San Diego's City Council will debate new labor contracts Tuesday and a hot issue is retiree health care benefits that, if decreased, could leave retired city employees to foot a large part of their health care bill according to Rani Gupta and our partners at voiceofsandiego.org.
While details of Mayor Jerry Sander’s plan are limited, it’s understood that his plan will reduce the city’s future retiree health care obligations, further aggravating the pension problem.
While comments from the Mayor’s office are thin due to the ongoing labor negotiations, the city’s final offer to the police union spells out some of the changes proposed.
“Instead of officers receiving a set benefit at retirement ($8,880), the city would agree to put aside a certain amount of money in what’s known as a defined-contribution plan. Such a plan provides the city more certainty when it comes to funding the benefit,” wrote Gupta of the final offer.
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Unlike the current system, the defined-contribution plan does not guarantee a final amount and would not obligate the city to pay the difference if there’s not enough in the account.
Even though talks with the five city unions are at a stand still, Sander’s said the retiree health care issue is up to the City Council. But unions say a drastic change like this should be voted on by all employees in accordance with the city charter.
“Even Sanders said in an interview last year that retiree health care was an untouchable benefit,” said Gupta in an article. “If the City Council does vote to impose a change, it would almost certainly lead to a lawsuit.”
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