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TIER 2 PROVISIONS

Los Angeles Administrative Code div. 4, ch. 10, art. 2
in effect

Los Angeles Administrative Code § 4.1050 Statement of Purpose.

Sec. 4.1050. Statement of Purpose. This Article sets forth the benefits and conditions of entitlement that have been established for persons who are members of Tier 2 of the Los Angeles City Employees’ Retirement System (LACERS) 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 City Charter whenever Memorandums 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 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. SECTION HISTORY Added by Ord. No. 182,629, Eff. 7-25-13. Amended by: Third para. added, Ord. No. 183,456, Eff. 3-4-15.

Los Angeles Administrative Code § 4.1051 Definition of Terms.

Sec. 4.1051. Definition of Terms. (a) For the purposes of Article 2 of Chapter 10 and Article 3 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 interest credited to the member’s account. 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 for LACERS established in Charter Section 1104(b). City Service or Service. Only those periods during which a member received compensation from the City as an employee or during which the employee not only 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, but for which the employee also made contributions to the 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 the member 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 Rule provisions. Compensation Earnable. The base salary established for any position or office in the City service for the particular period involved in any calculation required and shall not include any bonuses or premium pay. Continuous Service. Shall mean uninterrupted City service, except that discontinuance of such service of a member for any cause whatever, followed by re-entrance into the City service within three (3) years from the date of such discontinuance, shall not be considered as a break in the continuity of service. Cost of Living Amount. That portion of a retirement allowance resulting from adjustments made pursuant to Section 4.1069. Dependent Parent. A person whom 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 4.1059 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 or rank whatever at a regular salary, wage or compensation, and regardless of whether the position held by any such person is classified as an office or employment. Larger Annuity. The annuity funded entirely by the member as provided in Section 4.1068. Member or Tier 2 Member. An employee of the City of Los Angeles who meets the membership requirements contained in Section 4.1052. 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 2 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 2 unless otherwise specified. Operative Date. Shall mean the “effective date.” unless a different date is specified by any ordinance adopted pursuant to the provisions of Charter Section 1168. Regular Interest. Interest credited to the individual account of each member as provided in Charter Section 1162(b). Reserve Basis. A system that provides for the accumulation and maintenance of a fund that 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, except for those allowances granted pursuant to Section 4.1060(a)(2), together with all subsequent adjustments thereto. Retired Member or Retired Tier 2 Member. A former member who is receiving a monthly benefit from Tier 2 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 paid during the member’s last thirty-six (36) months of service or any other thirty-six (36) consecutive months of service which the member shall designate. Since employees are paid on a biweekly basis, rather than a monthly basis, the Board shall adopt appropriate rules to convert a member’s biweekly compensation into an amount that represents the member’s equivalent compensation for the thirty-six (36)-month period that is to be used to determine final compensation pursuant to this provision. If for any reason final compensation must be computed for any member who has completed less than thirty-six (36) months of continuous service, the salary for the missing months shall be at the rate for the first month of service to arrive at the compensation earnable. This exception shall not apply if a member has any period of continuous service of thirty-six (36) months or more for which the member will receive service credit. Compensation which is to be included in the calculation of Final Compensation shall be limited to payments designated as base salary by an ordinance of the City or a memorandum of understanding; all other payments of money not so designated shall not be included in the calculation of Final Compensation. Compensation which shall not be included in the calculation of Final Compensation shall include, but not be limited to, regularly assigned bonuses, premium pay, overtime, daily and other non-regularly assigned bonuses, reimbursements, car allowances, uniform allowances, payments in lieu of benefits or cash-out of benefits and other forms of compensation. With respect to an employee who begins 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 unless expressly indicated otherwise. SECTION HISTORY Added by Ord. No. 182,629, Eff. 7-25-13.

Los Angeles Administrative Code § 4.1052 Membership in Tier 2.

Sec. 4.1052. Membership in Tier 2. (a) Membership Provisions. Effective July 1, 2013, and ongoing, every employee shall become a member of Tier 2 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 (b) of this section, unless the employee qualifies for Tier 1 membership pursuant to one of the following four exceptions to Tier 2 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 July 1, 2013, shall return to membership in Tier 1 if the former member has pre-July 1, 2013, 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-July 1, 2013, 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 re-deposits 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 July 1, 2013, as provided in Subsections 4.1008(e) or (f), shall return to membership in Tier 1. (3) Reciprocal Retirement Benefit Arrangement. If an employee of the City’s Department of Water and Power (DWP) participates in the reciprocal retirement benefit arrangement established in Section 4.1095, the employee shall become a member of Tier 1 upon becoming a member of the Retirement System, rather than Tier 2, provided that the employee’s employment with the DWP commenced prior to July 1, 2013, and there is no break in service of more than seven (7) calendar days, as provided in Section 4.1095(b). In the event that a member is initially placed into membership in Tier 1 based upon this exception and subsequently makes a timely election not to participate in the reciprocal retirement benefits arrangement, as provided in Subsection 4.1095(d), this exception to Tier 2 membership shall no longer apply to said member and the member shall become a member of Tier 2, retroactive to the first date of the member’s membership in the Retirement System. (4) Limited Term Retirement Plan. An elected official who was a member of the Limited Term Retirement Plan (LTRP) on June 30, 2013, and subsequently becomes a member of the Retirement System shall become a member of Tier 1, rather than Tier 2, provided that the elected official’s service as an elected official was continuous from June 30, 2013, 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 4.1017(c)(1). The only exceptions to Tier 2 membership are the four exceptions set forth above, determined based upon the employee’s status at the time the employee enters membership in the Retirement System. Service or service credit obtained in connection with the provisions of Sections 4.1017, 4.1018, 4.1019, 4.1020 or any other provision that permits a Tier 2 member to purchase service or service credit shall not qualify a Tier 2 member for membership in Tier 1. Further, there shall be no exception to Tier 2 membership based upon establishing a right to reciprocity pursuant to Section 4.1096. If an employee becomes a member of LACERS on or after July 1, 2013, the fact that the employee was a member of a reciprocal system prior to July 1, 2013 shall not qualify the employee for membership in Tier 1. A City employee shall cease to be a member 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 (b) of this section, or if the employee’s membership has been terminated pursuant to the provisions of Subsection (c) of this section. (b) Exclusions from Membership. The following employees shall not be members of the Retirement System: (1) Persons employed by the Board of Education or School District. (2) Persons serving on any Board of Commissioners whose compensation consist of attendance fees per meeting attended. (3) Members of the Fire and Police Pension Plans 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 Plans herein mentioned, 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, for or on account of any period of service for which such person is entitled to receive or is receiving any benefit, under the Fire and Police Pension Plans 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 is a member at the time the person commences to serve on such a basis, or unless the appointing authority certifies to the Board of Administration that the person’s employment is regular and continuous and will probably extend for at least one (1) year and require service for at least one-half the time required of employees in the same group or class of service on a full-time basis. (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 next 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; provided that any officer who has filed such declaration may revoke it in writing and, upon filing the 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 as provided in this paragraph, and 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. (c) Employees Who May Terminate Membership. Any member whose employment status changes in such manner that the member would be ineligible for membership pursuant to the provisions of Subsection 4.1052(b)(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 member’s membership in the Retirement System be terminated. Provided that the 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. 182,629, Eff. 7-25-13.

Los Angeles Administrative Code § 4.1053 Member Contributions.

Sec. 4.1053. Member Contributions. (a) A member who belongs to Tier 2 shall contribute, by salary deduction, to the Retirement Fund at an actuarially determined rate sufficient to fund seventy-five percent (75%) of normal costs and fifty percent (50%) of any unfunded liability for Tier 2. The member contribution is paid solely for the purpose of providing benefits for the member and, unlike Tier 1, does not include a survivor contribution. The initial contribution rate for the first four (4) years of Tier 2 shall be ten percent (10%) of the compensation earnable for each member. The Board shall establish the Tier 2 member contribution rate every three (3) years thereafter, with the first such determination to be effective July 1, 2017, for the following three (3) years. The Board shall establish the member contribution rate as a percentage of compensation earnable for each member, and the rate established shall be actuarially determined to be sufficient to fund seventy-five (75%) of normal costs and fifty percent (50%) of any unfunded liability for Tier 2. The City contribution shall be determined annually by the Board in a percentage that, when combined with the member contribution, is sufficient to fully meet the actuarial funding requirements. (b) For purposes of this Article: (1) Member contributions shall be credited to each member’s individual account, and no portion of a member’s contribution shall be paid into the 401(h) account; (2) Member contributions are subject to the provisions of Charter Section 1162, including the right to be credited with interest; (3) Compensation earnable shall consist of base salary and shall not include any bonuses or premium pay; (4) Normal costs and unfunded liability shall include costs associated with funding the Retirement Fund’s 401(h) account for purposes of establishing the member contribution rate except that, if for any reason the determination of the member contribution rate at the time of an adjustment results in a member contribution rate that exceeds the amount necessary to fund one hundred percent (100%) of normal costs and unfunded liability excluding all costs associated with funding the 401(h) account, then the member’s contribution rate shall be reduced accordingly to assure that no part of a member contribution is used to fund the 401(h) account since, if member contributions were paid into the 401(h) account, these contributions would become non-refundable and could not be paid on a pre-tax basis pursuant to Chapter 15 of Division 4 of this Code; (5) The unfunded liability used to determine rate adjustments shall be based upon the average of the last three (3) years’ amortization payments toward the unfunded liability for Tier 2 as determined by the Board’s actuary; (6) The normal costs used to determine rate adjustments shall be based upon the average of the last three (3) years’ normal costs for Tier 2 as determined by the Board’s actuary. (c) Notwithstanding the provisions of this section, the City Council shall have the discretionary right to adopt an ordinance to temporarily reduce the member contribution rate for a period not to exceed three (3) years. Members of Tier 2 shall not obtain any vested right to a lower contribution rate on account of any such reduction. Further, the Council explicitly retains the right to amend this Code, by ordinance, to delete this provision. Any ordinance adopted pursuant to this paragraph shall be adopted in the same manner as provided in Charter Section 1168. (d) The City shall pick up all employee contributions payable by salary deduction pursuant to this Section as provided in Sections 4.1500 through 4.1504 of Chapter 15 of Division 4 of this Code. SECTION HISTORY Added by Ord. No. 182,629, Eff. 7-25-13.

Los Angeles Administrative Code § 4.1054 Rights of Former Members.

Sec. 4.1054. Rights of Former Members. 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 ceases to be a member of 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. A former member shall be paid the former member’s accumulated contributions upon written demand made to the Board of Administration. Contributions, however, 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 may permit the former member’s accumulated contributions to remain in the Fund. A former member whose contributions remain on deposit and who qualifies for deferred service retirement may apply to retire as provided in Section 4.1056. If such former member fails to file a written retirement application prior to attaining age seventy and a 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 a former member does not have sufficient years of continuous service so as to be entitled to a deferred service retirement and 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, provided that the former member: (1) shall be relieved from such forfeiture upon returning to membership in the 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) shall be relieved from such forfeiture upon the making of a valid claim therefor determined at the sole discretion of the Board of Administration. If any such former member attains age seventy and a 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. 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 therefor, determined at the sole discretion of the Board of Administration. 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. 182,629, Eff. 7-25-13.

Los Angeles Administrative Code § 4.1055 Service Retirement for Employees.

Sec. 4.1055 Service Retirement for Employees. (a) Eligibility for Normal Retirement. (1) A Tier 2 member with ten (10) or more years of continuous City service shall be eligible to retire after reaching age sixty-five (65) with a retirement factor of two percent (2%). (2) A Tier 2 member shall be eligible to retire at age seventy (70) or older, regardless of length of City service, with a retirement factor of two percent (2%). (b) Eligibility for Early Retirement. A Tier 2 member with ten (10) or more years of continuous City service shall be eligible to retire after reaching age fifty-five (55) with the following retirement factor based upon the member’s age taken to the completed quarter year: Age | Retirement Factor Age | Retirement Factor 55.00 | 0.7700% 55.25 | 0.7880% 55.50 | 0.8050% 55.75 | 0.8230% 56.00 | 0.8400% 56.25 | 0.8600% 56.50 | 0.8800% 56.75 | 0.9000% 57.00 | 0.9200% 57.25 | 0.9430% 57.50 | 0.9650% 57.75 | 0.9880% 58.00 | 1.0100% 58.25 | 1.0350% 58.50 | 1.0600% 58.75 | 1.0850% 59.00 | 1.1100% 59.25 | 1.1380% 59.50 | 1.1650% 59.75 | 1.1930% 60.00 | 1.2200% 60.25 | 1.2500% 60.50 | 1.2800% 60.75 | 1.3100% 61.00 | 1.3400% 61.25 | 1.3750% 61.50 | 1.4100% 61.75 | 1.4450% 62.00 | 1.4800% 62.25 | 1.5180% 62.50 | 1.5550% 62.75 | 1.5930% 63.00 | 1.6300% 63.25 | 1.6750% 63.50 | 1.7200% 63.75 | 1.7650% 64.00 | 1.8100% 64.25 | 1.8580% 64.50 | 1.9050% 64.75 | 1.9530% (c) Application Requirements. A Tier 2 member who is eligible for normal or early retirement may file a service retirement application with the Board of Administration specifying a retirement date. The application shall be filed not less than thirty (30) or more than sixty (60) days prior to the requested retirement date, except as follows: (1) In the event a member has been notified by the City that the member will be laid off, the application may be filed less than thirty (30) days in advance and shall be accepted provided it is filed with the Board while the member is still employed, specifies a retirement date prior to the member’s termination, and shall not be effective earlier than the date on which it is filed. (2) The thirty (30)-day advance filing requirement shall not apply if the City has adopted a Resolution of Fiscal Emergency that is in effect and the Mayor has notified the System, in writing, that the City’s fiscal condition warrants a waiver of the advance filing requirement for a ninety (90)-day period from the date of such notification, provided that the application shall not be effective earlier than the date on which it is filed. As long as the Resolution of Fiscal Emergency remains in effect, the Mayor may extend a waiver of the advance filing requirement in successive periods of ninety (90) days each by written notification from the Mayor to the System. (d) WPERP Service. All of the member’s service with the Water and Power Employees’ Retirement Plan (WPERP) shall be combined with LACERS service solely for the purpose of determining retirement eligibility under this section. All WPERP service, except WPERP service based on the purchase of Other Government Service (OGS) and noncontributory WPERP service, may count towards the ten (10) years of continuous City service requirement, as applicable. SECTION HISTORY Added by Ord. No. 182,629, Eff. 7-25-13. Amended by: Subsec. (d) added, Ord. No. 182,824, Eff. 12-19-13.

Los Angeles Administrative Code § 4.1056 Service Retirement for Former Members (Deferred Retirement).

Sec. 4.1056. Service Retirement for Former Members (Deferred Retirement). A Tier 2 member who terminates City employment other than by retirement may leave their contributions in the Retirement Fund. Such former member’s individual account shall be credited with regular interest in the same manner as applies to a member’s individual account. (a) Eligibility for Deferred Service Retirement. In order to become eligible for a deferred service retirement from Tier 2, a former member’s Tier 2 contributions must remain in the Retirement Fund, and the former member must have: (1) Five (5) years of continuous City service, be age fifty-five (55) or older, and ten (10) years must have elapsed since the former member first became a member; or (2) Five (5) years of continuous City service and be age seventy (70) or older; or (3) Been a part-time employee, be age fifty-five (55) or older, and ten (10) years must have elapsed since the former member first became a member; or (4) Been a part-time employee and be age seventy (70) or older. (b) Application Requirements. A former member of Tier 2 who is eligible for a deferred service retirement must notify the Retirement System, in writing, when the former member wants to retire and shall then be retired with the retirement factor attributable to the former member’s age as provided in Subsection 4.1055(b), if age fifty-five (55) through sixty-four (64), or with a retirement factor of two percent (2%) if age sixty-five (65) or older, provided that the date of the former member’s retirement may not be earlier than the date that the written notification is received by the System. (c) WPERP Service. All of the member’s service with the Water and Power Employees’ Retirement Plan (WPERP) shall be combined with LACERS service solely for the purpose of determining retirement eligibility under this section. WPERP service, except WPERP service based on the purchase of Other Government Service (OGS) and noncontributory WPERP service, may count towards the minimum five (5) years of continuous City service, as applicable. Further, the date that the member first became a member of WPERP may be used to satisfy the requirement that ten (10) years must have elapsed since the member first became a member. SECTION HISTORY Added by Ord. No. 182,629, Eff. 7-25-13. Amended by: Subsec. (c) added, Ord. No. 182,824, Eff. 12-19-13.

Los Angeles Administrative Code § 4.1057 Service Retirement Allowances.

Sec. 4.1057. Service Retirement Allowances. (a) Tier 2 Formula. The service retirement allowance for a person who is eligible to retire under either Section 4.1055 or 4.1056 herein shall be determined pursuant to the following Tier 2 Formula: Retirement factor (multiplied by) City service credit (multiplied by) final compensation (equals) service retirement allowance. Each service retirement allowance shall be allocated between the following two components: (1) An annuity which shall be the actuarial equivalent of the retiree’s accumulated contributions at the time of retirement (excluding any additional contributions paid to provide a larger annuity at the time of retirement), calculated in accordance with approved actuarial methods as of the date of retirement; and (2) A pension, in the amount of the remaining balance, payable to the retiree on account of the retiree’s service. The retirement allowance as so calculated shall be subject to the following adjustments, if applicable: (1) If the retiree had been on disability retirement, the retiree’s service retirement allowance shall be reduced by an amount equal to the annuity which the total of the disability annuity payments made to the retiree would have provided had they still been part of the retiree’s accumulated contributions at the time of retirement unless, upon returning to service from disability retirement, a member elected, as provided by Board rule, to make additional contributions in order to restore part or all of the member’s annuity. (2) If the retiree received any minimum distribution required by the Internal Revenue Code, the retiree’s service retirement allowance shall be subject to adjustment as provided in rules to be adopted by the Board of Administration. (b) Cap on Allowances. In no event shall any Tier 2 retirement allowance exceed seventy-five percent (75%) of final compensation, except where the allowance is based solely upon the annuity component funded by the retiree’s accumulated contributions, and thus does not include a pension component. The seventy-five percent (75%) of final compensation limitation upon the retirement allowance set forth above, which is subject to one exception as noted, shall apply to the member’s retirement allowance prior to any adjustments that may be required as a result of the purchase of an additional annuity, the provision for a continuance to a survivor, or any other election authorized in this Article. (c) Internal Revenue Limitations. All Internal Revenue Code limitations set forth in Section 4.1051(b) shall be applicable to benefits payable under Tier 2. In addition, Tier 2 members shall not be entitled to the payment of benefits to the extent such benefits are reduced by the limitations on benefits imposed by Section 415 of the Internal Revenue Code. Tier 2 members shall not be eligible to participate in the Excess Benefit Plan established in Section 4.1800. (d) WPERP Service Credit. Service credit with the Water and Power Employees’ Retirement Plan (WPERP) shall not be included in the calculation of the member’s retirement allowance pursuant to Subsection (a) of this section unless the member has purchased credit for this WPERP service with the Retirement System or unless such service credit was transferred to the Retirement System pursuant to reciprocity under current Section 4.1095 or prior Section 4.1060. SECTION HISTORY Added by Ord. No. 182,629, Eff. 7-25-13. Amended by: Subsec. (d) added, Ord. No. 182,824, Eff. 12-19-13.

Los Angeles Administrative Code § 4.1058 Disability Retirement.

Sec. 4.1058. Disability Retirement. (a) Application for Disability Retirement. Any member who has ten (10) or more years of continuous service and who has become physically or mentally incapacitated and who is incapable, as a result thereof, of performing the member’s duties, may be retired upon written application of such member, or of any person acting in the member’s behalf, or of the head of the department in which such member is employed. Any such application for disability retirement may be made at any time within, but not exceeding, one (1) year after the discontinuance of the service of an employee or the termination of any duly authorized sick leave with pay, provided such incapacity has been continuous from the discontinuance of such service. (b) Disability Determination. The Board shall cause each member who applies to be examined by and a written report thereon rendered by at least three regularly licensed, practicing physicians selected by the Board unless the member is terminally ill, in which case the Board shall only require the member to be examined by one such physician selected by the Board. If, upon considering the report(s) of such physician(s) and such other evidence as shall have been presented to it, the Board finds that the member has become physically or mentally incapacitated and is incapable, as a result thereof, of performing the member’s duties and if said Board finds that such disability was not due to intemperance or the willful misconduct of such member, the member shall be retired as of the date of the discontinuance of the member’s service on account of such disability or termination of sick leave with pay. (c) Disability Retirement Allowance. Any member retired on account of disability shall receive a disability retirement allowance which shall consist of: (1) An annuity which shall be the actuarial equivalent of the member’s accumulated contributions at the time of the member’s retirement, calculated in accordance with approved actuarial methods as of the date of retirement; and (2) A pension which shall be in such an amount that the same, when added to that portion of the member’s annuity not derived from additional contributions paid to provide a larger annuity at the time of retirement, shall be a sum which shall be equal to one-ninetieth (1/90) of the member’s final compensation, as defined in Section 4.1001(b), calculated as of the date of retirement, multiplied by the City service credit of such member. (d) Death of Applicant Prior to Board Action. Whenever the Board shall have before it for consideration an application for disability retirement by a member who died while the member was waiting for the application to be processed and prior to reports of examination being obtained from three or more physicians selected by the Board, a disability retirement may be granted on the basis of fewer than three medical reports or no such reports subject to the following provisions: The Board must find: (1) That the applicant was physically or mentally incapacitated since the discontinuance of service and incapable of performing the duties of the applicant’s position; and (2) That the disabling condition(s) and death of the applicant were not due to the applicant’s intemperance or willful misconduct. It shall be within the power of the Board to adopt all necessary rules to implement the provisions of this subsection, including, but not limited to, rules regarding the type and quantity of evidence required to make the determination required herein. (e) Review of Disability Retirees. The Board may, from time to time in its discretion, require any beneficiary under the age of sixty (60) years who shall have been retired because of disability to submit to medical examination by three regularly licensed practicing physicians selected by the Board. Upon the basis of such examination and other proper evidence, said Board shall determine whether such beneficiary is still incapacitated for service in the position held by the beneficiary at the time of the beneficiary’s retirement. If the Board shall determine that such beneficiary is not so incapacitated, the beneficiary shall be restored to duty in the position held by the beneficiary at the time of said retirement order and, upon the beneficiary’s return to active service, the beneficiary’s retirement allowance shall be canceled. The failure, neglect, or refusal of any beneficiary to submit to such medical examination as the Board may order or to return to active service when determined to be no longer incapacitated, within such reasonable time as the Board may determine, shall be sufficient cause for cancellation of such retirement allowance, in the discretion of the Board, in which event the only right that the beneficiary shall have as a former member pursuant to Section 4.1054 is to receive a refund of the beneficiary’s accumulated contributions, less any payments made on account of the annuity provided herein. If the Board should determine that a beneficiary is no longer incapacitated, but the beneficiary cannot be restored to duty in the position held by the beneficiary at the time of retirement due to the beneficiary’s termination or resignation, the Board shall cancel the beneficiary’s retirement allowance, and, as a former member, the beneficiary shall have the rights set forth in Section 4.1054, provided that, in the event the beneficiary requests a refund of contributions, the accumulated contributions shall be reduced by any payments made on account of the annuity provided herein. (f) Consentual Re-Employment in a Different Position. Any person retired for disability by the Board, even though incapable of performing the duties of the position from which the person was retired, may be re-employed in a different vacant position if the Board of Civil Service Commissioners were to find that the person is capable of performing the duties of such position, provided, however, that such person may be so re-employed only with the consent of the appointing authority for such position and the written consent of such person. The Board of Civil Service Commissioners shall adopt rules and regulations to effectuate the purpose of the foregoing provisions. Upon the re-employment of such person, the person’s disability retirement allowance shall cease, and, should the person be eligible for membership in the Retirement System, the person shall again become a member (g) Rights and Obligations upon Re-Employment. Any beneficiary who re-enters the service of the City, as provided in Subsection (e) or (f) herein, and again becomes a member of the Retirement System, shall return to membership in Tier 2. The balance, if any, of the member’s accumulated contributions, after deducting the annuity payments made to their member on account of a disability retirement allowance, shall be credited to the individual account of such member with the Retirement System, regardless of whether the member becomes a member of the Retirement System or of another City retirement system upon re-employment. The member shall receive credit for services rendered prior to the date of the member’s retirement in the same manner as though the member had never been retired for disability, but the payment of a disability pension shall not constitute compensation from the City entitling the member to service for the period it was paid. If otherwise eligible, a member may purchase eligible service with another governmental entity for employment during periods in which the member received a disability allowance. Members of Tier 2 may elect to make contributions, on a post-tax basis, in order to replace some or all of the contributions used to fund the annuity portion of the member’s disability pension so as to reduce or eliminate the reduction that would otherwise occur to the member’s service retirement allowance pursuant to the provisions of Section 4.1057(a)(1). The Board shall adopt rules to allow Tier 2 members to make contributions for this purpose. (h) Board Authority. The Board shall have the power to hear and determine all matters pertaining to the granting or termination of any retirement allowance provided for in this section, and the determination of the Board shall be final and conclusive. (i) Loan Program for Disability Applicants. The Board shall, by rule, establish a loan program for members who have made application for disability retirement or upon whose behalf an application has been made in accordance with the provisions of this chapter, provided that the loan program shall be in compliance with the provisions of Internal Revenue Code Section 72(p). The loan program shall further provide that in no event shall the amount of funds loaned to any member exceed the amount of contributions and interest in the member’s LACERS account, and that once a Board determination is made granting or denying a member’s disability application, no further funds shall be lent to the member in connection with that application. Loan repayments will be suspended under this program as permitted under Section 414(u)(4) of the Internal Revenue Code. (j) Right to Make Back Contributions When Disability Application Denied. Any member who has, at any time, filed an application for the benefit of a disability retirement, which application was thereafter denied by the Board of Administration upon a finding by said Board that the applicant had not become physically or mentally incapacitated so as to be incapable of performing the member’s duties, shall have the right to designate up to six (6) months of the period while such application was pending for purposes of acquiring credit towards City service as defined in Section 4.1051, subject to the following conditions: (1) The designated period does not already entitle the member to service credit. (2) The maximum period to be designated is six (6) months or the actual period of time while the application for disability retirement was pending, whichever was less. (3) If a member has applied more than once for disability retirement, the cumulative total period to be designated may not exceed six (6) months or the time elapsed while applications were processed, whichever is less. (4) The right granted herein shall be exercised in writing, filed with the Board, designating the period of City Service for which the member desires to receive retirement credit, and must be accompanied by a single payment of back contributions or by an irrevocable agreement to pay such back contributions in installments. The back contributions to be paid shall be in an amount equal to all of the contributions which the member would have made to the Fund had the member been making contributions during such period, based upon such member’s Compensation Earnable before the discontinuance of the member’s service, together with all regular interest which, had the member so made the same, would have been credited thereon prior to the date of such payment; provided, however, that in the case of such installment payments thereof, the same shall be made pursuant to rules which shall be adopted by the Board establishing minimum amounts to be paid and the period of time therefor and providing the rate of interest which shall also be paid upon the unpaid balance of the same. Every member who makes up back contributions as provided herein shall be allowed credit for the period of City Service designated in the declaration filed by the member with the Board; provided, however, that should the member, for any reason, cease to be a member before making up the full amount thereof, the member shall be allowed retirement credit, counter-calendarwise, for the same portion of such designated period as the amount made up by the member is of such full amount. (k) WPERP Service. Service with the Water and Power Employees’ Retirement Plan (WPERP) shall not count towards continuous service for purposes of Subsection (a) of this section unless the member has purchased credit for this WPERP service with the Retirement System or unless such service was transferred to the Retirement System pursuant to reciprocity under current Section 4.1095 or prior Section 4.1060. Service credit with the WPERP shall not be included in the calculation of the member’s disability retirement allowance pursuant to Subsection (c) of this section unless the member has purchased credit for this WPERP service with the Retirement System or unless such service was transferred to the Retirement System pursuant to reciprocity under current Section 4.1095 or prior Section 4.1060. SECTION HISTORY Added by Ord. No. 182,629, Eff. 7-25-13. Amended by: Subsec. (k) added, Ord. No. 182,824, Eff. 12-19-13.

Los Angeles Administrative Code § 4.1059 LACERS Domestic Partnerships.

Sec. 4.1059. LACERS Domestic Partnerships. (a) Establishment of Domestic Partnership with LACERS. Domestic partners are two adults who have chosen to share one another’s lives in an intimate and committed relationship of mutual caring. A domestic partnership shall be established for purposes of this Article when both partners file a Declaration of Domestic Partnership with the Board, provided all the following requirements are met: (1) Both persons agree to be jointly responsible for each other’s basic living expenses incurred during the domestic partnership. (2) Neither person is married or a member of another domestic partnership. (3) The two persons are not related by blood in a way that would prevent them from being married to each other in this State. (4) Both persons are at least eighteen (18) years of age. (5) Both persons may be of the same sex or the opposite sex. (6) Both persons are capable of consenting to the domestic partnership. (b) Termination of Domestic Partnership with LACERS. Once a domestic partnership is established as provided above, this domestic partnership shall be terminated when any of the following occurs: (1) One partner gives, or sends by certified mail, to the other partner a written notice that the partner is terminating the partnership. (2) One of the domestic partners dies. (3) One of the domestic partners marries. Upon termination of a domestic partnership, at least one of the former partners shall file a Notice of Termination of Domestic Partnership with the Board, provided that failure to file such notice shall not prevent the termination of the domestic partnership. (c) Six (6) Month Prohibition. No person who has established a domestic partnership by filing a Declaration of Domestic Partnership with the Board may file a new Declaration of Domestic Partnership with the Board until at least six (6) months after the date that a Notice of Termination of Domestic Partnership was filed with the Board as provided herein. This prohibition does not apply if the previous domestic partnership ended because one of the partners died or married. (d) Death of Member Prior to Filing with the Board. Should a member die prior to filing a Declaration of Domestic Partnership with the Board, but (1) have a current domestic partner based upon an earlier established domestic partnership with the Personnel Department, and (2) have a beneficiary designation on file with the Board that designates that domestic partner as the beneficiary entitled to receive all of the member’s contributions, then such domestic partner shall be entitled to receive the same benefits that the partner would have received had their domestic partnership been filed with the Board, as provided herein, on the date that the parties filed their Affidavit or Declaration of Domestic Partnership with the Personnel Department SECTION HISTORY Added by Ord. No. 182,629, Eff. 7-25-13.

Los Angeles Administrative Code § 4.1060 Payments Upon Death.

Sec. 4.1060. Payments Upon Death. (a) Death of Member before Retirement. Upon the death of any member before retirement: (1) Accumulated Contributions. The member’s accumulated contributions shall be paid to such person or legal entity as the member shall have nominated by written designation, duly executed and filed with the Board of Administration or, if there be no such written designation of beneficiary, then to the surviving spouse or domestic partner of such deceased member, or to the member’s children in the event there be no surviving spouse or domestic partner, or to the member’s parents in the event there be no surviving spouse or domestic partner or children. In the event there be no written designation of beneficiary, surviving spouse or domestic partner, children or parents, then said accumulated contributions shall be paid to the executor or administrator of the estate of such deceased member, or to any other person or legal entity legally authorized to collect money due the decedent. (2) Limited Pension. In the event such member shall have had at least one year of City service for which the member is entitled to receive retirement credit, then a limited pension shall be paid as provided herein. The limited pension shall be paid in equal monthly payments of one-half of the average monthly compensation earnable of such member during the member’s last year of service. For each year of service, not to exceed six (6) years, two (2) monthly payments shall be paid, not to exceed a total of twelve (12) monthly payments for six (6) or more years of service. Such limited pension shall be paid to the surviving spouse or domestic partner of such deceased member, or to the minor children of such member in the event there shall be no surviving spouse or domestic partner. The payment to a minor child shall continue beyond the month the child reaches age eighteen (18) if the child was a minor on the date of the member’s death. In the event there be no surviving spouse or domestic partner or minor children, the limited pension shall be paid to the dependent parents of such member. However, no limited pension shall be paid in the event the Board of Administration, upon investigation and after a hearing in the matter, finds that the death of such member was due to or resulted from the intemperance or the willful conduct of such member. In the event any such beneficiary should die before receiving the full amount of such limited pension, the same shall be continued to the persons who, in the order hereinabove set forth, qualify as beneficiaries thereof as of the date of death of such deceased beneficiary and who, within sixty (60) days after such date make demand for payment thereof; provided, however, that, in the event no such demand is made within such time, the said limited pension shall conclusively be deemed to have been terminated as of such date of death. (3) Election of Optional Retirement Allowance when Member Eligible to Retire. In the event such member was eligible to retire pursuant to the provisions of Section 4.1055 and that the person or persons entitled to be paid such limited pension is or are the same person or persons entitled to be paid, against the claims or demands of any and all other persons thereto, the full amount of such member’s accumulated contributions, then such person or persons may, by a written instrument duly executed, acknowledged and filed with the Board of Administration, waive payment of such limited pension and such accumulated contributions and elect to be paid, in lieu thereof, the optional retirement allowance which would have been paid to such member throughout the member’s life and continued, upon the member’s death, throughout the life or lives of such person or persons as the member’s designated survivor or survivors, had the member, as of the day preceding the member’s death, been retired pursuant to the provisions of Section 4.1062(a)(1) and designated such person or persons as the member’s survivor or survivors. In no event shall the benefits of this paragraph be payable to any person after the allowance of a limited pension pursuant to the provisions of this subsection, nor shall the limited pension be payable to any person after the allowance of the benefits of this paragraph. If any person elects to receive the optional retirement allowance provided in this paragraph, no benefits shall be paid from the Family Death Benefit Plan established in Section 4.1090 of this Chapter. The duly appointed, qualified and acting guardian of the estate of a minor child or an incompetent shall make such waiver and election on behalf of such minor child or incompetent. Whenever a member shall die while in City service leaving a survivor who would be eligible to receive the benefit provided herein if the deceased member had been eligible, at the time of the member’s death, to retire pursuant to Section 4.1055 if such member’s vacation time accrued immediately preceding the day of death pursuant to Article 1, Chapter 6, Division 4 of this Code or any applicable Memorandum of Understanding would have been added to the member’s years of service, the accrued vacation time of the deceased member or any necessary portion thereof shall be added to such member’s total years of service. The benefit herein created shall be available at the option of the eligible survivor of the deceased member. Accrued vacation time of a deceased member may only be utilized for purposes of establishing eligibility to the survivorship benefits provided herein, and may not be used to create or affect other retirement rights provided in the City Charter or the Los Angeles Administrative Code. (b) Death of Former Member before Retirement. Upon the death of any former member who had not yet retired, the former member’s accumulated contributions shall be paid to such person or legal entity as the former member shall have nominated by written designation duly executed and filed with the Board of Administration or, if there be no such written designation of beneficiary, then to the surviving spouse or domestic partner of such deceased member, or to the member’s children in the event there be no surviving spouse or domestic partner, or to the member’s parents in the event there be no surviving spouse or domestic partner or children. In the event there be no written designation of beneficiary, surviving spouse or domestic partner, children or parents, then said accumulated contributions shall be paid to the executor or administrator of the estate of such deceased member, or to any other person or legal entity legally authorized to collect money due the decedent. Every former member, including a former member who has established reciprocity with another retirement system, shall be limited to the rights provided in this paragraph if the former member dies prior to retirement. (c) Death of Retired Member. Upon the death of a retired member: (1) Continuance to a Survivor. A continuance of the retired member’s retirement allowance shall only be paid if the member elected to provide for a continuance to a survivor at the time of retirement. (2) Unused Contributions and Unpaid Retirement Allowance. Upon the death of a retired member or, upon the death of all of the member’s survivors to whom a retirement allowance was paid, the unused contributions and any accrued but unpaid retirement allowance of the retiree shall be paid in the same manner as that provided in Subsection (a)(1) of this section for the payment of the accumulated contributions of a member who dies before retirement; provided, however, that the retired member or any survivors shall not have received a retirement allowance pursuant to which no refund of contributions is payable upon the death of the retiree or the retiree’s last survivor, in which case no contributions shall be refundable. For the purpose of this Article, the phrase “unused contributions” shall be the remainder, if any, of the accumulated contributions of such deceased member after deducting the total of all amounts paid on account of any annuity to such retiree and to the retiree’s survivor or survivors, provided that there shall be no unused contributions in the event that the retiree or any survivors received a retirement allowance pursuant to which no refund of contributions is payable upon the death of the retiree or the retiree’s survivor. The spouse or domestic partner who is receiving a retirement allowance as a result of the retiree’s death, referred to as a survivor for purposes of this provision, may file a beneficiary designation with the Board of Administration naming a beneficiary or beneficiaries for any accrued but unpaid allowance payable upon the survivor’s death and, subject to the limitations set forth below, for the deceased’s unused contributions. Upon the survivor’s death, any accrued but unpaid allowance due the survivor shall be paid in the following order: (i) to the survivor’s designated beneficiaries; (ii) if none, to the children of the survivor; (iii) if no children, to the parents of the survivor; or (iv) if no parents, to the executor or administrator of the estate of the survivor or to any other person or legal entity legally entitled to collect money due to the survivor. Should the survivor leave no one legally entitled to collect any accrued allowance, it shall be paid in the following order: (i) to the deceased retired member’s children; or (ii) if none, to the deceased retired member’s parents; or (iii) if none, to the executor or administrator of the estate of the retired member or to any other person or legal entity legally entitled to collect money due to the deceased retired member. If the deceased member has failed to designate a beneficiary for the unused contributions or if the beneficiaries so designated by the deceased member have all predeceased the survivor, then upon the death of the survivor, the Board of Administration shall pay the unused contributions pursuant to the survivor’s beneficiary designation on file with the Board. In the event the survivor has no beneficiary designation on file or the named beneficiaries have all predeceased the survivor, then the unused contributions shall be paid in the following order: (i) to the deceased member’s children; or (ii) if none, to the deceased member’s parents; or (iii) if none, to the executor or administrator of the estate of the survivor or to any other person or legal entity legally entitled to collect money due to the deceased survivor. (3) Burial Allowance. Upon the death of every retired member, the sum of $2,500.00 shall be paid to one, and only one, person or legal entity whom the retired member shall have nominated by written designation duly executed and filed with the Board of Administration, or to the surviving spouse or domestic partner of such deceased retired member in the event there be no designated beneficiary, provided that such payment shall be made only after satisfactory evidence has been presented to the Board showing that the expense of burial of the decedent has been paid or that the obligation to pay therefor has been assumed by a person or persons or an organization legally capable of contracting such obligation. The fact of burial, as evidenced by a certified copy of the death certificate, shall be sufficient evidence of compliance with the requirements stated in the foregoing sentence. While the purpose of this benefit is to provide a funeral allowance for the deceased retiree, the Retirement System shall have no responsibility to assure that this payment is used for that purpose. In the event there be no designated beneficiary, surviving spouse or domestic partner, or in the event the requirements herein stated with respect to the expense of burial of such retired member have not been complied with within such time as said Board in its discretion may determine, then the payment of the amount specified in this provision shall be paid to the executor or administrator of the estate of such decedent or to any other person or legal entity legally authorized to receive money due said decedent. (d) Reversion of Unclaimed Contributions to the Retirement Fund. The right to payment of the accumulated contributions upon the death of the member or former member before retirement, as provided in Subsections (a) and (b) herein, and the right to payment of the member’s unused contributions, as provided in Subsection (c) herein, upon the later of the death of the retired member or the member’s survivor to whom an allowance was paid, is a vested property right of the person(s) entitled to such payment; provided, however, that should the person(s) entitled thereto fail to claim this benefit within ten (10) years from the date of such death, the funds shall revert to the Retirement Fund, unless and until, the Board of Administration receives a valid belated claim for payment determined at the sole discretion of the Board of Administration. Any death benefit payable shall be subject to mandatory minimum distribution as required by the Internal Revenue Code, provided that the funds that are required to be distributed shall revert to the Retirement Fund if the person(s) entitled to the funds refuses to cooperate in electing to be paid such funds or cannot be located and the Retirement System has followed Internal Revenue Service procedures to locate such person(s). SECTION HISTORY Added by Ord. No. 182,629, Eff. 7-25-13.

Los Angeles Administrative Code § 4.1061 Election to Provide an Allowance to a Designated Beneficiary Upon the Retiree’s Death.

Sec. 4.1061. Election to Provide an Allowance to a Designated Beneficiary Upon the Retiree’s Death. A member or former member may make an irrevocable election at the time of retirement, in writing, to provide for a continuance of the member’s or former member’s retirement allowance to one designated beneficiary. The retiree shall take an actuarial reduction of the retiree’s retirement allowance to pay for the continuance to a designated beneficiary. The retiree shall specify any whole percentage not to exceed one hundred percent (100%) as the portion of the retirement allowance to be paid as an allowance to the beneficiary, subject to any limits imposed by federal law. The allowance payable to the beneficiary shall commence the day following the retired member’s date of death and shall terminate upon the death of the beneficiary. The beneficiary’s continuance shall be subject to all cost of living and discretionary increases. A beneficiary under this section shall not be entitled to any disability retirement allowance, any basic death benefit, any special death benefit, any monthly allowance for survivors of a member or retired person, any insurance benefit or subsidy, or retired member lump-sum death benefit. The Board shall adopt rules to administer this continuance and shall formulate the benefits in such a way that no additional actuarial liability is incurred either by the System or by the City. SECTION HISTORY Added by Ord. No. 182,629, Eff. 7-25-13.

Los Angeles Administrative Code § 4.1062 Election to Provide an Optional Allowance to Specified Survivors Upon a Retiree’s Death.

Sec. 4.1062. Election to Provide an Optional Allowance to Specified Survivors Upon a Retiree’s Death. (a) Optional Retirement Allowance Election. At any time before the first payment of a service or disability retirement allowance, a member or former member who is retiring may elect to receive the actuarial equivalent of such retirement allowance as: (1) One Hundred Percent (100%) Continuance. An optional retirement allowance payable throughout the balance of the retiree’s life, with the provision that upon the retiree’s death, one hundred percent (100%) of such optional retirement allowance shall be continued through the life of and paid to the retiree’s surviving spouse or domestic partner; or to the retiree’s minor children, in the event there be no surviving spouse or domestic partner; or to the retiree’s dependent parents, in the event there be no surviving spouse or domestic partner or minor children, provided that, in the case of a minor child, the same shall terminate with the monthly payment next preceding the date on which said child attains the age of eighteen (18) years; or (2) Lesser Percent (%) Continuance. Any other optional allowance which the retiree may elect to receive and which shall be authorized by the Board, payable throughout the balance of the retiree’s life with the provision that, upon the retiree’s death, a specified percentage of such optional allowance selected by the retiree shall be continued through the life of and paid: to the retiree’s surviving spouse or domestic partner; or to the retiree’s minor children, in the event there be no surviving spouse or domestic partner; or to the retiree’s dependent parents, in the event there be no surviving spouse, domestic partner or minor children, provided that, in the case of a minor child, the same shall terminate with the monthly payment next preceding the date on which said child attains the age of eighteen (18) years. In order for the person who is the retiree’s spouse or domestic partner at the time of retirement to be eligible to receive the continuance provided in this section, this person must be the surviving spouse or surviving domestic partner of the retiree at the time of the retiree’s death. (b) Calculation of Optional Retirement Allowances. The amount of any optional retirement allowance granted pursuant to this section shall be so calculated that the liability of the system at the date of retirement under the optional retirement allowance shall be equal to the liability of the system at the same date under the retirement allowance provided in Sections 4.1057 or 4.1058. For the purpose of this section, the liability of the System is defined as the present value, in accordance with tables adopted by the Board, of the retirement allowance or optional retirement allowance calculated by approved actuarial methods, giving due weight to the average probabilities of survivorship of all parties involved in the allowance, or optional allowance, to the limitation of payments to age 18 in the case of a minor child, and to the requirement for refund of unused contributions after the death of the retiree or beneficiary, as provided for in Section 4.1060(c)(2). (c) Federal Law Limitations May Not Be Exceeded. No optional allowance shall be granted under the provisions of this section that exceed any limitations imposed by federal law. SECTION HISTORY Added by Ord. No. 182,629, Eff. 7-25-13.

Los Angeles Administrative Code § 4.1063 Right to Elect Life Annuity with No Refund of Contributions.

Sec. 4.1063. Right to Elect Life Annuity with No Refund of Contributions. Any member, former member, or the survivor of a deceased member who is eligible for a retirement allowance under the provisions of this Article may, in lieu of the annuity payment calculated on the basis of the refund of unused contributions, elect to receive an annuity payable only during the life or lives of the persons covered by the option with no payment due upon the death of the last survivor on account of unused contributions. In all other respects, the provisions of Section 4.1062(b) with respect to the liability of the System under the option being equal to the liability of the System under the retiree’s unmodified retirement allowance shall be applicable. SECTION HISTORY Added by Ord. No. 182,629, Eff. 7-25-13.

Los Angeles Administrative Code § 4.1064 Back Contributions.

Sec. 4.1064. Back Contributions. (a) Back Contributions for Past Periods of City Service. Every member who was a City employee during any period or periods in which the member was regularly employed, on a full-time basis or on a part-time basis, but was not a member, and thus not contributing to the Retirement Fund, shall have the option to designate all or any portion of such employment for which the member may receive retirement credit, provided, however, that the member is not receiving, and is not entitled to receive, for that period of City employment any benefit from any other pension or retirement system including, but not limited to, the Fire and Police Pension Plan, the Water and Power Employees’ Retirement Plan, the Limited Term Retirement Plan, the Pension Savings Plan for Part-time, Seasonal and Temporary Employees, and any union plan. Such option shall be exercised in writing, filed with the Board of Administration, designating the period of City employment for which the member desires to receive retirement credit, and must be accompanied by a single payment of back contributions or by an agreement to pay such back contributions in installments. The back contributions to be paid shall be in an amount equal to all of the contributions which the member would have made to the Fund had the member been a member during such period, together with all regular interest which, had the member so made the same, would have been credited thereon prior to the date of such payment; provided, however, that, in the case of such installment payment thereof, the same shall be made pursuant to the rules which shall be adopted by the Board of Administration establishing minimum amounts to be paid and the period of time within which they must be paid and, furthermore, providing the rate of interest which shall be paid upon the unpaid balance of the same. Should back contributions be made for any period of City employment prior to July 1, 2013, such contributions shall be in an amount equal to the portion of the contributions the member would have paid as normal contributions if that member had been a member of Tier 1 during such period, together with all regular interest which would have been credited thereon prior to the date of such payment, but excluding the portion that would have been paid as a survivor contribution. Every member who makes up back contributions, as hereinabove provided, shall be allowed credit for the period of City employment designated in the declaration filed by the member with the Board of Administration, the same as though that member had been a member during such period. Any such member shall be allowed, at any time, to make a single payment equal to the then present value of all of the unpaid installments in such manner as shall be determined by the Board. Should the member fail to make all of the payments required of the member under the provisions of this section, the member shall be allowed retirement credit, counter-calendarwise, for the same portion of such designated period as the amount made up by the member is of such full amount, and provided further, that, should the member cease to be a member by reason of the member’s death, retirement credit shall be allowed for the whole period designated by the member if the member’s surviving spouse or domestic partner exercises the option which, under such circumstances, hereby is given to such survivor to make a single payment equal to the then present value of all of the unpaid installments in such manner as may be determined by the Board. The written option hereinabove referred to shall be filed with the Board of Administration. For purposes of determining whether a member is not receiving, and is not entitled to receive, for a prior period of City employment any benefit from a non-City pension or retirement system, such as a union plan, the Board shall adopt rules regarding the proof that a member must provide to establish a right to make back contributions for such prior period of City employment since, for a non-City system, such information is not directly available to the Retirement System. Persons who become members of Tier 2 on or after January 1, 2014, shall not be eligible to make back contributions under this subsection for periods of employment with the Department of Water and Power. (b) Back Contributions for Periods of Participation in the Pension Saving Plan. Notwithstanding the provisions of Subsection (a), a member may receive retirement credit for any period or periods in which the member was a participant in the Pension Savings Plan for Part-time, Seasonal and Temporary Employees provided for in Chapter 16 of Division 4 of this Code. Such option shall be exercised in writing, filed with and subject to rules promulgated by the Board of Administration as provided for in Subsection (a) above. The amount of back contributions to be paid shall be the total of the following: (1) An amount equal to all of the contributions which the member would have made to the Fund had the member been a member during such period, together with all regular interest which would have been credited thereon by the Board of Administration prior to the date of such payment; and (2) The full amount of all contributions made to the Pension Savings Plan by the City on behalf of the member during such period or periods, plus all interest credited to those contributions by the Pension Savings Plan. With regard to any period of City employment prior to July 1, 2013, the amount required to be paid under (1), above, shall be an amount equal to the portion of the contributions the member would have paid as normal contributions if the member had been a member of Tier 1 during such period, together with all regular interest which would have been credited thereon prior to the date of such payment, but excluding the portion that would have been paid as a survivor contribution. (c) Back Contributions for Periods of Participation in the Limited Term Retirement Plan. Notwithstanding the provisions of Subsection (a) herein and Section 4.1850(g) of Chapter 18.5 of Division 4 of this Code, every person who is a member may receive service credit for any period or periods in which the person was a participant in the Limited Term Retirement Plan, provided for in Chapter 18.5 of Division 4 of this Code, by making back contributions, which shall be paid in one of the following manners: (1) All of the participant’s interest in the participant’s individual account with the Limited Term Retirement Plan, based upon contributions made both by the Participant and by the City, and any gains or losses thereon, shall be transferred from the Limited Term Retirement Fund to the LACERS Retirement Fund for credit to the member’s LACERS account and, upon receipt, shall constitute full payment for the buy back; or (2) Where the member’s entire account balance in the member’s former individual account with the Limited Term Retirement Plan, based upon contributions made both by the participant and by the City and any gains or losses thereon, is directly rolled over from the Limited Term Retirement Plan to another eligible retirement plan prior to January 1, 2003, provided these funds have been segregated and not co-mingled with any other funds, the trustee-to-trustee transfer of the total balance from that eligible retirement plan to the LACERS Retirement Fund for credit to the member’s LACERS account shall constitute full payment for the buy back; or (3) In all other cases in which the member’s Limited Term Retirement Plan account balance has been distributed, the amount of back contributions to be paid shall be in the amount of the entire lump sum distribution, whether received by the member or by any other person, together with all regular interest which would have been credited thereon by the Board of Administration subsequent to the date the lump sum was distributed had the member been a member during that period. This option shall be exercised in writing, filed with and subject to rules to be promulgated by the Board of Administration. The service credit purchased pursuant to this subsection shall count as continuous service credit for all LACERS benefits, the same as if the person had been a member during the entire period of time for which service credit is given. (d) Back Contributions for Periods when Member Received Workers’ Compensation Benefits. The Board of Administration shall, by rule, provide for the making up of contributions that a member failed to make for any period during which the member 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 the member’s employment with the City, together with an amount equal to the regular interest that would have been credited had the member made the contribution. (e) Back Contributions in Connection with Disability Denials. A limited right to make back contributions in connection with denials of disability applications is provided in Section 4.1058(j)(4). (f) Limitations on Back Contributions Imposed by Federal Law. Notwithstanding the provisions of Subsection (a), (b), and (c) herein, a member shall not be allowed to make back contributions to purchase retirement credit under this Section if the period of time being purchased constitutes “unqualified service” which the member is prohibited from purchasing under federal law. The Board shall adopt such rules as are necessary to comply with federal law, and may authorize payment methods that comport with federal requirements. SECTION HISTORY Added by Ord. No. 182,629, Eff. 7-25-13. Amended by: Subsec. (a), Ord. No. 182,824, Eff. 12-19-13.

Los Angeles Administrative Code § 4.1065 Redeposit of Formerly Withdrawn Contributions.

Sec. 4.1065. Redeposit of Formerly Withdrawn Contributions. Any former member of either Tier 1 or Tier 2 who received a refund of their contributions upon separating from the service of the City shall, upon again becoming a member, have the option to re-deposit with the Retirement Fund the amount previously withdrawn, together with regular interest, irrespective of any time period that may have elapsed since such separation. Such option shall be filed, in writing, with the Board of Administration. The amount of the contributions to be re-deposited shall be the sum of the amount of accumulated contributions withdrawn plus all of the regular interest which would have been credited thereon had said accumulated contributions remained on deposit in the fund to the date the member re-deposits such contributions either by a single lump sum payment or executes an agreement to pay such re-deposit in installments, except that should a member redeposit contributions refunded from Tier 1, only the amount of the refund attributable to normal contributions and interest thereon shall be required to be re-deposited together with regular interest thereon. The portion of the refund attributable to survivor contributions and interest thereon shall not be required to be re-deposited since Tier 2 does not provide survivor benefits funded by the Retirement System. In the case of installment payments, the Board of Administration shall establish the minimum amounts to be paid, the period of time therefor, the rate of interest which shall be paid on the unpaid balance of the same, and all other rules the Board may deem necessary for the carrying out of the provisions of this section. Any such member shall be allowed, at any time, to make a single payment equal to the then present value of all of the unpaid installments in such manner as shall be determined by the Board. Every member who makes a re-deposit as hereinabove provided shall be allowed retirement credit for the period of service for which the re-deposit is made; provided however, that the member is not receiving, and is not entitled to receive retirement credit for such period of service from any other pension or retirement system of the City of Los Angeles. Should the member fail to complete payment of the re-deposit, credit shall be allowed, counter-calendarwise, from the same portion of such designated period as the amount made up by the member is of such full amount, and provided further that, should the member cease to be a member by reason of the member’s death, retirement credit shall be allowed for the whole period for which the re-deposit is being made if the member’s surviving spouse or domestic partner exercises the option which, under such circumstances, hereby is given to such survivor to make a single payment equal to the then present value of all of the unpaid installments in such manner as shall be determined by the Board. SECTION HISTORY Added by Ord. No. 182,629, Eff. 7-25-13.

Los Angeles Administrative Code § 4.1066 Buy Back of Periods of Uncompensated Leave from City Service.

Sec. 4.1066. Buy Back of Periods of Uncompensated Leave from City Service. (a) Definitions. For the purpose 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: Leave of Absence shall mean an approved uncompensated leave of absence from City service, excluding any period of absence due to disciplinary suspension. Buy Back shall mean purchase by a member of retirement credit for periods of eligible leaves of absence from City service. (b) Eligibility. Every person who is a member on the effective date of this section, or who shall become a member subsequent thereto, shall be eligible to buy back credit for periods of uncompensated leave of absence from City service. (c) Application of Buy Back Credit. Buy back credit for periods of leave of absence from City service shall not count toward establishing the minimum ten (10) years of continuous service required to qualify for retirement under Subsection 4.1055(a), the minimum five (5) years of continuous service required to qualify for retirement under Subsection 4.1056(a), or the minimum (10) ten years of continuous service required to qualify for disability retirement under Subsection 4.1058(a). Further, such buy back credit shall not count as service or service credit for purpose of qualifying for any benefits provided in Chapter 11 of Division 4 of this Code. (d) Effect of Benefit Increases. If retirement benefits should be increased by City Council action pursuant to Section 1168 of the City Charter, such increased benefits shall be applicable to service credits purchased pursuant to this section. (e) Minimum Periods of Purchase. A member electing to buy back credit for periods of uncompensated leave of absence shall file with the Board of Administration a written application identifying the time periods for which credit is to be purchased. A member may buy back credit for one or more periods of uncompensated leave, except, however, a minimum of six (6) months of leave in the aggregate shall be purchased. Total buy back credit purchased shall not exceed the member’s actual City service at the time the buy back is concluded. (f) Agreement with the City Employees’ Retirement System - Buy Back Methods. A member electing to buy back credit described herein shall enter into a written agreement with the Retirement System. Such agreement shall provide that the member contribute an amount equal to the present value of the liability incurred by the System in crediting the service based upon actuarial assumptions in effect at the time the agreement is entered into or amended, and the projected retirement date contained in the agreement. Such agreement shall identify the method of payment of the additional contributions required to fund the purchased credit, which may be a specific dollar payment or percent of salary obligation. If a member elects to make the required contribution by a specific dollar payment, the payment may be made in a lump sum or in biweekly installments through payroll deduction over a period not to exceed five (5) years. If the member elects to enter into a percent of salary obligation, the member shall agree to make the contributions as a percent of salary through payroll deduction over a period extending from the date of the agreement with the Retirement System to a projected retirement date included in the agreement. (g) Termination or Completion of Agreement. A member who has entered into a buy back agreement shall complete all contributions prior to the effective date of retirement in order to receive agreed upon buy back credit. If all contributions have not been completed and the member elects to retire, the member may receive prorated buy back credit for that portion of the service which has been purchased by contributions already made and forfeit the remainder of credit covered by the agreement or may make a lump sum payment sufficient to complete the total payment covered by the agreement. In the event the member elects to retire at a later date than the age specified in the agreement after completing all payments, no adjustments shall be made in the buy back credit or the cost of such credit. A member who elects to terminate an after-tax agreement prior to its completion or at the time of retirement shall forfeit buy back credit and may elect to receive a cash refund of the buy back contributions and interest payable upon the earlier of death, termination of employment or retirement. (h) Member’s Death. In the event of the death of a member who has entered into a buy back agreement, the beneficiary of the member may receive a refund of the buy back contributions and interest thereon, or, if the beneficiary is a survivor who qualifies for benefits without the addition of buy back service credit, the beneficiary may elect to apply the credit, or a portion thereof, to the calculation of such benefits, or may elect to complete the terms of the agreement with a lump sum payment of the remaining amount owed. (i) Administration. The administration of this section shall be under the exclusive management and control of the Board of Administration. Said Board shall have, and is hereby granted, full power and authority to adopt and enforce all such rules and regulations as it may deem necessary for the carrying out of the provisions of this section. The Board of Administration shall have the right to construe this section, to interpret any provision thereof, to make rules and regulations relating to this section, and to determine any factual questions arising in connection with the operation of this section after such investigation or hearing as the Board may deem appropriate. Any decision made by the Board under the provisions of this section shall be conclusive and binding on all parties concerned. SECTION HISTORY Added by Ord. No. 182,629, Eff. 7-25-13.

Los Angeles Administrative Code § 4.1067 Government Service Buy Back Program.

Sec. 4.1067. Government Service Buy Back Program. (a) Definitions. For the purpose 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: Buy Back shall mean purchase by a member of retirement credit for periods of eligible service with other governmental entities or purchase by a member of retirement credit for uncompensated maternity leave. Full-time Service shall mean a minimum of six (6) months of uninterrupted service with an eligible governmental entity, excluding part-time service. Governmental Entity shall mean the United States Government, including its territories, any agency of the United States Government, the United States Postal Service and any branch of the United States military service, any state or political subdivision thereof, any local government or special district within any state in the United States; and shall exclude non-governmental agencies supported by government contracts or grants and any prior service with the City of Los Angeles. Government Service Buy Back Program or GSB shall mean the method for the buy back of retirement credit set forth in this section. Prior Plan shall mean a retirement plan of a governmental entity in which the member was a participant during full-time service. Uncompensated Maternity Leave shall mean a leave of absence from City Service taken for maternity reasons without pay, provided that such leave shall be a minimum of one (1) month and a maximum of twelve (12) months with respect to any one pregnancy. (b) Eligibility. A member is eligible to buy back credit for periods of full-time service with other governmental entities and to buy back credit for periods of uncompensated maternity leave. Notwithstanding the foregoing: (1) Members may not buy back credit for periods of service for which they are currently eligible or will become eligible to receive a retirement benefit from a prior plan. For purposes of the previous sentence, a member shall be treated as eligible for such benefit from a prior plan even if the member will not receive such benefit solely due to the member’s withdrawal of member contributions and interest from the prior plan, unless such withdrawal occurred prior to the member’s date of hire by the City or unless the member deposits the amount of such withdrawal within ninety (90) days of such withdrawal as a portion of the purchase cost. In addition, a member shall be treated as eligible for such benefit from a prior plan if the member received, at any time, a distribution from the prior plan in excess of member contributions and interest with respect to such period of service. The Board may extend the 90-day period if required for compliance with Section 415 of the Internal Revenue Code. In the event that, prior to the attainment of the minimum age and service for a service retirement under LACERS, the member becomes eligible to receive currently or in the future a retirement benefit from the prior plan with respect to such period of service, the corresponding buy back credit shall be canceled, and the member shall receive a refund of the payments made to purchase such buy back credit, with interest, payable upon the earlier of death, termination of employment, or retirement from City Service. (2) Members are not allowed to buy back credit for periods of service from a governmental entity which provides reciprocal benefits with LACERS and for which that member would be entitled to those reciprocal benefits. For purposes of the previous sentence, a member shall be treated as entitled to reciprocal benefits even if the member will not receive such benefits solely due to the member’s withdrawal of member contributions and interest from the prior plan, unless such withdrawal occurred prior to the member’s date of hire by the City. (3) Only a member performing City service as defined in Section 4.1051 shall be eligible to execute a buy back agreement. (4) For purposes of this section, the date of a withdrawal shall be deemed to be the date of receipt of the proceeds of the withdrawal by the member or other designated recipient. (5) Uncompensated Maternity Leave. Only a member who was on an active employment status immediately before and after taking a leave of absence for maternity reasons without pay shall be eligible to buy back credit for such leave of absence. (c) Application of Buy Back Credit. Purchased service credit shall only count for purposes of calculating the member’s service retirement allowance. Purchased service credit shall not count toward establishing the minimum ten (10) years of continuous service required to qualify for retirement under Subsection 4.1055(a), the minimum five (5) years of continuous service required to qualify for retirement under Subsection 4.1056(a), or the minimum ten years of continuous service required to qualify for disability retirement under Subsection 4.1058(a). Further, purchased service credit shall not count as service or service credit for purpose of qualifying for any benefits provided in Chapter 11 of Division 4 of this Code. (d) Minimum and Maximum Periods of Purchase. A member electing to buy back credit for previous service with other governmental entities or for periods of uncompensated maternity leave shall file with the Board of Administration a written application identifying the time periods and agencies for which credit is to be purchased, and shall submit proof acceptable to the Board of Administration establishing the fact of such other service with another governmental entity or such uncompensated maternity leave. Buy back credit for one or more periods of full-time service with another governmental entity prior to entrance or re-entrance into the Retirement System may be purchased, except, however, such purchase shall be limited to not less than six (6) months of uninterrupted service from a single entity. The six (6)-month minimum requirement does not apply to the uncompensated maternity leave. The period(s) of service purchased shall be limited to a total of four (4) years. (e) Written Agreement and Cost of Purchase. A member electing to buy back credit described herein shall enter into a written agreement with the Retirement System. Such agreement shall specify the amount to be paid for the purchase of this service credit. The cost to purchase service credit shall be determined as follows: The member’s contribution rate shall be combined with the “City Contribution Rate” (as defined below) to establish the total percent of the member’s compensation, at the time of purchase, that is to be paid for the total length of the period of service credit (not to exceed four years) that the member agrees to purchase. Compensation as used in this subsection shall refer to the member’s compensation earnable, as defined in Subsection 4.1051(a), at the time of purchase. As an example, assuming the member’s compensation at the time of purchase is $100,000.00 per year, the member’s contribution rate is ten percent (10%), the City Contribution Rate is twenty percent (20%), and the period of service credit to be purchased is two (2) years, the cost would be determined as follows: The ten percent (10%) member contribution rate plus the twenty percent (20%) City Contribution Rate results in a total contribution rate of thirty percent (30%). Thus, to purchase two (2) years of service credit would cost the member a total of $60,000.00 (thirty percent (30%) of the member’s $100,000.00 compensation for each year of service purchased). The “City Contribution Rate” shall be the average annual percent of payroll contributed by the City to the Retirement Fund (excluding contributions allocated to fund the 401(h) account) for Tier 2 based upon the City’s payments for the seven years prior to the time of purchase. For the first seven (7) years commencing January 1, 2013, this rate shall be computed upon the City’s average annual percentage of payroll contributions to Tier 2, with the rate for any missing year(s) based upon the average of the annual rate(s) for the prior year(s). (f) Method of Purchase. (1) The member may elect to pay on an after-tax basis in a lump sum or in biweekly installments through payroll deduction, subject to any applicable Internal Revenue Code restrictions. (2) The Board may establish rules to allow members to pay for purchases via rollovers of funds. (3) Should the member elect to purchase the buy back service credit through payroll deduction, annual interest at a rate determined by the Board and set at the commencement of the agreement shall be charged. The Board may establish a minimum biweekly payroll deduction. (g) Execution of the Agreement. A member entering into a buy back agreement shall complete all contributions prior to the effective date of retirement in order to receive agreed upon buy back credit. In the event the member elects to retire prior to completion of the buy back agreement, the member may receive prorated buy back credit for that portion of the service with other governmental entities or uncompensated maternity leave which have been purchased by contributions already made and forfeit the remainder of credit covered by the agreement; or the member may make a lump sum payment sufficient to complete the total payment covered by the agreement. Additionally, a member who elects to terminate an after-tax agreement prior to its completion, or at the time of retirement, may elect to receive a cash refund of the buy back contributions and interest payable upon the earlier of death, termination of employment or retirement or prorated buy back credit. (h) Member’s Death. In the event that a member who has entered into a buy back agreement dies prior to retirement, the funds paid for this purchase shall be considered to be a part of the member’s accumulated contributions and shall be refunded accordingly, with interest thereon computed at the rate applicable to regular member contributions. (i) Member’s Disability Retirement. Because purchased service credit does not count towards disability retirement benefits, at the time of the member’s disability retirement the member may elect either to receive a refund of the funds paid for this purchase, including interest thereon, or to apply these funds to purchase a larger annuity. (j) Limits on Purchase. In the event part or all of the purchased service credit at the time of retirement would cause the member’s service retirement allowance to exceed 75% of final compensation, the purchase cost attributable to any excess service credit that may not be used in the retirement formula, including interest thereon, shall be refunded or may be applied by the member to purchase a larger annuity if doing so does not cause the retirement allowance to exceed any federal limitations that may apply. (k) Administration. The administration of this section shall be under the exclusive management and control of the Board of Administration. Said Board shall have, and is hereby granted, full power and authority to adopt and enforce all such rules and regulations as it may deem necessary for the carrying out of the provisions of this ordinance. The Board of Administration shall have the right to construe this section, to interpret any provision thereof, to make rules and regulations relating to this section, and to determine any factual questions arising in connection with this section’s operation after such investigation or hearing as the Board may deem appropriate. Any decision made by the Board under the provisions of this section shall be conclusive and binding on all parties concerned. SECTION HISTORY Added by Ord. No. 182,629, Eff. 7-25-13.

Los Angeles Administrative Code § 4.1067.1 Purchase of Service with WPERP.

Sec. 4.1067.1. Purchase of Service with WPERP. A member may purchase credit for periods of service with the Water and Power Employees’ Retirement Plan (WPERP) on the terms and conditions set forth below, except that periods of noncontributory WPERP service may not be purchased. (a) Contributions Must Be Transferred. A member may not purchase credit for periods of service with WPERP so long as the member’s contributions remain on deposit with WPERP unless the member authorizes a transfer of the member’s WPERP contributions to the Retirement Plan, to be credited towards payment pursuant to this section. (b) Treatment of Purchased Service. Service purchased under this section shall be treated the same as LACERS service for purposes of establishing the minimum ten (10) years of continuous service required to qualify for retirement under Subsection 4.1055(a), the minimum five (5) years of continuous service required to qualify for retirement under Subsection 4.1056(a), or the minimum ten (10) years of continuous service required to qualify for disability retirement under Subsection 4.1058(a), except that WPERP service purchased under WPERP’s Other Governmental Service (OGS) program shall not be treated the same as LACERS service for the aforementioned purposes. WPERP service purchased under WPERP’s OGS program when purchased with the Retirement Plan shall only count as service credit for purposes of calculating the member’s service retirement allowance or disability retirement allowance, as applicable. Service purchased under this section shall not count as service or service credit for the purpose of qualifying for any benefits provided in Chapter 11 of Division 4 of this Code. (c) Written Agreement and Cost of Purchase. A member electing to purchase WPERP service under this section shall enter into a written agreement with the Retirement System. Such agreement shall specify the amount to be paid for the purchase of this service. The cost to purchase service shall be determined as follows: The member’s contribution rate shall be combined with the “City Contribution Rate” (as defined in Subsection (e) of Section 4.1067) to establish the total percent of the member’s compensation, at the time of purchase, that is to be paid for the total length of the period of service that the member agrees to purchase. Compensation as used in this subsection shall refer to the member’s compensation earnable, as defined in Subsection 4.1051(a), at the time of purchase. As an example, assuming the member’s compensation at the time of purchase is $100,000.00 per year, the member’s contribution rate is ten percent (10%), the City Contribution Rate is twenty percent (20%), and the period of service to be purchased is two (2) years, the cost would be determined as follows: The ten percent (10%) member contribution rate plus the twenty percent (20%) City Contribution Rate results in a total contribution rate of thirty percent (30%). Thus, to purchase two (2) years of service would cost the member a total of $60,000.00 (thirty percent (30%) of the member's $100,000.00 compensation for each year of service purchased). (d) Method of Purchase. (1) The member shall transfer any contributions the member has on deposit with WPERP as payment towards the member’s purchase cost. (2) The member may elect to pay on an after-tax basis in a lump sum or in biweekly installments through payroll deduction, subject to any applicable Internal Revenue Code restrictions. (3) The Board may establish rules to allow members to pay for purchases via rollovers of funds. (4) Should the member elect to purchase the buy back service credit through payroll deduction, annual interest at a rate determined by the Board and set at the commencement of the agreement shall be charged. The Board may establish a minimum biweekly payroll deduction. (e) Execution of the Agreement. A member entering into a purchase agreement shall complete all payments prior to the effective date of retirement in order to receive full credit for the service purchased. In the event the member elects to retire prior to completing payment under the purchase agreement, the member may receive prorated credit for that portion of the service for which payments have already been made and forfeit the remainder of service covered by the agreement; or the member may make a lump sum payment sufficient to complete the total payment covered by the agreement. Additionally, a member who elects to terminate an after-tax agreement prior to its completion, or at the time of retirement, may elect to receive a cash refund of the purchase contributions and interest payable upon the earlier of death, termination of employment or retirement, or to receive prorated service at retirement. (f) Member’s Death. In the event that a member who has entered into a purchase agreement dies prior to retirement, the funds paid for this purchase shall be considered to be a part of the member’s accumulated contributions and shall be refunded accordingly, with interest thereon computed at the rate applicable to regular member contributions. (g) Limits on Purchase. In the event part or all of the purchased service credit at the time of retirement would cause the member’s service retirement allowance to exceed seventy-five percent (75%) of final compensation, the purchase cost attributable to any excess service credit that may not be used in the retirement formula, including interest thereon, shall be refunded or may be applied by the member to purchase a larger annuity if doing so does not cause the retirement allowance to exceed any federal limitations that may apply. (h) Administration. The administration of this section shall be under the exclusive management and control of the Board of Administration. Said Board shall have, and is hereby granted, full power and authority to adopt and enforce all such rules and regulations as it may deem necessary for the carrying out of the provisions of this section. The Board of Administration shall have the right to construe this section, to interpret any provision thereof, to make rules and regulations relating to this section, and to determine any factual questions arising in connection with this section’s operation after such investigation or hearing as the Board may deem appropriate. Any decision made by the Board under the provisions of this section shall be conclusive and binding on all parties concerned. SECTION HISTORY Added by Ord. No. 182,824, Eff. 12-19-13.

Los Angeles Administrative Code § 4.1068 Larger Annuity Program.

Sec. 4.1068. Larger Annuity Program. The Board of Administration shall, by rule, provide for the making of additional contributions to provide 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 4.1076. All larger annuity benefits funded by the making of additional contributions, as authorized in this section, shall be determined by the actuary 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. The Board of Administration shall have the authority to adopt all rules necessary to administer the larger annuity program within the constraints established in this Section, including the authority to establish a deadline for the receipt of the rollover funds, after which the member’s application shall be deemed denied. SECTION HISTORY Added by Ord. No. 182,629, Eff. 7-25-13.

Los Angeles Administrative Code § 4.1069 Cost of Living Adjustment.

Sec. 4.1069. Cost of Living Adjustment. (a) The provisions of this section shall not be applicable to any benefit payable pursuant to the provisions of Section 4.1060(a)(2). The provisions of this section, however, shall be applicable to each other benefit payable in monthly installments pursuant to any other provisions of this Article, but the application thereof to any such benefit shall not reduce the amount to be paid on, or subsequent to, July 1st of any year to an amount less than that payable immediately prior to July 1st of said year. (b) The Board of Administration, not later than the 1st day of May of each year, shall determine with respect to the Federal Bureau of Labor Statistics Consumer Price Index for the Los Angeles area (“the C.P.I.”) the percentage of increase or decrease, if any, in the C.P.I. for the whole of the first next preceding calendar year from the C.P.I. for the whole of the second next preceding calendar year and shall round any such percentage increase or decrease to the nearest one-tenth (1/10) of one percent (1%). (c) The Board, whenever it shall have determined that there had been an increase or decrease in the C.P.I., shall increase or decrease the amount of each such benefit as hereunder provided, subject, however, to the limitations contained in Subsection (a) of this section: Effective the 1st day of July of each year, beginning with the year 2014, the Board of Administration, with respect to each eligible benefit which became payable prior to the applicable 1st day of July, shall increase or decrease the amount thereof payable immediately prior to the applicable 1st day of July by one-twelfth (1/12) of the percentage of increase or decrease in the C.P.I. as determined by it pursuant to Subsection (b) of this section, for each whole month that such benefit was payable during the year commencing the 1st day of July next preceding the applicable 1st day of July and ending the 30th day of June next preceding the applicable 1st day of July, providing that any increase or decrease in the amount of any such benefit shall not exceed one-twelfth (1/12) of two percent (2%) thereof for each whole month that it was payable during the year. (d) The amount of any benefit which shall be continued to any survivor upon the death of a retired member shall be in the same ratio to the amount of the benefit which such member shall have been receiving as of the date of the member’s death as the amount of the benefit which originally would have been continued to such survivor shall bear to the amount of the benefit which originally was payable to such member. (e) If it were to be impossible or impracticable for the Board to cause all necessary calculations to be made in time for it to include any increases or decreases in the amounts of benefits, as hereinabove provided, in the demands drawn in payment of such benefits for the month of July in any year, then the Board shall have the power and authority, when such calculations shall have been made, to increase or decrease the amounts of the demands drawn in payment of such benefits for any month subsequent to the month of July so as to include any increases or decreases in such benefits which shall have accumulated from and after the 1st day of July. (f) The Board shall adopt rules to allow a member to purchase additional cost of living adjustment (COLA) coverage, not to exceed an additional one percent (1%) per year, provided that the member shall pay the full actuarial cost for this additional benefit. If a retiree has purchased an additional annuity, the additional COLA coverage shall not apply to the additional annuity unless the member has paid the full actuarial cost to extend the additional COLA coverage to include the additional annuity benefit. SECTION HISTORY Added by Ord. No. 182,629, Eff. 7-25-13.

Los Angeles Administrative Code § 4.1070 Discretionary Cost of Living Adjustments.

Sec. 4.1070. Discretionary Cost of Living Adjustments. (a) There is hereby created and established a policy whereby the City Council shall periodically review the matter of the cost of living adjustments for certain beneficiaries who receive retirement benefits from the Retirement System. The review shall be made to ascertain the impact of increases in the Consumer Price Index upon retirement benefits and the adequacy of the annual cost of living adjustments provided in Section 4.1069 of the Los Angeles Administrative Code. Should the City Council find and determine that annual cost of living adjustments are inadequate in light of the movement of the Consumer Price Index, the City Council may grant additional, but discretionary, cost of living adjustments as hereinafter provided. (b) The first of the reviews provided in Subsection (a) hereof shall be made during the third fiscal year following the date that the first beneficiary of Tier 2 receives a benefit that is subject to a cost of living adjustment, pursuant to Section 4.1069, and annually thereafter until the City Council has provided a first discretionary adjustment pursuant to this section. Thereafter, the City Council shall make periodic reviews in intervals not to exceed three (3) years from the date of the completion of the last review or from the effective date of the last discretionary cost of living adjustments, whichever shall be the later. (c) Should it be the finding of the City Council that discretionary cost of living adjustments would be in order, any such adjustments would be subject to the following limitations: (1) The first discretionary adjustment may be granted at any time. Thereafter, discretionary adjustments may not be provided more frequently than once every three (3) years, counting from the date the last discretionary adjustments became effective. (2) Discretionary adjustments shall not exceed one-half (1/2) of the difference between the percentage of the annual increases in the cost of living, as determined pursuant to the provisions of Section 4.1069(b) herein, for each of the preceding three (3) years and the annual adjustments made pursuant to Section 4.1069(c). Discretionary adjustments shall be allocated to each of the three (3) years for which an adjustment is made. (3) Any discretionary cost of living adjustments provided pursuant to the provisions of this section shall be subject to the following further limitation: If a benefit became payable on or after July 1 immediately preceding the effective date of such adjustments, it shall not be so adjusted; and any benefit which shall become payable at a time within a three-year period between discretionary cost of living adjustments (but prior to the immediately preceding July 1), shall be prorated according to the annual increase, on a monthly basis, to the number of completed months for which the benefit was received. (4) Discretionary cost of living adjustments may be granted only by ordinances adopted in accordance with the provisions of Section 1168 of the City Charter. (5) All adjustments provided in this subsection are to be applied prospectively only, and shall not be understood to permit retroactive adjustments of benefits. (d) Discretionary cost of living adjustments shall only be applied to monthly benefits not otherwise excluded from cost of living adjustments under the provisions of Section 4.1069 of this Chapter. (e) It shall be the duty of the Director of the Office of Administrative and Research Services to prepare appropriate reports and recommendations to enable the City Council to make findings as to the adequacy of the annual cost of living adjustments. SECTION HISTORY Added by Ord. No. 182,629, Eff. 7-25-13.

Los Angeles Administrative Code § 4.1071 Waiver of Benefits.

Sec. 4.1071. Waiver of Benefits. Each beneficiary, as defined in Charter Section 1152, shall have the right, at any time, to waive payment of the whole or any portion of any benefit whatsoever, or of any increase in the amount of any benefit which is, or shall become, payable to the beneficiary pursuant to any provision of this Chapter, and may waive payment thereof forever or for a definite or indefinite period of time. Any such waiver shall be in writing, shall be filed with the Board of Administration and shall be effective as of the first day of the month following the month in which it shall be filed. Each beneficiary who shall make and file such a waiver shall have the right, at any time, to cancel the same. Any such cancellation shall be in writing, shall be filed with the Board of Administration, and shall be effective as of the first day of the month following the month in which it shall be filed. Any such waiver shall constitute a complete release, discharge and acquittance of the City of Los Angeles and the Board of Administration from any and all liability to pay any amount or amounts of any benefits which shall be waived by any such beneficiary. SECTION HISTORY Added by Ord. No. 182,629, Eff. 7-25-13.

Los Angeles Administrative Code § 4.1072 Unclaimed Benefits Revert to the Retirement Fund.

Sec. 4.1072. Unclaimed Benefits Revert to the Retirement Fund. Any benefit payable from the Retirement System that is not claimed shall revert to the Retirement Fund. Unless there is a different claim period specified elsewhere in this article, benefits payable from the Retirement System must be claimed within one (1) year. If the person entitled to a benefit is a minor, the period in which to claim the benefit shall be tolled until the person attains age eighteen (18). In the event that a beneficiary is entitled to a benefit from the Retirement System, but payment cannot be made for any reason, such as the beneficiary’s failure to cooperate, where the beneficiary’s whereabouts is unknown or where a beneficiary has failed to cash an outstanding check within such reasonable time period as established by Board rule, and the Retirement System has followed Internal Revenue Service procedures to locate the beneficiary, the funds due to the beneficiary shall be forfeited to the Retirement Fund, provided that a beneficiary shall be relieved from such forfeiture upon receipt of a request from the beneficiary, or anyone authorized to act on the beneficiary’s behalf. SECTION HISTORY Added by Ord. No. 182,629, Eff. 7-25-13.

Los Angeles Administrative Code § 4.1073 Board Determinations.

Sec. 4.1073. Board Determinations. If it shall be impracticable for the Board to determine from the records the length of service, the compensation, either final or earnable, or the age of any member, the said Board may estimate, for all purposes of this Article, such length of service, compensation or age. It shall determine and fix the amount of service rendered, which shall be the equivalent of a year of service, provided that not more than one (1) year of service shall be credited for all services rendered during any one year. In all cases where compensation of any member consists, in part, of payment for the use of equipment owned and operated by such member personally, the Board of Administration shall fix and determine, for all purposes of this Article, a compensation for the personal service of such member, which shall be in keeping with the salary or wage paid by said City for comparable service, and the compensation so fixed by the Board shall be the basis, and the only basis, for the calculation of the contributions of such member and any and all benefits provided for in this Article. Each member shall file with said Board such information affecting the member’s status as a member of said Retirement System, as said Board may require, and the administrative head of each department of the City government shall furnish to said Board such information relative to any member, and the member’s status, as it may request. SECTION HISTORY Added by Ord. No. 182,629, Eff. 7-25-13.

Los Angeles Administrative Code § 4.1074 Rule Making Power of the Board.

Sec. 4.1074. Rule Making Power of the Board. (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.

Los Angeles Administrative Code § 4.1075 Provision Required to Comply with the Pension Protection Act of 2006 § 822(a) Regarding Rollover Distributions.

Sec. 4.1075. Provision Required to Comply with the Pension Protection Act of 2006 § 822(a) Regarding Rollover Distributions. (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.

Los Angeles Administrative Code § 4.1076 Provision Required to Comply with Internal Revenue Code Section 401(a)(37) and the Heroes Earnings Assistance and Relief Tax Act of 2008 § 104(a).

Sec. 4.1076. Provision Required to Comply with Internal Revenue Code Section 401(a)(37) and the Heroes Earnings Assistance and Relief Tax Act of 2008 § 104(a). (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.

Los Angeles Administrative Code § 4.1077 Provision Required to Comply With Internal Revenue Code Section 401(a)(9).

Sec. 4.1077. Provision Required to Comply With Internal Revenue Code Section 401(a)(9). 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.

Los Angeles Administrative Code § 4.1077.1 Additional Provisions Required for Retirement System Compliance with the Internal Revenue Code.

Sec. 4.1077.1. Additional Provisions Required for Retirement System Compliance with the Internal Revenue Code. 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.

Los Angeles Administrative Code § 4.1078 Former Spouse or Domestic Partner’s Option to Elect a Life Annuity.

Sec. 4.1078. Former Spouse or Domestic Partner’s Option to Elect a Life Annuity. 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.

Los Angeles Administrative Code § 4.1079 Separate Account Option in Legal Separations or Dissolutions.

Sec. 4.1079. Separate Account Option in Legal Separations or Dissolutions. Separate accounts, on the terms and conditions set forth in this section, may be established under a court order dividing community property in connection with a legal separation or a dissolution, provided that the order is entered prior to the member’s retirement. Separate accounts cannot be established by a court order entered after the member’s retirement. (a) Court Order Required for Separate Accounts. When a court of competent jurisdiction orders the division of community property prior to the member’s date of retirement, the court may order that the accumulated contributions, plus regular interest and service credit attributable to periods of service during the marriage, be divided into two separate and distinct accounts in the name of the member and the nonmember, respectively. Any service credit or accumulated contributions that are not explicitly awarded by the court order shall be deemed the separate property of the member, in which the nonmember shall have no further interest. The nonmember who is awarded a separate account under this section shall be required to make an irrevocable written election to either receive a refund of contributions or a separate account allowance, provided the nonmember must be eligible for the option that is elected. If said election is not timely made, the nonmember shall be deemed to have chosen a refund of contributions. (b) Definitions. For purposes of this section, the following terms shall mean: Nonmember means the spouse, former spouse, domestic partner, or former domestic partner of a member who, as a result of petitioning the court for the division of community property, has been awarded a separate account reflecting specific credited service and accumulated contributions. Separate Account Allowance means the monthly amount remitted to a nonmember based on the division of community property, by a court of competent jurisdiction, into a separate account reflecting specific credited service and accumulated contributions, actuarially reduced to provide an annuity for life. Final Monthly Average Compensation, for a nonmember only, is the monthly average of the member’s highest consecutive twelve (12) months of salary at the time of separation. (c) Benefits Available to Nonmember Awarded a Separate Account. (1) Refund of Contributions. (i) A nonmember who is awarded a separate account shall have the right to a refund of the accumulated contributions plus regular interest in the separate account of the nonmember. A nonmember who elects a refund of contributions is deemed to have permanently waived all rights in this System and all rights to any future retirement benefits pertaining to the service credit, accumulated contributions, or both, when the refund becomes effective. The nonmember may not cancel a refund once it has become effective, nor may the nonmember redeposit a refund once it has been paid. (ii) If, at the time of separation, the member does not have five (5) years of service credit in the System, the nonmember who has been awarded a separate account shall only receive a refund of the accumulated contributions and regular interest placed in the nonmember’s account. (iii) A nonmember who has elected a refund of contributions, or whose only separate account right is to a refund of contributions, shall not have interest credited to the contributions in the nonmember’s separate account after the date of the member’s retirement or death, whichever occurs first. The nonmember’s right to receive a refund of all the contributions in the nonmember’s account on such date is a vested property right; provided, however, that, should the nonmember fail to request a refund within ten (10) years from the date of the member’s death or retirement, as applicable, said contributions shall be removed from the nonmember’s separate account and shall revert to the Retirement Fund, unless and until the Board of Administration receives a valid belated refund request, determined at the sole discretion of the Board of Administration, which shall be granted. If the nonmember attains age seventy and a half (70 1/2) with contributions still on deposit in the nonmember’s separate account, the nonmember’s contributions shall be subject to mandatory distribution, as required by the Internal Revenue Code, provided that, if such person cannot be located and paid such mandatory distribution and the Retirement System has followed Internal Revenue Service procedures to locate the beneficiary, such funds shall revert to the Retirement Fund, as provided above, unless and until the Board of Administration receives a valid belated refund request, determined at the sole discretion of the Board of Administration, which shall be granted. (2) Separate Account Allowance. (i) Unless the nonmember has elected to receive, or has received, a refund of contributions, a nonmember who is awarded a separate account shall be entitled to receive a Separate Account Allowance paid monthly for life, provided that a timely written election has been made and that both of the following conditions are met: (A) On the date of separation the member had five (5) years of service credit in the System; and (B) The member was eligible to receive a service retirement allowance on the date that the separate account allowance begins. (ii) The amount of the Separate Account Allowance shall be based on the service retirement formula in effect on the date of separation applicable to the service credited to the nonmember by the employer and the effective date of the nonmember’s Separate Account Allowance, actuarially reduced to provide an annuity for life. The Separate Account Allowance shall be subject to all cost-of-living and discretionary increases. (iii) The Separate Account Allowance shall consist of a pension and a life annuity, the latter of which shall be derived from the nonmember’s accumulated contributions. The Separate Account Allowance shall terminate upon the death of the nonmember. (3) Election of Nonmember Benefits. The nonmember may make an irrevocable election, in writing, to receive the benefit provided under this section as either a refund of contributions or a Separate Account Allowance at any time after the entry of the court order and before the member’s retirement or death, whichever occurs first. A nonmember who elects a refund of contributions may request a refund of contributions at the time the election is made or any time thereafter. A nonmember who elects a Separate Account Allowance may request the allowance to begin at the time the election is made or at any time thereafter so long as the conditions set forth in Section 4.1079(c)(2)(i) have been met by the date the monthly allowance is to begin. The nonmember shall be deemed to have elected a refund of contributions if an irrevocable written election is not made either prior to the member’s retirement or death, whichever occurs first, or within such period following the retirement or death as provided by Board rule. The Board of Administration shall adopt rules establishing a limited period following the member’s retirement or death, as applicable, in which a nonmember who has not yet made an election may be allowed to make an irrevocable written election. If within the period established by Board rule the nonmember elects to take a separate account allowance, the allowance shall begin on the day prior to the member’s retirement or death, as applicable, so long as the conditions set forth in Section 4.1079(c)(2)(i) have been met by that date. (4) Benefits Not Granted to Nonmember. A nonmember whose dissolution is final shall not be entitled to any disability retirement allowance, any basic death benefit, any special death benefit, any monthly allowance for survivors of a member or retired person, any insurance benefit, medical or dental subsidy, or retired member lump-sum death benefit. No survivor continuance allowance shall be payable to a survivor of a nonmember. (d) Calculation of Member’s Service Retirement Allowance. A member whose retirement is divided under the provisions set forth above shall receive a monthly retirement allowance based on all service credit and the member’s final compensation at the date of retirement, as provided under the provisions of this Article, subject to reduction by the value of the separate account determined as follows: (1) If the separate account was paid as a refund of contributions, the service credit and contributions awarded to the nonmember shall not be included in the calculation of the member’s retirement allowance except to the extent that the member has re-deposited funds as provided in Section 4.1079(f)(1). (2) If the nonmember elected to receive a Separate Account Allowance, the service credit and contributions awarded to the nonmember shall not be included in the calculation of the member’s retirement allowance except to the extent that the member has paid to purchase service credit as provided in Section 4.1079(f)(2). (3) If the nonmember has not elected to receive either a refund of contributions or a Separate Account Allowance prior to the member’s retirement, the service credit and contributions awarded to the nonmember shall not be included in the calculation of the member’s retirement allowance. (e) Calculation of Member’s Disability Retirement Allowance. Members whose retirement is divided under the provisions set forth above shall receive a monthly disability retirement allowance as provided for in Section 4.1058, except that the portion of accumulated contributions credited to the nonmember will be treated as missed deductions in the member account. (f) Buy Back of Funds Allocated to Nonmember. (1) If a nonmember receives a refund of contributions and interest, the member may re-deposit these funds, together with any accumulated interest these funds would have earned if the refund had not occurred, to the System, subject to rules adopted by the Board of Administration, and receive full credit for the period of time represented by these funds. (2) If a nonmember elects to receive a Separate Account Allowance, the member may purchase service credit not to exceed the years of service credited to the nonmember. The purchase of this service credit shall be the full actuarial cost and subject to rules adopted by the Board of Administration. (g) Duties and Responsibilities of the Board of Administration. The Board of Administration shall adopt rules to administer separate accounts ordered by a court of competent jurisdiction and shall formulate benefits applicable to these separate accounts in such a way that no additional actuarial liability is incurred either by the System or by the City. SECTION HISTORY Added by Ord. No. 182,629, Eff. 7-25-13.
Source: City of Los Angeles, Charter and Codes (American Legal Publishing, codelibrary.amlegal.com)URL: https://codelibrary.amlegal.com/codes/los_angeles/latest/laac/0-0-0-16102Fetched: 10/24/2026

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