Mayor Ed Lee will unveil today his plan to rein in The City’s skyrocketing pension costs, which are projected to double to $800 million by 2014.
According to a draft of the proposal, the mayor’s plan calls for increasing retirement ages for new hires by three years, having police officers and firefighters contribute up to 6 percent more of their paychecks toward their pensions, and requiring all elected officials to pay into their retirement.
Talks between the Mayor’s Office and labor leaders stretched through the weekend and into Monday with the aim of striking an agreement on the pension measure by today’s deadline to submit it to the Board of Supervisors.
Since February, Lee and labor leaders have met to negotiate a consensus measure to ensure its passage by the voters.
“We are ready to present [Tuesday] a very united front,” Lee said early in the day Monday about the pension measure.
Those familiar with the talks said Service Employees International Union, Local 1021, The City’s largest labor union, was the last holdout. Details of the mayor’s proposal were still being debated at press time Monday evening.
Lee’s charter amendment establishes a cost-sharing mechanism, in which employees pension contributions “rise and fall with The City’s costs,” according to a draft summary of the legislation obtained by The San Francisco Examiner.
Most city workers contribute 7.5 percent of their pay to pensions. Under Lee’s proposal, those who earn less than $50,000 would be exempt from additional increases. Those who earn between $50,000 and $100,000 would likely see increases between 2.5 percent and 3.75 percent during the next several years. Those earning more than $100,000 would likely see increases between 3 percent and 4.25 percent.
Meanwhile, public safety workers could see rates increase between 3.5 percent and 4.75 percent. If The City’s costs increase beyond what is projected, rate hikes could go as high as 6 percent for public-safety workers.
Public Defender Jeff Adachi, who reviewed the proposal Monday in a meeting with Lee, said he will continue to move forward with his own pension reform ballot measure. Adachi’s measure includes pension-rate hikes that labor leaders say are too high.
“My hope is, as the legislation goes through the board process, the proposal becomes stronger and not weaker,” he said.
Once introduced Tuesday, the board will have until July to review it and make any changes. It takes six votes to place the measure on the ballot.
Mayor Lee’s pension proposal
Here are some highlights of what the mayor’s pension plan will do, according to a draft of the legislation:
1) Cost-sharing: Employees’ pension rates to increase when The City’s pension costs increase
- Pension-contribution rate increases will depend on salary range.
- Public-safety workers could increase from current 7.5 percent to as much as 13.5 percent. Those earning less than $50K will be exempt from increases.
2) Increase retirement age for new hires
- From 62 to 65 for non-public safety employees
- From 55 to 58 for public safety workers
3) Calculate pension for new hires based on last three years of pay, not just one or two
4) Require all employees to begin contributing into a retiree health care trust fund in 2016-17
Source: Draft Summary of Pension and Health Reform Legislation