Councilmember Pete Constant is leading the charge to terminate the CalPERS pension program for the mayor and City Council. Originally asking City Attorney Rich Doyle to study the proposal in June, Constant’s Dec. 19 memo, which suggests Doyle draft a resolution that gives notice of the city’s intention to terminate its contract with CalPERS, went in front the Rules and Open Govt. Committee on Wednesday and was unanimously approved.
The council will now consider a resolution at its Jan. 24 meeting.
While the move seems to have the support of Mayor Chuck Reed and councilmembers Pierluigi Oliverio and Madison Nguyen, who are on the Rules Committee with Constant, the entire council isn’t necessarily on board. Councilmember Kansen Chu told the Mercury News he has concerns that the move would be mostly symbolic and might end up actually costing the city money. That could be true. The city is still waiting on a detailed report from CalPERS, which “will not prepare a preliminary valuation report for the City until the City Council adopts and delivers to CalPERS a resolution of its intention to terminate its contract,” according to Constant’s memo.
“Quite frankly, if were going to save $160,00 a year, but it costs us $5 million to get out that would be a stupid financial decision,” Constant told SJI. “But if it’s going to cost us $400,000 to get out that would be a good financial decision.”
According to numbers Constant received from CalPERS, “the city has an unfunded liability of $432,000 for just the 11 positions of Mayor and council, as well as the people already retired on the system,” he said.
“If were going to reform pensions, we need to start with us. We’re a pretty young council right now,” Constant said. “The day we turn 55, we would get a pension check for the rest of our lives.”
Well aware of the criticism some website commenters—ahem!—direct his way for the pension he receives from his time as a San Jose police officer, Constant added that he suggested eliminating pensions for the council as far back as last January when meeting with the council salary committee.
“For all the people who complain about double dipping, this isn’t something I just did now,” he said. “This had been in the process for a year.”