City of San Jose v. Howard Jarvis Taxpayers Assn.

I. FACTS AND PROCEDURAL BACKGROUND

San José is a charter city, whose current charter took effect on May 4, 1965. (City of San José City Charter, adopted 1965.) 2 The City Council established the city’s current Federated City Employees Retirement System (federated plan) in 1975 (San José Mun. Code, ch. 3.28, § 3.28.010) and its current Police and Fire Department Retirement Plan (police and fire plan) in 1961 (San José Mun. Code, ch. 3.36, § 3.36.010) (collectively, the retirement plans or pension plans), pursuant to the city’s authority under the charter. (Charter, art. XV, § 1500.) Under the retirement plans, pension benefits for individual city employees vary based on factors such as age, final salary, years of service, type of retirement, and any cost of living adjustments (COLAs). According to the city’s actuarial expert, “[t]he exact amount of the pension benefit an active employee will receive upon retirement cannot be known until their retirement date, since it depends on their years of service and pensionable earnings. The current pension benefits of retirees are known, but their future benefits will depend on cost of living and on how long they and their beneficiaries…