A San Francisco civil grand jury report released today warns the unchecked growth of the city’s pension system is cause for concern.

The report on the San Francisco Employees’ Retirement System found significant increases in pensions and health benefits in the past 10 years, and spread the blame among politicians and unions, as well as voters who approved recent pension benefit measures for city employees.

“The escalation of pension costs can be attributed to many factors not the least of which being the relationship of public officials and unions who have negotiated extraordinary pension and retirement benefits today, without consideration of the unfair financial burden placed on future generations,” the report stated.

The city’s $178 million contribution to the pension fund this year is expected to nearly double next year, according to the report.

The report, which focused on the police and fire departments, investigated a practice known as “pension spiking,” where employees artificially inflate their compensation right before retiring in order to increase their pension.

The practice “may be institutionalized and ongoing” within San Francisco’s public safety departments, with about one-quarter of retirees in the last 10 years getting pay increases of at least 10 percent in their final year, the grand jury said.

More than half of the firefighters, and 60 percent of police, who have retired since 1998 now receive pension checks greater than their highest salary before retiring, the report found. As of May, almost 20 percent of retired officers earned pensions over $100,000.
“Ultimately the public will bear the cost of these pension benefits, via increases in taxes and loss of vital services,” the report said.

The grand jury recommended a city audit of the San Francisco Employees’ Retirement System, a ban on pension spiking, and the establishing of a task force to evaluate a change to a “defined-contribution” plan for all new city employees.
The full report can be viewed at http://www.sfgov.org/site/courts_page.asp?id=3680.

Please make sure your comment adheres to our comment policy. If it doesn't, it may be deleted. Repeat violations may cause us to revoke your commenting privileges. No one wants that!