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SD City Council Votes To Contribute More To Their Own Pension Plans

Audio

Aired 10/6/10

San Diego City Council members have agreed to contribute more to their own pension plans. It’s the first condition the city has to meet before a half cent sales tax increase on the November ballot could take effect.

San Diego City Council members have agreed to contribute more to their own pension plans. It’s the first condition the city has to meet before a half-cent sales tax increase on the November ballot could take effect.

Marcia Fritz, president of California Foundation for Fiscal Responsibility,  San Diego Councilman Carl DeMaio discuss the City of San Diego's public employee pension and call for reforms to the system.
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Above: Marcia Fritz, president of California Foundation for Fiscal Responsibility, San Diego Councilman Carl DeMaio discuss the City of San Diego's public employee pension and call for reforms to the system.

The decision means all non-union San Diego city employees will give up a city subsidy that has allowed them to contribute less every month into their own pension plans.

The city subsidy for council members is particularly generous. The council voted to eliminate that subsidy, and pay almost 9 percent of their salaries into their pension funds.

Councilman Carl DeMaio derided the vote as a drop in the bucket. He pointed out the city still covers most pension contributions. He is calling for all employees to contribute an amount that is “substantially equal” to the amount the city contributes to pension funds. That is more in line with private sector pensions where employers match an employee’s contribution.

But Councilwoman Donna Frye said the vote is a step in the right direction.

“To say that cutting one’s salary almost six percent doesn’t reform anything is not logical.” Frye said, “It might not be the way my colleague would like it to be, but we are moving forward, we are working together and we are taking pay cuts.”

Councilman Kevin Faulconer joined with Frye to get the item on the agenda.

“This is a very small step,” Faulconer said, “but it is an important step to take in the right direction.”

Tony Young was the only council member to vote against the change. He pointed out city council members’ salaries ($75,000) are equivalent to mid level managers at the city, and increasing his pension contribution cuts his take home pay by more than $2,000 a year. He also said the decision will be a hardship on his office staff.

Ending the city’s pension subsidy for all non-union employees will save the city only $350,000 a year.

The city has a $2 billion unfunded pension liability and a $70 million budget hole to close next year.

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