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Amends City Charter Regarding Retirements Benefits
City of San Diego
Charter Amendment - Majority Approval Required
Pass: 154,216 / 65.8% Yes votes ...... 80,126 / 34.2% No votes
Index of all Propositions
|Information shown below: Summary | Fiscal Impact | Impartial Analysis | Arguments ||
Should the Charter be amended to: direct City negotiators to seek limits on a City employee's compensation used to calculate pension benefits; eliminate defined benefit pensions for all new City Officials and employees, except police officers, substituting a defined contribution 401 (k)-type plan; require substantially equal pension contributions from the City and employees; and eliminate, if permissible, a vote of employees or retirees to change their benefits?
Potential Salary Freeze Savings
Pension Benefit Changes
Additional ballot measure costs include: administrative and set-up costs for the new DC plan and new disability program and actuarial analyses, if required.
Note that the ballot measure is estimated to result in increased costs to the City of $54.1 million for fiscal years 2014 through 2016, largely due to the change in the UAL payment schedule. These costs will be greater and could continue over a longer period of time if salary freezes are not implemented.
The City's existing defined benefit pension plan is a retirement plan that the City and City employees contribute to throughout an employee's career. Upon retirement, an employee receives specified pension payments. The employee's annual pension benefit is presently calculated by a formula that includes the employee's highest one-year salary (or three-year average salary for general and safety employees hired in certain recent years). The proposition refers to "base compensation" as the salary used to calculate pension benefits.
From its effective date until June 30, 2018, this proposition requires the City's initial bargaining position in negotiations with labor organizations to include terms consistent with: limiting employees' base compensation used to calculate pension benefits to no more than Fiscal Year 2011 levels, and other terms as described in the proposition. These proposed terms can be overridden by a vote of six City Councilmembers.
The proposition prohibits most new employees hired on or after the effective date of the proposition from participating in the existing defined benefit pension plan. Instead, new employees, except new sworn police officers, would be offered a defined contribution plan modeled after a 401(k).
The proposition authorizes the City Council to enroll new sworn police officers in either the defined benefit pension plan or defined contribution plan. For new police officers enrolled in the defined benefit pension plan, the maximum pension payment would be capped at 80 percent at age 55 of the average of the officer's highest consecutive three years of base compensation. Pension payments would be decreased if an officer retires before age 55.
The proposition authorizes the City to make contributions for employees participating in the defined contribution plan. The City's maximum contribution for general City employees would be 9.2 percent of an employee's compensation; the maximum contribution for uniformed public safety officers would be 11 percent of their compensation.
Unless required by law or agreement, the proposition eliminates existing requirements to obtain a majority vote of employees or retirees in the retirement system for changes affecting their benefits.
The proposition eliminates the defined benefit pension plan for elected officials (Mayor, City Attorney and Councilmembers) assuming office on or after the effective date. The proposition eliminates, if allowed by law, pension benefits for City officers or employees convicted of a felony related to their employment, duties or obligations as a City officer or employee. This may be reversed if the conviction is overturned.
For those remaining in the defined benefit pension plan, the proposition would require substantially equal pension contributions by the City and employees for a normal retirement allowance, except in certain circumstances. Charter amendments are not effective until chaptered by the California Secretary of State. If approved, the City will enter "meet and confer" negotiations with labor organizations regarding this proposition's implementation. A defined contribution plan would need to be created.
News and Analysis|
UT San Diego
|Arguments For Proposition B||Arguments Against Proposition B|
|A YES vote for Proposition B, the Comprehensive Pension Reform initiative, is the longterm solution to San Diego's pension problems.
The City's pension costs are projected to increase by more than $100 million over the next 10 years if we don't take action now. Proposition B is expected to save nearly $1 billion, which means more City money for priorities like:
YES on Proposition B guarantees that government employees pay a fair share of their pension costs, and it ends the practice of City taxpayers subsidizing the employees' share of pension costs.
YES on Proposition B will require all new City employees, except police officers, to be enrolled in a 401K-style retirement plan that caps taxpayer costs. This ensures that San Diego taxpayers will no longer be on the hook for expensive, unpredictable future pension system payments.
YES on Proposition B also bans pension benefits for City employees convicted of job related felonies. This prevents convicted government workers and politicians from receiving taxpayer-funded pension benefits.
Proposition B will not prevent the City from enrolling employees in Social Security.
YES on Proposition B:
Proposition B Increases City Retirement Costs by $54 Million in the FIrst Three Years
That's money that could go to improving public safety, restoring library and recreation center hours, and fixing our crumbling roads. And there's no guarantee that the ballot measure will actually save the City any money. The City's own analysis shows that the Proposition B retirement plan for new employees is more expensive than the existing plan.
Proposition B Does Not Freeze Pay
All projected saving from Proposition B are from a pay freeze that may not occur because pay increases are allowed with a two-thirds City Council vote, which the Charter already requires for negotiated pay increases. Employees have not had a pay increase for five years. City employees have made heavy sacrifices while Councilman DeMaio provided his staff with a 20% pay raise and refused to take a 6% pay cut along with everyone else.
Retirement Benefits Have Been Substantially Reduced
In 2009, San Diego reduced pension benefits for new employees and increased employee contributions by 6 percent of their pay. Total retirement benefit changes will save the City over $1 Billion.
Unfair to Employees
City workers are excluded from Social Security and for most of them Proposition B will eliminate the pension that serves as a substitute. Proposition B will leave some first responders without either a pension or Social Security, making it harder to recruit and retain public safety professionals. Proposition B will cost the City more, but employees will get less.
No Cap on Excessive Pensions
Proposition B does nothing to address $100,00 pensions. Although city workers' average pension is $40,000, some highly paid city managers and politicians receive pensions of over $100,000.
Don't play costly, political games with the City's budget. Vote No on Proposition B.