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BENEFITS


FAQS - DEATH AND CONTINUING BENEFITS

Death of an Active LACERA Member         Death of a Deferred LACERA Member

SECTION I: DEATH OF A LACERA RETIREE

Continuing Benefits

  1. How are LACERA continuing benefits and eligibility determined?

    The benefits are determined by the Retirement Option the decedent elected at the time of retirement. Eligibility for continuing benefits depends on the deceased member’s retirement plan, and your relationship to the member.

  2. How will I find out which benefits I am entitled to receive?

    Upon notification of the member’s death, LACERA researches the member’s case to determine the available death benefits. It also reviews the member’s account (including the member’s Beneficiary Designation Form) to identify any eligible survivors or beneficiaries. Once applicable benefits and eligible survivors or beneficiaries are determined, LACERA sends the appropriate paperwork to the applicable parties.

  3. What is a monthly continuing allowance?

    A monthly continuing allowance is a benefit LACERA pays to eligible survivors or beneficiaries of deceased LACERA retirees. The allowance is a percentage of the monthly retirement allowance the decedent received during his or her lifetime. It is paid each month for the remainder of the recipient’s life (regardless of any future change in the recipient’s marital status).*

    *A continuing allowance to an eligible minor child continues until the child is no longer eligible.

  4. Are all LACERA continuing benefits paid as monthly allowances?

    No. Depending on the retirement plan, some members can elect to have their continuing benefit paid as a single lump-sum payment, rather than a continuing allowance. The structure of your survivor benefit is determined by the Retirement Option the decedent elected at retirement.

  5. I am the surviving spouse of a LACERA retiree who just died. Can’t I just continue to receive my spouse’s monthly retirement allowance?

    No. According to the law, LACERA retirement allowances end the month of the retiree’s death. That’s why it’s so important to promptly notify LACERA of the death. The sooner LACERA is notified, the sooner a benefit account in the survivor’s name can be established.

  6. My spouse, who was a LACERA retiree, just died. When will LACERA make my spouse’s final retirement allowance payment?

    LACERA will issue a full and final retirement allowance payment on the last business day of the month in which the retiree died.

  7. Are monthly continuing montly benefits eligible for cost-of-living adjustments (COLA)?

    Yes. The COLA provision in the law that applies to retirement allowances also applies to continuing benefits to eligible survivors or designated beneficiaries. Retiree and survivor allowances are adjusted by the Board of Retirement each April 1, based on changes in the Consumer Price Index (CPI).

  8. Can I name a beneficiary to receive my monthly continuing allowance after my death?

    No. The allowance will be discontinued upon your death.

  9. My spouse, who was a LACERA retiree, just died. Am I eligible for a LACERA-administered health plan?

    It depends on the circumstances of your situation. Generally, any survivor or beneficiary who is receiving a continuing monthly allowance from LACERA and who qualifies as a surviving eligible dependent (as defined by LACERA’s Retiree Healthcare Administrative Guidelines) is eligible to enroll in LACERA-administered healthcare coverage.* Survivors and dependents who had continuous coverage under the decedent’s LACERA-administered health plan, but are not eligible for a continuing monthly allowance, may apply for continued healthcare benefits (for a maximum of 36 months) under the Consolidated Omnibus Budget Reconciliation Act (COBRA).

    When an eligible survivor notifies LACERA of a member’s death, LACERA mails a healthcare benefits information packet to the survivor. The packet includes information on benefits and premium rates, along with an enrollment form. To avoid late enrollment rules, the survivor must notify LACERA within 30 days of the member’s death.

    Note: Under The Affordable Care Act, individuals who are ineligible to enroll in Medicare have the option to buy health insurance coverage through an insurance exchange. Some may find that option preferable to continuing coverage in a LACERA-administered health plan. To determine your best course of action, review all available coverage options and premium costs.

    *Member’s surviving spouse, domestic partner, minor child(ren), or disabled dependent children who meet eligibility requirements.

  10. My spouse, who just died, was covered under a LACERA-administered healthcare plan. If I continue in a LACERA-administered healthcare plan, will the County subsidize my premiums?

    If the County was subsidizing your spouse’s (or domestic partner’s) LACERA-administered healthcare premiums, based on his or her length of County service, the County will contribute the same percentage toward your premiums (as the eligible survivor).

  11. I am the surviving spouse of a LACERA retiree who just died. Can I continue to receive my spouse's monthly retirement allowance via his/her Direct Deposit?

    According to the law, LACERA retirement allowances end the month of the retiree's death. After notifying LACERA of your spouse's death, your continuing benefits can be established. You may receive continuing benefits via your spouse's Direct Deposit if you shared a joint banking account. If you did not share a joint banking account — you, as the recipient of continuing benefits, would need to enroll in your own Direct Deposit for your banking account.

  12. I am the surviving spouse of a LACERA retiree who just died. How do I enroll in a Direct Deposit account in order to receive my spouse's continuing benefits?

    Direct Deposit enrollment can be completed by calling LACERA at 800-786-6464. Be ready to provide your banking account and routing numbers. You can also download Direct Deposit authorization forms by visiting the Brochures & Forms page on lacera.com. Simply complete the Direct Deposit form in its entirety and mail it to LACERA.

Taxability of Continuing Benefits

  1. Are continuing monthly allowances taxable?

    Yes, under most circumstances.* However, you may elect to have federal or California state tax withheld from your continuing allowance at whatever rate you choose. (California income tax is not withheld from your retirement allowance if you reside outside of California.) Or you may elect not to have withholding deducted from your continuing allowance. You may designate your tax withholding elections on tax form W-4P/DE-4P, which LACERA will send you.

    Note: Without a completed tax form W-4P/DE-4P on file, LACERA is required by law to withhold taxes from your allowance as if you were a married person claiming three (3) withholding exemptions.

    *Exceptions may apply in certain cases where the decedent had been granted a service-connected disability retirement.

  2. Does LACERA report the amount of my continuing allowance to the IRS?

    Yes, as required by law. Each January, LACERA will send you a copy of the Form 1099-R it submits to the IRS. The form indicates the taxable amount of the benefit paid to you in the previous year.

Death/Burial Benefit

  1. Does LACERA pay a death/burial benefit to the beneficiary of a retired member?

    Yes. A one-time lump-sum payment of $5,000 is payable upon the death of a LACERA retiree.* It is payable to the named beneficiary(ies) of the decedent, independent of any applicable continuing benefits.

    In cases where more than one beneficiary has been designated, the $5,000 is divided among all named beneficiaries in the percentages indicated on the decedent’s Beneficiary Designation Form.

    *Upon the death of a retired reciprocal member, LACERA pays the death/burial benefit only if the member’s last employing agency was L.A. County or an outside district.

  2. Are taxes withheld from the $5,000 death/burial benefit?

    Yes. Federal law requires LACERA to withhold 20 percent in federal income tax. Additionally, LACERA must withhold an additional two percent in state tax if the recipient resides in California.

  3. Is the $5,000 death/burial benefit eligible for a tax-deferred rollover to a traditional IRA or eligible employer plan?

    In most cases, yes. Benefit rollovers postpone taxation of the benefit until it is paid to you. However, individuals who reach age 70.5 on or before December 31 in the year the benefit is disbursed are not eligible to roll over their death/burial benefit. California residents are subject to state income tax on the benefit.

    Information on the taxability of payments from qualified employer plans (such as LACERA’s) is available in IRS Publication 575, Pension and Annuity Income, and IRS Publication 590, Individual Retirement Arrangements. These publications are available from your local IRS office, on irs.gov, or by calling 800-TAX-FORMS. For questions regarding your personal situation, consult with a professional advisor; LACERA does not offer legal or tax advice.

  4. Will LACERA send me a rollover form?

    If you are the beneficiary of a $5,000 death/burial benefit, LACERA will send you a Beneficiary Benefit Payment Rollover Form.

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Section II: Death of an Active LACERA Member

Safety Member Death and Continuing Benefits

  1. How does LACERA determine which benefits apply when an active safety member dies?

    Active safety member death benefits are based on category of death (service-connected or nonservice-connected) and vesting status (length of service). Eligibility for a service-connected disability benefit is determined by the Board of Retirement through the disability retirement application process.

  2. How is eligibility for those benefits determined?

    Benefit eligibility is based on your relationship to the decedent.

  3. Does LACERA pay death benefits on all active safety member deaths?

    Yes. Pre-retirement (active member) death benefits are included in all LACERA safety retirement plans (Safety Plans A, B, and C).

  4. How are benefits paid when an active safety member dies?

    Depending on the circumstances of the case, benefits may be payable as a lump-sum cash payment or a continuing monthly allowance, or a combination of the two.

  5. How will I find out which benefits I am entitled to receive?

    Upon notification of the member’s death, LACERA researches the member’s case to determine the available death benefits. It also reviews the member’s account (including the member’s Beneficiary Designation Form) to identify any eligible survivors or named beneficiaries. Once applicable benefits and eligible survivors or named beneficiaries are determined, LACERA sends the appropriate paperwork to the applicable parties.

  6. What if the decedent didn’t complete a LACERA Beneficiary Designation Form?

    According to the law, the decedent’s surviving spouse or domestic partner or minor child (in the absence of a spouse or domestic partner) would receive any applicable death benefits. If the member did not have a survivor and did not name a beneficiary, benefits may be payable to an estate or trust, or to a declarant(s) under provisions of California Probate Code, Section 13100. Certain limitations apply.

  7. I am the spouse of an active LACERA safety member who recently died; however, I am not the named beneficiary. Am I eligible to receive death benefits?

    The rights of a surviving spouse or domestic partner of an active member who dies before retirement may take precedence over the rights of any other named beneficiary. For additional information, call 800-786-6464 to speak with a LACERA Retirement Benefits Specialist.

  8. Does LACERA pay special death benefits when a safety member dies in the performance of duty?

    Yes, under certain circumstances. If a safety member dies in the performance of duty or as the result of an accident or injury caused by external violence or physical force, his or her survivors may be eligible for special death benefits (in addition to whatever benefits otherwise apply). In such cases, LACERA will notify the eligible survivor of all applicable benefits.

  9. Are continuing monthly benefits to survivors or designated beneficiaries eligible for cost-of-living adjustments (COLA)?

    Yes. The COLA provision in the law that applies to retirement allowances also applies to continuing benefits to eligible survivors or designated beneficiaries. Retiree allowances and continuing benefits are adjusted by the Board of Retirement each April 1, based on changes in the Consumer Price Index (CPI).

  10. Are active safety members covered by any Los Angeles County-sponsored benefits?

    County-sponsored benefits vary according to the member’s benefits plan. Safety Plan A, B , or C participants in Options, Choices, and Flex benefit programs are covered by a $2,000 basic term life insurance plan paid by the County. In addition, some may have elected to purchase additional coverage. Flex and MegaFlex participants may have elected to purchase County-sponsored Group Variable Universal Life insurance. Contact the Los Angeles County Employee Benefits Hotline at 213-388-9982 for information on life insurance benefits. LACERA does not administer these plans.

  11. Does the federal government provide benefits for survivors of safety members killed in the line of duty?

    Yes. The Public Safety Officers Benefits (PSOB) Program, which is administered through the Bureau of Justice Assistance, provides benefits to survivors of public safety officers killed in the line of duty. For information on PSOB, call 1-888-744-6513. LACERA does not administer these benefits.

  12. My spouse, who was an active LACERA safety member, just died. Am I eligible for coverage under a LACERA-administered health plan?

    It depends on the circumstances of the situation. Generally, any survivor or beneficiary who is receiving a continuing monthly allowance from LACERA and who qualifies as a surviving eligible dependent (as defined by LACERA’s Retiree Healthcare Administrative Guidelines) is eligible to enroll in LACERA-administered healthcare coverage.* When an eligible survivor notifies LACERA of a member’s death, LACERA mails a healthcare benefits information packet to the survivor. The packet includes information on benefits and premium rates, along with an enrollment form.

    Note: Under The Affordable Care Act, individuals who are ineligible to enroll in Medicare have the option to buy health insurance coverage through an insurance exchange. Some may find that option preferable to continuing coverage in a LACERA-administered health plan. To determine your best course of action, review all available coverage options and premium costs.

    *Member’s surviving spouse, domestic partner, minor child(ren), or disabled dependent children who meet eligibility requirements.

Taxability of Continuing Benefits (Safety Member Death)

  1. Are continuing monthly allowances taxable?

    It depends on the circumstances of the death. If the safety member was killed in the line of duty (service-connected), the continuing allowance may not be taxable under IRS Code. For specifics on your personal situation, consult with a professional advisor. LACERA does not offer tax or legal advice.

    Generally, continuing allowances based on nonservice-connected deaths are taxable. However, you may elect to have federal or California state tax withheld from your continuing allowance at whatever rate you choose. (California income tax is not withheld from your continuing allowance if you reside outside of California.) Or you may elect not to have withholding deducted from your allowance. You may designate your tax withholding elections on tax form W-4P/DE-4P, which LACERA will send you.

    Note: Without a completed tax form W-4P/DE-4P on file, LACERA is required by law to withhold taxes from your allowance as if you were a married person claiming three (3) withholding exemptions.

  2. Are taxes withheld from lump-sum payments on active safety member death benefits?

    That also depends on the circumstances of the death. If the safety member was killed in the line of duty (service-connected), lump-sum death benefits may qualify as non-taxable under IRS Code. For specifics on your personal situation, consult with a professional advisor. LACERA does not offer tax or legal advice.

    Lump-sum death benefits based on nonservice-connected deaths are taxable. Federal law requires LACERA to withhold 20 percent in federal income tax. Additionally, LACERA must withhold an additional two percent in state tax if the recipient resides in California.

  3. Are active safety member lump-sum death benefits eligible for a tax-deferred rollover to a traditional IRA or eligible employer plan?

    In most cases, yes.* Benefit rollovers postpone taxation of the benefit until it is paid to you. However, individuals who reach age 70.5 on or before December 31 in the year the benefit is disbursed are not eligible to roll over their death benefit. California residents are subject to state income tax on the benefit.

    Information on the taxability of payments from qualified employer plans (such as LACERA’s) is available in IRS Publication 575, Pension and Annuity Income, and IRS Publication 590, Individual Retirement Arrangements. These publications are available from your local IRS office, on irs.gov, or by calling 800-TAX-FORMS. For questions regarding your personal situation, consult with a professional advisor. LACERA does not offer legal or tax advice.

    *In certain cases, a portion of the benefit may not be taxable. LACERA will notify you of the taxable portion of the benefit.

  4. Does LACERA report the amount of the death and/or continuing benefits I receive to the IRS?

    Yes, as required by law. Each January, LACERA will send you a copy of the Form 1099-R it submits to the IRS. The form indicates the taxable amount of the benefit paid to you in the previous year.

Death of an Active LACERA Member

General Member Death and Continuing Benefits

  1. How does LACERA determine which benefits apply when an active general member dies?

    Active general member death and continuing benefits are based on the decedent’s retirement plan, vesting status (length of service), and category of death (service-connected or nonservice-connected). Eligibility for a service-connected disability benefit is determined by the Board of Retirement through the disability retirement application process.

  2. How is eligibility for those benefits determined?

    Benefit eligibility is based on your relationship to the decedent.

  3. Does LACERA pay death benefits on all active general member deaths?

    Pre-retirement (active member) death benefits are included in all LACERA contributory retirement plans (Plans A, B, C, D, and G). They are not included for active and deferrred members in LACERA’s non-contributory Plan E.

  4. How are benefits paid when an active general member dies?

    Depending on the circumstances of the case, benefits may be payable as a lump-sum cash payment or a continuing monthly allowance, or a combination of the two.

  5. How will I find out which benefits I am entitled to receive?

    Upon notification of the member’s death, LACERA researches the member’s case to determine the available death benefits. It also reviews the member’s account (including the member’s Beneficiary Designation Form) to identify any eligible survivors or beneficiaries.

    Once applicable benefits and eligible survivors or beneficiaries are determined, LACERA sends the appropriate paperwork to the applicable parties.

  6. What if the decedent didn’t complete a LACERA Beneficiary Designation Form?

    According to the law, the decedent’s surviving spouse or domestic partner or minor child (in the absence of a spouse or domestic partner) would receive any applicable death benefits. If the member did not have a survivor and did not name a beneficiary, benefits may be payable to an estate or trust, or to a declarant(s) under provisions of California Probate Code, Section 13100. Certain limitations apply.

  7. I am the spouse of an active LACERA general member who recently died; however, I am not the named beneficiary. Am I eligible to receive death benefits?

    The rights of a surviving spouse or domestic partner of an active member who dies before retirement may take precedence over the rights of any other named beneficiary. For additional information, call 800-786-6464 to speak with a LACERA Retirement Benefits Specialist.

  8. Are continuing monthly survivor allowances eligible for cost-of-living adjustments (COLA)?

    Yes. According to the law, the Board of Retirement adjusts retirement and continuing allowances each April 1, based on changes in the Consumer Price Index (CPI).

  9. Are active general members covered by any Los Angeles County-sponsored benefits?

    County-sponsored benefits vary according to the member’s benefits plan. Plan A, B, C, D, and G participants in Options, Choices, and Flex benefit programs are covered by a $2,000 basic term life insurance plan paid by the County. In addition, some may have elected to purchase additional coverage. Flex and MegaFlex participants may have elected to purchase County-sponsored Group Variable Universal Life insurance. Contact the Los Angeles County Employee Benefits Hotline at 213-388-9982 for information on life insurance benefits. LACERA does not administer these plans.

  10. What benefits are payable to the surviving spouse or domestic partner upon the death of an active LACERA Plan E member?

    The surviving spouse or domestic partner of an active Plan E member may be eligible to receive benefits through the Los Angeles County Long-Term Disability and Survivor Benefit Plan. For information, call the Los Angeles County Employee Benefits Hotline at 213-388-9982. LACERA does not administer this plan.

  11. Does Los Angeles County sponsor life insurance benefits for active Plan E members?

    Yes. Plan E participants in Options, Choices, and Flex benefit programs are covered by a $10,000 basic term life insurance plan paid by the County. Additionally, Options and Choices participants may have elected to purchase additional coverage. Flex and MegaFlex participants may have elected to purchase County-sponsored Group Variable Universal Life insurance.

    Additionally, Plan E MegaFlex participants may have purchased a County-sponsored life insurance plan known as the Survivor Income Benefit (SIB). SIB provides survivors with a benefit equal to a percentage of the decedent’s earnings.

    Contact the Los Angeles County Employee Benefits Hotline at 213-388-9982 for information on life insurance benefits. LACERA does not administer these plans.

  12. My spouse, who was an active LACERA member, just died. Am I eligible for coverage under a LACERA-administered health plan?

    It depends on the circumstances of the situation. Generally, any survivor or beneficiary who is receiving a continuing monthly allowance from LACERA is eligible to enroll in LACERA-administered healthcare coverage. When an eligible survivor notifies LACERA of a member’s death, LACERA mails a healthcare benefits information packet to the survivor. The packet includes information on benefits and premium rates, along with an enrollment form.

  13. Note: Under The Affordable Care Act, individuals who are ineligible to enroll in Medicare have the option to buy health insurance coverage through an insurance exchange. Some may find that option preferable to continuing coverage in a LACERA-administered health plan. To determine your best course of action, review all available coverage options and premium costs.

Taxability of Continuing Benefits

  1. Are continuing monthly survivor allowances taxable?

    Yes. However, you may elect to have federal or California state tax withheld from your monthly continuing allowance at whatever rate you choose. (California income tax is not withheld from your survivor allowance if you reside outside of California.) Or you may elect not to have withholding tax deducted from your continuing allowance. You may designate your tax withholding elections on tax form W-4P/DE-4P, which LACERA will send you.

    Note: Without a completed tax form W-4P/DE-4P on file, LACERA is required by law to withhold taxes from your allowance as if you were a married person claiming three (3) withholding exemptions.

  2. Are taxes withheld from lump-sum payments on active general member death benefits?

    Yes. Federal law requires LACERA to withhold 20 percent in federal income tax. Additionally, LACERA must withhold an additional two percent in state tax if the recipient resides in California.

  3. Are active general member lump-sum death benefits eligible for a tax-deferred rollover to a traditional IRA or eligible employer plan?

    In most cases, yes.* Benefit rollovers postpone taxation of the benefit until it is paid to you. However, individuals who reach age 70.5 on or before December 31 in the year the benefit is disbursed are not eligible to roll over their death benefit. California residents are subject to state income tax on the benefit.

    Information on the taxability of payments from qualified employer plans (such as LACERA’s) is available in IRS Publication 575, Pension and Annuity Income, and IRS Publication 590, Individual Retirement Arrangements. These publications are available from your local IRS office, on irs.gov, or by calling 800-TAX-FORMS. For questions regarding your personal situation, consult with a professional advisor; LACERA does not offer legal or tax advice.

    *In certain cases, a portion of the benefit may not be taxable. LACERA will notify you of the taxable portion of the benefit.

  4. Does LACERA report the amount of the death and/or continuing benefits I receive to the IRS?

    Yes, as required by law. Each January, LACERA will send you a copy of the Form 1099-R it submits to the IRS. The form indicates the taxable amount of the benefit paid to you in the previous year.

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Section III: Death of a Deferred LACERA Member

Death Benefits

  1. Does LACERA pay benefits for the death of a deferred member?

    Upon the pre-retirement death of a deferred member, the member’s retirement contributions and accumulated interest are payable in a lump sum to the named beneficiary or estate.

Taxability of Death Benefits

  1. Are taxes withheld from deferred member death benefits?

    Yes.* Federal law requires LACERA to withhold 20 percent in federal income tax. Additionally, LACERA must withhold an additional two percent in state tax if the recipient resides in California.

    *In certain cases, a portion of the decedent’s retirement contributions may not be taxable. LACERA will notify you of the taxable portion of the benefit.

  2. Are deferred member death benefits eligible for a tax-deferred rollover to a traditional IRA or eligible employer plan?

    In most cases, yes. Benefit rollovers postpone taxation of the benefit until it is paid to you. However, individuals who reach age 70.5 on or before December 31 in the year the benefit is disbursed are not eligible to roll over their death benefit. California residents are subject to state income tax on the benefit.

    Information on the taxability of payments from qualified employer plans (such as LACERA’s) is available in IRS Publication 575, Pension and Annuity Income, and IRS Publication 590, Individual Retirement Arrangements. These publications are available from your local IRS office, on irs.gov, or by calling 800-TAX-FORMS. For questions regarding your personal situation, consult with a professional advisor; LACERA does not offer legal or tax advice.

  3. Does LACERA report the amount of the death benefit I receive to the IRS?

    Yes, as required by law. In January, LACERA will send you a copy of the Form 1099-R it submits to the IRS. The form indicates the taxable amount of the benefit paid to you in the previous year.

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12/18/18