San Jose City Council Approves Placing Retirement Reform on June 5 Ballot

On an 8-3 vote, the San Jose City Council approved placing a modified retirement reform ballot measure on the June 5, 2012 ballot.

The Council approved placing a revised ballot measure on the ballot, as well as a memo from Councilmember Liccardo recommending that, should the measure be approved by the voters, the City immediately seek declaratory relief from a trial court. The motion also included minor clarifications to the language that will appearon the ballot.

Yes votes FOR placing the measure on the ballot: Mayor Chuck Reed, Vice Mayor Madison Nguyen, and Councilmembers Pete Constant, Rose Herrera, Sam Liccardo, Nancy Pyle, and Donald Rocha
No votes AGAINST placing the measure on the ballot: Councilmembers Xavier Campos, Kansen Chu, and Ash Kalra.

Background on Retirement Reform and the Proposed Ballot Measure

On December 6, 2011, the City Council voted 6-5 to place a retirement reform ballot measure on the June 2012 ballot. At that time, the Council asked that the City negotiators ask the bargaining units to re-engage in mediation in an attempt to reach an agreement. Since then, the city has engaged in 20 mediation sessions with a state mediator, but did not reach agreement. However, the City Manager following the mediation process is recommending changes to the ballot measure. These changes are a combination of clarifying language and substantive changes after mediation discussions. They are outlined in a staff report and new ballot language.

Key elements of the revised retirement reform ballot measure approved today are outlined on this chart and include:

New Employees would be placed in a new, lower-cost retirement plan

Current employees would be given the option to either: a) pay more to keep their current retirement plan or b) opt-in to a new, lower-cost retirement plan

The City Council would have the ability to temporarily suspend retirees’ Cost of Living Adjustments (COLAs) during a fiscal and service level emergency

Disability retirement rules would be reformed to prevent abuses

“Bonus” Pension Checks from the Supplement Retiree Benefit Reserve (SRBR) would be discontinued

Voter approval would be required to enhance retirement benefits in the future (other cities, like San Francisco, already require this

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