Employee Pensions

By Tom Brewer

As our unfunded pension obligation is growing, we need to have all employees pay toward their pensions.

Pension concerns by the public surfaced because of an article in the Wall Street Journal on Oct. 30, 2013, that stated that the city of Torrance would eventually go bankrupt paying for pensions for city employees. Our finance director wrote a letter to the WSJ that pointed out that they were using the wrong criteria to arrive at their conclusion.

At a forum in January I was asked about police pensions. I have always said that I do not want to change the amount that our employees will receive when they retire and I said it again that evening. I also said that our city had a plan to pay our unfunded obligation of $220M. That weekend I went to a workshop and learned that CALPERS had recalculated pension obligations based on retirees living longer. When I returned to Torrance I asked our finance director about what I had learned and was told that we would hire an actuary to look at our growing pension obligations. At our council meeting on February 25th we learned that our unfunded obligation had grown to $392M.

Currently pension payments to CALPERS amount to 12% of our budget but that will rise to 18% by 2020. We cannot sustain that obligation without an effect on other city services. Although new city employees do pay toward their pensions, senior employees continue to have the city pay for their pension. When it comes time to negotiate new contracts for employees, I favor having all employees pay toward their pension.

I will receive a pension when I retire from the UCLA Medical Center this year and understand public concerns about pensions. I contribute 9% of my salary toward my pension so I also understand how employees feel about pensions as well.