San Diego City Council is getting ready to make some big changes in the pension system – with or without voter approval of a reform ballot initiative.
City Councilmember Carl DeMaio said it’s time to “hit the ground running,” on reforming the city’s severely underfunded pension system. He announced the creation of a “Retirement Security Task Force,” as a way to prepare ideas for reform.
As it stands, the city’s pension system is $2.1 billion short of meeting city employees’ needs.
The task force includes a nine-member board and calls on the public to submit ideas for reform. DeMaio already identified a new 401(k) program as the first item to tackle.
A recently qualified ballot measure would replace the current pension system with a 401(k) plan and would freeze pensionable pay for the next five years for new city employees. The transition has garnered some support for its projected savings of over $1 billion in the next 27 years.
As a 2012 Mayoral Candidate, DeMaio must compete with other candidates on the important issue of pension reform. Of the well-known mayoral candidates running for the 2012 ticket, republican candidates Bonnie Dumanis and Nathan Fletcher support it. Democrat Bob Filner opposes it.
DeMaio said whether or not the initiative passes, the city and its future mayor will need to begin making changes as soon as possible. If it doesn’t pass, DeMaio said the city can make its own reforms through labor negotiations.
However, if the initiative is approved in June, the city will have to take measures to implement it. Republican candidates have tossed around ideas of how to do so, mainly focusing on the pay-freeze as the first way to save money.
District Attorney Dumanis has voiced her support for the annuity it would provide for first-responders.
“I had real concerns that that some first responders would no longer receive a benefit they can count on,” she said in an August statement. The annuity would serve as a “safety net,” she said, for these employees.
Assemblyman Fletcher told the Voice of San Diego that if voters approve the initiative, he would use the money saved to help fund services such as police departments and city infrastructure. He also said the pay freeze “generates the most immediate savings.”
On Congressman Filner’s website, he explains his reasons for opposing the initiative. The plan, he said, will “cost untold millions of dollars,” and that it “will also be throwing public employees under the bus, when they do not have Social Security.”
DeMaio said a public hearing will be scheduled sometime in the beginning of next year.