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Benefits August 7, 2012
San Diego’s Switch to DC Plan Can Move Forward
August 7, 2012 (PLANSPONSOR.com) – A San Diego judge denied a union attempt to stop voter-backed city pension reforms from moving forward.
Reported by Rebecca Moore
According to news reports, Superior Court Judge Luis Vargas denied a motion for a preliminary injunction against Proposition B filed by the state Public Employment Relations Board (PERB), which said it needed time to investigate complaints of unfair labor practices. The measure would place new employees, except police officers, in a defined contribution plan rather than the current pension plan. In addition, it imposes a six-year freeze on pay levels used to determine pension benefits.
PERB argued that the measure should not have been put before voters prior to union and city negotiations, but a city attorney said that since the proposition was the product of private citizens, the negotiations were not required until after the vote.
In his written ruling, Vargas said he was satisfied with the progress made by the city and its unions on negotiating the terms of an interim 401(k) plan for new hires and noted that PERB will still have an opportunity to rule on the initiative’s legality.
“The court finds traditional equitable considerations now weigh in favor of the voters, the city of San Diego and of a proper and orderly implementation of CPRI (Comprehensive Pension Reform Initiative),” he wrote. “The court is persuaded that if Proposition B is ultimately found invalid, pension benefits conferred upon new employees can be reverted as by law.”