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Villaraigosa to propose rollback in retirement benefits in budget

April 20, 2012 |  7:38 am

Los Angeles Mayor Antonio Villaraigosa plans to call Friday for a rollback in the retirement benefits offered to newly hired civilian city employees, limiting their pensions to no more than 75% of their salaries, according to a budget document obtained by The Times
Los Angeles Mayor Antonio Villaraigosa plans to call Friday for a rollback in the retirement benefits offered to newly hired civilian city employees, limiting their pensions to no more than 75% of their salaries, according to a budget document obtained by The Times.

When he releases his annual budget, Villaraigosa is to propose an end to the practice of allowing city employees to receive as much as 100% of their salaries once they retire, and decrease overall benefits given to retiring workers.

He is also expected to seek to increase the retirement age to 67 -– something he promised to do weeks ago as part of his plan to close a $238-million budget shortfall. Villaraigosa spokesman Peter Sanders had no comment on the proposal, which is set to be discussed during a 1 p.m. news conference with Police Chief Charlie Beck and Fire Chief Brian Cummings.

But last month, the mayor told a group of investors that rising mortality rates made the city's existing retirement age "not sustainable." Workers currently retire at 60 -- or at 55 if they have worked 30 or more years as a city employee.

"I'm 59 years old, I work out every single day. I'm going to live a long time. In fact, most of us are going to live a long time. That's not me saying that. That's the actuary" talking, Villaraigosa told the audience last month.

Villaraigosa has also said in recent weeks that his 2012-2013 budget would include "a large number" of layoffs. Although he has been quiet on the details, some have been predicting that between 200 and 250 employees will be targeted.

The mayor's pension proposal received poor marks from the city's employee unions, which have accused Villaraigosa of spending too much time out of town and not enough time managing the city bureaucracy.

During the mayor's State of the City Speech on Wednesday, city workers handed out postcards with the message "Greetings from Los Angeles -- Wish You Were Here." Union officials said they looked at many of the proposals backed by Villaraigosa and found the anticipated savings were minimal.

Few retirees currently receive pensions that are equal to 100% of their salaries, those union officials said, because they would need to work 46 years to do so.

"If you're the mayor and living a jet-setting lifestyle, it's easy to imagine living that lifestyle until age 67," said Lowell Goodman, spokesman for Service Employees International Union Local 721. "That's not the case of a tree surgeon who's carrying a chainsaw up into a tree or a street services worker who's operating heavy machinery to fix our potholes.”

Villaraigosa's proposal would scale back the formula used to calculate retirement benefits, which takes a percentage of a worker's salary and multiplies it by the number of years that employee works. That percentage would drop from 2.16% of a worker's salary to 2%.

The plan also seeks to prevent "pension spiking" -– the practice of boosting retirement benefits by earning an especially high city salary in the final year before retirement. None of the pension proposals would apply to civilian city employees at the Department of Water and Power, which has a separate pension system.

That development disappointed but did not surprise Jack Humphreville, a frequent critic of the utility.

"There's no way the mayor or any of his buddies at the DWP are going to touch" the union that represents DWP employees, he said.

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-- David Zahniser at Los Angeles City Hall

Photo: Mayor Antonio Villaraigosa delivers his State of the City' address on Wednesday. Credit: Lawrence K. Ho / Los Angeles Times

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