Update : * Follow-up on the news : HUNTINGTON BEACH : City Considers Plans for Retirement Benefit

The city is continuing to study how to cover a special retirement benefit for employees.

All city retirees receive the benefit as part of their negotiated contracts, Deputy City Administrator Bob Franz said. The city pays a supplemental amount during the life of the retiree so that a spouse or other beneficiary can receive a portion of the retiree’s pension after the worker’s death.

For the current fiscal year, the city will spend about $600,000 to pay for the benefit.

An annual financial audit presented to the City Council last month showed that the city is paying the benefit out of its regular budget rather than setting aside money to cover it.

The city’s total liability, if all eligible employees were to request it at once, would add up to $13 million, officials said. Though that would never happen, Franz said, “it’s an unfunded liability, and someday there will be obligations to pay.”

Employees have been receiving the benefit since 1983, Franz said, but “the city didn’t put money away in prior years to pay those obligations in the future.”

The city will consider establishing a fund, that would be phased in to eventually have enough money to cover all current and future payments to retirees and their beneficiaries.