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 G 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 G 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 G retirement benefits will not run out; you cannot outlive them.
*Certain eligibility rules apply.
Three Factors Determine Your Retirement Benefits
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. Any Plan G member who meets the minimum age and service requirements may retire for service and receive a monthly lifetime retirement allowance.
Summary of Provisions (The Basics)
- Member makes contributions through pre-tax payroll deductions*
- Employer makes contributions
- Retirement Eligibility
- Age 52 with 5 years of County (or combined County and reciprocal system) service credit
- Age 70, regardless of years of service credit
- Final Compensation
- Based on highest monthly average of pensionable compensation earned during any 36-consecutive-month period of service**
*Contributions for benefits resulting from industrial accidents may be made on an after-tax basis.
**Subject to employee benefit limits set forth in PEPRA § 7522.10 and 7522.32. PEPRA limits preclude other federal compensation and benefit limits that would otherwise apply.
- Purchasable Service Credit
- Certain County and non-County employment prior to LACERA membership
- Protects retirement benefits when employees transfer between reciprocal public agencies
- Retiree Healthcare
- Eligible for LACERA-administered retiree healthcare benefits
- 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, unless they were later employed by another system under CERL
- Continuing Benefits
- Upon the death of a retired member, LACERA pays up to 100 percent of the member’s retirement allowance to an eligible survivor or eligible designated beneficiary*
Benefits Provided by Los Angeles County
- Retiree Healthcare Subsidy
- County subsidizes retiree medical/dental insurance based on a minimum of 10 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, unless they were later employed by another system under CERL
- 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.
Pensionable compensation in Plan G includes the member’s base pay and certain other items of compensation. For a list of pay items included in pensionable compensation, visit lacera.com > Active Members > Compensation.
Benefit Cap May Affect Highly Compensated Members
PEPRA imposes a limit, which is adjusted annually for cost-of-living increases, on the annual amount of pensionable compensation that may be used to calculate a Plan G member’s retirement benefit. The law bases the cap on 120 percent of the Social Security Administration annual taxable earnings limit. In accordance with the law, every year the dollar limit shall be adjusted for cost of living, based on annual changes to the Consumer Price Index (CPI) for All Urban Consumers: U.S. City Average. Cost-of-living adjustments are effective each January 1.*
*The change is calculated by dividing the September CPI of the current year by the September CPI of the previous year, with the result rounded to the nearest thousandth. Adjustments become effective the following January 1.
The limit does not affect the amount a member may earn each year; rather, it caps the amount of pensionable compensation LACERA is permitted to use when calculating a member’s retirement benefits. To learn more about the benefit cap, visit lacera.com > Active Members > Compensation > Compensation Limits.
Contributing to Plan G
Plan G is a contributory plan; both you and your employer contribute to it.
Plan G members make a flat-rate semimonthly contribution to the Plan through automatic payroll deductions. Contribution rates on all LACERA plans, including Plan G, are subject to change.
Contribution percentages are subject to change as the result of several factors, including, but not limited to, interest rate changes set by the Board of Investments, and system actuarial valuations. System valuations, which are performed every three years as prescribed by law, provide 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.
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 and do not opt out of California withholding, we must withhold an additional 2 percent in state income tax. However, you may defer tax by rolling the funds over into an IRA or other qualified retirement plan. Please note that amounts considered IRS required minimum distributions cannot be rolled over.
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 Plan G are eligible to retire when they reach age 52 and have five years of County (or combined County and reciprocal system) service credit or when they turn age 70, regardless of years of service credit.
Plan G members who terminate service with five or more years of service credit may keep their contributions on deposit with LACERA until they elect to apply for retirement. Their contributions will continue to earn interest.
An active member currently holding a temporary, seasonal, intermittent, or part-time position may retire when the following conditions are met:
- They have reached age 52, and
- They have received five full years of service credit for that position, and
- They had previously been a permanent County employee working three-quarter time or more
Advantage of Remaining in Active Service: Ages 52-67
Between the ages of 52 and 67, 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 67.)
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 52 and 67, the percentage increases with each quarter-year (three months) of age you attain.
|Age at Retirement
|57 yrs. /0 mos.
|57 yrs. /3 mos.
|57 yrs. /6 mos.
|57 yrs. /9 mos.
|58 yrs. /0 mos.
|20 yrs/0 mos.
|20 yrs/3 mos.
|20 yrs/6 mos.
|20 yrs/9 mos.
|21 yrs/0 mos.
|Percentage of Final Compensation