SJ unions file lawsuit against pension reform

(BCN)San Jose’s much-debated pension reform Measure B passed with 70 percent approval on Tuesday, marking a major victory for Mayor Chuck Reed, who has been watched nationally for his attempts to rein in retirement costs.

Reed expressed cautious optimism about the measure’s passage on Tuesday night, as results were still being allied. “It’s going great, and it’s good news for the people of San Jose,” he said.

Tom Saggau, a union political consultant, said Measure B’s passage would be swiftly followed by legal action by the city employee unions.

Among the changes contained in Measure B, new employees would pay 50 percent of pension costs, while current employees would be given the option to choose a lower-cost plan or pay more for their current one. According to Saggau, that amounts to the city walking away from a contract it made with employees. “It’s absolutely unconstitutional … we’re going to court very shortly to litigate over Measure B,” Saggau said.

The measure would also give the City Council the right to temporarily suspend retiree cost-of-living adjustments during fiscal emergencies and would require voter approval for any future increases in retirement benefits.

Reed has said the city’s retirement costs have tripled in the last

decade and now cost the city $245 million per year.

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