San Jose Mayor Chuck Reed has called on the City Council to declare a fiscal emergency in an effort to reduce pension and retiree health benefits.

“The dramatic impacts of the budget shortfall on our community demonstrates why we have to gain control over skyrocketing retirement costs,” Reed said in a release on May 20.

The city’s annual retirement costs have quadrupled to $250 million in 2011 from $63 million in 2000. By 2016, the costs are expected to reach $400 million, according to the mayor.

Reed has proposed capping the city’s contribution to retirement benefits for new employees at 9% of base salary and 50% of the total. He also wants to raise the retirement age to 60 for public safety personnel and 65 for other employees, and raise eligibility for retiree health care benefits.

The mayor’s proposal does not target benefits that current employees and retirees have already earned and accrued.

The plan also put in place a temporary limit on employee benefits until essential city services are restored to first-of-the-year levels or the retirement plans have new unfunded liabilities.

Reed said his proposal builds on an earlier plan by the city manager that would potentially save $216 million from retirement reform.

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