Message from Ann Smith Regarding McGuigan v. City of San Diego
On behalf of all MEA-represented employees, I have reviewed the ten-page “Notice of Proposed Modified Judgment and Fairness Hearing” which was recently disseminated to City employees in the case of McGuigan v. City of San Diego.
I recommend that MEA-represented employees support the Proposed Modified Judgment.
The modification fulfills the objectives of the original case in that the full amount of the agreed-upon additional contributions are being made to SDCERS – with the final amount owed under the judgment being paid by June 30, 2010 (which is a year ahead of the deadline).
The need for a modification to the judgment arose because the City has arranged for Bank of America to help it make the final payment due to SDCERS under this judgment (about $39.5 million) — with the City then re-paying Bank of America at a more favorable interest rate than would otherwise be accruing on the unpaid amount owed to SDCERS.
The bottom line is that the obligations of the original judgment are fulfilled — earlier than the deadline set in the original Judgment — for the benefit of the Class Members (pension plan participants) while the City is also relieved of the obligation to make an additional lump sum payment to SDCERS (on top of its annual actuarially required contribution) when its budget is already strained. Instead, Bank of America will make the lion’s share of this additional payment to SDCERS (with some cash from the City), and the City will then re-pay Bank of America over the four-year period beginning on July 1, 2011.
Best regards to all, Ann Smith