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Mayor Antonio Villaraigosa supports a plan to reduce pension benefits for future city employees.
The union that represents City of Los Angeles employees is threatening to sue the city if it adopts a proposal to reduce retirement benefits for new civilian workers.
The change in pension benefits could save the city as much as $4.3 billion over a 30-year period, according to a report released Tuesday.
The plan reflects months of negotiations behind closed doors. Highlights include:
- The retirement age would increased from 55 to 65
- Retirement benefits would be based on 75 percent of an employee’s final compensation, instead of 100 percent
- Cost of living adjustments would be capped
- Healthcare benefits for dependents would be eliminated
City Administrative Officer Miguel Santana believes the benefits for new hires are not subject to bargaining with the unions. However, the president of SEIU Local 721 called the report “an end run around collective bargaining.”
Former Los Angeles Mayor Richard Riordan and business community leaders on Wednesday called for an overhaul of the city’s pension system that would include changes for current employees.
Speaking before the Executive Employee Relations Committee, Riordan told Mayor Antonio Villaraigosa and several city council members that basic services — such as the police department and sidewalk repair — could be decimated without significant reductions in what the city pays toward employees’ retirement. He and leaders from the Los Angeles Area Chamber of Commerce want to see charter amendments on the ballot to change the city’s pension system.
The proposal would affect the pensions of current employees by capping their salaries, which determine retirement benefits.
Including current employees in pension reform would almost certainly be challenged in court. Voters in San Jose and San Diego recently approved pension reform for their employees. Immediately after the election, the City of San Jose asked a federal court for a prompt ruling on legal issues that may arise as a result of the vote.
Photos courtesy of candidates' campaigns
Candidates running to be Los Angeles' next mayor, in order from left to right: Wendy Greuel, Kevin James, Jan Perry and Eric Garcetti.
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.
SEIU Local 721
Upset over proposed pension reforms for new civilian employees, the leadership behind SEIU Local 721 released a flyer today likening Los Angeles Mayor Antonio Villaraigosa and Wisconsin Gov. Scott Walker.
Mayor Antonio Villaraigosa’s proposal to change pension benefits for new city employees was sharply criticized today by the leadership of a local union, who likened the mayor’s actions to those of Wisconsin Gov. Scott Walker.
A flyer from SEIU Local 721 features Villaraigosa and Walker side by side with the headline: “Separated at birth?” The piece goes onto accuse the mayor of using “Wisconsin tactics” to attack city workers.
At issue is Villaraigosa’s plan to reduce pension benefits for new civilian employees. His proposal calls for:
- The retirement age to increase to 67
- Benefits to be capped at 75 percent of final compensation
- Cost of living adjustments to be reduced
- Health benefits to be capped for employees and eliminated for dependents
The Executive Employee Relations Committee is considering the proposal. If approved, the pension plan will be sent to the Los Angeles City Council.