Corina Lee
August, 2010
Pension Update
Good news regarding pensions: The Public Employee Pension Limitation initiative (seeking to cap public pensions at a certain limit) did not receive enough signatures to move forward. This initiative was yet another attempt to attack our hard-earned pensions. This particular initiative had nothing to do with protecting your paycheck and everything to do with pension takeaways. The politicians and legislators need to stop attacking public employee pensions and blaming them for our economic crisis. Part of our responsibility as the LAPPL Board of Directors is to educate everyone that the men and women of the Los Angeles Fire and Police Pension (LAFPP) system contribute millions of dollars (8-9% of every paycheck) into funding their pension system. The LAFPP system is one which I believe should be used as a model for other pension systems, utilizing a conservative approach to asset allocation. The LAFPP has implemented numerous safeguards and protections to ensure the system continues to meet the established goals and needs of its members. Rather than slashing and eliminating benefits as a quick budget fix, politicians and legislators in California should be looking at the LAFPP system as a best practice and utilize our system as a benchmark that other systems should strive to achieve. The current short-term, band-aid approach to the budget crisis will negatively impact public employees (teachers, nurses, police and firefighters), who will lose their homes, stop consumer spending and move out of California. This will ultimately impact our other state residents and undermine California’s long-term stability and financial health. That is not the answer! The answer is looking to programs and best practices that work, not cutting back on services, benefits and undermining public confidence.
Also regarding pensions, the following letter from Jim Wilke, president of the Los Angeles Retired Fire and Police Association (LARFPA), is regarding the City’s ongoing attempts to combine the administration and investment functions of the LAFPP, LACERs and Water and Power pension departments. As I have said before, Prop. 163 prohibits the combining of the three pension-investment functions; however, Tim’s letter is a good explanation of why we are against combining the administrative aspects, or any other parts of our pension systems for that matter!
Lateral-Pay Issue
On June 29, the CAO, City of Los Angeles City Personnel Department, LAPD and several Directors met to resolve the confusion over the lateral-pay issue. The issue was what pay-step and scale would be utilized to determine the starting pay of officers who lateral from other police departments to the LAPD. Because answers to lateral-pay questions varied widely depending on to whom and where questions were directed, we felt it necessary to ensure that all parties who could reasonably expect to be asked lateral-pay questions have the correct information and work from the same documents.
The Lateral Entry Program is available for candidates who possess a valid California Basic Peace Officer Standards and Training (POST) Certificate or a Basic Course Waiver issued by California POST and who have successfully completed a probationary period at a police agency. The lateral process is started by the applicant sending a letter stating their desire to apply to the police specialist analyst in the City’s Personnel Department. The letter must include the applicant’s name, social security number, telephone number(s) where s/he can be contacted, address, the law enforcement agency employer and the length of employment with the agency. The applicant must also send a copy of their current California Basic POST Certificate or a Basic Course Waiver issued by California POST. After qualifications for the Lateral Entry Program have been verified, the police specialist analyst will contact the applicant with additional information to begin the testing process.
Lateral candidates are hired in the class of Police Specialist and must meet all of the requirements for a police officer and complete all test parts. Per MOU 24, the regular pay for the Police Specialist (lateral) class is a salary range from POI to the top step of POII (Schedule A-2). The salary level at which laterals start is dependent on law enforcement experience, military service and education [MOU 24, Appendix C-1 (effective July 1, 2010), Page 119, and Los Angeles Administrative Code Sec. 4.159(a)]. In exceptional cases, upon request from the Chief of Police, the city administrative officer may approve advanced-step hiring upon demonstrated need and qualifications of the individual [MOU 24, Appendix D(a)(6), Pages 127 and 128].
The bottom line: There is a lot of information that has been disseminated that is incorrect, misunderstood or even false. We hope that we have helped clarify and resolve this issue going forward. If you have any questions or concerns, please call us at (213) 251-4554.
LAPPL Director Elections
August 3 to September 7 will be the open filing period for Directors for Office Number 5 (police officer) and Office Number 8 (sergeant/detective) for the 2011-2013 term. Here is the process for filing, per the Los Angeles Police Protective League Bylaws (Chapter 6: Election of Directors, Subsection A, “Candidates Petition for Nomination”):
Members seeking election to the Board of Directors shall be nominated as follows: A petition shall be filed with the Chairman of the Election Committee (or his designee) no later than the close of business on September 5 of the applicable election year or the first regular business day thereafter if such date falls on a Saturday, Sunday or legal holiday.
The petition form shall be completed by the candidate using the official League form designated and approved, from time to time, by the Election Committee. Failure to submit the petition on the official petition form shall cause the candidate to be declared ineligible by the Election Committee. The official petition form will be provided only to the candidate by coming to the League in person, by mail, fax or mail.
The petition shall set forth the name of the nominee, the Directorship number with respect to which election is sought, and it shall be signed by the nominee and at least three (3) other Represented Members of the same rank or group of ranks from which the nominee is seeking election.
The completed petition shall be hand delivered to the Election Chair (or designee) together with a campaign platform statement and a photograph, if desired, by the designated deadline. The Petition shall be dated and time noted upon receipt by the League.
The filing period closes at 1700 hours on September 7.
Uniform Checks
According to the CAO, the LAPD is on target to achieve cost savings as specified in the MOU. If these efforts continue at the current rate, our membership will receive their 2009-2010 uniform checks by December 31. However, if the savings targets are not likely to be met for some unforeseen reason, issuance of the uniform checks will be delayed until July of 2011.
Members who were eligible to receive the lump-sum POST bonus, in accordance with Paragraph A of MOU Article 5.7, should have received this check prior to July 31, 2010.
I can be reached via e-mail at corinalee@lappl.org with any questions. Be safe.
Mr. George Aliano
President
Board of Fire and Police Pension Commissioners
City of Los Angeles
360 E. Second Street, Suite 400
Los Angeles, CA 90012Dear President Aliano,
At the Fire and Police Pension Department Board meeting on May 6, 2010, there was a request from the City Council for the Board to submit a report to the Council on the effects of combining the administration and investment functions of the City’s three pension funds into one pension department.
When this proposal was first initiated by the Independent Fiduciary Services (IFS) report in 2007, the Los Angeles Retired Fire and Police Association (LARFPA) was strongly opposed to this recommendation. Our Association wanted to inform this Board of our position on this subject.
We worked long and hard, over 40 years, to place both active and retired stakeholders on the Fire and Police Board. Elected members of the Board have been very instrumental in keeping an even balance on both administrative and investment activities of our pension system and achieved a funded status of over 100% approximately 35 years ahead of schedule. To combine all pension systems into one system would reduce our input and effectiveness in maintaining the welfare and benefits for our retirees.
IFS claims that combining the investments under one Board would reduce costs. It is interesting to note that there was next to no supporting documentation in their audit to support this claim. In addition, our experience has been when the City begins a new program the savings don’t last for more than several years, especially when a different political entity (not the current Boards) would have the power to determine contracts and administrative costs for the new Investment Board. The existing Boards (Fire and Police, LACERS and Water and Power) would have to maintain a full investment staff to try and ensure that their members on the new board would have the necessary information to make prudent decisions.
We do not support the Pension System spending time and resources on whether plans should be consolidated. This particular issue should be studied by the employer, perhaps by the CAO’s office, not by the Pension System itself. Another area where inconsistencies exist is the philosophies and rules that govern the different plans. It is like comparing apples, oranges and bananas. The Fire and Police Pension plan is governed by the City Charter and changes and benefits are granted by a vote of the people. These rules and regulations are adhered to in the strictest sense.
LACERS’s pension plan is mainly governed by the Administrative Code and changes and benefits could be made at the pleasure of the Council and the Mayor. At the recent LACERS’s Board meeting, the staff was giving a report on a custodial bank (Northern Trust) and how the contract duration had been changed to a year-to-year contract then reverting back to a twoyear contract. During the questioning by the Board, it was discovered that the staff had been approving the contract for a couple of years without getting the Board’s approval and trying to hide that fact.
Department of Water and Power is also governed by a different set of rules. They are regulated by the Council and Mayor but manage their Department almost independently of the City. This was evident with what happened during recent negotiations between the Council, Mayor and Department of Water and Power regarding the Department of Water and Power’s payment to the City for the budget.
We don’t believe that any amount of changes in the Charter, the Administrative Code or the State Constitution would be fair to the stakeholders in the different plans. We do believe the different Departments should cooperate with each other to reduce some of the costs in operating their individual Departments but not to the extent of consolidation.
Respectfully,
Jim Wilke
PresidentJRW/mai
cc: Michael A. Perez
Pat McOsker
Paul Weber
