Dave Druker | 10th Street
Recent headlines warning about Del Mar pension costs ballooning to more than 2 million by 2015 and comparing us to the City of San Diego are very misleading. The future is not so bleak. The City of Del Mar’s pension fund is managed by CALPERS – the State of California’s pension fund manager.
An increase in pension costs could be due to one (or more) of four factors:
An increase of staffing levels – the number of employees at the city has remained steady.
An increase in salaries – salary increases averaged about 3% per year – the average inflation rate. City staff wages have consistently been below the median salary for similar positions at other public agencies.
A change in benefits – in 2006 a benefit increase for many employees was granted. This benefit increase was offset by an increase in employee contributions. The city has consistently required that employees pay for their benefits. Note that no employee is offered retiree healthcare benefits.
A change in investment return – prior to 2002 investment returns provided funds for the employer portion of the pension contribution. Since 2003 the investment return has not covered the employer portion. In fact, the investment return has been negative in some years.
The average employer contribution to the pension between 2003 and 2009 has been 19.75%. So if the contribution in 2003 was based on the average of 19.75%, the contribution would have been $579,190, while the contribution in 2009 would have been only $720,933 which is an increase of only 19.66% (from 2003 to 2009). These costs are monitored vigilantly by the Council and City Manager to ensure that employees are contributing the maximum allowed by law.