LACERS - Retirement Allowances Fast Facts

LACERS Retirement Allowance Fast Facts

Updated January 2013

Defined benefit based on formula: Final Compensation x Service Credit x 2.16%
- 2.16% factor has not changed since 1975

Eligibility requirements for full retirement allowance:

Age 55 or older with at least 30 years of City Service*
Age 60 or older with at least 10 years of Continuous Service*
Age 70 or older
* At least 5 years of Continuous Service must be from City employment. Service recognized under Reciprocity may apply.

Final Compensation is based on highest 12 consecutive months salary

Is limited to base salary and regularly assigned bonuses and premium pay
- Does not include many items that might be included in other pension systems such as: lump sum bonus payments, transportation allowances, and uniform allowances (to name just a few).

LACERS Final Compensation definition helps minimize “pension spiking” which is the ability to artificially increase an employee’s retirement allowance.

For example: If a person was promoted with a salary increase two months before retiring, the Final Compensation will reflect an average of the new pay salary, along with ten months of the prior salary.

January – October: $3,000 per month
November - December: $3,500 per month
Final Compensation: $3,083.33 (average 12 months of both salaries)
Monthly Retirement Allowance: $3,083.33 X 30 X 2.16 = $1,998**

**This is just an example for illustrative purposes. Actual calculation is based on an average using biweekly salary, pursuant to Los Angeles Administrative Code.

Maximum retirement allowance is 100% of Final Compensation

Requires approximately 46.3 years of City Service to retire with 100% of Final Compensation

Annual COLAs of up to 3% based on local Consumer Price Index. Anything above 3% is “banked”

As of June 30, 2012:

Benefit Type	Number of Recipients	Average Monthly Pension Amount	Average Annual Pension Amount*
Service Retirement	12,634	$3,804	$45,648
Disability Retirement	897	$1,534	$18,408
Survivor Continuance	3,692	$1,888	$22,656
All	17,223	$3,275 (weighted average)	$39,300 (weighted average)

For the December 2012 payroll, 546 (or approximately 4.7%) of the 11,589 members on a service retirement have a retirement allowance of $100,000 or more per year.
More than 80% (81.13%) of our Service Retirees have pensions that are 75% or less of their Final Compensation (as of December 2012 payroll). An employee would have to work 34.72 years to achieve a pension worth 75% of their Final compensation.
More than 90% (91.12%) of our Service Retirees have pensions that are 80% or less of their Final Compensation (as of December 2012 payroll). An employee would have to work over 37 (37.03) years to achieve a pension worth 80% of their Final Compensation.
Less than one third of a percent (0.30%) of our Service Retirees have pensions that equal 100% of their Final Compensation (as of December 2012 payroll). This would require at least 46.30 Year of Service to the City.