Pension changes recently endorsed by the Los Angeles city council do not go far enough for former Mayor Richard Riordan, who aims to put more aggressive fixes on the city's May 2013 ballot, Reuters reported yesterday. The overhaul backed by the leaders of the second-largest U.S. city includes raising the retirement age for new non-safety workers to 65 from 55 and new formulas to reduce their pension payments. New hires also face higher contributions to help with unfunded pension liabilities. The changes are estimated to save Los Angeles $4 billion over 30 years, with savings of $30 million to $70 million over the next five years. Riordan, a former lawyer and businessman turned politician, does not think these estimates are accurate. The assumed savings rely on shaky assumptions on future investment returns at the city's pensions funds, said Alex Rubalcava, an adviser to the former Republican mayor. Rubalcava added that the council did not touch the pensions of future police officers, firefighters and utility employees, leaving Los Angeles open for higher future pension costs.
