Los Angeles city workers hired after the start of the next fiscal year will have to work more years to receive fewer pension benefits, under a plan unanimously approved Friday by the Los Angeles City Council.
The vote finalized a plan first approved a month ago. Councilmen Eric Garcetti and Richard Alarcon had asked city and labor representatives to get together to reach a compromise in the last 30 days, but the talks did not result in any changes.
Problems started with the city’s lawyers determine the new pension tier is not subject to collective bargaining. Labor leaders strongly disagreed.
“I’m here to tell you that we will vigorously pursue our administrative and legal remedies,” said Victor Gordo, an attorney for the Coalition of L.A. City Unions. “You have violated your obligation to meet and confer on the one end, and on the other end you’ve attacked the integrity of our collective bargaining agreement."
For employees hired on or after July 1, 2013, the plan raises the retirement age to 65. It also eliminates health care benefits for dependents and calculates pension payments based on 75 percent of an employee’s final salary. It will also cap cost-of-living adjustments.
The plan is also opposed by former Mayor Richard Riordan, but for reasons vastly different than those held by labor. He believes the plan doesn’t go far enough in solving the city’s multibillion-dollar pension obligation, as the plan would only save $30 million to $70 million over a five-year period.
“It’s a Band-Aid solution that fails to make a dent in the city’s pension crisis, which, if not fixed, will take away basic city services from Angelenos within a few years,” Riordan said. “It does not go nearly far enough to fix the problem we have. I wish it were otherwise.”
The former mayor is collecting signatures to get the Bankruptcy Avoidance and Pension Protection Act on the city’s May 2013 ballot. That proposal would give new city workers a 401(k)-type retirement plan.