California’s high court must decide whether San Diego’s mayor needed to bargain with public employee unions before leading a citizens’ initiative to change the city’s pension plan.

Proposition B passed in June 2012 and required that newly hired city workers be placed into a 401(k)-style pension account instead of the traditional retirement plan. It went into effect that year. The move was proposed as a way of helping to solve the city’s pension shortfall.

Justices heard arguments May 29 in...