New San Jose firefighters will see reduced pension benefits after a ruling on the voter approved pension changes.
The ruling is a major victory for Mayor Chuck Reed, who has backed pension changes, and his fiscal conservative allies that make up a majority of the City Council, who have seen the public costs for employee retirement skyrocket in the last decade.
The ruling from retired Judge Catherine Gallagher, the arbitration board chair, comes nearly four years after voters approved a second "tier" of reduced retirement benefits for new employees.
Under the new guidelines, newly hired firefighters can retire at age 60 with a pension of up to 65 percent of their salary. That’s dramatically lower than the current system, where firefighters can retire at age 50 with up to 90 percent of their salary.
The reduced benefits will only affect new hires. Unions representing the firefighters say the changes will make it harder for the city to attract new hires.
But this fight could be heading back to the ballot. The firefighters union has proposed a measure for the 2016 ballot that would provide new firefighters with pensions that are about half-way between those two plans -- allowing them to retire at age 55 with 75 percent of salary. That proposal is expected to be denied by the current 11-member City Council, though the mayor's seat and up to five council spots will turn over after the Nov. 4 election, according the the Mercury News’ Mike Rosenberg.