CHARTER OF THE CITY OF LOS ANGELES 

SECTION 1200

Part 3 FIRE AND POLICE PENSION PLANS GENERAL PROVISIONS
Sec. 1200. Applicability.
Sec. 1202. Definitions.
Sec. 1204. Consolidation of General Manager and Secretary. 
Sec. 1206. Persons Not Entitled to Fire and Police Pension.
Sec. 1208. Repeal of Limitations on Surviving Spouse Benefits.
Sec. 1210. Budget.
Sec. 1212. Effect of Receipt of Workers' Compensation.
Sec. 1214. Domestic Partner Benefits.
Sec. 1216. Pension Benefits in Connection with Mergers and Contracts for Fire and Police Services.

Part 3 FIRE AND POLICE PENSION PLANS GENERAL PROVISIONS Back to index

Sec. 1200. Applicability. Each Tier of Fire and Police Pension Plans shall be governed by the following:

(a) provisions specific to each Tier as set forth in this Article; and

(b) these General Provisions for the Fire and Police Pension Plans. Back to index

Sec. 1202. Definitions. For the purposes of the Tiers of the Fire and Police Pension Plans set forth in this Part 3, the following words and phrases shall have the meaning ascribed to them in this section, unless a different meaning is clearly indicated by the context.

(a) City : The City of Los Angeles.

(b) Board : The Board of Fire and Police Pension Commissioners.

(c) Plan or System : The applicable Tier of the Fire and Police Pension Plans.

(d) Beneficiary : Person entitled to receive a benefit from any of the Plans.

(e) Department Member : A person who is a sworn Member of the Fire Department or a sworn Member of the Police Department.

(f) Retired Plan Member : A person who is a former Plan Member whose active duty status has been terminated and is receiving a regular monthly benefit payment from any Tier of the Fire and Police Pension Plans.

(g) Tier : Any one of the several plans administered by the Board within the Fire and Police Pension Plans.

(h) Outside Agency : Any governmental entity other than the Fire or Police Departments of the City of Los Angeles.

(i) Transferring Employees : Employees of an Outside Agency who become Department Members pursuant to a merger or contract for fire or police services authorized by action of the Council. Back to index

Sec. 1204. Consolidation of General Manager and Secretary. The positions of general manager of the Fire and Police Pension Department and of secretary to the Board may be consolidated, in the discretion of the Board. Back to index

Sec. 1206. Persons Not Entitled to Fire and Police Pension. A deputized, reserve or auxiliary police officer or firefighter hired by the City of Los Angeles to perform duties on a part- time basis shall:

(a) not be a Plan Member or System Member of any Tier for any purpose;

(b) not be entitled, and the surviving spouse or surviving minor or dependent children or dependent parent( s) shall not be entitled to payment of any benefit or pension provided by the Fire and Police Pension Plans; and

(c) not have any deductions made for pension purposes from any moneys earned or paid by the City. Back to index

Sec. 1208. Repeal of Limitations on Surviving Spouse Benefits. After December 5, 1996, the survivor benefit of a Qualified Surviving Spouse under any Tier of the Fire and Police Pension Plan shall not be discontinued due to the subsequent remarriage of a Qualified Surviving Spouse. Back to index

Sec. 1210. Budget.

(a) Adoption of Annual Budget. The Board of Fire and Police Pension Commissioners shall adopt a budget each year setting forth the administration expense for each Tier of the Fire and Police Pension Plans. The budget shall be adopted at a meeting open to the public. At the discretion of the Council, administrative expense, which includes investment management expense, may be paid from the assets of the applicable Tier.

(b) Separate Items of Budget. The Board shall annually prepare and transmit to the Mayor, Council and Controller a budget setting forth the estimated cost of maintaining the Fire and Police Pension Plans. The budget shall include separate items as follows: (1) Fire and Police Pension Plan - Tier 1. (A) A sum equal to that percentage of the salaries of all Tier 1 Members shown in the last actuarial valuation to be required to cover the entry age cost to be paid by the City on account of new entrants into Tier 1. The entry age cost is defined as the level percentage of compensation of new Tier 1 entrants which must be paid into the Fire and Police General Pension Fund - Tier 1 from their date of entry in order to provide the benefits under the Plan, less the contributions to be made by new entrants during the period of their membership as provided in Section 1324. (B) A sum equal to the dollar amount shown in the last actuarial valuation to be required to amortize the unfunded liabilities of Tier 1. The unfunded liabilities are the present value of all of the assumed obligations of Tier 1, less (i) the present value of the future contributions to be made by the City under the preceding subsection and by the members under Section 1324, and (ii) the assets of the Fire and Police Tier 1 Service Pension Fund and of the Fire and Police Tier 1 General Pension Fund. The amortization period shall be 70 years beginning with the fiscal year 1967- 1968.

(C) A sum sufficient to cover the cost, as determined by an actuarial estimate, of benefits granted by the Council under the authority of Section 1330 of Tier 1.

(2) Fire and Police Pension Plan - Tier 2.

A sum equal to that percentage of the salaries of all Tier 2 Members shown in the last actuarial valuation to be required to cover the entry age cost to be paid by the City on account of new System Member entrants into Tier 2. The entry age cost being defined as the level percentage of salary of Tier 2 entrants which must be paid into the Fire and Police Tier 2 General Pension Fund from their respective dates of entry in order to provide the benefits pursuant to this Plan, less the deductions to be made from the salaries of new entrants, while they are Tier 2 Members, as provided by Section 1420.

(B) A sum equal to that percentage of the aggregate salaries of all members of the Fire Department and of the Police Department who are included under the provisions of Tiers 1, 2 and 3 of this Article, as shown in the last actuarial valuation required to amortize the unfunded liabilities of Tier 2, which sum will remain level as a percentage of salary, but which will increase in dollar amount in accordance with the aggregate salary increase assumption. Unfunded liabilities are defined as the present value of all of the assumed obligations of the Plan less:

(i) the present value of the future contributions to be made by the City pursuant to the preceding subsection (2)( A);

(ii) the present value of the deductions to be made from the salaries of the Tier 2 Members; and

(iii) the assets of the Fire and Police Tier 2 Service Pension Fund and of the Fire and Police Tier 2 General Pension Fund.

The amortization period shall be 70 years beginning with the fiscal year 1967- 68, except the Board shall assume that the unfunded liabilities of Tier 2 shall be $258,000,000 as of July 1, 1967. (C) A sum sufficient to cover the cost as determined by actuarial estimate, of benefits granted by the Council under the authority of Section 1428 of this Tier 2.

(3) Fire and Police Pension Plan - Tier 3.

(A) A sum equal to that percentage of the salaries of all Tier 3 Members shown in the last actuarial valuation to be required to cover the entry age cost to be paid by the City on account of Tier 3 Member entrants into the Fire and Police Pension Plan - Tier 3. The entry age cost being defined as the level percentage of salary of new Tier 3 Member entrants which must be paid into the fund from their respective dates of entry in order to provide the benefits pursuant to the Tier 3 provisions, less the deductions to be made from the salaries of new entrants while they are Tier 3 Members.

(B) A sum equal to that percentage of salaries of all Tier 3 Members shown in the last actuarial valuation to be required to amortize the unfunded liabilities of the Fire and Police Pension Plan - Tier 3. The unfunded liabilities being defined as the present value of all the assumed obligations of the Fire and Police Pension Plan - Tier 3 less: (i) the present value of the future contributions to be made by the City; (ii) the present value of the deductions to be made from the salaries of the Tier 3 Members; and (iii) the assets of the funds of the Fire and Police Pension Plan - Tier 3.

(C) A sum sufficient to cover the cost, as determined by an actuarial estimate, of benefits granted by the City Council by ordinance as authorized by Tier 3.

(4) Fire and Police Pension Plan - Tier 4.

(A) A sum equal to that percentage of the salaries of all Tier 4 Members shown in the last actuarial valuation to be required to cover the entry age cost to be paid by the City on account of Tier 4 Member entrants into the Fire and Police Pension Plan - Tier 4. The entry age cost is defined as the level percentage of salary of new Tier 4 Member entrants which must be paid into the fund from their respective dates of entry in order to provide the benefits pursuant to the Tier 4 provisions, less the deductions to be made from the salaries of new entrants while they are Tier 4 Members.

(B) A sum equal to that percentage of salaries of all Tier 4 Members shown in the last actuarial valuation to be required to amortize the unfunded liabilities of the Fire and Police Pension Plan - Tier 4. The unfunded liabilities being defined as the present value of all the assumed obligations of the Fire and Police Pension Plan - Tier 4 less:

(i) the present value of the future contributions to be made by the City; (ii) the present value of the deductions to be made from the salaries of the Tier 4 Members; and

(iii) the assets of the funds of the Fire and Police Pension Plan - Tier 4.

(C) A sum sufficient to cover the cost, as determined by an actuarial estimate, of benefits granted by the Council by ordinance as authorized by Tier 4.

(c) General Obligation of the City. For the purpose of providing funds to meet the budget of all the Fire and Police Pension Plans, the Council annually shall provide from revenues available to it, funds sufficient to provide the total amount of all items in the budget submitted by the board. Back to index

Sec. 1212. Effect of Receipt of Workers' Compensation.

(a) Definition. For the purposes of this section, "compensation" is defined as every payment provided for by any general law granting benefits for injury, sickness or death caused by or arising out of employment, and also includes payments made to satisfy any claim for damages to the extent that the payments relieve the obligation to pay compensation under that general law.

(b) Coordination of Pension Benefits. If, pursuant to general law, an award of compensation is made or compensation is paid on account of injury, sickness or death caused by or arising out of employment as a Department Member, then the total amount of any disability or survivor pension granted pursuant to any Tier of the Fire and Police Pension Plans shall be reduced by the total amount of the awarded compensation and the amount remaining after reduction shall be the pension granted.

(c) Payment Procedure. If the reduction provided in subsection (b) of this section is applicable to a pension:

(1) Applied First to Compensation Award . Any pension payments made under any Tier of the Fire and Police Pension Plans shall be deemed to be, and shall be, payments of the compensation award and shall be first applied as payments of the compensation award. Any pension payments not applied as satisfaction of the compensation award shall be deemed to be, and shall be, applied as payments of the pension granted.

(2) Payments Made to the Extent They Exceed Award. Pension payments shall be made only to the extent that the cumulative sum of the payments of disability or survivor pension provided in any Tier exceed the cumulative sum of the compensation award.

(3) Limit on Installment Basis . Compensation awards may be deducted on an installment basis if no installment is less than 25% of any monthly pension amount payable to the Retired Plan Member.

(d) Service Pensions Not Affected. The reduction provided in subsection (b) of this section shall not apply to any service pension granted under any Tier of the Fire and Police Pension Plans. Nor shall any pension be reduced by any compensation which shall be awarded or paid to any Retired Plan Member receiving a service pension under any Tier of the Fire and Police Pension Plans or to any Plan Member who shall die while eligible to retire. Any deductions made from the salary of any Plan Member and deposited to the credit of any Tier of the Fire and Police Pension Plans shall be applied solely to the cost of service pensions granted under that Tier and never shall cover, directly or indirectly, the cost of any compensation award. Back to index

Sec. 1214. Domestic Partner Benefits.

(a) Council Authority. The Council may by ordinance provide survivor benefits for domestic partners of members of Tiers 2, 3 and 4 of the Fire and Police Pension Plans, subject to any conditions of entitlement set forth in any ordinance adopted in accordance with the provisions of this section. The authority granted in this section shall include the authority to expand the definition of "qualified surviving spouse" for purposes of the Fire and Police Pension Plans to include a domestic partner.

(b) Mode of Adoption. Ordinances adopted under this section shall be adopted in the same manner as provided in Section 1618( b), but Council shall be advised in writing by an enrolled actuary as to the cost of the proposed benefits. Back to index

Sec. 1216. Pension Benefits in Connection with Mergers and Contracts for Fire and Police Services.

(a) Council Authority. The Council may by ordinance establish pension benefits for persons who leave the employment of an Outside Agency to become Department Members of the Fire or Police Department pursuant to a merger or contract for fire or police services which is authorized by action of the Council. Except as limited in subsection (c), Council shall have broad authority to enact ordinances necessary for the provision and funding of pension benefits for Transferring Employees.

(b) Examples of Council Authority. The broad authority granted to Council includes, but is not limited to:

(1) Different Benefits Allowed . The authority to provide Transferring Employees with benefits other than those provided in the Fire and Police Pension Plans, whether by contracting for coverage with a non- City pension plan, by providing for alternative benefits to be administered by the Board or by other means as the Council shall determine;

(2) Transfer of Assets and Liabilities . The authority to provide for the transfer of pension assets and liabilities in connection with mergers and contracts.

Should it be necessary for the City to assume responsibility for the provision of pension benefits to persons other than the Transferring Employees in order to facilitate a merger or contract, then the Council' s authority shall include the authority to provide benefits to these other persons if the future annual costs attributable to the provision of these benefits is clearly identified in the actuary' s report and any ordinance providing these benefits must prescribe a mechanism for funding the cost of these benefits. The funding mechanism may include, but is not limited to, the transfer of assets from another pension plan and/ or reimbursements from the Outside Agency.

(c) Limitation Upon Council Authority. The authority given to the Council to establish pension benefits herein is specifically limited as follows:

(1) No City Service Credit. The Council may not provide service credit to a Transferring Employee for service performed prior to becoming a Department Member if the Transferring Employee is receiving or will be entitled in the future to receive pension benefits from another pension plan based upon prior service.

(2) Funding of Costs of Service Credit Granted. Any ordinance adopted pursuant to this section which provides for a Transferring Employee to receive service credit for prior service must prescribe a mechanism for funding the costs attributable to this prior service which may include, but is not limited to, the transfer of assets from another pension plan and/ or reimbursements of costs from the Outside Agency.

(d) Mode of Adoption. Ordinances adopted under this section shall be adopted in the same manner as provided in Section 1618( b), but Council shall be advised in writing by an enrolled actuary as to the cost of the proposed benefits. Back to index