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Pensions No Longer Top Benefit For Blue Collar City Workers

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Aired 8/29/11

City and state workers across the Southwest have historically put up with mediocre salaries because of the guaranteed pension benefits that came with the job.

— City and state workers across the Southwest have historically put up with mediocre salaries because of the guaranteed pension benefits that came with the job. Those days may be over.

Many cities now face huge deficits in their pension funds after the recession and many years of dipping into those funds for other projects. San Diego is a poster child for the pension crisis; the city faces a $2.1 billion deficit.

Tommy Salazar, 48, works for the parks and recreation department at the city of San Diego.
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Above: Tommy Salazar, 48, works for the parks and recreation department at the city of San Diego.

Tommy Salazar is a 48-year-old San Diego city park worker who has been doing the same job meticulously, day in and day out, for 19 years. Among his duties: Pick up the trash that park visitors leave behind, make sure the sprinklers work, keep the public restrooms clean and care for the trees and the grass.

He is in charge of Ski Beach, a 38-acre park by Mission Bay, popular with jet skiers. On a recent day, he stepped onto the dock and checks the nails on the edge of the wooden platform.

"I'm just making sure that none of the boards are loose," said Salazar. "I'm making sure that no nails are sticking out, so that nobody will get hurt out here.”

During the busy summer months, Salazar gets help from another worker, but typically he is out working from 6:30 a.m. until 2:30 p.m., all by himself.

“I’m a fast worker, and I have to run sometimes to get a lot of this stuff done," said Salazar. "I don’t mind it, but it does make it a little difficult to get everything done.”

Such physical labor can be hard on the body. Salazar acknowledged that he and many of his colleagues have suffered injuries and back pain from their jobs. One of the things that had always made it all worthwhile for them had been their city pension.

Salazar is responsible for maintaining Ski Beach and its 38-acres in Mission Bay Park.
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Above: Salazar is responsible for maintaining Ski Beach and its 38-acres in Mission Bay Park.

Like most city workers, Salazar doesn’t make much - a modest salary of around $36,000. He is really counting on a pension that will be equivalent to about 50 percent of his salary for the rest of his life - around $15,000 to $18,000. He has health benefits, a three-week paid vacation, and the steadiness of a full-time job.

But since 2005, the city has frozen his salary, made cuts to retirement contributions, and increased the deduction to pay for health care benefits. At the same time, the cost of living in San Diego has gone up. Next year, as part of a highly controversial pension reform plan, San Diegans may be asked to vote on whether new city employees will have a guaranteed pension or whether they would need to contribute to a riskier 401(k) plan instead.

Some critics have come out against big pensions for high-earning municipal employees. The debate has also hurt almost 2,000 blue-collar city workers like Salazar, who barely make a living wage.

“You hear them; they’ll say, you guys are getting a great pension," said Salazar. "But truthfully, I don’t think I’ll be able to retire for a long time. I used to think: 'I'll be able to retire when I’m 55 or 60. Now, it’s like, I don’t know.”

Salazar joined the pension system when he was hired almost 20 years ago, and he’s been paying into the system ever since. Somewhere around 10 percent of his pay is deposited into his retirement account; the city contributes a smaller amount.

That leaves him with little money in his pocket, and he is worried that his pension will not be enough to support him when he does retire. The $15,000 a year pension will be worth even less in the future than it is today.

After a full day of work, Salazar drops off the truck at a city facility and fills out his work sheet to give to his manager.
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Above: After a full day of work, Salazar drops off the truck at a city facility and fills out his work sheet to give to his manager.

“All these different thoughts start going through your mind," said Salazar. "What do I do now? If we don’t have our pension, we can’t even try to get Social Security, because we don’t get any Social Security. All we have is this.”

Around two in the afternoon, Salazar is close to finishing his eight-hour shift. After making one last minute check of the bathrooms and hauling some plastic bags onto his pickup truck, he headed to another city facility, five miles away from the park.

As a matter of practice, Salazar said he tries not to think too much about retirement. It’s the least of his worries these days.

“I had a vision before, and I lost my house; I ended up getting divorced," said Salazar. "I don’t know, my vision of my retirement has disappeared.”

Salazar is just one of 10,000 city blue- and white-collar workers in San Diego, and hundreds of thousands nationwide, who are witnessing guaranteed public pensions becoming a thing of the past. As they disappear, public workers are likely to end up like their private counterparts: gambling their retirement funds on the market in a 401(k)-type contribution plan.  

Comments

Avatar for user 'EastCountySD'

EastCountySD | August 29, 2011 at 11:48 a.m. ― 2 years, 11 months ago

I'm not sure Ruxandra understands what a 401k is.

A 401k lets you allocate your retirement money to suit your needs, be it in risky investments like stocks, or in safe investments like government bonds.

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Avatar for user 'onthebeach'

onthebeach | August 30, 2011 at 6:29 p.m. ― 2 years, 11 months ago

From what I have read, the pension reform will only affect new city employee hires. I personally don't think a 401k will reduce the amount a person will get for retirement. If what I am reading is correct, the purpose of the reform is to eventually not use taxes to pay for pensions, and use the taxes to hopefully get our fine City out of debt!
I may be wrong on this, and if I am please correct me. The statement in this article reads."public workers are likely to end up like their private counterparts: gambling their retirement funds on the market"...isn't that what the city pension is/was doing? In a 401k, the employee can choose the risk, but I don't think they have that option paying into their city pension.

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Avatar for user 'HarryStreet'

HarryStreet | September 4, 2011 at 3:18 p.m. ― 2 years, 11 months ago

Reducing or taking away low-paying city worker pension / jobs is going to hardly produce any results. It's the high-paying pension benefits to top officials, police department, and fire department that have spiralled out of control.

I hate to see anyone lose their retirement. I plan to retire one day myself. But to expect your retirement to rely solely on taxpayer fund is not realistic. You have people in the police and fire dept earning double pensions, out-of-control overtime. They can demand and insist all they want, but when so many Americans are out of work and it's all coming to light where our money has and will be going, naturally there will be an upheaval.

I appreciate what city workers do, but they should be realistic and plan on ways to fund their own retirement as most Americans do. It's not a question of, 'If I can't get that then no one can,' but a question of practicality. Do they really believe the taxpayer can continue to fund their pensions in the manner they currently have indefinitely?

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Avatar for user 'jhall888'

jhall888 | February 21, 2012 at 11:43 p.m. ― 2 years, 5 months ago

The problem is not this poor hard working individual drawing 15k a year upon retirement. It's higher paid state and city workers who will be drawing 6 figure retirements. They need to play for their own retirement just like anybody else and not rely on the taxpayer to fund a lavish retirement.

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