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Villaraigosa asks council to cut health and pension benefits for new workers

As part of a broad pension reform plan, Los Angeles Mayor Antonio Villaraigosa unveiled a proposal Wednesday to cut costs in pensions and retiree healthcare costs for newly hired civilian city workers.

“Our current pension system doesn’t work,” Villaraigosa said at a news conference. “We’ve got to stop the bleeding.”

The mayor said his plan would save the city $255 million for every 1,000 new employees.

If the current system continues, the city estimates that costs for pensions and retiree healthcare could eat up as much as a third of the general fund budget in five years.

The plan comes 10 days after the mayor proposed savings in pensions for new police officers and firefighters. But the plan for uniformed personnel must go before the voters, probably in March, while the civilian pension overhaul needs only City Council approval.

Legal and political restrictions make it difficult to cut benefits for current workers -- about 30,000 civilian employees and 14,000 police and firefighters.

Consequently, the projected savings will largely be in the future for a city that has already shed thousands of employees, cut services and still faces a more than $300-million budget gap next year.

Neither of the proposals applies to employees of the giant Department of Water and Power, which has a separate retirement system.
Among the major changes sought by the mayor for civilian employees are increased retirement age eligibility, from 55 to 62; a reduction in maximum pension benefit from the current level of 100% of salary (after 46.3 years) to a proposed 75% (after 37.5 years); an increase in employee pension contributions from 7% to 9% of salaries; and a new, 2% contribution for retiree healthcare costs (employees currently pay nothing.)

Under the city's current plan, an employee with a $75,000 salary who retires at 55 with 30 years of service would receive a $48,600 pension. Under the mayor’s proposal, a new hire who retires at 55 with 30 years of service would receive $26,100 annually.

The proposal would also eliminate retiree healthcare coverage for a pensioner’s spouse or partner -- one of several proposed cuts that labor leaders are expected to fight.
Victor Gordo, counsel to a coalition of city unions, declined to comment on specifics of the mayor's proposal but said labor was willing to cooperate in maintaining the city’s solvency.
Villaraigosa called the proposals “reasonable and realistic” but said he would listen to alternatives that yielded comparable savings.

The mayor’s plan now goes before the council, where at least one other civilian pension reform proposal is already circulating.

-- Patrick J. McDonnell at Los Angeles City Hall

Comments () | Archives (47)

I wasn't aware the city had the funds to hire new workers. So is that a savings? The problem is the benefits that have been locked in. Certainly there must be something that can be done to cut those outrageous costs. Oh, but wait, aren't they union? I guess like the Mayor, any changes to them will never be done!

Cut government assistance to illegals period. But villaraigosa would not do that. He feels he need to protect his people.


The 3% at 50 formula for Police and Fire is the true budget-buster. That one needs to be rolled back first. I completely agree on capping pensions to 75% (heck, I'd go lower, and am a CalPers enrollee), but the exemption for public safety in these reforms needs to stop.

This is an outrage! Public sector employees are instrumental to the health and vibrancy of the economy.

Taxes need to be raised. People want the bet roads, schools, police and firefighters but don't want to pay for it. It's high time they recognized this.

This begs the question, what are we paying now for retirement benefits for city employees.

The estimated savings of $255,000 per new employee by making fairly modest changes is a big number.

Here's my guess from the numbers in this article we're paying about $1million per employee. It's just a back of the envelope rough guess, how about some hard numbers?

How does that compare to private sector benefits?

Why only new workers? Times are hard. Everybody has to make a sacrifice. People in the private sector are suffering the most. If you have a steady job with a guaranteed retirement benefit that is considerably better than average for your job description, then you should take it and be grateful.

It's nice that the mayor is thinking 30 years into the future, but what about right now? The current system is completely unsustainable, and headed for a massvie failure.

I think the mayor needs to focus less on what will happen 30 years from now, and put more focus on what to do about the immediate future. Any changes made today will have an effect tomorrow, anyway.

This is the political dodge - "cut retirement benefits of FUTURE workers." Of course future workers retirement benefits are not the problem. The problem is CURRENT workers and current retirees!

To this the politicians respond by saying it is unconstitutional to reduce public employees pensions. In fact three states, including Minnesota and Colorado, have already done exactly this to which the California public employee unions respond that these three states are in court over these cut in CURRENt pension benefits. They don't however add that every state is currently in court over reductions in public employee pensions and none of these suits has yet prevailed!

As property values and property tax assessments in California continue their steady downward spiral, California taxpayers will very soon be supporting more retired California public employees, especially police and fire, than will actually be working. There is no avoiding this and time is not on our side.

California taxpayers, both conservative Republicans and liberal Democrats will not support any tax increases no matter how they are packaged while politicians allow this massive scam to continue uninterrupted.

The mayor needs to dig into the dealings of the DWP. It's where the true fats cats are hiding--the ones with all four feet firmly planted in the public trough and whose salaries and pensions need to be cut.

Someone's got to pay for all Slick Villies' illegals.

Why should next-generation employees of the City -- or any level of government -- pay the prices for the folly of earlier generations?

I envy all those who retired early using ERIP (early retirement incentive program). They are all on a work furlough and still getting paid well, traveling around the nation, playing golf, going to Vegas, camping in their RVs, and other fun recreations. I will end up working til my eighties! Good grief!

Well DUH...........it's about time a liberal wakes up and see it's an unsustainable system they let the unions extort from the taxpayers

Isn't that interesting...especially since the city is on a hard freeze!

Why doesn't he and his do something about these retired city employees who enjoy a raise when then working counterparts get one!

Employees get 100% of salary and contribute NOTHING? Are you kidding? When is this going to stop? And why is DWP immune--we taxpayers pay for power and water.

Hot Pants Tony is at it again. Some one is getting the "Choriso" when ever he shows those White Teeth/ Which is all the Time. The Smiling Midget................

Well, there you have it.
Proof that Democrats big spending was a stupid idea in the first place.
Proof that Democrats run better ponzi schemes than governments.
Proof that if you give a Democrat a dollar, he'll spend $10.

Here Villaragosa. You introduced me to the city as a voice. Now here this, file chapter 11 bankruptcy in the general fund. Let it run out, reorganize, if folks rebel fire them. Only that will work. Any other plan will just delay the crash. Although this plan will cost you for any details. Sorry no free lunches.Put me on the payroll. I can solve this problem. I would create a heart attack for the entire city then preform the bypass procedure. Over weight workers must contribute more to their health then those sporting a thin waist line. Just a small part of my plan will be for free. The rest of the plan will cost. My ideas are no longer for free.

Provide them with a 401K. Let employees buy there own health care. If they don't like the offer the let them find another job.

Good for the Mayor.

So? What's to be done with the billions that are unfunded for the existing public union trough feeders?

Whatever happened to the drunk driving financial reviewer he hired? There is over 100,000 with salary, his benefits AND his City owned car. Don't forget to add in his legal costs the City is probably paying for as well.

After DECADES of padding the Welfare Rolls, then, under Repub pressure, giving the CAREER Welfare cheats a shot at Govt 'Service' = you know, FREE CAR or SUV, Govt Credit Card - PAID by the Taxpayer - then, JUDICIOUS salaries, healthcare and HUMungous Retirement packages - ALSO PAID by the Taxpayer, this Fraudster and Imperious Perkster, thinks he can CLIMB the pork ladder to the District of Corruption thru more charades of integrity?????? What a SICK joke. But Californians LOVES their SICK Dem jokes, and give them life-long careers, bilking the productive.

So, the party is over and the chickens have finally come home to roost - Part 1

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