Reform 4.16: Share-in-Savings
Implement a Pension Reform “Share-in-Savings” Program for City Employees. Other Information:
The Roadmap to Recovery recognizes that salary freezes are a major part of the financial recovery process – and those freezes
will impact our city employees. To provide gain-sharing for city employees – and to offset years of salary freezes – the Roadmap
proposes the creation of a “Share-in-Savings” pool to provide non-pensionable bonuses to city employees based on documented
savings from pension reform. Beginning in FY 15, the gain-sharing program would offer a performance-based, non-pensionable
pay bonus. This bonus would be equal to 50% of the pension savings achieved in the FY 2015 ARC. These savings would be required
to be attributable solely to cost savings from reforms (e.g. not from potential actuarial gains due to investment experience).
To provide proper accountability and oversight, the SDCERS actuary and City Auditor would be responsible for certifying that
the savings attributable to the freeze in that year’s payment were, in fact, the result of the pay freeze reforms. The employee
bonuses would be available for distribution among City employees through a measurement methodology to-be-determined in negotiations
that would reward exceptional performance. In our Five Year forecast, we begin to share the reform gains with employees through
this system in FY 2015.
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