Home|Blog | Good News! Prop B Penalty Payment Coming to Paychecks on September 30

Good News! Prop B Penalty Payment Coming to Paychecks on September 30

MEA’s victory in the 10-year-long legal battle over the City’s 2012 “Prop B” ballot measure included a Court order that the City pay affected employees a “penalty.”  All affected employees who elected to enroll in SDCERS and thus accept the Court-ordered make-whole remedy will be receiving a taxable penalty payment in your regular paycheck on September 30.

Earlier this year, MEA communicated to you that the precise amount of the payment (based on the formula we negotiated with the City) could only be calculated after the July transition date.  At the time, we provided an initial estimate that the payment for MEA-represented employees would amount to roughly $800 to $1,000 per year of eligible service credit with the City, though we indicated that amount could very well end up being higher based on calculation factors that were likely to increase the amount of the final per-year penalty payment calculation.

MEA is very pleased to report that the final per-year amount is quite a bit higher – you will receive $1,555.48 per year of eligible City service credit for your penalty payment.  In other words, the City will pay you this penalty for every year during which the City unlawfully excluded you from SDCERS while Prop B was in effect.

To illustrate, if you were hired in a full-time position in mid-2017, you will be receiving an approximate (before tax) penalty payment of $7,500; if hired in 2019, the penalty payment will be more like $4,500; and if hired in 2014, the amount will be about $12,000.  The City will calculate your exact penalty payment based on actual eligible service (including partial years of service) and will communicate your amount to you this week by means of a personal e-mail.

In addition, sometime in October, the City expects to send you a “final” statement that details all transactions related to your transition to SDCERS, including the amounts transferred from your SPSP-H account to your new 401(a) and SDCERS accounts, as well as any amount the City paid on your behalf as part of its make-whole obligations and any excess you retained.

While the main goal of MEA’s long and hard-fought Prop B litigation battle was to restore your rights to a defined benefit pension plan and the increased retirement security that comes with it, MEA also fought to win a penalty payment based on the City’s violation of the law.  MEA is very proud of the penalty achieved and what it accomplishes as part of the make-whole remedy – and we hope you are pleased too! The cumulative Prop B penalty payout to approximately 1,700 affected MEA-represented employees on September 30 will be $12.8 million.

If you have further questions or feedback on the penalty payment, don’t hesitate to reach out to MEA at info@sdmea.org.

One final note…the vast majority (around 95%) of MEA-represented employees are dues-paying members of MEA.  There is no doubt this Prop B victory – and all that it means for City employees – would never have been achieved without a strong Union with the commitment and the resources achieved by pooling member dues dollars.  So if you are in the group of non-members who for whatever reason have not yet signed up to be a member, this is the perfect time to click here and become a member today.  If you are not sure whether or not you are a member, or want more information about membership, please contact Corinne Wilson at MEA at cwilson@sdmea.org today.