I’ve mentioned Chuck Reed a couple times before on this blog. He’s the former mayor of San Jose, CA, who led a misguided attempt to gut pensions for public employees there. Even after his failure in San Jose, he’s made several attempts to eliminate pensions at the statewide level in California. Now he’s joined up with some other anti-pension ideologues in a nationwide campaign to undermine retirement security for public employees.
Let’s start at the beginning. Chuck Reed was elected mayor of San Jose in 2006 after having previously served on the city council. As mayor, he proposed to “reform” public pensions; however, as we know, “reform” often means gutting retirement security for police officers, firefighters, and other public employees. Mayor Reed pushed Measure B, which appeared on the ballot in June 2012. Measure B made several changes to employees’ retirement and health benefits in an attempt to cut costs. Regarding pensions, Measure B would have forced employees to contribute as much as 16 percent of their pay toward their pension benefits and would have eliminated Cost of Living Adjustments (COLA) for retirees.
Although approved by voters in June 2012, Measure B was immediately challenged by city employees who argued that it violated their constitutionally-protected contract with the city. The courts agreed with the city employees and in December 2013 several provisions of Measure B were struck down as unconstitutional. Defined benefit pensions are a form of deferred compensation that employees earn over the course of their career. When city employees in San Jose sign an employment contract with the city, in addition to their salary and other benefits, part of their compensation is earning a defined benefit pension. These employees contribute a portion of every paycheck toward their pension. Since pension benefits are a contractual right and something to which employees contribute, it is also considered a “vested” right. In addition to San Jose, courts in Illinois, Oregon, and elsewhere have struck down pension-gutting laws for violating constitutionally protected rights.
It’s difficult to believe that Mayor Reed didn’t realize that the pension-gutting components of Measure B were unconstitutional, but he rammed it through anyway. The aftermath of these reckless efforts left taxpayers on the hook for years of legal battles instead of providing policy solutions. Finally, in 2015, with a new mayor in office, city leaders sat down with city employees and reached a compromise agreement that protected the retirement security of police officers, firefighters, and other city employees.
Chuck Reed, however, seems to have not learned the lesson from the fiasco of Measure B. Twice in recent years, Reed has worked with former San Diego city councilmember Carl DeMaio to pursue a statewide anti-pension ballot measure. They withdrew their measure both times, most recently due to a lack of public support. Reed has now joined up with other anti-pension ideologues to form a group called the Retirement Security Initiative. Far from protecting retirement security, however, the members of this group all have sordid pasts when it comes to the retirement security of public employees. Reed recently testified on behalf of RSI before the Lincoln, NE, Pension Review Board, promoting his same, tired anti-pension rhetoric. It’s clear now that Chuck Reed is just as committed as John Arnold to dismantling retirement security for public employees across the nation. If you hear of Chuck Reed or the Retirement Security Initiative being active in your state, please let us know so we can join you to fight back and protect pensions.