(a) Tier 2 Members. Effective February 21, 2016, all persons who entered LACERS membership between July 1, 2013 and February 21, 2016, as members of Tier 2 of the Retirement System shall be members of Tier 1 of the Retirement System and shall be subject to all the benefits and conditions of entitlement of that tier. The City shall contribute to the Retirement System the funds necessary, as determined by the actuary for the Retirement System, to make the Retirement Fund whole for any contributions that would have been made by the City and Tier 2 members had those members been members of Tier 1 from their respective initial dates of membership in LACERS. Such contributions will reflect the difference between the Tier 1 and Tier 2 normal cost rates calculated for the affected Tier 2 members adjusted with interest at the assumed earnings rate. Any such back contributions made by the City shall not be credited to any individual member’s account but shall be contributed solely for the purpose of making the Retirement Fund whole.
(b) Former Tier 2 Member with Contributions on Deposit. A former Tier 2 member who returns to membership in the Retirement System on or after February 21, 2016, shall return to membership in Tier 1 if he or she has pre-February 21, 2016, contributions that remain on deposit with the Retirement Fund on the date he or she begins City service in a position in which he or she again becomes eligible for membership in the Retirement System. In the event a former member’s pre-February 21, 2016, contributions have been forfeited to the Retirement Fund, he or she shall return to membership in Tier 1, provided that he or she is relieved from such forfeiture and said funds are returned to his or her individual account. Former members may not qualify to return to Tier 1 membership under this paragraph by making back contributions or redeposits of contributions after re-entry into City service. The City shall contribute the funds necessary, as determined by the actuary for the Retirement System, to make the Retirement Fund whole for any contributions that would have been made by the City and the former Tier 2 member had that former member been a member of Tier 1 from his or her initial date of membership in LACERS. Such contributions will reflect the difference between the Tier 1 and Tier 2 normal cost rates calculated for the affected Tier 2 members adjusted with interest at the assumed earnings rate. Any such back contributions made by the City shall not be credited to the former member's account, but shall be contributed solely for the purpose of making the Retirement Fund whole. A former Tier 2 member who was employed for any period of time as a part-time employee and was certified as a member pursuant to Section 4.1052(b)(8), and who leaves his or her pre-February 21, 2016, contributions on deposit in the Retirement Fund, but does not return to membership in the Retirement System, shall be entitled to apply to retire as a former Tier 1 member pursuant to Section 4.1006 of this Code.
(d) Service Purchase Elections of Tier 2 Members.
(1) Government Service Buy Back. Tier 2 members who elected to purchase Government Service Buy Back (GSB) prior to February 21, 2016, shall have their service purchases re-calculated using the Tier 1 cost benefits methodology and conditions of entitlement. The Tier 1 GSB cost, including the member’s salary, contribution rate, and interest rate, shall be based on the date the member signed his or her agreement. If payment has been received by the Retirement System and the Tier 1 purchase cost is less than the Tier 2 purchase cost, the Retirement System shall credit the member’s account with regular interest, as provided in Charter Section 1162(b), any excess funds collected in error. Excess funds originating from post-tax dollars may, at the member’s option, be refunded, applied to an additional service purchase, or transferred to a Larger Annuity Account. Excess funds originating from a pre-tax rollover of funds may, at the member’s option, be applied to an additional service purchase, or transferred to a Larger Annuity Account. If payment has been received by the Retirement System and the Tier 1 purchase cost is greater than the Tier 2 purchase cost, the member shall either receive prorated service based on the payment already received or enter into an agreement to purchase the difference to receive full service credit.
(2) Purchase of Back Contributions and Redeposit. Tier 2 members who elected to purchase Back Contributions or Redeposit prior to February 21, 2016, shall have their service purchases re-calculated using the Tier 1 cost benefits methodology and conditions of entitlement. The Tier 1 Back Contributions and Redeposit cost calculations shall include the survivor contributions for the period of purchased service and regular interest, as provided in Charter Section 1162(b), based on the date the Member signed his or her agreement. If the Tier 1 purchase cost is greater than the Tier 2 purchase cost, the Member shall either receive prorated service based on the payment already received or enter into an agreement to purchase the difference to receive full service credit.
(e) Death Benefits for Survivors of Tier 2 Members. Survivors of Tier 2 members, who are receiving benefits that were calculated prior to February 21, 2016, shall have their survivor benefits re-calculated based on the Tier 1 benefits and conditions of entitlement.
SECTION HISTORY
Added by Ord. No. 184,134, Eff. 1-22-16.