SDCERS Rejects Looser Accounting. Victory for Frye, DeMaio
The board of the San Diego City Employees' Retirement System today (Sept. 18) rejected by 10-2 a proposal that would have loosened accounting standards even more, and lowered the City's payment to the system next year by more than $30 million. Before the vote, the Sanders administration warned that the City would have to trim $30 million from the budget if the measure failed. After the vote, the Sanders clan warned that the City could lose up to 400 jobs. SDCERS and other pension funds use so-called "smoothing" techniques, such as spreading out gains or losses over four years. Through use of a so-called "corridor," such smoothing can be kept within fairly reasonable bounds. SDCERS was under pressure to widen the corridor so that the City's backbreaking payment would be reduced. Last July, when SDCERS said it would look into ledger-demain techniques, Councilmembers Donna Frye and Carl DeMaio immediately assaulted the idea, warning that phony accounting was what got the pension system $2 billion in the hole. DeMaio today congratulated SDCERS for rejecting looser accounting. He noted that it was Managers Proposal I (MP1) and Managers Proposal II (MP2) that got the City into such deep trouble. If SDCERS had loosened the reins, it would have been "Managers Proposal III," he said. David B. Wescoe, administrative head of SDCERS, denounced both Frye and DeMaio without naming them. Wescoe claimed that "any comparison of today's discussion to the 1996 or 2002...proposals [MP1 and MP2] is a mischaracterization of fact."
Said DeMaio, "If the mayor and the city council want to reduce the cost of the city's pension, they should focus on reforming the unsustainable level of benefits awarded to city employees."
More like this:
- Retirement Services Out to Lunch — July 22, 2009
- SDCERS Will Look into Looser Accounting — July 17, 2009
- Pension Pros Warn That Hocus-Pocus Could Be Used to Lower Annual Payment to System — April 15, 2009
- More Betrayal By Todd Gloria — March 11, 2009
- SEC cites San Diego's intentional underfunding of its pension plan — Dec. 20, 2007