Case Study: San Jose Pension Compromise. 3 Goals. 3 Challenges.

Background:

• In 2012, San Jose Police Pension System faced a $1 billion deficit
• Reform went to the voters, and passed with 70% 

3 Goals of the San Jose Pension Compromise:

• Pension Compromise occurred after the city laid off employees, cut services & raised taxes in an attempt to deal with the fiscal crisis
• Employees will contribute more or opt for less benefits
• New Employees would get less generous benefits

3 Challenges that Emerged:

• Compromised was challenged in court.
  • Courts agreed that the city couldn’t reduce the benefits to current beneficiaries
  • In 2016, a revised compromise was negotiated & was approved by the voters
• San Jose Police Department had an exodus & needs 300 street ready officers
• Business community raised concerns about public safety

3 Goals of the Revised 2016 Pension Compromise:

• Stop the 13th check
• Cut retiree health benefits
• Cut retiree cost of living adjustments

KQED | A Case Study on Pension Reform: San Jose’s Grand Compromise