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Under fire from labor, Riordan abandons pension overhaul plan

The former mayor says a self-imposed deadline, not union opposition, made him drop a proposed shift to a 401(k)-type retirement system.

November 26, 2012|By David Zahniser and Kate Linthicum, Los Angeles Times
  • Former Mayor Richard Riordan, left, with Councilman Bill Rosendahl, center, and Police Chief Charlie Beck, promises to keep pushing for major changes in city pension programs.
Former Mayor Richard Riordan, left, with Councilman Bill Rosendahl, center,… (Mark Boster, Los Angeles…)

Public employee unions scored a major victory Monday as former Los Angeles Mayor Richard Riordan abandoned his campaign to take a pension overhaul plan to voters next year.

The sudden retreat followed an attack by organized labor on a plan that Riordan said is vital to avoiding municipal bankruptcy. City leaders are coping with a financial crisis and will ask voters next spring for a sales tax increase to avert more cuts. Riordan argued that City Hall should reduce employee pension benefits instead.

The failure of Riordan's ballot drive could push the pension issue further into the background of the 2013 mayoral race. Three City Hall insiders in the contest have criticized the plan, while a Republican outsider has embraced it.

"This does take the heat off the mayoral candidates" on pensions, said Jaime Regalado, emeritus professor of political science at Cal State L.A. "It makes it not as much of an issue, because there's not something looming on the ballot."

Riordan's proposal, targeted for the May ballot, would have replaced guaranteed retirement payments with 401(k)-style investment accounts for new employees. It also would have scaled back benefits for existing workers. City Hall unions fought back, dogging Riordan's paid signature-gatherers at malls and supermarkets and demanding that the former mayor debate the president of the powerful LAPD officers' union.

Riordan, 82, who suffered a heart attack last year and had a medical scare this month that sent him to the hospital, said his health played no role in his decision to suspend his campaign. His self-imposed Dec. 28 deadline to gather 265,000 valid signatures, not the union assault, was his biggest obstacle, he said.

He remained unbowed Monday, promising to keep pushing for major changes in city pension programs and raising the possibility of a similar ballot measure in a future election.

"I'm going to be heard until this city government does something to avoid bankruptcy," he said. "I cannot stand seeing the city of L.A. ruined.... This city is going to be in rubble."

Monday's announcement marked a high-profile setback for the former mayor, the only Republican to lead the city in at least half a century. A spokesman said Riordan spent more than $500,000 on the campaign.

Riordan, who was mayor from 1993 to 2001, had hoped to replicate successful pension overhaul efforts in San Diego and San Jose, where voters this year agreed to sizable reductions in benefits.

But Kent Wong, director of the Center for Labor Research and Education at UCLA, said Riordan faced an uphill fight in heavily Democratic, labor-friendly Los Angeles. "It would have been a much harder sell here," he said.

Mayor Antonio Villaraigosa and City Council members have pursued a series of changes in recent years to control rising retirement costs. Last year, they persuaded voters to trim pension benefits for newly hired police officers. And last month, facing the threat of Riordan's ballot measure, council members voted to roll back benefits for new civilian employees.

Those changes followed warnings from budget officials that pension costs were on track to consume 26% of the city's general fund budget by 2016, up from 19% this year. Revised numbers have not been released since the council's recent pension changes. But Assistant City Administrative Officer Ray Ciranna predicted that the savings from recent pension changes would be "minimal" over the next two years, with bigger cost reductions in future years.

Riordan denounced the city's efforts to date as too timid, and noted that his proposed shift to a 401(k)-type retirement system would apply to all new employees, including police and firefighters. That ignited huge opposition from the Los Angeles Police Protective League, which represents roughly 10,000 rank-and-file officers.

The union depicted backers of the measure as a "billionaire boys club" and chided Riordan for failing to obtain an actuarial study that would determine the financial effects of his initiative. The union said Riordan's plan would cost the city money because new hires would no longer be financially supporting existing pension systems.

Civilian employee unions waged a different strategy, sending members to malls and grocery stores to counter Riordan's signature-gatherers. Union organizers approached voters who signed Riordan's petition and sought to persuade them that they made a mistake. They then asked them to sign a document requesting the city clerk to remove their names from the pension petition.

Ian Thompson, spokesman with Service Employees International Union, Local 721, said his organization had gathered 8,000 signatures from voters who wanted their names dropped. The union also had a "rapid response team" to make sure that if a city employee saw a signature-gatherer at a neighborhood mall or market, someone would show up to ask people not to sign. "We were fully prepared to continue until the end," Thompson said.

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