Audit Report compares LADWP, City and County Workers' Pension Payments

Retired employees of the Los Angeles Department of Water and Power are paid higher monthly pensions compared to retired public servants from the county and the city. This was revealed in an audit report that was released by the City Controller Ron Galperin. Retirees from LADWP were offered an average pension payment of $5,212 per month in the financial year that ended on July 1, 2015. The city retirees received an average monthly pension payment of $ 4,023 while retired workers of the country were paid $3,881 per month. Aon Hewitt Investment Consulting was the contractor that was in charge of conducting the audit.

The average pension benefits that the LADWP retirees receive are higher than those of the city and county but lower than the police and firefighters. The audit report indicates that the retired Los Angeles police and firefighters are offered an average of $5,309 per month as pension payments. Evaluations are conducted after every five years to enable city officials to oversee the LADWP’s pension system.

Ron Galperin released the report after Transparent California, an oversight organization, released information on the personal retirement benefits that over 7,000 retirees of the LADWP were offered in 2016. The group posted the data on its website, and it indicated that LADWP paid a total of the $435 million to its retired employees. The audit report of the city controller compared the pension compensation that LADWP offered to a dozen other public agencies in San Bernardino County as well as the cities and counties of Orange and San Diego. It concluded that the average monthly retirement benefits that LADWP gave are within range of other public agencies.

According to David Lewin, who works at UCLA Anderson School as a professor of management, the retirement compensation of LADWP is relatively higher due to the competition that the agencies get from the private sector. The organization is run like a “quasi-private, ” and it hires executives from the same pool with leading companies such as ExxonMobil and many others in the private wind and solar sectors. LADWP’s system is different from the private firms since it does not use the 401K-style retirement benefits, which offers defined compensation. According to Lewin, LADWP and other public agencies across the nation are facing a major challenge of affording the benefits that they promised their employees. They will have to source for the funds in every possible way including raising taxes.