Straws in the Wind on External Pension Agitation

From time to time, I post a reminder that the pension reform movement could lead to a state ballot initiative that could override UC’s apparent move to a two-tier plan modeled on Option C. Here are two recent illustrations.

Sanders proposes no pensions for new city hires: New employees would get 401(k) accounts; current workers not affected (excerpt)

By Craig Gustafson

November 19, 2010, San Diego Union-Tribune

Mayor Jerry Sanders has proposed eliminating pensions for new non-public safety hires and giving them 401(k) accounts instead… Sanders said Friday he’ll gather signatures to put a measure before city voters that would eliminate guaranteed pensions for future employees and replace them with 401(k) accounts similar to what many private-sector workers receive. Only police officers and firefighters would continue to receive pensions under the proposed ballot initiative…

The proposed ballot measure is the cornerstone of the mayor’s new approach to the city’s financial woes after the failure of Proposition D, a Nov. 2 measure supported by Sanders that called for a sales tax increase to help balance a $73 million budget deficit and avoid deep cuts to public safety, parks and libraries. “I heard the voters loud and clear. They want definitive solutions to our pension problems,” Sanders said. “While the solution I’m about to propose will not in the near term solve our budget problems, it will ensure we never end up here again.”

…City workers opted out of Social Security in 1982 when then-Mayor Pete Wilson promised the city would provide taxpayer-funded health care for retired workers. Retiree health care ended for new hires in 2005 so if the 401(k) plan is implemented, that would be a new worker’s only source of retirement income…

Full article at http://www.signonsandiego.com/news/2010/nov/19/sanders-proposes-eliminating-city-pensions

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Background: A pension initiative in San Francisco was just defeated. But its chief proponent suggests the campaign for such an initiative will be repeated.

Prop. B: Adachi may yet get pension reform action (excerpt)

C.W. Nevius

November 20, 2010, San Francisco Chronicle

It took more than $2 million, an unlikely coalition and hundreds of volunteers. But in the end, they won. The labor unions, firefighters, police officers and nurses killed Public Defender Jeff Adachi’s city employee pension reform proposition in this month’s election.

Or did they? That clanking you hear is Adachi rising – Terminator-like – from the rubble. With voter anger still fresh over cushy pension payouts, Adachi is uttering three words: “I’ll be back.”

“We are disappointed but not discouraged,” Adachi said this week. “Prop. B redux is definitely in the works.”

…(T)he city can’t afford to let this problem fester. This week Moody’s Investors Service, one of the best known bond rating services in the country, downgraded San Francisco’s rating. Among the comments in the report was this stinger: “The defeat in the election earlier this month of a local pension and health care cost control measure suggests that little near-term fiscal improvement is likely to result from external political pressure.”

“What they are saying is that our budget is held together with rubber bands and string,” Adachi said…

Full article at http://sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/11/20/BA5R1GE6T1.DTL