IMPORTANT: These changes only apply to (1) all City of San Diego members and (2) Port Safety members who were hired on or after January 1, 2013.
Member contributions are the mandatory pre-tax deductions on a member’s biweekly paycheck that are deposited into the SDCERS Trust Fund, where they earn interest and ultimately fund each member’s individual pension benefit. Contributions are calculated as a percentage of the member’s pensionable salary on each paycheck. The percentage is determined according to the member’s plan tier and age of entry into SDCERS. Contribution rates are adjusted by SDCERS’ Board, as recommended by SDCERS’ actuary, based on requirements in the City of San Diego Charter and the Public Employees’ Pension Reform Act of 2013.
At its May 2024 meeting, SDCERS’ Board of Administration approved new member contribution rates, which will go into effect on July 1, 2024 for all Port Safety Members hired on or after January 1, 2013, and all City of San Diego members. You can view your current contribution rate chart by going to “Retirement Plan Summaries” and clicking on your employer and date range corresponding to your initial hire date. You can also see how your contribution rate changed by reviewing the chart corresponding to your plan tier and locating your entry age. (Note: If you log in to your Member Portal account and go to “SDCERS Account Information,” you can find your entry age there.) Most members will experience slightly increased contribution rates – this is due to changes in certain actuarial assumptions. The aggregate average across the board increase was approximately 1 percentage point.
According to the most recent annual valuation, the most significant change to the economic assumptions was an increase in the annual cost of living adjustment (“COLA”), from 1.90% to 2.00%. In addition, the price inflation and wage inflation assumptions were updated. Previously, the price inflation assumption and the wage inflation assumption were both 3.05%. Under the revised assumptions, the price inflation assumption is 3.00% and the wage inflation assumption is 3.25%, which is price inflation plus productivity. There were other minor adjustments to the demographic assumptions, including a change to the assumed mortality improvement scale to better anticipate future improvements in life expectancy. Overall, the new assumptions increase the expected cost to the system; therefore, members and their plan sponsors must contribute more while they are working in order to keep the system properly funded, given the added cost due to these new assumptions.