Ed Lee Announces Pension Reform Measure for November; Adachi Says Doesn’t Go Far Enough
San Francisco Mayor Ed Lee and several city officials gathered at City Hall today to announce a measure for the November ballot that proposes widespread reform to city workers’ pensions and health benefits.
The proposed charter amendment–the result of months of negotiations between city officials and labor and business leaders–would cap pension benefits and raise retirement ages for city workers, and require them to contribute more to their retirement and health plans.
Lee said the proposal would save the city between $800 million and $1 billion over the next decade. San Francisco’s pension costs are set to increase by more than $125 million in the next fiscal year, and by more than $100 million in each of the next three years, according to the mayor’s office.
Lee said “we needed to fix our financial house in the city,” and called the measure “a consensus, comprehensive plan that we believe will fix this problem for the long-term.”
Among the details of the proposal are the raising of the retirement age from 62 to 65 for most city employees, and from 55 to 58 for police and firefighters. The plan would create additional cost sharing of up to 6 percent for future and current city employees, and all elected officials would be required to begin paying into their retirement plans.
Lee stressed that the proposal was developed with the input of labor unions and the business community. “We’re proud to say that in working on this, we were making sure we talked to everybody and allowed every voice to be heard,” he said.
The measure will be introduced at today’s Board of Supervisors meeting, and will be discussed by the rules committee next week before being considered by the full board, which could vote to place it on the November ballot.
The proposal appears to have the support of a majority of the 11 supervisors, nine of which were at this morning’s news conference.
Supervisor Sean Elsbernd, who has been one of the board’s strongest backers of pension reform, said, “This is real reform … that every San Franciscan can be proud to support come November.”
The Chronicle today looked at some of the details outlined in a memo from the city’s Department of Human Resources. From the Chron story:
The most contentious piece of Lee’s proposal is likely to be its method of figuring employees’ pension contributions, which will rise and fall depending on the economic climate. The contribution rates would be set each year, depending on the percentage of salaries the city has to pay toward pensions. Currently, most of the city’s workers pay 7.5 percent of their paychecks toward pensions. Others pay nothing and some pay as much as 9 percent.
Lee’s proposal would set 7.5 percent as the baseline for all workers every year. Employees earning less than $50,000 a year would not pay more than that.
In bad economic years, when the city pays 35 percent or more of salaries into the pension fund – because investment returns aren’t keeping pace with what actuaries say is needed to meet obligations – employees earning $50,000-$100,000 would pay an extra 4 percent, those earning more than $100,000 would pay an extra 5 percent and public-safety workers would pay an extra 6 percent.
Unlike Chuck Reed in San Jose, Lee brought the public unions in on the proposal. Several strongly endorsed the measure today.
The SEIU, however, the union that represents the most city workers, is still not on board. An SEIU rep appeared with Lee at today’s press conference, but told KQED’s Peter Jon Shuler that the union was withholding its endorsement at this time.
The elephant not in the room during negotiations was Jeff Adachi, the San Francisco Public Defender who floated his own unsuccessful pension reform measure last election. Adachi vowed he’d be back with a new proposal, as can be heard in this February interview with KQED’s Joshua Johnson. Adachi told Peter Jon Shuler today that although he “applauds the mayor’s efforts” in taking pension reform seriously, he doesn’t think Lee’s plan goes far enough, and that he would not withdraw his own measure unless the Lee proposal was strengthened by the Board of Supervisors. Listen here: