LOS ANGELES (CBS) — Mayor Antonio Villaraigosa on Wednesday unveiled a pension reform proposal estimated to save the city $1.5 billion over the next 20 years, but union leaders claimed it would leave new civilian hires “struggling to survive upon retirement.”

Union Says Pension Reform Math Doesn’t Add Up: KNX 1070’s Bill Cooper Reports

Villaraigosa called for raising the minimum retirement age of future civilian employees from 55 to 62, and limiting the total compensation for a retiree at up to 75 percent of salary after 37.5 years of service.

Currently, retirees can receive up to 100 percent of their salary as pension after 46.3 years of service.

Villaraigosa also recommended increasing civilian employees’ pension contributions from 7 percent to 11 percent, 2 percent of which would be used to help pay for retiree healthcare.

Employees currently contribute nothing toward that benefit.

At present, retirees are entitled receive a pension enough to cover themselves and their spouse or domestic partner under the plan currently in place. Villaraigosa’s plan would cover only retirees.

Proposed pension reforms for police officers and firefighters — who are sworn employees — must be approved by voters, but those for civilian employees can be enacted by the City Council through an ordinance. At least 10 votes are necessary to enforce the changes.

Villaraigosa repeatedly contended his plan was “moderate” and “reasonable”, adding that
“economic realities dictate that the city cannot afford to provide these fair benefits for free.”

“While we want to do everything we can to maintain healthcare benefits for all retirees, it would be wholly irresponsible to endanger the financial solvency of the city by doing so,” Villaraigosa said.

City Administrative Officer Miguel Santana estimated that a third of the city’s budget will be spent on pensions by 2015 unless changes are made.

Federal and state law, however, bars city officials from unilaterally reducing the pensions of current employees, both civilian and sworn.

Villaraigosa’s proposal would apply only to future hires.

The Coalition of Los Angeles City Unions, which represents more than 20,000 civilian employees, denounced Villaraigosa’s proposal, saying it “will leave the average rank-and-file city employee — who has no Social Security benefits to rely on — struggling to survive upon retirement,” according to a statement.

They contended that under the proposed plan, future clerk typists who retire at age 60 after 30 years of service would receive a pension of $12,318 a year — less than half what they would have received under the current plan.

They insisted Villaraigosa’s proposal was prompted by “pension envy” on the part of private-sector workers, and “pension fury” over the reported retirement pay of former Bell City Manager Robert Rizzo.

“Rather than focus on real pension reform, politicians across the country are pushing to slash pensions for new hires to poverty levels,” the statement said.

Villaraigosa said he is “not wedded” to his civilian pension reform proposal and was amenable to changing it — if the coalition can come up with an alternative plan that would provide comparable savings.

Victor Gordo, counsel for the coalition, said: “We’re well aware of the mayor’s goal and we believe there are ways to realize savings that protect modest pensions and that address the city’s financial crisis.”

He declined, however, to go into detail about the union proposal.

Villaraigosa’s proposal for civilian pension reform comes a day after the City Council called for a ballot measure that would scale back the retirement pay of police officers and firefighters.

That ballot measure would allow the city’s sworn personnel to earn up to 90 percent of their salary as pension after 33 years of service. It would not cut spousal benefits.

Santana said officials maintained the 90 percent maximum pension for sworn personnel in order to remain competitive with other cities.

(©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.)

Comments (7)
  1. FLF says:

    Poor babies- my heart pumps ACID for the corrupt union slugs who are worthless lazy SOBs! They will bankrupt the state and county and could care less about compromises.

  2. Willowby says:

    Viagra-osco is …….

  3. Noel D says:

    He is willing to cut all employees penson,but when it comes to the DWP,City Council and his pension they refuse to vote on it

  4. fish wrap says:

    Saving money over 20 years they need to save now. Anyone who gripes about pensions could have done the same job they just chose the private sector. If people want to be mad direct your anger at crooked politicians who spent us into the ground on free programs

    1. Mariscal says:

      Absolutely! If the Mayor and City Council were sincere, they would also cut some of their staff. They’ve left $500 Million of uncollected debt on the table and still haven’t curbed their spending abuses. Even if the Civilian employees gave up half their salaries and benefits, they’d still march us right into insolvency!!

  5. ginny25 says:

    Considering that this only affects new hires and none of the current people I have to say that this is the first time I have agreed with the Mayor. Retirement programs are changing all over the country and in all job sectors (union and non-union) so what would make the new employees of LA City to be any different?

  6. TerryK says:

    I already presented a budgetary reform plan to the City, but the CAO turned it down. I’d like to go directly to the citizens to offer them exactly the same deal I offered the City.

    I do civil engineering design work and I get paid $43/hr. With benefits, including a future pension, the City says you pay me $65/hr. You have 1400 engineers, scientists, criminalists, programmers, and architects just like me.

    You have another 700 private sector employees from out-of-state companies on the City payroll, doing the same work we do. The only benefits you give them are round trip airfare on weekends, offices, computers, IT services, and clerical staff in buildings you own. After that, you pay their companies $163/hr for each of them.

    If we work full time, our total cost to you is $189 million a year. They cost you $237 million a year, plus the cost of the City services you provide.

    My offer:

    Give us a 3% raise, send 250 of these additional workers back to New Jersey and Colorado, and return us to full time work so your employees, not the Mayor’s temps, are doing the City’s work.

    Your cost then will be $195 million for your own employees, with benefits, and $153 million for the employees of our Mayor’s sponsors.

    We just saved you $78 million, plus more than a third of the cost of the services you provide for these additional employees.

    Here’s another plus. It will be harder for them to hide $150 million of their engineering design work that can’t actually be built. The only negative is that they and their companies will have less extra cash to fund the Mayor’s next political campaign. I’m willing to sacrifice that.

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