Briefly explain why the City of San Diego was facing a $1,700,000,000 pension fund deficit. Include in your discussion the concepts of (1) service costs, (2) contributions and benefits (3) interest on the liability (4) estimated and actual return on plan assets, (5) projected benefit obligation, and (6) amortization of prior service costs.
Provide your answer below in 400 words or less.
(Hint: the first paragraph(s) should explain briefly the type of pension plan and how it operates. The following paragraph(s) should identify at least one example(s) and explain what went wrong at the City of San Diego).
Warning: Use your own words. Material quoted verbatim in your answer, with or without citation, from other sources will result in zero points for the entire problem.