City facing pension shortfall? Check to see if there were enough contributions

Pensions shortfalls have become more prevalent as investments head south.

Matthai Kuruvila of the San Francisco Chronicle recently wrote about a pension plan that has faced a shortfall for more than 30 years: Oakland’s financial time bomb: pensions.

Lack of funding for the plan for police officers and firefighters and their widows has forced the city to take on $210 million in debt.

Matthai writes that the city spent “$250 million more on the pension than it would have if the city had simply paid into the pension – and that was just for one of its bond deals.”

Matthai says he’s been covering the pension plan for about three years and the latest bond offering has been a big issue. “This was an attempt to look at it in a more comprehensive way,” he says.

His challenge was narrowing the information to enough to fit in the paper, he says. He also had to understand the differences between this plan and one for public employees, which is more generous, he says.

Check out my previous post on how risky investments led to pension shortfalls.

To learn more about covering pensions, check out the Reynolds Center’s webinar on covering public pensions. You also can find more tips on digging into public pensions from the Society of Business Editors and Writers conference.