Pension questions dominate local ballots

In the wake of the economic crisis, municipalities across California have struggled to maintain city operations while balancing a budget. In an effort to avoid bankruptcy, city councils have scoured budgets to find enough resources to continue funding operations. Pensions have been one of the largest targets of these austerity measures and a contentious choice for cuts.

 

The most contentious efforts to reform pension benefits have been in the retroactive alteration of benefits. As seen in Stockton (http://www.latimes.com/business/la-fi-stockton-bankruptcy-20141002-story.html), pension obligations could be treated like other debts and dramatically reduced in order to repay other dues, which would come at the cost of retirees. This November, voters in Oakland, Yorba Linda, and San Jose will go to the polls to decide the fate of their city’s pension payments.

 

Measure EE in Oakland would terminate the Oakland Municipal Employees Retirement System (OMERS) created in 1939 to provide retirement benefits to city employees, however, the fund was made unavailable in 1970 when the city chose to contract with CalPERS. OMERS currently serves 22 retirees with an average age of 90. By closing OMERS and transitioning to a private insurance company, Oakland aims to save $900,000.

 

In Yorba Linda (http://www.ocregister.com/articles/members-631091-council-city.html), Measure JJ could eliminate pension and healthcare benefits for city council members in the future. While this measure does not affect past councilmembers retroactively, it will definitely impact councilmembers going forward.

 

Pensions in San Jose have also been a political hot topic, after Measure B pension reforms passed in 2012 and dramatically cut compensation packages to public employees. City unions challenged (http://www.mercurynews.com/pensions/ci_26071906/pension-reform-san-jose-ballot-initiative-would-water) these reforms in court where a bulk of its objectives were upheld. This November, voters will have the chance to contribute to these reforms by voting to establish a Retirement Board who will have the authority to administer city retirement plans.

 

Still, the overwhelming hostility toward pensions’ large fiscal impacts and city’s continuing need to rearrange the budget maintains that the future of public employees may not be set in stone, regardless of their current retirement agreements.


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