LOS ANGELES (CBS) — City officials unveiled a proposed pension reform plan for police and fire departments on Monday, one they say will save the city hundreds of millions of dollars, but requires voters to cut back on retirement pay for newly-hired police officers and firefighters.

“This is not a radical position, this is a sustainable one,” Mayor Antonio Villaraigosa said at a news conference in City Hall.

Controller Warns LA Faces Crisis If Reform Not Passed: KNX 1070’s Pete Demetriou Reports

City Controller Wendy Greuel noted pension payments make up 18 percent of the city’s general fund expenses this fiscal year, and that number is expected to double by 2014.

“Doing nothing is simply not an option,” she said. “As city controller, I don’t want to have to choose between making payments to pension funds and paying the city’s bills for road repair and trash collection.”

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 plan — which Villaraigosa hopes the City Council will put on the March ballot — 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 place under the proposed plan.

Currently, a police officer or firefighter can receive a pension of 65 percent after 25 years, and 80 percent after 30 years. Under the proposed plan, sworn personnel would earn a 55 percent pension after 25 years; and 75 percent after 30 years.

“The major components of the plan … are very basic,” said City Administrative Officer Miguel Santana. “We are rewarding employees … to work longer, and we’re penalizing employees who decide to retire at a younger age.

“The expected savings under this plan for the next 10 years is approximately $120 million — it’s a 20 percent reduction of what our pension costs are today,” he added.

The plan would also require sworn personnel to contribute 2 percent of their salary toward their post-retirement healthcare. Currently, they pay nothing.

“I believe strongly that we have a special obligation to our sworn officers and firefighters to provide reasonable healthcare while they served the city and in retirement, but we simply cannot continue to provide that benefit for free,” Villaraigosa said.

Santana said the proposal plan was among 10 that the city submitted to an actuary for review. He said it was designed to reduce the city’s pension costs without detracting from recruitment and retention efforts.

If approved by voters, it would apply to police officers and firefighters hired on and after July 1, 2011, and would be available for existing sworn personnel to opt into if they choose.

A spokesman for the Los Angeles Police Protective League declined to comment until the language of the proposed ballot measure is finalized, but United Firefighters of Los Angeles City President Pat McOsker said the union tentatively supports the plan.

“We’ve worked collaboratively with the mayor’s office and the City Administrative Officer to find something fair in terms of pension for firefighters and police officers, and we’re going to support this, but the devil is always in the details,” McOsker told reporters.

“If nothing changes from what we’ve talked about and worked towards so
far, then we’re going to be supportive,” he said.

Under the Charter, any changes to the Los Angeles Fire and Police
Pension system must be approved by voters.

(©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 (8)
  1. Rod says:

    How many more years would they have to work? Extemely poor reporting.

  2. Scott says:

    They will have to work at least 30 years to get full retirement benefits. Plus, they would have to pick up some of their medical costs while retired

  3. Robert Campbell says:

    I’d love to see some of those stupid politicians do the dangerous jobs cops and firefighters do for the pittance they receive. Statistic; most cops and firefighters die early due to injuries and cancers sustained while on the job. How about the politicians cut their own salaries and kickbacks they get. A disgrace.

    1. Joe Orange says:

      There’s no proof that cops and firefighters have a greater chance of an earlier death than any other occupation. The most dangerous occupations are fisherman, utility workers, log workers, flight engineers, steel workers, ranchers, etc.The reason why they are reworking their pensions is because the city will go bankrupt if they don’t. Los Angeles Police are some of the highest paid police in the nation and world.

      Being a cop is a tough job but there are other jobs that are just a challenging, like soldiering.

    2. Rebecca Ivatt says:

      I completely agree. Though I have no family affiliation to an officer of the Police of Fire Department, you cannot ever compare what they do for a living to what we do in the private sector. I, as an office administrator do not risk my life or see death and horor or crime daily. They do. You reward your heros. If they live to retirement then God Bless them for their service. They do it for us so I gladly pay taxes for them.

  4. TeaPartyPatriot says:

    “most cops and firefighters die early due to injuries and cancers sustained while on the job.”

    Firefighters, yes. Burning plastics, etc. are very toxic.

    Cops? What kind of toxic substances are they exposed to?

  5. keithj says:

    At leas t20 cops i worked with at LAPD died this past year, many by age 60. We did not have protective gear, the FD does. PCP labs, hazardous materials, etc. A sad deal.

  6. Draimanformayor Losangeles says:

    Pension crisis

    I do not think that any elected officials have a viable solution to the pension deficit issue which will continue to grow.

    As I said before there is no simple solution. This is an issue that affects every level of government (City, County, State, Federal, Etc.). No one solution or one individual can solve this problem. It would take a committee with multitude of financial planners and an open mind to modify the plan as it progresses, when some facets of the plan do not work as anticipated.

    But as the crisis grows, we as people of this great country must put our differences aside and work for the common goals and restore our City, State and the Nation to the spirit of our founding fathers.

    I think that every politician or candidate should state what they propose to do to correct the situation and not attack their opponent or the opposition.

    Tell me and or show me what you can do, not what the other did not do or did wrong.

    Action speaks louder than words.

    We need to remain vigilant, especially as the City of Los Angeles is facing a monumental fiscal crisis.

    Public confidence in the integrity of the Government is indispensable to faith in democracy; and when we lose faith in the system, we have lost faith in everything we fight and spend for.

    Thank you

    YJ Draiman for Mayor of LA

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