Eli Broad and Richard Riordan

Richard Riordan and his billionaire friends are currently circulating petitions to put a Charter Amendment ballot measure called the “New Defined Contribution Plan” on the May 2013 ballot. Riordan is telling anyone who will listen that closing the three city pension funds to new hires and replacing them with a 401(k) system would be less costly to the City. His statements are in the league of Arnold Schwarzenegger — they sound good, however they are not true.

The actual facts are that Riordan should be well aware that closing the plan will immediately lead to substantially-increased costs for pension plans. Potential savings, if they exist, will not appear for decades. Instead, the Riordan plan simply (and deliberately or directly) passes the costs of the current pension plan on to our children and grandchildren.

We now know that retired insurance billionaire Eli Broad is bankrolling the Wall Street scheme designed to take away public safety pensions and giving them to stock market speculators. Broad’s former company, AIG, helped create the mortgage crisis which led to the recession. Now, he is helping Riordan bankroll a reckless pension scheme that has been tried before — and has failed. In the past year, a number of states and local municipalities have considered switching their new employees to the same type of plan that Broad and Riordan are recklessly supporting. Every single state that considered it did a thorough study and then rejected the switch, because it not only wouldn’t save taxpayers any money but would cost taxpayers billions more!

Thoughtful analysis and real solutions are needed to solve public employee pension issues. Not Wall Street double-talk. If asked, please do not sign the petition to put this costly scheme on the ballot.

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