Guess what? The city of San Diego pension board has discovered that its retired employees are living longer than the actuarial calculations to fund their retirement. What a surprise, since nearly everyone else has noticed the aging of Americans is putting a strain on retirement funds, either private or public, that are potentially underfunded.

A study by a consultant disclosed that the city’s pension fund which has been slightly more than $2 billion in arrears for many years has suddenly spiked to $2.5  billion. In an attempt to interpret the mumbo-jumbo predictions of the actuary, it appears that the city must accelerate its annual pension payments over the next 12 years then could have a swing downward in 2029.

The former chief executive of the city’s pension system, Henry Morgan, reacted to this new study with the comment that this is a slippery slope that could lead the city toward bankruptcy if there’s a sudden sharp down turn in the economy. He referred to a similar situation in past years for the cities of Vallejo and San Bernardino. The courts said taxpayers can’t get off the hook on pensions in a bankruptcy.

Last year the City Council funded a $16 million “reserve” for the pension fund, but they did not expect the money to get wiped out in one year. Perhaps if the pension board should discontinue making the “13th check” payment on some years (checks were issued in 2011 and 2013), the pension fund could reduce its growing deficit. This extra bonus is based on a perk that provides an extra month of pay if the pension fund portfolio earns more than 8% for the year. If it is less, there is no provision for retirees to make a refund.

Needless to say, the last six years of the economic down-turn has not provided the growth in the pension fund portfolio that the pension board counts on to minimize the annual actuary calculation for funding by the city. The current estimate based on the new calculations providing longer retirement periods will require about $50 million or more each year. The estimated payment for the fiscal year 2018 would climb from $268 million to $311 million, and even more in 2019.

The consistent problem in public pension funding is the current governing bodies (city council, state legislature and teachers’ unions) when strapped for balancing the current budget, they pass the pension deficit along to the next elected officials to deal with it. Hardly a California municipality or state agency has funded a pension plan even to 90% for decades.

San Diego is not the only victim of aging American retirees. San Francisco taxpayers are facing the same spike in pension funding. The California State Teachers Retirement System has received a warning that pensioners were living longer, something they should have noticed before this crisis became official. Sometimes I wonder if our elected officials and bureaucratic employees managing civic affairs ever read a newspaper. Perhaps it’s easier just to sweep the problem under the carpet.

Other events that impact future retirees are the recent recession and its effect on the real estate market, as well as the stock market, for a period of several prior years. A recent analysis by the Congressional Budget Office indicates that the median family wealth of adults ages 50 to 64 reached $259,000 in 2007, then dropped to $176,000 by 2013. This group’s wealth plunged. $143,000 or nearly 45% in just six years.

In comparison, median family wealth of people age 65+ was $244,000 in 2007 falling to $225,000 three years later. As of 2013 this group’s family wealth stood at $211,000 about a 14% decline over six years.

Columnist Robert Samuelson in The Washington Post reported that an aging America reduces economic growth, big time. This was revealed in a study by the Rand Corp. comparing the United States with fast-and-slow-growing elderly populations. That’s no surprise when you consider that the Social Security and Medicare payouts to seniors will exceed the amount collected from the working generations by mid-century.

Samuelson speculates that the growth of Medicare spending will intensify pressure to cut other programs or raise taxes or accept large budget deficits.

All of these scenarios would have an effect on economic growth. The Rand Corp. study concludes that one way advanced societies can handle aging populations is through faster economic growth which enables the younger generation to pay the elderly’s benefits without sacrificing too much of their own income.

That could be one solution for the United States since the millennial generation is the largest in U.S history. However, it is a race to the finish line because the boomer generation is living much longer than any of their ancestors.