Plan Book D for General Members

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Section 1:

Welcome

About Your LACERA Defined Benefit Plan

All LACERA retirement plans are defined benefit plans; as such they promise to pay a specified monthly benefit at retirement. (See Active Service > More About Your Defined Benefit Plan.) The monthly allowance you will receive at retirement under Plan D is a lifetime benefit, payable every month for the rest of your life.*

The funds in your defined benefit retirement plan are invested by LACERA. You do not bear the risk of adverse investment performance. Benefits granted under Plan D are determined solely by the provisions set forth in the Plan; they are not affected by market volatility. This differs from a defined contribution plan such as a 457 or 401(k) plan, in which you make the investment decisions and bear the associated risks. In those types of plans, your benefit payments stop when the money is exhausted.

Your LACERA Plan D retirement benefits will not run out; you cannot outlive them.

*Certain eligibility rules apply.

Three Factors Determine Your Retirement Benefits

The specifics of your retirement benefits are determined by your age at retirement (calculated in quarter-years), amount of service credit, and final compensation — in accordance with the provisions of your Plan. Any Plan D member who meets the minimum age and service requirements may retire for service and receive a monthly lifetime retirement allowance.

Summary of Provisions (The Basics)

Contributions

Member makes contributions through pre-tax payroll deductions*

Employer makes contributions

Vesting

After five years of County (or combined County and reciprocal system) service credit

Retirement Eligibility

Age 50 with 10 years of County (or combined County and reciprocal system) service credit

Any age with 30 years of County (or combined County and reciprocal system) service credit

Age 70, regardless of years of service credit

Final Compensation

Based on highest monthly average of compensation earnable during any 12-consecutive-month period of service

Maximum Retirement Allowance

Equal to 100 percent of final compensation**

*Contributions for benefits resulting from industrial accidents may be made on an after-tax basis.

**LACERA plans are subject to benefit and compensation limits under Internal Revenue Codes §§ 401(a)(17) and 415(b) and PEPRA §7522.10 as applicable.

Benefit Enhancements*

Purchasable Service Credit

Certain County and non-County employment prior to LACERA membership

Additional Retirement Credit (ARC) purchased prior to January 1, 2013

Reciprocity

Protects retirement benefits when employees transfer between reciprocal public agencies

Retiree Healthcare

Eligible for LACERA-administered retiree healthcare benefits

Cost-of-Living

Retirement allowance eligible for cost-of-living (COLA) increases

*Certain eligibility requirements apply.

Disability, Death, and Survivor Provisions

Disability Benefits

LACERA pays disability benefits if the Board of Retirement determines an active member has become disabled

Death Benefits

LACERA pays death benefits if a member dies in active service

LACERA pays a $5,000 death/burial benefit when a retired member dies, unless they were later employed by another system under the County Employees Retirement Law (CERL).

Continuing Benefits

Upon the death of a retired member, LACERA pays up to 100 percent of the member’s retirement allowance to an eligible survivor or eligible designated beneficiary*

*Certain eligibility conditions and restrictions apply.

Benefits Provided by Los Angeles County

Retiree Healthcare Subsidy

County subsidizes retiree medical/dental insurance based on a minimum of ten years of service credit

Disability Benefits

County pays disability benefits in the event an active member becomes disabled*

Death Benefits

County pays death benefit in the event an active member dies

Life Insurance

County provides $2,000 life insurance benefit for active members who die in service**

*Certain eligibility conditions and restrictions apply.

**Eligible employees may purchase additional coverage. County-sponsored life and disability insurance benefits and options vary for MegaFlex participants. LACERA does not administer these benefits; contact your Department for details on County-sponsored/administered insurance benefits.

Contributing to Plan D

Plan D members make semimonthly contributions to the Plan through automatic payroll deductions. Your contribution rate is a percentage of your compensation earnable. That percentage is based on your entry age into LACERA; it remains based on your entry age throughout your career, regardless of how many years you work.

For example, if your official entry age is 30, your contributions will always be based on the age 30 rate.

Although your contribution rate will always be based on your LACERA entry age, it’s important to understand all contribution rate percentages are subject to change as the result of several factors, including periodic negotiations between management and employee groups, interest rate changes set by the Board of Investments, and system actuarial valuations. System valuations, which are performed every three years as prescribed by law, provide the basis for member contribution rate adjustments deemed necessary to properly fund the system.

Employer contributions are funds contributed by the County or outside district, at rates recommended by LACERA’s actuary. Those contributions are credited to the Employer Reserve Account and are not refundable to the member or the employer.

If you were a member of LACERA (or a reciprocal system) on or before March 7, 1973, and continuously thereafter, or if you have restored credit for service prior to March 1973, the law requires your contributions to be discontinued when you have accrued 30 years of service credit in a contributory plan. Member contributions are made through pre-tax payroll deductions, per Internal Revenue Code Section 414(h)(2). That means payment of tax on your contributions is deferred until you retire or terminate service and withdraw your accumulated contributions.

If you terminate County service and withdraw your retirement contributions, federal law requires LACERA to withhold 20 percent in federal income tax.* If you reside in California, you may elect not to have state tax withheld. If you do not make a state tax withholding election, we will withhold an additional 2 percent in California state income tax. However, if you are under age 70.5, you may defer tax by rolling the funds over into an IRA or other qualified retirement plan.

For questions regarding legal or tax matters, consult with a professional advisor; LACERA does not offer legal or tax advice.

*U.S. Government Code Title 26.

More Information

When Are You Eligible for Retirement?

Active members of LACERA Plan D are eligible to retire when they meet one of the following conditions:

  • At age 50 with 10 or more years of County (or combined County and reciprocal system) service credit.
  • At any age with 30 years of County (or combined County and reciprocal system) service credit.
  • At age 70, regardless of years of service credit.

Deferred vested members are eligible to retire when they meet any of these conditions:

  • At age 50, having reached the date they would have accrued 10 years of County (or combined County and reciprocal system) service credit had they remained in full-time service.
  • At any age, having reached the date they would have accrued 30 years of County (or combined County and reciprocal system) service credit had they remained in full-time service.
  • At age 70, regardless of number of years worked.

An active member currently holding a temporary, seasonal, intermittent, or part-time position may retire when the following conditions are met:

  • He or she has reached age 50 and has been in County service for 10 years, and
  • The member is employed in a temporary, seasonal, intermittent, or part-time position on his or her desired date of retirement, and
  • He or she has received five full years of service credit for that position, and
  • He or she had previously been a permanent County employee working three-quarter time or more.

Advantage of Remaining in Active Service: Ages 50-65

Between the ages of 50 and 65, every three months, the amount of the allowance you will be entitled to receive upon retirement increases. In other words, the older you are when you retire, the greater the monthly allowance you will receive. (There is no additional age benefit after age 65.)

Your retirement allowance is based on a percentage of your final compensation, and age is one of the factors used to determine that percentage. Between the ages of 50 and 65, the percentage increases with each quarter-year (three months) of age you attain.