If the current City retirement system is allowed to change, and the politicians then rape the retirement fund (like they did to Social Security) the citizens of San Diego will be in for massive financial problems in the form of unfunded liabilities. Yes it will take years for those problems to manifest themselves but just like Social Security, it will happen.
- As of today, not one penny of a retired employees retirement pay (their retirement check) has ever, or is currently coming from the tax payers; it is paid out of a protected trust fund that the employer (the City) and the employees paid into for as long as they were employed (in my case it was over 35 years). Yes they were paid by the taxpayers while they were employed but after they retire their retirement check is no longer paid by the taxpayers.
- The City is exempt from paying into the Social Security system for their employees because the City has its own retirement system. However, if the current retirement system is eliminated the City will then need to pay into Social Security (and everything else) just like any other employer. Therefore there will be no reduction in employee retirement expenses for the tax payers and it may even increase.
- If in the future, the currently well managed retirement fund is ever depleted, the taxpayers will then need to pay the retired employees retirement checks. It will have become an unfunded liability. That has never happened in the past because the retirement system is separate from the general fund, and untouchable to the politicians. It has also been well managed and therefore never experienced an unfunded liability.
- The 13th check, that was recently vilified by some ignorant (or lying) politicians, is a direct example of how well the retirement system is managed. The 13th check is only paid when the retirement fund investments make more money than the retirement system pays out. It does not come from the tax payers, it is paid directly out of the trust fund.
- The common misconception is that the current retirement system "shortfall" is a direct result of the increases of City employee benefits, but at best that misconception is a result of ignorance. However I personally believe it is actually fabricated lies and deception to cover up past financial deals.
- The City's retirement system problems began slightly less than ten years ago and was commonly called "the retirement system scandal." It became headline news when the City needed to pay back the monies the retirement system had allowed the City to defer. In simple terms, the retirement system, for a number of years, had given the City a no-interest loan and it then needed to be paid back.
- Many citizens believe that the San Diego public unions control the City politicians but just a quick look at the numerous pay cuts San Diego public employees have received (I know of at least six since I retired in 2004) will prove that cannot be accurate.