California Supreme Court strikes down San Diego ballot measure to switch to DC plan

The California Supreme Court ruled that the city of San Diego officials should have met and conferred with union officials regarding a ballot measure to replace the city's defined benefit plan with a defined contribution plan for new city employees, the court order shows.

The court sent the case back to the 4th District Court of Appeals to determine the appropriate remedy, which could include vacating the results of the election approving the ballot initiative and paying city employees for all lost compensation, including the value of lost pension benefits as ordered by the state Public Employment Relations Board. The proposition passed in 2012 and closed the city's defined benefit plan to city employees hired on or after July 20, 2012.

In the Thursday opinion, the court overruled the appeals court ruling and found that city officials had a duty to meet and confer in good faith concerning the ballot initiative. The ballot measure was conceived of and supported by then San Diego Mayor Jerry Sanders, the opinion stated.

Mr. Sanders had "pursued pension reform as a matter of policy while acting as the city's chief executive officer," the court noted. The state Supreme Court also found that Mr. Sanders used the "powers and resources of his office to alter the terms and condition of employment." The court noted that Mr. Sanders used his office to alter city employees' terms of employment, in part by holding a press conference to announce that he would be putting the reform measure on the ballot and by recommending in a state of the city address that the City Council adopt a policy of substituting the city's defined benefit plan with "401(k)-style plans."

"The Supreme Court's decision does not require any immediate action by SDCERS. Although SDCERS is not a party to these legal proceedings, SDCERS will continue to monitor these legal proceedings," said a statement by the $8.1 billion San Diego City Employees' Retirement System.