LA Council Approves Pension Reforms for New City Workers

The plan, opposed by unions, would affect workers hired after July 2013

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    NEWSLETTERS

    City workers gave a thumbs down to a plan to increase their costs, raise their retirement age and lower their payout. For the next 30 days, the city will talk with union leaders and then vote again, but the issue is likely headed to the courts. Conan Nolan reports from Downtown LA for the NBC4 News at 5 p.m. on Sept. 25, 2012. (Published Tuesday, Sep 25, 2012)

    New workers hired by the city of Los Angeles will see reduced pension benefits compared to current employees under a plan approved by the City Council Tuesday.

    The council voted 14-0 in favor of a package of retirement-benefit reforms that will affect workers hired after July 1, 2013.

    NewsConference: Lowell Goodman, Service Employees Internt'l Union Local 721

    [LA] NewsConference: Lowell Goodman, Service Employees Internt'l Union Local 721
    Los Angeles Mayor Antonio Villaraigosa's pension reform plan outrages the union that represents city workers. Lowell Goodman, Director of Communications, of SEIU Local 721 explains. (Published Friday, Sep 21, 2012)

    The reforms were fiercely opposed by employee unions, whose members rallied outside City Hall and threatened to sue.

    Several council members proclaimed their allegiance to unions but said the changes – which affect civilian workers such as clerks, janitors, sanitation workers and librarians – were necessary to maintain the city's fiscal health.

    Villaraigosa Defends Pension Reform Plan

    [LA] Villaraigosa Defends Pension Reform Plan
    LA Mayor Antonio Villaraigosa began his push for city pension reform Wednesday. The city of LA is trying to reduce its pension obligation by cutting benefits for new employees. Conan Nolan reports for the NBC4 News at 5 p.m. on Sept. 19, 2012. (Published Wednesday, Sep 19, 2012)

    "Do you think I want to do this? No. We have to do this," Council President Herb Wesson said, recalling financial support he received from union members as a young man. "If there was another option, another choice, I would take it."

    The plan will need a second vote in 30 days for it to go into effect next year.

    The council also approved an amendment directing city official to negotiate with unions during that period to see if a better plan can be drafted in that time.

    Union members in council chambers booed business representatives who spoke in support of the reforms. In a letter to Mayor Antonio Villaraigosa, lawyers for the Coalition of LA City Unions threatened to sue for breach of contract over the planned reforms.

    Dozens of SEIU Local 721 members attended the council meeting, periodically chanting, "We are not Wisconsin.''

    Some wore cheese wedges on their heads intended to liken the reforms to efforts by Wisconsin Gov. Scott Walker to strip unions of their collective bargaining rights.

    "What this really is about is the deterioration of the relationship between labor and this city. Pure and Simple,'' SEIU Local 721 political director James Johnson told the council.

    The changes to the Los Angeles City Employees Retirement System, or LACERS, include:

    • Raising the retirement age from 55 to 65
    • capping the maximum retirement benefit at 75 percent of final compensation, instead of the 100 percent currently allowed;
    • limiting cost-of-living increases to 2 percent;
    • increasing employee contributions to benefits;
    • eliminating retiree health care benefits for dependents; and
    • using a three-year average to calculate benefits to prevent pension "spiking."

    City officials said they believed the changes could be made without any negotiation with worker unions because the changes will affect new employees who are not currently union members. But union officials said they had a right to collective bargaining.

    The plan is projected to save $4 billion over 30 years, according to Villaraigosa, who defended the plan last week.

    The mayor issued a statement on Facebook after the vote Tuesday that praised council members.

    "Some will say this plan goes too far, others will say it doesn’t go far enough. But I believe this is the right plan for Los Angeles because it provides retirement stability to our employees who have earned it while allowing the City to continue providing a level of service that Angelenos expect and deserve," Villaraigosa said in the statement.

    Workers at the Los Angeles Department of Water and Power and police and fire departments are not affected by the changes.

    City News Service contributed to this report.

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