Sec. 4.2102. DROP Benefits and Accounts.

   (a)   A DROP account is a “nominal” account established within the Fire and Police Pension Plan on behalf of each DROP participant. All benefits accrued pursuant to this Chapter shall be accounted for in the DROP account. A DROP participant shall not have a claim on the assets of the Fire and Police Pension Plan with respect to such participant’s DROP account, nor shall there be any assets set aside for any DROP participant, which are separate from all other Pension Plan assets.

   (b)   All amounts credited to the member’s DROP account shall be fully vested.

   (c)   A member’s DROP account shall be credited with:

   (1)   an amount, credited monthly, which is equal to the monthly service pension to which the member would be entitled using the formula in the Tier in which the member is enrolled on the effective date of the member’s entry into DROP. Credit shall not be awarded for any calendar month when participation in DROP has been suspended pursuant to Section 4.2110.

   (2)   a cost of living adjustment (COLA) each year equal to the amount prescribed in the Charter for the Tier to which the member belongs, but not to exceed three percent (3%). Tier 5 and 6 members are eligible to use their COLA banks while in DROP.

   (3)   interest in the amount of five percent (5%) annually. Interest will be credited to member DROP accounts semi-annually on the dates specified by the Board. No interest shall accrue after a member terminates DROP participation. Notwithstanding whether or not participation has ever been suspended or a member is eligible to extend the original participation period, no interest shall accrue nor be credited after completion of the sixtieth (60th) month following the member’s DROP entry date. This 60-month limit on interest shall apply to all DROP participants.

   (d)   Until a member actually terminates employment as a sworn member of the City of Los Angeles Fire Department, Police Department, Harbor Department, or Department of Airports, no money shall be paid to any persons from the DROP account. After the member terminates employment, the DROP account shall be subject to court orders in the same manner as the monthly service pension entitlement and according to the terms of the court order.

SECTION HISTORY

Added by Ord. No. 174,540, Eff. 5-8-02.

Amended by: Subsec. (d), Ord. No. 177,214, Eff. 1-4-06; Subsec. (c)(2), Ord. No. 183,163, Eff. 8-8-14; Subsec. (d), Ord. No. 184,853, Eff. 4-6-17; Subsecs. (c)(1) and (c)(3), Ord. No. 185,935, Eff. 1-23-19.