California judge rules public employees have vested rights to pensions

December 24, 2013

RetirementAheadA California judge ruled Monday that employees of the city of San Jose have vested rights to their pension benefits. [Mercury News]

Santa Clara County Superior Court Judge Patricia Lucas struck down part of a 2012 pension reform measure that required existing city employees to contribute more to their retirement benefits.

Measure B, which 70 percent of San Jose voters approved in June 2012, mandated that existing employees pay 16 percent more toward their pensions to help reduce the more than $3 billion in unfunded liabilities accumulated in the plans.

Lucas ruled that the city of San Jose had long held itself responsible for the unfunded liabilities, thus creating a vested right for employees to have the city close the funding gap.

Lucas, however, upheld a section of the initiative that allows the city to reduce pension costs through salary cuts.

“It would be much better if we could deal directly with skyrocketing costs, but there are limited things we can do,” said Mayor Chuck Reed, a backer of the ballot measure. “The judge said all you can do is cut their pay.”

Reed still argued that the ruling was a victory for the city, and that over the coming months, officials will be able to make $68 million a year in pay cuts.

Union leader also claimed victory following Lucas’s ruling.

“Her decision affirms what we’ve been saying all along: the city cannot break its promises to its employees and its retirees,” said Ben Field of the South Bay Labor Council.

In 2011, San Luis Obispo voters, too, passed a pension reform initiative with more than 70 percent majority.

Following the passage of Measure A, San Luis Obispo labor groups also accepted agreements with the city that require employee contributions to pensions.

 


8 Comments

  1. isoslo says:

    Let’s see if I understand this correctly….a government employee with has ruled that government employees have rights to monies no matter what the people who are forced to pay for the costs say? Does that about sum up what is wrong with the government. Maybe we should appeal the decision to another government body?

    Like or Dislike: Thumb up 9 Thumb down 1

  2. Jorge Estrada says:

    So now self emposed pay raises and perks are not only legal, they are vested too.

    Like or Dislike: Thumb up 12 Thumb down 3

  3. shelworth says:

    Easy, cut all their pay in half. If they don’t like it, quit. Or be willing to put some of their own money into their retirement like the rest of us slobs.

    Like or Dislike: Thumb up 19 Thumb down 8

    • Jay0991 says:

      Let me get this right; you want to cut the pay of firefighters and police officers in half? Most of these people already put money into their retirement; anywhere from 5% to 50% depending when you got hired and where they work. Many firefighters / officers have not received raises since 2007. Many of these same unions willfully gave up raises and voluntarily increased the amount of money they put into their retirements to help their municipality out. Cutting pay in half at this point is asinine and unwarranted. I am sure you were exaggerating, but still these malicious comments confuse and anger people. Please watch what you say. Everyone is doing their part in these hard times.

      Like or Dislike: Thumb up 7 Thumb down 5

  4. fishing village says:

    Greed has driving these people to demand more and more money, ‘they are told by whatever administration is in power WE will pay , no problem. As that happy group leaves office the incoming people have to be saying, ‘what? the ….) and pay and pay. It is a sorry situation when the greedy receive all the money in a city and they don’t live or work anymore.I guess I’m old fashioned, but there is a limit to the amount an employee is worth.

    Like or Dislike: Thumb up 15 Thumb down 5

  5. falconbh says:

    We need to reduce pensions/salaries/ or close the grover beach station to help reduce costs for the five cities fire authority. The New Fire Tax Increase is a major threat to Seniors/Renters/Families/Local Businesses.
    The promise to save money for residents has turned into a ” Unlimited Tax Increase”
    for a basic service that we have all already paid for in your Super Sized Property Taxes.
    Lets place it on a real ballot, in a real democratic election, and let “All” residents Vote if they want a new Fire Tax Increase, or Cal Fire !

    Like or Dislike: Thumb up 10 Thumb down 3

  6. hijinks says:

    For the record, the SLO “pension reform” measure passed by voters didn’t directly touch anybody’s pension. It merely gave the City Council the right to include pensions in its labor negotiations. At least that’s the way the Tribune reported it. The far bigger issue in that election was the electorate’s taking away binding arbitration from police and fire fighters, after having given them that right several years previously. Almost all the public’s attention was focused on that issue, not on pensions.

    Like or Dislike: Thumb up 12 Thumb down 0

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