Penision reform in the news..again
August 28, 2012

Today, Governor Brown held a press conference to announce a sweeping pension reform plan that claims to save billions of taxpayer dollars through a cut in all California pension systems. Many of the changes offered do not affect current LA County Employees. Some do - enclosed is a summary of the pension proposals that affect our retirements. Please keep in mind… THESE ARE STILL ONLY PROPOSALS, NOT THE LAW, but will likely be signed by the governor. This is not a complete list, only those portions affecting Local 1014

• All employees will be required to pay 50% of normal costs incurred by the pension system. “Normal costs” are those costs that are incurred by the pension system to fund your pension, but do NOT include liabilities for stock market losses. These costs must be negotiated at the local level but local agencies and employees will be mandated if they do not negotiate at least a 50% premium.
• Formula for NEW Safety B members will change from 2.5 at 55 to 2.5 at 57.
• Pensionable salary for NEW employees will be capped at around $130,000 of annual income.
• Post-retirement work for your previous agency cannot exceed 960 hours per year.
• ARC time and all forms of “air-time” will be eliminated for ALL employees.
• New employees will have pensionable income based on highest 3 years of salary, not highest 1 year.
• “Ventura” benefits for new employees is questionable.

Local 1014 opposes any and all changes to our retirement plans, period. We have a well funded, well run retirement system that has passed every study, audit and actuarial with flying colors. We receive a great pension – but we pay top dollar for it. The employer pays as well, but since they pay no social security, no Social Security disability insurance or death benefits get a great deal as well. Our system is not broke, leave us out of this..

New employees will be asked to work 2 years longer, will get the highest 3 years average salary for retirement. They may lose “Ventura” benefits, but will definitely lose ARC time and the “30 and Out” benefit.

Current employees will lose ARC time and will likely pay a bit more for retirement after a new rate is negotiated – currently we pay around 42% of our retirement, the new law will demand 50%.

Our brothers and sisters coming into the job later will pay the most. These changes will only minimally impact current employees, but Local 1014 has a long history of NOT selling out the next generation. Plan A vs. Plan B was in 1978 was a bad deal, and we are not enthusiastic about a new “tier” for new employees. Local 1014 will continue with our current stance to our lawmakers and county policymakers that they stay out of our system – its NOT BROKEN!

There is no magic in the fact that existing employees are only minimally affected at this point, at this point our lawmakers would love to reduce your pension. There are many pieces that have been put together over the years to protect existing employees (Contract law, state vested benefit rules, county rules). We must do what we can to protect future pensions.

Fighting back against unwanted pension reform is a top priority for Local 1014 and the California Professional Firefighters. We will be in contact with the membership and likely calling for your assistance over the next few months.

Governor Announces Historic Pension Rollbacks

 Backroom agreement with Legislature Imposes Lower Tier for New Hires, Pension Salary Cap, Phased-in Mandatory Cost Sharing

At a news conference in Los Angeles, Gov. Jerry Brown announced an agreement that will take public employee retirement security back to the Reagan years.

The plan – hashed out with legislative leaders behind closed doors – imposes a range of rollbacks, all without the benefit of collective bargaining.

• New lower tier for almost all employees – local, state, teachers, the works. Public safety retirement would top out at 2.7% at 57;
• A cap on pensionable income -- $110,000 for those who pay Social Security; $130,000 for those who don’t.
• Mandatory cost sharing immediately, for all new employees, and by 2018, for current employees;
• Three-year final compensation averaging;
• Limits on pensionable compensation, airtime purchases, pension holidays and retroactivity.

You can read the governor’s media release HERE.

CPF President Lou Paulson had the following statement on the governor's announcement:

The pension proposals outlined today represent a retreat from collective bargaining and basic principles of retirement security. The proposal imposes rollbacks to levels not seen in four decades – the biggest pension rollback in California history. They punish everyday working people who have already sacrificed hundreds of millions of dollars in wages and benefits lost to furloughs, layoffs and downsizing.

For firefighters, it is an especially disappointing day. Our members depend on the promise of a reasonable, secure retirement in return for their commitment to a difficult and dangerous profession. These proposals make that future promise less secure for the next generation.

Firefighters in dozens of cities have agreed to two-tiered systems, higher contribution rates and crackdowns on spiking. To unilaterally impose these changes from Sacramento short-circuits a bargaining process that is producing real savings and mocks the governor’s stated commitment to local control.

Beyond its punitive nature, these pension changes could actually wind up imposing greater costs on public agencies, especially in the short term. According to a RAND study, firefighters over the age of 55 have a workplace injury rate that is more than a 60-percent greater than firefighters under the age of 45 years. That translates to higher workers’ comp and disability costs, as well as being bad for the safety of our citizens.

Nobody condones abuse of the pension system – least of all our members. But these proposals go far beyond “reform”. Instead they threaten basic retirement security for generations of front line first responders and their families.

In the meantime if you have any questions about your retirement please contact Will Pryor at willp@local1014.org.  Imagine if Prop 32 passes.  This kind of backroom deal without labor input and toltal disregard for our legally negotiated benifits would happen everyday.  We will not stand for this.

Please keep informed.  Register on the 1014 website, visit the CPF website and "like" us on Facebook.

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