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A proposition to overhaul the city's pension plan for local government and public safety workers was headed to victory Tuesday in an election that other California cities with looming retirement commitments of their own were watching closely.
Proposition C on the municipal ballot would increase contributions by workers and raise the minimum retirement age for some to save $1.3 billion over the next decade. With all the
precincts reporting, it had 69 percent approval.
Proposition D, a competing measure that would extend the retirement age even further to save $1.7 billion, appeared to be losing by roughly the same two-to-one margin.
Proposition C was designed and supported by Mayor Ed Lee, who was running for his first full term Tuesday, all of the city's supervisors and business groups and the public employee unions.
Proposition D was opposed by the unions and backed by public defender and mayoral candidate Jeff Adachi.
Pension reform is an issue in cities throughout California. San Francisco faces a $4 billion obligation over the next decade for tens of thousands of current and former employees under its current system.
The city's civil grand jury in 2009 released a study of the system, saying the ``pension and health benefits enjoyed by San Francisco retirees are unsustainable.'' The economic downturn hit
the pension fund hard and required the city to increase its payments to meet its legal obligation to its retired workers.
Yet the plan also has been seen as too generous, especially in a down economy. At the time of the grand jury's report, San Francisco had a list of 900 retirees receiving more than $100,000 a year.
Recent examples that have driven the need for reform home are a transit operator, who earned $105,000 annually under the plan, and a nursing supervisor who retired with $202,000 a year and former Police Chief Heather Fong, who retired at 53 with $264,000 per year in yearly benefits.
In addition to requiring employees to pay more, both new plans would change some retirement ages and the years of service needed to qualify for benefits for police, firefighters and other city
Currently, police officers and firefighters can retire at the age of 50 after five years of service and receive partial pension benefits, or at age 55 with 30 years of service for full benefits.
Other city employees and elected officials can enter into retirement at age 50 after 20 years of service for partial benefits, or at 60 with 10 years for full benefits.
Proposition C would change the retirement age to 53 for city employees with 20 years of service, and 65 for those with 10 years for maximum benefits. For police and firefighters, the minimum age would stay the same at 50, but the maximum would increase to 58.
Proposition D was more ambitious in its minimum service requirements.
Supporters of Proposition C described it as a consensus measure endorsed by diametrically opposed groups business and labor unions to achieve real, if not dramatic, savings.
They argue that Proposition D would be ineffective because it would be held up by legal challenges because it lacks a requirement for employee contributions to be reduced if the pension fund recovers.