In January 2020, the San Diego pension debt crossed the $3 billion mark for the first time; in January 2021, it reached $3.34 billion.

The San Diego pension debt will once more surpass $3 billion. Sharper than anticipated growth in coming years is predicted by new analysis.

There will be less money available for municipal officials to spend on libraries, parks, police officers, firefighters, lifeguards, and other services as a result of the increase in San Diego pension debt, which is predicted to boost the city’s yearly pension contribution by slightly over $20 million annually.

The long-term projections for annual salary increases for the pension system were increased from 3.05 percent to 3.25 percent on Friday by the San Diego pension debt board, which voted unanimously in favor of the change.

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The system’s long-term inflation-based forecast for annual retiree payout increases was also increased by the San Diego pension debt board from 1.9 percent to 2.0 percent.

These modifications, along with a few other smaller ones, will result in a $194 million rise in the San Diego pension debt. The  San Diego pension debt will now be $3.03 billion after being estimated at $2.84 billion last winter.

The San Diego pension debt initially exceeded $3 billion in January 2020, and it increased to $3.34 billion in January 2021. 

Since then, the San Diego pension debt has fallen two years in a succession, but the pension board’s vote on Friday will raise it above $3 billion once again.

The amount of the San Diego pension debt is determined by the difference between what the city will need to pay in benefits over the long term and the value of the pension system’s investments, according to Gene Kalwarski, the pension system’s actuary.

The city’s highest yearly pension payment was paid in July, just before the San Diego pension debt increased. San Diego had to make a record-breaking $415 million contribution to its pension system two years ago, but the $448 million payment was $33 million more than that amount.

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