San Jose and Pensions being modified

The New York Times reports that the City of San Jose is struggling with meeting its costs in regards to retirement and pensions.  So, the mayor of San Jose sponsored a referendum and created a two tiered retirement program.  What is problematic is that he is changing current employee's benefit packages as well.  

It states:

The situation in San Jose is not anywhere near as dire as it is in Detroit or two other California cities, Stockton and San Bernardino, already in bankruptcy. But government officials and municipal bankruptcy experts across the country are watching San Jose closely because of a plan to reduce benefits — drafted by Mayor Chuck Reed, a Democrat, and passed by 70 percent of voters in areferendum last year.

The plan is being opposed in court by unions that represent city workers and say it is illegal under state law. It would introduce a second tier for new city employees involving much lower pension and health benefits. It would also alter pension benefits for existing workers, allowing them to choose either a similar, second-tier benefits plan or to pay significantly more out of their own pockets for the benefits they had come to expect.

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