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San Jose Mayor Reed Seeks To Block Retirement Bonuses

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San Jose Mayor Chuck Reed (CBS)

San Jose Mayor Chuck Reed (CBS)

SAN JOSE (AP) – San Jose’s mayor wants to block bonus payments to thousands of city retirees because of the pension system’s projected $2 billion shortfall.

Mayor Chuck Reed said he’s surprised the city is considering bonus payments with pension plan finances in such distress.

At issue is a “supplemental retiree benefit reserve” payment giving retirees a 13th check on top of their monthly pension payment in years when investment returns exceed expectations. The benefit was granted to most city workers in 1986 and to police and firefighters in 2001.

The San Jose Mercury News reported an agenda-setting committee led by Reed voted Wednesday to ask the City Council next week to suspend the bonus checks and consider restructuring or eliminating the retirement benefit.

(© 2010 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)

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