Newport Beach is considering restructuring its unfunded pension liability again in a bid to save about $45 million in interest.
Under a plan recommended Thursday by the city Finance Committee for City Council consideration, Newport would commit to a fixed payment schedule to pay off about $320 million in unfunded pension obligations within 15 years.
The commitment, similar to one the city made in 2013, does not directly affect the discretionary payments of about $9 million a year the city started making last year on top of its compulsory payments to the California Public Employees’ Retirement System. Nor does it affect pension debt racked up going forward — only the $320 million the city is currently in the hole.
“This is only dealing with the problems that exist today,” said committee member Larry Tucker.
The committee unanimously backed sending the payment plan to the council for final approval.
Under the plan, the city would pay $35 million per year for 14 years, then $22.8 million in the 15th year — a total of nearly $513 million, including $320 million in principal and $193 million in interest.