Legal challenges continue to pose problems for municipalitiesseeking to cut their pension obligations in California,according to Fitch Ratings, but a voter initiative could present abigger challenge to unions and retirees.
Fitch said that a recent legal settlement in San Jose resultedin most pension reforms being restricted to new hires instead ofbeing imposed on existing employees and retirees, after the cityreached an agreement with police and firefighter unions.
A measure approved earlier by voters that was kicked down the road last year for anadditional year may not have borne much fruit as yet, thanks toagreements to delay or even eliminate certain of its provisions,but Fitch says that a new initiative could fare better and providea means for local governments to change pensionagreements.
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