The scene was the stuff of fiction just a few days ago — San Diego Mayor Jerry Sanders and the heads of three city unions standing side-by-side announcing an agreement on pension reform.
But that was indeed what transpired this afternoon at a news conference in the City Hall breezeway. One after another, Sanders, City Council members and the union chiefs thanked each other for the hard work at the negotiating table and seemed to breathe a collective sigh of relief that pension reform was not going on the November ballot.
It ended months of on-again, off-again negotiations among Sanders and the city’s non-public safety unions: the white-collar Municipal Employees Association; AFSCME Local 127, which represents blue-collar employees; and the Deputy City Attorneys Association.
Just last week, Sanders had declared impasse with Local 127 and it seemed just a matter of time before City Council voted to authorize a pension-reform ballot measure.
“When I left Friday, I had no inkling we were even talking anymore,” Sanders said. “Then I got a call Friday, and we met Saturday, then again on Sunday and Monday.”
Despite their public stances, neither side wanted this aspect of pension reform to go before voters. The unions because they figured they would lose, and it would create bad precedent; and the city because a ballot measure would cost as much as $300,000 and create bad blood between management and workers.
“We had to figure out how to keep this from going to the ballot,” said MEA General Manager Judie Italiano. “We don’t want to start a whole process where everything goes to the people — raises, healthcare, everything.”
The deal, as I reported earlier, is very similar to the June compromise struck by Sanders and City Council President Scott Peters.
The key differences are as follows:
- The Sanders/Peters compromise increased the minimum employee retirement age to 60 from 55. Today’s deal with the unions keeps 55 as the minimum retirement age, but employees hired after July 1, 2009 who retire at 55 will have a pension that is more than 60 percent smaller than 55-year-olds in the current system.
- Today’s deal reduces the city’s annual payment to the 401(k)-like “defined contribution” portion of an employee’s retirement savings to 1 percent of an employee’s annual salary, versus 1.25 percent in the Sanders/Peters compromise. The .25 percent will instead be put in a fund set aside for retiree medical costs, which the pension system will not cover for the new employees.
- An employee’s pension, under today’s deal, will be based on an employee’s highest three years of annual pay. The Sanders/Peters compromise based it on an employee’s final three years of pay.
Joan Raymond, president of Local 127, said it was especially important to members of her union that the minimum retirement age stay at 55, even if the pension amount is significantly smaller.
The city’s blue collar employees endure similar physical demands, she said, as firefighters and police officers who were exempted from pension reform and can retire with a generous pension at 55.
“At least it gives our people something between 55 and 60,” she said.