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City Reaches Deal With Labor On 401(k) Plan

— There’s been a thaw at San Diego City Hall. The city’s reached a tentative interim agreement with its labor unions on a 401(k) plan. That means a hiring freeze will soon be lifted.

Since the end of July, San Diego has had a hiring freeze in place because it didn’t yet have a 401(k) plan. Voter-Approved Proposition B called for replacing pensions with 401(k)s for most new employees.

San Diego Chief Operating Officer Jay Goldstone said the city has now reached a tentative interim agreement on a 401(k) with its labor unions. The plan will be in place until the city and labor can agree on a permanent plan. Negotiations on that front will begin immediately.

Goldstone said the interim plan is a good development.

“It’s a very, very positive first step,” he said. “It at least acknowledges, in my mind, there’s an acknowledgment by the labor organizations that they need to at least seriously have discussions with the city; that the voters spoke.”

The interim plan would provide new employees a 9.25 percent match beginning in late October or November. Safety employees would receive an 11 percent match. The city council has to ratify the agreement before the hiring freeze can be lifted. Goldstone said that will likely happen at the end of September.

Goldstone said there haven’t yet been discussions about whether San Diego should rejoin Social Security. New employees will vote on the issue and Goldstone said there needs to be new people in the system before the vote can happen.

Councilman Carl DeMaio, who is running for mayor and was one of the main supporters of Proposition B, issued a statement, which reads in part:

Because Proposition B provides significant leverage for taxpayers to get pension reform, I am confident that future negotiations between the City and the unions will result in full and complete implementation of Proposition B as decided by the voters without resorting to unnecessary and wasteful litigation.

There is still ongoing litigation over Proposition B.

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