An Analysis of Pensions and other Post Employment Benefits.

R1

1. The recommendation has been implemented, with a summary regarding the implemented action. 2. The recommendation has not yet been implemented, but will be implemented in the future, with a time frame for implementation. 3. The recommendation requires further analysis, with an explanation and the scope and parameters of an analysis or study, and a time frame for the matter to be prepared for discussion by the officer or head of the agency or department being investigated or reviewed, including the governing body of the public agency when applicable. This timeframe shall not exceed six months from the date of publication of the grand jury report. 4. The recommendation will not be implemented because it is not warranted ,or is not reasonable, with an explanation therefor. The conclusions of the report indicate "that until significant modifications are enacted, there is no doubt that the escalating cost of providing (employee pensions and other post employment benefits) at the current level is interfering with the delivery of essential City services and the ultimate cost to the taxpayers is an unbearable burden. These costs are already impacting delivery of essential services as demonstrated by San Jose reducing police and fire department staffing levels, closing libraries or not opening those newly built, curtailing hours of community centers, and not repairing pot-hold city streets." The report further concludes that other cities in Santa Clara County "are likely to face similar challenges as long as high cost benefit plans face an underfunding liability." The focus of the Grand Jury's finding and recommendations includes maintaining an actuarially sound retirement benefit for employees while adjusting the level of benefits offered to newly hired employees. The City of San Jose recognizes the need for reducing retirement costs and Subject: Response to the Civil Grand Jury Report Entitled "AN ANALYSIS OF PENSION AND OTHER POST EMPLOYMENT BENEFITS" recently had a ballot measure before the San Jose voters on June 5, 2012; "The Sustainable Retirement Benefits and Compensation Act," (Measure B). Measure B is intended to provide the City with long-term savings through cost containment strategies related to post-employment benefits, including providing maximums for the retirement benefit for new employees and requiring voter approval for increases in retirement benefits. Further,. a second tier for new employees in the Federated City Employees' Retirement System is currently in the process of being implemented. A second tier for employees in the Police and Fire Department Retirement Plan will be subject to binding interest arbitration. GRAND JURY FINDINGS, RECOMMENDATIONS AND CITY'S RESPONSE Grand Jury Finding 1 Public sector employees are eligible for retirement at least 10 years earlier than is common for private sector employees.