| Funding
Your Retirement Benefits
There has been some concern recently regarding the financial
soundness of your LACERS benefits. We want to take this opportunity
to explain to our Members how their benefits are funded and
to assure all of you that we are adequately funded to pay
retirement benefits.
The LACERS retirement benefit provided to our Members is
a defined benefit, which means that the pension benefit provided
is predetermined by a formula based on the highest year’s
salary and years of service credit. Your benefit is funded
through three sources:
• Member contributions
• City contributions
• Investment earnings on system assets
LACERS Members contribute to the retirement plan based on
a predetermined rate depending on their date of hire. Members
hired on January 1, 1983 or later pay a fixed rate of 6% of
their annual salary. Members hired before that date pay a
rate based on their age at hire. The required contribution
is deducted from
Members’ salaries bi-weekly. Members can expect to be
paid the level of benefit based on the formula, regardless
of the amount of their contributions.
The City contribution rate varies each year. The City is responsible
for the difference between the funds needed to meet its pension
obligations and the funds available through Member contributions
and the investment earnings on Plan
assets. The LACERS Board hires a certified actuary to evaluate
our assets and liabilities at the end of each fiscal year.
This annual valuation forms the basis for the City’s
contribution rate each year.
Please be assured that your retirement allowance continues
to be based on the formula and does not depend upon the City’s
contribution or investment performance in any given year.
By Sandra Dyson, L.A.C.E.R.S.
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