Mayor Jerry Sanders and two members of the City Council today lauded what they called a major step in implementation of a voter-passed pension reform initiative.
The City Council on Monday unanimously approved an interim 401(k)-style retirement plan with the municipality's labor unions, pending a permanent version that is still being negotiated.
Proposition B, passed by two-thirds of the electorate in the June 5 primary, mandates that all new employees other than police officers be given the 401(k)-style plan, instead of being enrolled in the debt-ridden pension system. New police officers will still get pensions.
Until the interim agreement with labor was passed by the council, the city was unable to hire new workers. The city will now start hiring firefighter recruits and librarians, Sanders said.
He said city and union negotiators worked together to craft the interim plan, and hopes the spirit continues during talks on the permanent version.
"Implementing this initiative, of course, is vital to the city's financial health,'' Sanders said.
The measure's supporters believe the city will save $1 billion in pension costs through 2040.
Councilwoman Lorie Zapf said San Diego has become a national role model for dealing with employee pension system problems.
"You don't deny them, you don't delay them, you face them head-on and come up with a workable plan to put in place,'' Zapf said.
The law requires that the city meet and confer with its labor groups before implementing the terms of the measure.
Zapf said she was relieved that the two sides avoided "a long, nasty, protracted negotiation.''
Councilman Carl DeMaio, a major backer of Proposition B, said the unions and City Council respected the will of the people.
Sanders and DeMaio, who is running for mayor, criticized state legislation signed into law by Gov. Jerry Brown this past weekend that requires the city of San Diego to enroll new hires in Social Security.
For years, municipal employees weren't enrolled in Social Security because they were given pensions. Because of Proposition B, most new workers won't have the pensions, either, a key reason why organized labor opposed the measure at the ballot box.
The city will probably offer new workers some sort of combination of Social Security and a 401(k) plan, Sanders said. However, he added that City Attorney Jan Goldsmith is studying the new law and could challenge it in court.
