San Diego’s pension board has unanimously approved lowering the city’s pension payment nearly $31 million during the new fiscal year, from $414.9 million to $384.3 million.
Critics say San Diego shouldn’t lower its pension payment when the city still faces nearly $3 billion in pension debt. But the actuary, Gene Kalwarski, stressed that the strong investment returns shrunk the debt from $3.34 billion to $2.95 billion.Investment gains shrink the city’s pension debt and annual payment because a crucial part of the city’s long-term payoff plan is significant growth in the value of investments made by the city’s pension system.
The city’s annual payment spiked nearly $50 million last January, from $365.6 million to $414.9 million. The city’s actuary had projected the payment to climb again this year to $423.1 million, but it shrank instead to $384.3 million. The pension system’s investments have fared similarly, gaining 23.6 percent between July 2020 and June 2021.