CHAPTER 10 RETIREMENT BENEFITS AND CONDITIONS OF ENTITLEMENT FOR THE LOS ANGELES CITY EMPLOYEES' RETIREMENT SYSTEM

4.1029 Provision Required to Comply with Internal Revenue Code Section 401(a)(37) and the Heroes Earnings Assistance and Relief Tax Act of 2008 § 104(a).

4.1030 Provision Required to Comply With Internal Revenue Code Section 401(a)(9).

4.1030.1 Provisions Required for Retirement System Compliance with the Internal Revenue Code.

4.1031 Former Spouse or Domestic Partner's Option to Elect a Life Annuity.

4.1032 Separate Account Option in Legal Separations or Dissolutions.

4.1033 Early Retirement Incentive Program.

4.1034 Separation Incentive Program.

Sec. 4.1000. Statement of Purpose.

This Article sets forth the benefits and conditions of entitlement that have been established for persons who are members of Tier 1 of the Los Angeles City Employees’ Retirement System (LACERS) and for their beneficiaries. These benefits may be modified and the conditions of entitlement changed by ordinance as authorized in Section 1168 of the City Charter.

It is also the purpose of this Article to demonstrate the intent of the City of Los Angeles, through its governing bodies, to promote the improvement of personnel management and employer-employee relations by enacting from time to time such ordinances as may legally be adopted under the authority of Section 1168 of the City Charter whenever Memorandums of Understanding and other agreements, duly executed by all parties thereto and approved by the City Council, require by their terms presentation to the City Council of ordinances changing retirement benefits or conditions of entitlement thereto.

The Retirement System is established, as may be amended from time to time, as a qualified defined benefit plan intended to satisfy the provisions of Section 401(a) of the Internal Revenue Code as applicable under Section 414(d) of the Internal Revenue Code for a governmental plan and such other applicable provisions of the Internal Revenue Code, Treasury regulations, or other guidance.

SECTION HISTORY

Added by Ord. No. 182,629, Eff. 7-25-13.

Amended by: Third para. added, Ord. No. 183,456, Eff. 3-4-15.

Sec. 4.1001. Definition of Terms.

(a) For the purposes of Article 1 of Chapter 10 and Article 2 of Chapter 11 of Division 4 of the Los Angeles Administrative Code, the following words and phrases shall have the meaning ascribed to them in this Section unless elsewhere defined:

Accumulated Contributions. The total of the amounts paid into the Retirement Fund by the Member and any regular interest credited to the Member’s account, as provided in Charter Section 1162(b).

Airport Peace Officer Member. A Member of Tier 1 of the Retirement System who: (i) while a City employee and on their retirement date was employed by the Department of Airports as a peace officer as defined in California Penal Code Section 830.1 and was appointed to that position before January 7, 2018; or (ii) on their retirement date was employed by the Fire Department as a firefighter, was appointed to that position before January 7, 2018, directly following employment by the Department of Airports as a peace officer as defined by California Section 830.1, and served as a firefighter for the Fire Department from the date of appointment until the date of retirement. An Airport Peace Officer Member shall include an individual who became a Member of Tier 1 of the Retirement System pursuant to Section 4.1080.2(b)(8). Notwithstanding anything in this subsection or elsewhere in this Code to the contrary, an Airport Peace Officer Member shall be ineligible for any enhanced benefits under Sections 4.1007(a), 4.1008.1 and 4.1010.1, and shall revert to status as a Tier 1 Member, if LACERS did not receive a lump sum payment of $5,700, by cashier’s check, on a post-tax basis, before January 8, 2019, or prior to the Member’s retirement date, whichever was earlier.

Airport Peace Officer Former Member. A former Member of Tier 1 of the Retirement System who was eligible for, and elected to, remain in LACERS rather than transfer to LAFPP under Charter Section 1704 and LAAC Section 4.1002(e) and who: (i) while a City employee and on the date that they separated from City service or ceased to be a Member of the Retirement System was employed by the Department of Airports as a peace officer as defined in California Penal Code Section 830.1 and was appointed to that position before January 7, 2018; or (ii) on the date they separated from City service or ceased to be a Member of the Retirement System was employed by the Fire Department as a firefighter, was appointed to that position before January 7, 2018, directly following employment by the Department of Airports as a peace officer as defined by California Section 830.1, and served as a firefighter for the Fire Department from the date of appointment until the date of separation. Notwithstanding anything in this subsection or elsewhere in this Code to the contrary, an Airport Peace Officer Former Member shall be ineligible for any enhanced benefits under Sections 4.1007(a), 4.1008.1 and 4.1010.1, and shall revert to status as a former Tier 1 Member or Tier 1 Member, as applicable, if LACERS did not receive a lump sum payment of $5,700, by cashier’s check, on a post-tax basis, before January 8, 2019, or prior to the Member’s retirement date, whichever was earlier.

Airport Peace Officer Retired Member. A Member of Tier 1 of the Retirement System who, on their retirement date: (i) was employed by the Department of Airports as a peace officer as defined in California Penal Code Section 830.1, and was appointed to that position before January 7, 2018; or (ii) was employed by the Fire Department as a firefighter, and was appointed to that position before January 7, 2018, directly following employment by the Department of Airports as a peace officer as defined by California Section 830.1; and (iii) had paid to LACERS the $5,700 mandatory additional contribution payment required by Section 4.1002(e)(2). An Airport Peace Officer Retired Member shall include an individual who became a Member of Tier 1 of the Retirement System pursuant to Section 4.1080.2(b)(8).

Annuity. Payments for life derived from the Accumulated Contributions of a Member as provided in this Article.

Base Amount. That portion of a Retirement Allowance resulting if cost of living amount is deducted therefrom.

Beneficiary. A person entitled to receive a benefit from the Retirement System.

Board of Administration or Board. The Board of Administration for the Los Angeles City Employees’ Retirement System established in Charter Section 1104(b).

City Service or Service. Only those periods during which a Member received compensation from the City as an employee or during which the Member not only received Workers’ Compensation benefits (Div. IV, Labor Code) for temporary disability on account of any injury or illness arising out of and in the course of employment with the City, but for which the Member also made contributions to the Retirement Fund as provided in Charter Section 1162. Notwithstanding the foregoing, a Member shall be entitled, at the time of death or retirement, to receive credit for their years of service from the date such Member entered employment with the City of Los Angeles in a capacity that would entitle the Member to membership in the Retirement System.

City Service Credit or Service Credit. The time component of the formula used by the Retirement System for purposes of calculating benefits pursuant to applicable Los Angeles Administrative Code and Board Rules.

Compensation Earnable. The full salary, wage or compensation established for any position or office in City service for the particular period involved in any calculation required.

Continuous Service. Uninterrupted City Service except that discontinuance of such service of a Member for any cause whatever, followed by re-entrance into City Service within three (3) years from the date of such discontinuance, shall not be considered as a break in the continuity of service.

Cost of Living Amount. That portion of a Retirement Allowance resulting from adjustments made pursuant to Section 4.1022.

Dependent Parent. A person whom the Board of Administration, upon investigation and after a hearing in the matter, shall find is the parent of a Member to or for whom the Member, during the last year of the Member’s service, contributed at least one- half the necessary living expenses.

Domestic Partner. A person who has formed a valid domestic partnership by filing a Declaration of Domestic Partnership with the Retirement System, as authorized in Section 4.1009 herein, or with the State of California, as authorized in Family Code Section 298.5, or a person who has established a legal union which was validly formed in another jurisdiction that is substantially equivalent to a domestic partnership, as provided in Family Code Section 299.2. Domestic Partner shall not include a person who has established a domestic partnership pursuant to any other authority, unless expressly otherwise provided in this Article. A partnership shall be established, for purposes of this Article, on the date of the filing with the Retirement System or state.

Employee. Every person in the employ or service of the City of Los Angeles in any capacity or rank whatever at a regular salary, wage or compensation, and regardless of whether the position held by any such person is classified as an office or employment.

Larger Annuity. The annuity funded entirely by the Member as provided in Section 4.1021.

Member or Tier 1 Member. An employee of the City of Los Angeles who meets the membership requirements contained in Section 4.1002 of this Article. Member, as used in this Article, shall mean a Member of Tier 1 unless otherwise specified. Notwithstanding the foregoing, a person who is no longer employed by the City, but who qualifies for reciprocity under Section 4.1096 and whose Tier 1 member contributions remain on deposit with the Retirement Fund may be considered to be a Member, but only to the limited extent necessary to comply with the reciprocity provisions contained in Section 4.1096.

Operative Date. Shall mean the “effective date”, unless a different date is specified by any ordinance adopted pursuant to the provisions of Charter Section 1168.

Public Safety Officer Member. The following definition shall apply only to Article 1 of Chapter 10 of the Los Angeles Administrative Code. A Member of Tier 1 of the Retirement System who while a City employee and on their retirement date, which shall occur on or after March 25, 2022, was employed by the Police Department, Harbor Department, or Recreation and Parks Department as a peace officer as defined in California Penal Code Section 830.1 or Section 830.31. Public Safety Officer Member also shall include an Airport Peace Officer Member who elected not to make a one-time lump sum payment of $5,700 on or before January 8, 2019 in exchange for the enhanced benefits provided by Sections 4.1007(a), 4.1008.1 and 4.1010.1 as set forth in Section 4.1002(e)(2). To the extent a Public Safety Officer Member qualifies retroactively for the enhanced benefits provided for in Sections 4.1008.2 and 4.1010.2, LACERS will adjust those benefits accordingly.

Public Safety Officer Former Member. The following definition shall apply only to Article 1 of Chapter 10 of the Los Angeles Administrative Code. A former Member of Tier 1 of the Retirement System who while a City employee and on the date that they separated from City Service or ceased to be a Member of the Retirement System, which shall occur on or after March 25, 2022, was employed by the Police Department, Harbor Department, or Recreation and Parks Department as a peace officer as defined in California Penal Code Section 830.1 or Section 830.31. Public Safety Officer Former Member also shall include an Airport Peace Officer Former Member who elected not to make a one-time lump sum payment of $5,700 on or before January 8, 2019 in exchange for the enhanced benefits provided by Sections 4.1007(a), 4.1008.1 and 4.1010.1 as set forth in Section 4.1002(e)(2). To the extent a Public Safety Officer Former Member qualifies retroactively for the enhanced benefits provided for in Sections 4.1008.2 and 4.1010.2, LACERS will adjust those benefits accordingly.

Public Safety Officer Retired Member. The following definition shall apply only to Article 1 of Chapter 10 of the Los Angeles Administrative Code. A retired Member of Tier 1 of the Retirement System who while a City employee and on their retirement date, which shall occur on or after March 25, 2022, was employed by the Police Department, Harbor Department, or Recreation and Parks Department as a peace officer as defined in California Penal Code Section 830.1 or Section 830.31. Public Safety Officer Retired Member also shall include an Airport Peace Officer Retired Member who elected not to make a one-time lump sum payment of $5,700 on or before January 8, 2019 in exchange for the enhanced benefits provided by Sections 4.1007(a), 4.1008.1 and 4.1010.1 as set forth in Section 4.1002(e)(2). To the extent a Public Safety Retired Member qualifies retroactively for the enhanced benefits provided for in Sections 4.1008.2 and 4.1010.2, LACERS will adjust those benefits accordingly.

Regular Interest. Interest credited to the individual account of each Member as provided in Charter Section 1162(b).

Reserve Basis. A system that provides for the accumulation and maintenance of a fund that will at all times be equal to the difference between the present value of the obligations assumed and the present value of the money to be received for paying such obligations, where such present values are estimated in accordance with accepted actuarial methods and on the basis of an assumed rate of interest and the mathematical probabilities of the occurrence of such contingencies as affect both the payment of the assumed obligations and the receipt of money with which they are to be paid.

Retirement Allowance or Allowance. An allowance granted under this Article, except for those allowances granted pursuant to Section 4.1010(a)(2), together with all subsequent adjustments thereto.

Retired Member or Retired Tier 1 Member. A former Member who is receiving a monthly benefit from Tier 1 of the Retirement System. A retired Member shall not be considered a Member for purposes of this Article and, if re-employed as authorized in Charter Section 1164, shall continue to be a retired Member.

Retirement Fund. The trust fund established for the Retirement System in Charter Section 1154.

Retirement System or System. The Los Angeles City Employees’ Retirement System (LACERS).

Spouse. A person who is a party to a valid marriage.

(b) Wherever the phrase “Final Compensation” is used in this Article, it shall, unless a different meaning is clearly indicated by the context, have the following meaning:

The final compensation of every member shall be calculated upon an annual compensation earnable of the member during the member’s last twelve (12) months of service or during any other twelve (12) consecutive months of service which the member shall designate.

Compensation which is to be included in Final Compensation shall be limited to base salary and regularly assigned bonuses or premium pay. Payments of money to be included in the calculation of Final Compensation are limited, prior to July 1, 2000, to payments designated as salary by an ordinance of the City or, effective July 1, 2000, to payments designated as salary by an ordinance of the City or a memorandum of understanding; all other payments of money not so designated shall not be included in the calculation of Final Compensation. Compensation which shall not be included in the calculation of Final Compensation shall include, but not be limited to, overtime, daily and other non-regularly assigned bonuses, reimbursements, car allowances, uniform allowances, payments in lieu of benefits or cash-out of benefits and other forms of compensation.

With respect to an employee who begins membership in the Retirement System after June 30, 1996, compensation taken into account in any Plan year may not exceed the annual compensation limits established under Internal Revenue Code Section 401(a)(17), as adjusted for increases in the cost of living in accordance with Internal Revenue Code Section 401(a)(17)(B).

(c) Whenever a reference is made in this Article to a specific section, such reference shall refer to a section contained in this Chapter, unless expressly indicated otherwise.

SECTION HISTORY

Added by Ord. No. 182,629, Eff. 7-25-13.

Amended by: Subsec. (a), Ord. No. 184,853, Eff. 4-6-17; Subsec. (a), Ord. No. 187,923, Eff. 7-9-23.

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