Councilman Joe Buscaino joined Mayor Antonio Villaraigosa, Council President Herb Wesson, City Administrative Officer Miguel Santana and Councilmembers Dennis Zine, Tom LaBonge and Mitchell Englander at a press conference on Wednesday, to announce a pension reform proposal that would save Los Angeles taxpayers as much as $4 billion over 30 years.
“This is a matter of simple arithmetic,” Buscaino said. “We can not afford to offer future employees the same retirement benefits without compromising our ability to ensure public safety and deliver core city services, like filling potholes and fixing sidewalks.”
Santana released a report Tuesday outlining the elements of the plan, which will be considered by the City Council next Tuesday.
It would apply only to new employees hired after July 1, 2013.
Key changes include:
- moving the retirement age from 55 to 65
- capping the maximum retirement benefit at 75 percent of final compensation
- limiting cost-of-living increases to 2 percent
- increasing employee contributions to benefits
- reducing the factor used to calculate retirement benefits from 2.16 to 2 percent
- using a three-year average to calculate benefits to prevent pension “spiking.”
The CAO has forecast five-year savings of $30 to $70 million, 10-year savings of $169 to $309 million, and savings of $3.9 to $4.3 billion over 30 years.