Morro Bay tackles pension reform



Morro Bay became the first city in San Luis Obispo County to change its pension program, joining a growing list of cities in other counties that have adjusted their plans in the face of a stifling budgetary climate.


On Feb. 8, the Morro Bay City Council unanimously approved an ordinance authorizing an amendment to the city’s contract with the California Public Employees’ Retirement System (CalPERS). The new contract drastically reduces the city’s contribution to fire department employee pensions.

The changes only apply to employees hired by the fire department after Feb. 9. According to Councilman Noah Smukler, the savings won’t be realized immediately, but long-term savings would be significant as the city expands pension reform and as new hires replace retirees.

“We have very challenging financial issues ahead of us with the cost of employees’ pensions and benefits, and the question of where’s it all going to come from,” Smukler said. “And the fire department’s union has taken a real leadership role in this process by realizing the need and by being willing to negotiate. … We certainly applaud them for that.”

The council’s decision adjusts the city’s contributions from a formula figuring about 35 percent of salary at age 55, to a formula figuring 15 percent at age 50.

CalPERS is expected to approve the contract in mid March.

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