The Morning Report
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I’d been trying to reach Local 127’s president Joan Raymond for the past couple days to get her take the impasse between the union and Mayor Jerry Sanders on the proposed pension reform ballot measure.
She called back today. She said the union, which represents the city’s blue-collar employees, put forth a proposal that would eventually save taxpayers an estimated $1 million more annually than the plan put forth by Sanders.
The union estimates that their plan would save $25.8 million annually a generation from now; compared to an estimated $24.8 million saved by the Sanders plan over the same period. The administration has consistently said its plan would ultimately save taxpayers $22.5 million. The difference in the estimates is the result of different payroll assumptions by the union and the administration.
Sanders, Raymond said, never budged from the compromise reform plan he hammered out with City Council President Scott Peters last month.
“They gave us their last best and final offer yesterday,” Raymond said. “Their last, best and final was virtually the same as their first, best and only offer.”
The savings realized from the union proposal comes from the elimination of the city’s contribution to the Supplemental Pension Savings Program, a 401(k)-like “defined contribution” retirement savings vehicle that is separate from the pension plan.
However, even with the extra savings, such a proposal is a non-starter for Sanders because it would kill the defined contribution component of employee retirement savings, which to Sanders is key to pension reform going forward.
Sanders’ plan calls for SPSP to be eliminated and the defined contribution component become part of the pension plan under the San Diego City Employees’ Retirement System.
This gives the city the opportunity over time to gradually shift employee retirement savings from the defined benefit model, under which retirees get a set amount every month for life, to a defined contribution model in which employees have a retirement account that is invested like a corporate 401(k) plan.
Last week, the Deputy City Attorneys Association signed on to the Sanders plan. Sanders is still negotiating with the MEA, the city’s white-collar union. The reform proposal is scheduled to go before City Council next week.