Understanding how furlough status affects your retirement
Will mandatory furloughs affect my retirement
No. Taking furlough days will not impact your retirement benefits
because your benefit is determined by your Compensation Earnable,
which is the amount your classification earns for 80 hours in a
If I am earning less money because of the furlough days,
why won’t my retirement benefits be impacted?
Your retirement allowance is based on the following formula:
Service Credit x Final Compensation x 0.0216.
Service Credit – This is determined by the
amount of time you have worked as a member of LACERS and made
contributions to your retirement account per Los Angeles
Administrative Code (LAAC) 4.1001. As long as you work
enough hours to cover the costs of your full retirement
contribution and any other payroll deductions (this very likely
will not be an issue with two furlough days per month), you will
continue to earn the same amount of Service Credit with or
without furlough days.
Final Compensation – This is the average of
the last 12 months (or any other 12 consecutive month period you
designate) of Compensation Earnable in your classification
and will not be affected by furlough days. “Compensation
Earnable” is the amount your classification earns for full-time
service (LAAC 4.1001). Taking furlough days will reduce the
amount of money you earn, but it will not reduce your
Compensation Earnable. Because furlough days will not impact your
Service Credit or your Final Compensation, they will have no
impact on your retirement allowance.
Do I still have to make my full retirement contribution
if I am taking mandatory furlough days?
Yes. Your retirement contribution is calculated based on
your compensation earnable for your specific classification
(LAAC 4.1003). Your compensation earnable is the full
salary, wage or compensation established for any position or
office in the City service (LAAC 4.1001). Your retirement
contribution and service credit will remain the
same whether your work 72 hours or 80 hours in a pay period
While I understand mandatory furlough days will not
affect my retirement benefits, it will reduce my salary. Can I
borrow from my retirement account?
No. The Los Angeles Administrative Code does not provide LACERS
the authority to allow members to borrow from their LACERS
Do I have to take furlough days?
Please check with your Department Personnel Director to determine
if you are required to take any furlough days.
Does LACERS have any services that will help me cope with
the salary reduction of mandatory furlough days?
If you are facing other specific problems and feel you need
assistance, the City’s Employee Assistance Program (EAP) provides
help and counseling for a variety of issues. The EAP can be
contacted 24 hours a day, 7 days a week by their toll-free line
at (800) 213-5813. Their website is also
available for information at: www.liveandworkwell.com,
company code: CityofLA