San Jose firefighters are facing higher retirement ages and lower pension benefits after they came out on the losing side of a long fight between labor unions and the city of San Jose.
Voters approved a ballot measure to cut pension benefits for newly hired public employees almost four years ago, but the firefighters had yet to adopt the changes.
Reported by San Jose Mercury News:
The changes mean newly-hired firefighters can retire at age 60 with a pension of up to 65 percent of their salary. Current firefighters can still retire at age 50 with up to 90 percent of their salary.
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The final arbitration decision, announced this week, will save taxpayers millions of dollars compared to more generous retirement plans previously given to firefighters. It’s a victory for Mayor Chuck Reed, the city’s chief pension reformer, and his fiscal conservative allies that make up a majority of the City Council, who have seen the public costs for employee retirement skyrocket in the last decade.
Retired Judge Catherine Gallagher, the arbitration board chair, made the ruling nearly four years after voters approved a second “tier” of reduced retirement benefits for new employees, and more than two years after voters set limits on those pensions. Gallagher noted in siding with the city that the voter-approved measures prevented her from adopting anything that increased taxpayer costs.
The firefighters are the last of 11 city unions to implement the pension plan changes for new hires, while voter-approved cuts to current employees’ retirement plans remain tied up in court.
Firefighters unions opposed the changes. They argue that it will be harder to hire quality talent if they can’t offer better retirement benefits. As a result, they claim, emergency response times will increase and the quality of the fire department will suffer.