City’s 2nd Tier Pension Plan Ruled Illegal

This past Monday, the Employee Relation’s Board (ERB) ruled that Mayor Garcetti’s 2nd Tier Pension Plan was illegal. However, the city intends to appeal the decision, so the Tier 2 plan, or concept, is technically ON HOLD.

The 2nd Tier plan was unilaterally implemented for new employees hired after July 1, 2013. Monday’s ruling was a major victory for the Librarians’ Guild, the LA City Coalition of Unions and our newest Librarians and Clerk Typists who were enrolled automatically in the 2nd Tier.

The 2nd Tier plan significantly reduced retirement benefits. For example, the plan:

-Raised the retirement eligibility age from 55 to 65.

-Reduced the formula for calculating one’s retirement allowance. Normal Retirement for Tier 1 is 2.16% x 12-month Final Average Compensation x Years of Service Credit. Tier 2 is 2.00% x 36 month Final Average Compensation x Years of Service Credit. (We realize that only Richard Kraus gets this part on first read…)

-Dramatically altered benefits for survivors of Retired Members. Tier 1 gives continuance of benefits to the survivor; Tier 2  provides continuance if the retired worker (while still alive) elects to take a reduced allowance at retirement.

-Added 5 extra years of continuous service to qualify for disability benefits. Tier 1 people need 5 years of continuous service; Tier 2 people need 10 years–making it horrific if Tier 2 people became permanently injured on the job and had only worked 9 years for the city.

Former Mayor Antonio Villaraigosa and CAO Miguel Santana created the plan two years ago, and former Councilmember (and now Mayor) Garcetti, as well as the rest of the City Council, supported it (and promoted it) as well. The so-called “pension reform” plan was unilaterally implemented July 1, 2013 without bringing it to the collective bargaining table first, which the Mayor(s) argued that the city could do because the plan only impacted “future hires” not current city employees.

Of course, the Librarians’ Guild and LA City Coalition disagreed with this sort of reasoning (or rationalization), and with the help of our labor attorneys filed an unfair labor practice. Yesterday, the ERB sided with the unions.

For a good article in the LA Daily News about this, featuring our own librarian Jeff Sargeant, go to:

http://www.dailynews.com/government-and-politics/20140728/panel-rules-that-los-angeles-city-hall-must-toss-out-new-pension-rules

Sincerely, Roy and Henry

Comments are closed.