Hermosa, labor unions forge two-tier pension system
Negotiators for Hermosa Beach and its labor unions have agreed to adopt a two-tier pension system in which future employees will see reduced retirement packages.
Hermosa Beach city officials over the past couple of years have pushed hard for the reform, in which employees will shoulder more of the costs of their pensions.
The change is expected to save the city nearly 40 cents of every $1 in payroll for each new police officer, 25 cents for every $1 for each new firefighter, and 9 cents for every $1 for all other employees.
“I think this is a very historic moment,” Mayor Peter Tucker said as he announced the reform at the City Council’s regular meeting on Tuesday.
He said none of Hermosa’s neighboring cities “have been able to do this.”
Tucker thanked members of the city’s seven employee groups for adopting the reform, which is now included in the employment contracts of each group.
“I really do want to thank them. Everyone worked really hard. We listened to their ideas and they listened to ours,” Tucker said. “…This will really help us with our legacy costs.”
City Manager Steve Burrell also praised the employee groups.
“By working collaboratively with the city, our public employee groups have helped us craft a pension system that will be sustainable, protect the future benefits of our valued public servants and ensure the city’s ongoing ability to provide police and fire protection and other critical municipal services,” Burrell said in a prepared statement.
Many municipal officials throughout California and the nation have pushed for a two-tier system, some of them successfully. In California, the pensions of public employees, especially police and firefighters, have come under frequent fire as too costly.
Councilman Kit Bobko told his colleagues that the Hermosa reform does not go nearly far enough.
“Even though we’ve done this now, this is only a tiny portion of what we have to do to return to fiscal sanity,” Bobko said. “…It’s just moving us back into the ballpark of fiscal sanity.”
Bobko said police and firefighters can retire at age 50 “with a guaranteed benefit – not a guaranteed contribution but a guaranteed benefit” based on their highest-salary year of service.
“It should not be more financially beneficial to work in government than it is to work in the private sector,” Bobko said.
He said he was appalled that the firefighters’ contract calls for them to work out while they are on the clock, and to receive additional payments for the exercise.
“This absolutely drives me up the wall,” he said.
Bobko also reiterated his call for contracts with random drug testing for police and firefighters. He has said he would agree to be tested as well.
“This is a first step,” Tucker responded. “We’re not going to turn back what’s happened over 20 years in the first night…Somewhere you have to take a step, and this is a step.”
Councilman Jeff Duclos said economic woes that are caused high on the fiscal food chain are unfairly blamed on the working class.
Councilman Howard Fishman said public employee pensions spiraled out of control, and it’s time for corrective action.
“For years retirement benefits were super-funded by [the state public employee retirement system]. The cities did not contribute anything into the retirement fund,” he said.
“For five or six years the cities got a free ride, and were able to hire more people and provide more service,” Fishman said. “…Now the economy has turned, and so have we.” ER