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