San Francisco taxpayers contributed $104.5 million into city workers’ Social Security accounts this fiscal year, and that cost is expected to grow in the next year. Yet those costs are not factored into two dueling ballot measures meant to address growing retirement costs.
For decades, city government has paid 6.2 percent of a city worker’s salary into their Social Security accounts. That contribution is matched by the employee’s own 6.2 percent contribution. When that worker retires at age 62, he or she receives a yearly payout of more than $20,000 a year.
That’s in addition to a pension from the San Francisco Employees Retirement System, which has come under scrutiny over increasing costs. Last month, Mayor Ed Lee, Supervisor Sean Elsbernd and unions unveiled a moderate reform measure that would require employees to pay more of their salary into their pension. Public Defender Jeff Adachi is pushing another measure that asks for even more of a contribution from employees.
As city staffers and labor unions hammered out the compromise plan introduced by Lee, Social Security was a hot topic. While most of The City’s 26,000 employees receive the benefit, police officers, firefighters, probation officers and sheriff’s deputies are excluded.
Those public safety employees receive 90 percent of their salaries as part of their pension package while other employees receive 75 percent. The added Social Security payments are meant to bridge the disparity between the two pension plans.
That contribution is significant. Social Security payments for city employees for the current fiscal year, ending on June 30, total $104.5 million. In the next fiscal year, that cost is expected to rise to $107 million.
Public safety unions say it is unfair that they already are being asked to pay more into their pensions under Lee and Adachi’s pension-reform proposals than other employees in addition to not receiving Social Security.
“It’s a pretty significant number when you throw that in there,” said Tom O’Connor, president of the Firefighters Local 798. “It’s just one of the inequities you see out there with public safety, especially when you look at Adachi’s plan.”
But when the Social Security contributions were brought up in pension reform discussions, the topic was shelved because the federal government requires counties to provide that payment. It’s also required of most private businesses owners under federal law.
6.2 percent: Amount of employee’s salary paid by city
6.2 percen:t Amount paid by employee
4.2 percent: Employee contribution in 2010 because of stimulus
62: Age at which Social Security can be collected
$104.5 million: Spent on Social Security in 2010-11
$107 million: Expected to spend in 2011-12