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(a) Member contributions shall continue as usual while the member participates in DROP at the rates specified as follows: Tier 2 = 6% or 7%, as specified in Charter Section 1420(b); Tier 3 = 8%; Tier 4 = 8%; Tier 5 = 8% or 9%, as specified in Charter Section 1222(b)(3) and Administrative Code Section 4.2014; Tier 6 = 9% or 11%, as specified in Charter Section 1714(a). Member contributions, however, shall cease when the member would have become eligible for the maximum service retirement formula established by the member’s Tier, except that members who have agreed to make Additional Contributions as provided in Administrative Code Section 4.1167 shall continue to make Additional Contributions as provided therein.
(b) Member contributions will be deposited into and become part of the general assets of the Fire and Police Pension Plan. Member contributions will not be deposited into nor become part of the member’s DROP account.
(c) The City will continue to make the annual contributions to the Plan under the Charter. These contributions will be deposited into and become part of the general assets of the Pension Plan. No City contributions will be credited to the member’s DROP account.
(d) After a member retires and simultaneously leaves DROP, the member will thereafter receive a monthly service pension benefit based upon the years of service and pension base at the time of entry into DROP and COLAs granted while in DROP, plus future COLAs according to the member’s Tier.
(e) A member who participates in DROP and who elects to apply for and is granted a disability pension after entering DROP shall forfeit the member’s entire DROP account and receive the member’s disability pension benefits as if the member had never entered DROP. Members waive any right to apply for or be granted a disability pension once they have taken distribution of their DROP account.
(f) Members on IOD status at the conclusion of their final month of participation must leave DROP but are permitted to continue on IOD status with their Department. Those members are not eligible to receive distribution of their DROP account until their retirement status is determined. If the member takes a disability retirement, the member shall forfeit the member’s DROP account. If the member elects to take a service retirement and distribution of the member’s DROP account, the member shall be required to repay any IOD pay earned after the last day of the member's participation in DROP.
(g) In the event of a member’s service connected death during the period of the member’s DROP participation, the member’s surviving spouse or domestic partner shall have the right to elect to forfeit the member’s DROP account and collect survivorship benefits as if the member had never entered DROP, provided that the election must be made no later than one hundred eighty (180) days following the member’s death. For all other deaths occurring while a member is participating in DROP, the normal post-retirement continuance benefits of the member’s Tier will be available plus the proceeds of the member’s DROP account.
(h) A member must be married or have a domestic partnership affidavit on file with the Fire and Police Pension Plan for at least one year prior to the member’s entrance into DROP for the member’s surviving spouse or domestic partner to be eligible for qualified surviving spouse/qualified surviving domestic partner pension benefits.
(i) Members, by entering DROP, are not eligible to be returned to active duty (as reactivated members) as provided in Charter Section 1410(a), Los Angeles Administrative Code Sections 4.2026(f) and 4.2200, or any other provision authorizing retired members to return to active duty as reactivated members.
SECTION HISTORY
Added by Ord. No. 174,540, Eff. 5-8-02.
Amended by: Subsec. (i), Ord. No. 177,900, Eff. 9-28-06; Subsecs. (a) and (i), Ord. No. 183,163, Eff. 8-8-14; Subsecs. (f) - (h), Ord. No. 185,935, Eff. 1-23-19.
(a) Subject to Subsection (c) and Section 4.2103(h), a member who elects to participate in DROP shall designate in writing, at the time of entry into DROP, a beneficiary for the DROP account. The member may change the designation at any time prior to taking the distribution of the DROP account. The member’s beneficiary designation shall be applicable only to the distribution pursuant to provisions of this chapter.
(b) If the designated beneficiary predeceases a DROP participant who then dies before designating a new beneficiary, all distributions pursuant to this chapter shall be made to the estate of the DROP participant.
(c) Notwithstanding the above provisions, a member’s community property obligations under applicable California law will not be affected by the beneficiary designation.
SECTION HISTORY
Added by Ord. No. 174,540, Eff. 5-8-02.
(a) DROP participation shall be terminated by the first occurrence of any one of the following events:
(1) upon the member’s completion of the DROP participation period. The member may choose to leave DROP at any time during the participation period.
(2) involuntary termination of employment. At the member’s request, distribution of the DROP account will be withheld while the appeal of the member’s discharge is pending. Should the member be reinstated, the member may continue to participate in DROP if the account has been withheld. The period of DROP participation will continue under the terms of the original application.
(3) death of the member.
(4) approval of disability retirement benefits under the terms of this chapter.
(5) voluntary termination of employment prior to the completion of the DROP participation period.
(b) No interest shall accrue after any one of the events set forth in Subsection (a) terminating DROP.
SECTION HISTORY
Added by Ord. No. 174,540, Eff. 5-8-02.
Amended by: Subsec (a)(5) added, Ord. No. 183,163, Eff. 8-8-14; Subsec. (a)(1), Ord. No. 185,935, Eff. 1-23-19.
(a) Upon the simultaneous termination of DROP participation and employment as a sworn member of the City’s Fire Department, Police Department, Harbor Department, or Department of Airports, a member shall be entitled to receive:
(1) a monthly retirement allowance in the amount determined under the Charter that was credited monthly to the member’s DROP account at the date of termination of DROP participation, including any applicable COLA; and
(2) all amounts credited to the member’s DROP account on the effective date of termination of DROP participation, subject to applicable taxes and any domestic relations court orders regarding community property distributions.
(b) The form of payment from the DROP account shall be a lump sum distribution. Members may also elect a direct rollover of the proceeds in their DROP account to an eligible retirement plan pursuant to Section 4.2107(b)(4). The Board shall set forth the rules regulating the distribution of the DROP account, including the time period within which the distribution must be taken.
SECTION HISTORY
Added by Ord. No. 174,540, Eff. 5-8-02.
Amended by: Subsec. (a), Ord. No. 177,214, Eff. 1-4-06; Subsec. (a), Ord. No. 184,853, Eff. 4-6-17.
(a) It is intended that DROP shall not jeopardize in any way the tax qualified status of the Fire and Police Pension Plan under the rules and regulations of the Internal Revenue Service. The Board shall have the authority pursuant to Section 4.2109 to adopt rules and regulations to the extent necessary or appropriate for DROP to maintain compliance with applicable Federal laws and regulations. These rules shall be adopted upon the advice and with the concurrence of the City Attorney.
(b) Notwithstanding any other provision in this chapter, benefits provided pursuant to this chapter shall be subject to the requirements of the Internal Revenue Code (Code) and regulations issued thereunder as necessary for the Retirement System to remain a tax qualified retirement plan, including, but not limited to, the following:
(1) The limitations of Section 415 of the Code relating to the amount of benefits that can be paid.
(2) The limitations of Section 401(a)(17) of the Code relating to the amount of compensation that can be taken into account for benefit accrual.
(3) The limitations of Section 401(a)(9) relating to the time that benefit payments must begin.
(4) The limitations of Section 401(a)(31) relating to the rollover of benefits.
(5) The limitations of Section 401(a)(25) relating to “definitely determinable” benefits.
SECTION HISTORY
Added by Ord. No. 174,540, Eff. 5-8-02.
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