Last week’s election results were unexpected, to say the least. Few people projected Donald Trump to win the presidential race. While we’ve expressed doubts about Trump’s commitment to retirement security for working families, much is still uncertain about the future Trump administration. There was one clear pension victory though: Measure F passed in San Jose, CA!
We discussed Measure F in our election preview. Measure F is part of the ongoing fight over public pensions in San Jose. This all started back in 2012 when former Mayor Chuck Reed forced through Measure B, which enacted harsh cuts to pension benefits for police officers, firefighters, and other city employees. San Jose employees sued over the unconstitutional attacks on their pension benefits and Measure B faced years of legal challenges. Eventually, a new mayor worked with the unions representing the affected city employees and they reached a compromise, which became Measure F.
San Jose’s police officers, firefighters, and city employees all participate in defined benefit pension plans, as well as a retiree healthcare plan. Measure F represents a compromise between the benefits that employees received before Measure B passed in 2012 and the harsh cuts that were enacted by Measure B. Employees will continue to participate in their defined benefit pension plan, but they will increase their contributions. The city of San Jose and its employees will be required to make the full annual required contributions to the pension fund each year. Pension benefits for certain employees will be improved to make San Jose competitive with other cities in the Bay Area. Measure F makes other, more technical improvements to establish a fair pension system.
Measure F also offers a lesson in how to make changes to pension benefits. Rather than force through unconstitutional, harsh cuts to public pensions, political leaders should work with firefighters, police officers, and other public employees if benefit changes must be made.
Former Mayor Reed did end up endorsing Measure F. It is admirable that Reed can admit where his plan failed and see that Measure F offers a better path forward. However, Reed is now a board member of the Retirement Security Initiative, a national group funded by noted anti-pension crusader John Arnold. He travels around the country to places like Lincoln, NE, and argues for the same kinds of cuts to public pensions he pursued in San Jose. Instead, Reed should urge the Retirement Security Initiative to advocate for preserving and protecting the retirement security of working families, rather than pushing for harsh cuts and failed alternatives like 401(k)s.