Photo by Sam Hodgson
Statement: “City workers today have a 401(k) and no Social Security,” mayoral candidate Nathan Fletcher said at an Oct. 19 forum.
Analysis: Former Assemblyman Nathan Fletcher often says he’ll be the mayor who helps the city move forward rather than focusing on past struggles.
He applied that perspective to the city’s pension crisis at an Oct. 19 mayoral forum, suggesting that the city has taken steps to solve it and should now work with city employees and others on crafting a better future.
“The city has spent the last decade trying to clean up the messes that were created. I don’t know what more you are going to do to city workers,” Fletcher said before claiming those staffers now have 401(k) plans and go without Social Security.
Last June, voters approved a pension reform initiative that aims to save nearly $1 billion over three decades by freezing for five years the portion of city staffers’ pay that contributes to their pensions. The measure also gave most new city employees the option of a 401(k) plan rather than a traditional pension. (Police officers still collect pensions.)
This means only employees hired since Proposition B was partially implemented could join the city’s 401(k) plan. That’s far from all of the city’s 10,293-member workforce.
The city has brought on 1,047 new employees since the defined contribution plan was created in late July 2012, and 454 joined the 401(k) plan. About 400 of those staffers remain on the city’s payroll today, according to data provided by the city.
That’s just a fraction of city employees.
Now, the latter portion of Fletcher’s statement is true. The city and its workers don’t pay into Social Security. The city opted out in 1978 after cutting a deal with city unions to pay lifetime retiree health benefits. It hasn’t enrolled staffers in the federal system since, even despite a recent legislative attempt to force the city to do so.
But the first part of Fletcher’s statement merits a different ruling. Only 4 percent of city staffers have joined the city’s 401(k) plan established under Prop. B but Fletcher implied otherwise. He made it sound as if all city employees are enrolled in 401(k) plans thanks to the city’s reforms, when in fact the change only affects new staffers. The vast majority of city employees are still set to collect pensions, so his statement is false.
A Fletcher spokeswoman said he misspoke and meant to say that only newly hired workers participate in the plan.
If you disagree with our determination or analysis, please express your thoughts in the comments section of this blog post. Explain your reasoning.
Value investigative reporting? Support it. Donate Now.
Show 1 comments