SECTION 2 Understanding the Variables
In the course of a County career, there are many factors and events that can impact an individual's retirement benefits. These include circumstances such as leaving and returning to service, prior or future employment with a reciprocal retirement system, transferring retirement plans, and prior or future service as a safety member, among others.
Let's explore how these factors can affect your Plan E benefits.
The Importance of Service Credit
Since years of service credit is one of the factors that determines the monthly allowance you receive when you retire; the more years of service credit you have, the higher your monthly retirement allowance will be.
Service credit also affects the cost of your LACERA-administered retiree health care benefits. The County subsidizes retiree medical/dental insurance based on a member's years of service credit; the more County service credit you have, the more the County pays toward your premiums.*
*Certain exceptions apply.
Earning Service Credit
Plan E members earn retirement service credit for each payroll period of County employment, provided at least one of the following conditions is met:
- Your employment is uninterrupted
- You are awaiting payment (during a six-month qualifying period) for Long-Term Disability (LTD) Benefits or receiving LTD payments
- You are totally disabled and receiving Long-Term Disability Benefits and are under age 65
- You are receiving Workers' Compensation Temporary Disability Benefits (verification required)
Note: At retirement, the years and months of service credit you accrued are converted to a decimal equivalent. For example: 12 years and six months of service credit is converted to 12.5 years.
Members who transferred to Plan E from a contributory plan prior to January 1993 are eligible to receive credit at no cost (“free credit”) for County service performed prior to the time of transfer. Members who transferred from other plans are also eligible to receive credit at no cost for certain non-County service performed prior to the transfer; this includes military service and other public service which the member would otherwise have been eligible to purchase under his or her prior plan.* Certain eligibility restrictions and requirements apply; for additional information, call 1-800-786-6464 to speak with a LACERA Retirement Benefits Specialist.
*Certain eligibility requirements apply.
Purchasing Service Credit
Plan E members are not eligible to purchase credit for County or non-County service prior to membership in LACERA.
Additional Retirement Credit
Additional Retirement Credit (Plan E ARC) provides a way to increase your years of service credit. It is not based on actual employment. The Plan E ARC you purchase will increase the total amount of your service credit, which in turn, will increase the amount of the monthly retirement allowance you will be entitled to receive when you retire. Any Plan E ARC you purchase is eligible for COLA adjustments, as well.
If you are an active member with at least five years of actual County service credit, you are eligible to purchase ARC.*
Certain restrictions apply. ARC is applied to your total service credit solely for the purpose of calculating your retirement. It does not apply toward:
- Meeting minimum eligibility requirements for retirement, vesting, or retiree health care subsidy
- Calculating additional LACERA-administered retiree health care benefits or other benefits based on total years of service credit
In the event you transfer to contributory Plan D, Plan E ARC remains as Plan E service credit. In such case, you will have double accounts with LACERA.
The minimum purchase is one year of ARC; the maximum purchase is a total of five years under any Plan or combination of Plans.** You may choose the length (payment period) of your ARC contract; contracts range from one month to a maximum of ten years (120 months).
*Reciprocal service and purchased temporary time do not count toward eligibility to purchase ARC.
**Additional months may be purchased once the purchase of one or more full years has been completed.
6/16/09