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Paul Clinton

Paul Clinton

As the POLICE Web editor, Paul Clinton contributes posts about patrol cars, motorcycles, and other police vehicles. He previously wrote about automotive electronics as managing editor of Mobile Electronics. Prior to that, he was an award-winning newspaper reporter.



William Harvey

William Harvey

William "Bill" Harvey is currently serving as chief of police in south central Pennsylvania. He retired from the Savannah (Ga.) Police Department where he worked assignments in training, patrol, and CID. Harvey has more than 25 years of experience working with recruits, rookies, and FTOs.
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Reckless Pension Reform In Los Angeles

A pension-reform initiative backed by Los Angeles' former mayor would be a step backward.

November 13, 2012  |  by Los Angeles Police Protective League

CC_Flickr: 401(K) 2012
CC_Flickr: 401(K) 2012

Editor's Note: This blog post first appeared on the Los Angeles Police Protective League's website.

Former Los Angeles Mayor Richard Riordan has taken the first steps toward eliminating the current pension system for all future city employees, including LAPD officers, and replacing it with 401(k) plans. However, this proposal will not only impact the pay and benefits of current employees, who have already given years of service to the city, but it will be detrimental to Los Angeles taxpayers.

Under the Charter Amendment proposal, which needs signatures from more than 254,000 registered voters by Dec. 7 to qualify for the May 21, 2013 election, Riordan's proposal would close the current pension systems and have all future employees adopt 401(k) plans. Please tell your friends and family that if they value the work of police officers, firefighters and other city workers, they should not sign this petition.

The Riordan scheme has the catchy ballot title, "Bankruptcy Avoidance and Pension Protection Act," when in reality the cost of closing the three pensions plans is projected to cost taxpayers nearly an additional billion dollars in the next decade alone. His poorly thought-out plan does not save the city money, despite his witty sound bites, but instead may lead the city to bankruptcy.

The plan Riordan is proposing immediately becomes more costly to the city. The reasons are twofold: (1) the pension system will have a shorter investment horizon and a lower return rate; and (2) the time to pay the unfunded liability is reduced. In short, it ends up costing taxpayers billions more.

In the past year, nine states considered switching their new employees to 401(K) plans. Every single state that considered it did a thorough independent study and then rejected the switch for one reason: because it does not save taxpayers money and in fact would cost taxpayers billions more!

City Administrative Officer Miguel Santana has examined a possible shift to a 401(k)-style system, but found it would cost the city even more than the current system. The study found that the city would still be liable for the benefits to be paid to workers covered by the existing system without the benefit of new contributions from the new city workers.

It is disappointing that the Charter backers may likely bankrupt the city by pushing a plan that is more costly than the current pension systems. Thoughtful analysis and real solutions are needed to solve public employee pension issues—not Wall Street double-talk and Charter changes that are poorly thought out, more expensive and legally dubious.

The Riordan plan is reckless in light of all the publicly available reports from many different states that such a drastic change will cost taxpayers billions.

Richard Riordan is factually wrong about all the pension plans and has no independent analysis to back up his numbers. The Riordan scheme will bankrupt the city. We urge all residents not to sign the petition that would put this poorly thought out plan on the ballot.

Related:

Former L.A. Mayor Launches Petition To Give Cops 401K Plans

Tags: Pensions, LAPD, Elections, City Budgets


Comments (6)

Displaying 1 - 6 of 6

David Cook @ 11/22/2012 3:46 PM

Why is it always the Police Offices who get screwed first and the most? When there are cuts to be made, they always look at the Police Force first and formost. Most Police Officers especially in small cities can't even aford to raise a family unless their spouse works full time and they have two incomes just to get by. It's imbarrasing when your children are eligible for free lunches at school because Mom or Dad who is working full time as a Police Officer can't make enough money to feed their kids. If I wanted a career in Law Enforcement today, I would have to think twice and I would probably do something else where I could make some money.

John @ 11/23/2012 2:16 AM

I believe public pension systems should be fully funded. However, pension benefits should be limited to 50% after 20 years of service. This is what our military retirees receive. 75% to 90% retirement benefits are not fair to taxpayers or to government agencies.

CJ @ 11/23/2012 4:35 AM

@John, Actually John your statement that that pension benefits should be limited to 50% as that is "what are military retirees receive" is not correct if you are implying that 50% is the maximum that they can receive. Having served in the military myself, I can tell you the way the retirement system is set-up you receive 50% retirement at 20 yrs (regardless of age, thus an 18 yr old enlistee can retire at 38 and receive his pension) but the amount increases depending on the total years of service. The maximum a military retiree receives is 87.5% of his/her pay if they retire after the maximum of 35 yrs of service. So you see, John, our military veterans can receive almost 90% of their pay if they stay in 35 yrs. If you say this amount is 'unfair' for peace officers that risk their lives on a domestic front then it seems to imply that it would be 'unfair' to pay our military the same for risking their lives.

Steve @ 11/26/2012 6:29 AM

@CJ....Sir in my eyes you are truly a hero. First for your years of Military service. Second for having my back. Unfortunately this site has numerous "police bashers" that seem to love stomping us in comments of things they obviously no little about. Thank you again.

steve @ 11/26/2012 6:34 AM

@John... Sir, my comment was directed at you. I have seen some very unkind comments towards Law Enforcement on this site. Yours was not

Joey Tang @ 12/31/2012 1:17 PM

@CJ- "If you say this amount is 'unfair' for peace officers that risk their lives on a domestic front then it seems to imply that it would be 'unfair' to pay our military the same for risking their lives"

Most soldiers don`t get to go home every night and see the family. Unlike police officers. You`re talking apples and oranges. Soldiers deal with roadside bombs, Suicide bombers, And crazy people with fully automatic assault rifles, All day long. You`re average police officer in the US doesn't have to deal with that kind of stuff. The more dangerous the job the better your pay should be.

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