(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.