San Francisco's labor unions wary of potential pension-rate increases 

A ballot measure from Public Defender Jeff Adachi that would double pension rates has drawn concern from labor leaders working to strike an agreement with Mayor Ed Lee on an alternative measure.

As Lee is negotiating a consensus pension measure with buy-in from labor unions for the November ballot, Adachi is gathering signatures to place his own pension measure on the ballot that would result in workers paying significantly more out of their paychecks.

Police Officers Association President Gary Delagnes sent an email to union members Wednesday warning them about Adachi’s measure: "The effect on our members, both current and future, will be severe." Delagnes warned the measure will double officers’ pension contributions to 15 percent of their paychecks for years to come.

The missive comes as labor leaders and Lee are close to a compromise November ballot measure, and one Delagnes would have to sell to his union members. "I am doing everything possible to craft an amendment that we can all live with," Delagnes said in his email.

Adachi’s measure increases all public safety workers’ pension contribution rates from 7.5 percent — or 9 percent for new hires — to 10 percent. Other workers’ pension rates would stay at 7.5 percent. But a provision in the measure would trigger higher employee contribution rates when The City’s share of retirement costs rises. High-end wage earners could see increases between 4 and 8.5 percent.

By 2014, The City’s rate is projected to be 31 percent of payroll, an $800 million bill. Adachi maintains only a proposal that increases by the his proposed levels when The City’s expenses go up would adequately address the financial crisis. "We set out to solve the problem," he said.

Delagnes and other labor leaders that are part of the financier Warren Hellman’s pension working group have advanced their own ideas, including pension rate increases between 2 and 4 percent. A rate increase of 1 percent would generate an additional $24 million a year, based on the current $2.4 billion payroll.

Firefighter labor leader Tom O’Connor said he expects agreement on the sticking points with Lee by as early as the end of next week. Labor leaders met Thursday afternoon with city officials, and are scheduled to meet again next week on the pension proposals. Pension contribution rates remain unresolved, he said. "Both sides are working toward a common number."

O’Connor dismissed the suggestion Adachi’s proposal is influencing the debate.

"Jeff is kind of like background noise," he said.


Rising expenses

The City’s pension costs are expected to double in just a few years.

FY 2010-11: $357 million

FY 2011-12: $422 million

FY 2012-13: $537 million

FY 2013-14: $675 million

FY 2014-15: $796 million

Source: City Controller’s Office, Department of Human Resources

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