Under fire for their generous compensation packages, Newport Beach lifeguards have bowed to pressure to scale back their retirement benefits.
Newport Beach City Council members Tuesday night approved a reworked contract with full-time lifeguards that would roll back pension plans for new employees, and require current guards to contribute more toward their own retirement costs. The council voted 6 to 1 to approve the contract, with Councilman Steven Rosansky voting no.
Newport is one of a growing number of California beach cities that have said they can no longer afford to pay full-time lifeguards the same "public safety" pensions offered to police officers and firefighters.
Lifeguards in the past have argued that they deserve similar benefits because they also put their lives at risk.
"We're happy about the outcome for the taxpayer," said Councilwoman Leslie Daigle, who has pushed for reducing the retirement deals.
In 2010, Newport Beach paid about $500,000 toward pension plans for the city's 14 full-time lifeguards.
Guards in Newport currently have a contract that makes them eligible for a pension worth up to 90% of their largest paycheck at age 50. Under the new contract, newly hired employees would have a pension worth up to 50% less.
Lifeguards also will pay 9% of their salary toward pensions, instead of the 3.5% they pay now.
Full-time lifeguards in Newport Beach were facing the prospect of layoffs in the proposed 2011-12 budget, so they offered to trade pension cuts for saving jobs.
Ultimately, all of the lifeguard spots were spared, although one will spend time doubling as the Police Department's crime prevention officer. The new budget eliminates some of the lifeguard overtime and special pay as well.
In all, the reworked pension deals and budget cuts will save the city about $700,000, officials estimate.
"It keeps the public safe and addresses our budget challenges," said City Manager David Kiff.
Representatives of the Lifeguard Management Assn. did not have an immediate comment.
City officials are looking toward the fall, when contract negotiations begin with the fire and police unions.
Kiff said he hopes they also will accept a so-called "2% at 50" pension formula instead of their current "3% at 50" plan, and that they agree to pay 9% of their paycheck toward retirement benefits.
"I thought it sets an appropriate tone going into the rest of our safety discussions," Kiff said.
But firefighter and police unions, with their hefty budgets for political campaigns, are a tougher target for politicians.
Daigle was more circumspect about scaling back other public safety retirement plans.
"These are negotiations," she said. "It's not a math problem with one solution."