SECTION 1 Welcome to Plans A, B, and C
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. The monthly allowance you will receive at retirement under Plan A, B, or C 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 A, B, or C 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 A, B, or C retirement benefits will not run out; you cannot outlive them.
*Certain eligibility rules apply.
Plans A, B, and C Provide a Monthly Retirement Allowance for Life
Plans A, B, and C are contributory plans for general members of LACERA; thus, both you and your employer contribute to them. As previously noted, when you retire, Plan A, B, or C will provide you with a guaranteed monthly lifetime retirement allowance, provided you meet the Plan's eligibility requirements.
Any Plan A, B, or C member who meets the minimum age and service requirements may retire for service and receive a monthly retirement allowance for life. 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.
*Subject to employee benefit limits set forth in Internal Revenue Code Section 415(b).
| BENEFIT ENHANCEMENTS* | |
|---|---|
| Purchasable Service Credit | Certain County and non-County employment prior to LACERA membership |
| Additional Retirement Credit (ARC) | |
| Reciprocity | Protects retirement benefits when employees transfer between reciprocal public agencies |
| Retiree Health Care | Eligible for LACERA-administered retiree health care 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 $5,000 death/burial benefit when a retired member dies | |
| Survivor Benefits | Upon the death of a retired member, LACERA pays up to 100 percent of the member’s retirement allowance to eligible surviving spouse or domestic partner or minor child(ren). |
| BENEFITS PROVIDED BY LOS ANGELES COUNTY | |
|---|---|
| Retiree Health Care 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 and/or administered insurance benefits.
Contributing to Plans A, B, or C
Members of Plan A, B, or C make monthly contributions to their Plan through automatic payroll deductions. Your contribution rate is a percentage of your pensionable earnings. 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.
*Under some conditions, the entry age for returning employees may be based on their age at the time they rejoined LACERA.
Any future rate adjustments will be applied based on your entry age. In accordance with the law, LACERA undergoes a system actuarial valuation every three years. These valuations serve as 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; however, if you do not make a state tax withholding election, we will withhold an additional 2 percent in California state income tax. 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.
When Are You Eligible for Retirement?
Active members of LACERA Plans A, B, or C 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 members are eligible to retire when they meet any of these conditions:
- At age 50, having reached the date they would have accrued ten 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.
Advantage of Remaining in Active Service: Ages 51-65
Between the ages of 51 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 51 and 65, the percentage increases with each quarter-year of age you attain. For example, if your birthday is May 17, your retirement allowance would be greater if you retired on August 17—when you would be three months or one quarter-year older—than it would be if you retired on July 17.
**In plan A, there is no additional age benefit after age 62.
6/16/09