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Riordan's Pension "Reform" Proposal Withering Under Criticism in LA
It looks like former LA Mayor Richard Riordan's plan to slash the retirement security of that city's public employees is imploding.
In a Los Angeles Daily News story, Riordan admitted that he has not conducted any independent actuarial study to support his wild claims of bringing cost savings to the City.
“Riordan has rushed out an initiative with claims that he now admits are unsupported by any actuarial analysis. Every credible businessman would demand to see a thorough financial analysis before investing in any business opportunity, and would never make a major purchase based on solely on provocative Powerpoint slides and overstated claims without some financial data to back it up. Yet, Riordan has insulted voters of the City of Los Angeles by paying to put an initiative on the ballot that lacks even a rudimentary actuarial analysis to support the claims he has put forward in both public statements and the initiative preamble,” said Tyler Izen, president of the Los Angeles Police Protective League (LAPPL).
“Last week, while flip-flopping on his promise to debate the LAPPL on the merits of his scheme, Riordan said, ‘Let’s not put the cart before the horse.’ How ironic, now that he has been caught putting the cart before the horse, Riordan is scrambling to buy an actuarial analysis that he can point to in support of his claims. That slipshod and reckless approach should be rejected. Thoughtful analysis and real solutions are needed to address pension issues – not sound bite clips and Charter changes that are poorly thought-out and extremely costly,” said Izen.
Texas, New Hampshire, North Dakota, Minnesota, Kansas, New Mexico, Rhode Island, Missouri, Wyoming and New York City have considered and rejected the same type of proposal offered by Riordan. The common reason for rejection was that it was too costly to close the pension system to new employees and switch to a defined contribution system.
Riordan told the Daily News, “I didn’t feel we needed one (a study) because we were basing our proposal on existing city studies.” The Riordan scheme ignores all of these published studies, as well as the one done in 2005 for the City of Los Angeles showing the immediate and significant costs of closing the defined benefit plan to new hires and implementing a defined contribution pension proposal in its place for the new hires is higher than continuing to make the defined benefit plan open to new employees.
“Also troubling is that the Business Leadership of Los Angeles Chamber of Commerce, of which the LAPPL is a member, voted to support the Riordan scheme without doing any independent due diligence to verify Riordan’s claims. We hope that the business community hasn’t decided to support a pension plan of such great impact based on unsubstantiated rhetoric by the Riordan camp,” concluded Izen.
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