San Francisco’s unfunded pension and retiree health care liabilities have ballooned to around $6 billion, according to a report by a Stanford academic and former California assemblyman.
According to the report on San Francisco’s pension and health care costs by Joe Nation, city pension and retiree health costs will increase from $514 million in the current fiscal year to $1 billion by 2016, which will exceed current combined spending for all public safety departments.
A venture capitalist in favor of curbing the public pension costs paid Nation to prepare the report.
The report said the San Francisco Employees’ Retirement System unfunded liabilities are $1.5 billion on an actuarial basis and $4.47 billion on a market-value basis.
The city’s unfunded liabilities to the California Public Employee Retirement System hit $51 million on an actuarial basis, according to Nation. CalPERS does not report market value.
The report assumes a continued annual 7.75% rate of return from investments by the retirement systems.
San Francisco also currently reports more than $4.3 billion in unfunded retiree health care costs, which is likely to increase to $9.5 billion by 2028.
Nation said that neither of the systems are likely to meet their obligations to the retirees “even under their most optimistic investment-return scenarios.”
