Richard Riordan

Former Mayor Richard Riordan has taken the first steps toward eliminating the current pension system for all future City employees and replacing it with 401(k) plans. However, this proposal will significantly cost the City more while it impacts current officers’ pay and benefits.

It is surprising that a restaurant owner who expects to be paid immediately after meals are consumed is advocating that the City adopt a “dine and dash” mentality for the costs of current City services.

Riordan owns the Original Pantry Cafe, Riordan’s Tavern, Gladstones 4 Fish and the Village Pantry. The former mayor, a multi-millionaire with a $100 million fortune, apparently doesn’t believe in paying the bills he created and convinced voters to approve during his terms.

In 2001, Riordan championed and signed a ballot initiative that allowed the City to skip pension payments to the Fire and Police Pension fund. Less than five years later he advocated bankruptcy as a way to skip out of the obligations. Now he has a new approach: stick the grandkids with the bill.

The League has been asked by some individuals to boycott the restaurants. While organized boycotts can be a powerful tool for raising awareness about the impact of an issue, we are not organizing a boycott (picketing, establishing sanctions, etc.) of Richard Riordan’s restaurants, because to do so would take time away from educating the public about his flawed proposal. At the same time, we understand why so many people and their families have stopped patronizing Riordan owned establishments. They have told us that when they spend their hard-earned money, they want to do so at establishments where the owners are not advocating for policies that are detrimental to the City of Los Angeles and their personal safety.

The Riordan initiative will cost taxpayers hundreds of millions of dollars and will result in less money for public safety. In New Hampshire, after the pension plan produced a study showing why and how costs would dramatically increase, the Republican House Speaker did not believe the report and so he commissioned his own actuarial study. That study also concluded that it would be more expensive to close the pension plan and open a new 401(k) plan.

The reports concluded that “total pension funding costs would rise” and that “in all areas” transition to a “proposed defined contribution plan will be more expensive to employers and employees than maintaining the current defined benefit system.” If there was a simple off-the-shelf idea to avoid the cost of closing a plan due to the amortization of the unfunded liability, they would have included it in their studies. They didn’t, because there isn’t. Riordan’s idea wasn’t included because those experts rightly rejected simply “cost shifting” to a future generation.

Why does Richard Riordan think he is smarter than the authors of those nine other studies? Answer: he isn’t. Unlike Riordan, those studies didn’t try to hide the cost of closing the plan by shifting it to our children and grandchildren.

Riordan is cynically trying to shove the costs of the policies he pushed for onto the future generations of Los Angeles. We vigorously disagree, and urge all people who care about the City’s future to learn the facts about his proposal.

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