SAN DIEGO -- According to a recent report released by the city's auditor's office, by 2010 San Diego's pension program will be short by almost $2.5 billion. A cost-saving plan was announced Wednesday, but some believe more solutions are needed in order to bail out the under-funded retirement system.

City Councilman Brian Maienschein and the leaders of San Diego's police and fire unions want more money to pay for what they say are "underfunded and neglected public safety agencies."

But, at least one City Council member and a tax activist said the city has to tighten its belt and first figure out how to solve its spiraling pension deficit.

According to a memo received by 10News, the city pension program will be underfunded by $1.3 billion by the end of the year. By 2010, the pension program will be short by $2.4 billion.

City Councilwoman Donna Frye said the most disturbing part is that the "huge" liability problem was "understated" in recent bond disclosures.

"The first thing to do is to make sure the information we are provided with is accurate, so that it doesn't happen again," Frye said.

Frye said too many people are getting too much money, and San Diego will not balance its books without a major overhaul of the pension and DROP programs.

"This is the way the drop program works: An employee who qualifies can enter the system and receive their regular pay for five years. Over that period, the same annual pay goes into an account in that employee's name. When the five years are up, they can withdraw that full amount," Frye said.

City auditor Ed Ryan, who retired Friday, will get $112,000 a year and a lump sum of more than $174,000 after working only 18 months in the DROP program. Assistant city manager Bruce Herring, who entered the system in December, will get $928,000 when he leaves his job in 2008. Chief librarian Anna Martinez will receive more than $124,000 a year and a one-time payment of $800,000 when she leaves in June 2008.

Tax activist Richard Rider said the situation is "terminal."

"There is no solution. We can not fund the benefits," Rider said.

Rider said the only way to fix the problem is to change the benefits for not only future employees, but current city workers as well. But police and fire union leaders said benefits for their employees are far lower than what was already stated and they will never agree to a major overhaul like the one suggested by Rider.

Ron Saathoff, the president of Firefighters Union Local 415, said, "The average retirement benefit is $26,000, which is a handful."

The pension fund is able to cover all of its costs right now, but Frye said the city will have to find a way to cover the $1 billion deficit over the next few years.

Saathof said improving market conditions are helping the long-term health of the fund. He said his workers are just now catching up to their peers in pension benefits.