Retiree Health Negotiations May Hinge On One Question
Wednesday, September 8, 2010
Negotiations between San Diego and its unions over how to lower retiree health costs haven’t officially begun. But the two sides showed their positions Tuesday at a city council meeting and the talks could get off to a rocky start.
SAN DIEGO Negotiations between San Diego and its unions over how to lower retiree health costs haven’t officially begun. But the two sides showed their positions Tuesday at a city council meeting and the talks could get off to a rocky start.
One of the major issues separating the two sides is whether retiree health benefits are vested, meaning they can’t be changed. Unions say they are, similar to pensions. But the city argues retiree health care is an employment benefit similar to vacation or sick leave.
San Diego is facing a $1.3 billion unfunded retiree health liability. City Attorney Jan Goldsmith said the unions need to appreciate that.
“If the city’s goal is to cut this down to size and the position of our negotiating partners is that, that’s not a legitimate concern because it’s vested, then we got trouble,” he said
If the benefit is not vested that means it can be negotiated. But union attorney Ann Smith said the fact that employees don’t receive the benefit until after they retiree puts it in the same class as a pension.
“You don’t receive it while you’re working. It’s not one of your employment benefits,” she said.
Reducing the city’s retiree health liability is linked to the proposed sales tax increase on the November ballot. If voters approve a tax hike, reducing the liability is one of ten conditions that must be met before the tax can be collected.
The city and unions hope to reach an agreement by April.
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