Latest report on pension, health care spending predicts nightmare scenario 

The latest report on pension and health care funding for city workers paints a bleak picture.

“These systems are on an unsustainable path that will result in their exhaustion, resulting in the city’s inability to meet its pension and health care obligations to public employees, as well as threatening city services and employment,” read a press release Tuesday on the report.

This study was prepared by former Assemblyman Joe Nation for a potential ballot initiative pushed by Public Defender Jeff Adachi and venture capitalist Michael Moritz. It follows other reports, including one from a group of actuaries commissioned by Warren Hellman and another from the Controller’s Office.

A few highlights of the latest include:

  • San Francisco currently owes $4.476 billion in pensions to its employees. Despite spending hundreds of millions of dollars each year, The City still lacks the money to cover over 25 percent of that liability. To put that in perspective — every family in San Francisco would have to pay over $35,000 per household in order to cover The City’s unfunded liability.
  • Without significant changes in policy, there is a zero probability that San Francisco will be able to meet its health care obligations to retirees. 
  • Current spending on pension and health care is $514 million, but within five years that is expected to balloon to $1 billion annually.

This report was widely panned by labor interests. Nation’s analysis is suspect when compared with the San Francisco Retirement Board’s numbers, according to Tom O’Connor, president of the firefighters union.

“For Joe Nation and Jeff Adachi to come out with these numbers is absurd,” O’Connor said. “They’re changing the rate of return and acting like they’re experts in the field when they’re not.”

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Brent Begin

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