SAN DIEGO -- A final Pension Reform Committee report the mayor released Wednesday recommends 17 steps to help fix the city of San Diego's ailing retirement system.

The nine-member committee was appointed by Mayor Dick Murphy in 2003 to scrutinize the San Diego City Employees Retirement System. It now faces a $1.15 billion deficit and $545 million in unfunded retiree health care costs.

"We have arrived at a series of recommendations that deal with paying off that debt," said April Boling, who chairs the panel.

Among the recommendations, the committee called on the city to:

infuse $600 million into the plan over the next three fiscal years, with no less than $200 million paid in during fiscal year 2005.
amend the City Charter to require a 15-year amortization period beginning in fiscal year 2008.
require a five-year amortization schedule on any new benefits.
halt the funding of payments for retiree health care benefits via the retirement plan.
raise the retirement age by seven years and set the early retirement age at five years less than the normal retirement age.
change the way pension benefits are calculated.
eliminate specific programs related to deferred retirement and the purchase of years of service credits.
establish a separate trust or accounting to take into consideration the assets and liabilities of the retiree medical benefit plan.
change the composition of the Retirement Board to seven members appointed by the City Council who are not city employees, union representatives or participants in the pension system.
establish a committee to review the entire disability retirement system.
require a report from SDCERS on the issue of an employer/employee cost splitting program by the end of the year.

Investment performance, underfunding by the city, the use of plan earnings for contingent benefits, net actuarial losses and benefit improvements contributed to the poor condition of the pension system, the report said.

Boling said that at least $259 million needs to be put into the retirement system each year to keep from going backward.

The city put $130 million into the system this year.

"This recommendation is a roadmap to solving the problem," Murphy said. "The city can and will solve the unfunded liability in its pension system."

Four of the recommendations in the Pension Reform Committee report have, in part, already been advanced, Murphy said.

In July, the City Council initiated a plan to issue at least $200 million in pension obligation bonds this fiscal year.

The panel also agreed to place two ballot measures before voters on Nov. 2 that would restructure the way the $3.2 billion retirement system is managed.

The first would change the makeup of the Retirement Board. It does not decrease the number of board members or exclude all city employees and retirees from serving as recommended in the report.

Nine of the 13 trustees now on the board are active or retired city employees, which some people argue promotes a public perception of a conflict of interest.

The second ballot measure would require the retirement board to adopt amortization schedules similar to those recommended in the report.

The Pension Reform Committee's recommendations are scheduled to go before the City Council on Tuesday.