SAN DIEGO -- A tentative deal to overhaul the city's pension plan has been reached by Mayor Jerry Sanders and three city unions, officials said Tuesday.Sanders said the agreement is another step in reforming the city's pension system. He said in 20 years, the new compromise would save the city $23 million a year.An outline of the new retirement plan was announced at a news conference outside City Hall on Tuesday. Among the highlights; starting on July 1, 2009, new non-public service employees would receive a pension based on the highest three years of compensation instead of their top one-year salary.
Sanders also said a supplemental pension plan would be eliminated. Instead, the defined contribution portion would be administered in a two-part program.And the city would set up a retiree medical trust to pay health care costs from a dedicated revenue stream.The agreement means the issue will be kept off the November ballot, thereby saving the city more than $300,000."In this city, $300,000 is not chump change," said Ann Smith, MEA's lead negotiator. "It can mean the difference between a park that is open or a swimming pool that is open or library hours that are extended. So we took seriously that goal of avoiding that expense."Sanders first unveiled his plan last week. He told NBC 7/39 that he wanted to come up with a plan that would be beneficial to future city employees and taxpayers. Sanders' plan could save the city more than $22 million a year, he believes. It would reduce the amount of multipliers used to calculate retirement pay and introduce a defined contribution component similar to 401 (k) plans common in the private sector."It took us 20 years to get into this trouble," Sanders said. "It's going to take us some time to get us out.The unions still need to ratify the proposal and it also needs City Council approval.Previous Stories:
