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(a) Trustee-to-Trustee Transfers. The Board of Administration may, notwithstanding any restrictions upon the method of such payment specified elsewhere, provide, by rule, that any member eligible to:
(1) make up back contributions,
(2) re-deposit contributions,
(3) buy back service credit,
(4) make up contributions for periods during which Workers’ Compensation was received,
(5) make additional contributions to purchase a larger annuity provided it is determined cost-neutral by the actuary or
(6) make any other payment in order to receive an increased benefit, may make full or partial payment for these purposes by a direct trustee-to-trustee transfer of funds from any eligible retirement plan (as defined in Section 402(c)(8)(B) of the Internal Revenue Code) as permitted under current federal and state law or under these laws as amended in the future. Should this transfer constitute a partial payment, any additional payment received in a lump sum shall, together with the amount transferred directly, be considered one payment for purposes of this Article.
(b) Certain Actions. Except as otherwise expressly provided, wherever the provisions of this Article call for an “election,” “application” or “option” or other act to be performed by any person receiving or entitled to receive benefits pursuant to this Article, it shall be within the power of the Board of Administration to establish all necessary rules with respect to the time, manner and operative date of such act.
(c) Charter Authority. Pursuant to Charter Section 1106(f), the Board shall have the power to adopt any rules, regulations, or forms it deems necessary to carry out its administration of the Retirement System or assets under its control.
SECTION HISTORY
Added by Ord. No. 182,629, Eff. 7-25-13.
(a) This section applies to distributions made on or after January 1, 1993. Notwithstanding any provision of the Los Angeles City Employees’ Retirement System to the contrary that would otherwise limit a distributee’s election under this part, the “distributee” of an “eligible rollover distribution” may elect to have any portion of an eligible rollover distribution that is equal to at least $200.00 paid directly to an “eligible retirement plan” specified by the distributee in a “direct rollover.”
(b) Definitions.
Eligible Rollover Distribution. An eligible rollover distribution is any distribution of all or any portion of the balance to the credit of the distributee, except that an eligible rollover distribution does not include: any distribution that is one of a series of substantially equal period payments (not less frequently than annually) made for the life (or the life expectancy) of the distributee or the joint lives (or joint life expectancies) of the distributee and the distributee’s designated beneficiary, or for a specified period of ten (10) years or more; any distribution to the extent such distribution is required under Section 401(a)(9) of the Internal Revenue Code; the portion of any distribution that is not includable in gross income; and any other distribution which the Internal Revenue Service does not consider eligible for rollover treatment, such as certain corrective distributions necessary to comply with the provisions of Section 415 of the Internal Revenue Code, or any distribution that is reasonably expected to total less than $200.00 during a year. On or after January 1, 2002, a portion of a distribution that is not includable in gross income, but that otherwise qualifies as an eligible rollover distribution, is an eligible distribution, provided that the eligible retirement plan designated to receive such portion of a distribution is (i) an individual retirement account described in Section 408(a) of the Internal Revenue Code, an individual retirement annuity described in Section 408(b) of the Internal Revenue Code, or a qualified defined contribution plan described in Section 401(a) or 403(a) of the Internal Revenue Code that agrees to separately account for amounts so transferred, including separately accounting for the portion of such distribution, which is includable in gross income and the portion of such distribution, which is not so includable; (ii) on or after January 1, 2007, a qualified defined benefit plan described in section 401(a) of the Internal Revenue Code, or to an annuity contract described in section 403(b) of the Internal Revenue Code, that agrees to separately account for amounts so transferred (and earnings thereon), including separately accounting for the portion of the distribution that is includable in gross income and the portion of the distribution that is not so includable; (iii) on or after January 1, 2008, to a Roth IRA described in Section 408A of the Internal Revenue Code.
Eligible Retirement Plan. An eligible retirement plan is an individual retirement account described in Section 408(a) of the Internal Revenue Code, an individual retirement annuity described in Section 408(b) of the Internal Revenue Code, an annuity plan described in Section 403(a) of the Internal Revenue Code, or a qualified plan described in Section 401(a) of the Internal Revenue Code that accepts a distributee’s eligible rollover distribution. On or after January 1, 2002, an eligible deferred compensation plan described in Section 457(b) of the Internal Revenue Code, maintained by an employer described in Section 457(e)(1)(A) of the Internal Revenue Code, and annuity contract described in Section 403(b) of the Internal Revenue Code, are also eligible retirement plans. However, prior to January 1, 2002, in the case of an eligible rollover distribution to the surviving spouse or other designated beneficiary, an eligible retirement plan is an individual retirement account or individual retirement plan annuity only. On or after January 1, 2008, a Roth IRA described in Section 408A of the Internal Revenue Code is an eligible retirement plan.
Distributee. A distributee means an employee, former employee, spouse or former spouse of an employee or former employee eligible for a rollover distribution. On or after January 1, 2007, a distributee further includes a nonspouse beneficiary who is a designated beneficiary as defined by Section 401(a)(9)(E) of the Internal Revenue Code. However, a nonspouse beneficiary may only make a direct rollover to an individual retirement account or individual retirement annuity established for the purpose of receiving the distribution, and the account or annuity will be treated as an “inherited” individual retirement account or annuity.
Direct Rollover. A direct rollover is a payment by the plan to the eligible retirement plan specified by the distributee.
SECTION HISTORY
Added by Ord. No. 182,629, Eff. 7-25-13.
(a) Notwithstanding any other provisions of this Article, the benefits payable to any person who becomes a member on or after January 1, 1990, shall be subject to the limitations set forth in Section 415 of the Internal Revenue Code. Effective for limitation years beginning on or after January 1, 2001, for purposes of applying the limitations of Section 415 of the Internal Revenue Code, compensation paid or made available during the limitation year shall include any amounts that are not includable in the gross income of the member by reason of Section 132(f)(4) of the Internal Revenue Code.
(b) 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:
(1) The limitations set forth in Section 415 of the Internal Revenue Code; or
(2) The accrued benefit of the member (determined without regard to any amendment made after October 14, 1987), as provided in Section 415(b)(10)(A) of the Internal Revenue Code.
(c) Notwithstanding any other provisions of the Retirement System to the contrary, the member contributions paid to and retirement benefits paid from the plan shall be limited to such extent as may be necessary to conform to the requirements of Section 415 of the Internal Revenue Code for a qualified pension plan.
(d) If any of the limitations of Section 415 of the Internal Revenue Code should be repealed, the provisions of this section shall be deemed repealed to the same extent.
(e) Nothing contained in this section shall limit the City Council from modifying benefits to the extent such modifications are permissible by City Charter and applicable State and Federal law.
(f) Notwithstanding any provision of this Plan to the contrary, effective December 12, 1994, contributions, benefits and service credit with respect to qualified military service while an employee will be provided in accordance with Section 414(u) of the Internal Revenue Code.
(1) Effective with respect to deaths occurring on or after January 1, 2007, while a member is performing qualified military service (as defined in Chapter 43 of Title 38, United States Code), to the extent required by Section 401(a)(37) of the Internal Revenue Code, survivors of a member in a state or local retirement or pension system are entitled to any additional benefits that the system would provide if the member had resumed employment and then died, such as accelerated vesting or survivor benefits that are contingent on the member’s death while employed. In any event, a deceased member’s period of qualified military service must be counted for vesting purposes.
(2) Beginning January 1, 2009, to the extent required by Section 414(u)(12) of the Internal Revenue Code, an individual receiving differential wage payments (as defined under section 3401(h)(2) of the Internal Revenue Code) from an employer shall be treated as employed by that employer, and the differential wage payment shall be treated as compensation for purposes of applying the limits on annual additions under Section 415(c) of the Internal Revenue Code. This provision shall be applied to all similarly situated individuals in a reasonably equivalent manner.
SECTION HISTORY
Added by Ord. No. 182,629, Eff. 7-25-13.
Amended by: Subsec. (a), Ord. No. 183,456, Eff. 3-4-15.
The Retirement System will pay all benefits in accordance with a good faith interpretation of the requirements of Section 401(a)(9) of the Internal Revenue Code and the regulations in effect under that section, as applicable to a governmental plan within the meaning of Section 414(d) of the Internal Revenue Code. The Retirement System is subject to the following provisions:
Distribution must begin by the required beginning date, which is the later of the April 1 following the calendar year in which the member attains age 70 1/2, or April 1 of the year following the calendar year in which the member terminates. If a member fails to apply for retirement benefits or request a refund, as applicable, by the later of either of those dates, the Board shall begin distribution as required by this rule in the form provided in Section 4.1057 or Section 4.1054, as applicable.
(a) The member’s entire interest must be distributed over the member’s life or the lives of the member and a qualified survivor, or over a period not extending beyond the life expectancy of the member or of the member and a designated beneficiary.
(b) The Retirement System, pursuant to a court order, may pay a portion of the member’s benefit to a nonmember.
(c) If a member dies after the required distribution of benefits has begun, the remaining portion of the member’s interest must be distributed at least as rapidly as under the method of distribution before the member’s death.
(d) If a member dies before required distribution of the member’s benefits has begun, the member’s entire interest must be either:
(1) Distributed (in accordance with federal regulations) over the life or life expectancy of the qualified survivor, with the distributions beginning no later than December 31 of the calendar year following the calendar year of the member’s death, or
(2) Distributed within five (5) years of the member’s death.
(e) The amount of an annuity paid to a member’s beneficiary may not exceed the maximum determined under the incidental death benefit requirement of Section 401(a)(9)(G) of the Internal Revenue Code, and the minimum distribution incidental benefit rule under Treasury Regulation Section 1.401(a)(9)-6, Q&A-2.
(f) The death and disability benefits provided by the retirement system are limited by the incidental benefit rule set forth in Section 401(a)(9)(G) of the Internal Revenue Code and Treasury Regulation Section 1.401-1(b)(1)(i), or any successor regulation thereto. As a result, the total death or disability benefits payable may not exceed twenty-five percent (25%) of the cost for all of the members’ benefits received from the retirement system.
(g) Notwithstanding the other provisions of this rule or the provisions of the Treasury Regulations, benefit options may continue so long as the option satisfies Section 401(a)(9) of the Internal Revenue Code based on a reasonable and good faith interpretation of that section.
SECTION HISTORY
Added by Ord. No. 182,629, Eff. 7-25-13.
In order for the Retirement System to maintain its status as a qualified governmental defined benefit plan under the Internal Revenue Code, the Retirement System is additionally subject to the following provisions:
(a) In addition to any vesting protections under current provisions of the plan, in the event of a full or partial termination of, or a complete discontinuance of employer contributions to, the plan, the accrued benefits of the affected members under the plan shall be 100% vested and nonforfeitable to the extent required by federal law.
(b) The Retirement Fund (the trust fund established for the Retirement System in Charter Section 1154) must not revert, and no contributions shall be permitted to be returned, to the employer.
SECTION HISTORY
Added by Ord. No. 183,456, Eff. 3-4-15.
When a court of competent jurisdiction does not order a separate account as specified in Section 4.1079, but instead awards the former spouse or former domestic partner (the “Ex”) a portion of the retirement benefits payable to the member and to the member’s surviving spouse or domestic partner (survivor), if any, the “Ex,” in lieu of receiving the “Ex’s” portion of the benefits payable based upon the lifetime of the member and/or survivor, may instead make an irrevocable election to convert the “Ex’s” interest in such retirement benefits into an actuarially equivalent life annuity payable for the lifetime of the “Ex.” If the member has not yet retired, the “Ex” must make this irrevocable election to receive a life annuity, in writing, prior to receiving payment of the “Ex’s” community property portion of the retirement allowance. If the member has already retired, the election must be made at the time the “Ex” requests direct payment of the “Ex’s” community property portion of the retirement allowance. If this irrevocable election is not made prior to the applicable times specified herein, the “Ex” will be deemed to have waived the right to elect to receive a life annuity.
This option is not available in a legal separation where the parties’ relationship has not been legally terminated.
SECTION HISTORY
Added by Ord. No. 182,629, Eff. 7-25-13.
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