Former LA Mayor Richard Riordan proposes new pension reform plan


Villaraigosa has preliminary support from the city council to change and roll back pension benefits for city employees. Riordan now has entered the battle with a proposed ballot initiative to change pension plans.

"The council is only taking care of 1 percent of the problem," said Riordan. "And what they are doing only applies to new employees and to one-third of the new employees of the city."

Riordan's proposal includes all police department and fire department personnel and nearly all city employees, including the Department of Water and Power. All have unions that wield a lot of clout in city elections.

The Villaraigosa plan would cap maximum benefits. The Riordan plan puts all new hires into 401(k) plans.

The Villaraigosa plan raises the retirement age for a full pension. The Riordan plan freezes retirement benefits for current workers.

Villaraigosa targets only future employees. The Riordan proposal covers all employees.

There are 10,000 members of Service Employees International Union Local 721. Bob Schoonover is president of Local 721. He says Riordan's plan isn't very well thought out for the unions or the city.

"He would actually create a financial burden in years to come because nobody would be contributing into the old plan, so the rate that the city would have to pay into the old plan would go up," said Schoonover.

"We're trying to protect their pensions as well as save the city government from going bankrupt," said Riordan.

Schoonover says the employees have already come close to doubling their contributions to their retirement benefits.

Riordan's proposal needs 255,000 signatures to get it on the May ballot. And the unions will be doing all they can to keep it off, or defeat it.

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