referenced inserts - lacera

LACERA • Los Angeles County Employees Retirement Association

April 2011

KEY CONTACTS

LACERALos Angeles County Employees Retirement Association

1-800-786-6464 • (626) 564-6155 FAX • lacera.com • Email: [email protected]

Great West(Deferred Compensation Plans: 401(k), 457 Horizons, Pension Savings for Temp Employee)

1-800-947-0845 Key Talk or 1-800-382-8924 Glendale Office655 N. Central, Glendale, CA 91203 • countyla.com

Employee Benefits Hotline (County)(213) 388-9982 • dhr.lacounty.info

CIGNA Optional Group Life Insurance (continuation)Options and Choices 1-800-842-6635

MetLife Group Variable Universal Life Insurance (continuation)Flex and Megaflex 1-800-846-0124

COBRA (County Health Insurance Plan Continuation)(213) 388-9982

Long-Term Disability and Survivor Benefits (County)(213) 738-2143 • (213) 738-2150

Sedgwick1-800-786-8600 • sedgwickcms.com/calabasas

Long-Term Care Insurance1-800-207-9883

CALPERS1-888-225-7377 • 655 N. Central #1400, Glendale, CA 91203 • calpers.ca.gov

Medicare1-800-633-4227 • medicare.gov

Social Security Administration1-800-772-1213 • 1-877-255-1508 • ssa.gov

The closest SSA office to LACERA is located at 104 N. Mentor Avenue in Pasadena Southeast corner of Mentor and Union (2 blocks south on Mentor from LACERA)


April 2011


April 2011

PENSIONABLE AND NON-PENSIONABLE CAFETERIA PLANSIf you were hired on or before 12/31/95, you may be eligible to include a portion of the County’s cafeteria plan contribution as pensionable earnings.

CAFETERIA PLAN HIRED PENSIONABLE AMOUNT*

CHOICES (Represented) Pensionable On or before 12/31/95 Capped at $244

Non-pensionable On or after 1/1/96 $0

OPTIONS (Represented) Pensionable On or before 12/31/95 Capped at $244


FLEX (Non-Reps) Pensionable On or before 12/31/94 Capped at $442 OR % of salary at

12/31/94, whichever is greater.


MEGAFLEX (Non-Reps) Pensionable On or before 12/31/94 Capped at $442 OR % of salary at

12/31/94, whichever is greater.

Pensionable In 1995 Capped at $244


Add the pensionable amount shown on the chart above to your final average compensation (Retirement Calculator) or gross monthly salary (Transfer Calculator or ARC Calculator).

Please contact the Employee Benefits Hotline at (213) 388-9982 to verify your cafeteria plan and the pensionable portion as of 12/31/94. The amount of the County contribution paid to employees changes periodically, and the portion that is pensionable varies according to your cafeteria plan, your hire date, and your retirement plan (Megaflex only).

*Special rules may apply if your final compensation period included any time prior to January 1, 1991.

Who is Eligible Maximum Buyback When Generally PaidOverstated Buybacks in Final Compensation

Issues

SICK BUYBACK

Non-MegaFlex Sheriff Deputies/Custody

Assistants/Probation Officers/Beach Lifeguards/

Public Defender Investigators/DA

Investigators hired before February 2000

5 days (40 hours) July or August The FAC period may only include 2 sick buybacks. Amongst those 2, only 64 hours may be included in the FAC. If, for example, a member sells 40 hours in August, 0 in January, and 40 in July, one of the 40

hours will be reduced to 24 so as not to exceed the 64

hour limit.

3 days (24 hours) January or February

56-hour Firefighters1 1/2 shifts (36 hours) July or August The FAC period may only

include 2 sick buybacks (72 hour max)1 1/2 shifts (36 hours) January or February

Non-MegaFlex Participants (except 56-hour Firefighters

3 days (24 hours) July or August The FAC period may only include 2 sick buybacks

(48 hour max)3 days (24 hours) January or February

MegaFlex Participants Not eligible - -

VACATION BUYBACK

Non-MegaFlex Participants (except 56-hour

Firefighters)20 days (160 hours) January or February

The FAC period may only include 1 vacation buyback

and a maximum of 160 hours.

56-hour Firefighters 10 shifts (240 hours) January or February

The FAC period may only include 1 vacation buyback

and a maximum of 240 hours.


HOLIDAY BUYBACK56-hour Firefighters (including MegaFlex

Firefighters)

5 1/2 shifts (132 hours) January or February 132 hours maximum

Non-MegaFlex Participants (except 56-hour

Firefighters)11 days (88 hours)

Unusual for anyone other than a Firefighter to reach the maximum

-


NON-ELECTIVE LEAVEOnly available to MegaFlex

Participants 10 days (80 hours) January or February 80 hours maximum


December 2011

TAX ConsiderATions: ConsulT your TAX Advisors before you ACT

Monthly before-Tax Payroll deductions that can lower your taxable income:

Plan contributions (A, b, C, d):• Pre-determined contribution percentage based on entry age

• General member: 30-year cancellation, if pre-03/07/1973 membership date• Safety member: 30-year cancellation

• E to D transfer• Contribution percentage based on entry age or prospective transfer age

Payments on service credit purchase and plan transfer contracts (pre-tax):

• The shorter the contract period, the higher the monthly payment amount

deferred Compensation Plan contributions (457 Horizons, 401(k)) through Great- West:

• You decide the contribution percentage and may change it any time:• Maximum per year -- $17,000 (2012) • If 50 and older ------- $22,500 (2012)• Catch-up provision -- $34,000 (2012) Horizons only• The limits above for Horizons include the County match.

• No more regular contributions after retirement.

Termination Pay is TaxableFor information regarding strategies for deferring tax on termination pay, call Great-West (Glendale Office) at 1-800-382-8924.

Consult with professional advisors regarding legal, tax, and/or medical matters: LACERA does not offer legal, tax, or medical advice.


April 2011

SOCIAL SECURITYIf you paid into Social Security prior to becoming a member of LACERA, you should contact the Social Security Administration to find out if their records are accurate and up to date. We also suggest you find out what you can expect from Social Security and how this source of income will fit into your retirement plans. The County withdrew from the Federal Social Security program in December 1982.

LACERA Rules:Plan A, B, C, and D (General)LACERA retirement allowances will be slightly reduced by a fixed dollar amount for each year of service that was covered by Social Security while employed by the County prior to 1983.

Plan E (General)As a member of Plan E, a percentage of your estimated Social Security benefit will be subtracted from your retirement allowance, based on the total number of years and months of County service covered by Social Security while employed by the County prior to 1983.

If you retire at or after age 62, you may voluntarily provide evidence of your actual Social Security benefit to LACERA within 6 months after retirement. LACERA will use the actual benefit to recompute your retirement allowance.

Otherwise, LACERA will use the actuarial tables to compute your Social Security benefit offset and your retirement allowance.

Government Pension Rules: (GPO and WEP)If you worked in a job that was not covered under Social Security, e.g., some federal, state, or local government employment, the pension you receive based on that work may reduce your Social Security benefits. Your benefit can be reduced under one of two provisions.

Government Pension OffsetThe Government Pension Offset (GPO) affects spouses, widows, and widowers. Under the GPO, if you receive a LACERA pension (based on work when you did not pay Social Security taxes), your Social Security spouse’s, widow’s, or widower’s benefits may be reduced by an amount equal to two-thirds of your LACERA pension.

Windfall Elimination ProvisionThe Windfall Elimination Provision (WEP) reduces the Social Security benefit for retired and disabled workers receiving government pensions from employment not covered by Social Security. Basically, the Social Security Administration uses a different (less favorable) formula to calculate a worker’s benefit under the WEP than it does to calculate the benefit of a worker who is not affected by the WEP.

The “normal” Social Security benefit formula separates a worker’s average monthly earnings into three segments, and multiplies each by a different percentage. The WEP modifies the percentage by which the first segment is multiplied. This results in you receiving a lower Social Security benefit than you would have received were you not entitled to a LACERA pension.

The WEP formula includes a sliding scale based on the length of your Social Security-covered employment. If you have 30 or more years of “substantial earnings” under Social Security, you are fully exempt from the WEP. For more information, visit the Online Calculator (WEP Version) at ssa.gov.

SOCIAL SECURITY — PLAN A, B, C, D The County of Los Angeles withdrew its employees from the federal Social Security program in December 1982. Your LACERA retirement allowance will be reduced by a fixed dollar amount for each year of service that was covered by Social Security while employed by the County prior to 1983.

Example: Plan A members retiring at age 60 with 10 years of Social Security coverage as a County employee would have their retirement allowance reduced by $28.50 based on the chart. (10 times $2.85 = $28.50)

Retirement Allowance Reduction Amounts For Members In Plans A, B, C, & D Covered By Social Security

Age atRetirement

Reduction per YOS*Plan A Plan B Plan C Plan D

50 $1.72 $1.45 $1.38 $4.14 51 1.83 1.53 1.45 4.35 52 1.94 1.62 1.52 4.56 53 2.03 1.72 1.59 4.77 54 2.15 1.83 1.66 4.99 55 2.27 1.94 1.74 5.22 56 2.40 2.03 1.82 5.47 57 2.55 2.15 1.91 5.74 58 2.65 2.27 2.01 6.04 59 2.75 2.40 2.12 6.36 60 2.85 2.55 2.24 6.71 61 2.95 2.65 2.32 6.97 62 3.05 2.75 2.44 7.32 63 3.05 2.85 2.56 7.69 64 3.05 2.95 2.70 8.09 65+ 3.05 3.05 2.84 8.51

SOCIAL SECURITY - PLAN E The County of Los Angeles withdrew its employees from the federal Social Security program in December 1982.

As a member of Plan E, a percentage of your estimated Social Security benefit will be subtracted from your retirement allowance, based on the total number of years and months of County service covered by Social Security.

If you retire after age 62, you may voluntarily provide evidence of your actual Social Security benefit to LACERA within 6 months after retirement. LACERA will use the actual benefit to recompute your retirement allowance. Otherwise, LACERA will use the actuarial tables to compute your Social Security benefit offset and your retirement allowance.

Consult with professional advisors regarding legal, tax, and/or medical matters: LACERA does not offer legal, tax, or medical advice.

*Note: “YOS” means years of service covered by Social Security as a County employee.


December 2011

MediCAre

2012 Part b Premium Amounts for Persons with Higher income levelsMost Medicare beneficiaries will pay a standard premium of $99.90 (single party) or $199.80 (two parties) for Part B in 2012. Beneficiaries who currently have the Social Security Administration (SSA) withhold their Part B premium and have incomes above $85,000 or ($170,000 or more for joint filers) are responsible for a larger portion of the estimated total cost of Part B benefit coverage.

Social Security will use the income reported two years ago on your IRS income tax return to determine your premium (if unavailable, SSA will use income from three years ago). For example, the income reported on your 2010 tax return will be used to determine your monthly Part B premium in 2012. If your income has decreased since 2010, you can request to have the income from a more recent tax year used to determine your premium; however, you must meet certain criteria.

should i sign up for Medicare Part A and b if i am still working?Even if you keep working after you turn 65, you should sign up for Medicare Part A. If you have health coverage through your employer or union, Part A may still help pay some of the costs not covered by your group health plan. Call the Social Security Administration at 1-800-772-1213 to sign up.

However, you may want to wait to sign up for Medicare Part B if you or your spouse are working and have group health coverage through your or your spouse’s employer or union.

You would have to pay the monthly Medicare Part B premium, and the Medicare Part B benefits may be of limited value to you as long as the group health plan is the primary payer of your medical bills.

i want to add Part b to my Medicare. When can i do that?You can sign up for Medicare Part B:

1) When you first enroll in Medicare (your Initial Enrollment Period). Your Initial Enrollment Period starts three months before you turn age 65 and lasts for seven months.

2) January 1 - March 31 of each year (your General Enrollment Period). If you enroll in Part B during a General Enrollment Period, it will be effective July 1 of the year in which you apply. Your Medicare Part B premium may go up 10 percent for each 12-month period that you could have had Medicare Part B, but did not take it.

3) If you didn’t take Medicare Part B when you were first eligible because you or your spouse were working and had group health plan coverage through your or your spouse’s employer or union, you can sign up for Medicare Part B during a Special Enrollment Period.

You can sign up:• anytime you are still covered by the employer or union group health plan through your or your

spouse’s current or active employment, or• during the eight months following the month the employer or union group health plan coverage

ends, or• when the employment ends (whichever is first).

This material was created by Medicare and is reprinted from SSA Publication No. 05-10536 (available on socialsecurity.gov) for the convenience of LACERA members. LACERA does not administrate Medicare.

For questions, call 1-800-Medicare (1-800-633-4227).

Modified Adjusted Gross Income (MAGI) Part b Monthly Premium

Individuals with a MAGI of $85,000 or lessMarried couples with a MAGI of $170,000 or less 2012 standard premium=$99.90

Individuals with a MAGI above $85,000 up to $107,000Married couples with a MAGI above $170,000 up to $214,000

Standard premium + $40.00





Individuals with a MAGI above $214,000Married couples with a MAGI above $428,000 Standard premium + $219.80

The standard Part B premium for 2012 is $99.90. If you are single and filed an individual tax return, or married and filed a joint tax return, the following chart will apply:

Modified Adjusted Gross Income (MAGI) Part b Monthly Premium

Individuals with a MAGI of $85,000 or less 2012 standard premium=$99.90

Individuals with a MAGI above $85,000 up to $129,000 Standard premium + $159.80

Individuals with a MAGI above $129,000 Standard premium + $219.80

If you are married and lived with your spouse at some time during the taxable year, but filed a separate tax return, the following chart will apply:


December 2011

MaxiMuM Monthly aMount your Benefit May Be reduced Because of

the Windfall eliMination Provision (WeP)*

eligibility year

years of substantial earnings20 or less 21 22 23 24 25 26 27 28 29 30

1990 $178.0 $160.2 $142.4 $124.6 $106.8 $89.0 $71.2 $53.4 $35.6 $17.8 $0.01991 185.0 166.5 148.0 129.5 111.0 92.5 74.0 55.5 37.0 18.5 0.01992 193.5 174.2 154.8 135.5 116.1 96.8 77.4 58.1 38.7 19.4 0.01993 200.5 180.5 160.4 140.4 120.3 100.3 80.2 60.2 40.1 20.1 0.01994 211.0 189.9 168.8 147.7 126.6 105.5 84.4 63.3 42.2 21.1 0.01995 213.0 191.7 170.4 149.1 127.8 106.5 85.2 63.9 42.6 21.3 0.01996 218.5 196.7 174.8 153.0 131.1 109.3 87.4 65.6 43.7 21.9 0.01997 227.5 204.8 182.0 159.3 136.5 113.8 91.0 68.3 45.5 22.8 0.01998 238.5 214.7 190.8 167.0 143.1 119.3 95.4 71.6 47.7 23.9 0.01999 252.5 227.3 202.0 176.8 151.5 126.3 101.0 75.8 50.5 25.3 0.02000 265.5 239.0 212.4 185.9 159.3 132.8 106.2 79.7 53.1 26.6 0.02001 280.5 252.5 224.4 196.4 168.3 140.3 112.2 84.2 56.1 28.1 0.02002 296.0 266.4 236.8 207.2 177.6 148.0 118.4 88.8 59.2 29.6 0.02003 303.0 272.7 242.4 212.1 181.8 151.5 121.2 90.9 60.6 30.3 0.02004 306.0 275.4 244.8 214.2 183.6 153.0 122.4 91.8 61.2 30.6 0.02005 313.5 282.2 250.8 219.5 188.1 156.8 125.4 94.1 62.7 31.4 0.02006 328.0 295.2 262.4 229.6 196.8 164.0 131.2 98.4 65.6 32.8 0.02007 340.0 306.0 272.0 238.0 204.0 170.0 136.0 102.0 68.0 34.0 0.02008 355.5 320.0 284.4 248.9 213.3 177.8 142.2 106.7 71.1 35.6 0.02009 372.0 334.8 297.6 260.4 223.2 186.0 148.8 111.6 74.4 37.2 0.02010 380.5 342.5 304.4 266.4 228.3 190.3 152.2 114.2 76.1 38.1 0.02011 374.5 337.1 299.6 262.2 224.7 187.3 149.8 112.4 74.9 37.5 0.02012 383.5 345.2 306.8 268.5 230.1 191.8 153.4 115.1 76.7 38.4 0.0

for More informationVisit socialsecurity.gov/gpo-wep/ for more Windfall Elimination Provision information. You’ll find information on:

• HowWEPaffectsyourbenefitinthefactsheetWindfallEliminationProvision(05-10045).• HowSocialSecurityfiguresyourretirementbenefitinthefactsheetYourRetirementBenefit:HowItIs

Figured(05-10070),• Cost-of-livingadjustmentsforindividualyearsinTheHistoryofAutomaticCost-of-LivingAdjustments.

Consult with professional advisors regarding legal, tax, and/or medical matters; LACERA does not offer legal, tax, or medical advice.

*Important: The maximum amount may be overstated. The WEP reduction is limited to one-half of your pension from non-covered employment.

Windfall eliMination Provision

your social security retirement or disability benefits may be reducedIfyouworkforanemployerwhodoesnotwithholdSocialSecuritytaxesfromyoursalary,suchasagovernmentagencyoranemployerinanothercountry,thepensionyougetbasedonthatworkmayreduceyourSocialSecuritybenefits.

TheWindfallEliminationProvisionaffectshowtheamountofyourretirementordisabilitybenefitiscalculatedifyoureceiveapensionfromworkwhereSocialSecuritytaxeswerenottakenoutofyourpay.Amodifiedformulaisusedtocalculateyourbenefitamount,resultinginalowerSocialSecuritybenefitthanyouotherwisewould receive.

When your benefits may be affectedTheWindfallEliminationProvisionprimarilyaffectsyouifyouearnedapensioninanyjobwhereyoudidnotpaySocialSecuritytaxesandyoualsoworkedinotherjobslongenoughtoqualifyforaSocialSecurityretirementordisabilitybenefit.

Forexample,thisprovisionaffectsSocialSecuritybenefitswhenanypartofaperson’sfederalserviceafter1956iscoveredundertheCivilServiceRetirementSystem(CSRS).However,federalservicewhereSocialSecuritytaxesarewithheld(FederalEmployees’RetirementSystem)willnotreduceyourSocialSecuritybenefitamounts.TheWindfallEliminationProvisionmayapplyif:

•Youreached62after1985;or•Youbecamedisabledafter1985;and•YoufirstbecameeligibleforamonthlypensionbasedonworkwhereyoudidnotpaySocialSecuritytaxesafter1985,evenifyouarestillworking.

Why a different formula is usedSocialSecuritybenefitsareintendedtoreplaceonlyapercentageofaworker’spre-retirementearnings.ThewaySocialSecuritybenefitamountsarefigured,lower-paidworkersgetahigherreturnthanhighlypaidworkers.Forexample,lower-paidworkerscouldgetaSocialSecuritybenefitthatequalsabout55percentoftheirpre-retirementearnings.Theaveragereplacementrateforhighlypaidworkersisabout25percent.

Before1983,peoplewhoworkedmainlyinajobnotcoveredbySocialSecurityhadtheirSocialSecuritybenefitscalculatedasiftheywerelong-term,low-wageworkers.TheyhadtheadvantageofreceivingaSocialSecuritybenefitrepresentingahigherpercentageoftheirearnings,plusapensionfromajobwheretheydidnotpaySocialSecuritytaxes.CongresspassedtheWindfallEliminationProvisiontoremovethatadvantage.

how does it work?SocialSecuritybenefitsarebasedontheworker’saveragemonthlyearningsadjustedforinflation.Weseparateyouraverageearningsintothreeamountsandmultiplytheamountsusingthreefactors.Forexample,foraworkerwhoturns62in2011,thefirst$749ofaveragemonthlyearningsismultipliedby90percent;thenext$3,768by32percent;andtheremainderby15percent.Thesumofthethreeamountsequalsthetotalmonthlypaymentamount.

The90percentfactorisreducedinthemodifiedformulaandphasedinforworkerswhoreachedage62orbecamedisabledbetween1986and1989.Forthosewhoreach62orbecamedisabledin1990orlater,the90percent factor is reduced to 40 percent.

Thereareexceptionstothisrule.Forexample,the90percentfactorisnotreducedifyouhave30ormoreyearsof“substantial”earningsinajobwhereyoupaidSocialSecuritytaxes.Thetableonpageoneliststheamountofsubstantialearningsforeachyear.

Thetableonthenextpageshowsthepercentageuseddependingonthenumberofyearsofsubstantialearnings.Ifyouhave21to29yearsofsubstantialearnings,the90percentfactorisreducedtobetween45and 85 percent.

Toseethemaximumamountyourbenefitcouldbereduced,visitsocialsecurity.gov/retire2/wep-chart.htm.

some exceptions...TheWindfallEliminationProvisiondoesnotapplyif:

•YouareafederalworkerfirsthiredafterDecember31,1983;•YouwereemployedonDecember31,1983,byanonprofitorganizationthatdidnotwithholdSocialSecuritytaxesfromyourpayatfirst,butthenbeganwithholdingSocialSecuritytaxesfromyourpay;

•Youronlypensionisbasedonrailroademployment;•TheonlyworkyoudidwhereyoudidnotpaySocialSecuritytaxeswasbefore1957;or•Youhave30ormoreyearsofsubstantialearningsunderSocialSecurity.

TheWindfallEliminationProvisiondoesnotapplytosurvivorsbenefits.However,benefitsmaybereducedforwidowsorwidowersbecauseofanotherprovisionofthelaw.AskforGovernmentPensionOffset(PublicationNo.05-10007). ... and a guaranteeIfyougetarelativelylowpension,youareprotected.ThereductioninyourSocialSecuritybenefitcannotbemorethanone-halfoftheamountofyourpensionthatisbasedonearningsafter1956onwhichyoudidnotpaySocialSecuritytaxes. contacting social securityOurwebsiteisavaluableresourceforinformationaboutallofSocialSecurity’sprograms.Thereareanumberofthingsyoucandoonline.

Inadditiontousingourwebsite,youcancallustoll-freeat1-800-772-1213.Wetreatallcallsconfidentially.Wecananswerspecificquestionsfrom7a.m.to7p.m.,MondaythroughFriday.Wecanprovideinformationbyautomatedphoneservice24hoursaday.(YoucanuseourautomatedresponsesystemtotellusanewaddressorrequestareplacementMedicarecard.)Ifyouaredeaforhardofhearing,youmaycallourTTYnumber,1-800-325-0778.

Wealsowanttomakesureyoureceiveaccurateandcourteousservice.ThatiswhywehaveasecondSocialSecurityrepresentativemonitorsometelephonecalls.


This material was created by the Social Security Administration (SSA) and is reprinted from socialsecurity.gov for the convenience of LACERA members. LACERA does not administrate the Windfall Elimination Provision.

For questions, call SSA at 1-800-772-1213.


April 2011

RETIREMENT ALLOWANCE OPTIONS & ESTIMATESTheRetirementOptionyouchooseatthetimeofretirementdeterminesthesurvivordeathbenefit.AllOptionsareavailabletoallPlanmembers(A,B,C,DandE),unlessotherwiseindicated.Estimatesarebasedonthehighestaveragecompensationtodateanddonottakeintoaccountanyfuturesalaryincreasesbetweennowandyourretirementdate.Youshouldthereforefocusonthepercentages,notthedollaramounts,atthistime.

UnmodifiedThe Unmodified Option is the most popular, since it offers the highest possible benefit over your lifetime. Itpaysyouthefullamountofthemonthlybenefittowhichyouareentitledbasedonyourageatretirement,amountofservicecredit,andfinalcompensation.(TheUnmodifiedOptionexhauststhecontributionsofacontributorymemberratherquickly,butstillprovidesalifelongallowance.)UnderthisOption,if your eligible surviving spouse or domestic partner or minor child dies before you, youmaychangeyourbeneficiaryafterretirement.*However,uponyourdeath,yournewbeneficiarywouldonlyreceivea$5,000lump-sumdeath/burialbenefit,alongwithanyremainingportionofyouraccumulatedcontributions.(Youmaynameadifferentbeneficiarytoreceivethe$5,000lump-sumdeath/burialbenefit.SeeDeath/BurialBenefitsectionfordetails.)

Unmodified+PlusThisOptionlimitsthepaymentofacontinuingallowancetoaneligiblespouse,domesticpartner,orminorchild(ren).Survivorpaymentsstopuponthedeathofyoursurvivor.Youcannotchangeyourbeneficiaryafterretirement. If your beneficiary dies before you,thereductiontoyourretirementallowanceremainsineffect.

Plan A, B, C, or DUnder this customizable Option, you can designate the percentage of your monthly allowance — between 66 and 100 percent — that your eligible surviving spouse, domestic partner, or minor child(ren) will receive upon your death.*Tofundyoursurvivor’sallowance,yourmonthlyallowanceisreducedduringyourlifetime.Thereductioniscalculatedusinganactuarialequivalenttocoverthecostdifferencebetween66and100percent.Thereisnolump-sumdistributionofanyremainingcontributionsprovided to your survivor.

Plan E UnderUnmodified+PlusinPlanE,youcandesignateyoursurvivortoreceivebetween56and100percentofyourmonthlyallowance.Thereductiontoyourallowanceduringyourlifetimeiscalculatedtocoverthecostdifferencebetween56and100percent.

Service-connected Disability (SCD)UponthedeathofmemberreceivinganSCDallowance,LACERApaysamonthlyallowancetotheeligiblesurvivor.Certainrequirementsandrestrictionsapply.

Other Retirement OptionsYoumaycustomizeyourretirementallowancebyelectingoneofthenumberedRetirementOptions:Option1(notavailableunderPlanE),2,3,or4.TheseOptionsallowyoutoreduceyourretirementallowanceduringyourlifetimetoprovidecontinuingsurvivorbenefitstooneormorenamedbeneficiariesuponyour

*Minor child eligibility applies only in situations where there is no surviving spouse or domestic partner; additional restrictions apply.

death.Namedbeneficiariesmayincludeanyonewithaninsurableinterestinyourlife.*Paymentsstopuponthedeathofyournamedbeneficiary(ies).

Option 1: Thisisalump-sum benefit underwhichyoureceiveaslightlyreducedUnmodifiedRetirementAllowanceduringyourlifetime.Ifyoudiebeforereceivingthecontributionsyoupaidintothefund,thebalanceofyouraccumulatedcontributionsispaidinalumpsumtoyournamedbeneficiaryorestate.(Onaverage,contributionsaredepletedover7-10years.)OnlyOption1allowsfullflexibilitytochangeyourbeneficiarydesignationafteryouretire.ThisoptionisnotavailabletoPlanEmembers.If your beneficiary dies before you,thereductiontoyourretirementallowanceremainsineffect.However,youmaynameanotherbeneficiarytoreceivetheOption1lump-sumpayment.Thisoptiondoes not provide a continuing survivor allowance.

Option 2: IfyouelectOption2, you will receive a reduced Unmodified Retirement Allowance during your lifetime.Thereductionwillbecalculatedbasedonyourageatretirementandtheageofyourbeneficiary.Uponyourdeath,yournamedbeneficiarywillreceive100percentofyourreducedallowance. If your beneficiary dies before you,thereductiontoyourretirementallowanceremainsineffect.Youcannotnameanotherbeneficiarytoreceivethepreviousbeneficiary’sportionofyourmonthlyallowance.

Option 3:ThisOptionpays you a reduced Unmodified Retirement Allowance during your lifetime; upon yourdeathyour named beneficiary receives 50 percent of your reduced allowance as a monthly continuance. Bothyourageatretirementandtheageofyourbeneficiaryareusedtocalculatetheamount of your reduced allowance.If your beneficiary dies before you, thereductiontoyourretirementallowanceremainsineffect.Youcannotnameanotherbeneficiarytoreceivethepreviousbeneficiary’sportionofyourmonthlyallowance.

Option 4: PerhapsthemostflexibleoftheRetirementOptions,Option4allows you to name one or more beneficiaries to receive a fixed percentage of the reduced Unmodified Retirement Allowance youreceiveduringyourlifetime.Ifyouprefer,youmaydesignateasetdollaramount,ratherthanafixedpercentage,asamonthlycontinuanceforoneormoreofyourbeneficiaries.Thereductiontoyourallowanceiscalculatedusingyourageatretirementandtheageofyourbeneficiaries.If one of your beneficiaries dies before you,thereductiontoyourretirementallowanceremainsineffect. You cannotnameanotherbeneficiarytoreceivethepreviousbeneficiary’sportionofyourmonthlyallowance.

*Person with Insurable Interest:According to California law, every person has an insurable interest in the life and health of:

• Himself [herself] • Any person on whom he [or she] depends wholly or in part for education or support• Any person under a legal obligation to him [her] for:

• payment of money • property or services of which death or illness might delay or prevent the performance

• Any person upon whose life any estate or interest vested in him [her] depends

Required Documents You Must SubmitWhen you apply for retirement, you must submit your completed:

•RetirementBenefitEstimateandElectiontoRetireform•LACERABeneficiaryDesignationform•W-4P/DE-4Ptaxwithholdingform

DependingonyourpersonalcircumstancesandtheRetirementOptionyouelect,youmaybealsorequiredtosubmitthefollowing additional documents:

•Your original certifiedmarriagecertificateorCertificateofRegisteredDomesticPartnership•Yourbeneficiary’soriginal certifiedbirthcertificate(forUnmodified+PlusorOptions2,3,or4)•Yourdependentchild’soriginal certifiedbirthcertificateifhe/shewillbecoveredunderyourLACERA-administeredhealthinsurance

Changing Your Mind after RetirementIfyouwishtochangeyourRetirementOption,youmaydosobeforeyourfirstretirementcheckhasbeenpaid.Atimelyrequestmustbemadeinwriting.Thereafter,youwillnotbeabletochangeyourRetirementOption.

Pension Advance OptionThePensionAdvanceOptionisdesignedtoequalizeamember’sLACERAincomepriortoage62withthecombinedLACERAandSocialSecurityincomethememberwillreceiveafterage62.UnderthisoptionLACERAaddsapercentageofthemember’sSocialSecuritybenefit(basedontheestimatethatappearsonthemember’sSocialSecurityStatement)tothemember’sLACERAretirementallowanceuntilheorshereachesage62.At62,thefullSocialSecurityestimateissubtractedfromtheallowance.ThesefiguresappearonyourRetirementBenefitEstimateandElectionForm.YoumayapplyforSocialSecurity90dayspriortoyour62ndbirthday.

Important Note:ToelectthePensionAdvanceOption,youmustpresentyourSocialSecurityStatementwhenyouretire.DuetodifferencesbetweenestimatedandactualSocialSecuritybenefitamountsandotherreductionsthatmayapplyunderfederallaw,the combined income members receive under this option is often less than they received prior to age 62.

Eligibility Requirements for Pension Advance Option•Serviceretirementpriortoage62•SubmitaSocialSecuritystatementofbenefitstoverifyeligibility•Electoneofthefollowing:

•UnmodifiedOption•Option1

If you are considering the Pension Advance Option, we recommend you call 1-800-786-6464 to consult with a LACERA Retirement Benefits Specialist prior to making your decision.


$3,500

$3,300

$3,000

$2,800

$2,500

62

AGE

BEN

EFIT

PENSION ADVANCE OPTION

Unmodified Option = $3,000 Pension Advance before age 62 = $3,300Pension Advance after age 62 = $2,800SocialSecurityatage62=$500

UnmodifiedOption

PensionAdvance $2,800+$500=$3,300

$3,000+$500=$3,500

year substantial earnings1937-54 $ 900

1955-58 1,050

1959-65 1,200

1966-67 1,650

1968-71 1,950

1972 2,250

1973 2,700

1974 3,300

1975 3,525

1976 3,825

1977 4,125

1978 4,425

1979 4,725

1980 5,100

1981 5,550

1982 6,075

1983 6,675

1984 7,050

1985 7,425

1986 7,875

1987 8,175

1988 8,400

1989 8,925

1990 9,525

1991 9,900

1992 10,350

1993 10,725

1994 11,250

1995 11,325

year substantial earnings1996 11,625

1997 12,150

1998 12,675

1999 13,425

2000 14,175

2001 14,925

2002 15,750

2003 16,125

2004 16,275

2005 16,725

2006 17,475

2007 18,150

2008 18,975

2009 - 2011 19,800

Source: http://www.socialsecurity.gov/pubs/10045.html. Reflects latest figures available as of December 27, 2011.

years of substantialearnings Percentage

30 or more 90 percent

29 85 percent

28 80 percent

27 75 percent

26 70 percent

25 65 percent

24 60 percent

23 55 percent

22 50 percent

21 45 percent

20 or less 40 percent