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Los Angeles Adopts New Pension Plan amidst Union Resistance

October 29, 2012

Los Angeles – The Los Angeles City Council has voted on, and subsequently adopted, a new pension reform program under pressure from former Mayor Richard Riordan’s stricter competing plan, reports said.

The new plan will impose higher retirement ages, increase amount of contributions, and reduce payouts of hired workers for the following year.

The 10-0 vote was made amidst union leaders’ strong opposition regarding the reform.

According to reports, the union leaders had threatened to go to court to force the city into formal negotiations concerning the plan before it is implemented.

Mayor Antonio Villaraigosa proposed the said tier. It states that employees who are hired after July 1 are required to stay on the job until they are 65 years old in order to avail of pension benefits. Moreover, they need to contribute more for health costs.

In turn, these employees will receive up to 75 percent benefits from their pay. Villaraigosa estimated that the tier would save the city some $4 billion over the next 30 years.

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