San Diego’s decade-long experiment with putting city employees under a 401(k) plan similar to private industry officially ended Wednesday with Mayor Todd Gloria reinstating traditional pensions.
Gloria signed an ordinance passed by the City Council on Monday that unwinds Proposition B and reinstates city employee pensions at a cost of $80 million.
Prop. B was passed by voters in 2012, but challenged by labor unions and ultimately invalidated by the California Public Employee Relations Board and confirmed by the courts.
Under former Mayor Kevin Faulconer, the city fought in court to keep the new pension arrangement but was ultimately unsuccessful.
Gloria said that in signing the ordinance the city was “undoing an ill-conceived and illegally executed ballot measure that has had a host of negative impacts on city operations.” He cited difficulties in recruiting and retaining workers.
“The reality of Prop B, which I opposed when it was on the ballot, was that it sought to place the burden of politicians’ short-sighted decisions onto rank-and-file workers, who always paid their fair share into the pension system and who had already agreed to a hybrid plan that was financially sustainable,” he said.
Under the agreement unwinding Prop. B, city employees get to make a choice whether to keep their current 401(k) plan or go into the pension system.
