Editorial: Progress on municipal pension payments

Our neighbors to the west in Solana Beach are trailblazing their way toward workers paying their full share into their retirement accounts. Officials there announced recently that the city will become the first in the county to require full retirement fund participation by employees. Just as importantly, the city said that new public safety employees will receive a lower pension benefit than current employees. The changes will save Solana Beach, a city of 13,000 residents, $200,000 this coming year, an amount that will increase to $600,000 annually after 10 years.

Progress is also being made in Poway, where all three employee groups have approved one-year contracts that increase employee contributions to the retirement fund. Over the past three years the employees, who used to pay nothing into their accounts, have agreed to making contributions of first 1 percent, then 3 percent last year. In 2010-11 the contributions are increasing another 1 percent. The city still contributes 5 percent to firefighters and 3 percent to other employees, but there appears to be a concerted effort to close that gap. We would also like see reduced retirement benefits offered to new Poway workers once the city’s hiring freeze is lifted.

Why is it important that municipal benefits be lowered and that employees pay their fair share of the costs? Aside from relieving cash-strapped governments of related costs, treating workers more like private-sector employees makes sense because of the changed employment climate. Until a few years ago governments were saying they needed to beef up their benefits in order to compensate for lower salaries, so that cities could attract and keep good workers. It was common for a mid-level manager, for example, to hire on with a city, gain a few years of experience, then bolt to the private sector.

Those days are over, thanks to the Great Recession. Confronted with decreased tax revenue sources and soaring costs to service existing retirement obligations, (see City of San Diego) governments are laying off workers and trying to make do with less. In the rare cases when there is a need to fill a position, there are no shortages of qualified applicants who are willing to work for less money and reduced benefits.

To ignore this significant shift in the labor pool is to do a disservice to taxpayers.