FAQs Archives - Page 2 of 3

General Information

How soon should I submit my pension application in order to receive a pension at the end of the month of my retirement?

Members are advised to submit their applications at least four to six weeks in advance. Your pension will be payable approximately one to two months after your employment termination date.

Can you give me tax advice?

No. You will need to speak with your tax advisor or the taxing agency. If you wish to calculate an estimate of your Federal and State taxes based on various tax withholding scenarios, you may do so utilizing Paycheck City Calculator.

How much money will my former spouse receive when I retire?

A signed written request is required providing the projected date of retirement and marital period information if the Department does not have Qualified Domestic Relations Order (QDRO) documents on file. A calculation of the member’s benefit is prepared first. The community property portion is determined based upon the marital period and the member’s pension amount. Responses are completed and mailed within 7-10 business days.

Do you deduct non-California state taxes?

No. If you complete an Income Tax Withholding Form, you will only be able to withhold for the federal government and the State of California. Effective January 1, 2018, for members who reside outside of California, their State tax withholding will be changed automatically to “Do Not Withhold.”

Income Tax Withholding Form

How do I change my address?

Members are advised to submit a signed written notification of the address change (fax, email or U.S. Mail). You can update your address using MyLAFPP or download and submit a Change of Address Form. You can also write a letter stating the current address, the new address, phone number, email address, member’s signature and the last four digits of the Social Security number.

Change of Address Form

Can you help me with questions regarding my medical/dental subsidy?

Our Medical and Dental Benefits Section can assist you at (213) 279-3115 or (844) 88-LAFPP.

I am divorced from a LAFFP pensioner and receiving a community property share of this member’s pension. Will my portion continue when the member dies?

In the event of a member’s death, payment of your community property portion will terminate if there is no qualified survivor. If the member has a qualified survivor, you may be entitled to the community property portion of the survivor benefit. Please refer to your marriage dissolution documents.

When will the new cost-of-living adjustment (COLA) information be available?

In late March of each year, the Bureau of Labor Statistics will establish the Consumer Price Index percentage, which we will apply effective July 1, and will be reflected on your pension payment dated July 31. Be sure to read through the information available in Cost of Living Adjustments (COLA).

Why does it take so long to process final checks due to the estates of deceased members?

Final payments due to the estates of deceased members cannot be processed until:

a death certificate is received
the pension discontinuance is approved by the Board of Fire & Police Pension Commissioners
an affidavit, mailed to the survivor, is completed in the presence of a notary and returned to the Department; and
the direct deposit reversal is completed and funds are received from the bank, if applicable.

If the death is reported in a timely manner, the final check can still take up to 30 to 90 days to complete due to circumstances where death and marriage certificates are not readily available; established payment transaction cut off dates; and the benefit payment cycle on a monthly basis.

I’m getting things organized and I’d like to give you records for my Dependent Child so that he/she is on file with your office if I die before him/her. Who receives those records in your office?

A Dependent Child is a child of a member who became mentally or physically disabled before age 21 and is not capable of earning a living. Dependent Children become eligible for benefits upon the death of their parent who is a member of the pension system. Since processing of the Dependent Child benefits do not start until the death of the pension member, it would be prudent to keep essential documents available for others to provide the Fire and Police Pensions Department upon your death. We also encourage you to submit copies of any documentation you may have in person or by mail to: Los Angeles Fire and Police Pensions Disability Pension Section 701 East Third Street, Suite 200 Los Angeles, CA 90013. The information you collect to document the disabling condition may include medical records, school records, social security benefits, assisted living or institutionalization records, etc. In addition, we will also need the birth certificate for your child, marriage certificate for you and your spouse, any previous dissolution decrees for previous marriages, guardianship/conservatorship papers, and a written request for the child to be granted dependent child status. A letter confirming our receipt of your documentation is usually mailed within 10 business days.

When is my money deposited in my bank account?

It is directly deposited on the last working day of the month. Availability of funds may vary according to your financial institution.

How do I change my direct deposit or tax withholding?

You can make these changes online using MyLAFPP or you may download and complete a Direct Deposit Form or Income Tax Withholding Form and email it to rs@lafpp.com or mail it to us at: Los Angeles Fire and Police Pensions, Retirements Services Section, 701 E. Third Street, Suite 200, Los Angeles, CA 90013. In addition, forms can be mailed to you by calling the Retirement Services Section at (213) 279-3125 or (844) 88-LAFPP.

Direct Deposit Form

Income Tax Withholding Form

How do I get a letter for Social Security or for pension verification for a loan?

The members must submit a written request (fax or U.S. Mail). The request must be signed by the member and include the last four digits of your Social Security number. The response is completed and mailed within three business days. For questions, please contact pensions@lafpp.com.

Pension Verification Letter

How do I cancel/change/or add a voluntary payroll deduction?

To change a voluntary deduction, you must directly call the agency where the deduction was made.

What will be my survivor’s pension if I die?

The benefit paid to a qualified surviving spouse/domestic partner varies according to the member’s tier and his/her status at the time of death – active or retired. More information is available in the Survivor Benefits Handbook. You can also contact the Retirement Services Section by email at rs@lafpp.com or by phone at (213) 279-3125 or (844) 88-LAFPP for more information.

Survivor Benefits Handbook

How do I update my address?

You can update your address online using MyLAFPP or you may email (rs@lafpp.com), mail or fax a Change of Address Form to our Retirement Services Section at: Los Angeles Fire and Police Pensions, Retirements Services Section701 E. Third St., Suite 200, Los Angeles, CA 90013 or you may fax it to (213) 628-7716. You can also send a signed written request including your current address, your new address, and the last 4 digits of your social security number. For questions, please contact rs@lafpp.com.

Change of Address Form

What Tier am I in?

The information in HOW TO: Determine Your Plan Tier will help you identify your tier using your pension check. You can also contact the Retirement Services Section by email at rs@lafpp.com or by phone at (213) 279-3125 or (844) 88-LAFPP and a staff member can provide that information to you.

How do I get a pension verification letter?

You can request a Pension Verification Letter online using MyLAFPP, or you may download and complete a Pension Verification Letter Form and email it to rs@lafpp.com or mail it to us at: Los Angeles Fire and Police Pensions, Retirements Services Section, 701 E. Third Street, Suite 200, Los Angeles, CA 90013. In addition, forms can be mailed to you by calling the Retirement Services Section at (213) 279-3125 or (844) 88-LAFPP, or by email at rs@lafpp.com.

Pension Verification Letter

What pension amount will I receive when I retire?

Members with internet access are encouraged to utilize MyLAFPP. You will be able to run various estimates at your convenience. If you do not have internet access, a signed, written request is required providing the projected date of retirement. Upon receipt, the member’s service records are reviewed and a pension estimate is prepared based upon the date provided and current salary information. Responses are completed and mailed within 7-10 business days.

Can I get a copy of my direct deposit statement?

You can download a copy of your direct deposit statement online using MyLAFPP, or a duplicate copy can be printed for you by calling or emailing (rs@lafpp.com) the Retirement Services Section at (213) 279-3125 or (844) 88-LAFPP.

Taxability Of Pensions

Part of your pension may not be taxed based on any after-tax contributions you made to the Plan.

Pension income is subject to federal income tax. However, part of your pension may not be taxed based on any after-tax contributions you made to the Plan. You may have made after-tax contributions for any of the following reasons:

From 7/1/82 -12/21/96, mandatory pension contributions were collected after-tax.
Elective purchases of service credit made by contract or lump sum payments are collected after-tax. (Trustee-to-trustee transfers from Deferred Compensation are pre-tax.)
The voluntary 2% “opt-in” pension contribution by certain members elected in order to vest future retiree medical subsidy increases are collected after-tax. (NOTE: This does not apply to Tier 6 members.)

For all other periods, mandatory member contributions were made on a “pre-tax” basis. This means your contributions were deducted from your paycheck before income tax withholding was calculated. These amounts are “tax-free” when you contribute them. Therefore, the pension benefits provided by these contributions are taxable when you receive them during retirement.

You may have contributed both on an after-tax and pre-tax basis. The amount of your after-tax contributions will be returned to you free of federal and state income taxes as you receive your pension. “Basis recovery” is the process by which your after-tax employee pension contributions are returned to you, free of taxes, as part of your pension benefits. We will inform you of the portion of your first payment that is tax-free. The balance of each pension payment will be taxable as ordinary income in the year received. The tax-free amount of your pension will continue until you have recovered all of the after-tax dollars or “basis” you contributed to the Plan. Once your after-tax contributions have been recovered, the entire amount of all future pension payments will be taxable as ordinary income.

DROP Account Funds

The Internal Revenue Code includes a provision that allows DROP members to recover a portion of their eligible after-tax contributions using an accelerated basis recovery method. This method allows you to take a lump sum distribution of any eligible after-tax DROP funds, rather than recovering it in monthly payments over your lifetime through the Simplified Method (explained below). Members exiting DROP on or after January 1, 2014, will be subject to this accelerated basis recovery method and may:

Recover pre-1987 after-tax contributions entirely from the lump sum DROP distribution.
Have post-1986 after-tax contributions allocated pro-rata between the lump sum DROP distribution and your ongoing monthly pension annuity. Any after-tax funds included in the monthly pension annuity will be subject to the Simplified Method as detailed below.

Members exiting DROP must complete the DROP Distribution Election Forms within 90 days of your DROP exit date to determine how you wish to recover your after-tax contributions. After 90 days, the distribution of your DROP account will be limited to a lump sum cash payment only, subject to mandatory 20% Federal tax withholding for the entire account balance.

Simplified Method

For pensions effective on or after January 1, 1998, the formula we use to determine the amount of your ongoing monthly pension benefit that is taxable vs. the amount that is tax-free, is the one developed by the IRS. (Also called the “Simplified Method.”) The tax-free portion is based on the amount of your unrecovered after-tax contributions at retirement and your age (plus your spouse’s/domestic partner’s age, if applicable), when you begin to receive pension benefits.

The formula determines the amount of your pension that will not be taxed and the length of time for that exclusion. (See charts below.) By subtracting the tax-free amount from your gross pension for a fixed number of months, your already taxed contributions will be recovered. Cost-of-living pension increases will not change or have any effect on the tax-free amount since the calculation is based upon your total after-tax contributions at retirement.

Simplified Method – Table I

For Retirees Who Do Not Have a Qualified Surviving Spouse/Domestic Partner

55 and under	360
56-60	310
61-65	260
66-70	210
71 & over	160

Example: Assume a single retiree at age 55 has a monthly pension of $5,300.13 and total after-tax contributions amount to $48,656.60. The tax excludable amount is $48,656.60 / 360 = $135.16. Therefore, in this example, the taxable amount of the pension is indicated in the right-hand column below:

$5,300.13

$135.16

$5,164.97

In this example, the service pension would be fully taxable after 360 months.

Simplified Method – Table II

For Retirees Who Have a Qualified Surviving Spouse/Domestic Partner

110 and under	410
111-120	360
121-130	310
131-140	260
141 & over	210

Example: Assume a 55 year-old retiree has a 54 year-old Qualified Surviving Spouse/Domestic Partner, a monthly pension of $5,300.13 and total after-tax contributions amounting to $48,656.60. Using the Simplified Method – Table II, the total amount of monthly payments to recover the after-tax contributions is calculated as follows:

Combined age 55 + 54 = 109. Number of payments for the combined age of 109 is 410. $48,656.60 / 410 = $118.67

Therefore, in this example, the taxable amount of the pension is indicated in the right-hand column below:

$5,300.13

$118.67

$5,181.46

In this example, the service pension would be fully taxable after 410 months.

If you have any questions, please call the Retirement Services Section at (213) 279-3125 or toll-free at (844) 88-LAFPP (52377) or email at rs@lafpp.com.

Additional FAQs For members entering DROP on or after February 1, 2019

Is the 112-hours of active duty status counted in calendar or work hours?

Work hours.

What time counts as “active duty status”?

You can use actual hours worked (HW), vacation (VC), preventive medicine (PM) and overtime taken of (TO) as part of the 112 hours. A complete list of payroll codes that qualify for “active duty status” is shown on page 8 of DROP handbook.

What time does not count as “active duty status”?

Sick time (SK), family illness (FI) and Injury on Duty/Workers’ Comp time will not count toward your 112 hours on active duty status. There is an exception, however, if you are hospitalized for 3 or more days as a direct result of an on-duty injury.

Does overtime count toward my “active duty status” hours?

You cannot use overtime toward your active duty status hours, but if you bank your hours and take them as TO, those hours will count.

If I don’t meet the monthly 112-hour active duty status requirement, will I be immediately terminated from the DROP Program?

No. A participant can work up to the full 5 years of DROP. Within the 5 years, any month with less than 112 active duty status hours is not eligible for DROP pension accrual (i.e., your participation is suspended for that month). The months ineligible for pension accrual can be made up at the end of the 5-year original DROP period, for up to a maximum of 30 additional months beyond the original participation period.

Where does my money go if I fail to meet the 112-hour active duty requirement?

While it is common to refer to DROP credit being earned in the form of a payment or check, it is not, in fact, a payment or a check. While in DROP, you get credit in your individual DROP account once you have earned the credit; but the actual money stays in the LAFPP trust fund. If you fail to meet the 112-hour requirement during a calendar month, your DROP account will not receive pension credit for that month. However, the funds remain in the LAFPP trust fund.

Will the months I make up be subject to the 5% interest?

No. The 5% interest is only for the first five years in DROP. Any extension beyond the original five-year DROP period would not earn the 5% interest. Extensions beyond the five-year DROP period would receive cost of living adjustments to your pension.

Will my DROP account from the initial 5-year period continue to accrue interest while I’m making up any months?

No. Your DROP balance from the initial 5-year period will be frozen and not collect interest during your extended make-up time.

What if I enter DROP in the middle of the month or exit DROP in the middle of the month?

You must be on “active duty status” for a minimum of 112 hours in a calendar month to be credited with a DROP deposit for that month, regardless if it is at the beginning or end of your DROP participation period.

Will the timing of DROP payouts be impacted by these new provisions?

Yes, under the new DROP provisions LAFPP must confirm with the City’s payroll system that you met the 112-hour active duty status threshold in your final pay period. Depending upon your DROP exit date, this may delay the payout of your DROP lump sum for a minimum of 1 month beyond your exit date.

Will I earn interest on my DROP balance while the final pay period is being verified?

No. The terms for crediting interest remain unchanged. No interest accrues after a member’s DROP exit effective date.

Taxes and Social Security

Are there any income tax consequences to my entering DROP?

Yes. The distribution of your DROP account is subject to federal and state tax laws in effect at the time you receive your distribution. You may defer income taxes by rolling over 100 percent of your taxable DROP account proceeds into a tax-qualified plan or to an IRA. We encourage you to consult with your personal tax advisor both before you enter DROP and before you exit DROP.

What is the Windfall Elimination Provision?

If you are eligible to receive a Social Security benefit, it may be reduced by your service pension benefit due to the Windfall Elimination Provision. The amount of the reduction depends on your earnings and number of years in jobs in which you paid Social Security taxes, and the year you are age 62 or become disabled. Please contact the Social Security Administration at (800) 772-1213 or visit their Web site at www.ssa.gov if you have questions.

DROP Participation

YOUR STATUS IN DROP

Will I receive any service credit for retirement benefit calculation purposes for the time I am in DROP?

No. Service credit is determined as of the time you enter DROP and no additional credit will be given for any time while you are in DROP. Any prior service time such as Lost Service Time (Tier 2), Workers’ Compensation State Rate Time, recruit training time (Tiers 3, 4, 5 and 6) or time under the Public Service Purchase (PSP) Program, must be purchased prior to enrollment in DROP in order for that time to be counted toward your years of service credit. Also, you may want to consider working to the end of the payroll period immediately prior to your date of retirement/DROP entry date if you wish to receive credit toward your years of service for that pay period.

Will I pay contributions into the retirement system while I’m in DROP?

Yes. To maintain the requirement in the LAAC that DROP be cost neutral, both your contributions and the City’s contributions will continue while you are in DROP. Your contributions will continue at the rate and for the length of time specified for your tier, as shown in the chart below. Additionally, members of Tiers 2 – 5 who elected to pay the 2% “opt-in” contributions will continue to make these contributions until they have done so for 25 years. All member contributions go into the LAFPP Service Pension Fund and are not applied to your DROP account.

While I’m in DROP, will my pension contributions cease when I reach the maximum years of service (YOS) for my tier?

Yes. Although you no longer earn YOS credit as a DROP participant, YOS does count toward the maximum number of years in which you must make pension contributions. For example, a Tier 3 member entering DROP upon completing 28 YOS would cease making contributions after two years of participation in DROP.

What happens to my sick, vacation and overtime accruals when I enter DROP?

While you are in DROP, you are still considered an active employee for purposes of sick, vacation and overtime accrual. Your operating Department will make payouts of unused sick, vacation and overtime when you terminate employment with the City. Sick, vacation and overtime cannot be used beyond the end of your DROP participation period.

Will I receive cost of living adjustments to my pension payments?

Yes. Cost of living adjustments (COLAs) for your tier will be applied to your monthly service pension while you are in DROP; however, the amount of the COLA is capped at +/- 3% for all tiers, as shown below. Note that in the event of a negative COLA, your pension will never be adjusted to less than your original pension amount.

Can I participate in both DROP and the City’s Deferred Compensation program?

Yes. As long as you are an active employee receiving a salary you may contribute to Deferred Compensation, a retirement savings program administered by the City’s Personnel Department. Deferred Compensation is a deduction taken from your active salary while your DROP account is a retirement benefit administered by LAFPP.

What happens if I am promoted while in DROP?

The amount of your retirement benefit, both the amount credited to your DROP account and the amount you will eventually receive as a monthly pension when you terminate employment and retire, are frozen at the time of entry. Therefore, your DROP account and pension will not reflect the additional pay from your promotion. If you think a promotion may be forthcoming, you may want to consider delaying your entry into DROP. You may wish to also consider that your monthly pension entitlement, if in Tiers 3, 4 or 5, is based upon the calculation of a 12-month Final Average Salary, and if in Tier 6, upon a 24-month Final Average Salary.

What happens if I am demoted while in DROP?

The amount of your retirement benefit, both the amount credited to your DROP account and the amount you eventually receive as a monthly retirement allowance, will not be affected by any reduction in your salary that accompanies the demotion.

What happens if I am terminated while in DROP?

Being fired automatically terminates your participation in DROP. At your request, distribution of your DROP account will be withheld while the appeal of your discharge is pending. Should you be reinstated, you may continue to participate in DROP if the account has been withheld, and the original period of DROP participation will continue but cannot exceed the original 5-year/60-month limit (plus any additional months where your DROP participation was suspended, applicable to members who enter DROP on or after February 1, 2019 – up to 30 additional months). If the DROP funds have been distributed, you cannot return to sworn employment or continue in DROP even if your termination is overturned.

What happens if I resign while in DROP?

Resigning from sworn employment with the City will automatically terminate your participation in DROP and you will be deemed to have retired. You will begin receiving your monthly retirement benefit and will have to decide how you wish to have your DROP account distributed. (See Question 29 for more information).

INJURY, DISABILITY OR DEATH

What if I am on injured on duty (IOD) status while in DROP?

In the event you are injured on duty any time during your DROP participation period and you happen to remain on IOD status on your mandatory DROP exit date, you must still exit the program, unless you entered DROP on or after February 1, 2019. You are allowed to continue on IOD status with your Department. If you continue on IOD status after exiting DROP, you will not become eligible to receive distribution of your DROP account until your retirement status is determined. Once you have exited the program, interest will stop accruing to your DROP account.

If you entered DROP on or after February 1, 2019, and your DROP participation was suspended due to an on-duty injury (or you otherwise did not meet the 112-hour minimum for active duty status in one or more calendar months), you will be eligible to participate in DROP for as many months as your participation is suspended for a maximum of thirty (30) additional months beyond your original 60-month participation period.

If you subsequently decide to take a disability retirement, you are required to forfeit your DROP account. However, if you elect to take a service retirement and distribution of your DROP account, you will be required to repay any IOD pay earned after the last day of your participation in DROP.

What happens if I join DROP and then become disabled?

If you apply for and receive a disability pension, your years of service credit and active pay adjustments, etc., are restored as if you never entered DROP. However, you must forfeit your entire DROP account should you receive the disability pension. Once you have received your DROP account funds, you are no longer eligible to apply for or receive a disability pension.

What happens if I die while in the DROP Program?

Nonservice-Connected Death: Should you die of nonservice-connected causes, the normal post-retirement survivor pension benefits provided by your tier will be paid to your qualified survivor(s), in addition to the proceeds of your DROP account.

Service-Connected Death: If your death is service-connected, in lieu of the survivor benefits described for a nonservice-connected death, your Qualified Surviving Spouse/ Domestic Partner may choose to forfeit your DROP account and collect a “Service Connected” survivor pension based on your salary and years of service as if you never entered DROP.

Please note: If you were not married or did not file a Declaration of Domestic Partnership with LAFPP one year prior to entering DROP, your surviving spouse/domestic partner would not be considered a “qualified survivor”. However, if your death is deemed service-connected by the LAFPP Board, your surviving spouse/domestic partner could become “qualified” by electing to forfeit your DROP account and collect a “Service Connected” survivor pension based on your salary and years of service. (In order to qualify for a survivor pension in the event you die in the line-of-duty, your spouse must be married to you or your domestic partner must be declared with the Plan as of the date of your service-connected death).

MARRIAGE AND DOMESTIC PARTNERSHIPS

What happens if I marry while I’m in DROP?

Your marriage will be deemed to be a marriage occurring post-retirement, and your spouse will not be eligible for survivor benefits. To qualify your surviving spouse for pension benefits, you must be married to him/her at least one year prior to entering DROP.

If you have a domestic partner and would like for him/her to qualify for pension benefits, you must file a confidential affidavit with LAFPP or register your partnership with the State of California at least one year prior to entering DROP. Please note that there are special requirements to register a domestic partnership with the State of California. Further information may be obtained from any county clerk or at the Office of the Secretary of State.

Will my post retirement spouse/domestic partner be entitled to any survivor benefits?

Under the Survivor Benefit Purchase Program, a Retired Plan Member may elect to provide a survivor benefit to a spouse or domestic partner by reducing his/her monthly pension benefit. The continuance percentage choices range from 30% to 100% in 5% increments. The benefits do not vest until one year from the date of the member’s election, and the election is irrevocable. Since DROP members are Active employees, you cannot elect this program until you are retired and have exited DROP. For more information regarding this program, please call the Retirement Services Section at (213) 279-3125 or visit our website, www.LAFPP.com.

What happens if my marriage is dissolved prior to or while I’m in DROP?

Some or all of your DROP account may be community property depending on your dissolution judgment or order. Your former spouse may have a claim to a portion of the DROP account and may be entitled to a share when you exit DROP and the DROP account is distributed. Whether this applies in your case depends on the court orders and judgment. You may wish to check with your own lawyer regarding this issue.

Note: Until you actually terminate sworn employment with the City of Los Angeles and become eligible to receive a monthly pension benefit, no monies shall be paid from your DROP account. There are no provisions within the Fire and Police Pension Plan to permit payment of any retirement benefit until you terminate sworn City employment.

Your DROP Account

How much interest will my DROP account earn?

Interest is earned at an annual percentage rate of 5% and your account will be credited with interest earned semi-annually, on June 30 and December 31. No interest shall accrue after you terminate DROP participation.

Will I be able to take a loan from my DROP account?

No. The provisions of DROP do not allow you to take a loan from your DROP account.

Can I get an estimate of how much money my DROP account will accumulate?

Visit our website at www.lafpp.com and access MyLAFPP, our Internet-based member information portal. Click on the “Log In” button in the MyLAFPP box. Once you are logged into MyLAFPP, you can calculate an estimate of how much money will accumulate in your DROP account.

When can I see information on the balance in my DROP account?

Semi-annual DROP statements are available on our website the first week of January and July in MyLAFPP. Additionally, you can log in to MyLAFPP to view your balance at any time.

Entering DROP

Why do I have to sign the various releases, waivers and covenants that are contained in the DROP election application? What happens if I refuse to sign them?

The various releases, waivers and covenants are designed to protect you, LAFPP and the City. We have done our best to disclose to you all of the advantages, as well as disadvantages, of DROP. You must sign all required forms in order to participate in DROP.

Can the provisions of DROP be changed?

Yes, but if you are already in DROP, you will not be affected by any changes to the DROP ordinance.

What is the effective date of my DROP participation?

The same date you elect to make your service pension effective. You must be on active duty status on your DROP entry date.

What constitutes “active duty status” for purposes of entering DROP?

For purposes of entering DROP, active duty status includes light-duty status, but excludes sick, vacation, injured on duty, administrative leave and all other types of non-working status. (See charts on page 5 of DROP Handbook.) If you are on a non-working status, your intended effective date of DROP participation will be adjusted to reflect the date you return to active duty/working status. The City Administrative Officer has determined which payroll codes constitute active duty status for purposes of this provision.

What if I want to revoke my DROP election?

To revoke your entry into DROP, you must submit a DROP Revocation Notice no later than the day prior to your DROP entry effective date: The Notice may be submitted in-person, during regular business hours, at 701 E. 3rd Street, Suite 200, Los Angeles, CA 90013, by fax directed to (213) 628-7716, or by email sent to dropsp@lafpp.com. It must be received before the close of business at 4:30 p.m., or if faxed or emailed, by 11:59 p.m. The effective date of revocation is established only upon receipt of the Notice prior to the DROP entry effective date and upon signature thereupon by LAFPP administrative staff. If you do not revoke your election before your DROP entry effective date, your decision to enter DROP and to terminate sworn employment at the end of the DROP period will be irrevocable. Consult with outside advisors (e.g., your own attorney, accountant, tax advisor or other professional) prior to making your decision to enter DROP.

When do I choose a beneficiary for my DROP account?

We encourage you to designate your beneficiaries for your DROP account when you enter DROP. You may change your beneficiary designation at any time prior to exiting DROP. As your marital status or family circumstances change, it is advisable that you review your designations to ensure that the person(s) named as your DROP beneficiary(ies) is/ are the person(s) you want named. Overlooking this matter may have very serious and undesirable consequences.

Note: Your choice of a beneficiary cannot defeat any community property interest awarded to a former spouse in a dissolution.

Can I receive a refund of my pension contributions?

No. Once you have enrolled in DROP, you are no longer eligible for a refund of pension contributions.

Refund of Contributions

You may submit the completed and signed forms to the Active Member Services Section by fax to (213) 628-7716, by email to amssection@lafpp.com, by mail, or in-person during business hours, at 701 E. 3rd Street, Suite 200, Los Angeles, CA 90013.

Requests for refunds are processed once a month, with the check or direct deposit being issued at the end of the month. Your completed/signed forms must be received by the 10th of the month for your refund to be issued at the end of the month. Please note that this does not guarantee that your refund will be issued at the end of the month as other issues may affect the payment of your refund of contributions.

Will my refund be reported to the IRS?

Yes. A Form 1099-R will be mailed to the address on your refund form by January 31st of the following calendar year for your tax filing purposes. Please keep your mailing address current with LAFPP.

Can I receive both a lifetime pension and a refund of contributions?

No, once you withdraw your contributions, your membership with LAFPP is terminated and you are no longer entitled to retirement, health/dental subsidy, death, or survivorship benefits.

How can I find out the status of my refund?

Please contact the Active Member Services Section at (213) 279-3140 or by email at amssection@lafpp.com to obtain the status.

What if I submitted my refund packet and then change my mind?

If you contact us at least 2 weeks prior to the issue date of your refund, you can request to cancel the refund in writing. Otherwise, we will be unable to accommodate your request. However, if you return to the City and resume LAFPP membership, you may restore your service credit by purchasing prior service.

I am resigning from the department. What is the processing time for my refund of contributions?

It generally takes 12 to 16 weeks upon termination of your employment to process a refund of contributions. It may take longer if there is a divorce claim or garnishment court order on file.

Active Member Services receives notification from your employing department 6 to 8 weeks after your resignation/termination. Your payroll status must be changed (active to terminated) by your department before the refund process can begin. You will know your status has been changed when you receive payment for your remaining vacation and/or overtime balances. (Sick time is not eligible for separation payout).

Upon notification of your termination, a refund packet consisting of the following will be sent to you:

Letter – estimate of your refund providing the taxable and non-taxable portions
Refund of Contributions Questionnaire – form you must complete and sign. It consists of basic questions with “yes” or “no” answers to help us in the timely processing of your refund
Request for Refund of Contributions – form you must complete and sign with a Notary Acknowledgement, unless your signature is witnessed by a Los Angeles Fire and Police Pensions staff member.
Distribution Election and Rollover Forms – forms you must complete and sign; one for the taxable portion, and another for any non-taxable portion
Authorization for Wire Transfer – form you must complete if you want your rollover distribution to be wire transferred directly to your financial institution for a fee. This is for rollovers only, NOT for cash payments.
Direct Deposit Authorization Form – form you must complete if you want your refund direct deposited to your checking or savings account. This is for lump sum cash payments only, NOT for rollovers.
Special Tax Notice Regarding Your Rollover Options under a Governmental 401(a) Plan – summarizes tax information and options available to you.

What if I die before I receive my refund?

If you designated a beneficiary before you terminated, we will issue the refund to your designated beneficiary.

If you do not have a beneficiary designation on file, the refund will be paid based on the Plan’s order of succession as stated in applicable City Charter and Administrative Code provisions: 1) Spouse or State-Registered Domestic Partner; 2) Children; 3) Parents; 4) Executor or Administrator of your estate, or to any other person legally authorized to collect money due to you. If the Plan’s order of succession is insufficient to pay a beneficiary, then the California Intestate Succession laws will be applied. See California Intestate Section 6402 for more information.

Additionally, if your total estate (including the refund) is greater than the prescribed limit found in California Probation Code Section 13100, the probate proceedings will need to be initiated.

It is very important to maintain a current beneficiary designation with LAFPP. Doing so ensures that your refund of pension contributions and accrued interest will be paid to the person(s) of your choice and the refund will not be delayed by probate, regardless of your estate’s value.

Note: Should you pass away and leave someone eligible for survivor pension benefits (i.e., spouse/domestic partner, minor/dependent children, dependent parent), your contributions and accrued interest will not be refunded, although your eligible survivor(s) may receive your contribution as part of the Basic Death Benefit, if applicable.

Please visit www.lafpp.com/retirees-beneficiaries/qualified-survivors for more information on survivor benefits.

I separated from City employment and want a refund of my contributions. How do I obtain a refund?

You may download the refund forms from our website or call Active Member Services to have the forms mailed or emailed to you. There are three (3) choices to receive your refund:

100% lump sum cash payment: a check will be issued to you by mail or will be directly deposited to your bank. If you do not elect a direct rollover to an IRA or qualified retirement plan, LAFPP is required to withhold 20% of the payment for federal income tax and, if you choose, we will withhold 10% of your federal income tax withholding amount for California state income tax. You may elect to opt out of the California state income tax withholding only. A 1099-R Tax Form will be mailed to you for your tax filing purposes the following January 31st. Please keep your mailing address current with LAFPP.
100% rollover: a check will be issued by mail or via wire transfer to an IRA or a qualified retirement plan if you have an open account. There will be no taxes withheld or penalties applied under this method. Example: Voya Financial Deferred Compensation Plan.
Combination: You may elect a combination of a lump sum cash payment and a rollover. Please apportion the amount you want as a cash payment and the amount you want as a rollover when filling out your refund forms.

Once your completed forms are signed and notarized, please submit them to:

Los Angeles Fire & Police Pensions
Attn: Active Member Services
701 E. Third Street, Suite 200
Los Angeles, CA 90013
Fax: (213) 628-7716
Email: amssection@lafpp.com

Note: Forms require notarization, unless your signature is witnessed by a Los Angeles Fire and Police Pensions staff member. If you come to our offices to sign the forms, you do not have to pay for notary service. If you require assistance in completing refund forms or to make an appointment to visit our offices, please call Active Member Services at (213) 279-3140.

Once your refund packet is received and, barring any unforeseen circumstances, it will be processed on the next available payroll. Refunds are issued only once a month, at the end of each month. Your forms must be received by the 10th of the month for your refund to be issued at the end of the month, provided all forms are completed correctly.

Your refund may take longer if there is a court-ordered community property division or back pay of child/spousal support payments.

Is my refund of contributions taxable?

Yes, the taxable portion of your refund (i.e., contributions made on a pre-tax basis) is taxable as ordinary income.

Is there a penalty for early withdrawal?

Yes, if you are under age 50 (for public safety employees), you will be subject to a 10% Federal and 2½% California state tax penalty for early distribution on your taxable portion. You may defer taxes if you rollover the taxable portion of your refund into another tax qualified account within 60 days. (As amended by the Pension Protection Act of 2006)

Can my refund be rolled over to an IRA?

Yes. If we issued your refund prior to the calendar year you attained age 72 (age 70 ½ for those individuals who attain age 70 ½ before December 31, 2019), the entire taxable portion of your refund is eligible to be rolled into an IRA or a qualified retirement plan. If the refund is paid in the calendar year you turned 72 (70 ½ for those individuals who attain age 70 ½ before December 31, 2019) or later, a portion of the refund will not be eligible for rollover due to the IRS’ required minimum distribution regulations. Please seek professional tax advice for additional information.

Do you withhold federal income tax from a refund payment that is not rolled into an IRA or other eligible savings plan?

Yes. If your refund is issued before you turn age 72 (age 70 ½ for those individuals who attain age 70 ½ before December 31, 2019), it is subject to a mandatory 20% federal income tax withholding.

Do you withhold state income tax from a refund payment that is not rolled into an IRA or other eligible savings plan?

Regardless of your age when the refund is paid, California state income tax withholding is optional. However, when you file your taxes during tax season, you will be liable for the state income tax on the taxable amount.

Is there a limit on how many refunds LAFPP can process in a year?

No, LAFPP is prepared to refund any terminated employees their member contributions and accrued interest if they are in a Tier where they are entitled to a refund upon termination. Even if a large number of members were to terminate employment in any given year, LAFPP is prepared to refund member contributions upon request.

Public Service Purchase

What is the Public Service Purchase (PSP) Program?

PSP is a voluntary program that allows members of the Los Angeles Fire and Police Pension (LAFPP) Plan who served in the military or were employed by other public agencies to purchase service credit in the pension plan, subject to requirements and limitations established by ordinance.

Can I use my DROP money to purchase service credit?

No, you cannot use your DROP money to purchase service credit. Service credit must be purchased prior to DROP entry or service retirement.

What types of funds can I use to make a purchase?

A Trustee-to-Trustee Transfer/Direct Rollover from another eligible retirement plan is acceptable, provided the funds are pre-tax, from a different California public pension plan, and you will not be entitled to any non-LAFPP retirement benefits based on the contributions you have rolled over.

What is the advantage of purchasing service credit?

The service credit you purchase will count towards increasing the monthly pension allowance that you and your qualified survivors would receive from LAFPP.

How do I apply for PSP?

Fill out either the Application to Purchase Military Service or the Application to Purchase Public Service.

Or follow our How To Guide page by clicking here for more information.

Will the time I purchase count toward DROP or health subsidy eligibility requirements or other plan benefits?

No. Purchased service credit will not count toward years of service credit for health subsidy credit, eligibility for service retirement or eligibility to enter DROP. It also does not count toward years of service for ceasing your employee pension contributions. It will only count toward increasing your monthly pension allowance and any survivorship benefits.

Who do I contact to apply for PSP?

Contact the Active Member Services Section at (213) 279-3140 or (844) 88-LAFPP.

What types of service can I purchase?

Eligible types of service that can be purchased include service with:

a branch of the United States military, but only if the member was honorably discharged;
a bonafide police agency or fire suppression agency, but only if the member was not terminated for cause; and
any agency of the United States Government: Federal, State or local, or Postal Service.

The eligible service must be a minimum of six months of full-time, uninterrupted service with an eligible public entity.

How many years can I purchase?

If you purchase PSP time, you must purchase a minimum of six (6) months and may purchase up to a maximum of four (4) years of service.

How much will it cost?

You will pay the full actuarial cost determined by our actuary. Factors that will be considered in the actuarial assumptions include:

member’s age;
date benefits will first become payable;
number of possible beneficiaries;
ages of survivors;
member’s pension base;
investment earnings rate assumed by the plan;
and any other factors that are relevant to cost neutrality.

The PSP ordinance requires that the program be cost-neutral. Therefore, the member will be required to pay the full cost of the benefit. The purchased service includes your contribution plus the City’s cost. All purchases completed more than 180 days prior to a member’s entry into DROP or their retirement date will be trued up. An actuarial calculation will be performed to determine the change in the total purchase amount.

The following is an example of a comparison of pension benefits for a Tier 5 member with a final average salary of $8,000 per month and 25 years of service, who purchases four years under the PSP program:

Pension Benefits Without PSP	Pension Benefits With PSP
FAS – $8,000	FAS – $8,000
25 YOS – 65%	29 YOS – 77%
Pension – $5,200	Pension – $6,160 ($960 more per month)
Survivor – $3,120	Survivor – $3,696 ($576 more per month)

In the above example, under the PSP Program the member is responsible for paying the full cost of the increased pension and survivor benefits gained from the additional years of service purchased. A PSP calculator is available when you log in to MyLAFPP to provide an estimate of the cost of the additional service credit based on the above factors.

What does “cost neutral” mean in relation to the PSP Program?

One of the key provisions of the PSP program is that it must be cost-neutral. This means that in addition to the normal member pension contribution rate of 8, 9 or 11%, the member is responsible for paying the full cost of each additional year of service that is purchased. For example, Tier 5 members currently pay 9% of salary in pension contributions, while the City contributes approximately 21% of sworn payroll toward the pension system (does not account for the City’s additional contributions to pay down any unfunded liability or retiree health benefits). Combined they represent approximately 30% per year to fund the pension system. However, the individual cost factors used to determine your cost for each year of service purchased may increase the combined cost. The cost factors used to establish the actuarial cost for PSP include:

member’s age;
date benefits will first become payable;
number of survivors;
ages of survivors;
member’s pension base;
investment earnings rate assumed by the plan; and
any other factors that are relevant to cost neutrality for the pension plan.

Why is it so much more costly than purchasing my recruit training time?

There is no cost neutrality provision for purchasing City of Los Angeles training time which is provided for under a different section of the Charter. Therefore, you only pay your pension contributions plus any applicable interest.

Is there a way to determine if this purchase will benefit me?

You may log in to MyLAFPP and use the Public Service Purchase Estimate calculator to get an estimated cost of the additional service credit and the additional monthly amount it would provide. We strongly recommend that you discuss this option with your financial advisor to determine if this purchase would be beneficial for you. Consider your overall financial situation and retirement needs very carefully before making this decision.

What payment options are available?

You have a choice of the following payment options (may combine) subject to applicable IRS provisions:

Lump sum payment – a single payment for the total projected cost;
Payroll deduction – automatic monthly deductions from your paycheck (maximum of 780 payments); and
Trustee-to-Trustee Transfer from the City’s Deferred Compensation Plan or another eligible retirement plan within the state of California

Domestic Partnerships

1. What is a domestic partner?

Domestic partners are two adults who have chosen to share one another’s lives in an intimate and committed relationship and meet the eligibility requirements stated in California Family Code Section 297.1.

2. What benefits can a qualified domestic partner get?

Domestic partners may qualify for the same survivor benefits available under the Plan as a surviving spouse, provided all eligibility and notification requirements are met. Learn more about filing your Domestic Partnership with LAFPP.

3. What if I already filed my domestic partnership with the State of California?

Submit a copy of your State of California Declaration of Domestic Partnership/Certificate of Registration to the Active Member Services Section. The certificate will be accepted and the filing date with the State will be the effective date of your domestic partnership with LAFPP.

If your domestic partnership was filed with a state other than California, your document(s) will need to be reviewed by the Office of the City Attorney.

See FAQ #12 to find out how your benefits may be affected if you terminate a state-registered domestic partnership.

4. If I filed a domestic partner affidavit with the City’s Personnel Department, do I still have to file one with LAFPP?

On January 7, 2021, the Board of Fire and Police Pension Commissioners adopted a policy to acknowledge and accept filings with other City departments as filing with LAFPP.

Submit proof of filing, such as a stamped copy of the Affidavit of Domestic Partnership form you submitted to the Personnel Department or another City department, or the acknowledgment letter you received from the department. The effective date you filed your domestic partnership with another City department will be the effective date of your domestic partnership with LAFPP.

5. What happens if I die before I submit proof that I filed my domestic partnership with the City’s Personnel Department (or another City department)?

Should you die before you submit proof of establishing your domestic partnership with any agency/department other than LAFPP, your domestic partner must submit an acceptable documentary proof before any eligible survivorship benefits are payable.

NOTE: Your domestic partnership filed with LAFPP or any other agency may supersede the beneficiary designation you have on file with LAFPP.

6. If I file a domestic partnership declaration with LAFPP, should I still file one with the Personnel Department?

The form you file with the Fire & Police Pension System is for pension benefits and the retiree health subsidy. If you are an active employee and want to cover your domestic partner on your health insurance, you must file a form with the City’s Personnel Department. Please call the Personnel Department’s Employee Benefits Office at (213) 978-1655 to obtain the form.

7. What if my domestic partner is also an LAFPP member?

If you and your domestic partner are both LAFPP members, only one member needs to submit the Declaration of Domestic Partnership or documentary proof of the domestic partnership filing with another agency/City department. It will be cross-filed and will apply to both of your pension benefits.

8. What are the domestic partner eligibility requirements for receiving a survivor pension?

The domestic partnership filing date requirements will depend on the type of death as listed below.

Member Death Occurrence:	Domestic Partnership Filing Effective Date must be:
Service-Connected Death	On or before the date of member’s death
Nonservice-Connected Death	At least one year prior to member’s death AND partnership continuous to the date of member’s death
After Service Retirement OR After Nonservice-Connected Disability Pension	At least one year prior to the effective date of member’s pension or entering the Deferred Retirement Option Plan (DROP) AND partnership continuous to the date of member’s death
After Service-Connected Disability Pension	On or before the effective date of member’s pension AND partnership continuous to the date of member’s death

Please refer to your tier Summary Plan Description for more information on pension and survivor benefit eligibility requirements.

9. What are the domestic partner eligibility requirements for receiving a surviving domestic partner health subsidy?

If you receive a qualified surviving domestic partner pension, you are eligible for a health subsidy if the following conditions are met:

You are enrolled in a Board-approved health plan.
The member had at least 10 years of service.
The member would have been at least 55 years old. Learn more about surviving spouse/domestic partner health benefits.

Note: If you receive a survivor benefit due to a purchase made by the member under the Survivor Benefit Purchase Program for retirees, you are not eligible for a health subsidy.

10. When are qualified domestic partners eligible to begin receiving the pension and health subsidy benefits?

The effective date of this benefit is January 17, 2000. However, you must meet the eligibility requirements for the various types of pensions. Those requirements are covered above in Questions #8 and 9.

11. I am already retired. Can I file a domestic partner declaration and qualify my domestic partner for a pension?

Although your domestic partner will not qualify for the standard survivor pension benefits under the Plan (see FAQ # 8), you may elect to purchase a survivor benefit for your domestic partner by paying the full actuarial cost of the benefit. Learn more about the Survivor Benefit Purchase Program.

12. How are my benefits affected if I terminate a domestic partnership?

Under state law, your Plan benefits may become subject to community property law if your domestic partnership is state-registered. Court proceedings are normally required to terminate state-registered domestic partnerships, just as with marriages, and the community property interest in your benefits is subject to division by the court in the same manner as when a marriage is terminated. In the event your benefit is divided, any payments to the former state-registered domestic partner or their beneficiaries, will be reported as taxable income to you. To learn more about terminating a state-registered domestic partnership, visit the California Secretary of State’s website.

13. How do I terminate a domestic partnership?

Filing solely with the Plan will not create community property rights in your pension benefits or inheritance rights to your contributions. Termination of these partnerships is governed by the Plan provisions and does not require court action. A Plan-registered domestic partnership terminates when any of the following occurs:

One partner gives or sends by certified mail, to the other partner a written notice that he or she is terminating the partnership.
One of the domestic partners dies.
One of the domestic partners marries.

Whenever one of these events ends the partnership, one of the domestic partners must file a Notice of Termination of Domestic Partnership Form with the Department of Fire & Police Pensions.

A new Declaration of Domestic Partnership cannot be filed until at least six months after the filing of a Notice of Termination of Domestic Partnership. The six-month waiting period does not apply where the domestic partnership was terminated because of death or marriage.

14. Whom should I contact if I have other questions about domestic partners?

If you have more questions, please contact the Active Member Services Section at (213) 279-3140, (844) 88-LAFPP, or amssection@lafpp.com.