§ 4.2216 — LACERS Peace Officer Transfer Program

Sec. 4.2216. LACERS Peace Officer Transfer Program.

(a) Definitions. For the purposes 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. Active Employee means a person who currently is employed by any City department. This definition does not include a person who has terminated employment with the City for any reason. Board means the Board of Fire and Police Pension Commissioners. City Service or Service means those periods during which a LACERS Member received compensation from the City as an employee or during which the LACERS Member not only received Workers’ Compensation benefits (Div. IV, California Labor Code) for temporary disability on account of any injury or illness arising out of and in the course of employment with the City, but for which the LACERS Member also made Member contributions to LACERS as provided in Charter Section 1162. DROP means the Deferred Retirement Option Plan established in Chapter 21 of Division 4 of the Los Angeles Administrative Code. Employer Contributions means contributions paid by the Member’s employing department, from the following revenue sources: the City’s General Fund, the Airport Revenue Fund, or the Harbor Revenue Fund. Full Actuarial Cost means the cost to be paid by the City, including costs attributed to the Department of Airports or Harbor Department for transferred service, membership, and associated ongoing costs to achieve cost neutrality for the Plan as determined by the Plan’s actuary. LAAC means the Los Angeles Administrative Code. All statutory references contained in this section are to the LAAC unless otherwise indicated. LACERS means the Los Angeles City Employees’ Retirement System. LACERS Board of Administration means the Board of Administration of the Los Angeles City Employees’ Retirement System. LACERS Peace Officer Former Member means a former Member of LACERS who is an Active Employee on and as of January 12, 2025 of the Police Department, transferred to Tier 6 pursuant to Charter Section 1703 and Section 4.2214 of the LAAC; serves as a sworn peace officer pursuant to California Penal Code Section 830.1; performs police duties; and belongs to one of the following class codes: 2214-1, 2214-2, 2214-3, 2217, 2223-1, 2223-2, 2223-3, 2227-1, 2227-2, 2232-1, 2232-2, 2244-1, 2244-2, 2244-3, 2251, 2262-1, 2262-2, 3188-1, 3188-2, 3183-1, 3183-2, 3183-3. An employee in Class Code 2112 is not a LACERS Peace Officer Former Member for the purposes of this section. LACERS Peace Officer Member means a Member of LACERS who, on and as of January 12, 2025, is an Active Employee of the Police Department, the Department of Airports, the Harbor Department, or the Department of Recreation and Parks; serves as a sworn peace officer pursuant to California Penal Code Section 830.1 or Section 830.31; performs police or firefighting duties; and belongs to one of the following class codes: 1968-0, 1966-0, 1967-1, 1967-2, 2214-1, 2214-2, 2217, 2214-3, 2223-1, 2223-2, 2223-3, 2227-1, 2227-2, 2232-1, 2232-2 , 2244-1, 2244-2, 2244-3, 2251, 2262-1, 2262-2, 3188-1, 3188-2, 3183-1, 3183-2, 3183-3, 3221-1, 3221-F, 3221-2, 3238-0, 3221-3, 3222-0, 3225-1, 3225-F, 3225-2, 3225-3, 3333-0, 3185-0, 3226-0, 3227-0, 3228-0, 3205, 3234, 3233, or 3232. An employee in Class Code 2112 is not a LACERS Peace Officer Member for the purposes of this section. LACERS Service means a Member’s City Service and any periods of time purchased from LACERS, pursuant to Sections 4.1017, 4.1018, 4.1019, 4.1020, 4.1020.1, 4.1080.18, 4.1080.19, or 4.1080.20, provided that the terms and conditions for any service purchase agreements have been satisfied at the time of transfer or by a date selected by the Board and the LACERS Board of Administration. Any outstanding service purchase agreements shall be prorated for payments made as of the date of the Member’s transfer of service to Tier 6. LAFPP or Plan means the Fire and Police Pension Plan established in Article XI, Part 3 of the Los Angeles City Charter. LACERS Peace Officer Transfer Program or Program means the voluntary program that allows LACERS Peace Officer Members or LACERS Peace Officer Former Members, who are Active Employees on and as of January 12, 2025, to transfer membership and/or LACERS Service from LACERS to Tier 6 on the terms and conditions established in this section. Tier 6 means the Tier of the Plan established in Charter Sections 1700 - 1726. (b) Participation in LACERS Peace Officer Transfer Program. Only a LACERS Peace Officer Member or LACERS Peace Officer Former Member, who is an Active Employee of the Police Department, Department of Airports, Harbor Department, or Department of Recreation and Parks on and as of January 12, 2025, is eligible to make an irrevocable election in writing to participate in the Program on the terms and conditions set forth in Charter Section 1709 and Section 4.1002, Section 4.1080.2, and this Section 4.2216 of the LAAC. (1) Transfer of Membership and Service for LACERS Peace Officer Members. Consistent with Charter Section 1709, a LACERS Peace Officer Member may make an irrevocable election in writing to become a Member of Tier 6 in lieu of membership in LACERS, and to transfer all LACERS Service to the Plan on the terms and conditions established in this section. (2) Transfer of Membership and Service for LACERS Peace Officer Former Members. Consistent with Charter Section 1709, a LACERS Peace Officer Former Member may transfer all remaining LACERS Service from LACERS to the Plan, including LACERS Service that was previously excluded from transfer pursuant to Section 4.2214(c) of the LAAC, on the terms and conditions established in this section. (c) Requirements for Participation. A LACERS Peace Officer Member and LACERS Peace Officer Former Member shall transfer all prior periods of LACERS Service from LACERS to Tier 6 by filing an election form and executing a transfer agreement, subject to the following terms and conditions: (1) All LACERS Service Must Be Transferred. Consistent with Charter Section 1709(b) and Subsection (b) of this section, a LACERS Peace Officer Member or LACERS Peace Officer Former Member who elects to participate in the Program must transfer all LACERS Service from LACERS to Tier 6, and shall forfeit all rights to receive any benefits from LACERS. (2) Election Deadline. The rights granted in this section to transfer membership from LACERS to Tier 6 and to transfer LACERS Service to Tier 6, shall terminate on the election deadline, which shall be January 9, 2026 or on an earlier date selected by the Board and the LACERS Board of Administration, as provided in Sections 4.1002 and 4.1080.2 of the LAAC. A LACERS Peace Officer Member or LACERS Peace Officer Former Member must elect to transfer by the election deadline, unless the Board determines that a Member was unable to meet the deadline due to an authorized leave of absence. (3) Written Agreement. The election to become a Member of Tier 6 and to transfer LACERS Service pursuant to this section shall become irrevocable once an election form is accepted by LACERS pursuant to Section 4.1002 or Section 4.1080.2 of the LAAC. The Plan requires a written agreement for the transfer of service. (4) Years of Service. Notwithstanding the provisions of Charter Section 1702(r), service transferred through participation in the Program shall count as Years of Service for all Tier 6 purposes. (5) Level Contributions. A LACERS Peace Officer Member who elects to transfer to Tier 6 shall continue to make contributions at the rate applicable to their LACERS membership to the extent required by the Internal Revenue Code and as provided in Charter Section 1714(a)(3). (6) Age-Based Reduction Factor for Early Retirement. A LACERS Peace Officer Member or LACERS Peace Officer Former Member who does not satisfy the requirements to be a qualified participant as defined by the Internal Revenue Code, including an employee of the Department of Recreation and Parks, shall be subject to the age-based reduction factor for early retirement as provided in Section 4.1906(l) of the LAAC. (d) Actuarial Determinations for Costs. The Plan’s actuary shall determine the full actuarial cost of the Program, utilizing the actuarial assumptions in the most recent actuarial valuation as of June 30, 2024, and then adjusting those results for the passage of time from June 30, 2024, to the date of the actual transfer of membership and LACERS Service using the actuarial assumptions from the June 30, 2024 valuation, and taking into consideration the benefits that may be provided by the Plan as a result of the transferred LACERS Service. Factors to be considered by the actuary shall include: (a) projected salary increases; (b) probabilities of service retirement, disability retirement, DROP participation, termination, and death; (c) probability of leaving a spouse or domestic partner eligible for a continuance benefit; and (d) medical inflation and other assumptions included in the actuarial valuations. All the relevant actuarial assumptions used in the June 30, 2024 Plan actuarial valuations, will be used in the calculations, without taking into consideration incidental administrative expenses incurred by the Plan, which also may be reimbursed but separately tallied. There shall be a separate calculation for costs attributable to the transfer of LACERS Service, Tier 6 health benefits, and other Tier 6 benefits. The Plan’s actuary shall calculate each Member’s transfer cost as of the effective date of the transfer as provided in Section 4.1002 or Section 4.1080.2 of the LAAC. (e) Transfer of Funds from LACERS to the Plan. For each Member who transfers LACERS Service pursuant to this section, LACERS shall transfer to the Plan by way of a direct trustee-to-trustee transfer and in a manner consistent with the Internal Revenue Code: (1) Sufficient funds to cover all funded accrued liability related to the benefits provided in Chapter 10 of Division 4 of the LAAC for all periods of the Member’s LACERS Service to include, but not necessarily be limited to, employee contributions, employer contributions, buy back contributions, and earnings. The funds that are transferred from the Member’s contribution account with LACERS, including interest, shall be transferred to the Member’s individual contribution account with the Plan (where they shall earn interest and be refundable as provided in Charter Section 1714); the balance of the funds transferred from LACERS shall be transferred to the appropriate Plan account and credited toward satisfying the City’s liability for the benefits provided in Tier 6 of the Plan (excluding the City’s liability for benefits provided in Chapter 11.5 of Division 4 of the LAAC). (2) Sufficient funds from the LACERS Health Care Coverage Account shall be transferred to cover all funded accrued liability related to the health benefits provided in Chapter 11 of Division 4 of the LAAC for all periods of the Member’s LACERS Service to include, but not necessarily be limited to, employer contributions and earnings. These funds shall be transferred in a manner consistent with the Internal Revenue Code directly to the LAFPP Health Care Coverage Account and credited toward satisfying the City’s obligation to fund benefits provided in Chapter 11.5 of Division 4 of the LAAC. Sufficient funds from the LACERS Health Care Fund shall be transferred to cover all funded accrued liability related to the health benefits provided in Chapter 11 of Division 4 of the LAAC for all periods of the Member’s service to include, but not necessarily be limited to, employer contributions and earnings. These funds shall be transferred in a manner consistent with the Internal Revenue Code directly to the LAFPP Health Care Fund and credited toward satisfying the City’s obligation to fund benefits provided in Chapter 11.5 of Division 4 of the LAAC. The amount of funds due to the Plan from LACERS shall be agreed upon between the Plan and LACERS, subject to all requirements of the Internal Revenue Code, upon advice from their respective actuaries, and is to include, but not necessarily be limited to, employee contributions, employer contributions, and earnings to cover all funded accrued liability for the period of the transferred service determined by first using the results in the most recent actuarial valuation as of June 30, 2024, and then adjusting those results for the passage of time, including adjustments for both time value of money and City and employee contributions made from June 30, 2024, to the date of fund transfer to the Plan, using the actuarial assumptions from the June 30, 2024, valuation. All the relevant actuarial assumptions used in the June 30, 2024, actuarial valuations are to be used in the calculations. There shall be a separate calculation for purposes of Subdivision (1) and Subdivision (2) of this subsection. The total sum transferred shall be credited towards the costs associated with each Member’s transfer, as provided in Subsection (f) herein. (f) Cost Neutrality for LAFPP. The Program shall be cost-neutral for the Plan. The City, Department of Airports, and Harbor Department shall pay the Full Actuarial Cost for the transfer of personnel and service, Tier 6 benefits, and Tier 6 health benefits, including increased ongoing costs as determined by the Plan’s actuary as provided in Subsection (d) above, and reduced by the amount of any funds transferred from LACERS to the Plan as provided in Subsection (e) above. The total transfer cost for each Member shall be allocated between the portion necessary to fund the Tier 6 benefits provided in the Charter and to fund the Tier 6 health benefits provided in Chapter 11.5 of Division 4 of the LAAC. (1) Costs Attributable to Tier 6 Benefits. The City, Department of Airports, and Harbor Department shall pay the Full Actuarial Cost for the Years of Service transferred attributable to Tier 6 benefits, excluding the cost for the health benefits provided in Chapter 11.5 of Division 4 of the LAAC as described in Subdivision (2) of this subsection. To the extent that the cost required to fund Tier 6 benefits exceeds the funds transferred under Subsection (e), the City, Department of Airports, and the Harbor Department shall make additional contributions, which shall be credited to the Plan to ensure this section is cost-neutral and shall not be placed in the Member’s individual contribution account. (2) Costs Attributable to Tier 6 Health Benefits. The City, Department of Airports, and Harbor Department shall pay the Full Actuarial Cost for the Years of Service transferred attributable to the Tier 6 health benefits provided in Chapter 11.5 of Division 4 of the LAAC, as determined in Subsection (d). In accordance with the Internal Revenue Code, in the event that the funds transferred from the LACERS Health Care Coverage Account to the LAFPP Health Care Coverage Account and from the LACERS Health Care Fund to the LAFPP Health Care Fund are insufficient to fund the Full Actuarial Cost of the transferred service attributable to the benefit provided in Chapter 11.5 of Division 4 of the LAAC to a given Member, then the City, Department of Airports, or Harbor Department, as applicable, shall make additional contributions to the LAFPP Health Care Coverage Account and the LAFPP Health Care Fund. The purpose of the additional contributions is to offset the additional liability incurred by the Plan for the benefits payable to the Member from the LAFPP Health Care Coverage Account and the LAFPP Health Care Fund, pursuant to the provisions in Chapter 11.5 of Division 4 of the LAAC, to ensure that each Member’s transfer is cost-neutral for the Plan. (3) Costs Attributable to Administration. The City, Department of Airports, and Harbor Department shall pay the costs and expenses necessary to administer the Program, excluding LAFPP staff time, which may be reimbursed at the City’s discretion. Reimbursement is required for all costs and expenses, including, but not limited: to the cost of any necessary reports prepared by the Plan’s actuary, the cost of any changes to the pension administration system, and expenses incurred by the Plan in connection with this election. (g) Responsibility for Payment. The City’s General Fund, the Airport Revenue Fund, and the Harbor Revenue Fund shall be responsible for all costs and expenses associated with the Program. The unfunded actuarial accrued liability for the Program shall be paid at the time of transfer to ensure there is no impact on the Plan’s funded status. The Department of Airports and the Harbor Department shall pay the Plan for the costs and expenses, described in Subsection (f) above, for all transferring LACERS Peace Officer Members employed by their respective departments. The City shall pay the Plan for all other costs and expenses, including those associated with the Members of the Police Department and Department of Recreation and Parks who elect to participate in the Program. LAFPP shall be responsible for preparing invoices for all costs and expenses incurred and submitting them to the parties responsible for review and payment, provided that any requests for reimbursement of LAFPP staff time shall be submitted as a separate invoice. (h) Reversion of Funds to LACERS. A LACERS Peace Officer Member or a LACERS Peace Officer Former Member who transferred service and membership pursuant to this section shall have Member contributions reversed and their membership reverted to the appropriate LACERS Tier only if it is required by the Internal Revenue Service to preserve the qualified status of either LACERS or LAFPP. In the instance of reversion, the former Plan Member shall waive all rights to benefits from the Plan. All Member contributions shall be transferred to LACERS, including all Member contributions made to the Plan during periods of Plan membership plus any Member contributions made to LACERS that were previously provided by the City, the Department of Airports, or the Harbor Department to the Plan and the Member’s service shall be reestablished in LACERS. In addition to transferring all Member contributions, the Plan shall transfer to LACERS all other funds transferred to the Plan from LACERS on account of the former Plan Member, together with any interest and/or earnings attributable thereto. These funds shall be transferred from the appropriate Plan account (Member contributions, City regular contributions and investment income, LAFPP Health Care Coverage Account, and LAFPP Health Care Fund) and shall be returned to the appropriate LACERS fund (Member contributions, City regular contributions and investment income, LACERS Health Care Coverage Account, and LACERS Health Care Fund). (i) Boards’ Administration of the Program. The Board shall administer the Program and adopt all the rules necessary to facilitate LAFPP’s implementation of the Program. The Board shall determine any factual questions that may arise during LAFPP’s operation of the Program and shall take any action the Board deems appropriate. The Board’s determination shall be final. The LACERS Board shall adopt any rules necessary to support the Plan’s implementation of the Program and may work with the Board to determine a deadline for eligible LACERS Peace Officer Members to participate in the Program. SECTION HISTORY Added by Ord. No. 188,756, Eff. 11-16-25.