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Labor fights Newport Beach pension plan

Union appeals for public support for police and firefighters as city seeks higher contributions to pension funds.

December 07, 2011|By Mike Reicher and Lauren Williams, Los Angeles Times

Newport Beach may seem like an unlikely place for a labor fight, but union officials are striving to rally community support after leaders of the wealthy city asked them to start contributing more to their own pension funds.

As contracts for police, firefighters and lifeguards are about to expire, union officials sent out a mailer last week in an effort to get residents to support their cause. City administrators, meanwhile, countered with an open letter explaining why they think employees should pay more toward their retirements.

"While the city is in fairly good fiscal shape today, if the current pension practices don't change, we are concerned that it won't stay in such good shape," City Manager Dave Kiff wrote in a statement to residents.

But unlike cities across California that have budget deficits, Newport Beach has a reserve of $90 million. In neighboring Santa Ana, a far larger city, the city reserves are down to $300,000.

Firefighters and police officers in Newport Beach have a retirement plan that allows them to retire at 50 with a pension that equals 90% of their highest annual salary. They contribute 3.5% of their base pay toward their retirement fund.

Lifeguards had a similar contract until last summer, when guards — under growing criticism over their salaries and pensions — agreed to contribute 9% of their total salary to their retirement and to a less generous formula for new hires.

Now, city officials want police and firefighters to make the same concessions.

On Friday, fliers were distributed to Newport Beach residents to rally support for public safety services. They read: "When one of the most prosperous cities in the country unnecessarily targets public safety for cuts, it's time for police and fire to sound the alarm."

Newport Police Chief Jay Johnson said the reexamination of public safety pensions isn't unique to Newport Beach but is happening statewide.

In Santa Ana, a proposal released last week calls for firefighters to contribute 9% of their salaries toward their pensions — a steep jump from the 1.4% they contribute now. Gov. Jerry Brown wants public employees to eventually pay half of their pension costs, according to a reform plan he released in October.

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