Proposition A — Retiree Supplemental Cost of Living Adjustment; Retirement Board Contract with Executive Director

See our November 2022 SF Election Guide for a nonpartisan analysis of measures and contests on the ballot in San Francisco for the election occurring Nov. 8, 2022. Voters will consider the following proposition in that election.

This charter amendment would adjust supplemental cost-of-living benefits for people in the San Francisco Employees’ Retirement System who retired before Nov. 6, 1996. It would eliminate a requirement that the retirement system be fully funded based on the prior year’s market value of its assets. Also, the system would adjust those retirees’ base allowance to account for the five years when they didn’t receive supplemental payments because of the full-funding requirement. Those years were 2013, 2014, 2017, 2018 and 2019, and supporters say this change would affect approximately 4,400 retirees, in a system of 74,000 active and retired employees and their families.

This measure incorporates an exception: In years when the retirement system is not fully funded, supplemental payments for cost of living adjustments would be capped at $200 for eligible retirees whose pensions exceed $50,000 annually.

An Aug. 16 letter from the city’s controller to the Department of Elections indicated that if this measure is approved, it would likely cost the city $8 million annually for 10 years, of which $5 million each year would come from the city’s General Fund. The measure requires a simple majority to pass.

An add-on to Proposition A concerns hiring the system’s executive director, who is selected by the city’s Retirement Board, which oversees the San Francisco Employees’ Retirement System. Currently, the board must follow San Francisco’s civil service hiring rules, which limit the salary and benefits the board can offer when hiring an executive director. Proposition A would change that and allow the board to enter into an individual employment contract with any executive director hired on or after Jan. 1, 2023, without regard to the city’s regular civil service pay limits.

In July 2021, the executive director position merged with the CIO position into a new combined position of chief executive officer and chief investment officer. That dual position has been held by Alison Romano since June 2022.

The person in this position is responsible for $34.5 billion in assets — as of June 30, 2021 — and charged with ensuring financial stability for a system that serves 74,000 San Francisco employees and retirees.

In recruiting for this job, the city competes with non-governmental investment and finance leaders paying sums far beyond San Francisco’s civil service salary grades — and often extended with additional compensation based on investment performance.

This measure requires more than 50% affirmative votes to pass.

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