San Diego Mayor Jerry Sanders Tuesday proposed a new, slimmer, pension plan for its general employees.

The new plan would provide smaller pension payouts to employees who start on the job in 2009 and later.

The pension plan has been a hot-button issue for years in San Diego. Sanders took office in 2005 after a special election following the resignation of Dick Murphy, who quit in the wake of the crisis that followed the city’s revelation that it had failed to disclose to bond investors the extent to which the pension plan was underfunded.

The crisis led to Securities and Exchange Commission sanctions against the city and delays to the auditing of city financial statements. Those delays have kept San Diego out of the public debt markets to this day.

Sanders said he’s releasing the proposal now because it’s the first time during his tenure that all city general employee unions — not including police and fire — are at the bargaining table.

His proposal calls for a reduced pension formula, the elimination of incentives to retire before age 65, and a change in the way retirement pay is calculated from the current highest one year of pay to a “more conservative” highest consecutive three-year average.

“Put simply, our existing pension plan is not sustainable over the long term,” Sanders said at a press conference.

Union representatives were unhappy.

San Diego Municipal Employees Association negotiator Ann Smith called the proposal “ridiculous.”

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