Voters in San Diego and San Jose overwhelmingly voted to pare back retirement benefits for city employees, setting the stage for a showdown over public pensions in Sacramento later this year.
A coalition of labor groups which has balked at some of the changes to retirement packages proposed by Gov. Jerry Brown, decried the vote results in a statement Tuesday.
“While we respect the decision of San Diego and San Jose voters, these measures will have perilous long-term consequences for workers, the economy and the public,” said Dave Low, chairman of Californians for Retirement Security, a union group. “These results will mean broken promises and less retirement security for working families and seniors, many of whom do not receive Social Security.”
In San Jose, current employees will have to pay more for their retirement plans -– up to 16 percent of their salaries in some cases — or agree to smaller pension payouts.
San Jose’s pension payments have nearly tripled over the last decade, jumping from $73 million in 2001 to $245 million this year. Annual payouts now account for more than a quarter of the city’s overall budget. The measure was backed by the city’s mayor, Chuck Reed.
Brown has proposed raising the retirement age for most state workers, and requiring new employees to put some of their money into a 401(k)-style plan, proposals that have met resistance from Democratic lawmakers and organized labor.
The San Diego measure will create a six-year freeze on pay used to determine pension benefits and creates a 401(k)-style retirement plan for most new city workers.
Sen. Darrell Steinberg (D-Sacramento) said he expects lawmakers to adopt a series of pension changes by the end of August, when the Legislature will adjourn for the year.
