Troubled Pension System Means No Bonus Checks For San Jose City Retirees
SAN JOSE (KCBS) - Thousands of retired San Jose city employees won't be getting their bonus checks after the city council voted Tuesday to suspend the benefit in the face of a projected $2 billion shortfall in the pension system.
Paying retirees a 13th check, as it's called, would cost the city $3 million. Mayor Chuck Reed said suspending the benefit makes sense at a time when the city is facing a $2 billion shortfall in its pension system.
"It's somewhat alarming to think that we might be sending bonus checks out to people when we're so underfunded with liabilities in the billions," said Reed.
KCBS' Mike Colgan Reports:
Bob Lenniger, president of the Federated Retirement Employees Association said that a lot of retirees at the lower end of the scale would be hurt by the suspension.
"Out of three-thousand pensioners in the federated system, 2,000 qualify for the city's housing program on the pension amount of 'extremely low-income, and very low income,'" said Lenniger. "And 875 of those 3,000 get $18,000 or less per year gross, that's $1,500 each month."
The motion passed on a seven to four vote.
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