San Jose Offers Model For Pension Reform

The independent commission tasked with making state government more efficient has sought San Jose Mayor Chuck Reed’s views on how to control skyrocketing public pension costs.

Reed said his testimony before the Little Hoover Commission in Sacramento on Thursday would describe San Jose’s efforts to offer newly hired public employees less costly pension plans.

“Our pension costs have nearly tripled in the last decade. They’re driving costs out through the roof, making it necessary to cut other services,” Reed said.

KCBS Mike Colgan Reporting:

The city employed 7,400 full-time employees in 2001 where now just 5,800 are on the payroll. Several of San Jose’s public employee unions took wage concessions of as much as 10 percent this year to help balance the city’s budget.

Reed blamed the staffing cuts on a pension system that allows 50-year-old retirees to collect 90 percent of their salary, with an annual three percent cost of living increase each year.

“They’ll make more money in retirement than when they were on active duty. That’s too much,” he said.

Changing San Jose’s public employee pension system requires a charter amendment that goes before voters in November.

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