No Pension Destruction Ballot Measure in 2016

Citing a lack of money, former San Jose Mayor Chuck Reed and former San Diego Councilman Carl DiMaio announced that they have ended their efforts to qualify ballot measures for the 2016 ballot which would have eviscerated public-employee pensions.  The first proposed ballot measure would have put new hires on a 401k style retirement plan, instead of defined-benefit pension plans.  The second proposed ballot measure would have placed salary-based caps on retirement benefits for new hires.  Neither will see the ballot, at least in 2016. 

This is the latest in a string of defeats for Reed and DiMaio.  They attempted to qualify a measure for the 2014 ballot which would have drastically restructured retirement benefits for current public employees. However, Reed and DiMaio were frustrated when the ballot measure summary crafted by Attorney General Kamala Harris accurately stated that the measure sought to eliminate constitutional rights for public employees, like teachers, nurses, and peace officers.  Reed and DiMaio were unsuccessful in their efforts to challenge the summary in court, and ultimately pulled the measure.  Now their 2016 effort has suffered the same fate.

This is a significant victory for workers.  A recent study by researchers at Boston College concluded that pension plans offer significantly better returns for workers when compared with 401k plans.  This is also good news for the public.  A 2014 study concluded that the quality of public services suffer when public employers cut benefits.  Finally, please review our previous discussion of the phony nature of the “public pension crisis.”

For more information on public sector pension issues, please contact your labor law counsel.

By Jake White | February 26, 2016

Legal Developments