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(a) The Los Angeles Fire and Police Pensions Retiree Health Care Fund (the “LAFPP Health Care Fund”) is established for the sole purpose of funding the retiree health care benefits provided to eligible retirees, their eligible dependents, and their qualified survivors, of the Los Angeles Fire and Police Pension plan pursuant to the programs established by Chapter 11.5 of Division 4 of the Los Angeles Administrative Code, and is intended to qualify for exemption from federal income tax under Section 115(1) of the Internal Revenue Code. Except as provided in Subsection (d), funds in the LAFPP Health Care Fund may not be used, directly or indirectly, to pay the cost of any other benefits provided by, or expenses or obligations incurred by, the Los Angeles Fire and Police Pension plan (the “Plan”).
(b) The LAFPP Health Care Fund shall provide an alternative funding mechanism, in addition to or in lieu of the 401(h) account described in Section 4.1150, for funding benefits under the Health Care Plan described in that section. Effective July 1, 2022, on a prospective basis, the City shall provide for an annual contribution of funds from appropriations and other sources to the LAFPP Health Care Fund, in the amount determined each year by the Board of Fire and Police Pension Commissioners (the “Board”) based upon the recommendation of the Plan’s actuary. Such contributions shall be in lieu of contributions to the 401(h) account described in Section 4.1150
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(c) The City and the Board shall enter into a written trust agreement for the LAFPP Health Care Fund (the “Trust Agreement”) on or before July 1, 2022. The Trust Agreement shall provide that the Board shall serve as the trustee of the LAFPP Health Care Fund. The Trust Agreement shall establish the respective roles and responsibilities of the Board and the City with respect to the administration and investment of the LAFPP Health Care Fund, consistent with Charter Section 1106 and Section 17 of Article XVI of the California Constitution. The Trust Agreement may include, but is not limited to, funding, distribution, expenditure, actuarial, accounting, and reporting considerations. The Board shall have sole control over the investment activity of the LAFPP Health Care Fund, as provided in Subsection (d).
(d) Consistent with Charter Section 1106 and Section 17 of Article XVI of the California Constitution, the Board shall have sole, exclusive, and plenary authority, and shall have fiduciary responsibility, over the funds in the LAFPP Health Care Fund, including the investment of such funds. The Board may commingle and/or co-invest all or any portion of the funds in the LAFPP Health Care Fund with those in the Service Pension Funds and General Pension Funds of the Los Angeles Fire and Police Pension plan (the “Pension Funds”), to the extent allowed by federal tax laws, including through a group trust under Revenue Rulings 81-100 and 2011-1. The investment earnings and investment expenses attributable to the investment activity of the LAFPP Health Care Fund shall be accounted for separately from the investment earnings and expenses of the Pension Funds. The funds in and investment earnings of the LAFPP Health Care Fund shall be used to pay the reasonable costs related to investment expenses and administration of the LAFPP Health Care Fund and the Health Care Plan to the extent allowed by federal tax laws. Those expenses shall not be deemed to be an investment or administrative expense of the Los Angeles Fire and Police Pension plan or the Pension Funds.
(e) Any amendment to the Trust Agreement shall require approval by a majority vote of all members of the Board and two of the affirmative votes must be cast by elected employee members of the Board.
(f) In accordance with the procedures established in the written Trust Agreement described in Subsection (c), the Board may elect to terminate the LAFPP Health Care Fund. If the Board so elects, the Board shall disburse the funds in the LAFPP Health Care Fund in the following order and manner:
(1) The Board shall retain an amount sufficient to fund and pay for, as applicable, all retiree health care benefits owed to eligible retired members and beneficiaries under the programs established by Chapter 11.5 of Division 4 of the Los Angeles Administrative Code.
(2) The Board shall retain an amount sufficient to pay reasonable administrative and investment costs described in this Section 4.1150.1.
(3) After the amounts in Subdivisions (1) and (2) have been retained or disbursed, the Board shall transfer any remaining funds to the general fund.
(g) The Board may establish rules and procedures governing the investments and administration of the LAFPP Health Care Fund.
(h) The Board is authorized to take any and all actions necessary to establish, administer, and maintain the LAFPP Health Care Fund in compliance with applicable federal tax laws or other legal requirements, including, but not limited to, Section 115 of the Internal Revenue Code.
(i) The Board shall have the authority to adopt any rules it deems necessary to carry out its role as trustee of the LAFPP Health Care Fund.
(j) The Trust Agreement entered into between the City and the Board, as described in Subsection (c), shall not change the obligations of the City or the Board created under other contracts, laws, ordinances, regulations, or similar actions to provide benefits for employees or retired employees of the City, or their eligible beneficiaries.
SECTION HISTORY
Added by Ord. No. 187,351, Eff. 2-21-22.
It is the purpose of this Chapter to provide a program whereby retired members or beneficiaries, if eligible, pursuant to the terms and conditions hereinafter set forth in this Chapter, shall have subsidy payments made on their behalf for such benefit program or programs specified in Sections 1330, 1428, 1518, 1618, or 1718 of the Charter or Section 4.2018 of the Administrative Code as may be authorized by the Council by ordinance, subject to such conditions of entitlement as may be set forth in such ordinance in accordance with the provisions and limitations of Sections 1330, 1428, 1518, 1618, or 1718 of the Charter or Section 4.2018 of the Administrative Code.
The cost of the subsidies provided in this Chapter and the Board’s administrative costs connected therewith shall be provided from the Health Care Coverage Account established in Section 4.1150 of this Chapter and/or the LAFPP Health Care Fund established in Section 4.1150.1 of this Chapter. Notwithstanding all of the foregoing, the cost of the subsidies provided in this Chapter, including all administrative costs, shall be paid first from the Health Care Coverage Account, until it is depleted. Upon depletion of the Health Care Coverage Account, the LAFPP Health Care Fund shall fund the cost of the subsidies provided in this Chapter, including all administrative costs. The Board shall establish the policies and/or procedures necessary to implement this section.
SECTION HISTORY
Added by Ord. No. 147,014, Eff. 3-21-75.
Renumbered and Relocated by Ord. No. 154,536, Eff. 11-30-80.
Amended by: Ord. No. 172,040, Eff. 7-3-98; Ord. No. 173,272, Eff. 6-25-00, Oper. 7-1-00; Ord. No. 176,731, Eff. 6-21-05; Ord. No. 179,538, Eff. 3-2-08; Ord. No. 181,770, Eff. 7-8-11; Second para. added, Ord. No. 182,628, Eff. 7-16-13; In Entirety, Ord. No. 187,351, Eff. 2-21-22.
Any program established by this chapter shall be administered by the Board of Fire and Police Pension Commissioners (hereinafter referred to as “the Board”). In furtherance thereof, the Board shall provide suitable health, medical, hospital or other plans as may be authorized by ordinance, and shall have the power to adopt such rules as it deems necessary to administer the program. The Board shall have the authority to contract for suitable health, medical, hospital, dental or vision plans to be made available to retired members and their eligible beneficiaries. The Board may also contract with third-party administrators that provide or contract for suitable plans (such as health care exchanges). The Board shall adopt rules necessary to administer any such plans.
Notwithstanding the foregoing provisions, the Board may in its discretion, and subject to the approval of the City Council and the Mayor, authorize the Personnel Department to administer any program, in which case such authorization may include the power to negotiate and establish health, medical and hospital plan or plans; provided, however, that the Board shall retain the power to sign necessary service agreements or to execute contracts and that the Board shall reimburse the General Fund of the City of Los Angeles for all necessary expenses incurred by the Personnel Department in the administration of such program.
SECTION HISTORY
Added by Ord. No. 147,014, Eff. 3-21-75.
Renumbered and Relocated by Ord. No. 154,536, Eff. 11-30-80.
Amended by: Ord. No. 173,272, Eff. 6-25-00, Oper. 7-1-00; Ord. No. 179,538, Eff. 3-2-08; Ord. No. 184,853, Eff. 4-6-17.
In order that a subsidy be paid on behalf of a beneficiary as hereinafter provided, said beneficiary must be enrolled in a plan approved by the Board or by the Personnel Department if so authorized by the Board.
SECTION HISTORY
Added by Ord No. 140,714, Eff. 3-21-75.
Renumbered and Relocated by Ord. No. 154,536, Eff. 11-30-80.
Amended by: Last unnumbered para, Ord. No. 172,040, Eff. 7-3-98; Second Para., Ord. No. 173,272, Eff. 6-25-00, Oper. 7-1-00; Second Para., Ord. No. 176,731, Eff. 6-21-05; Second Para., Ord. No. 181,770, Eff. 7-8-11; Second Para. Deleted, Ord. No. 182,628, Eff. 7-16-13.
Upon written application by eligible retired members not qualified for Medicare or upon written application by eligible retired members and verification that the applicant is and remains enrolled, to the extent of the applicant’s entitlement, in federally-funded Part A or Part B or Part A and Part B of Medicare, the following monthly health subsidy amounts shall be paid:
(a) Those retired members retired pursuant to the provisions of Section 1304 or Section 1408 of the Charter respectively, who are receiving a service pension in accordance with the terms of either one of said Sections 1304 or 1408 and who are age sixty (60) years or older, shall have paid to their approved health insurance carrier on their behalf the following amount:
Basic Monthly Subsidy: For twenty (20) “years of service” as said term is defined in Section 1406(m) of the Charter, 80% of the maximum monthly health subsidy amount as established in Subsection (e) of this section, subject to the limitation hereinafter set forth in this section.
Additional Monthly Subsidy: For more than twenty (20) years of service, add to the Basic Monthly Subsidy 4% of the maximum monthly health subsidy for each whole year of service in excess of twenty (20) years.
Maximum Monthly Subsidy: No eligible retired member shall have paid to the eligible retired member’s health insurance carrier an amount exceeding the maximum monthly amount established pursuant to Subsection (e) of this section.
(b) Those eligible retired members who do not qualify for benefits under Part A of the federally- funded Medicare program shall have paid to their health insurance carrier on their behalf 4% of the maximum monthly subsidy for each whole year of service as hereinabove defined, not to exceed the maximum monthly subsidy set forth in Subsection (a) of this section.
(c) Those eligible members described in Subsection (a) of this section or those retired under the provisions of Sections 1310, 1312, 1412(a), 1412(b), 1504, 1506(a), 1506(b), 1604, 1606(a), 1606(b), 1704, 1706(a), or 1706(b) of the Charter or Sections 4.2004, 4.2006(a), or 4.2006(b) of the Administrative Code with a minimum of ten (10) Years of Service and who qualify for benefits under federally-funded Part A of Medicare, shall have paid to the approved health insurance carrier providing them with a plan supplemental to Medicare coverage the following amount:
For ten (10) but less than fifteen (15) years of service, 75% of the qualifying monthly premium of the approved health insurance plan supplemental to Medicare coverage in which the retired member is enrolled.
For fifteen (15) or more but less than twenty (20) years of service, 90% of the qualifying monthly premium of the approved health insurance plan supplemental to Medicare coverage in which the retired member is enrolled.
For twenty (20) or more years of service, 100% of the qualifying monthly premium of the approved health insurance plan supplemental to Medicare coverage in which the retired member is enrolled.
The qualifying monthly premium for eligible retired members, as used in this Subsection (c) shall mean the monthly premium of the member’s approved plan. However, if the monthly premium exceeds the highest monthly premium of an approved plan supplemental to Part A of Medicare available to retired members of the Los Angeles City Employees’ Retirement System then the premium for the latter shall be the qualifying monthly premium.
(d) Those members retired under the provisions of Sections 1310, 1312, 1412(a), 1412(b), 1504, 1506(a), 1506(b), 1604, 1606(a), 1606(b), 1704, 1706(a), or 1706(b) of the Charter or Sections 4.2004, 4.2006(a) or 4.2006(b) of the Administrative Code and receiving a pension under the terms of any of those sections and who are age sixty (60) years or older, shall have paid to their approved health insurance carrier on their behalf the following amount:
Basic Monthly Subsidy: For ten (10) Years of Service as said term is defined in Sections 1406(m), 1502(m), 1602(m), and 1702(p) of the Charter and Section 4.2002(m) of the Administrative Code, 40% of the maximum monthly health subsidy amount as established in Subsection (e) of this Section, subject to the limitations hereinafter set forth in this Section.
Additional Monthly Subsidy: For more than ten (10) Years of Service, add to the Basic Monthly Subsidy 4% of the maximum monthly health subsidy for each whole year of service in excess of ten (10) years.
Maximum Monthly Subsidy: No eligible retired member under the provisions of this Subsection (d) of this Section shall have paid to the eligible retired member’s health insurance carrier an amount exceeding the maximum monthly amount established pursuant to Subsection (e) of this Section.
(e) The maximum monthly subsidy towards the health insurance premium, effective July 1, 2005, but paid from the June 2005 payroll, is fixed at $735.38 per month for all retired Plan members. The Board is authorized to make discretionary changes, on an annual basis beginning in 2006, to the maximum monthly subsidy, so long as no increase exceeds the lesser of a 7% increase or the actuarial assumed rate for medical inflation for pre-65 health benefits established by the Board for the applicable fiscal year.
Any change made by the Board that exceeds this limitation must be submitted for Council review accompanied by an actuarial report. Any increase that is not acted upon by the Council within 45 days after receipt of the report to Council for consideration of the increase shall be deemed approved. Should the Council reject the subsidy set by the Board, the Council shall determine the amount, if any, by which the subsidy shall be increased and shall adopt this increase by resolution.
Notwithstanding the authority given to the Board in this subsection, the Council retains the right to establish, by ordinance, the maximum monthly subsidy either if the Board fails to act timely to grant an increase or if the Council desires to approve an increase in excess of the amount authorized by the Board.
The maximum monthly subsidy shall be reduced by the amount of any subsidy a retired Plan member receives from any other City source.
(f) “System Members” or “Plan Members” as defined in Sections 1406(c), 1502(c), 1602(c) or 1702(d) of the Charter or Section 4.2002(c) of the Administrative Code who retire on or after July 1, 1998 shall be eligible for the monthly health subsidy amounts and other benefits provided for in Subsections (a) through (e) above at age fifty-five (55) rather than age sixty (60) if all other conditions of eligibility prescribed in those subsections are met.
(g) Those members retired under the provisions of Section 1706(a) of the Charter with less than ten (10) years of service and who are age fifty-five (55) years or older shall have paid to their approved health insurance carrier on their behalf the following amount:
(1) For retirees not eligible for Medicare or enrolled in Medicare Part B only, 40% of the maximum monthly health subsidy amount as established in Subsection (e) of this Section or 40% of the single-party cost of the retiree’s plan, whichever is lower; or
(2) For retirees enrolled in Medicare Parts A and B, 75% of the qualifying monthly premium that would be paid under Subsection (c) herein for an eligible retiree with ten (10) years of service or 75% of the single-party cost of the retiree’s plan, whichever is lower.
Retirees eligible for a subsidy from any other source shall not be eligible for the subsidy provided in this subsection. Further, no survivor subsidy shall be paid under Section 4.1161 based upon eligibility for the subsidy provided in this Subsection.
SECTION HISTORY
Added by Ord. No. 147,014, Eff. 3-21-75.
Amended by: Subsec. (c), Ord. No. 147,952, Eff. 12-26-75; Renumbered and Relocated by Ord. No. 154,536, Eff. 11-30-80; In Entirety and Subsec. (f) added, Ord. No. 172,040, Eff. 7-3-98; Subsecs. (a), (c), (d), (e) and (f), Last Para. of Section, Ord. No. 173,272, Eff. 6-25-00, Oper. 7-1-00; In Entirety, Ord. No. 176,731, Eff. 6-21-05; Subsec. (e), Ord. No. 177630, Eff. 6-19-06; Subsecs. (c), (d) and (f) amended and Subsec. (g) added, Ord. No. 181,770, Eff. 7-8-11.
[SUPPLEMENTAL REFERENCES]
For Paragraph (a) re Identification of Members. See also Charter, Sec. 523.
For Paragraph (a) re Basic Subsidy. See also Charter, Sec. 521(t).
For Paragraph (d) re Basic Subsidy. See also Charter, Sec. 521(t).
SECTION HISTORY
Supplemental References Added by Ord. No. 158,965, Eff. 6-30-84.
SECTION HISTORY
Added by Ord. No. 164,851, Eff. 6-19-89.
Amended by: Subsecs. (h) and (i) added, Ord. No. 170,092, Eff. 12-8-94; Subsec. (j) added, Ord. No. 172,040, Eff. 7-3-98; Subsecs. (a), (c), (f) and (h), Ord. No. 173,272, Eff. 6-25-00, Oper. 7-1-00.
Deleted by Ord. No. 184,853, Eff. 4-7-17.
SECTION HISTORY
Added by Ord. No, 165,333, Eff. 1-14-90.
Amended by: Subsecs. (g) and (h) added, Ord. No. 170,418, Eff. 4-16-95; Subsec. (i) added, Ord. No. 172,040, Eff. 7-3-98; Subsecs. (a), (c), (f) and (g), Ord. No. 173,272, Eff. 6-25-00, Oper. 7-1-00.
Deleted by Ord. No. 184,853, Eff. 4-7-17.
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