Filner Releases Pension Alternative to Prop B

by on April 30, 2012 · 4 comments

in Economy, Election, Labor, Politics, San Diego

The long awaited pension reform proposal from the lone Democrat in the San Diego Mayor’s race has finally arrived

As I noted last Friday, mayoral candidate Bob Filner wasn’t doing San Diego any favors by not officially releasing his alternative to the Comprehensive Pension Reform (Prop B) promoted so heavily by Carl DeMaio and the other Republican challengers in the mayor’s race.  Prop B is the plan that would switch San Diego’s public employees’ pension plan to a 401k style investment account.  It’s a plan that saves the city no money on the switch itself, but instead claims to save $763 million over the next 30 years,  entirely through the legally dubious pay freeze on public employee salaries.

Well, the Filner campaign finally got the message, and today they released the details of his alternative in its entirety.  As he discussed in a lengthy interview with myself and Annie Lane of the OB Rag, the plan calls for the refinancing of the pension debt, saving the city over $500 million over 10 years; negotiating a new five year labor agreement with labor unions that will freeze pensionable salaries for the next two years, and capping pay increases by no more than 2% over the following three years; and capping pension payments at $99,999, eliminating the much maligned six figure pension payouts that have become a political football by candidates on the right  of the political spectrum.

All told, Filner says his plan will save the city $753 million over the next 15 years, achieving similar savings to Prop B but in half the time.

DDF= DeMaio, Dumanis, Fletcher Plan. Source:


See the entire proposal here.


{ 3 comments… read them below or add one }

dave rice April 30, 2012 at 9:51 pm

Devil’s advocate checking in…

On the surface this looks compelling, but I’ve got to question where the $250M in savings from a renegotiated labor contract comes from. Is this a watered-down version of CPM, claiming savings from a negotiated pay cut that may or may not be agreed to at the bargaining table? Are any of the future savings not included in the $250M also going to come from lower eventual pensions as a result of the proposed deal?

I’m not saying that the plan doesn’t hold promise, or that it wouldn’t work. But absent an upfront and unambiguous promise from labor to go with Bob’s plan (which I’m not seeing in the link, though I haven’t searched extensively), it seems just as hypothetical as any savings promoted by the DeMaio plan, minus the certain legal defense costs of his ballot initiative, since up to this point as far as I know Filner intends to negotiate with labor rather than shove a cut down their throats. I’m just saying that negotiation doesn’t guarantee an outcome.


Andy Cohen April 30, 2012 at 11:17 pm

The answer to part of your question is yes, he is trying to accomplish something very similar by negotiating a labor agreement with the unions. Look at it this way: The independent budget analyst found that Prop B achieved the entirety of its savings through the five year pay freeze. They also found that the switch to the 401k system will actually cost the city $13 million.

Also keep in mind that city workers have already been working for the last five years under a pay freeze, which they agreed to in negotiations with the City Council. What Filner proposes is to extend that pay freeze for two more years, and then contract in 2% raises per year for the following three years. That would give similar results that Prop B will supposedly offer, assuming the pay freeze can be put into full effect (which it won’t).

But the bulk of the pension savings comes from refinancing the pension debt, which he says can be done immediately and without putting anything to a vote. The figure he used in our interview with him was $550 million over 10 years.

Given the level of cooperation that the labor groups have already displayed, and given Filner’s history of being labor friendly, it’s really not all that farfetched to believe that he would be able to strike a deal at the very least close to what he’s proposing.

The unions have skin in the game. They want to see city services restored to full capacity just like everyone else. Unless something’s drastically changed, there’s no reason to believe that they wouldn’t continue to work with city officials to get something along these lines done. Maybe I’m being naive, but I don’t think so.

Also consider that what Filner is proposing claims to accomplish its goal in half the time that Prop B does: 15 years as opposed to 30 years, lending further credence to the notion that Prop B is more about punishing public workers for being public workers than it is about actually being fiscally responsible.

I guess we’ll have to wait for an actuary to actually parse through the plan to know for sure what we can expect, but on it’s face at least it seems very reasonable, and almost completely without the legal complications that will accompany Prop B.


dave rice May 2, 2012 at 10:33 pm

Thanks for the response, Andy. Sorry so slow acknowledging it…

I would expect labor to be much more receptive to the Filner plan than Prop B, and you’re right in that it doesn’t add the extra cost of switching to a 401(k) system. But as you say, workers have already been operating under a pay freeze for some time – are they itching to agree to extend it?

Of course, I’m not going to believe that Prop B stands a chance of being implemented without a lengthy (and costly) legal battle, the expense of which isn’t accounted for anywhere by B backers because it’s as yet unknown.

As I said before, I’m mainly playing devil’s advocate and anticipating counter arguments from the opposition.

I also wonder if the long-term cost of refinancing and extending debt obligations offsets some of the early gains. But that argument opens the door for the counter that using the money in the short run to avoid deferring maintenance to city infrastructure offsets those costs.

Like you say, we’ll have to wait for the full analysis of the plan to make any real judgement…I look forward to seeing how that goes.


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