SF: Prop B – Changing Qualifications for Retiree Health and Pension Benefits and Establishing a Retiree Health Care Trust Fund

Shall the City increase the years of service required for new City employees and certain employees of the School District, the Superior Court and the Community College District to qualify for employer-funded retiree health benefits, establish a separate Retiree Health Care Trust Fund to fund retiree health care costs, and increase retirement benefits and retirement cost-of-living adjustments for certain City employees?

I am confused as to why this measure needs to be voted on in an election.

The legal text makes Proposition B out to be a change in the retirement rules for miscellaneous City employees. These employees fall into the group that excludes firefighters, police officers, MUNI employees, etc.

Having read a bit about the retirement benefits for City employees, I have come to the conclusion that City workers make out like bandits. Not only do they receive a healthy amount of holidays and decent pay, but they also get pretty good retirement benefits. An employee can work for the City for only 5 years and when he/she retires, they can collect on retirement benefits from the City; even if they had gone on to work in another field for decades.

It’s no wonder the City is approaching a $4 billion debt for retiree health insurance benefits.

This proposition will increase the amount of years a new City employee must serve before their full retirement benefits kick in; the current number of years is only five. Under the new plan, new employees must work a minimum of 10 years to receive 50% of their retirement benefits, 15 years for 75% and 20+ years for 100%. The City employee must also retire within 180 days of leaving their position to receive said benefits.

The proposition will also increase the maximum retirement benefit for the miscellaneous City employees from 2% at age 60 to 2.3% at age 62. The cost for the City to fund these benefits for an average employee would be an increase of 3.5%. To pay for these costs, employees salaries will be frozen for the 2009-2010 fiscal year.

The proposition will also have the new City employees contribute 2% of their salary to a Retiree Health Care Trust Fund with the City matching 1%. The City predicts this change will make the retirement program self-sufficient by 2031.

Even with this reform active, the City will still have to find a way to pay an annual cost of $200 to $300 million from the $4 billion debt for the current retirees and employees.

There are a huge number of supporters for this proposition–Mayor Gavin Newsom, the entire Board of Supervisors, the Chamber of Commerce President, the Executive Director of the San Francisco Labor Council and four pages of paid arguments for the passing of Proposition B in the voters guide.

Those who oppose the proposition do not actually oppose the content of the proposition. They oppose the fact that the proposition is on the ballot when the changes could be done in-house.

A vote of Yes equates to a vote for fiscal responsibility by the City.

A vote of No express the desire to continue increasing debt for the City and its residents.

2 thoughts on “SF: Prop B – Changing Qualifications for Retiree Health and Pension Benefits and Establishing a Retiree Health Care Trust Fund

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