Southern California breaking news and trends

LA City Council approves reduced pension benefits; union threatens lawsuit

SEIU Local 721

Alice Walton/KPCC

Members of the Coalition of L.A. City Unions protested the city's pension reform plan. They wore cheesehead hats as they likened Mayor Antonio Villaraigosa’s treatment of union workers to that of Wisconsin Gov. Scott Walker.

Over the objections of unions that represent thousands of employees, the Los Angeles City Council agreed Tuesday to scale back retirement benefits for future hires in an effort to reign in what city budget officials say are unsustainable costs.

The 14-0 vote came after passionate speeches from union members and city council members alike. A last minute motion from Councilman Richard Alarcon asked labor leaders and budget officials to meet in the next 30 days, at which point the pension ordinance will come back for a second vote, as mandated by the city's charter. 

The new benefits would impact civilian workers hired on or after July 1, 2013.

The Coalition of L.A. City Unions has threatened to sue the city for breach of contract, and a letter from the group’s attorney said an unfair employment practice charge could be filed with the Employee Relations Board. 

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Labor threatens to sue Los Angeles over pension plan

Mayor Antonio Villaraigosa

Jerod Harris/Getty Images for BGR

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:

  1. The retirement age would increased from 55 to 65
  2. Retirement benefits would be based on 75 percent of an employee’s final compensation, instead of 100 percent
  3. Cost of living adjustments would be capped
  4. 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.” 

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Union: More pension 'reform' out of the question at LA City Hall

Los Angeles City Hall

Alice Walton/KPCC

At City Hall, there's a fight brewing over pension reform. The mayor and city council members agree that retirement plans need to change, but labor leaders say they are done making concessions.

The president of the Los Angeles City Council is hoping for “peace, not war” in the ongoing retirement talks with city employees, but one union said on Tuesday that it's done talking about pension reform.

City council members met behind closed doors today to discuss moving forward with plans to reduce pension costs. It was just a week ago that former mayor Richard Riordan and a coalition of business leaders took to City Hall to demand reform that includes:

  • Giving voters the power to change employees’ benefits
  • Capping salaries when pension costs get too expensive relative to pay
  • Creating a new pension tier for new employees

Following the closed session discussion, the city’s top budget official, Miguel Santana, was directed to conduct an actuarial study and look at creating a new pension category for future city employees.

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