CARMEN A. TRUT ANICH City Attorney REPORTRE:

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1 City Hall East 200 N. Main Street Room 800 Los Angeles, CA (213) Tel (213) Fax CARMEN A. TRUT ANICH City Attorney REPORTRE: REPORT NO. Rl AUG l' 2011 DRAFT ORDINANCE TO AMEND CHAPTERS 10 AND 18 OF DIVISION 4 OF THE LOS ANGELES ADMINISTRATIVE CODE TO PROVIDE FOR THE PAYMENT OF ADDITIONAL CONTRIBUTIONS BY CERTAIN MEMBERS OF THE LOS ANGELES CITY EMPLOYEES' RETIREMENT SYSTEM IN EXCHANGE FOR THE VESTING OF CERTAIN SUBSIDY BENEFITS AND FOR THE PAYMENT OF ADDITIONAL CONTRIBUTIONS BY PARTICIPANTS IN THE LIMITED TERM RETIREMENT PLAN AND TO MAKE OTHER RELATED TECHNICAL CHANGES The Honorable City Council of The City of Los Angeles Room 395, City Hall 200 North Spring Street Los Angeles, California Honorable Members: Council File No S4 This Office has prepared and now transmits for your consideration the enclosed draft ordinance, approved as to form and legality. This ordinance, prepared at the request of your Honorable Body, amends the Los Angeles Administrative Code (LAAC) to provide for the payment of additional contributions by certain members of the Los Angeles City Employees' Retirement System (LACERS) in exchange for payment of additional contributions as described more fully below, and additionally makes related technical changes. A copy of the draft ordinance was sent pursuant to council Rule 38 to LACERS and the City Administrative Officer and their comments have been incorporated. More specifically, Section one of the draft ordinance provides that, depending upon the terms and conditions of the specific MOU to which a member is subject, a represented member shall contribute by salary deduction either:

2 Honorable Members of the Los Angeles City Council Page 2 of 3 (1) an additional two percent (2%) of the member's compensation earnable retroactive to April 24, 201, and ongoing, and an additional two percent (2%) of the member's compensation earnable commencing on July 1, 2011, and ongoing, for a total additional contribution of four percent (4%) effective July 1, 2011, and ongoing; or (2) an additional four percent (4%) of the member's compensation earnable retroactive to July 1, 2011, and ongoing. The draft ordinance additionally provides that members subject to other certain MOUs, elected officials and other non-represented members shall contribute by salary deduction an additional two percent (2%) of the member's compensation earnable retroactive to July 1, 2011, and ongoing, and an additional two percent (2%) of the member's compensation earnable commencing on January 1, 2013, and ongoing, for a total additional contribution of four (4%) effective January 1, 2013, and ongoing. Lastly, Section two of the ordinance provides that, for those eligible participants under LAAC Section (Limited Term Retirement Plan), that such participants shall contribute to the Retirement Fund by salary deduction at the same percentage that he or she would be required to contribute as if he or she were a member of LACERS. This ordinance may be adopted by the City Council pursuant to Charter Section 1168(a) which requires approval by not less than two-thirds of the membership of the Council, subject to the veto of the Mayor and the override by the Council by three-fourths of the Council. The final adoption of this ordinance cannot occur until after a public hearing has been held and until at least 30 days after its first presentation to the Council. Since this ordinance modifies retirement benefits, Government Code Section 7507 requires that a report from an actuary, who is an associate or fellow of the Society of Actuaries, must be obtained and made public at a public meeting at least two weeks prior to the adoption of these changes. If the future costs of the changes exceed one-half of one percent (.5%) of the future annual costs, an actuary shall be present to provide information as needed at the public meeting at which the adoption of a benefit change shall be considered.

3 Honorable Members of the Los Angeles City Council Page 3 of 3 If you have any questions regarding this matter, please contact Assistant City Attorney Alan Manning at (213) He or another member of this Office will be present when you consider this matter to answer any questions you may have. Very truly yours, CARMEN A. TRUTANICH, City Attorney PEDRO B. ECHEVERRIA Chief Assistant City Attorney PBE:TS:ac Transmittal cc: Antonio R. Villaraigosa, Mayor Miguel A. Santana, City Administrative Officer Gerry Miller, Chief Legislative Officer LACERS Board of Administration Thomas Moutes, General Manager, LACERS M:IProprietary-OCCIRETIREMENT BENEFITSlreprt non-repvestlnq doc

4 ORDINANCE NO. _ An ordinance amending Chapters 10 and 18 of Division 4 of the Los Angeles Administrative Code to provide for the payment of additional contributions by certain members of the Los Angeles City Employees' Retirement System in exchange for the vesting of certain subsidy benefits and for the payment of additional contributions by participants in the Limited Term Retirement Plan and to make other related technical changes. THE PEOPLE OF THE CITY OF LOS ANGELES DO ORDAIN AS FOLLOWS: Section 1. Subsection (c) of Section of Chapter 10 of Division 4 of the Los Angeles Administrative Code is amended to read as follows: (c) In addition to the contributions required pursuant to Subsection (a) or (b) herein, as applicable, certain members shall make additional contributions to the Retirement Fund as provided herein. In consideration for such additional contributions, these members shall receive the benefit set forth in Section of this Code. The City Administrative Officer shall notify the Retirement System and the Controller of the specific Memoranda of Understanding (MOUs) which require members to contribute as provided herein and shall also provide the Retirement System and Controller with the names of all members who are non-represented employees, including elected officials. Because the benefit conferred by Section of this Code is a vested benefit, a member who is employed in a position requiring the payment of additional contributions to the Retirement Fund as provided in this Subsection shall continue to make additional contributions to the Retirement Fund for so long as he or she is a member, notwithstanding that he or she may subsequently transfer to a position that does not require the payment of the additional contributions. 1. Members subject to specific MOUs shall contribute by salary deduction to the Retirement Fund an additional two percent (2%) of the member's compensation eamable retroactive to April 24, 2011, and ongoing; further, such members shall contribute by salary deduction to the Retirement Fund an additional two percent (2%) of the member's compensation eamable commencing on July 1, 2011, and ongoing, for a total additional contribution of four percent (4%) effective July 1, 2011, and ongoing. 2. Members subject to other specific MOUs shall contribute by salary deduction to the Retirement Fund an additional four percent (4%) of the member's compensation eamable retroactive to July 1, 2011, and ongoing. 3. Members who are subject to other specific MOUs and members who are non-represented employees, including elected officials, shall contribute by salary deduction to the Retirement Fund an additional two percent (2%) of the member's compensation earnable retroactive to July 1, 2011, and ongoing;

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6 Sec. 4. The City Clerk shall certify to the passage of this ordinance and have it published in accordance with Council policy, either in a daily newspaper circulated in the City of Los Angeles or by posting for ten days in three public places in the City of Los Angeles: one copy on the bulleting board located at the Main Street entrance to the Los Angeles City Hall; one copy on the bulleting board located at the Main Street entrance to the Los Angeles City Hall East; and one copy on the bulletin board located at the Temple Street entrance to the Los Angeles County Hall of Records. I hereby certify that this ordinance was passed by the Council of the City of Los Angeles, by a vote of not less than two-thirds of all of its members, at its meeting of JUNE LAG MAY, City Clerk By ~~-- Deputy Approved Mayor Approved as to Form and Legality CARMEN A. TRUTANICH, City Attorney File No S4