Digital News Report – Like other cities around the nation, the City of San Jose has a shortfall of contributions compared to pension payments.
According to the city, as of June 30, 2009 the city has an “unfunded liability” of $2 billion based on $3.4 billion in pension assets.
Besides pension problems, there is a problem with the retiree healthcare fund. There is a $1.4 billion unfunded retiree healthcare liability.
According to a recent report by the city, rising pension costs threaten the city’s ability to maintain service levels.
The cities problems will likely continue for the near future. For fiscal year 2010-2011, the deficit is expected to balloon $118.5 million. Of the total, about $52 million can be attributed to retirement costs.
The city is looking into methods of controlling costs. The first step, according to city officials, is to understand how “we” got here. The council will continue to monitor the situation.
The city may have to negotiate with current employees. There may also be a second tier for new hires. They may also join CalPEERS to help reduce the administrative costs.
By: Mark Williams