Former San Jose Councilwoman Questions Legality Of Pension Reform Plan

SAN JOSE (KCBS) – A former San Jose city councilmember and Vice Mayor is among many poking holes in the city’s new pension reform plan.

Cindy Chavez served eight years on the city council and now heads the South Bay Labor Council.

She said the city can’t change pension benefits of current city employees simply by declaring a fiscal emergency.

“To declare a fiscal emergency, to benefit one party, so that one party can eliminate an agreement is a huge challenge,” Chavez said. “It’s a huge legal challenge for them that I don’t think they’re going to overcome.”

KCBS’ Mike Colgan Reports:

But San Jose City Attorney Rick Doyle said the Supreme Court has recognized the right of cities to alter contracts.

“Because we have a fiscal emergency, or may have a fiscal emergency if they declare it, there is the ability to modify those agreements,” said Doyle.

The San Jose City Council is scheduled to vote on formally declaring a fiscal state of emergency and deciding which pension reforms might be taken to voters on June 21.

Cities across the country with similar problems are expected to closely follow the legal fight in San Jose.

(Copyright 2011 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

  • Darlene Walker

    The Unions, isn’t that where your salary comes from??? Of course you’ll do anything to keep your salary and benefits. You don’t give a damn about the City or it’s employees or anyone else. Now we see where all the crooks should bhe ashamed of yourself. You’ve mjade promises you can’t keep huh !!! well too bad.

    • lisa

      Amen to that…..those people will make a ton of money after they retire, your also right they don’t give a damn about anyone but themselves and I sit here wondering how the hell am I going to feed my family for the week. Are we the only 2 people in San Jose who see a problem with all of this???

    • JT

      Unions do not pay peoples salaries, they are there to negotiate and protect workers rights. Please do not confuse and lump all Unions together. City, County, State and Federal employees get paid by you and me and the taxpayers. So therefor we have a right to vote on the pension reform. Other employees that belong to Unions such as carpenters, farm workers, grocery workers, teachers, and nurses get paid by their employers not the taxpayer. It is the city and state pensions that have gotten us in trouble I think due to the fact that they did not know how to fund or invest into the employees retirement. I am not a public employee nor do I belong to a Union. But I am on the fence on this one. One thing I do know is that Unions are not bad. Poor money management within the city is.

  • Ronald

    401K is the answer

    • The Cold Hard Truth

      Yes, Ronald McDonald, 401K is the answer. Do you happen to know what you are even talking about? A 401K or 457B is meant to be part of an overall retirement package. It is not and was not meant to be the sole source of income into retirement. It was meant to augment social security and pensions/retirement plans. As one economist put it, “It’s meant to the third leg of a three-legged stool.” However, now most people do not receive pensions/retirements so they have to rely on a 401/457 and social security. The vast majority of 401/457 plans have investment opportunities that are at absolute best mediocre. They also depend upon the financial markets, which you should realize can be quite hard on people’s personal money.

      So, what you advocate is having uneducated (most people have no clue about investing) people making vital financial investment decisions which they will have to base their future retirement and ability to live on coupled with social security. Sounds like a winning plan. I guess you have adonis dna and tiger blood, huh? YOU MUST SO BE WINNING!

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