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Long Beach says it has achieved total pension reform

October 16, 2013|By Christine Mai-Duc
  • Long Beach downtown and waterfront.
Long Beach downtown and waterfront. (Don Kelsen / Los Angeles…)

The city of Long Beach is announcing that it has achieved pension changes for all city employees after reaching a tentative agreement that asks four of the city’s bargaining units to increase the amount employees pay into their retirements.

The contracts represent the final piece of nearly three years of negotiations with nine unions that sought to lower pension costs as the city struggled financially.

Since 2007, the city has eliminated 786 positions and slashed $134 million from its general fund.

“Long Beach has become a smaller, more nimble organization…but we needed to address an issue of inequality in the city organization and compensate our remaining employees fairly,” Mayor Bob Foster said in a press release Monday.

Aside from the few dozen employees who received a raise in 2009, most of the 800 workers covered by the new contracts had not received raises since 2008. Foster said the new contracts help bring the employees’ pension contributions and salaries in line with other workers.

Employees covered under the new contracts will now contribute 8% of their salary into CalPERS, an increase from the 2% they previously paid. As part of the deal, they will also receive a 5% raise this month, followed by a 4% increase next year.

After more than a decade of painful cuts, city officials said they expect a healthier economy and improving budget situation to offset some of the resulting costs. Long Beach recently projected a surplus of $3.5 million for the 2014 fiscal year, its first in 10 years.

The contracts cover about 14% of the city’s workforce, including engineers, lifeguards, management, and confidential employees who assist in contract negotiations between the city and other employees.

The city struck pension deals with the city’s police and firefighters in 2011, and approved new contracts with the city’s largest union, the International Assn. of Machinists, in January.

In those deals, the retirement age and formula to calculate pension payouts for most existing employees remain unchanged – most continue to receive 2.5% of their salary as pension for each year on the job and are eligible to retire at 55.

However, new employees will receive 2% for each year, and would have to wait until age 62 to retire.

All together, the city expects its new contracts to save them $250 million across all funds, and $130 million in the general fund, over 10 years.


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