Los Angeles County Municipal Code Part 5 Termination Pay Contribution

Subject to the limitations contained in Section 5.26.160, effective December 3, 2004, an Eligible Employee (including an Eligible Employee who has already become a Participant pursuant to Section 5.26.040A) may, pursuant to a Payroll Deduction Authorization Agreement, 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). Notwithstanding any other provision of the Plan, on and after January 1, 2008, no Payroll Deduction Authorization Agreements may be entered, and no Termination Pay Contributions shall be made to or received by the Plan on behalf of any Participant pursuant to this Part 5 of the Plan, irrespective of whether such Participant has entered a Payroll Deduction Authorization Agreement before that date.

(Ord. 2008-0004 § 14, 2008: Ord. 2004-0064 §§ 1, 2 (part), 2004.)

A.

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. However, executing a Payroll Deduction Authorization Agreement shall have no affect on an Eligible Employee'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 5.26.175, a Payroll Deduction Authorization Agreement must be executed at least 90 days prior to the Eligible Employee'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 Eligible Employee'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 distributed in accordance with Part 7, 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 5, 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 executed by the Eligible Employee and shall provide that such Eligible Employee authorizes the appropriate deduction from his Termination Pay for the purposes of having it picked up and contributed to the Plan by the County, and that the Eligible Employee understands and acknowledges the requirements and limitations of this Section 5.26.175.

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 Code Section 414(h)(2), or that the Plan is not a Qualified Plan.

(Ord. 2004-0064 §§ 1, 2 (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. 2004-0064 §§ 1, 2 (part), 2004.)