SAN DIEGO (CNS) - Supporters of a comprehensive pension reform measure on next year's ballot began their campaign Thursday by estimating a minimum cost savings of $1.2 billion to the city of San Diego through 2040.
Giving new employees 401(k) retirement plans instead of putting them in the debt-ridden pension system, implementing a five-year freeze on pay used to calculate pensions, ending what is called "pension spiking" and having employees contribute to their plans could save as much as $2.1 billion on the high end, according to the San Diego County Taxpayers Association.
If the proposition is passed by voters, new hires except for police officers would receive 401(k) plans, which would cost the city less than the current pension system. Also, membership in the San Diego City Employees Retirement System would dwindle as ex-workers die.
The ban on pension spiking would prevent employees from including specialty pay, bonuses and other extra compensation in their calculations of what they are due after retiring.
"You might have heard of the 401(k) as the highlight of the measure, but it's much more than that," Lani Lutar, the director of the taxpayer's association, told reporters at a briefing on the measure.
Lutar said the cost savings estimates are conservative and use figures from a city consultant and SDCERS.
"San Diego voters are more sophisticated than others when it comes to pension issues," Lutar said. "A lot of resources will be available to voters who wish to dig deeper."
Lorena Gonzalez, the secretary-treasurer of the San Diego and Imperial Counties Labor Council, said the measure will remove a safety net for city workers.
Also, putting a freeze on pensionable pay for so long without bargaining with the unions is illegal because the five-year time period is so long, she said.
"They're counting chicks that will never hatch under state law," Gonzalez said.
Lutar said the ballot language has been examined by lawyers and is on firm legal ground.
If passed by voters, the provisions of the measure would take effect in the 2014 fiscal year. The SDCTA believes the city will see an immediate savings of $2.3 million.
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