Local Voters Scapegoat Public Employee Pensions
On June 5, 2012, voters in San Jose and San Diego approved ballot measures to significantly cut city workers’ pensions. The measure in San Jose would force current workers to either contribute an additional 16% of their salaries to keep their pensions or accept reductions in benefits. It also reduces benefits for new hires, and allows the city to freeze cost-of-living pension increases for up to five years. In San Diego, all new hires except police officers will move to defined contribution plans. The measure also creates a six-year freeze on pay levels used to set pension benefits.
Unlike previous measures targeting city pensions, these measures cut benefits for current employees as well as future workers. Both measures were heavily supported by their cities’ mayors, one Democrat and one Republican. The measures passed with 66% of the vote in San Diego, and 70% of the vote in San Jose.
The San Jose Police Officers Association and the San Diego Municipal Employees Association have already filed lawsuits to challenge these measures, arguing that they impermissibly cut city workers’ vested benefits.
For more information on how to protect public sector pensions, please contact your Trust Fund counsel.
Author: Daniel S. Brome
