League of Women Voters of California
Modification to Fire and Police Pension Plans
City of Los Angeles
Index of all Measures
|Information shown below: Fiscal Impact | Yes/No Meaning | Impartial Analysis | Arguments ||
Shall the Charter be amended to enable the City Council of the City of Los Angeles to establish by ordinance a program whereby a deferred retirement option plan (DROP) would be created and offered to members of the Fire and Police Departments on a voluntary basis as an alternative method of benefit accrual in the Fire and Police Pension Plans?
The proposal is a Charter amendment that would:
For each year that police officers and firefighters work for the City, they earn a percentage of their annual salary that is paid to them when they decide to retire. As long as they work, the percentage continues to increase up to a maximum of 70%. At the time that police officers and firefighters decide to join this program, the percentage of their annual income that they earn is fixed and not increased, and they will be paid that percentage of their annual salary once they retire.
For instance, an officer who worked for 25 years will earn 55% of her/his annual pay in retirement. If such an officer earned $50,000 per year, then her/his annual retirement benefit would be $27,500 for the rest of her/his life. For each additional year worked, she/he would earn 3% more of her/his annual pay up to a maximum of 70%. So if such an officer worked 29 years, then she/he would earn 67% of her/his annual pay, or in this case $33,500.
If an officer decided to join the alternative plan after having worked 25 years, then her/his annual pension benefits would be $27,500 for the rest of her/his life after retiring from the Department. During the 4 additional years that she/he works for the force, they City would deposit as much as $27,500 per year, or in this case, a total of $110,000, into an account. When she/he retires, such an officer would collect her/his pension benefit of $27,500 per year and would also have $110,000 for her/his retirement that she/he could take in a lump sum or in an annuity.
|Arguments For Proposition 2||Arguments Against Proposition 2|
|All across the country the pool of candidates for
police officers and firefighters is shrinking. This trend is expected to
continue as the unemployment rate remains low and the private sector job
market remains strong. The City is also experiencing increased retirements
of public safety personnel as the large numbers of officers and
firefighters hired in the 1970's attain their maximum pension benefits.
For quite some time we have seen police officers take retirement from the
City and continue to work someplace else. Many are leaving because they
are not ready to retire; yet they have earned the maximum pension
available. Consequently, they work elsewhere to increase their retirement
We are not the only city to face this problem. San Diego, San Jose, Houston, Dallas and Baltimore have faced similar problems and come up with a common solution - a deferred retirement option plan. Charter Amendment 2 will allow the City to develop a system to retain experienced officers and firefighters instead of losing them to other employment. Charter Amendment 2 requires that the plan must be cost neutral to the City and reviewed in five years to evaluate its impact.
In other jurisdictions where similar plans have been implemented, there has been improvement in morale and the police force has become more mature and experienced. This program will help us reduce the number of retirements for the next few years while we work to improve our recruitment results.
This deferred compensation is cost neutral to the City and promises to increase the experience and maturity of our police and fire departments. We have nothing to lose and everything to gain. Support public safety and VOTE YES ON CHARTER AMENDMENT 2.
Richard J. Riordan, Mayor, City of Los Angeles
Bernard C. Parks, Chief of Police, Los Angeles Police Department
Mike Feuer, Councilmember, 5th District
Rocky Delgadillo, Deputy Mayor, City of Los Angeles
Cindy Miscikowski, Councilmember, 11th District; Chair, Public Safety Committee
Mitzie Grasso, President, Los Angeles Police Protective League
Joel Wachs, Councilmember, 2nd District; Member, Public Safety Committee
|No argument against this measure was submitted.|