The State Worker

Chronicling civil-service life for California state workers

November 22, 2010
UPDATE: San Diego mayor pushes for city 401(k) plan to go before voters

101119 sanders.jpgEditor's note, 11 a.m.: This post has been updated with a link to a union press release that responds to Mayor Jerry Sanders' plan.

San Diego Mayor Jerry Sanders, a Republican, is pushing for a new 401(k)-type retirement system for new city employees, He wants to put the idea to a public vote.

The San Diego and Imperial Counties Labor Council's Secretary-Treasurer, Lorena Gonzalez, reportedly delivered a note with a can of cat food to the mayor's office last week. Her message: Eliminate defined benefit pensions and a generation of city employees will be consigned to retirement poverty, especially because San Diego workers don't pay into Social Security.

From the San Diego Union-Tribune:

City workers opted out of Social Security in 1982 when then-Mayor Pete Wilson promised the city would provide taxpayer-funded health care for retired workers. Retiree health care ended for new hires in 2005 so if the 401(k) plan is implemented, that would be a new worker's only source of retirement income.

Sanders acknowledged the Social Security dilemma and said some work groups might be allowed back into the system. He said any proposed city match for a 401(k) plan would likely have to be high to ensure approval from the Internal Revenue Service. A typical 401(k) plan has a 3 percent match.

The plan could go before voters in June 2012 , earlier if the state calls a special election next year.

Click here for the mayor's press release about his proposal. This link opens the U-T story by reporter Craig Gustafson. And here's the Labor Council's response to the Sanders plan.

PHOTO: San Diego Mayor Jerry Sanders (center) talks at a Friday press conference about plan to end defined benefit pensions for city workers. / www.sandiego.gov

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About The State Worker

Jon Ortiz The Author

Jon Ortiz launched The State Worker blog and a companion column in 2008 to cover state government from the perspective of California government employees. Every day he filters the news through a single question: "What does this mean for state workers?" Join Ortiz for updates and debate on state pay, benefits, pensions, contracts and jobs. Contact him at (916) 321-1043 and at jortiz@sacbee.com.

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