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L.A. mayor, city controller back pension reform plan for police, firefighters [Updated]

October 18, 2010 | 10:22 am

Los Angeles Mayor Antonio Villaraigosa and City Controller Wendy Greuel have thrown their weight behind a plan to scale back pensions for newly hired police officers and firefighters.

The proposal is part of a larger effort to prevent retirement costs from eating away at taxpayer-funded services.

Villaraigosa and Greuel called a 10 a.m. news conference Monday to announce their support for City Administrative Officer Miguel Santana's proposed pension reform ballot measure. It would require newly hired sworn public safety employees to contribute more toward their pensions while receiving less generous benefits than those currently allowed.

[Updated at 11:30 a.m.: At the City Hall news conference, Villaraigosa said the “landmark” pension reform proposal would save the city $173 million for every 1,000 new police officers and firefighters hired.

“This plan not only reduces the taxpayers’ obligation to fund the pension system, it also promotes a more stable and invested public safety force,” Villaraigosa said. “I think, in the end, this is a sustainable proposal for pension reform that generates savings.”

The mayor expressed confidence that the City Council, voters and unions would accept the plan, which would also end free healthcare for retirees and require new hires to pay 2% of their salaries into the pension fund for healthcare.

“The era of free healthcare is over,” Villaraigosa said.]

The Times reported Saturday that Santana's plan would require new police and firefighters to contribute 11% toward their pensions, not the 9% currently required. It would also pare back the size of pensions awarded to those employees.

Police officers and firefighters who retire after 20 years currently are eligible to receive an annual pension that is equal to 50% of their yearly salary.

Santana's proposal would lower that amount to 40% for new hires. Sworn employees who retire after 25 years are currently eligible for a yearly pension that is equal to 65% of their salary. That figure would drop to 55%, according to the plan.

"We're trying to discourage people from retiring earlier," Santana said.

The proposal comes at a time when pension costs are growing fast at City Hall. By 2015, those costs are expected to consume one-third of the city's general fund budget -- which pays for such basic services as public safety and parks -- unless costs are brought under control.

Santana's plan is designed to save $173 million over 30 years for every 1,000 new police officers and firefighters hired. Even in a recession, the city is hiring roughly 300 new offers each year, Santana said last week.

The City Council is scheduled to meet Friday to review the ballot proposal, which is planned for the March 8 municipal election. Voters agreed to give more generous pension benefits to sworn employees in 2001, approving a ballot measure backed by then-Mayor Richard Riordan.

The plan allowed firefighters and police officers to earn up to 90% of their salaries upon retirement -- if they had served 33 years. That will not change, even if voters agree to scale back public safety pensions.

Newly hired police and firefighters would still receive 90% of their salaries after 33 years of service, according to Santana's report.

-- David Zahniser and Patrick J. McDonnell at City Hall