2023
Most City General Members are anticipating significant salary increases, staggered over the next couple of years. You can read about the negotiated increases in the MEA’s article, here. In light of this, we thought it would be helpful to provide a quick review of how “final compensation” is calculated and used in your pension benefit formula.
If you are a City General Member initially hired before July 1, 2009, then your final compensation is your highest one-year pensionable salary, approximately equal to your highest 26 consecutive pay periods prior to your retirement (or DROP entry) date.
If you are a City General Member initially hired on or after July 1, 2009, then your final compensation will be calculated as your highest pensionable salary averaged over three years.
The raises negotiated between the City and relevant labor unions will amount to a compounded total of a 22.8% increase as of July 1, 2025. For the sake of simplicity, let’s assume these negotiated increases are the only changes to your salary between now and your retirement (or DROP entry) date. In order for the full 22.8% increase to be used as your final compensation:City General Members hired before July 1, 2009 must retire or enter DROP on or after July 2, 2026.City General Members hired on or after July 1, 2009 must retire on or after July 2, 2028.To generate a benefit estimate through your Member Portal account that takes into account your future increased salary as discussed in this article, you must first choose a retirement date on or after the date stated above (whichever applies to you based on your hire date), and then override your final compensation on the right side of the calculator accordingly. The easiest way to do that prior to the first increase on July 1, 2023 is to simply increase the “Final Average Salary” that automatically populates on the left side of the calculator by 22.8% and then input that higher number on the right side.
Please see our Benefit Estimate Calculator Fact Sheet for guidance regarding generating estimates and contact our Call Center if you need additional help. Our Call Center can be reached at (619) 525-3600 on regular business days from 9:00 a.m. to noon, and 1:00 to 4:00 p.m.
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At its May 12, 2023 meeting, SDCERS’ Board of Administration approved the Cost of Living Adjustment (“COLA”) that will be applied to eligible SDCERS retirees’ (including active DROP participants) monthly pension benefit amount beginning with their July 2023 payment. Your pension benefit will receive a COLA for Fiscal Year 2024 if your retirement or DROP entry date is on or before June 30, 2023.
Per San Diego Municipal Code section 24.1505 and section 1301 of the Port and Airport Plans, the COLA is calculated every year based on the change in the cost of living between the two previous Decembers, as published by the Bureau of Labor Statistics Consumer Price Index (“CPI”), United States – All items. However, the maximum allowable increase in any given year is 2.0%.
In years where the COLA is greater than the maximum 2.0% (such as this year), the amount over 2% is added to what is called a “COLA bank.” A retiree’s COLA bank accumulates based on their fiscal year of retirement (or DROP entry), and each annual retiree group has its own COLA bank. In years that the CPI’s published COLA is less than 2%, each retiree group’s COLA bank may be able to increase the actual COLA received by the retiree up to a maximum of 2%, if that retiree group’s COLA bank has accrued enough funds from previous years where the published COLA was greater than 2%.
According to the CPI, the change in cost of living between December 31, 2021 and December 31, 2022 was 6.5% (rounded to the nearest 1/10th of a percent). This means that everyone who is retired or participating in DROP as of June 30, 2023 will receive the maximum 2% COLA increase to their pension benefit, and bank the additional 4.5%.
This means that those who receive the fiscal year 2024 COLA and add the additional 4.5% to their COLA banks are guaranteed to receive a 2% COLA in fiscal years 2025 and 2026, at the very least (assuming we do not experience a negative COLA in either year). Let’s look at a theoretical scenario to really see the significance – but please remember that we have absolutely no way of predicting what the CPI’s published COLA will be in future years, and this is therefore very much a hypothetical example:
If Sam Diego retires or enters DROP in June of 2023 and his initial monthly pension benefit is $5,000:
You can see how the 4.5% addition to Sam’s COLA bank right off the bat can help ensure his benefit receives the maximum 2% increase in future years, when the published COLA is less than 2%. In the example above, we assumed that the published COLA applicable to fiscal years 2025-2030 was always between 1.3% and 2.0%. Note that if the published COLA is less in any given years, more would be subtracted from Sam’s COLA bank for those years. Conversely, if the published COLA is greater than 2.0% in any of the given years, then the amount above 2.0% would be once again added to his bank.
This article is not an attempt to persuade you to retire or enter DROP before July 1, 2023 – there are certainly other factors to consider, such as your age, upcoming salary increases, etc. (please review this article discussing factors to consider before deciding when to retire, or this article discussing considerations when deciding upon a DROP entry date). However, as this is the second highest published COLA we’ve seen since 1982, and it is very rare for a retiree to add such a large amount to their COLA bank in a single year, it’s worth noting and may factor into your decision to retire or enter DROP before July 1, 2023. (Note: You must enter DROP at the beginning of a pay period – please consult your payroll specialist to confirm your pay period start dates in June.)
If you are eligible to receive a fiscal year 2024 COLA, the applicable increase will be reflected in your July 2023 pension payment.
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At today's meeting, SDCERS’ Board of Administration unanimously approved Board President Paul Kaufmann's recommendation for Lisa Marie Harris to continue her position as Board Vice President for her second consecutive term.
Congratulations to our Board Vice President! You can see all of the SDCERS Board Members’ biographies, including Lisa Marie's, on this page.
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SDCERS will be holding its regularly scheduled May 2023 Board and Committee meetings in our usual Board Meeting Room on the 3rd floor of our downtown office building – located at 401 West A Street, Suite 300.
Please note that SDCERS Board and Committee meetings are not held remotely (except as specified below) – Board and Committee members, as well as some SDCERS staff, will be on-site and the public is welcome to attend in person as well. You can find the agendas for the May 2023 meetings here.
However, as always, you can watch the Business & Governance Committee and/or Board of Administration meeting live by going to the agendas page (linked above) at the start time of the meeting and clicking the “Live Media” button next to the corresponding meeting, which will display once the meeting begins.
Meeting Dates
May 11th – Disability Committee meeting at 9:00 a.m. PST
Business & Governance Committee meeting at 9:15 a.m. PST
Investment Committee meeting at 12:30 p.m. PST
May 12th – Board of Administration meeting at 8:30 a.m. PST
You may request to participate in public comment by attending the relevant meeting in person and providing a completed Request to Speak form to the Board Assistant before the meeting begins.
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At the March 10th meeting, SDCERS’ Board of Administration approved the June 30, 2022 actuarial valuations for its three plan sponsors. These valuations determine each plan sponsor’s Fiscal Year 2024 Actuarially Determined Contribution (“ADC”), which are expected to be paid on July 1, 2023.
The City’s ADC for Fiscal Year 2024, is $448.1 million. The valuation is a snapshot in time on June 30, 2022; the City’s active employees affected by Proposition B who retroactively joined the system on July 9, 2022 were not included in the valuation results. However, the SDCERS Board of Administration voted to include the City’s FY24 Normal Costs and the first year of the 20-year amortization of the liability shortfall for these same 3,200 members in the ADC due July 1, 2023.
The Port’s Fiscal Year 2024 ADC is $19.2 million, and the Airport’s is $4.96 million.
You can review all three June 30, 2022 valuations, as well as past years’ actuarial valuation reports, here.
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SDCERS’ Board of Administration unanimously voted for Paul Kaufmann to continue his position as Board President for his second consecutive one-year term. Paul’s second term will begin with the May 2023 meeting, at which time he will present his choice for Vice President.
Congratulations to our re-elected Board President! You can see all of the SDCERS Board Members’ biographies, including Paul’s, on this page.
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On February 28th, voting concluded in the election for SDCERS' Retiree Member seat. All retired Members (City, Port, and Airport) were eligible to vote in this election. Thank you to all who participated in these elections, and especially to both candidates for volunteering their time.
The candidate who received the majority of votes for the Retiree Board Member seat was B.Chris Brewster. The full Board of Administration recertified the election results at today’s meeting. Chris will attend his first Board meeting as a member of the Board on May 12, 2023. Elected members serve a four-year term before a new election must be held, which means Chris’ term will end March 31, 2027.
Congratulations to our newest elected Board Member and thank you in advance for your voluntary service on SDCERS’ Board of Administration!
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SDCERS will be holding its regularly scheduled March 2023 Board and Committee meetings in our usual Board Meeting Room on the 3rd floor of our downtown office building – located at 401 West A Street, Suite 300.
Please note that SDCERS Board and Committee meetings are not held remotely – Board and Committee members, as well as some SDCERS staff, will be on-site and the public is welcome to attend in person as well. You can find the agendas for the March 2023 meetings here.
However, as always, you can watch the Business & Governance Committee and/or Board of Administration meeting live by going to the agendas page (linked above) at the start time of the meeting and clicking the “Live Media” button next to the corresponding meeting, which will display once the meeting begins.
Meeting Dates
March 8th – Audit Committee meeting at 9:00 a.m. PST
March 9th – Disability Committee meeting at 9:00 a.m. PST
Business & Governance Committee at 9:15 a.m. PST
Investment Committee meeting at 12:30 p.m. PST
March 10th – Board of Administration meeting at 8:30 a.m. PST
You may request to participate in public comment by attending the relevant meeting in person and providing a completed Request to Speak form to the Board Assistant before the meeting begins.
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Voting opens today for the Retiree Board Member election – if you are an SDCERS retiree, you should receive a ballot letter in the mail. This letter contains your unique validation number that you will need in order to cast your vote, so don’t throw your letter away until you have voted!
All votes must be cast by 5:00 p.m. PST on February 28th.
The nominees in this election are Chris Brewster and John Hemmerling. Each candidate’s statement is contained in your ballot letter and also on the online voting platform. Votes may be cast by phone by calling 1-855-812-8049, or online at https://vote.escvote.com/SDCERS – specific information about the voting process is contained in your election ballot letter. Again, you will need your unique validation number contained in your ballot letter in order to cast your vote.
If you lost your letter or need help voting, please contact the Election Services Helpdesk at SDCERSHelp@electionservicescorp.com or by calling 1-866-720-4357, open on regular business days from 6:00 a.m. until 2:00 p.m. PST. (Note: Email is generally the quickest way to get your questions answered.)
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Nominations for the Active Safety Police and Retiree Board Member seats concluded at 5:00 p.m. PST on January 17th. In order for a nominee to be eligible to proceed in these elections, they needed to have at least 10 signatures on their nomination petition by the deadline.
Current Active Safety Police Board Member, Lou Maggi, was the sole nominee for his seat. Since he was the sole nominee, there is no need for an election and Lou will continue his Board service through March 2027. Congratulations Lou!
However, we have two eligible nominees running for the Retiree Board Member seat: Bartlett (Chris) Brewster and John C. Hemmerling. Therefore, we will be proceeding with this election. All retirees will be mailed an election ballot on February 10, 2023 – please do not throw away your letter until after you have voted, as it contains a unique validation code that you will need to cast your vote! Voting will open on February 14th, and all votes must be submitted by 5:00 p.m. PST on February 28, 2023. Votes may be cast by phone or online – specific information about the voting process is contained in your election ballot letter and will also be posted on the front page of SDCERS’ website once voting begins.
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All IRS Form 1099-R’s for tax year 2022 were mailed on January 11th. This means all SDCERS retirees and beneficiaries who received a payment from SDCERS in calendar year 2022 should be receiving their 2022 1099-R forms via U.S. mail over the next couple of weeks. To access your 1099-R form sooner, please log in to your Member Portal account, click on “Tax Reporting” on the left, and select “2022 1099R” to download an electronic copy. You can also update your tax withholding preferences on your Member Portal by clicking on “Tax Withholding.” This guide explains how to update your tax withholding preferences.
For a detailed explanation of the pertinent information in your 1099-R, as well as answers to frequently asked questions regarding this tax form, please review our 1099-R Fact Sheet. If you have additional questions, please contact the Call Center at (619) 525-3600 or submit your questions electronically via our Contact Us web form.
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SDCERS’ IT Department is starting off the New Year with new leadership – please join us in welcoming Michelle Wegner-Maleki as our new Chief Information Officer! Michelle has actually served SDCERS since 2007, first as the IT Application Services Manager and now as Chief Information Officer (“CIO”).
As the CIO, she is responsible for managing all aspects of the SDCERS’ information technology functions, including network services, business application, communication services, business resumption, and project management services. Prior to joining SDCERS, Michelle worked for the City of San Diego since 1997, supporting the application environment across multiple City departments. Michelle is a native to San Diego and earned her Bachelor of Arts degree in Economics at San Diego State University. She also holds a certificate of Project Management Professional (PMP) from the Project Management Institute.
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As of today, SDCERS’ physical offices are again open to the public – but wait, there’s more! We are now officially located on the 8th floor of the same building, so if you visit us in person, please be sure to take the correct set of elevators that go to the 8th floor (there are multiple banks of elevators, the signs above each set specify which floors those elevators go to.) See this page for directions to our building.
Also, if you park in the building’s underground parking garage, note that you will need to take the elevators to the Lobby Level first, and then cross the lobby to the elevators that go to the 8th floor. Don’t forget to bring your parking ticket with you for validation!
Lastly, please be sure to use the following address if you mail any documents to SDCERS moving forward:
401 West A StreetSuite 800
San Diego, CA 92101
(Don’t forget that you can always send documents via fax to (619) 595-0513, or as a PDF attachment via email to sdcers@sdcers.org.)
If you have any questions or if you find yourself a little lost while trying to find us, please contact the Call Center at (619) 525-3600, open on regular business days from 9:00 a.m. – noon and 1:00 – 4:00 p.m. (PST).
Thank you and happy New Year!
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