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Sec. 1234.  Authority of City Council to Establish a Public Service Purchase (PSP) Program by Ordinance.
 
   (a)   Council Authority.  The Council may by ordinance adopted in accordance with the provisions of this section establish a voluntary Public Service Purchase (PSP) program to allow members to purchase service credit with the Fire and Police Pension Plan (the Plan) for prior full-time service with other public agencies that may include military service.  The authority granted in this section shall include the authority to determine which members may participate in the program and specify what public service is eligible for purchase, to establish eligibility requirements and benefit limitations, to conduct periodic review of the costs and usefulness of the program for recruitment and retention purposes, and to terminate or make changes to the program.  The authority granted in this section shall include the authority to make necessary modifications to requirements of other Charter and Los Angeles Administrative Code provisions of the Plan for the specific and limited purpose of implementing a PSP program.
 
   (b)   Limitations of the PSP Program.  The authority given to the Council to establish a PSP program is specifically limited as follows:
 
   (1)   The PSP Program Shall Be Cost Neutral.  The member shall be required to pay the full actuarial cost of the service credit to be purchased as determined by the Plan's actuary based upon the additional benefits available from the Plan as a result of the purchase.  The City shall conduct periodic reviews of the PSP program to ensure the program is cost neutral to the City insofar as the additional benefits provided by the Plan are concerned, without regard to incidental administrative expenses incurred by the Plan.
 
   (2)   Limitations on Service Purchases.  A member may only purchase full-time service with eligible public agencies.  A member may purchase full-time service with a branch of the United States military service only if the member was honorably discharged.  Full-time service with any bona fide police agency or fire suppression agency may be purchased only if the member was not terminated for cause.  A member may not purchase service for which the member is eligible, or may become eligible, to receive a retirement benefit from another entity unless federal law requires otherwise.
 
   (3)   Restrictions Applicable to Purchased Service.  Purchased service shall be included in a member's years of service for purposes of calculating the amount of the member's service pension, but shall not be included in years of service for purposes of establishing eligibility for service retirement.  Purchased service may be used to qualify for other retirement benefits that are dependent on years of service, such as the Deferred Retirement Option Plan (DROP) or health premium subsidies or reimbursements payable after retirement, if authorized by ordinance and the member has paid the full actuarial costs to cover these additional benefits.
 
   (4)   Refund of PSP Program Payments.  In the event a member terminates employment, all payments made by the member under the PSP program, including interest accruing on the payments, shall be refunded to the member upon request.  If a member dies and contributions become payable from the Plan upon his or her death, all payments made by the member under the PSP program, including interest accruing on the payments, shall be considered contributions of the member and shall be paid accordingly.
 
   (5)   PSP Program May Be Modified or Terminated.  If the Council determines that the PSP program is not cost neutral and/or that the program is not useful for recruitment or retention, the PSP program may be modified or terminated by the Council by ordinance provided that the appropriate employee representatives have received a minimum of sixty days notice prior to Council action.  Agreements entered into prior to the PSP program's termination shall be honored based upon the benefits available from the Plan at the time the agreement was executed.  If the PSP program is modified by ordinance, existing agreements to purchase service will continue to be honored based upon the benefits available from the Plan at the time the agreement was executed, unless the agreement is modified to encompass different benefits with actuarial costs adjusted accordingly.
 
   (c)   Mode of Adoption.  Ordinances adopted pursuant to this section shall be adopted in the same manner as provided in Charter Section 1618(b), but the Council shall be advised in writing by an enrolled actuary as to the cost of the proposed program.
 
SECTION HISTORY
 
Added by Charter Amendment M, approved March 6, 2007, effective April 4, 2007.