Sanders: Labor deals will reduce pension deficit
Labor deals reached with three of San Diego’s municipal labor unions and imposed on two others will cut the city’s $2 billion pension deficit by $100 million next year and reduce the annual payment into the retirement system by $12 million, Mayor Jerry Sanders said Monday.
The more than $1 billion shortfall in the city’s retiree health care obligations will also be cut by about $350 million through the temporary freeze in benefits for city workers, Sanders said.
“So with all of these concessions, you can see, we will see a dramatic impact to our pension system and retiree health care system -- both of which
are the two large unfunded liabilities,’' he said.
Two-year labor agreements were reached last week with the San Diego Municipal Employees Association, San Diego City Firefighters Local 145 and the Deputy City Attorneys Association.
The City Council voted unanimously to impose one-year contracts on the San Diego Police Officers Association and the American Federation of State, County and Municipal Employees Local 127.
The deals cut compensation for San Diego’s 10,500 employees by 6 percent across-the-board through a pay freeze, reduction in retirement and health benefits, fewer paid holidays and mandatory furloughs.
Sanders sought the cuts to help close a $60 million budget shortfall for the coming fiscal year. The employee compensation cuts will save the city about $32 million in fiscal year 2010.
The reduction in pay in benefits will also lead to long-term savings through lower pension and retiree health care obligations.
The City Council is expected to finalize the deals Tuesday.