Los Angeles County Municipal Code Ch. 5.24 County of Los Angeles Deferred Compensation Plan

This Deferred Compensation Plan is designed to permit employees of Los Angeles County to defer a portion of their compensation and provide for retirement and death benefits.

While the County intends to continue the Plan, it reserves the right to terminate the Plan, in whole or in part, at any time. Benefits under the Plan shall at all times be limited to those payable from Participants' Deferred Accounts to the extent funded by County Contributions that have been made and credited to such Accounts, subject as provided herein to the

claims of the County's general creditors. Therefore, neither participation in the Plan nor eligibility therefor shall entitle any employee to have the Plan or any of its provisions continued for his benefit in the future.

(Ord. 87-0061 § 2 (part), 1987.)

The following terms when used herein with initial capital letters, unless the context clearly indicates otherwise, shall have the following respective meanings:

"Administrative Committee" means a committee consisting of: the Auditor-Controller, County Counsel, Treasurer-Tax Collector, and Chief Administrative Officer of the County, which Committee shall be the administrator of the Plan, and which may delegate all or part of its powers, duties and authority in such capacity (without ceasing to be the administrator of the Plan) as hereinafter provided.

"Beneficiary" means such person or persons as a Participant may designate to receive his interest under the Plan after his death. The designation may be made, and may be revoked or changed, only by a written instrument (in form acceptable to the County) signed by the Participant and filed with the County before his death. In the absence of a designation and at any other time when there is no existing Beneficiary designated by the Participant, his Beneficiary shall be his spouse, if living 30 days after the date of his death, or, if not, his children (by blood or adoption) equally (with children of a deceased child to share equally the share of such deceased child). If a Beneficiary cannot be determined pursuant to the preceding sentence, the Beneficiary shall be the Participant's estate.

"Board" means the Los Angeles County Board of Supervisors.

"Code" means the Internal Revenue Code of 1986, as amended.

"County" means the County of Los Angeles and (i) any governmental entity of which the Board is the governing body, and (ii) the Los Angeles County Municipal Courts and the Los Angeles County Superior Court to the extent the operation of this Plan in said courts is otherwise authorized by State law or rules of court.

"Deferred Account" means a book account established by the County for a Participant to which any Deferred Compensation Contribution, and any earnings and investment gains or losses allocable thereto, shall be credited.

"Deferred Compensation Contribution" means any amount of Eligible Earnings deferred by a Participant pursuant to a Participation Agreement, which contributions are fully vested at all times.

"Effective Date" means January 23, 1981.

"Eligible Earnings" means any compensation for service performed for the County which is currently includable in gross income under the Code. Any monetary award received for recruitment of new registered nurse employees shall not be

included in Eligible Earnings.

"Eligible Employee" means a full-time permanent employee who is within an employment classification established by the County. For purposes hereof, "full-time permanent" means any employee appointed to an "A," "L," "N" or "O" item pursuant to Title 6 of the Los Angeles County Code; or any employee appointed to a "D" item pursuant to said Title 6 who is required to possess a California license to practice as a Registered Nurse.

"Employee" means an employee of the County.

"Entry Date" means the first day of every month unless a longer interval beginning on the first day of a calendar month is provided by the Administrative Committee.

"Investment Fund" means the fund created and maintained for investment purposes pursuant to Section 5.24.050 of this Code.

"Normal Retirement Age" means age 70 ½ unless the Participant shall have designated an alternative normal retirement age prior to his Separation from Service. A Participant's Normal Retirement Age shall not be earlier than the earliest date at which the Participant will become eligible to retire and receive a full pension benefit pursuant to the provisions of the county Employees Retirement Law of 1937, as amended, and shall not be later than age 70 ½ or, if the Participant remains in the Service of the County after age 70 ½, the date of such Participant's expected Separation from Service. If a Participant uses the increased deferral limit set forth in Section 5.24.040, such Participant shall be deemed to have selected as his Normal Retirement Age the third Plan Year following the first Plan Year in which such increased limit is utilized or such earlier year as is necessary to comply with the limitations set forth above. Once a Participant has utilized the increased deferral limits to any extent, his Normal Retirement Age may not thereafter be changed.

"Participant" means an Eligible Employee or a former Eligible Employee who has entered into a Participation Agreement and who has a balance in his Deferred Account.

"Participation Agreement" means the agreement with the County by which an Eligible Employee elects to become a Participant under the Plan as of an Entry Date and to defer irrevocably a portion of his Eligible Earnings, with the consent of the County.

"Plan" means the County of Los Angeles Deferred Compensation Plan, the terms and provisions of which are herein set forth, as the same may be amended, supplemented or restated from time to time.

"Plan Year" means a calendar year.

"Retirement" means Separation from Service after having met or exceeded the minimum age and service requirements for a service retirement benefit under the County Employees Retirement Law of 1937.

"Separation from Service" means any termination of the employer-employee relationship between a Participant and the County.

Unless the context otherwise indicates, the masculine wherever used shall include the feminine and neuter, and the singular shall include the plural.

(Ord. 2005-0019 § 1, 2005; Ord. 91-0008 § 2, 1991; Ord. 87-0061 § 2 (part), 1987.)

An Eligible Employee may become a Participant in the Plan by entering into a Participation Agreement with the County before an Entry Date. The Participation Agreement shall become effective with respect to Eligible Earnings payable to the electing Eligible Employee for services rendered to the County on or after the next Entry Date following the execution of such Participation Agreement, and shall remain effective for a minimum of one calendar month. The Participation Agreement shall thereafter be effective for so long as the Participant remains an Employee unless revoked by the Participant by a written notice to the County at least 20 days prior to the commencement of the calendar month for which the revocation is to be effective. The Participation Agreement shall specify, as either a percentage or a dollar amount, the portion of Eligible Earnings to be deferred each month pursuant to the Plan.

(Ord. 87-0061 § 2 (part), 1987.)

The amount that a Participant may defer under a Participation Agreement and the Plan for any Plan Year shall not exceed a ceiling which shall be the lesser of (a) $7,500.00, or (b) 33-1/3 percent of the Participant's Eligible Earnings, provided that the cumulative amount deferred shall not exceed 33-1/3 percent of the Participant's cumulative Eligible Earnings for the current Plan Year. However, the maximum amount that may be deferred in any of the last three Plan Years ending before the Plan Year in which the Participant attains Normal Retirement Age may be increased to the lesser of (a) $15,000.00 or (b) the sum of the Plan ceiling for the Plan Year determined as above and any deferrals (subject to such ceiling) not utilized for prior Plan Years after December 31, 1978, in which the Participant was eligible to participate in any "eligible deferred compensation plan" within the meaning of Section 457(b) of the Code. Further, the amount that may be deferred under the Plan for any Plan Year shall be reduced (i) by the amount recognized for purposes of the deferral limit for such Plan Year under any other "eligible deferred compensation plan," including Chapter 5.25 of this Code, and (ii) by any amount excludable from the Participant's gross income for such Plan Year under Section 403(b) of the Code on account of contributions made by the County, pursuant to Section 5.25.060 of this Code, or otherwise.

(Ord. 87-0061 § 2 (part), 1987.)

A.

Investment in General. All Deferred Compensation Contributions shall be invested (the "Investment Fund") by the Administrative Committee in annuity policies, deposit certificates, mutual funds or other assets to provide convenient methods of setting aside a portion of County assets to meet County obligations under the Plan. All Deferred Compensation Contributions, property and rights purchased with such amounts, and all income attributable to such amounts, property or rights shall remain solely the property and rights of the County and subject to the claims of the County's general creditors, until distributed to Participants or Beneficiaries. The Investment Fund shall at all times remain a part of the general assets of the County, and shall remain available for the payment of County debts. Neither the existence of the Plan nor the Investment Fund shall be deemed to create a trust or shall entitle any Participant, the Beneficiary of any Participant, or a creditor of any Participant, to a claim or lien against the assets of the Investment Fund.

B.

Allocation by Participants. Each Participant may allocate his Deferred Compensation Contributions, with the consent of the County, among the investment alternatives offered under the Plan. With the consent of the Administrative Committee, the Participant may also change the allocation of future Deferred Compensation Contributions and may transfer past Deferred Compensation Contributions, adjusted for earnings, gains and losses, if any, from one investment alternative to another.

(Ord. 87-0061 § 2 (part), 1987.)

The County shall maintain a Deferred Account for each Participant. The Deferred Account of each Participant shall be credited with earnings thereon, if any, and the Participant's Deferred Account shall be credited or debited, as the case may be, with the net amount of any gains or losses which may result from the investment of the Deferred Account in the investment alternatives. The County shall not be liable for any losses on any amount allocated to any investment alternative.

(Ord. 87-0061 § 2 (part), 1987.)

A.

Distributions in General. The entire balance in a Participant's Deferred Account shall be distributed to him or his Beneficiary in a lump-sum payment on the earlier of 90 days after the Participant undergoes a Separation from Service or 60 days after the close of the Plan Year in which the Participant undergoes a Separation from Service; provided, however, that a Participant or his Beneficiary may choose a later time and/or different method of distribution in accordance with this section on an election form provided by the Administrative Committee. The election form shall be filed with the County on or before the earlier of the 75th day after the Participant undergoes a Separation from Service or the 45th day after the close of the Plan Year in which the Participant undergoes a Separation from Service. The electing Participant or Beneficiary shall also furnish such other information as the Administrative Committee or its duly authorized agent may require. If the Participant or his Beneficiary cannot be located within four years of the date the Participant's interest under the plan is first payable, the entire balance in his Deferred Account shall be forfeited; provided, however, that the amount so forfeited shall be reinstated retroactive to the date of such forfeiture upon the subsequent filing of an application for benefits under the Plan, and payment of the lump-sum benefit shall be made not later than 60 days after the application is filed.

Distributions under the Plan to a Participant or his Beneficiary shall be made in cash in accordance with one of the following methods:

A lump-sum payment, or

Equal monthly, quarterly or annual installments not extending over more than 15 years, or

Consecutive periodic payments for the life of the Participant and his spouse and the last survivor of them, or

A combination of the methods of payment described in subdivisions 1 through 3 of this subsection.

The Participant or the Beneficiary, as the case may be, shall elect either a lump-sum payment, installment payments, an annuity or combination thereof with the consent of the Administrative Committee prior to the commencement of any distribution under this Plan; provided, however, that no method may be selected by a Participant unless the present value of the payment expected to be made to him hereunder is more than 50 percent of the present value of all payments expected to

be made to him and his Beneficiary; and provided further, that upon the death of a Beneficiary, any amount to which such Beneficiary would be entitled but for the Beneficiary's death shall be paid to the Beneficiary's estate. In the event that the vested balance of any Participant's Deferred Account is less than $3,500.00, the Administrative Committee shall distribute such Participant's interest under the Plan in a lump sum.

No distribution of the balance in a Participant's Deferred Account elected by the Participant shall commence later than the later of 60 days after the close of the Plan Year (i) in which such Participant attains or, in the case of a Separation from Service prior to normal retirement, would have attained, Normal Retirement Age, or (ii) in which the Separation from Service occurs.

If a Participant to whom benefit payments have commenced pursuant to this section due to his Separation from Service should again become an Eligible Employee before completion of the distribution of his Deferred Account, no further distribution shall be made on account of such prior Separation from Service.

B.

Vesting. Any amount credited to a Participant's Deferred Account shall be nonforfeitable and fully vested.

C.

Normal Retirement. If a Participant's employment with the County is terminated on or after his attaining Normal Retirement Age, the balance in his Deferred Account shall be paid to him in accordance with one of the methods of payment set forth in this section commencing no later than 60 days after the close of the Plan Year in which such Participant undergoes a Separation from Service.

D.

Separation from Service. Upon a Participant's Separation from Service prior to his attaining Normal Retirement Age, the amount credited to his Account shall be distributed pursuant to this section after such Separation from Service, but such distribution shall commence no later than the date 60 days after the close of the Plan Year in which such Participant attains Normal Retirement Age.

E.

Death.

Before Termination of Service. In the event of the death of the Participant while he is an Employee, the balance of his Deferred Account shall be paid to his Beneficiary in accordance with this section. Such payment shall commence no later than 60 days after the close of the Plan Year in which the deceased Participant would have attained Normal Retirement Age.

Following Separation from Service. In the event of the death of a Participant following his Separation from Service with the County, the Administrative Committee shall commence payment of the balance, if any, in the Participant's Deferred Account to his Beneficiary in accordance with this section no later than 60 days after the close of the Plan Year in which the deceased Participant would have attained Normal Retirement Age, unless payment of benefits has already commenced, in which event such payments shall be continued in accordance with the method of payment previously selected by the Participant.

F.

Emergency Withdrawals. The Administrative Committee, in its sole discretion, may permit a Participant upon written request to the Committee to make a withdrawal from the Plan to meet an unforeseeable emergency. An unforeseeable emergency is a severe financial hardship to the Participant resulting from sudden illness or accident of the Participant, Participant's spouse, and/or a dependent of the Participant, loss of the Participant's property due to casualty or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. A distribution under this

subsection may not be made to the extent the hardship is or can be relieved through compensation by insurance, by liquidation of the Participant's other assets (to the extent the liquidation would not itself cause severe financial hardship), or ceasing further deferrals under the Plan. Withdrawal of amounts based on an unforeseeable emergency will be permitted by the County only to the extent reasonably needed to satisfy the emergency, and shall not exceed the amount credited to such Participant's Deferred Account. Any withdrawal permitted pursuant to this subsection shall be paid by the County within 60 days of the Administrative Committee's approval of the Participant's written request.

G.

Notwithstanding any other provision of the Plan, to the extent permitted by Section 457(e)(9) of the Code and regulations thereunder, a Participant (i) whose Account is Credited with $3,500.00 or less and (ii) who is no longer entitled to defer compensation under the Plan may elect in writing to receive the balance credited to such Account in a lump sum payable as soon as practicable, but no later than 60 days, after such election is filed with the Administrative Committee.

(Ord. 87-0061 § 2 (part), 1987.)

A.

The Plan shall be administered by the Administrative Committee; provided, however, that consistent with Section 44.7 of the Los Angeles County Charter and Part 3 of Chapter 2.104 of this Code, the Administrative Committee may contract with one or more private firms for services related to the Plan. For purposes of determining whether retirement eligibility is present, the Administrative Committee may rely on the determination of the Los Angeles County Employees Retirement Association.

B.

Expenses incurred as a result of County employees performing the functions defined in this section may be reimbursed from Plan assets and paid to the County. The expenses so charged will be allocated to the individual Participants' Deferred Accounts. The annual charges shall not exceed the amount approved by the Board of Supervisors in the County budget and will only include direct, additional County costs. Expenses incurred as a result of contractors performing these functions will be similarly charged and are limited by the contract or contracts approved by the Administrative Committee.

C.

The Administrative Committee shall be responsible for the administration of the Plan, including but not limited to the preparation and delivery to the Board of Supervisors of Los Angeles County, Participants, Beneficiaries and governmental agencies of all information, descriptions and reports required by applicable law. The Administrative Committee shall also be responsible to contract with one or more private firms for services related to the Plan. The authority, responsibilities, immunities, and procedures of the Administrative Committee and specific departmental functions, responsibilities and immunities associated therewith are summarized in Chapter 5.26 of the Los Angeles County Code, Sections 5.26.340 through 5.26.390 and Section 5.26.435, all of which are hereby incorporated by reference as if fully set forth at length herein.

(Ord. 87-0061 § 2 (part), 1987.)

Effective on October 1, 1991 (the "Merger Date"), the County Deferred Compensation Plan established by Chapter 5.24 of this code shall be merged into the County Thrift Plan established by Chapter 5.25 and the merged plan shall be retitled the "Deferred Compensation and Thrift Plan" (the "Merged Plan"). The resultant Merged Plan is a continuation of both plans and shall not be construed as a termination of either plan. Notwithstanding any other provisions of Chapters 5.24 and 5.25, the following provisions shall apply to the plan merger:

A.

Pursuant to the provisions of Section 5.24.100, the Deferred Compensation Plan is amended to provide that:

The Deferred Compensation Plan is closed to new Participants on and after September 1, 1991; and

No further contributions shall be made to or assets set aside under the Plan after midnight September 30, 1991.

B.

Any person who is a Participant in the Deferred Compensation Plan as of the Merger Date is deemed to be an Eligible Employee for purposes of participation in the Merged Plan and shall become a Participant in the Merged Plan as of the Merger Date. Likewise, any person designated as a Beneficiary of a Participant in the Deferred Compensation Plan shall be a Beneficiary in the Merged Plan unless such designation is rescinded by the Participant.

C.

Subject to the deferral limits required by Section 5.35.040, and until later modified or terminated by the Participant, (i) Participation Agreements of a Participant in the Deferred Compensation or Thrift Plans that are in effect on the Merger Date shall remain in effect in the Merged Plan, and (ii) the Deferred Compensation Contributions of a Participant on and after the Merger Date shall be the sum of the deferrals elected by the Participant in the Deferred Compensation Plan, the Thrift Plan and the Merged Plan.

D.

The account balance credited to the Deferred Account of each Participant of the Deferred Compensation Plan as of midnight on September 30, 1991, shall be transferred to the Participant's Deferred Account in the Merged Plan as of the Merger Date.

E.

The Investment Fund of the Deferred Compensation Plan and all of its assets shall be transferred to the Investment Fund of the Merged Plan on the Merger Date.

F.

All Deferred Compensation Plan Deferred Compensation Contributions earned by any Participant of that plan in September, 1991, and due to be contributed for the Participant to the Deferred Compensation Plan in October, 1991, shall instead be contributed to the Merged Plan.

G.

Distributions from the Deferred Compensation Plan which commence or are approved to commence before the Merger Date shall continue or commence, as the case may be, pursuant to the distribution provisions and procedures of the Deferred Compensation Plan. Distributions from the Merged Plan which are approved on or after the Merger Date shall be made pursuant to the provisions of Section 5.25.080 of the Merged Plan.

H.

Effective on the Merger Date, the Deferred Compensation and Thrift Plan Administrative Committee shall assume the authority, responsibilities and contractual obligations of the Deferred Compensation Plan Administrative Committee.

(Ord. 91-0111 § 1, 1991.)

A.

To the extent and in the manner permitted under Section 457(e)(10) of the Code and regulations thereunder, the balance of the Account of a Participant who is no longer an Employee and who subsequently becomes a participant in another plan

qualified under Section 457 of the Code shall be transferred to his account in the plan of his new employer, provided that the plan provides for the receipt of such transferred amounts. If a Participant's Account has been transferred to such plan, the Participant shall not be entitled to receive any benefit under this Plan, anything in Section 5.24.070 to the contrary notwithstanding.

B.

If, prior to becoming an Employee, an individual participated in a plan qualified under Section 457 of the Code, the County will accept transfer of any amount credited to the deferred compensation account of such Employee under the predecessor plan and establish for the Employee an Account under the Plan to which such amount shall be credited. In all respects such amount shall be treated as an amount deferred under and subject to the terms of the Plan, except that no amount so transferred will be taken into account in applying the deferral limitations set forth in Section 5.24.040.

(Ord. 87-0061 § 2 (part), 1987.)

The Plan may be amended or terminated by the County at any time or the County may, without amending or terminating the Plan, cease to set aside assets under the Plan. No amendment or termination of the Plan, and no cessation of the setting aside of assets, shall reduce or impair the rights of any Participant or Beneficiary which have already accrued. In the event that the Plan is terminated by the County, the County shall distribute to each Participant or his Beneficiary, in a lump-sum payment, the balance in such Participant's Deferred Account as soon as practicable after such termination.

(Ord. 87-0061 § 2 (part), 1987.)

To the extent permitted by law and except as otherwise provided in the Plan, no right or interest of any kind of a Participant or Beneficiary hereunder shall be transferable or assignable by the Participant or Beneficiary, nor shall any such right or interest be subject to alienation, anticipation, encumbrance, garnishment, attachment, execution or levy of any kind, voluntary or involuntary.

(Ord. 87-0061 § 2 (part), 1987.)

Except to the extent that Federal law controls, the Plan shall be governed, construed and administered according to the laws of the State of California. All persons accepting or claiming benefits under the Plan shall be bound by and deemed to consent to its provisions.

(Ord. 87-0061 § 2 (part), 1987.)