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(a) Contribution Amount. Each Plan Member shall contribute to the Fire and Police Pension Plan – Tier 4 by salary deduction at the rate of 8% of the amount of his or her salary, except that further contributions to the Plan shall not be required from a Plan Member who has served as a Plan Member more than 30 years.
For purposes of determining the amount of the deduction, Salary shall mean those elements of a Plan Member’s compensation which would be included in calculating Final Average Salary. The administrative head of the Fire Department or the Police Department shall cause to be shown on each and every payroll of such department a deduction of 8% of the amount of salary of each Plan Member whose name appears thereon.
(b) Member Accounts. The Board shall maintain an individual account of the contributions by or for each Plan Member, as hereinabove provided. Regular interest shall be credited to such individual accounts as of the last day of June and December of each year at such rate as the Board may deem proper in light of the Fire and Police Pension Plan’s earnings, exclusive of profits and losses on principal heretofore or hereafter resulting from sales of securities. No such interest shall be credited at any other time or to the individual account of any person who is not a Plan Member but such interest shall be credited to the individual account of a Plan Member whose employment is terminated for any reason for any period of service between the next preceding last day of June or December and the end of the pay period preceding the date of such termination at the rate at which regular interest was last credited to Plan Members’ individual accounts.
(c) Payroll Deduction. Each Plan Member shall be deemed to consent and agree to each deduction made as provided for herein and the payment of each payroll check to such Plan Member shall be a full and complete discharge and acquittance of all claims and demands whatever for the services rendered by each member during the period covered by such payroll, except such claims as such Plan Member has to the benefits or payments provided for in this Tier 4.
(d) No Right to Refund of Contributions. Tier 4 Plan Members shall not be entitled to a refund of contributions upon termination of employment. Every person hired prior to July 1, 1997 who makes an irrevocable election in writing to receive benefits under Tier 4 shall not be entitled to a refund of contributions made prior to or after such election upon termination of employment.
Survivors of deceased members of Tier 4 shall be eligible for a refund of a deceased Tier 4 member’s contributions only in accordance with the Basic Death Benefit as provided in Section 1608(a)(7). Interest on contributions paid under the Basic Death Benefit shall be credited in accordance with the provisions described in Section 1614.
(e) Assuring Full Member Contributions. The Board shall have rule- making authority to insure that the Fire and Police Pension Plan – Tier 4 receives member contributions for all periods of credited service, except that the Board shall not have authority to require contributions for service credit for military service and for periods while a Plan Member is receiving a disability pension, or full pay for Injury On Duty. Plan Members, however, may elect to make contributions for periods of Injury on Duty compensated at the rate provided by general law in order to acquire credit for Years of Service for such period. Such contributions shall be at the contribution rate herein provided and shall be based on the salary the Plan Member would have received if he or she had not occupied Injury On Duty status.
(a) Determination of Cost of Living Adjustments. The Board, before May 1 of each year commencing with the year 1981, shall determine the percentage of the annual increase or decrease in the cost of living as of March 1 of that year from March 1 of the preceding year as shown by the Consumer Price Index for All Urban Consumers as published by the Bureau of Labor Statistics or such other index as the Federal Government may develop to replace the All Urban Consumers Index for the area in which the City is located. If any such index were not to reflect the cost of living as of a particular March 1, then the index for the closest preceding date shall be used.
(b) Annual Cost of Living Adjustments. Commencing as of July 1 of the year in which the Board shall determine the percentage of increase or decrease in the cost of living, the monthly amounts of all pensions granted pursuant to the provisions of this Tier 4, shall be increased or decreased by reason of such determined percentage of increase or decrease in the cost of living, not to exceed an increase or decrease of 3% in any given year. Pensions which became payable before July 1, but subsequent to the preceding July 1, will be adjusted on a prorated basis whereby one-twelfth of the annual adjustment shall be applied for each completed month since such pension commenced.
In no event shall pensions adjusted hereunder ever be decreased below the amount received by the Beneficiary when such pension first became payable to him or her.
(c) Discretionary Cost of Living Adjustments. To the extent that the annual cost of living adjustments provided by subsection (b) hereof are less than the annual change in the cost of living as determined in subsection (a) hereof, the Council may grant discretionary cost of living adjustments, in addition to the annual cost of living adjustments provided by subsection (b) hereof, subject to the following conditions and requirements:
(1) No More Than Every Three Years. Discretionary adjustments may not be provided more frequently than once every three years, counting from the effective date of this section and, after a discretionary adjustment has once been made, counting from the date the last discretionary adjustment became effective.
(2) Limit of Adjustments. Discretionary adjustments shall not exceed one-half of the difference between the percentage of the annual increases in the cost of living, as determined pursuant to the provisions of subsection (a) of this section, and the annual adjustments made pursuant to subsection (b) of this section for each of the preceding three years. Discretionary adjustments shall be allocated to each of the three years for which an adjustment is made.
(3) Pensions Eligible for Adjustment. Discretionary adjustments herein provided shall be applied to pensions granted pursuant to Sections 1604, 1606 and 1608 subject to the following limitations: If a pension became payable on or after July 1 immediately preceding the effective date of such adjustment, it shall not be so adjusted; and any pension which shall have become payable at a time within the three year period (but prior to the immediately preceding July 1), shall be prorated on a monthly basis to the number of completed months for which the pension was received, provided that pensions paid pursuant to Section 1608(a)(3), (4) or (5), or Section 1608(c), (e) or (f), shall be adjusted by basing eligibility on the date upon which the Retired Plan Member’s pension became effective.
(4) Report to Council Prior to Adoption by Ordinance. Discretionary cost of living adjustments may be provided only by ordinance. Ordinances providing discretionary adjustments may not be finally adopted until the Council has first obtained and published a report from the actuary or actuaries of the Fire and Police Pension Plan – Tier 4 indicating the present value of the liabilities that will be created by the proposed discretionary adjustment. This report must identify the annual funding cost of amortizing this liability over a 30 year period utilizing the funding procedure adopted by the Board.
(5) Vote by Council. Ordinances adopted pursuant to this subsection must be by not less than two-thirds of the membership of the Council, subject to the veto of the Mayor and re-adoption by the Council by not less than three-fourths of the membership of Council. No such ordinance may be finally adopted by the Council until the expiration of at least 30 days after its first presentation to the Council, nor until after a public hearing has been held thereon. Ordinances adopted pursuant to this subsection, shall be published no later than November 30, and shall become effective January 1.
(6) Prospective Application. All adjustments provided in this subsection are to be applied prospectively only and shall not be understood to permit retroactive adjustments of pensions.
(a) Purpose of this Section. It is the purpose of this section to enable the Council to provide by ordinance a program or programs whereby persons receiving pensions pursuant to the provisions of this Tier 4 may become eligible to have subsidy payments made on their behalf for health insurance, accident insurance, life insurance or health care plan coverage or coverage for any combination of such programs as determined by the Council and subject to such conditions of entitlement as may be set forth in any ordinance adopted in accordance with the provisions of this section.
(b) Mode of Adoption of Ordinance. Ordinances adopted pursuant to this section must be approved by not less than two-thirds of the membership of the Council, subject to the veto of the Mayor and readoption by the Council by three-fourths of the membership of the Council. No such ordinance may be finally adopted by the Council until the expiration of at least 30 days after its first presentation to the Council, nor until after a public hearing has been held thereon. Any ordinance adopted pursuant to this section shall go into effect upon its publication, but the terms of such ordinance, or portions thereof, may be operative at a later date or dates.
(c) Council Authority to Establish Subsidy Limitations. The Council may establish by ordinance the maximum subsidy payments for beneficiaries under any programs established by the Council pursuant to subsection (a), including appropriate limitations for employees receiving subsidies from other City plans.
(d) Administration of Subsidy Program. Any subsidy program adopted by ordinance pursuant to this section shall be administered by the Board. In furtherance thereof, the Board shall have the authority to contract for suitable programs as defined in subsection (a), to be made available to retired members or other beneficiaries, and shall have the power to adopt such rules as it deems necessary to administer such programs. Notwithstanding the foregoing provisions, the Board may authorize the Personnel Department to administer any program or part thereof established by ordinance pursuant to the provisions of this section, but the Board shall reimburse the General Fund of the City of Los Angeles for all necessary expenses incurred by the Personnel Department in administering these programs.
(e) Board Authority to Adjust Subsidy Amount. The Council may by ordinance authorize the Board to increase or decrease subsidy payments pursuant to factors, standards, and limitations prescribed in the ordinance.
SECTION HISTORY
Amended by: Charter Amendment 2, approved March 8, 2005, effective April 6, 2005.
(a) Notwithstanding any other provisions of this Tier 4, the benefits payable to any person who became a Plan Member prior to January 1, 1990, shall be subject to the greater of the following limitations:
(1) the limitations set forth in Section 415 of the Internal Revenue Code; or
(2) the accrued benefit of the Plan Member of the Fire and Police Pension Plan (determined without regard to any amendment to the Plan made after October 14, 1987), as provided in Section 415(b)(10)(A) of the Internal Revenue Code.
(b) The benefits payable to any person who becomes a Plan Member on or after January 1, 1990, shall be subject to the limitations set forth in Section 415 of the Internal Revenue Code.
(c) The Council shall, by ordinance, provide such benefits as are necessary to preserve the level of benefits in effect prior to the effective date of this section.
(d) Should it be determined that the provisions of Charter Section 1608(a)(1) violate the limitations of Section 415 or the incidental death benefit provisions of the Internal Revenue Code, Section 1608(a)(1) shall be deemed inapplicable to the extent necessary to achieve compliance. The Council shall by ordinance, adopt such measures as are necessary to achieve compliance and to preserve the level of benefits in effect prior to the effective date of this section.
(e) Ordinances adopted pursuant to this section shall be adopted in the same manner as those authorized by Charter Section 1618, except any ordinances adopted shall be effective upon publication.
(f) If any of the provisions of Section 415 of the Internal Revenue Code should be repealed, the provisions of this section shall be deemed repealed to the same extent.
(g) All benefits provided pursuant to any ordinance adopted under the provisions of subsection (e) shall be administered by the Board. A separate and distinct fund or funds shall be created by the Board as required to administer such benefits. Such fund or funds shall not contain employee contributions. The Board shall also determine the manner of funding any liabilities incurred as a result of ordinances adopted pursuant to this section.
(a) For members hired on or after July 1, 1996, the Final Average Salary taken into account to determine the benefits provided by Tier 4 shall not exceed the annual limit set forth in Section 401(a)(17) of the Internal Revenue Code and regulations thereunder for any Plan Year. This annual compensation limitation shall be adjusted automatically for each Plan Year to the amount prescribed by the Secretary of the Treasury or the Secretary’s delegate. For purposes of this section, the family aggregation rules of Section 414(q)(6) of the Internal Revenue Code shall apply; provided that “family” shall include only the Member’s spouse and lineal descendants who have not yet attained age 19 by the last day of the Plan Year.
(b) If any of the limitations of Section 401(a)(17) or Section 414(q)(6) should be repealed, the provisions of this section shall be deemed repealed to the same extent.
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