What it does
Reverses cost-neutral provision of charter by partially subsidizing transfer from state to City retirement plan for a small group of airport police.
This proposed amendment to the San Francisco City Charter would authorize the Board of Supervisors to amend the contract between the City and the California Public Employees' Retirement System to allow individual employees who were formerly airport police officers to transfer from coverage under CALPERS to coverage under the San Francisco Employment Retirement System and to have their service and retirement contributions credited appropriately. The charter currently requires that all contracts and contract amendments be cost-neutral to the City. This proposed amendment eliminates the cost-neutral requirement and allows for a City subsidy for the improved pension benefits without employees trading anything in exchange, as has been done in prior practice.
Why it is on the ballot
The question of employees transferring from the state CALPERS retirement system to the City SFERS retirement system has been an issue for several decades. Up until this measure, each time the discussion resulted in a reaffirmation that there should be no added cost to taxpayers of bringing employees into the city's retirement plan.
In 1983 the voters agreed to enhanced benefits for a defined group of "Miscellaneous Safety" employees if and only if the enhancement resulted in "no increased cost to the City." These miscellaneous safety employees included probation officers, airport police officers, district attorneys, public defender investigators, medical examiner investigators, juvenile court counselors, institutional police, fire-safety inspectors and fire-protection engineers.
Under the "no increased cost" compact, employee groups could trade lower current pay for higher retirement benefits. Of the nine job categories approved as miscellaneous safety employees in 1983, only five have received enhanced benefits. The remaining four have been unable to meet "no increased cost" requirement.
In 1990, San Francisco voters rejected a charter amendment that proposed to remove the airport police from the miscellaneous safety employees group created in 1983. This change would have resulted in the airport police being considered part of the City's police force and would have improved the airport police retirement formula to 2 percent of working pay for each year of service with a retirement age of 50, from 2 percent at 55.
In 1997, airport police officers were transferred to the San Francisco Police Department. All former airport police then began paying into SFERS for all future retirement benefits. However, their past retirement accounts for service prior to Dec. 27, 1997 remained with the CALPERS.
In 2003, voters approved a charter amendment (Prop. B) that allows the Board of Supervisors to agree to changes to retirement benefits for miscellaneous safety employees that involve an increased cost, so long as it is borne by the employees. This measure replaced the prior language that mandated "no net increase in cost" with "contracts and contract amendments shall be cost-neutral and employee bargaining units shall be permitted to trade salary or other employee benefits to achieve cost neutrality." Under Prop. B, the new "cost neutral" language meant that in a labor contract, any increases in retirement benefits would have to be offset by decreases in current pay or other changes. Seemingly, voters reaffirmed their 1983 ballot position to enhance benefits for the miscellaneous safety employees group if and only if the enhancement was cost-neutral to the City.
Those who support this measure claim:
- This measure is an inexpensive change that supports and rewards the people who guard our safety.
- When the airport police merged with the SFPD, it created a dual system where police working side by side have different retirement packages. This measure changes that and creates retirement parity for all San Francisco police officers who previously worked at the airport prior to it coming under the management of the SFPD.
- This measure treats equally the time worked by uniformed employees of the airport and the Police Department.
Those who oppose this measure claim:
- This measure abandons for the first time the "no cost" compact that was established in 1983 and reaffirmed by the voters in 1990 and 2003. It reverses two decades of practice whereby employee groups could upgrade pensions only in exchange for changes to other benefits (such as current salary) in order for the change to remain cost-neutral for the City.
- It treats one group of employees better than eight other miscellaneous public-safety groups by helping subsidize the better pension plan for the airport police with public money. Other groups who have yet to receive this benefit and could demand it as a result of this precedent include medical examiners, public defender investigators, fire safety inspectors, and fire protection engineers.
- The measure may be technically inoperative because the measure allows individuals to transfer benefits, which may violate state law requiring the entire group be transferred.
Currently, pensions for San Francisco police are calculated as 3 percent of the employee's highest one-year averaged monthly compensation. The employee is eligible for this pension at age 55 and after five years of service. The state retirement is calculated as 2 percent of salary for each year of service, but can be taken starting at age 50.
Under today's system, some members of the SFPD who had previously served as airport police prior to the merger have retirement benefits in two separate systems calculated at different rates. This proposition would transfer all airport police currently covered under CALPERS to the city system, whereby their entire retirement would become 3 percent at 55.
There are approximately 60 current and former airport police officers who would be affected by this charter amendment because a portion of their retirement is under the CALPERS system and could be switched over to the City retirement system.
Under the proposed Prop. F, the cost to the City for upgrading the retirement benefits is capped at $670,000 total. The majority of these funds will come from the airport and the remainder from the City's General Fund. The employee who elects to transfer from CALPERS to SFERS will pay any additional cost. It is estimated that the one-time cost for each employee will be between $8,000 and $11,000, depending on years of service.
The fact that the City is paying any portion of the total cost without that cost being offset by some other savings is what violates the existing cost-neutrality language in the charter.
We support the concept of groups of employees being able to improve their retirement benefits and treating the time worked by various peace officer groups as being comparable for retirement purposes. We supported the improvement in the safety retirement plan (3 percent at age 55). However, the original compact with the nine public safety groups regarding no City cost has been consistently applied and upheld and should not be waived for one group. This concept was reaffirmed by Prop. B in 2003 (which SPUR also supported). This proposed charter amendment reverses those past principles and would be a bad precedent for the City.
SPUR recommends a "No" vote on Proposition F.