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Board committee hears actuarial report on pension charter amendment; supervisor offers amendments and meeting set to continue
Summary
Committee heard an actuarial report estimating $375 million in 25-year savings from a proposed pension charter amendment; Supervisor Ellspern introduced amendments (redirecting employer-cost deltas to retiree health, changing effective date, allowing trial courts to opt in, and preserving negotiability of certain employee contributions). Committee continued the item for further review and meet-and-confer with labor.
The Rules Committee on January 2010 considered a charter amendment proposed by Supervisor Sean Ellspern that would change elements of the city’s defined‑benefit retirement plan. Gary Amelio, executive director of the retirement system, presented a costing from the system’s independent actuarial firm (Chiron) that estimated a conservative savings to the city of about $375,000,000 cumulatively over the first 25 years if the proposal is adopted, and an estimated additional roughly 1% reduction in employer contribution in each subsequent year. Amelio emphasized the estimate used a static payroll base and did not assume future pay increases or staffing changes.
Empek Stevenson from the Controller’s Office said her office received the actuarial report and will prepare the controller’s statement for the voter pamphlet, noting the statement will set out the assumptions the office chooses and that alternative payroll assumptions would keep the estimate in the same general range.
Supervisor Ellspern offered multiple amendments during the hearing. He proposed disbanding a three‑person distribution committee (controller, treasurer, executive director) and directing any delta when employer contribution falls below normal cost into the retiree health trust; he proposed changing the effective date to July 1, 2010; he proposed adding language to allow trial courts to opt into certain formulas; and he moved to delete a provision that would make employee contributions non‑negotiable so current contribution arrangements would remain subject to bargaining. Ellspern said removing the non‑negotiable clause would not materially change the actuarial estimate.
Labor representatives and public commenters testified at length. Union speakers — including Bob Muscat of the public employee committee, Robert Holland of SEIU, and Labor Council President Mike Casey — urged careful review of provisions addressing "spiking" (three‑year averaging), the formation of tiers for new employees, and the effect on recruitment, morale and collective bargaining. Some labor speakers said they sought adjustments that would preserve bargaining rights and avoid perceived targeting of specific worker groups.
After discussion, the committee agreed to duplicate the file (so members could consider the original proposal and a separate, amended file) and to continue both files to allow additional meet‑and‑confer and technical review by the city attorney. The committee set follow‑up meetings to give labor and sponsors time to negotiate and to allow staff to prepare voter‑pamphlet materials and any needed legal edits.
What happens next: The committee continued the item and will reconvene with revised text or companion files after further review and meet‑and‑confer sessions. Any formal vote will be scheduled after the texts are finalized and posted for public review.
