Villaraigosa Defends New Pension Plan

Mayor Antonio Villaraigosa defended his proposal Wednesday to alter pension benefits and adjust the retirement age in an effort to save taxpayers billions of dollars.

Villaraigosa's plan, introduced at a news conference at City Hall on Tuesday, would apply to new employees hired after July 1, 2013.

Under the plan, the retirement age for new employees will be raised from 55 to 65, and instead of receiving 100 percent of their pay, workers will receive a maximum of 75 percent.

"There are going to be a lot of upset people," regarding the plan, Villaraigosa acknowledged, before asserting "we're not here to be popular. We're here to do what's right."

The factor used to calculate new "cost of living" retirement benefits will drop from 2.16 percent to 2 percent, and employees will increase their own contributions to benefits.

Councilman Mitch Englander, who supports the plan, stressed that, "every dollar that we save on pensions today is a dollar that we can spend on other city services."

Under the plan, the city's Chief Administrative Officer projects savings of $30 to $70 million for the city in the next five years and $3.9 to $4.3 billion within the next three decades.

Many union leaders have already reacted to the proposal.

"This proposed ordinance is unsound and unlawful," said Service Employees International Union Local 721 President Bob Schoonover. "It's a full embrace of the CAO's vacuous plan to create a second tier in city worker pensions, which is a frontal attack on all city workers, future and present."

The plan is expected to be considered by the City Council within the next week.