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Extracted from Consolidated Report
This investigation was originally published as part of a larger consolidated report containing multiple investigations. View the consolidated PDF for the complete document.
⚠️ Translation Notice: This content has been automatically translated. The original English text is the official version. Translation may contain errors.
⚠️ Este contenido ha sido traducido automáticamente. El texto original en inglés es la versión oficial. La traducción puede contener errores.
Findings 4 findings
F1
Page 25
That there are multiple causes for the City’s $5.81 billion debt to its Retirement System, including investment losses ($1.4 billion), a court ruling on Supplemental Cost of Living Adjustments (COLAs) in the 2011 Proposition C ($1.3 billion), and changes in demographic assumptions ($1.1 billion)31. However, the principal underlying cause is the estimated $3.5 billion32 in retroactive retirement benefit increases implemented by voter-approved propositions between 1996 and 2008.
F2
Page 25
1) That the City’s Retirement System diligently protects the retirement- related interests of the City’s employees and retirees; 2) that the Retirement Board has a majority of members who are also members of the Retirement System (they receive, or will receive, pensions); 3) that when it came to retroactive retirement benefit increase propositions between 1996 and 2008, the Mayor, Board of Supervisors, Retirement Board, and Controller did not fulfill their responsibility to watch out for the interests of the City and its residents; and 4) that despite previous Retirement System-related propositions (2010 Proposition D and 2011 Proposition C) that reduced future pension liabilities, the Retirement System remains seriously underfunded, threatening the fiscal status of the City.
F3
Page 27
That the Voter Information Pamphlets for retroactive retirement benefit increase propositions between 1996 and 2008 did not provide voters with complete estimates of the propositions’ costs, who would pay those costs, how those costs were financed, and what the interest rates were.
F4
Page 27
The Controller and the Retirement System provide extensive reports about the Retirement System, but they are too complex for the average citizen, employee, or retiree to understand. The data in the Retirement System reports is not available to the Retirement System or the public in a dataset, making research and analysis more difficult.
Recommendations 5
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R1Page 25Name: Retirement System Oversight Committee
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R2Page 25Purpose a. Develop a comprehensive, long-term solution for the Retirement System’s unfunded liabilities that is fair to both employees, retirees, and taxpayers, and present it to voters in a proposition by the end of
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R3Page 26Public Meetings a. The Board of Supervisors shall provide the committee with any necessary technical assistance and shall provide administrative assistance in furtherance of its purpose and sufficient resources to publicize the conclusions of the committee. b. All committee proceedings shall be subject to the California Public Records Act (Section 6254, et seq., of the Government Code of the State of California) and the City's Sunshine Ordinance (Chapter 67 of this Code). The committee shall issue regular reports on the results of its activities. A report shall be issued at least once a year. Minutes of the proceedings of the committee and all documents received and reports issued shall be a matter of public record and be made available on the Board's website.
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R4Page 26Membership a. Two-thirds of the members will be Public members and one-third will be Representative members. b. Public members. i. Public members must be voters. ii. Public members cannot be members of the Retirement System. iii. Each Supervisor will appoint a single Public member. iv. The Mayor will appoint all other Public members. v. Public members can only be removed for cause. vi. Public members shall be experienced in life insurance, actuarial science, employee pension planning, investment portfolio management, labor negotiations, accounting, mathematics, statistics, economics, or finance. vii. Public members will receive no compensation. viii. Four-year term, staggered so that one-fourth of the Public members’ terms expire each year. THE SAN FRANCISCO RETIREMENT SYSTEM – INCREASING UNDERSTANDING & ADDING VOTER OVERSIGHT ix. No more than two consecutive terms. c. Representative members i. Mayor’s Office representative. ii. Board of Supervisors’ representative. iii. Controller’s Office representative. iv. Human Resources Department representative. v. Safety Unions’ representative. vi. Miscellaneous Unions’ representative.
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R5Page 27Committee Costs a. The Board of Supervisors will decide how best to fund the Committee. Recommendation R2.2: That , the Mayor and Board of Supervisors submit a Charter amendment proposition to the voters to add three additional public members who are not Retirement System members to the Retirement Board.