SAN DIEGO ANALYTICS BLOG
Sheffler: Pension Tweaking Stupid, Dangerous
Certain trustees on the board of administration of the San Diego City Employees’ Retirement Association took umbrage at the suggestion by City Councilman Carl DeMaio and Councilwoman Donna Frye that they refrain from studying tinkering with the actuarial funding methods.
Pension board contention
Those who aren’t already immersed in actuarial science may find reviewing the basics of retirement-plan funding worthwhile.
The cost of a retirement plan is paid for in installments over the working life of each employee. Each installment is invested and the income from those investments reduces the total cost of his pension to him and the city. This investment-income portion normally amounts to about 80 percent of the total cost of a worker’s benefits.