What it does
Proposition H would amend the Charter by adding a new retirement benefit for active police officers, firefighters and paramedics and future hires to those classifications. It would be paid to all uniformed forces retiring after January 1, 2003. The benefit would calculate pensions at 3% of last year's salary at age 55, capped at 90%. In other words, an officer who started in the uniformed forces at age 25 could retire at age 55 with a pension equal to 90% of his or her last year's salary. Maximum pension is higher than that of white-collar employees, though they receive Social Security, which uniformed forces do not.
Proponents of Proposition H state:
- The unions allege that Police and Fire Departments are facing a recruiting and retention crisis. This is a pension parity plan that will encourage trained officers stay in City service and to ease the shortage of recruits, as the City will have a pension benefit that is similar to other major Bay Area cities and counties in California . The benefit is cost neutral, at least for the immediate future, and may actually save the City money by retaining trained officers.
- Once again, no total compensation comparison has been made available.
Currently uniformed forces receive 2.7% of the last year's salary when retiring at age 55 or older, capped at 75% of final compensation. There are two different retirement plans for uniformed forces, depending on hire date. The pre-1976 plan would give a 55-year old employee with 30 years of service and a final salary of $60,000 a pension of $45,000. The post-1976 plan, which has been improved over the years, would give the same retiree a pension of the same amount (it does vary by age--the pre-1976 plan allows retirement at 50 versus 55).
This proposal would allow the same person to retire with a pension of $54,000, an increase of $9,000 per year.
Though called 3% at 55, it does stagger the pension amount based on not only years of service, but age, from 2.4% at age 50 to the maximum 3% at age 55. It also allows paramedics to add their civilian paramedic service time to this pension plan. Passage would also require the City, under an existing Memorandum of Understanding with the Deputy Sheriffs Association, to contract with CalPERS (the state insurance system) to provide the same benefits to Deputy Sheriffs.
The annual cost to the pension system is estimated at $28,000,000, which includes annual cost and amortized cost to fund the system for those that are close to retirement age. Currently, the retirement system has a surplus of $2.4 billion. It is anticipated that the proposed new benefits would not impact the General Fund for 10 years. Costs were not available for the paramedic and sheriff provisions.
SPUR has consistently opposed these pension improvements absent information from which the public can compare wages, pensions, health plan contributions, etc. The only measure we supported during the last 12 years restored parity between police and fire uniformed forces. We have asked the Board of Supervisors to require that such information be developed, but the request has fallen on deaf ears. The public should turn down all requests to increase benefits to City employees until the politicians stop this game-playing and present the voters with the information we need to evaluate the proposals.
SPUR recommends a "No" vote on Proposition H.