Mayor Antonio Villaraigosa is pushing a pension plan to reform how new city workers receive retirement benefits, but with the mayor termed out in just a year, additional pension efforts will fall to his successor.
The mayor wants to increase the retirement age for new civilian employees to 67. Under his proposal, which is being considered by the Executive Employee Relations Committee, benefits would be capped at 75 percent of final compensation, and cost of living adjustments would be reduced. Health benefits for retirees’ dependents would be eliminated.
“It’s important for us to finish the structural work, and new employees have certainly been a part of it,” said City Councilman Eric Garcetti, a candidate for mayor.
The Thirteenth District councilman spent six years as council president and was part of negotiations with labor unions that led to a five percent increase in what workers pay toward their pension and health care. Civilians now pay 11 percent toward retirement.
“I put myself politically on the line to get results and in that sense there are no short cuts. It’s really a matter of hard work, tough calculations,” Garcetti said. “I’m already walking the path of pension reform.”
Councilwoman Jan Perry praised the mayor’s plan as a good first step, but said more work is needed to prevent the entire retirement system from going under.
“We don’t want this to turn into a terminal situation where no one gets served,” Perry said.
“You have to begin to dig into what we do with existing employees and that is an unpopular thing to say, but I think I’ve always been very consistent in putting the reality check out on the table and been consistent in the way I respond to the budget,” Perry said.
Controller Wendy Greuel, who spent seven years on the city council, questioned the wisdom of raising the retirement age.
“I believe all options should be on the table and that labor needs to be part of this discussion, however the proposal to raise the retirement age to 67 has the potential to increase cost burdens and workers comp and therefore needs further analysis,” Greuel said in a statement to KPCC.
If elected, attorney and former talk radio host Kevin James said he would push a proposal to ignore an employee’s last year of compensation when calculating pension benefits.
“That’s when you see more abuse of the system,” James said.
James also wants to see reforms to the pension system that serves Department of Water and Power employees.
“When you have the DWP employees making 40 percent more than other city jobs that are akin, similar jobs to what the DWP employees are doing … it doesn’t create a great level of morale in the city,” he said.
The mayoral primary is set for March of 2013.