There is hereby created, established and adopted separate and apart from the Fire and Police Pension Plan, a plan entitled the Excess Benefit Plan to supplement the benefits of certain employees under Tier 5 of the Fire and Police Pension Plan 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) Eligibility. Those members of Tier 5 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 of the Excess Benefit Plan.
(b) Benefits.
(1) The benefits which each participant shall be entitled to receive under the Excess Benefit Plan shall be the difference between the actual benefits of such Participant under Tier 5 and the benefits that would have been payable under Tier 5 except for the limitations on benefits imposed by Section 415 of the Internal Revenue Code. The benefits payable under the Excess Benefit 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 Tier 5, and shall be paid in the same form, at the same time and for the same period as benefits are paid with respect to the Participant under Tier 5.
(2) Notwithstanding the foregoing, the Board of Fire and Police Pension Commissioners in its discretion may elect to pay a benefit under this Excess Benefit 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.
(3) The Board and the City shall make appropriate arrangements to deduct from all amounts paid under the Excess Benefit Plan any taxes required to be withheld with respect to the Excess Benefit Plan by any government or governmental agency.
(4) Except as otherwise provided in the Excess Benefit Plan, no right or benefit under the Excess Benefit 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 Excess Benefit Plan is transferable by inter vivos gift or testamentary disposition.
(c) Administration. The Excess Benefit Plan shall be under the exclusive management and control of the Board of Fire and Police Pension Commissioners. 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 section. The Board shall have the right to construe the Excess Benefit Plan, to interpret any provision thereof, to make rules and regulations relating to the Excess Benefit Plan, and to determine any factual questions arising in connection with the Excess Benefit 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.
(d) Funding. The Excess Benefit Plan shall be unfunded, and benefits under the Excess Benefit 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 excess Benefit Plan, shall at all times remain in the City, and the 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 Excess Benefit 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.
(e) Budget. The Board of Fire and Police Pension Commissioners shall annually prepare and transmit to the Mayor and Controller a budget setting forth the estimated cost of maintaining the Excess Benefit 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 Excess Benefit Plan.
(f) Amendment or Termination of the Excess Benefit Plan. The Council of the City of Los Angeles shall have the right to amend the Excess Benefit Plan with the exception of this section, or terminate the Excess Benefit Plan at any time. If the Excess Benefit 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 Excess Benefit Plan.
(g) Compliance with the Internal Revenue Code. It is the intention that this Excess Benefit Plan be a “qualified governmental excess benefit arrangement” within the meaning of Section 415(m) of the Internal Revenue Code, and may at any time be amended to comply with the Code requirements to maintain such qualification and status. This Excess Benefit Plan shall be deemed a “portion” of the Fire and Police Pension Plan solely to the extent required under, and within the meaning of, Section 415(m) of the Internal Revenue Code, and not for any other purpose.
SECTION HISTORY
Added by Ord. No. 174,367, Eff. 12-19-01.
Renumbered from former Section 4.2021 by Ord. No. 182,628, Eff. 7-16-13.