City Council Sends LA Pension Reform To Voters

LOS ANGELES (CBS) — Faced with soaring pension costs, the Los Angeles
City Council unanimously agreed on Tuesday to ask voters to scale back the retirement pay of future city police officers and firefighters.

The council voted 13-0 to place the measure on the March 2011 ballot.

According to the city’s budget analysts, pensions make up 18 percent of the city’s expenses this fiscal year, and the number is expected to double by 2014.

State law hinders officials from reducing the pensions of existing employees, but a ballot measure can be used to scale back the retirement pay of future police officers and firefighters.

Currently, police officers and firefighters who retire at age 50 with 20 years of service are eligible to receive a minimum pension that is equivalent to 50 percent of their average salary during their final year at work.

Under the proposed ballot measure, sworn personnel with 20 years of service would be entitled to a pension equivalent to 40 percent of their average salary over their last two years of employment.

Both plans allow a maximum pension of 90 percent after 33 years of service. However, sworn personnel would reach that milestone at a slower pace under proposed ballot measure.

A police officer or firefighter currently can receive a pension of 65 percent after 25 years, and 80 percent after 30 years.

Under the proposed ballot measure, they would instead earn a 55 percent pension after 25 years; and 75 percent after 30 years.

Also, the proposed measure would require sworn personnel to contribute 2 percent of their salary toward their post-retirement healthcare. Currently, they contribute 9 percent toward their pension, but nothing toward their healthcare after leaving the force.

If approved by voters, the ballot measure would apply to police officers and firefighters hired on and after July 1, 2011.

(©2010 CBS Local Media, a division of CBS Radio Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. Wire services contributed to this report.)


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