Los Angeles County Municipal Code Part 4.5 Settlement Awards

Notwithstanding anything in this Plan to the contrary, the provisions in this Part 4.5 shall apply with respect to any Settlement Award that a Participant receives on or after January 1, 2018.

A.

Definitions. For purposes of this Part 4.5, the following terms when used with initial capital letters shall have the following respective meanings:

"Contribution Date" means each date in a calendar month on which Participants make Tax Deferred Contributions and After- Tax Contributions pursuant to Part 3 of Chapter 5.26.

"Current-Year Award" means the portion of a Settlement Award intended to make a Participant whole with respect to lost wages and benefits during the Current-Year Settlement Period, which shall be treated as Eligible Earnings, Compensation and 415 Compensation under the Plan during the Current-Year Settlement Period for the purposes of calculating contributions under Section 5.26.171.B and C.

"Current-Year Settlement Period" means the period during the Plan Year in which a Participant receives a Settlement Award that begins on the first date in such Plan Year on which the Participant loses any wages or benefits as a result of his or her demotion, suspension, or termination and that ends on the date that the Participant receives the Settlement Award. If the County demotes, suspends or terminates a Participant in a Plan Year prior to the Plan Year in which the Participant receives a Settlement Award, the first day of the Current-Year Settlement Period shall be January 1st of the Plan Year in which the Participant received such Settlement Award.

"Deemed Compensation" means the sum of a Participant's Prior-Year Award plus either (i) Eligible Earnings, in the case of corrective Tax Deferred Contributions under Section 5.26.171.D, or (ii) any Compensation, in the case of corrective Matching Contributions under Section 5.26.171.D, that the Participant received (if any) during the Prior-Year Settlement Period.

"Election in Effect" means the terms of a Participant's Compensation Deferral Agreement and/or Salary Deduction Agreement in effect as of each Contribution Date within the Current-Year Settlement Period or the Prior-Year Settlement Period, as applicable, determined as follows:

a.

For a Participant who continued to be an Eligible Employee during the Current-Year Settlement Period or Prior-Year Settlement Period, as applicable, the Participant's actual deferral and/or deduction elections in effect as of each Contribution Date shall apply.

b.

For a Participant who was not an Eligible Employee during the Current-Year Settlement Period or Prior-Year Settlement Period, as applicable, the Participant's actual deferral and/or deduction Election in Effect as of the date that such Participant ceased to be an Eligible Employee shall apply.

"Prior-Year Award" means the portion (if any) of the Settlement Award intended to make a Participant whole with respect to lost wages and benefits during the Prior-Year Settlement Period.

"Prior-Year Settlement Period" means the portion (if any) of a Participant's period of demotion, suspension, or termination that occurs prior to the Current-Year Settlement Period.

"Settlement Award" means any compensation that a Participant receives pursuant to an order, judgment, award or approved settlement from an administrative agency, arbitrator or court or an executed settlement agreement between a Participant and a County advocate that causes the Participant to be retroactively reinstated to his or her position with the County following the County's demotion, suspension or termination of such Participant and that requires or instructs the County to make such Participant whole for lost wages and benefits during the period of his or her demotion, suspension or termination without requiring the County to take specific actions with respect to the Plan.

B.

Tax Deferred Contributions and After-Tax Contributions.

For purposes of applying the provisions in Part 3 of Chapter 5.26 (including, without limitation, the limits set forth therein), the terms of this Section 5.26.171.B shall apply with respect to each Current-Year Award.

Each Participant who receives a Current-Year Award shall be deemed to be eligible for a contribution of a fraction of the award on each Contribution Date that falls within the Current-Year Settlement Period, with the denominator of such fraction equal to the number of Contribution Dates in the Current-Year Settlement Period and the numerator of such fraction equal to the total amount of the Current-Year Award. The terms of the Election in Effect as of each Contribution Date within the Current-Year Settlement Period shall apply to determine the portion of the Current-Year Award to be deferred and/or deducted and contributed to the Plan with respect to such Contribution Date.

Each Tax Deferred Contribution and After-Tax Contribution that is made with respect to a Contribution Date as provided in this Section 5.26.171.B shall be deemed to have been made on such date, and shall be subject to the limits in effect under Sections 5.26.35, 5.26.100 and 5.26.160 when made.

C.

Matching Contributions.

For purposes of applying the provisions in Part 4 of Chapter 5.26 (including, without limitation, the limits set forth therein), the terms of this Section 5.26.171.C shall apply with respect to each Current-Year Award.

With respect to each month in the Current-Year Settlement Period, the department to which a Participant has been reinstated shall make a Matching Contribution to the Matching Contributions Account of such Participant in an amount equal to the difference between the Matching Contribution the Participant actually received in such month (if any) and the Matching Contribution the Participant would have received in such month if the Tax Deferred Contributions described in Section 5.26.171.B that are made with respect to such month had been made on the Contribution Dates in such month.

Each Matching Contribution that is made to a Participant's Matching Contributions Account pursuant to this Section 5.26.171.C shall be deemed to have been made in the month with respect to which such Matching Contribution was made and shall be subject to the limits in effect under Sections 5.26.35, 5.26.100 and 5.26.160 when made.

Effective beginning on and after April 1, 2010, or such later date as may be determined by the Chief Executive Officer when the human resources management system reflecting this provision is implemented, each reference to "month" in this Section 5.26.171.C shall be deemed to be a reference to "payroll period."

D.

Prior-Year Settlement Period.

For purposes of applying the provisions in Parts 3 and 4 of Chapter 5.26 (including, without limitation, the limits set forth therein), the terms of this Section 5.26.171.D shall apply with respect to each Prior-Year Award.

No portion of the Prior-Year Award shall be deferred or contributed to the Participant's Tax Deferred Contributions Account and, notwithstanding any other Plan provision, the Prior-Year Award shall not be treated as Eligible Earnings, Compensation, or 415 Compensation during the Current-Year Settlement Period. The Prior-Year Award, however, shall be treated as 415 Compensation in prior Plan Years to the extent provided under Treasury Regulation Section 1.415(c)-2(g)(8).

Corrective Contributions.

a.

The department to which a Participant is reinstated shall make a corrective contribution to the Participant's Tax Deferred Contributions Account with respect to each Contribution Date in the Prior-Year Settlement Period, in an amount equal to 50 percent of the positive difference (if any) between (a) an amount determined by the following formula: the Election in Effect for Tax Deferred Contributions (if any) multiplied by the Participant's Deemed Compensation and then divided by the number of Contribution Dates in the Prior-Year Settlement Period, less (b) the Tax Deferred Contribution the Participant made on such Contribution Date (if any).

b.

The department to which a Participant is reinstated shall make a corrective contribution to the Participant's After-Tax Contributions Account with respect to each Contribution Date in the Prior-Year Settlement Period, in an amount equal to 40% of the positive difference (if any) between (a) an amount determined by the following formula: the Election in Effect for After- Tax Contributions (if any) multiplied by the Participant's Deemed Compensation and then divided by the number of Contribution Dates in the Prior-Year Settlement Period and (b) the After-Tax Contribution the Participant made on such Contribution Date (if any).

c.

The department to which a Participant is reinstated shall make a corrective contribution to the Participant's Matching Contributions Account with respect to each month in the Prior-Year Settlement Period in an amount equal to the positive difference (if any) between (a) the amount he or she would have received as a Matching Contribution (based on Deemed Compensation) during the Prior-Year Settlement Period if Tax Deferred Contributions had been made in accordance with the Election in Effect and based on Deemed Compensation, divided by the number of months in the Prior-Year Settlement Period, less (b) the Matching Contribution the Participant actually received in such month (if any).

Each corrective contribution that is made with respect to a month within the Prior-Year Settlement Period as provided in this Section 5.26.171.D shall be deemed to have been made in such month. Notwithstanding anything to the contrary in this Section 5.26.171.D, the corrective contributions that a Participant is entitled to receive pursuant to this Section shall be reduced to the extent such contributions exceed the limits referenced in Section 5.26.160 for the Plan Year in which they are deemed to have been contributed, and shall not exceed the amount that the Participant would have been entitled to receive if the contributions had actually been made, and been subject to the limits in effect under Sections 5.26.035 and 5.26.100, during the Plan Year to which the corrective contribution relates.

Effective beginning on and after April 1, 2010, or such later date as may be determined by the Chief Executive Officer when the human resources management system reflecting this provision is implemented, each reference to "month" in this Section 5.26.171.D shall be deemed to be a reference to "payroll period."

E.

Contributions to Reflect Earnings. The department to which a Participant has been reinstated shall make a contribution to the Plan to reflect lost earnings on each contribution made pursuant to Sections 5.26.171.B through 5.26.171.D with respect to such Participant in accordance with the written procedures maintained by the County pursuant to Section 5.26.171.F.

F.

Procedures to Implement Part 4.5.

The Chief Executive Office shall maintain written procedures to implement this Part 4.5. Such procedures shall include requirements for a department to which a Participant is reinstated to notify the Auditor-Controller (or other County department as may be identified in the written procedures) prior to the Participant's receipt of a Settlement Award for the provisions in Section 5.26.171.B to apply with respect to such Settlement Award.

If a County department fails to provide timely notice of a Settlement Award in accordance with this subsection F. such that the Tax Deferred Contributions and After-Tax Contributions described in Section 5.26.171.B cannot be deducted from the Current-Year Award before it is paid, then that department shall be required to make contributions to the Plan equal to the amount of such Tax Deferred Contributions and After-Tax Contributions that should have been, but were not, deducted from the Current-Year Award. Such contribution obligation shall be in addition to the contribution obligations under subsections C, D and E of this Section 5.26.171.

(Ord. 2018-0003 § 2, 2018: Ord. 2010-0014, § 14, 2010; Ord. 2008-0004 § 13, 2008.)