Category: Newsroom

The California Franchise Tax Board (CFTB) is now re-validating the tax returns affected by the delayed reporting of 2015 quarterly tax information by Northern Trust, our pension benefit payment vendor.  If you have previously received a Notice of Tax Return Change from the CFTB, you may receive a Second Notice of Tax Return Change, to allow your California withholding credits as claimed.  This means no further action on your part should be required based on your pension tax withholdings.

We apologize for any inconvenience this issue may have caused.  Northern Trust will be accountable and has implemented a secondary audit as part of its quality control measure to ensure future accurate state tax posting and oversight by its management.  Northern Trust will also incur related penalties, should any be assessed by the California Franchise Tax Board.

If you have questions regarding these notices, please contact the California Franchise Tax Board at (800) 852-5711.  We understand that callers may leave a call back number for the California Franchise Tax Board in order to avoid the long call wait time.

Please contact the LAFPP Retirement Services Section at (213) 279-3125 or toll free at (844) 88-LAFPP extension 93125, if you have related concerns and questions.

The following are the two distinct issues that affected our members:

ISSUE 1: Northern Trust’s submittal of the 2015 Quarter 1 and Quarter 2 tax information at the individual payee level was delayed.  As of April 4, 2016, the California Franchise Tax Board has confirmed the proper posting of these quarterly taxes. 

ISSUE 2: The California Franchise Tax Board is experiencing a technology issue which may have created discrepancies in tax withholding information for Quarter 2 and Quarter 4 of 2015.  We were informed this issue affects many California taxpayers, regardless of the employer.  Therefore, for pensioners who have other sources of income in addition to their LAFPP pension, further efforts may be necessary to resolve this issue.  These efforts include providing copies of W-2s and year-end earnings statements, to substantiate the California state tax amounts withheld from all sources of income.

On May 19, 2016, the Board of Fire and Police Pension Commissioners (Board) formally dedicated the Boardroom in the new LAFPP office building to Sam Diannitto.

On May 19, 2016, the Board of Fire and Police Pension Commissioners (Board) formally dedicated the Boardroom in the new LAFPP office building to Sam Diannitto.  Commissioner Diannitto is the current Retired Fire Board Representative and has served on the Board for over 40 years.  He was honored by his fellow Board members, family, LAFPP staff, and other stakeholders from the affiliated unions and associations of both LAPD and LAFD.

General Manager Ray Ciranna presented a timeline of noteworthy achievements.

• In 1972, Commissioner Diannitto was elected to the Board to serve as the active Fire Department representative. He was re-elected and served an additional four terms.
• In 1997, he retired after 43 years of dedicated service as an Assistant Fire Chief of the Los Angeles Fire Department.
• In June 2000, Commissioner Diannitto was elected to serve as the retired Fire member representative and has held this position since that time.  His current term ends on June 30, 2020.

His other distinguished service includes:

• Vice President of the National Conference on Public Employee Retirement Systems (NCPERS)
• President of the United Firefighters of Los Angeles City
• Chairperson and member of the Public Employees Committee of the International Foundation of Employee Benefit Plans
• Membership in various associations, including USC Alumni, Fire Chief Officers, NCPERS, International Foundation of Employee Benefit Plans, and Government Finance Officers.

Commissioner Diannitto has always been a strong advocate for the members of the LAFPP system and we are proud to recognize his long history of commitment and dedication.  Congratulations to Commissioner Diannitto!

Click here to view the video commemorating Sam Diannitto at the May 19th Board meeting.

The Cost of Living Adjustment (COLA) effective July 1, 2016 is +2.4% and all eligible pensions will be adjusted accordingly beginning with the pension payment dated July 29, 2016.

The 2016 COLA of 2.4% was presented and approved by the LAFPP Board at its regular meeting on April 7, 2016. The COLA will be effective July 1, 2016, and eligible pensioners and DROP participants will receive an increase of up to 2.4% beginning with their July 29, 2016 monthly pension payment.

COLAs are made to eligible pension benefits effective July 1 of every year. Pursuant to the City Charter and the Administrative Code, the COLA is based on the annual change in the Consumer Price Index (CPI) as published by the Bureau of Labor Statistics.  Specifically, we look at the change in the CPI for All Urban Consumers in the Los Angeles-Riverside-Orange County Area for the prior 12-month period ending February.  As of February 2016, the change in the CPI is +2.4%.

How does this affect LAFPP Pensioners?

COLAs can increase or decrease one’s pension benefit, or have no effect. For example, in 2009 the 12-month CPI change yielded a flat COLA (0.00%) for pensioners for the first time in LAFPP history.  Also, please note that your monthly pension can never be reduced to less than your original pension amount as a result of a negative COLA.

For illustrative purposes, the following is an example of how an average monthly LAFPP pension benefit of $5,309 would be affected by a 2.4% COLA:

If 2.4% of $5,309 = $127.42

($5,309 x 0.024)

Then the monthly pension benefit would be increased to $5,436.42.

($5,309 + $127.42)

For more detailed information on the calculation of the CPI, please visit the Bureau of Labor Statistics website at http://www.bls.gov/cpi/.

Active members in Tiers 2 – 6 can now log in to MyLAFPP to view and/or print their 2015 Annual Active Member Statement. 

Once logged in, simply click on the link in the Online Paper Statement box and then select the year of your choice. This statement summarizes a member’s individual pension-related information by providing employee information, pension estimates (if eligible to retire), contributions and interest, domestic partner information and beneficiary designation as of December 31, 2015.

For questions concerning your statement, contact the Active Member Services Section at (213) 978-4522.

Please Note: Our offices will be moving. Beginning March 21, 2016, please contact the Active Member Services Section’s new number at (213) 279-3140.

To LAFPP Members:

In light of recent market volatility, it’s only natural to be concerned about your personal financial circumstances – especially your retirement plan.  We know that each of you has a significant personal interest in the health and long-term stability of the Fire and Police Pension Plan.  Most of the time we rarely question its stability.  But during periods in which the stock market falls sharply, we sometimes need a reminder that our Plan’s assets and the investment strategy the LAFPP Board has put in place is specifically designed to benefit from a rising stock market – such as we have enjoyed throughout the 2009 to 2014 period, and to cope with the periodic declines that regularly occur.  While it is certainly true that market declines are unwelcome and represent hurdles we must overcome in the future to keep our Plan’s funding strong, the Board’s investment strategy contains multiple elements to mitigate the effect of those declines.  These include: 

• A highly diversified portfolio that is not solely dependent on the stock market but includes bonds, real estate, private equity, commodities and other assets. 
• A continuous monitoring program by the Board and staff to measure and place boundaries around the Fund’s dependence on stocks. Every three months the Board conducts an intensive review of the asset allocation of the Plan’s assets and fund performance and risk over multiple time periods.
• A rebalancing policy that encourages the gradual sale of stocks or other holdings when they exceed the Board’s upper boundary and begin to add exposure when values have fallen below long-term targets.
• A policy that avoids exposing large amounts of the Plan’s assets to high risk short-term trading strategies in favor of high quality long-term investments.
• A periodic asset/liability study that carefully monitors the cohesion between the benefits the Plan is obligated to pay to our pensioners and the long-term investment strategies in place.  The last asset/liability study the Board had conducted by our independent consultant concluded that our Plan’s funding level was “unquestionably strong” relative to most other public pension plans.
• A frequent examination of the Plan’s ability to ensure sufficient cash is on hand or readily available to pay benefits due today for the years to come.

The most important point of this message is that this short-term decline in the stock market – even though sudden, significant and certainly unwelcome – is one of many that the Plan has encountered since it was first established in 1899 and does not threaten the long-term financial stability of our Plan or the Plan’s ability to pay benefits to LAFPP members.

Los Angeles Fire and Police Pensions (LAFPP) is open for business at our new headquarters location.

The new address is 701 East 3rd Street, Los Angeles, California, 90013 (NE corner of East 3rd Street & Alameda Street) in the downtown Arts District.  

We occupied our current offices in Little Tokyo for nearly 30 years.  The new headquarters building purchased by LAFPP is a 54,000 square foot four-story office building constructed in 1924. LAFPP will occupy floors 2 through 4 and plans to lease out the 1st floor. The building has undergone a number of tenant improvements and will feature:

• Energy and Environmental (“Green”) Design – to reduce operating costs in the future and benefit the environment.
• Enhanced security – to include key card access to office space and a security guard.
• Larger & more counseling rooms – for private individual appointments with members.
• Upgraded Board Room – with technology to offer all stakeholders the benefits of improved viewing and audio of Board meetings.  This room will also be used for training sessions for members and staff.
• Ergonomic workstations that offer employees the ability to sit or stand while they work.

New LAFPP Phone Numbers

All LAFPP phone numbers, including our toll-free number, have changed.  Please take time to update your records.

Section	Phone No.
Toll Free Number	(844) 88-LAFPP (52377)
LAFPP Main Line	(213) 279-3000
Active Member ServicesFax No. – 2nd Floor	(213) 279-3140(213) 628-7716
Communications & Special ProjectsFax No. – 4th Floor	(213) 279-3155(213) 628-7720
DROP/Service PensionsFax No. – 2nd Floor	(213) 279-3100(213) 628-7716
Disability PensionsFax No. – 3rd Floor	(213) 279-3165(213) 628-7782
Medical and Dental BenefitsFax No. 3rd Floor	(213) 279-3115(213) 628-7782
Retirement ServicesFax No. – 2nd Floor	(213) 279-3125(213) 628-7716

Medicare Health Subsidy

The maximum monthly Medicare Health Insurance Subsidy for LAFPP pensioners enrolled in Medicare Parts A and B is decreasing by $35.54 in 2016.

The decrease is in accordance with City of Los Angeles Administrative Code Section 4.1154(c), which limits the maximum amounts for the Medicare Health Insurance Subsidy affecting members and qualified survivors enrolled in Medicare Parts A and B, to the Los Angeles City Employees’ Retirement System (LACERS) plan premiums.  Effective 1/1/2016, the highest LACERS Medicare plan premium is $487.71/month; therefore, the LAFPP maximum Medicare Health Insurance Subsidy will decrease from $523.25/month to $487.71/month effective on the 12/31/2015 pension roll.

As a result, LAFPP members may see a reduction of up to $35.54 from their pension check due to the subsidy decreasing on the 12/31/2015 pension roll. If you have further questions please contact the Medical & Dental Benefits Section at (213) 978-4560 or (800) 787-2489, EXT. 84560, and we will be happy to assist you.

Two-Tier Medicare Part B Premium Reimbursement in 2016

Category 1

• Pensioners who: (1) are already enrolled in Medicare Parts A and B (prior to 2016), (2) have their Part B Premium deducted from their monthly Social Security benefit check, and (3) have yearly incomes of $85,000 or less (or $170,000 or less for joint filers) will continue to pay the same $104.90 per month Part B premium amount as they paid in 2015.  LAFPP pensioners meeting all three of these conditions need not take any further action, as they will continue to receive the lower-tier monthly reimbursement of $104.90 in 2016.

Category 2

• Pensioners who enroll in Medicare Parts A and B for the first time in 2016 will pay the higher-tier Part B premium of $121.80 per month. LAFPP pensioners in this category will not be required to provide any documentation beyond that which is requested upon enrollment in a Medicare Health Plan in order to receive the higher-tier reimbursement of $121.80 per month.

Category 3

• Pensioners who are billed directly by Medicare for their Part B premiums and pensioners whose annual incomes are $85,000 or more ($170,000 or more for joint filers) will be charged the higher-tier Part B premium of $121.80 per month in 2016 (NOTE: Pensioners with incomes exceeding the above thresholds may pay a higher amount). LAFPP pensioners in this category must provide supporting documentation in order to receive the higher-tier Part B Premium Reimbursement of $121.80.  Please complete the HIGHER TIER MEDICARE PART B PREMIUM REIMBURSEMENT AGREEMENT  form and return to our office along with applicable documentation by December 31, 2015 in order to request the higher-tier reimbursement of $121.80 per month.

Completed forms and documentation may be faxed to (213) 978-4504; scanned and sent by email to: PENSIONS@LAFPP.COM, or mailed to the following address:

Department of Fire and Police Pensions

ATTN: Medical and Dental Benefits Section

360 E. 2nd Street, Suite 400

Los Angeles, CA  90012

Police Officers and Firefighters are constantly in the public eye while protecting and serving our community. Constant exposure may lend itself to the risk of identity theft, especially during the holiday season.  Your online identity, which includes but is not limited to, your bank account, Social Security number and various log-in passwords, can be stolen or compromised if you are not careful and alert. You can take preventative measures to avoid falling victim to identity theft: 

• Create strong passwords – and update them frequently! Avoid using simple, common, or easy-to-guess passwords like your birth date, pet’s name, or something related to your line of work. Try to utilize upper and lower case letters, as well as symbols to keep identity thieves and scammers from figuring out your passwords.
• Keep personal and financial documents secure. This goes for both electronic and paper documents. If you store personal and financial documents on your computer, make sure that you install a firewall, utilize anti-spyware and anti-virus software to keep your internet browser up-to-date and to ensure that your wireless network is secure. If you are throwing away any paper documents with confidential or sensitive information, make sure that you shred them before they are disposed. And, if you are keeping any hard copies of the documents, make sure they are secured in a safe area. 
• Be careful what you share on social media! Your social media accounts, such as Facebook, LinkedIn, Google+, and Twitter may have a lot more personal information available than you think. Review the information you currently have in your accounts and limit the amount of personal information you have available to the public.
• Don’t fall for email/Phishing scams! There are a large number of fraudulent emails that claim to be from trustworthy sources, like a bank or a government agency. They are designed to seem as legitimate as possible. You are often asked to click on a link and enter personal information such as account numbers or even your Social Security number. Trustworthy companies would never ask for your personal or sensitive information before first having you sign into your account behind a secure firewall.
• Monitor your credit report! You are entitled to one free credit report per year. Take advantage of this opportunity to catch any possible fraudulent activity and errors. If any information has been compromised, set up a fraud alert with the major credit bureaus (Experian, Equifax, and TransUnion) to put a freeze on your files. For a free credit report, you may visit https://www.annualcreditreport.com/index.action.
• Restrict address information! For Active and Retired Police Officers, you have the opportunity to restrict your home address information through the Department of Motor Vehicles (DMV) if requested, according to Vehicle Code Section 1808.4.

The above tips are only a handful of the ways to reduce the chances of your identity and personal information from being stolen. Always use common sense and consideration when dealing with your personal sensitive information.

To view your DROP Semi-Annual Statement for the period ending December 31…