Mayor Sanders, DeMaio Offer Competing Pension Reform Plans

Should pension reform include police and firefighters? That may be the real question before voters in June 2012 if competing reform proposals from Mayor Jerry Sanders and San Diego City Councilman Carl DeMaio make it to the ballot next year.

Sanders and Councilman Kevin Faulconer on Thursday announced their proposal to offer most new city employees 401(k)-type plans instead of guaranteed pensions, a change that would not apply to public safety workers such as police and firefighters. However, DeMaio, who represents Rancho Bernardo in District 5, in his announced a proposed 401(k) switch that includes public safety employees.

Sanders, at a press conference Thursday, said his plan would save the city more than $141 million over the next five years and could generate $1.6 billion in savings in 30 years. Excluding public safety workers from the change will help San Diego attract the most qualified candidates, the mayor said.

“I don't think the public wants someone who is not qualified coming through their doors,” Sanders said. Without a guaranteed pension, police and firefighters will make use of tens of millions of dollars of training and then leave San Diego for other cities, he said.

DeMaio, however, that switching to 401(k)-type plans would not leave San Diego hurting for qualified candidates. They will be more attractive to an increasingly mobile workforce and help increase take-home pay for public safety employees, he has said.

“Police and fire unions will insist that they should somehow be exempt from these reforms,” DeMaio said in his State of the District speech on Feb. 22. “But a pension system that is not sustainable for a desk clerk does not somehow magically become sustainable for another classification of employee—regardless of how much we may value the work that they're doing.”

On Thursday, DeMaio, who was not at Sanders' news conference, said the mayor's proposal is unfair to exempt public safety employees because it “fails to achieve the savings, fairness and equity we require.”

Under Sanders' and Faulconer's plan, new public safety employees would get guaranteed pensions capped at 80 percent of their highest average salary over three consecutive years, down from the current 90 percent cap. The city's annual required contribution to the pension system would be capped at $600 million, and retirement benefits changes would no longer require approval from a majority of city employees, under the plan.

DeMaio said he was initially cooperating with Sanders on a ballot measure, but “unfortunately, the mayor cut off negotiations.” The mayor's argument about needing a pension to attract quality candidates would lead to further pension abuses, DeMaio said.

“The same argument was made in the 1990s to spike pension benefits, and they were wrong,” he said. “Taxpayers insist that the city's employees receive no better and no worse retirement benefits than the rest of us.”

Sanders and Faulconer said they have raised $100,000 so far to support their initiative, and will continue to raise money and gather the 94,000 required signatures to get the measure on the June 2012 ballot.

DeMaio said he would soon announce a kickoff for gathering signatures for his own proposal.

City News Service contributed to this report.

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