As a family, we are being affected by proposed budget cuts in the Los Angeles Police Department’s pension programs. Although not huge cuts, over time, they have a large impact on new officers retirement planning.
Our son in law is a great kid, after several years of service in the military, he returned to Los Angeles and has settled down close to us. As with several other members of his Army unit, he recently applied to become an officer with the LAPD and will need his pension to take care of himself, our daughter and grandchildren in his retirement years.
According to an article in the Los Angeles Times, in order to save money, the city will first want him to contribute 2 percent more of his salary to post-retirement healthcare than current officers do. They only pay 9 percent, our son in law will have to pay 11 percent. The second major change would be that public safety employees who earn $100,000 annually and retire after 20 years would be eligible for a pension equaling 40 percent of their salaries, or $40,000. That would be $10,000 a year less than under the current formula, which grants pensions of 50 percent of pay after 20 years. Not huge dramatic changes, but if an officer is retired for 15 years, he will stand to lose $150,000, as compared to current pension structure. That’s a lot of money.
The changes come at a time when healthcare costs are exploding out of control. The article states that within five years, pension-related costs are expected to consume one-third of L.A.’s general fund budget, which pays for such basic city services as public safety, parks and libraries. According to a city report, the new plan would save the city $173 million for every 1,000 new cops and firefighters hired..
We support the reforms proposed by the mayor, as do the major police and fire unions, always a powerful voice in these situations. Times are very tough, the city of Los Angeles is faced with an enormous budget deficit and must make cuts, as do cities and towns around the United States. But as a family who will be directly affected by these cuts, we ask the Mayor to again review the numbers and see if the cuts can be reduced.
Police officers and fire fighters in Los Angeles and every other city around the world are true heroes, giving their time, their service and sometimes even their lives, to help their fellow citizens. However, in these difficult economic times, even they must sacrifice to help meet city budgets.
Patrick McDonnell Villaraigosa introduces pension reform proposal Los Angeles Times via latimes.com