Transferring to Plan D
Plan E members who wish to gain certain benefits not available under Plan E may transfer to contributory Plan D. Plan D includes provisions for pre-retirement death and disability benefits, as well as the option to purchase service credit for certain types of County and non-County government service performed prior to the date you became eligible for LACERA membership. In general, Plan D provides a larger and higher-paying scope of benefits. As a contributory plan, it also requires you to make semimonthly contributions, which are automatically deducted from your paycheck.
LACERA offers two methods of transferring from Plan E to Plan D: Open Window Transfer and Prospective Plan Transfer (PPT).
OVERVIEW: Open Window Transfer and Prospective Plan Transfer
- OPEN WINDOW TRANSFER
- Contributions calculated at a lower rate. Based on your entry age to LACERA.
- Must purchase and convert credit for all Plan E service to Plan D.*
- Cost to purchase and convert Plan E service based on your entry age to LACERA.
- Contract payment periods from one year up to 10 years.
- You remain a Plan E member until your transfer is completed. Although you begin earning Plan D service credit upon the start of your payroll deductions, you are not entitled to Plan D benefits until your entire transfer contract is paid in full.
- PROSPECTIVE PLAN TRANSFER
- Contributions calculated at a higher rate. Based on your current age.
- May opt to purchase and convert some or all Plan E service credit to Plan D.
- Cost to purchase and convert Plan E service based on your age on the beginning date of the service being purchased.
- Contract payment periods from one year up to 10 years.
- You begin earning Plan D service credit on the effective date of transfer and become eligible for disability/survivor benefits when Plan D service requirements are met.**
*Certain exceptions apply.
**Certain eligibility applies: To be eligible to apply for disability retirement, you must have two years of continuous service after your most recent effective date of transfer. (During that two-year period, you must not take a medical leave necessitated by a preexisting condition.) Or, if you had a break in service, you must have earned five years of service credit as an active Plan D member after your most recent effective date of transfer.
The Open Window Transfer requires you to purchase and convert all your previous years of Plan E service credit before your transfer becomes effective. Basically, this means you must catch up on the back contributions you would have paid had you elected Plan D when you entered LACERA membership, along with the interest those contributions would have accrued. The purchase can be made by a lump-sum payment, through semimonthly payroll deductions made over a maximum of 10 years, or through a combination of both. You remain in Plan E until you have paid the transfer contract in full.
Contributory members who were in service on March 7, 1973 and remained in service continuously thereafter are eligible for a discontinuation of their contributions. However, in cases where a member transfers from Plan E to Plan D, any payments made for service in excess of 30 years will not be refunded.
Under an Open Window Transfer, your contributions are based on your entry age to LACERA. As a result, your cost to purchase and convert your Plan E service credit is lower under an Open Window Transfer than it is under a PPT.
Note: Open Window Transfers are available only during periods designated by the County Board of Supervisors. To check on the availability of an Open Window Transfer, call 800-786-6464.
A Prospective Plan Transfer is a simple plan change; you switch from Plan E to Plan D and begin making the semimonthly contributions. You become a Plan D member the first day of the month following 30 days after your application is received by LACERA. You retain all service credit you accrued under Plan E. You are not required to purchase any of your Plan E service; however, you have the option to purchase and convert some or all of it to Plan D service credit.
Under a PPT, any purchase and conversion of Plan E service to Plan D service credit is calculated based on your age on the beginning date of the service being purchased. For example: At age 40, you elect a PPT to Plan D. At age 42, as a Plan D member, you elect to purchase and convert a three-year period of your prior Plan E service. You were age 33 on the first day of that three-year period. Therefore, your cost to purchase that period of Plan E service and convert it to Plan D will be calculated based on age 33.
Note: Members who elect a PPT are not eligible to transfer back to Plan E for three years from their effective date of transfer to Plan D.* In addition, members who elect a PPT may not elect an Open Window Transfer in the future.
If you purchase and convert some, but not all, of your Plan E time, any unpurchased portion will remain as Plan E service credit. In that case, when you retire, you will receive a combined Plan D and Plan E retirement allowance. The amount you are entitled to under each Plan will be calculated separately, based on the service credit you earned under each Plan.
*Effective January 1, 2011, the three-year waiting period to transfer back to Plan E no longer applies to certain disabled Plan D Prospective Plan Transferees.
The allowance you receive at retirement will reflect the total of those two (Plan D and Plan E) amounts. All Plan D service credit is eligible for COLA adjustments; only Plan E service credit earned after June 4, 2002 is eligible for automatic COLA.*
*You may purchase Elective COLA for pre-June 4, 2002 Plan E service credit.
A member who has earned service credit in a contributory plan and in Plan E maintains a double account with LACERA. Double accounts are established when a member has earned both:
- Service credit in a contributory plan
- A minimum of 10 years of service credit in Plan E
Eligibility to retire from each Plan is determined independently, based on the requirements of each Plan. In most cases, service credit earned in one Plan cannot be used to meet the requirements of the other Plan.* However, if the double account was created through a PPT, service credit earned under each Plan will be combined and applied toward vesting requirements.
If a member with a double account is eligible to retire for service from Plan D, but has not met the minimum age requirement for Plan E, he or she may retire from Plan D. Plan E retirement benefits automatically become effective on the date of the member’s 55th birthday.
Dual status refers to a member who has accrued service credit both as a general member and a safety member. This occurs when a safety member changes job classifications and becomes eligible for general membership, or vice versa.
At retirement, members with dual status receive a combined retirement allowance based on service credit earned in each category of membership. Separate general and safety benefit amounts are calculated and added together to determine the member’s total retirement allowance.
If a member with a double account is eligible to retire for service under the terms of his or her safety Plan but has not met the minimum age requirement for Plan E, he or she may retire from the safety Plan. Plan E retirement benefits automatically become effective on the date of the member’s 55th birthday.
*The total amount of service credit accrued under all LACERA Plans counts toward the County retiree healthcare subsidy; certain eligibility rules apply.