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(a) Definitions. For the purpose of this section, the following words and phrases shall have the meaning ascribed to them in this subsection unless a different meaning is clearly indicated by the context:
Buy Back shall mean purchase by a member of retirement credit for periods of eligible service with other governmental entities or purchase by a member of retirement credit for uncompensated maternity leave.
Full-time Service shall mean a minimum of six (6) months of uninterrupted service with an eligible governmental entity, excluding part-time service.
Governmental Entity shall mean the United States Government, including its territories, any agency of the United States Government, the United States Postal Service and any branch of the United States military service, any state or political subdivision thereof, any local government or special district within any state in the United States; and shall exclude non-governmental agencies supported by government contracts or grants and any prior service with the City of Los Angeles.
Government Service Buy Back Program or GSB shall mean the method for the buy back of retirement credit set forth in this section.
Prior Plan shall mean a retirement plan of a governmental entity in which the member was a participant during full-time service.
Uncompensated Maternity Leave shall mean a leave of absence from City Service taken for maternity reasons without pay, provided that such leave shall be a minimum of one (1) month and a maximum of twelve (12) months with respect to any one pregnancy.
(b) Eligibility. A member is eligible to buy back credit for periods of full-time service with other governmental entities and to buy back credit for periods of uncompensated maternity leave. Notwithstanding the foregoing:
(1) Members may not buy back credit for periods of service for which they are currently eligible or will become eligible to receive a retirement benefit from a prior plan. For purposes of the previous sentence, a member shall be treated as eligible for such benefit from a prior plan even if the member will not receive such benefit solely due to the member’s withdrawal of member contributions and interest from the prior plan, unless such withdrawal occurred prior to the member’s date of hire by the City or unless the member deposits the amount of such withdrawal within ninety (90) days of such withdrawal as a portion of the purchase cost. In addition, a member shall be treated as eligible for such benefit from a prior plan if the member received, at any time, a distribution from the prior plan in excess of member contributions and interest with respect to such period of service. The Board may extend the 90-day period if required for compliance with Section 415 of the Internal Revenue Code. In the event that, prior to the attainment of the minimum age and service for a service retirement under LACERS, the member becomes eligible to receive currently or in the future a retirement benefit from the prior plan with respect to such period of service, the corresponding buy back credit shall be canceled, and the member shall receive a refund of the payments made to purchase such buy back credit, with interest, payable upon the earlier of death, termination of employment, or retirement from City Service.
(2) Members are not allowed to buy back credit for periods of service from a governmental entity which provides reciprocal benefits with LACERS and for which that member would be entitled to those reciprocal benefits. For purposes of the previous sentence, a member shall be treated as entitled to reciprocal benefits even if the member will not receive such benefits solely due to the member’s withdrawal of member contributions and interest from the prior plan, unless such withdrawal occurred prior to the member’s date of hire by the City.
(3) Only a member performing City service as defined in Section 4.1051 shall be eligible to execute a buy back agreement.
(4) For purposes of this section, the date of a withdrawal shall be deemed to be the date of receipt of the proceeds of the withdrawal by the member or other designated recipient.
(5) Uncompensated Maternity Leave. Only a member who was on an active employment status immediately before and after taking a leave of absence for maternity reasons without pay shall be eligible to buy back credit for such leave of absence.
(c) Application of Buy Back Credit. Purchased service credit shall only count for purposes of calculating the member’s service retirement allowance. Purchased service credit shall not count toward establishing the minimum ten (10) years of continuous service required to qualify for retirement under Subsection 4.1055(a), the minimum five (5) years of continuous service required to qualify for retirement under Subsection 4.1056(a), or the minimum ten years of continuous service required to qualify for disability retirement under Subsection 4.1058(a). Further, purchased service credit shall not count as service or service credit for purpose of qualifying for any benefits provided in Chapter 11 of Division 4 of this Code.
(d) Minimum and Maximum Periods of Purchase. A member electing to buy back credit for previous service with other governmental entities or for periods of uncompensated maternity leave shall file with the Board of Administration a written application identifying the time periods and agencies for which credit is to be purchased, and shall submit proof acceptable to the Board of Administration establishing the fact of such other service with another governmental entity or such uncompensated maternity leave. Buy back credit for one or more periods of full-time service with another governmental entity prior to entrance or re-entrance into the Retirement System may be purchased, except, however, such purchase shall be limited to not less than six (6) months of uninterrupted service from a single entity. The six (6)-month minimum requirement does not apply to the uncompensated maternity leave. The period(s) of service purchased shall be limited to a total of four (4) years.
(e) Written Agreement and Cost of Purchase. A member electing to buy back credit described herein shall enter into a written agreement with the Retirement System. Such agreement shall specify the amount to be paid for the purchase of this service credit. The cost to purchase service credit shall be determined as follows:
The member’s contribution rate shall be combined with the “City Contribution Rate” (as defined below) to establish the total percent of the member’s compensation, at the time of purchase, that is to be paid for the total length of the period of service credit (not to exceed four years) that the member agrees to purchase. Compensation as used in this subsection shall refer to the member’s compensation earnable, as defined in Subsection 4.1051(a), at the time of purchase.
As an example, assuming the member’s compensation at the time of purchase is $100,000.00 per year, the member’s contribution rate is ten percent (10%), the City Contribution Rate is twenty percent (20%), and the period of service credit to be purchased is two (2) years, the cost would be determined as follows:
The ten percent (10%) member contribution rate plus the twenty percent (20%) City Contribution Rate results in a total contribution rate of thirty percent (30%). Thus, to purchase two (2) years of service credit would cost the member a total of $60,000.00 (thirty percent (30%) of the member’s $100,000.00 compensation for each year of service purchased).
The “City Contribution Rate” shall be the average annual percent of payroll contributed by the City to the Retirement Fund (excluding contributions allocated to fund the 401(h) account) for Tier 2 based upon the City’s payments for the seven years prior to the time of purchase. For the first seven (7) years commencing January 1, 2013, this rate shall be computed upon the City’s average annual percentage of payroll contributions to Tier 2, with the rate for any missing year(s) based upon the average of the annual rate(s) for the prior year(s).
(f) Method of Purchase.
(1) The member may elect to pay on an after-tax basis in a lump sum or in biweekly installments through payroll deduction, subject to any applicable Internal Revenue Code restrictions.
(2) The Board may establish rules to allow members to pay for purchases via rollovers of funds.
(3) Should the member elect to purchase the buy back service credit through payroll deduction, annual interest at a rate determined by the Board and set at the commencement of the agreement shall be charged. The Board may establish a minimum biweekly payroll deduction.
(g) Execution of the Agreement. A member entering into a buy back agreement shall complete all contributions prior to the effective date of retirement in order to receive agreed upon buy back credit. In the event the member elects to retire prior to completion of the buy back agreement, the member may receive prorated buy back credit for that portion of the service with other governmental entities or uncompensated maternity leave which have been purchased by contributions already made and forfeit the remainder of credit covered by the agreement; or the member may make a lump sum payment sufficient to complete the total payment covered by the agreement. Additionally, a member who elects to terminate an after-tax agreement prior to its completion, or at the time of retirement, may elect to receive a cash refund of the buy back contributions and interest payable upon the earlier of death, termination of employment or retirement or prorated buy back credit.
(h) Member’s Death. In the event that a member who has entered into a buy back agreement dies prior to retirement, the funds paid for this purchase shall be considered to be a part of the member’s accumulated contributions and shall be refunded accordingly, with interest thereon computed at the rate applicable to regular member contributions.
(i) Member’s Disability Retirement. Because purchased service credit does not count towards disability retirement benefits, at the time of the member’s disability retirement the member may elect either to receive a refund of the funds paid for this purchase, including interest thereon, or to apply these funds to purchase a larger annuity.
(j) Limits on Purchase. In the event part or all of the purchased service credit at the time of retirement would cause the member’s service retirement allowance to exceed 75% of final compensation, the purchase cost attributable to any excess service credit that may not be used in the retirement formula, including interest thereon, shall be refunded or may be applied by the member to purchase a larger annuity if doing so does not cause the retirement allowance to exceed any federal limitations that may apply.
(k) Administration. The administration of this section shall be under the exclusive management and control of the Board of Administration. Said 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 ordinance. The Board of Administration shall have the right to construe this section, to interpret any provision thereof, to make rules and regulations relating to this section, and to determine any factual questions arising in connection with this section’s operation after such investigation or hearing as the Board may deem appropriate. Any decision made by the Board under the provisions of this section shall be conclusive and binding on all parties concerned.
SECTION HISTORY
Added by Ord. No. 182,629, Eff. 7-25-13.
A member may purchase credit for periods of service with the Water and Power Employees’ Retirement Plan (WPERP) on the terms and conditions set forth below, except that periods of noncontributory WPERP service may not be purchased.
(a) Contributions Must Be Transferred. A member may not purchase credit for periods of service with WPERP so long as the member’s contributions remain on deposit with WPERP unless the member authorizes a transfer of the member’s WPERP contributions to the Retirement Plan, to be credited towards payment pursuant to this section.
(b) Treatment of Purchased Service. Service purchased under this section shall be treated the same as LACERS service for purposes of establishing the minimum ten (10) years of continuous service required to qualify for retirement under Subsection 4.1055(a), the minimum five (5) years of continuous service required to qualify for retirement under Subsection 4.1056(a), or the minimum ten (10) years of continuous service required to qualify for disability retirement under Subsection 4.1058(a), except that WPERP service purchased under WPERP’s Other Governmental Service (OGS) program shall not be treated the same as LACERS service for the aforementioned purposes. WPERP service purchased under WPERP’s OGS program when purchased with the Retirement Plan shall only count as service credit for purposes of calculating the member’s service retirement allowance or disability retirement allowance, as applicable. Service purchased under this section shall not count as service or service credit for the purpose of qualifying for any benefits provided in Chapter 11 of Division 4 of this Code.
(c) Written Agreement and Cost of Purchase. A member electing to purchase WPERP service under this section shall enter into a written agreement with the Retirement System. Such agreement shall specify the amount to be paid for the purchase of this service. The cost to purchase service shall be determined as follows:
The member’s contribution rate shall be combined with the “City Contribution Rate” (as defined in Subsection (e) of Section 4.1067) to establish the total percent of the member’s compensation, at the time of purchase, that is to be paid for the total length of the period of service that the member agrees to purchase. Compensation as used in this subsection shall refer to the member’s compensation earnable, as defined in Subsection 4.1051(a), at the time of purchase.
As an example, assuming the member’s compensation at the time of purchase is $100,000.00 per year, the member’s contribution rate is ten percent (10%), the City Contribution Rate is twenty percent (20%), and the period of service to be purchased is two (2) years, the cost would be determined as follows:
The ten percent (10%) member contribution rate plus the twenty percent (20%) City Contribution Rate results in a total contribution rate of thirty percent (30%). Thus, to purchase two (2) years of service would cost the member a total of $60,000.00 (thirty percent (30%) of the member's $100,000.00 compensation for each year of service purchased).
(d) Method of Purchase.
(1) The member shall transfer any contributions the member has on deposit with WPERP as payment towards the member’s purchase cost.
(2) The member may elect to pay on an after-tax basis in a lump sum or in biweekly installments through payroll deduction, subject to any applicable Internal Revenue Code restrictions.
(3) The Board may establish rules to allow members to pay for purchases via rollovers of funds.
(4) Should the member elect to purchase the buy back service credit through payroll deduction, annual interest at a rate determined by the Board and set at the commencement of the agreement shall be charged. The Board may establish a minimum biweekly payroll deduction.
(e) Execution of the Agreement. A member entering into a purchase agreement shall complete all payments prior to the effective date of retirement in order to receive full credit for the service purchased. In the event the member elects to retire prior to completing payment under the purchase agreement, the member may receive prorated credit for that portion of the service for which payments have already been made and forfeit the remainder of service covered by the agreement; or the member may make a lump sum payment sufficient to complete the total payment covered by the agreement. Additionally, a member who elects to terminate an after-tax agreement prior to its completion, or at the time of retirement, may elect to receive a cash refund of the purchase contributions and interest payable upon the earlier of death, termination of employment or retirement, or to receive prorated service at retirement.
(f) Member’s Death. In the event that a member who has entered into a purchase agreement dies prior to retirement, the funds paid for this purchase shall be considered to be a part of the member’s accumulated contributions and shall be refunded accordingly, with interest thereon computed at the rate applicable to regular member contributions.
(g) Limits on Purchase. In the event part or all of the purchased service credit at the time of retirement would cause the member’s service retirement allowance to exceed seventy-five percent (75%) of final compensation, the purchase cost attributable to any excess service credit that may not be used in the retirement formula, including interest thereon, shall be refunded or may be applied by the member to purchase a larger annuity if doing so does not cause the retirement allowance to exceed any federal limitations that may apply.
(h) Administration. The administration of this section shall be under the exclusive management and control of the Board of Administration. Said 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 of Administration shall have the right to construe this section, to interpret any provision thereof, to make rules and regulations relating to this section, and to determine any factual questions arising in connection with this section’s operation after such investigation or hearing as the Board may deem appropriate. Any decision made by the Board under the provisions of this section shall be conclusive and binding on all parties concerned.
SECTION HISTORY
Added by Ord. No. 182,824, Eff. 12-19-13.
The Board of Administration shall, by rule, provide for the making of additional contributions to provide a larger annuity benefit at the time of retirement. A member shall not be permitted to make such additional contributions, however, if doing so would cause the member’s benefits to exceed the Internal Revenue Code limitations referenced in Section 4.1076. All larger annuity benefits funded by the making of additional contributions, as authorized in this section, shall be determined by the actuary to be cost- neutral.
Solely for the purpose of making additional contributions to provide a larger annuity benefit at the time of retirement, the Board of Administration may accept, subject to any limitations imposed by federal law, a direct rollover distribution of funds from the City of Los Angeles 457 Deferred Compensation Plan after the date of the member’s retirement provided that: the member’s application to purchase a larger annuity benefit is received prior to the effective date of the member’s retirement, the member prior to the member’s retirement shall have provided the Deferred Compensation Plan with the written authorization that is required for funds to be transferred to the Retirement System immediately after the member’s retirement, the rollover is completed as soon as administratively feasible, and the larger annuity benefit is not payable to the member until after the funds have been received. The Board of Administration shall have the authority to adopt all rules necessary to administer the larger annuity program within the constraints established in this Section, including the authority to establish a deadline for the receipt of the rollover funds, after which the member’s application shall be deemed denied.
SECTION HISTORY
Added by Ord. No. 182,629, Eff. 7-25-13.
(a) The provisions of this section shall not be applicable to any benefit payable pursuant to the provisions of Section 4.1060(a)(2). The provisions of this section, however, shall be applicable to each other benefit payable in monthly installments pursuant to any other provisions of this Article, but the application thereof to any such benefit shall not reduce the amount to be paid on, or subsequent to, July 1st of any year to an amount less than that payable immediately prior to July 1st of said year.
(b) The Board of Administration, not later than the 1st day of May of each year, shall determine with respect to the Federal Bureau of Labor Statistics Consumer Price Index for the Los Angeles area (“the C.P.I.”) the percentage of increase or decrease, if any, in the C.P.I. for the whole of the first next preceding calendar year from the C.P.I. for the whole of the second next preceding calendar year and shall round any such percentage increase or decrease to the nearest one-tenth (1/10) of one percent (1%).
(c) The Board, whenever it shall have determined that there had been an increase or decrease in the C.P.I., shall increase or decrease the amount of each such benefit as hereunder provided, subject, however, to the limitations contained in Subsection (a) of this section:
Effective the 1st day of July of each year, beginning with the year 2014, the Board of Administration, with respect to each eligible benefit which became payable prior to the applicable 1st day of July, shall increase or decrease the amount thereof payable immediately prior to the applicable 1st day of July by one-twelfth (1/12) of the percentage of increase or decrease in the C.P.I. as determined by it pursuant to Subsection (b) of this section, for each whole month that such benefit was payable during the year commencing the 1st day of July next preceding the applicable 1st day of July and ending the 30th day of June next preceding the applicable 1st day of July, providing that any increase or decrease in the amount of any such benefit shall not exceed one-twelfth (1/12) of two percent (2%) thereof for each whole month that it was payable during the year.
(d) The amount of any benefit which shall be continued to any survivor upon the death of a retired member shall be in the same ratio to the amount of the benefit which such member shall have been receiving as of the date of the member’s death as the amount of the benefit which originally would have been continued to such survivor shall bear to the amount of the benefit which originally was payable to such member.
(e) If it were to be impossible or impracticable for the Board to cause all necessary calculations to be made in time for it to include any increases or decreases in the amounts of benefits, as hereinabove provided, in the demands drawn in payment of such benefits for the month of July in any year, then the Board shall have the power and authority, when such calculations shall have been made, to increase or decrease the amounts of the demands drawn in payment of such benefits for any month subsequent to the month of July so as to include any increases or decreases in such benefits which shall have accumulated from and after the 1st day of July.
(f) The Board shall adopt rules to allow a member to purchase additional cost of living adjustment (COLA) coverage, not to exceed an additional one percent (1%) per year, provided that the member shall pay the full actuarial cost for this additional benefit. If a retiree has purchased an additional annuity, the additional COLA coverage shall not apply to the additional annuity unless the member has paid the full actuarial cost to extend the additional COLA coverage to include the additional annuity benefit.
SECTION HISTORY
Added by Ord. No. 182,629, Eff. 7-25-13.
(a) There is hereby created and established a policy whereby the City Council shall periodically review the matter of the cost of living adjustments for certain beneficiaries who receive retirement benefits from the Retirement System. The review shall be made to ascertain the impact of increases in the Consumer Price Index upon retirement benefits and the adequacy of the annual cost of living adjustments provided in Section 4.1069 of the Los Angeles Administrative Code.
Should the City Council find and determine that annual cost of living adjustments are inadequate in light of the movement of the Consumer Price Index, the City Council may grant additional, but discretionary, cost of living adjustments as hereinafter provided.
(b) The first of the reviews provided in Subsection (a) hereof shall be made during the third fiscal year following the date that the first beneficiary of Tier 2 receives a benefit that is subject to a cost of living adjustment, pursuant to Section 4.1069, and annually thereafter until the City Council has provided a first discretionary adjustment pursuant to this section. Thereafter, the City Council shall make periodic reviews in intervals not to exceed three (3) years from the date of the completion of the last review or from the effective date of the last discretionary cost of living adjustments, whichever shall be the later.
(c) Should it be the finding of the City Council that discretionary cost of living adjustments would be in order, any such adjustments would be subject to the following limitations:
(1) The first discretionary adjustment may be granted at any time. Thereafter, discretionary adjustments may not be provided more frequently than once every three (3) years, counting from the date the last discretionary adjustments became effective.
(2) Discretionary adjustments shall not exceed one-half (1/2) of the difference between the percentage of the annual increases in the cost of living, as determined pursuant to the provisions of Section 4.1069(b) herein, for each of the preceding three (3) years and the annual adjustments made pursuant to Section 4.1069(c). Discretionary adjustments shall be allocated to each of the three (3) years for which an adjustment is made.
(3) Any discretionary cost of living adjustments provided pursuant to the provisions of this section shall be subject to the following further limitation: If a benefit became payable on or after July 1 immediately preceding the effective date of such adjustments, it shall not be so adjusted; and any benefit which shall become payable at a time within a three-year period between discretionary cost of living adjustments (but prior to the immediately preceding July 1), shall be prorated according to the annual increase, on a monthly basis, to the number of completed months for which the benefit was received.
(4) Discretionary cost of living adjustments may be granted only by ordinances adopted in accordance with the provisions of Section 1168 of the City Charter.
(5) All adjustments provided in this subsection are to be applied prospectively only, and shall not be understood to permit retroactive adjustments of benefits.
(d) Discretionary cost of living adjustments shall only be applied to monthly benefits not otherwise excluded from cost of living adjustments under the provisions of Section 4.1069 of this Chapter.
(e) It shall be the duty of the Director of the Office of Administrative and Research Services to prepare appropriate reports and recommendations to enable the City Council to make findings as to the adequacy of the annual cost of living adjustments.
SECTION HISTORY
Added by Ord. No. 182,629, Eff. 7-25-13.
Each beneficiary, as defined in Charter Section 1152, shall have the right, at any time, to waive payment of the whole or any portion of any benefit whatsoever, or of any increase in the amount of any benefit which is, or shall become, payable to the beneficiary pursuant to any provision of this Chapter, and may waive payment thereof forever or for a definite or indefinite period of time. Any such waiver shall be in writing, shall be filed with the Board of Administration and shall be effective as of the first day of the month following the month in which it shall be filed. Each beneficiary who shall make and file such a waiver shall have the right, at any time, to cancel the same. Any such cancellation shall be in writing, shall be filed with the Board of Administration, and shall be effective as of the first day of the month following the month in which it shall be filed. Any such waiver shall constitute a complete release, discharge and acquittance of the City of Los Angeles and the Board of Administration from any and all liability to pay any amount or amounts of any benefits which shall be waived by any such beneficiary.
SECTION HISTORY
Added by Ord. No. 182,629, Eff. 7-25-13.
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