Retirement According to the City Charter

Mayor Chuck Reed and the City Council moved forward with steps Tuesday to declare a fiscal and public safety emergency. The goal in doing so is to allow the city to alter public employee retirements, which have become an enormous unfunded liability, estimated to cost the city more than $400 million by 2016.

The city charter sets out some basic tenants for public employee retirement, and Reed is often touted as a stickler for adhering to the charter. Some measures the mayor would like to take, however, will require going to voters for approval.

The question many have asked is: What exactly does the charter say?

We talked with the mayor’s spokesperson, Michelle McGurk, who sent over a link that will take you directly to the portion of the charter that deals with retirement. Broken up into two parts, the charter discusses retirement for police officers and firefighters as one group and then retirement for all other employees in a separate section.

The Following are the basic requirements for employees who are police officers or firefighters:

(a) RETIREMENT. An officer or employee of the Police Department or Fire Department of the City shall be entitled, upon his or her request, to be retired from City service and to receive during such retirement until his or her death a monthly retirement allowance equal to fifty percent (50%) of his or her “final compensation,” hereinafter defined, if he or she:

(1) Completes twenty (20) years of “service,” hereinafter defined, and attains, while holding such office or employment, the age of fifty-five (55) years or more; or

(2) Completes twenty (20) years of “service,” hereinafter defined, is “disabled,” as such term is hereinafter defined, while holding such office or employment, and applies for such retirement while holding such office or employment.

The Following is the basic requirements for employees who are not police officers or firefighters:

(a) SERVICE RETIREMENT. An officer or employee of the City, other than those hereinafter excluded, shall be entitled, upon his or her request, to be retired from City service and to receive during such retirement until his or her death an annual retirement allowance equal to two percent (2%) of his or her “final compensation,” hereinafter defined, per each year of his or her first twenty-five (25) years of service, hereinafter defined, plus one percent (1%) of such final compensation per each year of his or her service in excess of twenty-five (25) years, subject to a maximum of eighty-five percent (85%) of such final compensation, if he or she:

(1) Completes twenty-five (25) years or more of “service,” hereinafter defined, and attains, while holding such office or employment, the age of fifty-five (55) years or more; or

(2) Attains, while holding such office or employment, the age of seventy (70) years or more regardless of his or her years of service.

It’s worth noting this little tidbit at the very beginning of the charter’s “Duty to Provide Retirement System”:

“Subject to other provisions of this Article, the Council may at any time, or from time to time, amend or otherwise change any retirement plan or plans or adopt or establish a new or different plan or plans for all or any officers or employees.”

Josh Koehn is a former managing editor for San Jose Inside and Metro Silicon Valley.

16 Comments

  1. Of course the Mayor and his spokesperson leave out a crucial portion of the city charter where there are amendments that allow for bargaining. The city charter provides for a basic level of retirement compensation so the city cannot bend and employee over at the end of their tenure. Then there are contracts that are entered into, revisited and amended every year/few years depending on market conditions for pay, working conditions, health care, retirement, and current legal decisions related to employee or management rights.

    As usual, only half truths coming out of- the Mayors office. C’mon Josh, you usually do a better job that this in your research. What gives??

    • The fact remains that the payments to the current 4900 penioners account for almost 25% of the entire general fund budget for a city of 945,000 people. And it’ll be higher next year.

      You call that fair?

        • Well, when there are fewer police to respond to emergencies that DOES constitute an emergency on MY part!

          While I do not begrudge anyone a decent retirement, the cities primary responsibility is to protect its citizens, period. 

          The “failure to plan” and “there is no crisis mantra from the union people is wearing thin.

          So is the “blame the union” and “let’s lay them
          ALL off” talk from the anti-everything wignuts on other side.

          With all the demagoguery going on I suspect the citizens of San Jose will be the losers in this money fight, especially those who, after July 1st, have to call 911.

        • I could not agree with you more. While attempting to provide various degrees of solutions to the city the unions have had no luck and instead been ignored and beat up. Everyone has their line in the sand so to speak. When you try to help but get rebuffed at every turn, eventually you will have to pick a point and stand your ground. So, with that said, there will be an emergency on the behalf of citizens when Reed decides that his “my way or the highway” approach to bargaining is better than a true sit down based upon honest negotiations. ask and cop or firefighter and they will tell you that reform on some level needs to be done. No one will disagree, what we disagree on is being berated and demeaned during the process. SO I stand by what I said before, Failure to plan on their part does not constitute and emergency on my part.
          reed should have planned better in his efforts to negotiate a fair settlement instead of creating a situation where everyone is the loser.

      • For years we accepted lesser pay than the private sector. I could never buy a house on City pay in San Jose.  We were the tortoise and the dot.com the hare.  Lesser wages for retirement security.  They have already taken away my social security I earned working a second job for 20 years to make ends meet.  Many cash in their pensions to live between six figure income jobs.  I never approached six figures.  Had college degrees and Law School—chose security of government and liked government.  But we already got less through the years. Don’t take away our pension.

  2. “estimated to cost the city more than $400 million by 2016.”

    I don’t think it would have been any where near this amount if the city didn’t “offset” it’s contributions during the boom times.  It is estimated that was $120 million dollars.  Fiscal mismanagement.  Period.

    • <Fiscal mismanagement. Period.>

      Exactly correct. Fiscal mismanagement by the very people public employee unions helped to elect.

      • If the electorate-at-large would pay more attention and actually vote for qualified candidates, the unions would not have been able to elect the people they did.
        Shame on the electorate.

        • Ernest Beginner- Of course I mean Chuck Reed (among many others). He did get the POA’s endorsement for Mayor of San Jose didn’t he? This incarnation of Reed just happens to be an example that even the average public employee’s mind can grasp, of how their stupid decisions have ultimately not been in their own best interest. All their previous endorsements were undermining their future too but they just didn’t recognize it. 

          Just Sayin- Yep. Shame on the electorate-at-large. I’m a part of that electorate and you are right. Ultimately we ARE responsible for the spineless ‘leadership’ we’ve suffered for the past 2 decades and we ARE paying the price of our ignorant ballot decisions.
          But the public employees by and large have consistently gotten exactly the ‘leadership’ that they have sought over the last 20- 30 years. And for 20- 30 years they’ve been handsomely ‘quid pro quo’d’ for their ‘trouble’. How they now have the gall to moan about the ill effects that were caused by the very people that they themselves actively helped to place in office, is beyond me. We give ‘em everything they asked for for 20 years and now they’re pissed off at us?
          They should be apologizing to us. Instead they ratchet up the bogus indignation.

          Un.
          Freakin.
          Believable.

          Just another symptom of the modern phenomenon of refusing to take responsibility for one’s actions I guess.

        • > But the public employees by and large have consistently gotten exactly the ‘leadership’ that they have sought over the last 20- 30 years. And for 20- 30 years they’ve been handsomely ‘quid pro quo’d’ for their ‘trouble’. How they now have the gall to moan about the ill effects that were caused by the very people that they themselves actively helped to place in office, is beyond me. We give ‘em everything they asked for for 20 years and now they’re pissed off at us?

          You speak wisely, Galtus.

          The problem that the unions have made for themselves, and one that the don’t seem to recognize, is that they believed the promises of politicians who knew or should have known that those promises COULD NOT BE KEPT.

          The unions are like skinny teenagers who read the ads in the back of their comic books on how to get big muscles like Charles Atlas. They sent their money in, got their mail order junk, but never got big muscles.

          They’re never going to realize that the “big muscles” promise was bogus from the beginning, and everyone knew it was bogus but them.

  3. And you seem to have left this little part out….

    (e) MISCELLANEOUS. The benefits hereinabove specified are minimum only; and the Council, in its discretion, may grant greater or additional benefits……

    In other words, the city and the unions in joint contract agreements may give more than the minimum listed above….  If they didn’t have it, they shouldn’t have agreed to it. 

    You don’t buy a car and sign a contract with the dealer just to have the dealer say later… “just kidding you own more because we might be broke and can’t afford to have you pay only that amount…!”  That would be illegal….

    This is just another wave that the mayor is riding to get his agenda across…. the tide against public employees is overwhelming and he may get his way but not without a drawn out legal fight which will cost the city millions…. In the end, NO ONE will want to work for the city for any length of time when they can go next door and get a better retirement….  Can you say “stepping stone” to someplace better….

  4. Hey Josh! Please do you homework if you want to be a good investigative journalist. Journalist nowadays are so lazy and info given to them are received at face value and sometimes as the truth without checking and investigating the facts and background of the news/info given to them.

    Gone were the good journalists during the Watergate era.

    Did you do your homework Josh?

    http://www.sjretirement.com/Uploads/Fed/Microsoft Word – FEDFACTS 062710.pdf

    • Good journalists are not lazy. But they are only as good and aggressive as their editors allow them to be. The Merky has a corporate agenda; no matter its journalistic mission, the corporate one always trumps it. Metro has no journalistic mission. Its cover stories, one after another, define it as a life-style publication with a few pages of commentary, which is mostly for free, that they pass off as “politics.” Why does a San Josean have to come to this web site to learn about the charter’s requirements on retirement? And why does anyone trust the mayor’s spokesperson to deliver the full story on the charter?

  5. San Jose should feel lucky that it IS a Charter City and the citizens can, at any time, using the ballot initiative process, put forth a ballot measure to amend the Charter.