Los Angeles Mayor Proposes Pension Changes for New Police, Firefighters
From Bloomberg.com, October 18

LOS ANGELES – Los Angeles Mayor Antonio Villaraigosa proposed overhauling pensions for new police officers and firefighters, part of a broader effort to contain costs amid growing budget deficits statewide.

The plan would save Los Angeles, the second-largest U.S. city after New York, $173 million for every 1,000 new police officers and firefighters hired over 30 years, according to an Oct. 15 report released by the city.

“We know that a structural imbalance exists between revenues and expenditures, and projected general-fund deficits are driven by rising pension and health-care costs,” Villaraigosa said today in a statement about the proposal.

The plan would require new hires to work longer to qualify for retirement benefits and to put 2 percent of their pay into the pension to get health care after they stop working. The size of their pension payment once retired would be based on their highest two-year average salary, instead of the last year.

Eric Rose, a spokesman for the Los Angeles Police Protective League, and Patrick McOsker, president of the United Firefighters of Los Angeles City, didn’t immediately return calls seeking comment.

In May, the mayor and City Council bridged a $492 million fiscal 2011 budget gap by closing libraries, raising fees and making workers take unpaid time off. California Governor Arnold Schwarzenegger reached an accord with the state’s largest employee union this month to reduce pension costs.

The pension overhaul must pass the City Council and be approved by Los Angeles voters before it can take effect.