SAN JOSE, CA &#8211 In the latest battle with its employee unions, the city of San Jose has won a long struggle with its firefighters over reducing pension benefits for new hires — several years after voters approved the changes.

The final arbitration decision, announced this week, will save taxpayers millions of dollars compared to more generous retirement plans previously given to firefighters. It’s a victory for Mayor Chuck Reed, the city’s chief pension reformer, and his fiscal conservative allies that make up a majority of the City Council, who have seen the public costs for employee retirement skyrocket in the last decade.

But the firefighters union says the cuts will lead to fewer job applicants, much in the way recruitment has slowed for the short-staffed police department, which is dealing with the same pension cuts.

Retired Judge Catherine Gallagher, the arbitration board chair, made the ruling nearly four years after voters approved a second “tier” of reduced retirement benefits for new employees, and more than two years after voters set limits on those pensions. Gallagher noted in siding with the city that the voter-approved measures prevented her from adopting anything that increased taxpayer costs.

The firefighters are the last of 11 city unions to implement the pension plan changes for new hires, while voter-approved cuts to current employees’ retirement plans remain tied up in court.

The firefighters had seen their contract with the city expire at the end of June and were waiting for the arbitrator’s decision before starting negotiations, arguing the cuts were illegal and inferior to statewide standards. Before arbitration, the two sides had negotiated unsuccessfully for more than a year.

The changes mean newly-hired firefighters can retire at age 60 with a pension of up to 65 percent of their salary. Current firefighters can still retire at age 50 with up to 90 percent of their salary.

In response to the arbitrator’s decision, the firefighters union proposed a 2016 ballot measure that would provide new firefighters with pensions that are about half-way between those two plans — allowing them to retire at age 55 with 75 percent of salary. That proposal is expected to be denied by the current 11-member City Council, though the mayor’s seat and up to five council spots will turn over after the Nov. 4 election.

“City Hall is hell bent on doing to the fire department what they have done to the police department and the results will be the same; firefighters will leave San Jose and 911 emergency response times will increase,” firefighters union president Joel Phelan said in a statement.

From The San Jose Mercury News