Sec. 4.1080.1. Definition of Terms and Rules of Construction.

4.1080.13 Election at Time of Retirement for Members or Former Members Without Eligible Surviving Spouse or Domestic Partner to Provide Allowance to Designated Beneficiary Upon Death.

4.1080.14 Election at Time of Retirement to Provide Optional Allowance to Specified Survivors Upon Retired Member’s Death.

4.1080.15 Right to Elect Life Annuity with No Refund of Contributions.

4.1080.16 Community Property Payment Options.

4.1080.17 Cost of Living Adjustments.

4.1080.18 Back Contributions.

4.1080.19 Redeposit of Formerly Withdrawn Contributions.

4.1080.20 Buy Back Program for Governmental Service and Periods of Uncompensated Maternity Leave from City Service.

4.1080.21 Waiver of Benefits.

4.1080.22 Forfeiture of Unclaimed Benefits to the Retirement Fund.

4.1080.23 Board Determinations.

4.1080.24 Power of the Board of Administration.

4.1080.25 Compliance with Section 822(g) of the Pension Protection Act of 2006 Regarding Rollover Distributions.

4.1080.26 Compliance with Internal Revenue Code Section 401(a)(37) and Section 104(a) of the Heroes Earnings Assistance and Relief Tax Act of 2008.

4.1080.27 Compliance with Internal Revenue Code Section 401(a)(9) Regarding Required Distributions.

4.1080.28 Provisions Required to Maintain Status as Qualified Governmental Defined Benefit Plan Under Internal Revenue Code.

Sec. 4.1080. Statement of Purpose and Severability.

(a) Statement of Purpose. This Article sets forth the benefits and conditions of entitlement that have been established for members of Tier 3 of the Los Angeles City Employees’ Retirement System and for their beneficiaries. These benefits may be modified and the conditions of entitlement changed by ordinance as authorized in Section 1168 of the City Charter.

It is also the purpose of this article to demonstrate the intent of the City of Los Angeles, through its governing bodies, to promote the improvement of personnel management and employer-employee relations by enacting, from time to time, such ordinances as may legally be adopted under the authority of Section 1168 of the Charter of the City of Los Angeles whenever Memoranda of Understanding and other agreements, duly executed by all parties thereto and approved by the City Council, require by their terms presentation to the City Council of ordinances changing retirement benefits or conditions of entitlement thereto.

The Los Angeles City Employees’ Retirement System is established, as may be amended from time to time, as a qualified defined benefit plan intended to satisfy the provisions of Section 401(a) of the Internal Revenue Code as applicable under Section 414(d) of the Internal Revenue Code for a governmental plan and such other applicable provisions of the Internal Revenue Code, Treasury Regulations, or other guidance.

(b) Severability. Should any provision of this article be declared by a court of competent jurisdiction to be invalid, that decision shall not affect the validity of the article as a whole or any part thereof, other than the part so declared to be invalid.

SECTION HISTORY

Added by Ord. No. 184,134, Eff. 1-22-16.

Sec. 4.1080.1. Definition of Terms and Rules of Construction.

(a) For the purposes of Article 3 of Chapter 10 and Article 4 of Chapter 11 of Division 4 of the Los Angeles Administrative Code, the following words and phrases shall have the meaning ascribed to them in this section unless elsewhere defined:

Accumulated Contributions. The total of the amounts paid into the Retirement Fund by the Member and any regular interest credited to the Member’s account, as provided in Charter Section 1162(b).

Annuity. Payments for life derived from the accumulated contributions of a Member as provided in this Article.

Base Amount. That portion of a retirement allowance resulting if cost of living amount is deducted therefrom.

Beneficiary. A person entitled to receive a benefit from the Retirement System.

Board of Administration or Board. The Board of Administration of the Los Angeles City Employees’ Retirement System, established in Charter Section 1104(b).

City Service or Service. Only those periods during which a Member (1) received compensation from the City as an employee or (2) during which the employee both received Workers’ Compensation benefits (Div. IV, Labor Code) for temporary disability on account of any injury or illness arising out of and in the course of employment with the City, and made contributions to the Retirement Fund as provided in Charter Section 1162. Notwithstanding the foregoing, a Member shall be entitled, at the time of death or retirement, to receive credit for the Member’s years of service from the date such Member entered employment with the City of Los Angeles in a capacity that would entitle them to membership in the Retirement System.

City Service Credit or Service Credit. The time component of the formula used by the Retirement System for purposes of calculating benefits pursuant to applicable Los Angeles Administrative Code and Board Rules.

Compensation Earnable. The base salary established for service in any City position or office for the period involved in any calculation required, plus any items of compensation that are designated as pension based in an applicable Memorandum of Understanding or City ordinance. All other items of compensation shall be excluded from the calculation of compensation earnable.

Continuous Service. Uninterrupted City service except that discontinuance of such service for any cause whatever, followed by re-entrance into City service within three (3) years from the date of such discontinuance, shall not be considered as an interruption in the continuity of service.

Cost of Living Amount or COLA. That portion of a retirement allowance resulting from adjustments made pursuant to Section 4.1080.16.

Dependent Parent. A person who the Board of Administration, upon investigation and after a hearing in the matter, shall find is the parent of a Member to or for whom the Member, during the last year of the Member's service, contributed at least one-half the necessary living expenses.

Domestic Partner. A person who has formed a valid domestic partnership by filing a Declaration of Domestic Partnership with the Retirement System, as authorized in Section 4.1080.9 herein, or with the State of California, as authorized in Family Code Section 298.5, or a person who has established a legal union which was validly formed in another jurisdiction that is substantially equivalent to a domestic partnership, as provided in Family Code Section 299.2. Domestic partner shall not include a person who has established a domestic partnership pursuant to any other authority, unless expressly otherwise provided in this Article. A partnership shall be established, for purposes of this Article, on the date of the filing with the Retirement System or state.

Employee. Every person in the employ or service of the City of Los Angeles in any capacity, rank, or office, at a regular salary, wage, or compensation.

Forfeit or Forfeiture shall have the meaning provided by Internal Revenue Code Section 401(a)(8).

Larger Annuity. The annuity funded entirely by the Member as provided in Section 4.1080.3(d).

Member or Tier 3 Member. An employee of the City of Los Angeles who meets the membership requirements contained in Section 4.1080.2. Notwithstanding the foregoing, a person who is no longer employed by the City but who qualifies for reciprocity under Section 4.1096 and whose Tier 3 Member contributions remain on deposit with the Retirement Fund may be considered to be a Member, but only to the limited extent necessary to comply with the reciprocity provisions contained in Section 4.1096. Member, as used in this article, shall mean a Member of Tier 3 unless otherwise specified.

Operative Date. The “effective date”, unless a different date is specified by any ordinance adopted pursuant to the provisions of Charter Section 1168.

Public Safety Officer Member. The following definition shall apply only to Article 3 of Chapter 10 of the Los Angeles Administrative Code. A Member of Tier 3 of the Retirement System who while a City employee and on their retirement date, which shall occur on or after March 25, 2022, was employed by the Police Department, Harbor Department, or Recreation and Parks Department as a peace officer as defined in California Penal Code Section 830.1 or Section 830.31. Public Safety Officer Member also shall include an Airport Peace Officer Member who elected not to make a one-time lump sum payment of $5,700 on or before January 8, 2019 in exchange for the enhanced benefits provided by Sections 4.1007(a), 4.1008.1 and 4.1010.1 as set forth in Section 4.1002(e)(2). To the extent a Public Safety Officer Member qualifies retroactively for the enhanced benefits provided for in Sections 4.1080.8.1 and 4.1080.10.1, LACERS will adjust those benefits accordingly.

Public Safety Officer Former Member. The following definition shall apply only to Article 3 of Chapter 10 of the Los Angeles Administrative Code. A former Member of Tier 3 of the Retirement System who while a City employee and on the date that they separated from City Service or ceased to be a member of the Retirement System, which shall occur on or after March 25, 2022, was employed by the Police Department, Harbor Department, or Recreation and Parks Department as a peace officer as defined in California Penal Code Section 830.1 or Section 830.31. Public Safety Officer Former Member also shall include an Airport Peace Officer Former Member who elected not to make a one-time lump sum payment of $5,700 on or before January 8, 2019 in exchange for the enhanced benefits provided by Sections 4.1007(a), 4.1008.1 and 4.1010.1 as set forth in Section 4.1002 (e)(2). To the extent a Public Safety Officer Former Member qualifies retroactively for the enhanced benefits provided for in Sections 4.1080.8.1 and 4.1080.10.1, LACERS will adjust those benefits accordingly.

Public Safety Officer Retired Member. The following definition shall apply only to Article 3 of Chapter 10 of the Los Angeles Administrative Code. A retired Member of Tier 3 of the Retirement System who while a City employee and on their retirement date, which shall occur on or after March 25, 2022, was employed by the Police Department, Harbor Department, or Recreation and Parks Department as a peace officer as defined in California Penal Code Section 830.1 or Section 830.31. Public Safety Officer Retired Member also shall include an Airport Peace Officer Retired Member who elected not to make a one-time lump sum payment of $5,700 on or before January 8, 2019 in exchange for the enhanced benefits provided by Sections 4.1007(a), 4.1008.1 and 4.1010.1 as set forth in Section 4.1002 (e)(2). To the extent a Public Safety Officer Retired Member qualifies retroactively for the enhanced benefits provided for in Sections 4.1080.8.1 and 4.1080.10.1, LACERS will adjust those benefits accordingly.

Regular Interest. Interest credited to the individual account of each member as provided in Charter Section 1162(b).

Reserve Basis. A system which provides for the accumulation and maintenance of a fund which will at all times be equal to the difference between the present value of the obligations assumed and the present value of the money to be received for paying such obligations, where such present values are estimated in accordance with accepted actuarial methods and on the basis of an assumed rate of interest and the mathematical probabilities of the occurrence of such contingencies as affect both the payment of the assumed obligations and the receipt of money with which they are to be paid.

Retirement Allowance or Allowance. An allowance granted under this Article, together with all subsequent adjustments thereto, if any.

Retired Member or Retired Tier 3 Member. A former member who is receiving a monthly benefit from Tier 3 of the Retirement System. A retired member shall not be considered a member for purposes of this article and, if re-employed as authorized in Charter Section 1164, shall continue to be a retired member.

Retirement Fund. The trust fund established for the Retirement System in Charter Section 1154.

Retirement System or System. The Los Angeles City Employees’ Retirement System (LACERS).

Spouse. A person who is a party to a valid marriage.

(b) Wherever the phrase “Final Compensation” is used in this Article, it shall, unless a different meaning is clearly indicated by the context, have the following meaning:

The final compensation of every member shall be calculated as an average of the monthly compensation earnable during the member’s last thirty-six (36) months of service or any other thirty-six (36) consecutive months of service designated by the member.

Since employees are paid on a bi-weekly basis, rather than a monthly basis, the Board shall adopt appropriate rules to convert a member’s bi-weekly compensation earnable into an amount that represents the member’s equivalent compensation earnable for the thirty-six (36) month period that is to be used to deter- mine final compensation pursuant to this provision.

If for any reason final compensation must be computed for any member who has completed fewer than thirty-six (36) months of continuous service, the salary for the missing months shall be at the rate of compensation for the member’s first month of service. This exception shall not apply if a member has completed any period of continuous service of thirty-six (36) months or longer for which the member will receive service credit.

In calculating final compensation for the purposes of this article, compensation shall be limited to items of compensation designated as base salary by an applicable City ordinance or memorandum of understanding, and any items of compensation that are designated as pension based in an applicable memorandum of understanding or City ordinance. All other items of compensation shall be excluded from the calculation of final compensation.

When calculating final compensation for an employee who began membership in the Retirement System after June 30, 1996, compensation taken into account in any Plan year may not exceed the annual compensation limits established under Internal Revenue Code section 401(a)(17), as adjusted for increases in the cost of living in accordance with Internal Revenue Code Section 401(a)(17)(B).

(c) Whenever a reference is made in this Article to a specific section, such reference shall refer to a section contained in this chapter of the Los Angeles Administrative Code, unless expressly indicated otherwise by the text.

(d) Words used in the singular form in this article and in Article 4 of Chapter 11 of Division 4 of this Code shall be construed to include the plural meaning, and words used in the plural form shall be construed to include the singular meaning, unless expressly indicated otherwise by the text.

(e) Words used in the male form in this article and in Article 4 of Chapter 11 of Division 4 of this Code shall be construed to include the female meaning, and words used in the female form shall be construed to include the male meaning, unless expressly indicated otherwise by the text.

SECTION HISTORY

Added by Ord. No. 184,134, Eff. 1-22-16.

Amended by: Subsec. (a), Ord. No. 187,923, Eff. 7-9-23

Sec. 4.1080.2. Membership in Tier 3.

(a) Membership Provisions. Effective February 21, 2016, and ongoing, every employee shall become a member of Tier 3 of the Retirement System on the first day of employment in a position with the City in which the employee is not excluded from membership pursuant to the provisions of Subsection (c) of this section, unless the employee qualifies for Tier 1 membership pursuant to the exceptions to Tier 3 membership set forth in Subsection (b).

A City employee shall cease to be a member of the Retirement System upon termination of employment. A City employee shall also cease to be a member if a change in the employee’s employment results in an exclusion from membership pursuant to the provisions of Subsection (c) of this section or if the employee’s membership has been terminated.

A member or former member of LACERS who, after January 1, 2014, became ineligible to participate in LACERS by reason of transfer (including promotion, displacement, reclassification, or any other employment status change) to the Department of Water and Power, whose accumulated LACERS contributions remained on deposit in the Retirement Fund, and who is also a current, former, or retired member of the Water and Power Employees’ Retirement Plan (WPERP), shall be considered for retirement eligibility purposes only to be a member or former member of LACERS at the time such member or former member applies for retirement or deferred service retirement, as applicable, from LACERS, and shall be entitled to have the member’s or former member’s service and/or service credit with LACERS as provided in LACERS plan provisions governing Tier 1 or Tier 3, as applicable. As used herein, “service credit” shall have the meaning ascribed to it under Section VII.F of the plan provisions governing WPERP Tier 2.

(b) Exceptions from Tier 3 Membership for Members Who Qualify for Tier 1 Membership.

(1) Former Tier 1 Member with Contributions on Deposit. A former Tier 1 member who returns to membership in the Retirement System on or after February 21, 2016, shall return to membership in Tier 1 if the former member has pre-February 21, 2016, contributions that remain on deposit with the Retirement Fund on the date the former member begins City service in a position in which the former member 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, the former member shall return to membership in Tier 1, provided that the former member is relieved from such forfeiture and said funds are returned to the former member’s 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.

(2) Tier 1 Disability Retirees Returned to Employment. A Tier 1 disability retiree who is returned to City employment on or after February 21, 2016, as provided in Subsections 4.1008(e) or (f), shall return to membership in Tier 1.

(3) Tier 2 Disability Retirees Returned to Employment. A Tier 2 disability retiree who is returned to City employment on or after February 21, 2016, as provided in Subsections 4.1058(e) or (f), shall return to membership in Tier 1.

(4) 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 the former member has pre-February 21, 2016, contributions that remain on deposit with the Retirement Fund on the date the former member begins City service in a position in which the former member 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, the ormer member shall return to membership in Tier 1, provided that the former member is relieved from such forfeiture and said funds are returned to the former member’s 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 to make the Retirement Fund whole, as determined by the actuary for the Retirement System, for any contributions that would have been made by the City and the former Tier 2 member had that former member been making contributions as a member of Tier 1 from the former member’s 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.

(5) Tier 2 Members. All employees who entered LACERS membership between July 1, 2013, and February 21, 2016, as Tier 2 members shall be members of Tier 1. 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 all former Tier 2 members had those former Tier 2 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 the former Tier 2 member’s account but shall be contributed solely for the purpose of making the Retirement Fund whole.

(6) Certain Limited Term Retirement Plan Members. An elected official who was a member of the Limited Term Retirement Plan (LTRP) on February 20, 2016, and subsequently becomes a member of the Retirement System shall become a member of Tier 1, rather than Tier 3, provided that the elected official’s service as an elected official was continuous from February 20, 2016, until the date the elected official became a member of the Retirement System and all of the funds in the elected official’s individual account with the LTRP are transferred to the elected official’s member account with the Retirement System pursuant to the provisions of Section 4.1080.18(c)(1).

(7) Certain Part-Time Employee Members. As provided in Subsection (d), employees who first commenced employment with the City prior to February 21, 2016, in a position eligible for part-time employee membership pursuant to the requirements of Subsection (c)(8), who become eligible for LACERS membership on or after February 21, 2016, shall become members of LACERS Tier 1. An employee who first commenced employment with the City in a position eligible for part-time employee membership prior to February 21, 2016, who terminates employment with the City but subsequently returns to City employment on or after February 21, 2016, and thereafter becomes eligible for LACERS membership, shall become a member of Tier 1.

(8) Airport Peace Officers Appointed Prior to January 7, 2018. Effective January 7, 2018, all Members of Tier 3 who were appointed prior to January 7, 2018 and who, on that date, were sworn in, as provided by Penal Code Section 830.1, to perform police or firefighting duties for the Department of Airports, in class codes 3225-1, 3225-2, 3225-3, 3202-0, 3202-1, 3202-2, 3236, 3226-0, 3226-1, 3226-2, 3227, 3203, 3203-9, 3228-0, 3228-1, 3228-2, 3205, 3234 or 3232, 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, including the obligation to make an irrevocable written election to either remain in Tier 1 of the Retirement System as an Airport Peace Officer Member or become a member of Tier 6 of LAFPP, as described in Section 4.1002(e). Upon becoming a Member of Tier 1 of the Retirement System pursuant to this section, the Member's irrevocable written election under Section 4.1002(e) shall take effect in the manner described in that section. Such Members shall not be entitled to elect to remain in Tier 3 of the Retirement System. The Department of Airports 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 these former Tier 3 Members had those members been members of Tier 1 from their respective initial dates of membership in LACERS. Such contributions shall be made regardless of whether a former Tier 3 Airport Peace Officer Member elects to remain in Tier 1 of the Retirement System or become a member of Tier 6 of LAFPP. Such contributions will reflect the difference between the Tier 1 and Tier 3 normal cost rates calculated for the affected Tier 3 members adjusted

with interest at the assumed earnings rate. Any such back contributions made by the Department of Airports shall not be credited to any individual member’s account but shall be contributed solely for the purpose of making the Retirement Fund whole.

(1) Persons employed by the Board of Education or School District.

(2) Persons serving on any Board of Commissioners whose compensation consists of attendance fees per meeting attended.

(3) Members of the Fire and Police Pension Plan and members of the Water and Power Employees’ Retirement Plan, provided; however, that this exclusion shall not operate during any period of City service in which any such person is employed in any capacity which renders that person ineligible for current membership in said plans. Nothing in this chapter shall be construed to prevent any person entitled to the payment of any benefit on account of service as a member of the Fire and Police Pension Plan or the Water and Power Employees’ Retirement Plan from receiving payment on account of any benefit to which such person is entitled as a member of this Retirement System; provided, nevertheless, that no payment shall be made under provisions of this chapter, based upon any period of service for which such person is entitled to receive or is receiving any benefit, under the Fire and Police Pension Plan or the Water and Power Employees’ Retirement Plan.

(4) Inmates of City institutions who are allowed compensation for such services as they are able to perform.

(5) Persons in City institutions principally for the purpose of receiving training but who receive compensation.

(6) Persons employed under contract for a definite period or for the performance of a particular special service.

(7) Persons employed only on call or for seasonal work.

(8) Any person employed on an intermittent, temporary, or part-time basis, unless the person (i) is a member at the time the person commences to serve on such a basis; or (ii) the person’s appointing authority certifies to the Board of Administration, under penalty of perjury, that the person’s employment is regular and continuous and will likely extend for at least one year and require service for at least one-half (1/2) the time required of full-time employees in the same group or class of service; or (iii) the person’s appointing authority certifies to the Board of Administration, under penalty of perjury, that the person has satisfied the requirements for certification as a part-time employee member of the Retirement System, as such requirements have been set forth under an applicable memorandum of understanding.

(9) Any officer of the City elected for a fixed term who files a written declaration of the officer’s desire not to become a member of the System within ninety (90) days following the last day of the calendar month during which the first deduction on account of member contributions to the Retirement Fund is taken. When the declaration is filed, any contributions already taken attributable to the fixed term to which the officer was just elected, including interest thereon, shall be transferred to the officer’s account with the Limited Term Retirement Plan and said officer shall have no right to benefits from the System for any periods for which such contributions were taken. Any officer who has filed such a declaration may revoke it in writing and, upon filing the written revocation with the Board of Administration, shall become a member of the System.

In addition to persons elected for a fixed term as an officer of the City, any person appointed to fill a vacancy in an elected office for a fixed term, whether for the full remainder of such term or any portion thereof, may choose not to become a member of the System by filing the declaration procedure provided in this paragraph. Such a person shall be considered an elected official of the City for purposes of participation in the Limited Term Retirement Plan.

Notwithstanding the foregoing, whenever any retired member of the System is elected as an officer of the City, the retired member shall not re-enter membership in the System, but shall instead become a participant in the Limited Term Retirement Plan, during which time the retired member shall continue to receive benefits as a retired member of the System.

(10) Any person undergoing training who will become a member of the Fire and Police Pension Plan upon completion of training.

(11) Any retired member of the System employed by the City on a temporary basis not to exceed one hundred and twenty (120) days pursuant to Charter Section 1164.

(d) Part-Time Employee Members. Employees who qualify for membership in the Retirement System pursuant to Subsection (c)(8) herein shall be referred to as part-time employee members herein. As provided in Subsection (b)(7), employees who commence employment with the City prior to February 21, 2016, in a position eligible for part-time employee membership in LACERS pursuant to the requirements of Subsection (c)(8), who become eligible for part-time employee membership pursuant to the requirements of Subsection (c)(8) on or after February 21, 2016, shall become members of LACERS Tier 1.

Part-time employee members shall have their compensation earnable prorated based upon hours paid per pay period for purposes of the payment of member contributions in Section 4.1080.3(a) and 4.1080.3(b), and shall receive prorated service credit based on the hours worked per pay period for purposes of the calculation of their service retirement allowance, deferred service retirement allowance, and the amount of the retiree health subsidy to which they are entitled, if any, under Chapter 11 Division 4 of this Code. A person who qualifies as a part-time employee member shall continue in this status until the person’s status changes to that of a full-time employee or until the person’s membership in the Retirement System is terminated.

Any part-time employee member whose employment status changes in such manner that the part-time employee member would be ineligible for membership pursuant to the provisions of Subsection (c)(8) if not already a member, may file a written application, together with proof of status change, with the Board of Administration requesting that the part-time employee member’s membership in the Retirement System be terminated. Provided that the part-time employee member provides sufficient proof of status change, the Retirement System shall approve the request. If such request is approved, the former member shall become a member of the Pension Savings Plan for Part-time, Seasonal and Temporary Employees established in Chapter 16 of this Code, provided that the former member otherwise qualifies to participate in such plan. Unless federal law permits a withdrawal of contributions, the former member’s accumulated contributions shall remain in the fund so long as the former member continues to be employed, in any capacity, by the City.

SECTION HISTORY

Added by Ord. No. 184,134, Eff. 1-22-16.

Amended by: Subsec. (a) amended and Subsec. (b)(8) added, Ord. No. 184,853, Eff. 4-6-17.

Sec. 4.1080.3. Member Contributions.

(a) Normal and Survivor Contribution Rate. Each member shall contribute by salary deduction to the Retirement Fund at the rate of seven percent (7%) of the member’s compensation earnable. Of this seven percent (7%), one-half percent (0.5%) shall be the survivor contribution portion, and the remaining six and one-half percent (6.5%) shall be the normal contribution. Contributions paid pursuant to this section shall be deposited into each member’s individual account and credited with interest as provided in Charter Section 1162. No portion of a member’s contributions shall be paid into the 401(h) account. No portion of a member’s contributions shall be credited to the ERIP Cost Obligation under the Early Retirement Incentive Program provided by Section 4.1033 of this Code. The ERIP Cost Obligation is not an obligation of Tier 3 members, and, conversely, the recoupment by the Retirement System of the ERIP Cost Obligation shall have no impact on the seven percent (7%) normal contribution rate for Tier 3 members.

(b) Additional Contribution to Defray Cost of Providing Retiree Medical Plan Premium Subsidy. In addition to the contributions required pursuant to Subsection (a) herein, each member shall contribute by salary deduction four percent (4%) of the member’s compensation earnable to defray the cost to the City of providing the benefit set forth in Section 4.1126. The rate of the additional contribution described in this subsection is intended to defray the cost to the City to provide the benefit set forth in Section 4.1126. No portion of a member’s contributions shall be paid into the 401(h) account.

(c) Pick Up of Employee Contribution. The City shall pick up, by salary deduction, all employee contributions as provided in Sections 4.1500 through 4.1504 of Chapter 15 of Division 4 of this Code to the extent that the City’s pick up of employees’ contributions continues to be excludable from the gross income of the affected employees under the provisions of Internal Revenue Code Section 414(h)(2).

(d) Optional Additional Contributions under Larger Annuity Program Established by the Board. The Board of Administration shall, by rule, provide for the making by members of additional contributions to provide for 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 4.1080.26. All larger annuity benefits funded by the making of additional contributions by members, as authorized in this section, shall be determined by the actuary for the Retirement System 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.

SECTION HISTORY

Added by Ord. No. 184,134, Eff. 1-22-16.

Amended by: Subsec. (d), Ord. No. 184,853, Eff. 4-6-17.

Sec. 4.1080.4. Rights of Former Members to Refund of Contributions and to Leave Contributions on Deposit in Retirement Fund.

“Former member” shall include both a City employee who ceases to be a member upon separating from City service and a City employee who continues to be employed by the City, but becomes ineligible for membership in the Retirement System. For purposes of this section, former member shall not include, a retired member who is receiving any retirement allowance provided in this Article.

(a) Refund of Contributions. Upon written demand made to the Board of Administration, a former member of Tier 3 shall be paid the former member’s accumulated contributions. But contributions shall not be refunded to a former member who is employed in any capacity by the City unless such a refund is permitted under federal law. After a former member’s contributions have been refunded, the former member shall have no right to any benefits provided by the Retirement System.

(b) Contributions Remain in the Fund. A former member of Tier 3 may permit the former member’s accumulated contributions to remain in the Retirement Fund. A former member’s individual account shall be credited with regular interest in the same manner as applies to a member’s individual account.

A former member whose contributions remain on deposit in the Retirement Fund and who is eligible for service retirement may apply to retire as provided in this article. If such former member fails to file a written retirement application prior to attaining age seventy and one-half (70 1/2), the Retirement System, pursuant to rules to be adopted by the Board of Administration, shall make such mandatory minimum distributions as are required by the Internal Revenue Code. If mandatory minimum distributions cannot be paid to a former member for any reason, such as the former member’s failure to cooperate or where the former member’s whereabouts is unknown and the Retirement System has followed Internal Revenue Service procedures to locate the former member, then such funds shall be forfeited to the Retirement Fund, provided that the former member shall be relieved from such forfeiture upon the making of a valid claim for relief, determined at the sole discretion of the Board of Administration.

If a former member’s years of service are insufficient to qualify the former member for a deferred service retirement, and the former member fails to request a refund of contributions pursuant to Subsection (a) above within ten (10) years from the date the former member’s membership terminated or from the date the former member was last employed by the City, whichever occurs later, the former member’s accumulated contributions shall be forfeited to the Retirement Fund. The former member shall be relieved from such forfeiture, however: (1) upon returning to membership in the Retirement System, at which time said funds shall be returned to the former member’s individual account pursuant to rules to be adopted by the Board of Administration; or (2) upon making a valid claim for relief from forfeiture, as determined at the sole discretion of the Board of Administration. If any such former member attains age seventy and one-half (70 1/2) with contributions still on deposit in the former member’s account, the Retirement System, pursuant to rules to be adopted by the Board of Administration, shall make such mandatory minimum distributions as are required by the Internal Revenue Code.

In the event that a former member whose contributions or other benefits have been forfeited pursuant to this subsection is deceased, any person or entity who would be entitled to the payment of the former member’s funds upon the former member’s death may make a claim for relief from forfeiture on the deceased’s behalf.

SECTION HISTORY

Added by Ord. No. 184,134, Eff. 1-22-16.

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