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401(k) plans are not the solution

By LAPPL Board of Directors on 02/07/2011 @ 04:15 PM

Some self-styled experts are suggesting the replacement of public pensions with 401(k)-style retirement plans as one solution to municipal and state budget shortfalls. But recent facts and figures show why this is a non-starter.

A study commissioned by Retirement USA found that Americans aged 32 to 64 are facing a staggering retirement savings shortfall of $6.6 trillion. And, 87% of businesses surveyed acknowledged that a 401(k) plan would not provide retirement security for their workers.

401(k) plans are not a viable solution. On Forbes.com, Edward Siedle explained some of the 401(k) system’s major problems and why it has failed American workers. According to Siedle, the system is a hoax that will precipitate the greatest retirement crisis in the history of the world. He writes, “In other words, employers understood that offering a plan that purported to provide for workers’ retirement security, without obligating the employer to pay retirement benefits, was helpful in building their businesses. However, employers privately acknowledged that these 401(k) plans were not sufficient to provide for workers’ retirement. For 30 years employers chose not to share this little secret with the workers.”

Won't the proven failure of the 401(k) plans eventually translate into an aging population who must rely on their children and social services just to get by? And it would undoubtedly force retiring Californians to leave for the greener pastures of other states because they’d no longer be able to afford to live here. How would this exodus help the economy?

In stark contrast to the failed 401(k) scheme, the pension system covering Los Angeles police officers has existed since June 7, 1899. Los Angeles Fire and Police Pensions (LAFPP), even after the global economic downturn, is currently 91.6% funded. Members contribute up to 9% of their pay bi-weekly, which for the 2010-2011 fiscal year, will amount to $120,287,911. Sizeable as this amount is, it doesn’t even constitute the majority of the system’s funding; the lion’s share of LAFPP’s funding comes from returns on the fund’s investments.

It’s absurd that even as it becomes clearer why 401(k) plans don’t work, some still want to shove more American workers into these retirement schemes – the same ones that are on the verge of provoking a massive retirement crisis. These broken plans will prove woefully inadequate for millions of Americans reaching retirement age. That’s why we hope to see more respected business publications like Forbes shed light on the danger and inadequacy of private companies’ 401(k) plans and help everyone understand that largely self-supporting pensions are not the problem.

Studies and articles like these only strengthen our opposition to proposed 401(k) systems for public safety employees. It’s already failed millions of hardworking American workers, and it would surely fail our members.

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Team LAPD joins the fight against cancer

By LAPPL Board of Directors on 02/03/2011 @ 02:02 PM

Protecting public safety is just one of the many ways LAPD officers serve the community. Last year, officers held their 10th annual “Angels Community Book and Toy Drive,” they participated in several blood drives, and they stepped into the ring with deputies from the Sheriff's Department for the 17th annual "Fight for Life" boxing tournament benefitting City of Hope.

Now, a group of LAPD officers have signed up with the Leukemia & Lymphoma Society's Team in Training program and joined the fight against blood cancers. They’ve formed Team LAPD, who will train for the 2011 LA Marathon and raise funds for cancer research. With the support of their family, friends and colleagues, the team hopes to raise $35,000.

There’s a special significance to this goal since three of Team LAPD are themselves battling cancer. Five-year olds Nathaniel and Ryan, and 16 year-old Freddy are all putting up a brave fight against acute lymphoblastic leukemia, a debilitating cancer of white blood cells that has, over the last four decades, shown increasing survival rates thanks to ongoing research into new treatments and therapies. This is why Team LAPD is training to raise these urgently needed research funds.

We encourage everyone out there to join Team LAPD in their fight against blood cancer by pledging their support on the team’s page or by getting involved in any way they can. Team LAPD is also on Facebook.

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When you can’t win with facts, resort to spin

By LAPPL Board of Directors on 02/02/2011 @ 03:11 PM

Jack Humphreville, the self-proclaimed LA Watchdog, does not like our December 22 blog, “Pension holidays aren’t just ‘ancient history.’” In his latest CityWatch rant, Jack is upset with many facts and issues we raised. Let’s take apart his spin and insert some facts.

We pointed out that if the City had not taken “contribution holidays” and “simply made all its required annual payments, the system would’ve currently been funded at over 100%.” And we noted that the “pension reformers of today remained silent as the government shirked its pension obligations, helping to create the current situation.”

Looking to shift the blame, Humphreville plaintively asks: “where was the leadership of the PPL while the City was stiffing the Fire and Police Pension Plans (‘FPP’)? ” The answer: LAPPL leadership knew that if the City skipped payments and then had to make them up later, it would be the City’s choice. It’s the pension reformers, not us, who seek to bury the history of skipped payments and how that money would have multiplied in the markets if it had been contributed.

We also pointed out that the current pension plan is 91.6% funded. While acknowledging that this fact is accurate, he states “the ‘Actuarial Valuation and Review of Pension and Other Postemployment Benefits (OPEB) as of June 30, 2010’ indicates the unfunded liability is $5.9 billion based on market values, implying a funded ratio of 67.6%.”

This is an example of changing the facts to suit your argument. Jack, your comparisons are apples and oranges, the pension system is soundly funded. The OPEB, for benefits such as retiree health care, is not the pension system.

Jack then tries to change more facts, claiming that the unfunded pension liability number he has “…is based on an Investment Return Assumption of 7.75%, a level that is considered unsustainable over time and substantially higher than what is permitted in Corporate America.”

First, as a long term rate of return, 7.75% is sustainable. The actual long term performance of the plan has validated the approach used by our pension fund. Also, there are sound reasons why the public pension systems use a different funding ratio than corporate plans. GASB, the independent agency that provides accounting standards for public plans, has approved the approach used by the Los Angeles Fire and Police Pension System. Sorry, Jack, but changing the numbers because they don’t achieve the negative result you want won’t fly.

Working himself into full fury, Jack claims, “The Annual Required Contribution (“ARC”), the FPP Board of Commissioners relies on phony baloney, actuarial accounting techniques that peg the unfunded liability at $3 billion, implying a funded ratio of about 83%.” Now we know we are diving into numbers mumbo jumbo, but we simply have to point out the many fallacies underlying that rant.

Jack is apparently comfortable with the actuary deciding what the total liability of the plan is; he just doesn’t like the same actuary then calculating what the unfunded liability is. So, rather than intelligently analyzing how that number was arrived at, he resorts to calling the actuarial accounting “phony baloney.” Well, thanks for the cogent argument.

Jack wrongly claims that the “the City’s General Fund will be required to contribute $500 million to the FPP in 2011-12, or 37% the $1.357 billion total annual payroll, representing over 11% of the General Fund. This is an increase of over $110 million from the previous year.” Actually, the percentage of the General Fund paid to the pension system is within the historical range of what the City has paid, in good times and bad.

Jack next tries to question the recently adopted new pension tier, saying, “There is also no guarantee that this new tier is actuarially sound since it relies on an unsustainable Investment Rate Assumption of 7.75% and it allows officers to retire before the age of 65.” As stated above, the assumption rate is sustainable. And apparently, Jack wants 65-year-old police officers on patrol.

He wrongly asserts that, “Coupled with the unfunded liability of the Los Angeles City Employee Retirement System, the City has an unfunded pension liability for its two principal pension plans of over $15 billion assuming the market value of assets and a realistic Investment Rate Assumption.” It is important that you note how Jack changes the actual facts. The $15 billion number is a number he and other pension opponents created by using a Treasury bond rate for the return rate of pension funds. The approach has been rejected by the Government Accounting Standards Board, which sets accounting standards for government agencies. Fitch ratings called this approach "unrealistic, " yet it is the approach opponents insist on using to sell their point.

Having invented a parallel universe of financial facts and assumptions, Jack then closes by wondering why the City does not have a plan to address the universe he created – fascinating.

Jack didn’t like us pointing out the actual history of how we got here, claiming that was “spilt milk.” We can only guess he won’t be too happy with us pointing out his fabricated numbers to try to make today’s reality seem extremely dire.

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It’s kickoff time for AEG’s downtown pro football stadium

By LAPPL Board of Directors on 02/01/2011 @ 02:50 PM

Like most of our fellow Angelenos, we’ve been sitting on the sidelines over the years watching and listening to proposals for developing a world-class football stadium and bringing an NFL franchise back to Los Angeles.

And now, we’ve finally seen a plan that we can enthusiastically support and urge City leaders to make happen. We’re getting behind AEG’s bold plan to build a 64,000-seat retractable-roof stadium (expandable to 78,000 for NFL Super Bowls and NCAA Final Fours) that would complete the 15-acre campus that already includes the Staples Center, Nokia Theater and L.A. Live.

AEG proposes to pick up the stadium complex’s $1.5 billion cost – a laudable investment in Los Angeles that’s especially welcome because it requires no investment of public money. To get the ball rolling on this exciting project, LAPPL favors the issuance of $350 million in municipal bonds, which would fund construction of a new wing of the L.A. Convention Center (increasing its size by 90,000 square feet) and demolition of the old West Hall.

The complex would give the city a downtown area second-to-none in the world and generate economic benefits for the entire region. L.A. would also finally be in a position to compete for every convention, entertainment and sporting event in the world, including Super Bowls, Final Fours, World Cups and the Olympic Games.

We’ve seen the positive impacts of the Staples Center and L.A. Live: more jobs, greater tax revenues and reduced crime in the downtown district. The overall development is a magnet attracting people to the once overlooked downtown. For all these reasons, to City leaders we say: Build on the momentum and make the downtown stadium a reality.

What do you think? Is it kickoff time for an L.A. pro football stadium?

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An act of betrayal that stands alone

By LAPPL Board of Directors on 01/28/2011 @ 11:33 PM

We were as surprised and outraged as everyone else by the revelation that the Los Angeles School Police Department officer’s story of being shot by an unknown assailant may have been a hoax. Stenroos’ story triggered a sizeable manhunt and caused heartache and chaos for a great deal of people.

The LAPD’s response to the alleged shooting was swift, comprehensive and thorough. But as usual, detractors jumped on the chance to malign the force. Over 300 officers were deployed, a wide area was blocked off, and entreaties to the public were made for help in catching the suspect. This was a police department’s response to a threat whose nature, skill and motivations were still unknown. Cynical observers, however, assessed the response as unbalanced and overzealous. They attributed the show of force to the fact that it was a law enforcement officer who’d been shot, and suggested that officers would’ve been less responsive to an attack on a civilian. While we understand how it may have appeared this way, it was absolutely not the case.

Law enforcement officers are the community’s protectors; they symbolize public safety. Police officers are the ones who courageously respond when armed assailants attack, when disputes turn violent and whenever the public’s safety is threatened. In short, they are the ones who put their lives on the line to stop criminals from harming and killing. Therefore, when an assailant makes a direct and brazen attack on a member of this protective force, law enforcement must respond quickly and aggressively. Because a willingness to kill a law enforcement officer presents the ultimate danger to society. If a suspect is willing to shoot a trained, uniformed and armed police officer at point blank, what is he willing to do to the average person on the street?

The actions of Jeffrey Stenroos were a betrayal to the people of Los Angeles and the men and women of law enforcement. If proven to be a hoax, he wasted the already stretched resources of the LAPD. There is no question about the harm caused by such actions, and we are confident that the law will deal with him appropriately.

The alleged fabrications of an individual should not detract from the commitment and dedication of the men and women of the LAPD or the law enforcement community at large.


The LAPPL does not represent Los Angeles School police officers. LA School police officers are represented by the Los Angeles School Police Association. The LASPA website is www.laspoa.com.

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Public safety: Government’s top obligation

By LAPPL Board of Directors on 01/26/2011 @ 04:00 PM

As City leaders consider the consequences of Governor Jerry Brown’s proposed budget, it behooves them to remember that government’s top obligation is public safety; their actions should reflect that.

Recent gains in public safety have not been accidental. The Mayor and the Chief of Police correctly credited historic lows in crime to years of dedicated work by LAPD officers and adequate public safety funding.

But some people mistakenly believe we can hold on to these gains while “policing on the cheap.” That’s why it’s important to recognize some of the early negative effects of this approach. Keeping detectives at home to preclude overtime pay is bringing down the homicide clearance rate. Leaving these crimes unsolved until the budget allows a detective to work the case is bad news for everyone except the suspect.

LA Daily News recently published one of the best commentaries on the matter. Their lead editorial rightly reasoned that public safety budgets must come first: “Angelenos can adjust in the short term to many reductions in city services,” the editorial argued. “When the economy improves, the city can recover quickly from shortened library hours, from a delay in pothole repair and from parks gone raggedy. The city can't, however, rebound easily if criminals once again feel comfortable victimizing people in Los Angeles. And the public should never again have to adjust to living in the murder capital of the U.S.”

We couldn’t have said it better ourselves. City officials need to take the Daily News’ admonition to heart: Keep public safety first.

Is the City forgetting its top priority?

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Not armed doesn't mean not dangerous

By LAPPL Board of Directors on 01/24/2011 @ 05:15 PM

Why do otherwise reasonable individuals – despite evidence to the contrary before them – become reflexively critical of police, jumping to the twisted conclusion that an officer’s life faces less danger from an unarmed suspect than when the officer is staring down the barrel of a gun? Why do these same people immediately assume all officer-involved shootings – while always tragic – are "bad" shootings? Those making snap judgments about officer-involved shootings often cherry-pick the facts and do a disservice to the communities police officers serve.

So it was in the case of Reggie Doucet Jr., an unarmed, yet violent six-foot, 190-pound bodybuilder and college defensive-back. Last week, after initially fleeing from police officers, Doucet engaged them in violent, hand-to-hand combat, attempting to disarm at least one of two officers in what the officers described as a "fight for their lives." When he grabbed for the officer's gun after fighting with them, Doucet predetermined the tragic outcome of events.

In November 2010, Riverside police officer Ryan Bonaminio was reportedly killed with his own weapon. And only a few weeks ago, Rainier, Oregon Chief of Police Ralph Painter struggled with an “unarmed” suspect who used Painter’s own gun to kill him. According to the U.S. Department of Justice, from 1999-2008, no fewer than 44 police officers were killed with their own weapons; and another two in 2009. 2010 numbers are not yet in.

The “armed” vs. “unarmed” argument is the worst kind of willful blindness. The assumption that a gun or a knife are the only ways to threaten a life is false, irresponsible and has to stop.

What do you think of the ‘armed vs. unarmed’ argument?

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“Armed and dangerous” doesn’t mean “unarmed and harmless”

By LAPPL Board of Directors on 01/21/2011 @ 03:58 PM

Why do otherwise reasonable individuals – despite evidence to the contrary before them – become reflexively critical of police, jumping to the twisted conclusion that an officer’s life faces less danger from an unarmed suspect than when the officer is staring down the barrel of a gun? Why do these same people immediately assume all officer-involved shootings – while always tragic – are "bad" shootings? Those making snap judgments about officer-involved shootings often cherry-pick the facts and do a disservice to the communities police officers serve.

So it was in the case of Reggie Doucet Jr., an unarmed, yet violent six-foot, 190-pound bodybuilder and college defensive-back. Last week, after initially fleeing from police officers, Doucet engaged them in violent, hand-to-hand combat, attempting to disarm at least one of two officers in what the officers described as a "fight for their lives." A YouTube posting of real-time radio transmissions is chilling, but instructive. Mr. Doucet's intent was unambiguous. Indeed, when he grabbed for the officer's gun after fighting with them, he predetermined the tragic outcome of events.

In November 2010, Riverside police officer Ryan Bonaminio was reportedly killed with his own weapon. And only a few weeks ago, Rainier, Oregon Chief of Police Ralph Painter struggled with an “unarmed” suspect who used Painter’s own gun to kill him. According to the U.S. Department of Justice, from 1999-2008, no fewer than 44 police officers were killed with their own weapons; and another two in 2009. 2010 numbers are not yet in.

The “armed” vs. “unarmed” argument is the worst kind of willful blindness. The assumption that a gun or a knife are the only ways to threaten a life is false, irresponsible and has to stop.

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