DeMaio plan would eliminate 'double-dipping perk' of DROP - CBS News 8 - San Diego, CA News Station - KFMB Channel 8

DeMaio plan would eliminate 'double-dipping perk' of DROP

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SAN DIEGO (CNS) - San Diego's deferred retirement program, which allows some city workers to collect pension payouts while still employed, would be eliminated under a five-point plan released Thursday by Councilman Carl DeMaio.

The mayoral candidate said he wants Mayor Jerry Sanders and the City Council to implement his plan or he will generate "taxpayer pressure."

Even though the Deferred Retirement Option Plan -- known as DROP -- was not offered to municipal employees who started after 2005, about 6,500 city workers hired earlier remain eligible, he said.

Under DROP, they can officially retire but remain working for up to five years while drawing retirement benefits that go into a special account. The account cannot be touched until the actual retirement.

"Twenty years from now, we'll still have employees in DROP," DeMaio said, calling it "a double-dipping perk."

The program, adopted in 1997, was supposed to be cost-neutral to the city, but could end up costing the city nearly $150 million before those eligible employees are paid off, a consultant told the City Council last year.

DeMaio proposes to:

-- end a 2.9 percent interest rate guarantee for DROP accounts;

-- raise employee contributions, now 3 percent, to the maximum allowable by law;

-- reduce salaries for still-working employees by the same amount they receive under DROP; and

-- develop a reporting program that would be available to residents.

"If we implement these reforms, no one in their right mind would choose DROP," DeMaio said.

The fifth provision in his plan would be to seek a ruling from a judge to end the program for good, he said. Opinions by City Attorney Jan Goldsmith lend legal support to his plans, according to DeMaio.

Sanders' office didn't immediately respond to a message seeking reaction. A spokeswoman for council President Tony Young said she was checking to see if he would put DeMaio's proposal on an upcoming agenda.

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