Local Pension Reform Efforts in California Since 2010

Proposed Local Pension Reforms

Ventura County – filed 2014 – Currently gathering signatures
“Ventura County Pension Reform Intiative” – full text
Key Provisions:  The initiative would establish 401(k)-Style Plans for new employees with contribution rates based on private sector benchmarks. The initiative ensures any County employees who put their lives on the line to keep the public safe are protected with death and disability benefits for them and their families. Under the Pension Reform Initiative, county politicians would receive the same basic benefit as other county government employees. Politicians would not be able to vote on their own pension benefits. The initiative will reform existing pension payouts to more sustainable and acceptable levels by capping for five years the amount used to calculate higher paid county employee’s pensionable compensation.

Pacific Grove (Charter City) – filed 2013 – Qualified for ballot, currently contested in court
“Initiative to void Ordinance 02-18 which  illegally enacted a 3% at 50 pension benefit increase to public safety employees.” – full text
Key Provisions:  Affirms that Ordinance 02-18, the legislative act that implements the 3% at 50 pension benefit increase retroactively, was null and void. Affirms legal right of residents under State law to know the future costs, as provided by an actuary and revealed at a public meeting, of any increase in pension benefits before any such increase is enacted and also, that any action to do otherwise is legally null and void. Affirms that resident’s right of Referendum shall not be infringed

Los Angeles (Charter City) – filed October 2012 – Failed to qualify for ballot
Bankruptcy Avoidance and Pension Protection Act of 2013 – title and summary, full text
Key Provisions: Creates defined contribution plan, possibly including social security component, for all new hires. Current employees contribute amount to their pensions and retirement healthcare benefits equal or greater than amount contributed by city. Pension eligible salary based on average of final three years pay. Limits pension eligible salary for any employee where city contribution exceeds 15% of payroll (25% for public safety employees). Requires disclosure of pension costs including sensitivity analysis showing impact of changes to the rate of return on costs.

Local Pension Reform Votes, June 2012

San Diego  –  June 2012  –  Passed
Proposition B  –  ballot arguments and text
Key Provisions: All new City employees, except police officers, to receive a pension plan with the benefits dependent on the plan’s investment gains and losses (such as a 401k plan or IRA), the City and all employees to each pay half of the pension costs, limits compensation used to calculate pensions to base salaries only.
PERB Complaint to keep Prop. B off ballot, Feb. 2012

San Jose (Charter City)  –  June 2012  –  Passed
Measure B  –  ballot arguments and text
Key Provisions: Gradually increases current employee pension contributions to 16% of pay, offers “Voluntary election plan” (VEP) for current employees who don’t want to pay 16% for their pension. VEP limits pension accrual for future years of service to 2.0% of final compensation times years worked and gradually raises age of retirement eligibility to 57 for safety and 62 for non-safety personnel. Revises new employee defined benefits to cap city contribution to 50% of plan cost or 9%, whichever is less, raises retirement age to 60 for safety and 65 for non-safety personnel, caps pension benefits at 65% of final compensation.

Local Pension Reform Vote, March 2011

Los Angeles  –  March 2011  –  Passed
Measure G  –  text
Key Provisions: Creates new “Tier 6” reduced pension benefits for safety employees hired after July 1st, 2011.

Local Pension Reform Votes, Nov. 2010

Bakersfield  –  Nov. 2010  –  Passed
Measure D  –  text
Key Provisions: Requires newly hired employees to pay 100% of their share of the required pension contribution, reduces their annual pension accrual to 2.0%, times years worked, times their average annual salary calculated over 36 highest paid consecutive months.
California Attorney General Opinion reg. Measure D, June 2012

Carlsbad (Charter City)  –  Nov. 2010  –  Passed
Proposition G  –  text
Key Provisions:  All future increases to the city’s pension formulas to require voter approval, and City Council can make any decreases to the pension and healthcare benefits of current employees when it thought they were necessary.

Menlo Park  –  Nov. 2010  –  Passed
Measure L  –  text
Key Provisions:  Lowered pension formula to 2.0% at 60 for the City’s non-safety workers from 2.7% at 55.
City Attorney’s Analysis, Nov. 2010
Court Ruling Denying Complaint, May 2012

Pacific Grove (Charter City)  –  Nov. 2010  –  Passed
Measure R  –  text
Key Provisions: Caps the city’s contributions to employee pensions at 10% of their salary, and requires the employees to either pick up the difference or be placed in a 401k style retirement plan.
Lawsuit Against Measure R, Abstract, Nov. 2012
City Attorney’s Interpretation, April 2012

Redding  –  Nov. 2010  –  Passed
Measure A  –  text
Key Provisions:  Non-binding advisory measure. Advises city council to require its workers to cover the employee contribution to their pension plan themselves.

Redding  –  Nov. 2010  –  Passed
Measure B  –  text
Key Provisions:  Non-binding advisory measure. Advises city council to require its retiree’s to have worked for it for 5 years and be enrolled in Medicare before becoming eligible to receive contributions towards their retirement benefits.

Riverside County  –  Nov. 2010  –  Passed
Measure M  –  text
Key Provisions: Empowered the County Supervisors to unilaterally lower the pension and healthcare benefits to be enjoyed by its current workers. Specified that any increases to the current benefits scheme would have to be approved by the County’s voters.
Lawsuit Against Measure M, Aug 2011

San Francisco – Nov. 2010  –  Failed
Proposition B  –  text
Key Provisions:  Increased in the contributions made by the City’s employees towards their pension plans (from 7.5% to 9%), and called for an increased contribution by the City’s retirees towards their health insurance premiums (from 25% to 50%).

San Jose (Charter City)  –  Nov. 2010  –  Passed
Measure V  –  text
Key Provisions:  Required that all decisions made by an arbitrator must not create an unfunded fiscal liability for the city, and they must also decide with the City’s financial interests in mind.
City Attorney Analysis, Nov. 2010

San Jose (Charter City)  –  Nov. 2010  –  Passed
Measure W  –  text
Key Provisions:  Modified the City’s charter to allow the city council to place newly hired employees on a different pension and benefits plan than what was currently in place for other employees.
City Attorney Analysis, Nov. 2010

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