2024
At the September Board meeting, SDCERS reported a net return of 7.2% for Fiscal Year 2024. As of June 30, 2024, the trust fund’s assets totaled approximately $11.3billion. SDCERS’ annualized rate of return over the past 10 years is 6.7%, and its return since inception is 8.6%.
SDCERS’ net return for Fiscal Year 2024 of 7.2% was higher than its assumed rate of return (6.5%), but below the policy benchmark, which posted an 8.9% return for the year. The policy benchmark is a measure of how the Total Fund would have performed if the actively managed public portions of the portfolio had been completely passively invested in index funds, and if the private portions of the portfolio achieved stated benchmark returns.
Differences in the portfolio’s composition relative to the policy benchmark, as well as managers’ selection of specific assets within specific asset classes, hurt SDCERS’ relative returns. Specifically, SDCERS did not meet its benchmark for FY 2024 primarily due to the Fund’s overweight to specific areas within Private Equity, which underperformed in a difficult fundraising and exiting environment.
While Private Equity enjoyed fantastic returns in 2021 and 2022, the asset class was challenged in 2023 and into 2024 as a result of the Fed’s interest rate hiking cycle, which created a less favorable environment for Initial Public Offerings amidst higher borrowing costs. SDCERS’ overweight to private equity hurt returns from both an allocation and selection effect, as private equity as an asset class underperformed, and also from a selection effect, as private equity holdings within SDCERS’ portfolio underperformed the private equity benchmark by 9.7% due to valuation write-downs and a larger growth equity tilt.
Performance can also be measured in comparison to returns of other public pension plans, though it is important to remember that different plans have a variety of circumstances impacting their asset allocations and, in turn, their return targets. SDCERS compares very favorably against its peers over longer time periods – posting returns in the upper second quartile of the universe over the most recent10-year period ending June 30, 2024. Over the past 20 years, SDCERS’ return is in the top quartile of similarly-sized public pension plans. SDCERS’ risk-adjusted return, which takes into account reward for risk undertaken, is in the top quartile compared to similarly-sized public pension plans over the past 5 and 10 years.
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If you are a City of San Diego retiree, you are likely used to SDCERS managing your City retiree health benefits – this includes administering City Retiree Health Open Enrollment every year and processing health-related reimbursements. Although SDCERS has assumed the role of the City’s retiree health administrator for many years, this is not actually part of SDCERS’ mandate as the City’s pension plan administrator. After much collaboration and discussion, SDCERS and the City determined that it was in the best interest of the retirees to transition City retiree health to an outside vendor that specializes in benefits administration. This change is an enhancement to the City’s retiree health program and our goal is to provide retirees with the highest level of service available in the industry.
Therefore, in 2023, the City issued a Request for Proposals for the administration of retiree health benefits processing. We are pleased to announce that the City has selected Benefit Outsourcing Solutions as our new benefits administration partner, which will be operating under the name “City of San Diego Retiree Health Service Center” (“City Retiree Health Services”). SDCERS is committed to making this transition as smooth as possible and to providing you with timely information and updates.
Important Dates and Transition DetailsNovember 1 – 30, 2024: City Retiree Health Services will begin accepting enrollment and disenrollment forms during the Annual Open Enrollment period. You will receive the calendar year 2025 Annual City Retiree Health Open Enrollment Booklet via U.S. mail in late October and an electronic version will be available online by October 31st. City Retiree Health Services will also provide information about how to enroll or disenroll online, although you may still submit paper forms if you would like. Please contact City Retiree Health Services in November if you need assistance enrolling or disenrolling in a plan. As always, if you are not making any changes to your health plan, then you do not need to take any action at this time.January 1, 2025: City Retiree Health Services will begin administering retire health plan reimbursements, including reimbursements for privately secured healthcare plans and Medicare premiums. Starting in January 2025, contact City Retiree Health Services directly for any questions on these topics.Please continue to contact SDCERS for questions regarding retiree health plan reimbursements through December 31, 2024.What Will Stay the SameAll sponsored healthcare, dental, and vision providers and plans will remain unchanged for the calendar year 2025, although the premiums may be different. Look for the Annual Open Enrollment Booklet, which will be mailed in mid-October 2024.If you choose not to make any changes during Open Enrollment, your current plans will remain in effect through 2025. No action is required on your end.Payment for sponsored dental and vision plan premiums, as well as sponsored healthcare plan dependent coverage, will continue to be deducted from your monthly SDCERS pension payment.Reimbursements for privately secured healthcare premiums and Medicare premiums will continue to be paid through your monthly SDCERS pension payment.Continue to update your contact information via your SDCERS Member Portal – any changes made through the Member Portal will be reflected in City Retiree Health Services’ files as well.
If you have an Option C trust account, continue to submit reimbursement requests through your Option C trust administrator. What Will ChangeStarting January 1, 2025, all new reimbursement requests and sponsored healthcare, dental, and vision plan enrollments and disenrollments will be processed through City Retiree Health Services.Also beginning in January 2025, eligible retirees may begin applying for Medicare Part A reimbursements, retroactive to January 1, 2024.If you are currently paying $174.70 per month for your Medicare Part B premium, additional verification is no longer required. However, if your current monthly Part B premium is different (e.g., due to IRMAA or low-income subsidy), then you must send verification documentation to City Retiree Health Services.Beginning November 1, 2024, you can visit City Retiree Health Services’ website to review your retiree healthcare benefit information. You will not be able to register your account until you have received a letter from City Retiree Health Services with additional registration information and instructions.
In the coming weeks, you will receive a letter from City Retiree Health Services outlining these changes and providing contact information. Please be sure to open any letters you receive from City Retiree Health Services, as they will contain important information about your retiree healthcare benefits and plans.
We understand that transitions such as this can be stressful and you may have questions or concerns. We want to reassure you that SDCERS is working closely with City Retiree Health Services to ensure a smooth transition of your retiree health benefits administration. To stay up to date about this transition, visit the City Retiree Health page – this page will be updated periodically as we receive updates from City Retiree Health Services.
If you wish to speak to an SDCERS representative over the phone, please be advised that SDCERS anticipates callers will experience increased hold times between October and December. Therefore, we encourage you to utilize the Contact Us page on our website or send inquiries directly to health@sdcers.org rather than calling the main line. Electronic inquiries will generally be answered within three business days. Thank you in advance for your patience!
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SDCERS will be holding its regularly scheduled September 2024 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 September 2024 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
September 12th – 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
September 13th – Board of Administration meeting at 9:00 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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SDCERS was one of 157 public pension plans that participated in the National Conference on Public Retirement Systems’ (NCPERS) 2024 study, which invited public pension systems across the continent to share information on plan design, investment allocation, investment returns, actuarial assumptions, and plan governance practices. In recognition of SDCERS’ participation, NCPERS awarded SDCERS with its Certificate of Transparency. This certificate acknowledges SDCERS’ commitment to furthering an atmosphere of openness between public pension systems and the public. As “transparency” is one of SDCERS’ six core values, we were honored to receive this award. SDCERS strives to promote and maintain an open and honest relationship with its members, plan sponsors, and the public.
NCPERS is the largest trade association for public pensions, representing approximately 500 plans, plan sponsors, and other stakeholders through the U.S. and Canada. As a 501(c)(3) non-profit organization, NCPERS is comprises a network of trustees, administrators, public officials, and investment processionals who collectively oversee approximately $4 trillion in retirement funds.
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UPDATE: Our physical offices will reopen Monday, August 26, 2024.
ATTENTION: Due to an ongoing A/C outage, SDCERS' physical downtown offices will be closed until the problem is resolved. However, SDCERS staff continues to work remotely at this time.
If you have an in-person retirement counseling appointment this week, your counselor will reach out to you with further instructions or your options for rescheduling.
Please contact the Call Center at (619) 525-3600 if you have any additional questions or concerns. The Call Center is open on regular business days from 9:00 am. - noon, and 1:00 - 4:00 p.m.
We apologize for any inconvenience this may cause and thank you in advance for your understanding! This article will be updated when our offices are able to reopen.
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At the July 12th Board meeting, SDCERS’ new Board President, Lisa Marie Harris, appointed Clifford Schireson to her previous position of Vice President, with the Board unanimously confirming his appointment. The Vice President’s duties include acting as the Board President whenever the Board President is absent or otherwise unable to fulfill their duties, and temporarily assuming the role of Board President until an election can be scheduled in the event the current Board President’s seat becomes vacant. Mr. Schireson will also continue his position as the Chair of the Investment Committee.
Please join us in welcoming our new Vice President! Mr. Schireson’s biography can be found on our Board Members page. You can also watch the July 12, 2024 Board meeting here.
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As SDCERS staff teleworks for a portion of each week, there may not always be a retiree health staff member available in the office to assist members in person. Moving forward, please submit your retiree health documentation to SDCERS via our Retiree Health mailbox at health@sdcers.org. As always, please ensure any attachments are in PDF format, or your email may be blocked by our firewalls.
If you require immediate, in person assistance, you must travel to SDCERS’ downtown offices on a Tuesday or Thursday (not including holidays) between 9:00 a.m. and 4:00 p.m. You are encouraged to call ahead to confirm availability of a retiree health staff member. SDCERS’ Call Center is open on regular business days from 9:00 a.m. – noon, and 1:00 – 4:00 p.m.
Also, if you have a retiree health reimbursement plan through your City employment, your annual reimbursement allowance may have changed for fiscal year 2025. See this chart for updated City retiree health reimbursement allowances, which vary depending on your specific health reimbursement plan. City retiree health reimbursement allowances are based on a fiscal year calendar (July 1st – June 30th each year) and the annual allowances listed in the document linked above are effective as of July 1, 2024 and will reset on June 30, 2025.
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SDCERS will be holding its regularly scheduled July 2024 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 July 2024 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
July 10th – Audit Committee meeting at 9:00 a.m. PST
July 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
July 12th – Board of Administration meeting at 9:00 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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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 reviewingthe 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.
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If you receive anything in the mail from the Social Security Administration (“SSA”) or Centers for Medicare & Medicaid Services (“CMS”), it is extremely important that you open it immediately!
A small number of SDCERS’ retirees have experienced issues related to their Medicare Part B premiums. The affected retirees were required to pay their Medicare Part B premiums directly to CMS because they either 1) do not receive a monthly Social Security benefit, or 2) do receive a monthly Social Security benefit, but the amount is not enough to cover their Medicare Part B premiums. However, these retirees failed to make timely payments for their Part B premiums to CMS, resulting in the loss of their Medicare Part B coverage, and were subsequently either disenrolled from a sponsored Medicare Supplemental plan or they were switched to a much more expensive non-Medicare plan, with the higher monthly premiums owed retroactively to the date they lost their Medicare coverage.
If you fail to pay your monthly or quarterly Medicare Part B premiums in full and on time, you may become delinquent, causing your Medicare coverage to be at risk. Note that we have received reports from retirees stating that they never received information from the SSA regarding unpaid premiums before their Medicare coverage was terminated! Medicare may not send monthly or quarterly invoices – if you are paying all or a portion of your Medicare Part B premiums directly to CMS, it is imperative that you periodically check with the SSA to confirm your premiums are paid in full and on time.
If you have concerns about your status with Medicare, you should contact Social Security online at www.SSA.gov, go in person to any Social Security Office, or contact Social Security by phone at (800) 633-4227.
If you have not yet started your Medicare application process, please contact your local SSA office or visit www.SSA.gov to find out if you are eligible and see information on how to apply.
Please evaluate your healthcare coverage options carefully! Enrolling in a Medicare insurance plan may reduce your costs. However, note that you should not enroll in Medicare Part D (Prescription Drug Coverage) if you are enrolling in a health plan that already includes prescription drug coverage, because enrolling in Part D may result in the termination of your current health insurance coverage.
Health plan experts are available at CareCounsel to assist retirees, free of charge, with any health plan questions including questions about Medicare – email staff@carecounsel.com or call (888) 227-3334 Monday – Friday, open from 6:30 a.m. to 5:00 p.m. PST. CareCounsel also provides helpful videos on their website that may answer your questions about Medicare: https://carecounsel.com/medicare.html.
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SDCERS is excited to announce Lisa Marie Harris as the SDCERS Board of Administration’s President. Lisa Marie will be serving a one-year Presidential term with the possibility to serve a second one-year term. Lisa Marie previously served two terms as the Board Vice-President with service as interim President and interim Investment Committee Chair. Former Board President, Paul Kaufmann, served with distinction during his two one-year terms and confidently passed the gavel to Lisa Marie’s capable hands upon unanimous support from the entire board. We look forward to her continued leadership in her new position.
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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At today’s 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 2024 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, 2024.
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 2.0% 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 2.0%, each retiree group’s COLA bank may be able to increase the actual COLA received by the retiree up to a maximum of 2.0%, if that retiree group’s COLA bank has accrued enough funds from previous years where the published COLA was greater than 2.0%.
According to the CPI, the change in cost of living between December 31, 2022 and December 31, 2023 was 3.4% (rounded to the nearest 1/10th of a percent). This means that everyone who is retired or participating in DROP as of June 30, 2024 will receive the maximum 2.0% COLA increase to their pension benefit, and bank the additional 1.4%. This means that those who receive the fiscal year 2025 COLA and add the additional 1.4% to their COLA banks will be able to use the amount accrued in their COLA bank in future years, such that they would still receive a 2.0% increase, even if the published COLA is less than 2.0%.
(Note: The two members in the City's 1981 plan tiers will have a 2.4% COLA for FY 2025.)
This article is not an attempt to persuade you to retire or enter DROP before July 1, 2024 – 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, it’s always worth noting when the published COLA is greater than 2.0%, as this may factor into your decision to retire or enter DROP before the beginning of the next fiscal year.
(Note: You must enter DROP on the first day 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 2025 COLA, the applicable increase will be reflected in your July 2024 pension payment.
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SDCERS will be holding its regularly scheduled May 2024 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 2024 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 9th – 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 10th – Board of Administration meeting at 9:00 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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Please remember that SDCERS staff teleworks for a portion of each week, and there may not always be a retiree health staff member available in the office to assist members in person. Moving forward, if you would like to speak with a retiree health staff member in person, you must travel to SDCERS’ downtown offices on a Tuesday or Thursday (excluding holidays) between 9:00 a.m. and 4:00 p.m.
You are encouraged to call ahead to confirm availability of a retiree health staff member, especially if you are requesting to have your documents reviewed. SDCERS’ Call Center is open on regular business days from 9:00 a.m. – noon, and 1:00 – 4:00 p.m.
You can also reach SDCERS’ retiree health staff via email, at health@sdcers.org.
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When was the last time you thought about your SDCERS beneficiary designations? Over a year ago? Five years? The day you enrolled in SDCERS? Maybe never? Beneficiary designations may seem like a chore you can put off or do once and forget about, but the truth is you should review your beneficiary designations at least once a year to make sure they reflect your current circumstances. For example, beneficiary designations probably aren’t the first thing on your mind when you get married or divorced, have a child, or lose a loved one, but these are all defining life events that may affect who you want to receive your pension benefits when you die.
Active Members (meaning those who are actively employed by the City, Port,* or Airport and contributing to SDCERS, but are not in DROP) are eligible to leave one of three types of death benefits if they die before retiring or entering DROP, and the eligibility requirements are very specific for two of the three types. Importantly, if you die without having designated your surviving spouse as your sole pre-retirement death benefit beneficiary, then your surviving spouse will not be eligible to receive the lifetime Death While Eligible or Industrial Death Benefit, even if all other eligibility requirements are satisfied. This article contains a summary of the death benefits provided to Active Members, but please review the Death Benefits Fact Sheet for more in-depth information.
*General Port employees hired or rehired on or after January 1, 2009 (and are not in the General 2024 Plan) must complete five consecutive years of Port employment after each hire or rehire date before they become Members of SDCERS and are eligible to leave a death benefit.
Read the full article for more information!
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SDCERS will be holding its regularly scheduled March 2024 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 March 2024 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 6th – Audit Committee meeting at 9:00 a.m. PST
March 7th – 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
March 8th – Board of Administration meeting at 9:00 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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When it comes to retirement or entering DROP, timing is everything. One consideration when choosing your date is the effect of retiring or entering DROP before versus on June 30th (or earlier) compared to July 1st (or later) of any given year.
The main benefit of retiring or entering DROP towards the end of a fiscal year is that you will receive the next fiscal year’s cost of living adjustment (“COLA”) much sooner than if you wait to retire or enter DROP until the beginning of the next fiscal year. Everyone who retires or enters DROP before July 1st in any given year is eligible to receive that year’s COLA on their July pension payment, which usually increases your base pension benefit by 1-2% (maximum of 2% per year). However, if you retire or enter DROP on or after July 1st, you won’t receive a COLA until the July of the following year, when the next fiscal year begins. For example, let’s say your base pension benefit is $3,000 per month. If you retire on June 30, 2024 and the COLA effective July 1, 2024 is 2%, you’ll receive an additional $60 on each month’s pension check from July 2024 through June 2025, which comes to an additional $720 for the year. That’s $720 you’d miss out on if you chose to retire on or after July 1, 2024. (Note: The fiscal year 2025 COLA, effective July 2024, will be decided at the May 10, 2024 Board meeting – you can check SDCERS’ website the following week, which will have an article on the front page announcing what the July 2024 COLA will be.)
On the flip side, it’s possible you could increase your base pension benefit by waiting until after a new fiscal year has begun to retire or enter DROP. The logic behind this conclusion lies in your pension benefit formula: Retirement Factor x Final Compensation x Service Credit. First, retiring at an older age may grant you a higher retirement factor – remember that retirement factors are prorated in quarterly increments, so if your plan tier’s factor increases between age 62 and 63, for example, it will be slightly higher if you retire at age 62 ¼ compared to age 62. Second, the longer you continue to work before you retire, the more service credit you will accrue. In general, more service credit means a higher pension benefit. Lastly, if you recently received a salary increase, working longer while receiving that higher salary can increase your final compensation. Looking at the pension benefit formula, you can see that an increased final compensation will result in a greater pension benefit.
However, the thing to remember about your final compensation is that you must receive the higher salary for at least several months in order for it to have a noticeable effect on your pension benefit amount. The “Final Compensation” used in your pension benefit calculation is your highest pensionable salary averaged over either one or three years, depending on your plan tier. Therefore, if you only began receiving your increased salary in the beginning of the calendar year, you may want to keep working for at least several months into the new fiscal year in order to see a significant difference in your benefit amount. In order for your higher salary to be used in full when calculating your benefit, you’d have to continue working for one or three years from the date of your salary increase, again depending on your plan tier.
One more possible benefit of retiring or entering DROP after the start of a new fiscal year has to do with your cost of living (“COL”) annuity and interest applied to member contributions.* Your member contributions receive annual interest, currently at a rate of 6.5%, applied every June 30th. However, your contribution account do not receive that year’s interest if you are retired or participating in DROP before July 1st. Depending on your specific circumstances and the COLA for that year, waiting to retire or enter DROP until after the interest has been applied to your contributions may increase your COL annuity to such an extent that the higher COL annuity, combined with any other applicable benefits of waiting as discussed above, could be more financially beneficial to you than the COLA would be. If this is true in your case, it could make more sense to retire or enter DROP on or after July 1st. (Note: The same logic applies to your Surviving Spouse Annuity, if you select the Maximum Benefit (Single) retirement benefit option – see the Retirement Benefit Options Fact Sheet for more information.)
*Police officers hired on or after August 1, 2012 and Port General 2024 Membersdo not receive the COL annuity.
To be clear, the financial pros and cons of retiring or entering DROP before vs. after the start of a new fiscal year depend on multiple factors and your individual circumstances. There is no one size fits all regarding retirement/DROP entry date – it is a very personal decision and should be made after careful consideration of all relevant factors. This article is intended to inform you of some possible benefits of retiring before or after July 1st of a given year. Also, if you are considering entering DROP, please be reminded that your DROP entry date must be on the first day of a pay period – the last day to enter DROP before the beginning of Fiscal Year 2025 will be June 22, 2024 for City members and June 28, 2024 for Port and Airport members. Please submit your service retirement or DROP entry application via your Member Portal account soon if you are thinking about retiring or entering DROP before July 1st, so you can schedule a counseling appointment in May or early June – don’t procrastinate!
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All IRS Form 1099-R’s for tax year 2023 were mailed on January 16th. This means all SDCERS retirees and beneficiaries who received a payment from SDCERS in calendar year 2023 should be receiving their 2023 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 “2023 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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Friday, SDCERS said a bittersweet goodbye to our Deputy Chief Executive Officer, Marcelle Voorhies Rossman, who retired after attending her last SDCERS Board meeting as part of our staff. Marcelle gave more than 23 years of her career to the City of San Diego, and about 10 of those years were spent on SDCERS’ team. After many years leading our Benefits Administration Division, Marcelle spent the last six years as our Deputy CEO, overseeing not only Benefits Administration, but also Member Services, Finance, Retiree Health, Disability Retirement, and Death Benefits. Her knowledge of actuarial science and her expertise when it comes to organizing and analyzing spreadsheets is unparalleled. In recent years, Marcelle took the lead working with the City to facilitate the reversal of Proposition B, a huge undertaking that required near-constant attention and coordination across multiple City departments.
While Marcelle’s upbeat attitude, motivational leadership style, and institutional knowledge will be sorely missed, we know she has trained her team well and prepared SDCERS staff to fill in the hole she leaves behind. Please join us as, with mixed emotions, we congratulate our esteemed Deputy CEO on her well-earned retirement.
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SDCERS will be holding its regularly scheduled January 2024 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 January 2024 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
January 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
January 12th – Board of Administration meeting at 9:00 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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