Responding to the editorial “A smart pension proposal for City Hall” (May 16): As president of the city of San Diego Retired Employees Association, I can say that we agree that it is a good idea for Mayor Kevin Faulconer to propose setting aside funds to smooth out contributions to the pension fund from year to year, but it’s important to put this in context.
The pension system’s long-term target investment return is 7.25 percent. This is on the conservative side relative to other public employee retirement systems. Even so, the San Diego City Employees Retirement System has significantly exceeded this target over the long term, averaging 9.4 percent per year over the past 25 years.
In the past, when investment returns in a given year have been bountiful, the city has spent the savings; then in years when investment returns have been below the benchmark, the city has made cuts in programs to make up the difference.
Creating reserves to avoid the variables is wise.
One other bit of good news: The pension system’s actuary projects that the fund will be 90 percent funded by 2022 and 100 percent funded by 2028, at which point the city’s payments are likely to be significantly reduced.
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