Supervisors may seek talks to reduce benefits
Troy Anderson and Liset Marquez, Staff Writers
Created: 10/18/2010 08:46:56 PM PDT

Pension reform proponents are skeptical about the Los Angeles County Board of Supervisors’ proposed changes to the county pension system – a move some contend would save the county $200 million per year.

The board is expected to vote today on whether to direct Chief Executive Officer Bill Fujioka to begin negotiations with county unions to modify the pension system.

The proposed modifications come on the heels of a recent report from Fujioka’s office that calls for increasing the minimum retirement age and the amount of money current and new employees contribute to their pension plans. The report also requested that pensions be based on the highest consecutive three-year average salary as opposed to a single highest year salary.

“If Los Angeles County can bargain without any concessions with the unions, then it shows that democracy is working. It would mean that finally the taxpayers are given equal representation at the bargaining table,” said Marcia Fritz, vice president of California Foundation for Fiscal Responsibility, a group that advocates pension reform.

Supervisor Michael D. Antonovich called for the report in June after supervisors voted to boost annual taxpayer contributions to the system by $200 million to $987 million this year. Without reforms, retirement system officials warned that amount could reach up to $2 billion by 2015.

“The current pension plan is an 800-pound gorilla that if not adequately reformed will impact our ability to provide vital services to county taxpayers,” said Tony Bell, a spokesman for Antonovich, who represents the 5th District, which includes Claremont, San Dimas and LaVerne. “The recommended reforms would save upwards of $200 million annually.”

Any changes to pension formulas for current county employees would have to be negotiated with the unions, which have generally been skeptical of any proposal that would lower their members’ benefits.

Another hurdle, Fritz said, is the conflict between politicians and unions. Often, politicians have received direct campaign contributions from the unions they are in negotiations with, she said.

County officials need to aim for more dramatic changes, said Jack Dean, who runs the website www.pensiontsunami.com.

“It’s been my opinion that unions are going to fight any change, so why not go for the whole thing? They are going to battle you anyway,” Dean said.

Tracie Morales, spokeswoman for Los Angeles-based Service Employees International Union Local 721, which represents more than 55,000 county employees, said county and the union officials have already agreed on pension reforms twice in the past three decades.

“In December of 2009, measures were put in place to (increase employee contributions) to ensure the retirement system could withstand difficult economic downturns like the one we’re facing now,” Morales said.

But a “true reform, or fix,” would require new hires to be placed on a defined contribution plan, Dean said.

“It’s the only way to eliminate the incurring liability and not pushing it off into the future,” he said.

The current proposal means taxpayers are still on the hook, Dean said.

“It’s a step in the right direction but that’s not going to solve the problem,” he said. “It’s nibbling around the issue.”

The county isn’t the only government agency attempting to reform its coffers.

Fritz said she is following nearly half a dozen initiatives on the Nov. 2 ballot throughout California that aim to reform pension systems.

“I’m looking to see how effective they are on getting voters and unions to agree,” she said.

The outcome of those ballots also will speak about voter sentiment on the issue, Fritz said.

To read entire story, click here.