San Jose Still Hammering Out Details of Pension Reform Deal

Measure F marked the expected beginning of the end of a political battle between San Jose’s public employee unions and City Hall.

The measure, approved by voters last fall, replaced the controversial Measure B pension reforms that unions blamed for decimating the police force. But the compromise, which promised taxpayers $42 million a year in savings, remains a work in progress.

The City Council on Tuesday will consider revisions to the pension plan, including a provision creating a voluntary beneficiary association.

The Federated City Employees’ Retirement System, which represents 8,500 current and former city employees, criticized the pension framework as overly complicated. It essentially creates four tiers of benefits that may be expensive to administer, according to a letter from the retirement system’s lawyer, Jeffrey Rieger.

“For example, staff is currently in the process of implementing a new pension administration system, a five year project with a projected cost exceeding $7 million,” Rieger wrote in a letter to the council. “Designing, testing and implementing that system has also required substantial efforts of retirement staff, drawing resources away from the ordinary administration of the plan.”

Parts of the system will have to be redesigned once the new changes go into effect, he added. Meanwhile, the city will have to make sure that its reporting complies with complicated new rules.

“The added administrative complexity of the plan likely will result in higher rates of errors by retirement staff and the city,” Rieger predicted, “as well as more confusion among plan members.”

The attorney also took issue with proposed qualifications for physicians that would eliminate qualified candidates for the three-member medical panel. He criticized suggested deadlines for disability claims as too challenging to meet, because they fail to account for uncertainty.

“Because Measure F requires the creation of a medical panel, many of our concerns cannot be remedied by the parties alone,” Rieger noted in his letter, “but we recommend that the parties find ways to work within the confines of Measure F to establish a more workable paradigm.”

The unions worry about a provision in the plan that would allow the city manager to terminate second-tier retiree health benefits, Rieger continued.

“Giving a public official discretion to unilaterally terminate a benefit plan paid for by pre-tax dollars is atypical,” he said, adding that the plan’s language is rife with redundancy and confusing descriptions.

More from the San Jose City Council agenda for May 2, 2017:

  • The city will consider authorizing $31 million in bond sales for a developer to build affordable housing. The funding will pay to renovate Villa de Guadalupe Apartments, a 101-unit complex that will remain below market rate for 55 years.

WHAT: City Council meets
WHEN: 1:30pm Tuesday
WHERE: City Hall, 200 E. Santa Clara St., San Jose
INFO: City Clerk, 408.535.1260

Jennifer Wadsworth is a staff writer for San Jose Inside and Metro Newspaper. Email tips to [email protected] or follow her on Twitter at @jennwadsworth.

9 Comments

  1. > But the compromise, which promised taxpayers $42 million a year in savings, remains a work in progress.

    Amusing. In a sick, political way.

    “work in progress” is yet another political euphemism for “we didn’t tell the whole truth”.

    Remind us, SJI, who authored and sponsored Measure F?

    If I remember correctly, Johnny Khamis was among those who argued for passage of Measure F and Pierluigi was opposed.

    Maybe Pierluigi wasn’t such a dummy after all.

    http://www.mercurynews.com/2016/10/05/oliverio-measure-f-pension-settlement-is-too-costly/

    • Do you ever think… “maybe I won’t post my ignorant nonsense comments on this article?”

      You clowns are some the classiest gadflys and yap-boxes around. Oh what will tomorrow’s exciting comments be!

  2. Ah! This is good.
    As soon as they tell me how much I need to put away for their retirement then I’ll know when I can start saving for my own.

  3. The City has repeatedly shown since 2008 (when Lie-hard-oh was a Councilman firmly behind Measure B) nothing but loathe and disdain for it’s employees.

    The underlying message at every negotiation and following every election is the leaders of this City cannot be trusted. There is no intention to bargain in good faith and no matter the result of an agreement, the City does what it wants.

    The police are the only ones who recently made a wage deal, hopefully all the other Unions see the writing on the wall and strike. The cops can’t strike anyhow- hopefully the rest of the employees bring Shammy and his Council majority to their knees.

    Our elected don’t care about traffic, crumbling streets, public safety- only their next talking point to Bay Area news organizations that never call them on the carpet.

  4. > The city will consider authorizing $31 million in bond sales for a developer to build affordable housing. The funding will pay to renovate Villa de Guadalupe Apartments, a 101-unit complex that will remain below market rate for 55 years.

    Will this public housing, like French public housing, be populated by impoverished Muslim immigrants?

    Has the city council identified any place for American workers to live?

    Are our public officials smarter than French public officials?

    • One more question: who is the developer? A quick Google search reveals a Los Angeles corporation less than a year old with, reportedly, one employee. Which shell is the pea under?

  5. She said “end of a political battle between public employees and city hall” I cant stop laughing. Jennifer so naive or just so far tilted to the left that you cannot see sunshine or its reform in san jo. No the disdain and hate that the employees rightfully hold for city hall will not go away for decades.

    • The justified; disdain, abject hatred and disgust, appropriately asserted by San José City Employees and Retirees, will not be eradicated from the city for eternity.

      Unless, there are Members of the San José City Council who are not sired from the corrupt political loins of; liars, cheaters and thieves are elected and “right the wrongs” wrought upon employees and retirees by the Reed administration and the carry over Mayor Liccardo, et al.

      The San José Inside’s “yellow-journalistic” reporting of Measure F; which is nothing more than the re-bastardization of Measure B is still being revisited and hoisted upon us.

      The San José Inside, unfortunately, is a leftist rag of journalistic disrepute. Those that know the truth of Measure B; the lies and the unilateral, material breaches of contracts that are still occurring to this very day will never forget or forgive.

      City employees and retirees are still walking in the wilderness, praying for the deliverer(s).

      David S. Wall

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