Pension Contribution Rate Change
Last week the San Diego City Employees’ Retirement System (SDCERS) Board of Directors voted to change the way it calculates pension contributions from employees. The change is based on a new opinion from SDCERS’ fiduciary counsel related to how disability benefit costs should be shared by employees and the City. Both SDCERS and the City intend to have the new contribution rates take effect next month.
The result for MEA-represented employees will be a change in the employee contribution rate for your pension. Some employees will see their contribution rate go down slightly (meaning their take-home pay will go up), while others will see their contribution rate go up slightly (meaning their take-home pay will go down).
Where each employee falls on this spectrum is determined by the age at which you entered the retirement system (see attached chart). For most employees, your “entry age” is the same as your City hire date, but for some there are other factors that determine your entry age into the retirement system.
The SDCERS Board and media outlets are reporting that as a result of this decision, City employees will be paying “$3.3 million more into the pension system than they did last year.” This is true, but that increase is largely felt by safety employees represented by POA, Firefighters Local 145, and Teamsters as a result of the use of disability benefits by safety employees compared to general employees. As a whole, the 4,000 MEA represented employees hired before July 1, 2009 will actually see a slight decrease in contribution rates.
MEA represented employees hired after July 1, 2009 are calculated differently by SDCERS and are not represented on the attached chart. Most employees in this hire group will see a 0% – 1.5% increase in contribution rates.
Employees hired before July 1, 2009 can use the attached chart provided by SDCERS to find out how this will affect you, based on your entry age into the retirement system. If you have any questions or need more information on this change, please contact your MEA representative at 619-264-6632.