San Jose's auditor said in a recent report that the city is $2 billion short of meeting its $5.4 billion in liabilities for guaranteed pension benefits for current and retired employees.
The city's general-fund dollars have grown by 21% over the last decade, while the average cost per employee has risen by 87%, San Jose Mayor Chuck Reed said in a statement last week.
Reed said the cost for police and firefighters has grown by 99%. San Jose police and firefighters can retire at age 50, and the non-sworn employees can retire at 55.
"In some instances, pension payments are greater than the salary employees received when they were working," the mayor said.
"These out-of-control costs are why we can't keep all of our libraries, community centers, and swimming pools open," he said. "Many of these costs are the result of big pay and benefit increases awarded to our public safety unions by outside arbitrators."
The city charter requires San Jose to provide its employees with a minimum employer match of more than 250%, a retirement age of 55, and city-guaranteed benefits for life based on final compensation.
The mayor said a majority of non-public safety unions stepped forward in June, giving up 10% of total compensation and helping fund retirement payments.
