Law Used for Pension Hikes Is Overturned

Gov. Pete Wilson on Monday signed legislation overturning a state law used by Los Angeles County officials to adopt controversial pension changes that will cost taxpayers $265 million.

The measure, prompted by a Times story in February, allows the Board of Supervisors to cancel pension changes that boosted the retirement pay of some officials by 19%, to more than $125,000 a year.

The action came on the eve of a board vote scheduled today on Supervisor Gloria Molina’s proposal to rescind the pension rules.

“The new law will prevent abuse of county pension plans at the expense of taxpayers,” Wilson said in a written statement.

The legislation repeals an obscure 1990 law that Wilson said was misinterpreted by Los Angeles County.

The law allows benefits such as car and medical insurance allowances to be counted with salaries in calculating retirement pay. The author of the 1990 measure, Assemblyman Trice Harvey (R-Bakersfield) contended that county officials misread the law to mean they could adopt the pension changes without a public vote.

The county--without any study of the financial effect--implemented the pension rules last year. Last month, a county study concluded that the rule changes have created a liability of $265 million that will cost the county at least $18 million annually for the next 30 years. Two taxpayer groups have sued the county to repeal the pension rules.

County attorneys have contended that the pension changes are irreversible because it is illegal to take away pension benefits.

Though some changes will benefit most of the county’s 85,000 employees, the Board of Supervisors and top county managers will derive the largest gains in retirement income. Chief Administrative Officer Richard B. Dixon, who has defended the changes, could not be reached for comment.