The pension system for most city workers has nearly $700 million in unfunded liabilities, according to an audit released Wednesday.

In contrast, the smaller system for elected officials — who contribute to their pensions — is in strong financial shape, another audit shows.

City auditor Robert L. McCarty presented the documents to the city's spending panel, the Board of Estimates, along with annual financial reports that provided details about the fiscal health of the two systems. The police and fire pension system is separate and was not covered by the reports.

The pension system for municipal employees, who do not currently contribute to their retirements, faces $681 million in unfunded liabilities, the audit says. It underscores the change in the system's funding over the last decade. Fully funded in 2003, the system has weakened each year and is now only 67 percent funded.

An actuary, Cheiron Inc., recommended the city increase its contribution by 7.5 percent to shore up the system — from $88 million for fiscal year 2013 to $95 million next fiscal year.

By contrast, the pension system for elected officials — who contribute 5 percent of their salaries — is funded to cover 109 percent of liabilities and has an excess of $1.5 million in assets, the reports show.

City Council President Bernard C. "Jack" Young, who chairs the Board of Estimates, said officials are aware of the need to take action. At the same time, he said, he's concerned about promises made to city workers.

"People come to work. They're promised a pension. They're promised certain things," Young said. "We're going to look at it and see what tweaks we can make."

Mayor Stephanie Rawlings-Blake has consistently pointed to pension payments as a major driver of the city's long-term financial woes. She has proposed requiring more city employees to contribute some of their salaries to their pensions, while moving to a 401(k)-style retirement plan for new civilian hires.

Under the administration's proposal, the city would start requiring civilian employees to contribute 5 percent of their salaries to their pensions. The city would phase in the contribution increases, starting at 1 percent in the coming fiscal year. New employees would be given 401(k)-style plans instead of traditional pensions. The changes to city pensions would save $5 million in the coming fiscal year, city officials said.

According to the city's budget, taxpayers will contribute $192 million to public employees' pensions next fiscal year. Andrew Kleine, the city's budget director, has called the growth of pension costs "relentless."

Young said it makes sense for employees to contribute to their pensions, but he's worried about low-level employees with meager wages. "Police and fire make a contribution. We make a contribution," he said, referring to elected officials. "As you know, most of the city workers are on the lower end of the payroll scale. People are hurting."

The pensions for municipal employees are in similar straits as those for police and fire department employees, who will contribute 10 percent of their salaries to their retirements this year. In 2003, 96 percent of the public safety pensions were funded, with $81 million in unfunded liabilities on the books. Now, however, the public safety pension system has $712 million in unfunded liabilities, and the percentage of fully funded pensions has dropped to 77 percent.

In 2010, Rawlings-Blake moved to overhaul the pension system for police and fire employees, delaying retirement for many and increasing their contributions to the pension system. A federal judge struck down one aspect of that overhaul last year but said the rest of the law could stand.

The mayor has also proposed a new "hybrid" retirement system for new employees of the police and fire departments.

Meanwhile, City Councilman William H. Cole IV has suggested switching the pension system for elected officials to a 401(k)-style system.

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City pension systems

Municipal employees: 67 percent funded, $681 million in unfunded liabilities.

Public safety employees: 77 percent funded, $712 million in unfunded liabilities.

Elected officials: 109 percent funded, $1.5 million in excess assets.

Source: City of Baltimore reports