice an increase in their take-home pay starting in July 2014.
According to SDCERS, rates will be reduced by an average of 0.65 percent of pay for most general members and be reduced by an average of 0.84 percent for most safety members.
The report also stated that the city’s Unfunded Actuarial Liability decreased by $41.6 million, to $2.238 billion from $2.279 billion.
The decrease is primarily due to a freeze on inflationary pay increases based on negotiated labor agreements, a reduction in the long-term inflationary pay assumption after 2018, and an investment return of 13.6 percent, which exceeded the actuarially assumed rate of return of 7.50 percent.
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Sept. 23, 2014 -- George Chamberlin speaks with San Diego Mayor Kevin Faulconer about the importance of the military on San Diego's economy at a presentation of the San Diego Military Advisory Council’s sixth annual Military Economic Impact Study.