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Garcetti opposes 401(k) plans for city employees

The mayoral candidate says switching to such a system would cost the city money and not produce savings for at least 15 years. His views are more in line with unions than what his rivals have said.

October 19, 2012|By Christine Mai-Duc, Los Angeles Times
  • Councilman Eric Garcetti speaks at a debate last month.
Councilman Eric Garcetti speaks at a debate last month. (Allen J. Schaben / Los Angeles…)

Los Angeles mayoral candidate and City Councilman Eric Garcetti this week staked out a position on public pension reform more squarely in line with City Hall unions than his leading campaign opponents, drawing a potential early contrast in a race that has been dominated by three veteran City Hall elected officials with strikingly similar records.

Appearing with three rivals at a Westside forum, Garcetti said Wednesday that he would oppose any shift to 401(k)-style retirement accounts, which can grow or shrink with investments.

Some political and civic leaders want the city to switch to such plans for new hires to reduce ballooning costs of pension plans that guarantee future payouts to retirees. Garcetti argued that such a change would cost the city money and not produce savings for at least 15 years.

Two other top contenders in the mayor's race — City Controller Wendy Greuel and Councilwoman Jan Perry — spoke more generally about the need to reexamine city pensions. "Everybody's going to have to have a little pain in this," Perry said.

Candidate Kevin James, a former federal prosecutor and radio talk show host who has fashioned himself as an outside reformer, said Thursday that he supports a transition to a 401(k)-style system and raising the retirement age for city employees.

He warned that the city is "close to going off the cliff."

The exchange at a Jewish temple forum was one of the first since billionaire developer Rick Caruso announced that he would not join the contest.

It also comes days after former Republican Mayor Richard Riordan filed papers to place a measure on the ballot that would, among other changes, replace guaranteed pensions with 401(k)-style plans for all new city employees.

Unions, which can play an influential role in city elections, hope to head off Riordan's measure by discouraging voters from signing petitions to get it on the ballot.

If successful, Riordan's measure will appear on the May ballot, when the top two contenders to replace Mayor Antonio Villaraigosa will compete in a runoff.

Several attendees at the candidates forum said the city's ongoing budget troubles are among their top concerns. "I'd like to see a candidate that will go up and face the unions," said Larry Shuman, 70, who lives in West Los Angeles and attends Temple Isaiah. "We have to live within our budget, and [city employees] have to pay their fair share."

The candidates, seated in armchairs before a packed auditorium, largely agreed on the issues: Jobs should be the next mayor's top priority; schools need an overhaul; infrastructure is crumbling. But they offered few detailed solutions.

And Greuel pointed to her financial watchdog role as city controller, saying she's identified $150 million in savings for the city. She also said she would be a "bulldog" advocating for public education.

"I want my kid to go to public schools and graduate and be able to get a good job here," Greuel said.

James blamed his opponents for "breaking City Hall." But Garcetti argued that he and other city elected officials have taken steps to address budget shortfalls, including reducing the city payroll by 5,000 workers and getting employees to contribute more to the cost of their benefits. "Those who have led are different than those who have just talked about it," he said.

When James said he was prepared to take issues such as pension reform directly to voters, Garcetti shot back. "If you just call names and beat your chest … you get more headlines, but you usually get less results too."

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