A California state judge blocked changes to public pension plans approved by San Jose voters in November.
Superior Court Judge Patricia Lewis ruled that state law protected vested pension rights. She said the city could cut workers' pay.
Unions representing police officers, firefighters and other city workers challenged the pension changes, which called for city workers to contribute 16 percent more to their pension plans.
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San Jose Mayor Chuck Reed, a Democrat, had pressed for passage of the cuts contained in Measure B, which was supported by 70 percent of voters. Reed is supporting a state-wide measure that would give cities authority to institute pension cuts.
Reed issued a statement after the ruling that said he was pleased that $20 million in annual savings were upheld. But the decision on the pension cuts was another matter.
"Unfortunately, the judge's decision to invalidate certain portions of Measure B also highlights the fact that current California law provides cities, counties and other government agencies with very little flexibility in controlling their retirement costs," he said.
Union officials, of course, had a different reaction.
"We're happy about the ruling," said Sgt. Jim Unland of the San Jose Police Officers' Association. "We've been saying for two years that cutting pensions was illegal, and now we have a judge saying that."
The San Jose Mercury News reported that the ruling was likely to be appealed.
The decision came as cities and states across the country are dealing with huge unfunded pension liabilities. Illinois lawmakers passed a pension reform measure and Detroit's emergency manager instituted cuts to retirement benefits as part of the city's bankruptcy proceedings.
Unions in general oppose such cuts, arguing state law protects collective bargaining rights.
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