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Dueling Pension Reform Plans Proposed By City Leaders

San Diego voters could see dueling pension reform measures on the June 2012 ballot, as the city tries to reduce its budget deficit, city officials said today.

One proposal, backed by San Diego Mayor Jerry Sanders and Councilman Kevin Faulconer, would change the existing system from a guaranteed pension to a 401(k)-type program for most new employees, except for public-safety employees, such as police or firefighters.

New public-safety employees would continue to receive guaranteed pensions. But they would be capped at 80 percent of an employee's highest average salary over three consecutive years, down from the current 90 percent.


The plan would also put a $600 million cap on the city's annual required contribution to the pension system and cut out part of the city charter that requires a majority of city employees to approve changes to retirement benefits.

The other proposal, being pushed by Councilman Carl DeMaio, would also change the guaranteed pension to a 401(k)-type plan, but for all city workers -- including public safety employees.

At a news conference today, Sanders said his plan would save the city more than $141 million over the next five years and could generate $1.6 billion in savings in 30 years.

He called it a "common sense approach," adding, "it is legally defensible and can be put into effect immediately."

Faulconer called the plan "tough, necessary and groundbreaking."


"It puts San Diego at the forefront of pension reform," he said. "It ends the pension system as we know it."

DeMaio, who was not at the news conference, said Sanders' and Faulconer's proposal is unfair because by exempting public service employees, it "fails to achieve the savings, fairness and equity we require."

He said that initially he was cooperating with the mayor on a ballot measure, but that, "unfortunately, the mayor cut off negotiations."

Sanders said public-safety employees should continue to receive guaranteed pensions because the city needs an incentive to attract the most qualified candidates.

"I don't think the public wants someone who is not qualified coming through their doors," he said.

Without a guaranteed pension system for police officers and firefighters, "the city will spend tens of millions training them, and then they'll just go to other cities," Sanders said.

DeMaio said that argument would lead to further pension abuses.

"The same argument was made in the 1990s to spike pension benefits, and they were wrong," he said. "Taxpayers insist the city's employees receive no better and no worse retirement benefits than the rest of us."

Sanders and Faulconer said they have raised $100,000 to support their ballot initiative so far, and will continue to raise more money and gather the 94,000 signatures required to put the measure on the June 2012 ballot.

DeMaio said he would announce a kickoff for gathering signatures for his measure soon.