San Jose’s Pension Reform Passes

Measure B was a political football right up to election day.

The city of San Jose's pension reform plan --  known as Measure B and affecting city workers'  pension payouts as well as new negotiating parameters -- passed Tuesday night, handing Mayor Chuck Reed a victory.

Upset with the reforms, San Jose Police Officers Association President Jim Unland said the union would be filing a legal challenge before noon Wednesday.

An NBC Bay Area investigation into the city's pension woes -- and the politics surrounding it -- contributed to the spotlight being shined on the city's coffers as well as some potentially "fuzzy math" being used to support the retroactive reform.

The measure will:

Allow current employees to keep pension credits already earned but they must pay up to 16 percent more of their salary to continue that benefit or choose a more modest and affordable plan for their remaining years on the job.
Limit retirement benefits for future hires by requiring them to pay half the cost of a pension.
Suspend current retirees' 3 percent yearly pension raises up to five years if the city declares a fiscal crisis.
Discontinue "bonus" pension checks to retirees.
Require voter approval for future pension increases.
Change disability retirement with the aim of limiting it to those whose injuries prevent them from working.

Both sides of the Measure B campaign brought  in significant donations: supporters raised $740,000. Groups against the measure received $525,000 in money and services.

[Click here to see the series of stories and broadcasts around this issue.]

Succinctly put by

Measure B, or Pension Modification, was placed on the ballot by the San Jose City Council on an 8-3 vote on March 6. In short, proponents argue that the city simply can’t afford to pay benefits that were negotiated years ago and the escalating costs have forced layoffs and cuts to city services. Opponents say Measure B is illegal and will be challenged in court, taking money away from city services and putting it into costly legal fees.

San Jose has 11 workers' unions, all of whom opposed Measure B, citing their willingness to negotiate with the city on how to best reduce the ballooning payouts that were negotiated years ago.

Those previously negotiated payments have led to present-day layoffs and cuts in city services, according to proponents of the measure.

The San Jose City Council voted 8-3 to put Pension Modification on the June 5 ballot. The issue itself has caused political division within the council.

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