See Also: Index of all Measures

Currently, the Pension Plans are separated into four funds. Each Plan has a separate budget that accounts for its assets and liabilities. The surplus from one Plan cannot be used to pay for the liabilities of another. Strong investment earnings over the past several years have improved the funding level of the Plans, resulting in a surplus in one of the Plans.

The Proposal

This proposed Charter amendment would change the funding structure of the Pension Plans to allow one Plan's surplus to pay for any Plan's liabilities. This new funding structure is projected to reduce the contribution from the City's General Fund for the next 10 to 15 years.

In addition, this proposed Charter amendment would require the City to create a new benefits tier (Tier 5) to provide a pension ranging from 50% with 20 years of service to 90% with 33 years of service. Tier 5 would be created by ordinance and would become effective on January 1, 2002.

Meaning of Voting Yes/No

A YES vote of this measure means:

You want the Charter to be amended to combine the existing Fire and Police Pension Plans into a single Plan and to allow the City to establish a new benefit tier for firefighters and police officers.

A NO vote of this measure means:

You do not want the Charter to be amended to combine the existing Fire and Police Pension Plans into a single Plan and to allow the City to establish a new benefit tier for firefighters and police officers.

Under current Charter provisions, the Fire and Police Pension System assets are isolated into four groups, each paying for the benefits costs specifically related to Tiers 1, 2, 3, and 4. Each of the four existing pension plans is a separate trust fund with both a separate budget and accounting for each plan's assets and liabilities. This means that the surplus of one plan cannot be used to offset the liabilities of another plan. In the past, the funding levels of each plan were too low for the consideration of merging the four plans into a single plan. But due to strong investment earnings over the past several years, these funding levels have improved significantly which has resulted in a surplus, thereby giving rise to the opportunity to merge the four plans into a single plan.

This measure would amend the Charter by changing the funding structure of the Fire and Police Pension System. This new funding structure is projected to reduce the City's General Fund contribution to the Fire and Police Pension System by an estimated $196 million over the next five years. Given current projections, the reduction in General Fund contributions could continue for an additional five to ten years beyond the initial five-year period.

This measure would also amend the Charter in such a way as to require the City, by ordinance, to create an additional tier of pension benefits (Tier 5). The savings resulting from the new funding structure will offset the cost of the new Tier 5 benefits for at least five to ten years. This newly created tier of benefits would:

• Be available to newly hired police officers and firefighters and currently employed police officers and firefighters who elect to transfer into it.

• Allow police officers and firefighters to retire with a minimum pension benefit of 50%, at age 50 after having worked 20 years for the City, and a maximum of 90%, after having worked 33 years for the City.

• Provide that the annual cost-of-living adjustment may be increased by a maximum of three percent, which is consistent with some of the City's current plans (Tiers 3 and 4).

• Be enacted by ordinance and would become effective on January 1, 2002.

We need to keep our skilled firefighters and police officers on the job, but under the current pension system, many of our best men and women in uniform have a financial incentive to retire early.

Charter Amendment A will allow firefighters and police officers to continue earning pension benefits longer. This will encourage them to spend their prime years with the City instead of leaving for other jobs.

Firefighters and police officers risk their lives every day to protect our communities in Los Angeles. Far too often they pay the ultimate price, leaving a young family behind. Charter Amendment A will improve the City's ability to provide for the families of those who die or are seriously injured while on duty serving the public.

The City's Fire and Police Pension System used to offer benefits at least equal to those of other public safety agencies in California, but now the City lags behind. Charter Amendment A will make city benefits comparable again, allowing us to compete for and retain the best firefighters and police officers.

Charter Amendment A will allow the City to restructure the existing Fire and Police Pension System to reduce costs to the City without reducing benefits. An actuarial study shows that the City should save $196 million in the first five years. After that, additional cost savings are expected to continue for another five to ten years.

Your YES vote will keep our most experienced firefighters and police officers serving the communities of Los Angeles. Vote to improve public safety and save taxpayer dollars.

Vote YES on Charter Amendment A.

Richard J. Riordan Mayor, City of Los Angeles

Michael Feuer Councilmember, 5th District

Hal Bernson Councilmember, 12th District

Gloria Molina Los Angeles County Supervisor, First District

Cindy Miscikowski Councilmember, 11th District Chair, Public Safety Committee

William R. Bamattre Fire Chief, Los Angeles Fire Department

Additional Persons Signing Argument in Favor of Charter Amendment A

Lucille Roybal-Allard Congresswoman, 33rd District

Bernard C. Parks Chief of Police, Los Angeles Police Department

Yvonne Braithwaite Burke Los Angeles County Supervisor, Second District

Mitzi Grasso President, Los Angeles Police Protective League