L.A. City Council approves early retirement plan despite opposition

Under the plan, workers hired before 1983 would see their pension contribution hiked to 6% from a range of 2% to 4%.

Other city employees would see their contributions increase from 6% of their pay to 6.75% in July 2011.

Council members said they would receive an updated actuarial study within two weeks, in time for a final, public vote on the labor pact.

Councilman Bernard C. Parks, who voted for the early retirement concept, said he was reserving final judgment until he sees the long-term cost of the union agreement. "The council has a vote later to decide whether [to] accept it or not," he said.

Early retirement also will require a vote from members of the city's primary pension fund, the Los Angeles City Employees' Retirement System.

Councilman Richard Alarcon said the plan would be less painful for the public than a furlough plan, which would force workers to take 26 unpaid days off in the coming year.

"We're doing our best to save city services," he said.

The proposed agreement with the Coalition of L.A. City Unions is designed to dramatically reduce the possibility of layoffs and avoid furloughs, which would force the city to close some offices every other Friday.

Under the proposal, the coalition's 22,000 members would not receive raises for two years. Once that period is over, however, those workers would receive six raises between July 2011 and January 2014 -- the equivalent of an 18.8% raise -- plus two extra cash payouts.

To reduce the city's payroll costs, the city would offer early retirement to workers who are up to five years away from being eligible for retirement.

To entice them to leave, the city would offer some workers cash payouts and enough years of service to qualify for retirement ahead of schedule.

City officials have been increasingly anxious about the rising costs of retirement benefits at its two pension systems -- one covering public safety workers, the other for civilian employees.

A May report from the city's top financial advisor warned that the city's required pension contribution -- money that would otherwise be used to pay for basic services -- could jump from approximately $660 million next year to more than $1.6 billion by 2013-14.

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