401(k)’s replacing future employee pensions?

By Mark Nichols
for the American Police Beat.

After citizens of San Diego voted overwhelmingly against raising taxes to cover deficits, the Voice of San Diego is reporting that the mayor has a great idea to balance the budget. San Diego Mayor Jerry Sanders has proposed 401(k)-style retirement accounts for most new city employees and eliminating their pensions. When voters rejected the slightest of tax increases, half of one whole cent, Sanders apparently decided to bring out the big guns in trying to eliminate the $70 million-plus San Diego deficit. But Sanders’ plans to kill pensions for police officers needs voter approval.

Making matters worse is that the proposal won’t save any money for years to come should it get passed. Sanders has just two more years to solve the financial problem he was elected to fix. In order to even make a dent in the deficit the mayor will have to resort to drastic measures.

Details of how the new 401(k) plan would work are hard to come by- a characteristic of every proposal that promises to reduce spending by balancing the budget on the backs of public employees. Sanders has said that his proposal would exempt police officers and firefighters and the only ones losing their pensions would be teachers, DPW personnel and other city workers.

Read the full article here.

What do you think? This plan may exempt police and firefighters now, but that might change in the future. How would you feel if your city officials changed your city’s pensions into 401(k) -style retirement plans? Would the public support such a measure?