Villaraigosa Proposes LA Public Safety Workers Pension Changes

October 19, 2010 ( – Los Angeles Mayor Antonio Villaraigosa has introduced a reform plan for pensions and other benefits for new police officers and firefighters which he said would save $173 million for every 1,000 new officers and firefighters hired.

A  Los Angeles Times news report said the plan includes changes to pension payout levels, an effort to eliminate “pension spiking,” and a requirement that the new officers and firefighters contribute another 2% of their income for retiree health benefits on top of their usual 9% pension contributions. The changes would apply only to those hired after next July 1.

Under Villaraigosa’s proposal, public safety employees who earn $100,000 annually and retire after 20 years would be eligible for a pension equaling 40% of their salaries, or $40,000. That would be $10,000 a year less than under the current formula, which grants pensions of 50% of pay after 20 years, according to the news report.

As in the existing plan, the proposal would hike pension payouts gradually until reaching a maximum benefit level of 90% of an employee’s salary after 33 years of service. However, the new plan would stagger increases to save cash and provide an enticement for personnel to remain.

The plan to eliminate “pension spiking,” calculates retirement benefits based on workers’ average salaries during their highest-paid two years, not based a 12 month period, as is currently the case.

“The days of unsustainable pensions are over,” Villaraigosa declared at a City Hall press conference, according to the Times. “The era of free healthcare is over.”

The mayor said he is confident his proposal will win support from the City Council and public safety employee unions as well as from voters, who, by his timetable, will be asked to vote on the plan next March 8.  City officials are weighing broad pension reform ideas for civilian employees on the city’s 30,000-plus payroll, according to the news report.

“We know that a structural imbalance exists between revenues and expenditures and projected general fund deficits are driven by rising pension and healthcare costs,” Villaraigosa asserted in a Web site statement. “We are proposing a sworn pension reform plan that will save the city money without limiting the recruitment and retention efforts at our police and fire departments.  This plan not only reduces the taxpayers’ obligation to fund the pension system, it also promotes a more stable and invested public safety force.”