Wednesday, May 05, 2010

San Diego Sues its Pension System to Shift Responsibility for Deficit from Taxpayers to the Employees

San Diego's pension plan has a $2 billion deficit. To help fill the deficit the city plans to shift responsibility for some of the gap to the employees.

In a unanimous vote, San Diego Sues Its Pension System http://www.signonsandiego.com/news/2010 ... on-system/


The city of San Diego is suing its retirement system in a dispute regarding how much financial responsibility, if any, city workers should bear for a pension deficit topping $2 billion.

If successful, the lawsuit could lead to city workers helping pay for the pension fund’s investment losses rather than the current practice of having taxpayers make up for any deficiencies. The potential taxpayer savings have been estimated at $40 million for the fiscal year that begins July 1.

The lawsuit is based on City Attorney Jan Goldsmith’s interpretation of the city charter. He says that document, essentially a city constitution, states that the city and its employees shall contribute “substantially equalâ€