pensions

By Ed Mendel
Monday, May 20, 2013

One of the first local ballot measures aimed at cutting public pension costs, a cap on Pacific Grove payments to CalPERS approved by voters three years ago, was ruled unconstitutional by a Monterey County superior court judge last week.

Judge Thomas Wills ruled Friday that Measure R violated the contract clause of the state constitution, reaffirming the view that pensions promised on the date of hire are a “vested right” that can’t be cut without providing a new benefit of equal value.

In a tough week for the measure‘s backers, the Pacific Grove city council voted 5-to-0 Wednesday to seek a court ruling on the legality of a follow-up measure to roll back police pensions, rather than put the plan on the ballot as the council did with Measure R.

“It’s a constant battle down here,” said Daniel Davis, who worked on both measures. He is a former two-term councilman of Pacific Grove, a city with 15,000 residents located between Monterey and Pebble Beach.

The only pension measure listed so far this year by Ballotpedia was approved by Los Angeles voters in March. Sworn police officers transferring from general services to the police department will be allowed to purchase pension-boosting service credits.

Pensions moved into the spotlight after a deep recession and stock market crash. As other programs were hit by painful budget cuts, pensions stood out — not only untouchable, but often with costs projected to grow at an alarming rate.

All eight local pension measures on the November 2010 ballot were approved, except one in San Francisco. A union-backed alternative to a second pension initiative by Public Defender Jeff Adachi helped Ed Lee win election as San Francisco mayor in 2011.

In Los Angeles voters approved a modest union-backed measure in March 2011. After briefly gathering signatures last fall, former Mayor Richard Riordan dropped an initiative to switch new Los Angeles hires to a 401(k)-style plan.

The wave may have peaked last June when voters in San Diego and San Jose approved widely watched measures. In different ways, both aim to do what some say is needed to get big savings quickly: cut pensions earned by current workers in the future.

The state Public Employment Relations Board (PERB) upheld labor complaints that the measures in San Diego, San Jose and Pacific Grove violated state labor law requiring bargaining.

The board filed an unsuccessful lawsuit to prevent a vote on the San Diego measure. An administrative law judge ruled in February that former Mayor Jerry Sanders should have bargained before putting an initiative on the ballot, triggering a court battle.

“PERB forgets that citizen initiatives are constitutional rights in California,” said the city attorney, Jan Goldsmith. The initiative was placed on the ballot by the signatures of 120,000 registered voters and received 66 percent of the vote.

Now all new hires, except police, are receiving 401(k)-style individual invest plans instead of pensions. The initiative requires the city to begin labor bargaining with the initial position of freezing pay used to calculate pensions through June 30, 2018.

To read entire story, click here.