15-Year Contract Creates De-Facto “Vesting” of Life-Long City Employee Benefits On Top of Medicare
Just when you thought bad pension deals were a thing of the past at City Hall, along comes this unprecedented 15-year binding contract that guarantees life-long taxpayer-funded health benefits to city employees that are far in excess of private sector benchmarks.
How can city leaders actually claim this deal is good news when it allows city employees to receive an annual guaranteed allowance of $8800 plus Medicare?
Among the flaws in the deal:
- Benefits Significantly Richer Than Local Benchmarks: The deal awards city employees retiree healthcare benefits that virtually no other employer in the private sector provides to their employees. With the exception of some employees hired between 1981-1986, city employees receive Medicare. On top of that, the deal guarantees a generous $8800 per year allowance for long-time employees, and a $5500 per year allowance for all other employees.
- 15-Year Term is Unprecedented: The deal is set in a 15 year labor contract – no other labor contract in city history has ever extended for such a long period of time.
- De-Facto “Vesting” Status Given to Benefit: Even though courts have expressed that retiree health benefits are not vested, the deal in effect allows city employees time to achieve “vested” status on retiree health benefits. For example, the deal cannot be changed for three years (July 1, 2014) during which time thousands of employees will be eligible to retire and “vest” in the benefit. Even after July 1, 2014, it is improbable that “reformers” will gain 6 votes to modify the terms of the 15-year deal.
- No “Cap” Exists on City Financial Exposure: The deal expressly continues a “Defined Benefit” plan for city employees – and while city leaders tout a “cap” of $57.8 million (plus escalator), no such guaranteed “cap” exists. Costs could exceed the so-called “cap” that city leader tout
- City Leaders Give Up $340-530 Million in Savings: Because city leaders did not impose alternative reform proposals, the deal gives away the potential for millions in savings.
I am not proposing that we take away health care from retirees, or leave any city employee without reasonable health coverage in line with private-sector benchmarks. Unfortunately, under this excessive deal, taxpayers will be paying be paying for a generous health benefit package that they themselves do not receive.
Comments 6
So if this requires 6 votes, it obviously isn’t DeMaio. That leaves either Zapf or Faulconer unless I am missing something.
And to think we were all getting along so well.
http://www.sandiego.gov/mayor/pdf/110506factsheet.pdf
When will conservatives start demanding that before they continue to do squat for our Mayor we actually get a FACT sheet when it is promised to be a FACT SHEET.
Near as I can tell what this does is freeze the obligation for three years and then requires a greater employee contribution. As Carl seems to note, no discussion about trying to use cost ceilings to force down overall costs (i.e. if you want something other than Medicare Plus through Kaiser 100%t is on the retirees dime).
But who the hell knows because the press and the public and interest groups allow the Mayor to release things labeled FACT SHEETS that are anything BUT.
And then people wonder why San Diego is disfunctional.
That would appear to be a press release from the mayor, identified as a fact sheet.
I wonder if other government employees should demand such retirement benefits (Since many of us aren’t offered such).
Owen – Based on his press assistant’s subsequent post, its obvious that Faulconer went along with the Democrats on the Council.
They talk about savings, I want to talk about costs. Are the costs in real dollars going to go up during the course of the 15 year deal?
Details please.
Oops! Did Council member Faulconer(Rep.), that conservative, middle of the road, downtown interest, development lobbyist, mayor supporter, etc. support another pension new deal? Who woulda thunk it?