SAN JOSE — In the latest setback for San Jose’s landmark pension reform, city officials have agreed with their employee unions to wait at least another year to implement certain pension and pay cuts following a judge’s ruling.
The provisions of Measure B that required existing employees to pay more into their pensions had been scheduled to take effect July 1 after being delayed previously. It was a key part of the June 2010 measure that San Jose voters approved in hopes of reducing the city’s pension costs, a move that cops and other public workers sued to halt.
Santa Clara County Superior Court Judge Patricia Lucas in December ruled that provision violated the unions’ “vested rights” that are enshrined in state law, and forbid the city from raising employee pension contributions. She did affirm, however, that the city could cut workers’ pay to make up the difference — a move city unions feared but that city officials considered unlikely because they have been giving out pay raises recently to keep upset employees from leaving.
The new agreement between the unions and the city, and signed by Lucas this week, maintains the pension contribution increase that the judge struck down can’t go into effect before July 1, 2015, and the city also can’t cut worker pay until then. It’s unclear if the ongoing legal fight will be settled by then. Lucas closed the lower-court case this week and both sides have two months to appeal.
The agreement does not affect new hires, which already work under the new pension rules, or the city budget, which did not anticipate further pension savings.
Mayor Chuck Reed, who championed pension reform, noted other parts of Measure B have saved the city $20 million annually and said the delay will “allow more time for the legal process to come to resolution.”
The unions sent their adversary, Reed, a thank-you card at a press conference Thursday for agreeing to the delay.
Contact Mike Rosenberg at 408-920-5705. Follow him at twitter.com/RosenbergMerc.
http://www.mercurynews.com/pensions/ci_25677629/pension-reform-slowed-by-judges-ruling-san-jose