Los Angeles officials violated the law when they rolled back pension benefits for new employees in 2012, the city Employee Relations Board ruled, jeopardizing as much as $4.3 billion in projected savings over 30 years.
Leaders of the second-largest U.S. city failed to properly consult with municipal employee unions before pushing through the changes in a 10-0 City Council vote in October 2012, the five-member panel decided Monday.
“The Employee Relations Board affirmed today the basic concept that one side cannot change a contract by itself,” said Scott Mann, a spokesman for the Coalition of L.A. City Unions.
Yusef Robb and Jeff Millman, spokesmen for Mayor Eric Garcetti, weren't immediately available for comment.
Without reducing pensions for new employees, Los Angeles faced a 45% increase in its contribution toward employee pensions and the unfunded liability of the fund itself, Miguel Santana, city administrative officer, said in a 2012 report. The reduced pensions, along with raising retirement ages and income caps, would save $3.9 billion to $4.3 billion over 30 years, according to the report.