Los Angeles County Municipal Code Part 3 Termination Pay Contributions

A.

Subject to the limitations set forth in Section 5.18.110, an Eligible Employee may elect to have the County deduct a fixed percentage or dollar amount from his Termination Pay and contribute such fixed percentage or dollar amount to the Plan pursuant to a Payroll Deduction Authorization Agreement. The County shall pick up such contribution under Code section 414(h)(2).

B.

Notwithstanding any other provision of the Plan, on and after January 26, 2007, no Payroll Deduction Authorization Agreements shall be executed, and no Termination Pay Contributions shall be made to or received by the Plan on behalf of any Participant irrespective of whether such Participant has executed a Payroll Deduction Authorization Agreement before that date.

(Ord. 2008-0004 § 2, 2008: Ord. 2004-0063 § 1 (part), 2004.)

A.

To make an election as provided in Section 5.18.070, an Eligible Employee shall enter into a Payroll Deduction Authorization Agreement in accordance with procedures established by the Administrative Committee.

B.

The Payroll Deduction Authorization Agreement is binding and irrevocable upon execution. A Payroll Deduction Authorization Agreement is deemed executed on the date the completed, signed Agreement is filed with the County or its agent. Once executed, the Payroll Deduction Authorization Agreement may not be amended or revoked. An Eligible Employee who executes a Payroll Deduction Authorization Agreement shall thereafter have no option to receive in cash, or to otherwise direct the disposition of, the fixed percentage or dollar amount of his Termination Pay that he has elected to contribute to the Plan as a Termination Pay Contribution. The Plan shall not accept contributions from any source other than those deducted from Termination Pay.

This Plan does not restrict the Participant's ability to utilize any accrued benefits by taking vacation, sick or other leave while employed with the County.

C.

Except as otherwise provided in this Section 5.18.080, a Payroll Deduction Authorization Agreement must be executed at least 90 days prior to the Participant's Severance Date. The Payroll Deduction Authorization Agreement is effective upon

execution. The Payroll Deduction Authorization Agreement, however, shall not apply to any Termination Pay that becomes payable in the event the Eligible Employee's Severance Date is less than 90 days after the Payroll Deduction Authorization Agreement is executed, unless the Eligible Employee experiences an Involuntary Early Severance. If the Participant's Severance Date occurs later than originally designated, the Payroll Deduction Authorization Agreement will remain effective until his actual Severance Date.

D.

If a Participant is rehired by the County after his Severance Date, any Termination Pay Contribution made on his behalf to the Plan shall remain in the Plan unless and until it is distributed in accordance with Part 6, and the cashed out accrued benefits attributable thereto shall NOT be restored for any reason.

E.

Each Eligible Employee shall be eligible to make only one election to have Termination Pay picked up within the meaning of Code section 414(h)(2). Accordingly, an Eligible Employee may not execute more than one Payroll Deduction Authorization Agreement. If the Eligible Employee intends to have a portion of his Termination Pay picked up and contributed to purchase service with LACERA and a portion of his Termination Pay picked up and contributed to the Plan, he must execute a single Payroll Deduction Authorization Agreement covering both elections. If the Eligible Employee elects to contribute Termination Pay both to LACERA and to the Plan, his Termination Pay will be picked up and contributed first to LACERA, in satisfaction of the election to purchase additional retirement credit under the Payroll Deduction Authorization Agreement, and second to the Plan, in satisfaction of the election to contribute to the Plan under the Payroll Deduction Authorization Agreement. In no event, will the Termination Pay Contribution under the Plan exceed the amount of Termination Pay available after deduction therefrom to make contributions to LACERA in accordance with the Payroll Deduction Authorization Agreement.

F.

Termination Pay Contributions made pursuant to this Part 3., although designated under the Plan as employee contributions, shall be paid by the County in lieu of employee contributions.

G.

The Payroll Deduction Authorization Agreement shall be signed by the employee. It shall provide that the employee authorizes the appropriate deduction from Termination Pay for the purposes of having it picked up and contributed to the Plan by the County, and that the employee understands and acknowledges the requirements and limitations of this Section 5.18.080.

H.

As a condition to entering the Payroll Deduction Authorization Agreement, the County may require an employee to execute a release from liability for any adverse consequences that may result if the Internal Revenue Service or a court determines that a contribution to the Plan pursuant to a Payroll Deduction Authorization Agreement is not a picked up contribution within the meaning of IRC Section 414(h)(2), or that the Plan is not a Qualified Plan.

(Ord. 2004-0063 § 1 (part), 2004.)

Each Termination Pay Contribution shall be paid by the County to the Trustee within a reasonable period after a Participant's Severance Date, but in no event later than the last day of the month following the month containing the Participant's Severance Date or the final calculation of the amount of the Termination Pay by the County, whichever is later.

(Ord. 2004-0063 § 1 (part), 2004.)

A.

The Plan assets shall be held for the exclusive purpose of providing benefits to Participants and their Beneficiaries and defraying reasonable expenses of administering the Plan in accordance with Part 7.

B.

If a Termination Pay Contribution is made by the County due to a mistake of fact, such contribution shall thereafter be returned to the Participant to the extent permitted by applicable law. Additionally, if the Plan, or a portion thereof, is determined by the Internal Revenue Service not to satisfy the requirements of Code section 401(a) for a qualified plan, any Termination Pay Contributions attributable to the period for which it is determined not to be so qualified shall, at the direction of the Administrative Committee, be returned to the Participant.

(Ord. 2004-0063 § 1 (part), 2004.)

A.

Definitions. For the purposes of this Section, the following definitions apply:

"Annual Additions" means the sum of the following amounts:

a.

All contributions made by the County that are allocated to a Participant's account under a qualified defined contribution plan maintained by the County;

b.

All contributions made by the Participant to a qualified defined contribution plan maintained by the County;

c.

All forfeitures allocated to a Participant's account under a qualified defined contribution plan maintained by the County, and

d.

Any amount allocated to an individual medical benefit account (as defined in Code section 415(l)(2)) of a Participant that is part of a pension annuity plan maintained by the County (except that the 100 percent of 415 Compensation limit does not apply to such an individual medical benefit account).

"Limitation Year" means the twelve consecutive month period used by a qualified plan for the purposes of computing the limitations on benefits and annual additions under Code section 415. The Limitation Year for this Plan is the Plan Year (calendar year).

B.

Limit on Annual Additions. Notwithstanding any other provisions of the Plan, the Annual Addition for a Participant for any Limitation Year shall not exceed the lesser of (i) $40,000, as adjusted after 2002 for increases in the cost-of-living under Code section 415(d), or (ii) 100 percent of the Participant's 415 Compensation for the Plan Year. The limits set forth in this subsection constitute the "Contribution Limit" for such Limitation Year.

C.

Excess Annual Additions. If a Participant's Annual Additions would exceed the limitations of subsection 5.18.110B for a Limitation Year, as soon as practicable following the Limitation Year a portion of the Termination Pay Contribution made for

such Eligible Participant for such Limitation Year (together with gains attributable thereto) shall be treated as an Employee contribution not eligible to be picked up under Part 3 and returned to him as a corrective disbursement to the extent necessary to satisfy the limitations under subsection 5.18.110.B.

If the Participant participates in more than one defined contribution plan maintained by the County, the Termination Pay Contribution shall in all cases be treated as if it was made after any Annual Additions to any other plan and any reduction of Excess Annual Additions will be made first from this Plan in accordance with subsection 5.18.110.B

D.

Aggregation of Plans. For the purposes of applying the limitations set forth in this Section 5.18.110, all qualified defined contribution plans (whether or not terminated) ever maintained by the County shall be treated as one defined contribution plan.

(Ord. 2004-0063 § 1 (part), 2004.)