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OOC MINUTES JUNE 11, 2009 |
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OPERATIONS & OVERSIGHT
COMMITTEE MINUTES 6-11-09
PRESENT
- Yves Chery, Chair
- Ed C. Morris, Vice Chair
- Edward L. Blecksmith
- James P. Harris
- Sadonya Antebi, Alternate
BOARD MEMBERS AT LARGE
STAFF, ADVISORS, PARTICIPANTS
- Robert Hill
- Janice Golden
- Barry Lew
- JJ Popowich
The meeting was called to order by Chairman Chery at 12:15 a.m.
- APPOINTMENT OF VOTING MEMBER(S) IN THE EVENT ONE OR MORE REGULAR COMMITTEE
MEMBERS ARE ABSENT
All regular members of the Committee were present.
- APPROVAL OF THE MINUTES OF THE REGULAR MEETING OF MAY 7, 2009
A motion was made by Mr. Morris seconded by Mr. Harris, to approve the minutes
of the regular meeting of May 7, 2009.
The motion passed unanimously.
- FOR INFORMATION
- Internal Revenue Code Section 415(b) Compliance (oral presentation)
- Barry Lew/JJ Popowich
Barry Lew and JJ Popowich discussed the benefits limit mandated by Internal
Revenue Code Section 415(b). LACERA must comply with certain Internal Revenue
Code requirements to maintain a tax qualified status. Section 415 imposes
a limit for defined benefit plans as to the amount of retirement benefits
which can be paid out. The 2009 benefits limit is $195,000, which only
applies to the employer provided portion of a retirement benefit. The limit
is also adjusted for age, the $195,000 being for a member who retires at
age 65. Members who retire at a younger age have a lower benefits limit.
Therefore, members at risk of exceeding the benefits limit are those who
are highly compensated, and those who retire early.
LACERA needs to identify those members at risk, which will then be forwarded
to our actuary to determine the employer-provided and employee-provided
portion of the retirement benefit. LACERA cannot pay the employer-provided
portion of the benefit that exceeds the benefits limit. The Internal Revenue
Code also provides for a Replacement Benefit Plan (RBP), established separate
from the LACERA qualified trust, for the sole purpose to pay that portion
of the employer-provided benefit which exceeds the benefits limit. The
RBP will make the member whole in terms of the benefit he has earned. The
member would receive two monthly payments, one from LACERA and one from
the RBP.
LACERA staff has put together a plan to educate and counsel those members
who might be impacted by 415(b). This will be a low key approach, with
the objective of informing and reassuring members. Currently, we have no
members that are affected by the benefits limit.
- MISCELLANEOUS
- PUBLIC COMMENT
- GOOD OF THE ORDER (For discussion purposes only)
- ADJOURNMENT
7/11/09

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