San Diego Seeking to Reduce Police Pension Benefits

April 3, 2009 ( - San Diego is suing its police officers' union in an effort to reduce officers' pension benefits and thereby reduce the city's budget deficit.

According to a San Diego television news station, the Deferred Retirement Option Program allows eligible retirement-age municipal employees to continue to work for the city for five years while monthly pension payments are invested in an account which up until recently guaranteed a 7.755% rate of return. When employees retire, they collect the funds in their DROP account in a lump sum in addition to their monthly pensions, and some employees have received DROP payments in excess of $1 million, the news report said.

In an effort to close a projected $60-million budget deficit in next year’s city budget, Mayor Jerry Sanders proposed cutting the DROP program. The lawsuit, filed Wednesday, seeks to force the San Diego Police Officers Association to negotiate on Sanders’ proposal, which he says the union has refused to do.

However, union representative Emily Cox said the union continues to actively work toward attaining a contract with the city of San Diego that addresses all issues at the negotiating table, including DROP, according to the news report.

The mayor wants the program to be dropped citywide, and other city employee unions are expected to be asked to give up the perk when they negotiate new contracts.