| Legislative Update
The July 2007 retirement checks will show an increase of 3%. The annual cost of living at 4.3% was approved by the LACERS Board of Directors authorizing the 3% increase and 1.3% to be banked for future use when needed.
The LACERS Board has approved and sent to the Mayor and City council the following benefit increases for their consideration and action:
1. Increase the current burial expense allowance from
$2,500 to $5,000.
2. Provide a dental subsidy for surviving spouses and
domestic partners.
3. Provide Medicare Part B reimbursement to surviving
spouses and domestic partners of deceased members
who would be eligible.
The Mayor and City Council have approved a charter amendment to establish a “Survivor Benefit Purchase Program” to allow retired members of the Fire and Police Pension Plan to purchase, at their own expense a survivor benefit for a spouse or domestic partner. The amendment will be presented to the electorate at the next City-wide election. This amendment, if approved by the electorate, would permit a retired fireman or policeman to add a spouse to the survivor benefit program but the person would not be eligible for a health subsidy.
I intend to schedule a similar proposal for the Benefits Committee, which I chair and if approved, ask the full Board for approval. If approved, it would be self funded and expensive but it would give those interested the opportunity to buy the program. The cost of the program would be actuarially determined and paid for by the retiree through a reduction of his or her monthly retirement check. The program which would be cost neutral to the LACERS fund would require Mayor and City Council approval but not a charter change and thus, there is no need for a vote by the electorate.
On another issue, the City Council and Mayor have approved a new procedure for electing the two employee members and the one retired member to the Board of Administration of the City Employers Retirement System.
The major change for electing the retiree members affects the run-off provision, if needed. Under the new procedure, if a candidate receives 50% of the vote plus one, the election is over as opposed to the current procedure where the highest five vote getters go to a run-off. If no one receives 50% of the vote plus one, only the two highest vote getters will go to a run-off.
I currently serve on a committee along with Police and Fire retirees to review our future office needs. The options being considered include: Purchasing an existing building; Building a new building; leasing space in another building; or staying in our current building under a new lease or purchase agreement. Currently both retirement agencies are leasing space in the same building. Our office needs are very similar which allows us to share a board room and public areas.
It’s my opinion; we should have built a building long ago and leased surplus space to other city departments. We could rent to the city at a cheaper rate than they are now paying and apply the rental money to pay off our mortgage.
On the health care front, my committee has started negotiations with our health care providers. I expect to have some new providers bid this year for our contracts. I’m hoping that a greater level of participation will result in more services than we now have and at a reasonable premium.
Finally, just prior to this article going to print, the LACERS
Audit and Strategic Planning Committee will have reviewed the first draft of the 2007-08 LACERS budget. The draft report estimates the City’s contribution for retirement benefits will be $402,747,648, an increase of 2.40% as compared to fiscal year 2006-07. The budget for administrative expenses is up about 3% largely attributable to cost of
living increases for staff. The budgeted amount for Investment Management Expense is approximately $42.5 million, about $2.2 million higher than the current year’s budget. More details will be forthcoming once the budget has been approved.
LACERS Statistics |
| 1. Total Value of the fund as of close of business February 28, 2007 |
$10,494,300,000 |
| 2. Number of retiree checks issued monthly as of March 31, 2007 |
14,966 |
| 3. Average retiree monthly allowance as of March 31, 2007 |
$2,600.57 |
| 4. Number of retirees receiving a disability allowance as of March 31, 2007 |
893 |
5. Number of surviving spouses receiving an allowance as of March 31, 2007 |
3,237 |
6. Average surviving spouses monthly allowance as of March 31, 2007 |
$1,488.99 |
| 7. Average retiree age as of March 31, 2007 |
71.60 |
| 8. Average number of years served (including buyback, Service Retirement only) |
27.27 |
Ken Spiker
Commissioner to the LACERS Board of Administration
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