There is hereby created, established and adopted separate and apart from the Los Angeles City Employees’ Retirement System a plan entitled the Excess Benefit plan to supplement the benefits of certain employees under the Los Angeles City Employees’ Retirement System as defined in Article XI, Part I of the Charter of the City of Los Angeles to the extent such benefits are reduced by the limitations on benefits imposed by Section 415 of the Internal Revenue Code of 1986 as amended.
(a) Definitions. For the purpose of this ordinance, the following words and phrases shall have the meaning ascribed to them in this ordinance unless a different meaning is clearly indicated by the context:
“Board” or “Board of Administration” shall mean the Board of Administration as defined in Section 1104(a) of Article XI of the Charter of the City of Los Angeles.
“City” shall mean the City of Los Angeles.
“Code” shall mean the Internal Revenue Code of 1986 as amended.
“LACERS” shall mean the Los Angeles City Employees’ Retirement System as defined under Section 1150 of Article XI, Part I of the Charter of the City of Los Angeles.
“Participant” shall mean those employees eligible for participation in the Plan. As used herein, the term “employee” shall mean every person in the employ or service of the City as reflected on the payroll records of the City.
“Plan” shall mean the Excess Benefit Plan set forth herein, as amended from time to time.
(b) Eligibility. Those employees who are members of Tier 1 of the LACERS and whose benefits at the time of payment are reduced by the limitation on benefits imposed by Section 415 of the Internal Revenue Code shall be Participants hereunder. Members of Tier 2 of the LACERS shall not be eligible to be Participants in the Plan established herein.
(c) Benefits. The benefits which each Participant shall be entitled to receive under this Plan shall be the difference between the actual benefits of such Participant under the LACERS and the benefits that would have been payable under the LACERS except for the limitations on benefits imposed by Section 415 of the Code. The benefits payable under this Plan shall be payable to the Participant or to any other person who is receiving or entitled to receive benefits with respect to the Participant under the LACERS, and shall be paid in the same form, at the same times and for the same period as benefits are paid with respect to the Participant under the LACERS. Notwithstanding the foregoing, the Board in its discretion may elect to pay a benefit under this Plan in a lump sum in the event that the actuarial equivalent present value of the benefit at the commencement of payment is $5,000 or less.
The Board and the City shall make appropriate arrangements to deduct from all amounts paid under the Plan any taxes required to be withheld with respect to the Plan by any government or governmental agency.
Except as otherwise provided in the Plan, no right or benefit under the Plan shall be subject to anticipation, alienation, sale, assignment, pledge, encumbrance or charge, and any attempt to anticipate, alienate, sell, assign, pledge, encumber or charge such right or benefit shall be void. No such right or benefit shall in any manner be liable for or subject to the debts, liabilities or torts of a Participant or other benefit recipient. In addition, no right of a Participant or other benefit recipient under the Plan is transferable by inter vivos gift or testamentary disposition.
(d) Administration. The Plan shall be under the exclusive management and control of the Board of Administration. The Board shall have and is hereby granted full power and authority to adopt and enforce all such rules and regulations as it may deem necessary for the carrying out of the provisions of this ordinance. The Board of Administration shall have the right to construe the Plan, to interpret any provision thereof, to make rules and regulations relating to the Plan, and to determine any factual questions arising in connection with the Plan’s operation after such investigation or hearing as the Board may deem appropriate. Any decision made by the Board under the provisions of this ordinance shall be conclusive and binding on all parties concerned.
(e) Funding. The Plan shall be unfunded, and benefits under the Plan shall be paid from the General Fund of the City of Los Angeles through an Excess Benefit Plan Fund hereby established for payment of administration expense and benefit payments, subject to the claims of the City’s general creditors. No person other than the City shall by virtue of the provisions of the Plan have any interest in such amounts. Title to and beneficial ownership of any assets, whether cash or other investments which the City may earmark to pay any amount under the Plan, shall at all times remain in City, and Participants and any other persons entitled to benefits hereunder shall not have any property interest whatsoever in any specific assets of the City. The obligation of the City to make payments pursuant to the Plan is contractual only. No Participant or other person entitled to benefits hereunder shall have a preferred claim or lien on any assets of the City.
(f) Budget. The Board of Administration shall annually prepare and transmit to the Mayor and Controller a budget setting forth the estimated cost of maintaining the Plan, which budget shall include therein:
1. A sum equal to 125% of the projected benefit payments to be made in the budget year, offset by any residual sum budgeted in a previous year and not expended for a previous year’s benefit payments.
2. A sum estimated to provide for administrative costs of the Plan.
(g) Amendment or Termination of Plan. The Council of the City of Los Angeles shall have the right to amend the Plan with the exception of this section, or terminate the Plan at any time. If the Plan is terminated, the actuarial equivalent present value of any remaining benefits payable to a Participant or other person, increased by an amount determined by the Board to permit approximately the same after-tax payout over time to Participants as would have been realized in the absence of such termination, shall be paid in a lump sum 30 days after the termination of the Plan.
(h) Compliance with the Internal Revenue Code. It is the intention that this Plan be a “qualified governmental excess benefit arrangement” within the meaning of Section 415(m) of the Code, and may at any time be amended to comply with the Code requirements to maintain such qualification and status. This Plan shall be deemed a “portion” of LACERS solely to the extent required under, and within the meaning of, Section 415(m) of the Code, and not for any other purpose.
SECTION HISTORY
Chapter and Section Added by Ord. No. 171,487, Eff. 1-24-97.
Amended by: First Para., and Subsecs. (a), (b), (c) and (h), Ord. No. 173,272, Eff. 6-25-00, Oper. 7-1-00; Title, Ord. No. 182,196, Eff. 8-8-12; Subsec. (b), Ord. No. 182,629, Eff. 7-25-13.