Unions push to block pension reform measure in San Diego

San Diego mayoral candidate Carl DeMaio on his plan


This is a rush transcript from "Your World," February 21, 2012. This copy may not be in its final form and may be updated.

STUART VARNEY, GUEST HOST: All right, to San Diego, where labor leaders are lashing out over a new pension reform measure, just holding a hearing attempting to block it from the June ballot.

Well, today, the judge refusing the unions’ request. The plan would swap guaranteed pensions for new city hires for a 401(k).

San Diego City Council Member and mayor candidate Carl DeMaio is behind this overhaul.

Now, we did reach out to the Democratic mayoral candidate, Congressman Bob Filner. He was not available.

Carl, welcome to the program. Good to see you.


VARNEY: Now, pension reform is topic number one in state and municipal governments nationwide.

What you’re doing is trying to change the pension plan for San Diego city workers for new hires to put them on 401(k)s. I put it to you, Carl that will not do anything to fix the problem with existing retirees who have got the old-fashioned pension plan.

DEMAIO: That’s right, Stuart.

And that’s why our pension ballot measure also impacts existing employees.


DEMAIO: We figured out that you could actually change the calculation on pensions by ending pension spiking and using only the base salary of city employee compensation.

We also freeze -- we impose a hard freeze on city employee pensionable compensation for five years, and that has a major impact on reducing the payouts and the associated debt that’s created in these government pension systems.

VARNEY: Good. Carl, I’m glad you...


DEMAIO: So our measure has been called the most sweeping reform in the country.


VARNEY: Yes. No, I’m very glad you pointed that out, because one of the most -- the most important thing with pension reform is to tackle existing retirees and the pensions they receive.

DEMAIO: Exactly.

VARNEY: And you’re telling me that your measure would do that. Now, am I right...?

DEMAIO: Exactly.

VARNEY: Am I right in saying, not too long ago, you and I were talking, and you found 10 retired San Diego city workers who, in the lifetime of their retirement, would take home together $63 million; am I right?

DEMAIO: That is correct.

Every year since 2003, when I started this effort as a watchdog, I have been publishing the actual payouts to government employees in the city pension system, because the government unions say that these pensions are small, they’re modest.

I said, fine; let’s show the taxpayers the real money. And what we saw year after year after year are outrageous payouts and increases in what I call the $100,000 club.

So, Stuart, in the last two years, there’s been an 80 percent increase in the number of pensioners earning $100,000 or more in the city of San Diego pension system. And the top 10 pensioners will collectively receive over the course of their remaining lives $63 million in pension payouts that are from this taxpayer-funded pension system. It’s simply not sustainable.

VARNEY: OK. Now, you’re going reform that. You’re going reform that. Got it.

What’s the standing of your measure among voters in San Diego right now? Because the judge has just ruled, yes, it’s going to be on the ballot. So, are you going to win, or what?

DEMAIO: Well, we first took it to the government employee unions and said we want you to work with us on this. They said no. Their friends on the city council said no.

So, I gathered a whole coalition of taxpayer reformers together. We collected 156,000 signatures, submitted 145,000 signatures. And we were able to qualify the measure with a record-breaking number of signatures. The unions filed a lawsuit saying that citizens in California should not have a right to use the initiative process if it affects benefits for government employees.

And we said, well, nowhere in the constitution does it say that, and so the judge sided with us today in keeping the ballot measure on the ballot.


VARNEY: All right. Carl DeMaio thanks very much for joining us again today. Carl, astounding numbers there. Thanks very much.

DEMAIO: Absolutely. Thank you.

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