Separating from City Service

Leaving City Service Prior to Retiring

Overview
Leaving City Service Prior to Retiring

If you are not eligible for a Service Retirement, but are thinking of terminating City Service, you may still be eligible for certain benefits from LACERS. Your eligibility for these benefits will depend on the amount of Continuous Service you have when you leave City Service. 

If you have less than five years of Continuous Service, you can either:

  • Leave your contributions on deposit with the LACERS or,
  • Take a refund of your contributions and/or roll these funds over into another qualified retirement plan. 

If you have five or more years of Continuous Service, you can either:

  • Leave your contributions on deposit with LACERS until you are eligible for a Deferred Service Retirement; or
  • Take a refund of your contributions and/or roll these funds over into another qualified retirement plan.  

Leaving Your Contributions on Deposit

Even if you terminate with less that five years of Continuous Service, you can leave your contributions and interest on deposit with LACERS. Your account will continue to receive interest. If you should return to City employment as a LACERS Member in the future, you would be able to return to membership in Tier 1 if your contributions remain on deposit. If you do not return to City service, you must withdraw your contributions and interest by the time you reach age 72, pursuant to Internal Revenue Code provisions/rules. 

Taking a Refund and/or Rolling Your Contributions Into A Qualified Plan

You may take a refund of your contributions and interest in your account, subject to the taxation provisions, and/or roll these funds over into another qualified retirement plan. If you choose this opiton, you give up your right to any other benefits from the LACERS.

Additionally, you are not entitled to the City’s contributions because they are not part of your individual account. 

Tier Status

If you withdrew or withdraw your funds as a Tier 1 Member and reenter City service on or after February 21, 2016, you will become a Member of Tier 3. 

Deferred Service Retirement

If you terminate with five or more years of City Service or were a part-time employee while a LACERS Member, you may leave your contributions on deposit and take a Deferred Service Retirement upon reaching eligibility. For more information, please see refer the Deferred Vested eligibility table for Tier 1 and Tier 3 members.

IRS Tax Requirement

LACERS is required to withhold taxes on any amount you receive as a refund for which you have not paid taxes unless your money is rolled over into another qualified plan. Based on your age at the time your contributions are withdrawn, you may be subject to additional taxes and/or penalties. Please consult your tax advisor for more information prior to distributing your contributions. 

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