YES ON PROP A

The Context

A Cost of Living Adjustment (COLA) is an increase in retirement benefits based on local cost of living increases for retirees who receive pensions. And the cost of living is indeed increasing: by about seven percent in the San Francisco area so far in 2022. 

In 2011, voters added a “full funding” requirement to ensure the pension fund has more than enough money to meet its minimum debt payments and make timely payments to pensioners. A court found, in 2015, that this full funding requirement did not apply to people who retired on or after November 6, 1996. However, the court also allowed the city to continue enforcing its pension restrictions on people who retired before 1996. This was the accidental result of a lawsuit filed by a group named “Protect Our Benefits” against the City and County of San Francisco. The group has been working to correct the error ever since.

If passed, Prop A will correct the error introduced by the lawsuit and approximately 4,500 pre-1996 retirees (many of whom are more than 75 years old) will receive COLA regardless of whether or not the system is fully funded.

There are also guardrails in place that ensure the most low-income retirees also receive the most benefits:

• Retirees (or their qualified survivors/beneficiaries) would receive the full amount of COLA if their gross pension allowance is less than $50,000/year

• Retirees (or their qualified survivors/beneficiaries) with a gross pension allowance over $50,000 would receive a variable COLA amount depending on whether the system is fully funded but no greater than $200 per month, based on the COLA.

  
  

The Money

This measure costs approximately $59.7 million over 10 years. It doesn’t raise taxes but it takes money away from the City’s budget that would otherwise be used to pay for City services.

Although we support this proposition, rather than going into the General Fund to pay for this increase, we wish the San Francisco Employee Retirement System would use other subsidies available to retirees to offset these costs. San Francisco retirees get anywhere from 75–90 percent of their salary throughout retirement as well as lifetime health benefits paid for by the City, even though health benefits are available through Medicare, the Affordable Care Act or Covered California. Govern for California has covered this topic extensively and proposed solutions.

Additional Details

Prop A would also allow the retirement system to hire an Executive Director by contract, separate from the City’s usual hiring process. The previous Executive Director was paid over $400k annually in total compensation and a new Executive Director was hired earlier this year. The Retirement Board believes they need to raise the salary, outside of the City’s hiring process, in order to be competitive with investment fund managers in the private sector.

Support & Opposition

This measure is supported by Mayor Breed and nine other members of the Board of Supervisors. It was put forth to voters by Supervisor Safai, who is also President of the San Francisco Retirement Board, which oversees City employee retirement.

There is no organized opposition to this measure. The measure is supported by retirees who filed the lawsuit, the San Francisco Fire Department’s union, and the Police Officers Association. 

Paid for by TogetherSF Action. Not authorized by any candidate or a committee controlled by a candidate. Financial disclosures are available at sfethics.org.

Take me to the next prop >