Funding Your LACERS Retirement Benefits
Your LACERS retirement benefit is a "defined benefit," which means that your pension benefit is calculated by using a retirement formula based on your final compensation, years of service credit and LACERS' current retirement factor of 2.16%. The amount of your benefit is based on this retirement formula and not your Member contributions.
Your pension benefit is funded by three sources:
- Your contributions as a LACERS Member
- The City contributions
- LACERS' investment returns on its Plan assets
Your contribution rate, as a LACERS Member, is based on your date of hire. If you were hired on January 1, 1983 or later, you pay a fixed rate of 6% of your annual salary. If you were hired before that date, you pay a rate based on your age at the time you were hired. Your required contribution is deducted from your bi-weekly salary.
The City annual contribution rate is based on the difference between the funds needed to meet its pension obligations and the funds available from Member contributions and LACERS' investment returns on its Plan assets. At the end of each fiscal year, the LACERS Board hires a certified actuary to valuate its Plan's assets and pension obligations. This annual valuation determines how much the City will contribute towards your retirement plan and it varies each year.
Please be assured that your retirement allowance continues to be based on LACERS' retirement formula and not on the City's contribution or LACERS' investment performance in any given year.
LACERS Communications
February 1, 2005
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