Court Rules San Diego Must Compensate Workers After Prop B Pension Change

The City Attorney said San Diego officials should immediately begin taking all steps necessary to comply

What to Know

  • Prop B was passed by San Diego voters in 2012 affecting all city workers except police officers.
  • The then-mayor bypassed employee unions and put the pension reform on the ballot to let voters decide.
  • The Public Employment Relations Board issued a ruling in December 2015 saying that violated state labor law.

A state appeals court ordered San Diego to financially compensate about 4,000 city employees, who don't have pensions because of a 2012 voter-approved measure called Proposition B.

The court said the financial compensation for the workers must be the difference between the value of a pension and the value of the 401K-style plans, plus seven percent interest.

City Attorney Mara Elliott released a statement that says in part, "The City should immediately begin taking all steps necessary to comply with the court's order, in a way that is fair to both the public and to City employees."

Earlier this month, the California Supreme Court upheld a decision by state lawmakers to rollback one way for public workers to pad their pensions, but avoided ruling on the larger issue of whether retirement benefits can be taken away once promised.

At issue in the unanimous decision was a provision of a 2012 pension reform law that eliminated the ability of public workers to pay for more years of service for a more lucrative pension when they retire.

The law, backed by former Gov. Jerry Brown, sought to rein in costs and end practices viewed as abuses of the system.

The California Rule gives workers security that their retirement will be safe and predictable after a career in public service. But it also ties lawmakers' hands in responding to exploding pension costs -- a problem for the state, cities, counties, schools, fire districts and other local bodies.

Roughly a dozen states observe a variation of the California Rule, so a decision repudiating it could have implications beyond California.

Copyright AP - Associated Press
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