Permanent employees of Los Angeles County or outside Districts who work three-quarter time or more are members of the Los Angeles County Employees Retirement Association (LACERA). Any LACERA pension benefits that are accumulated during marriage are subject to division due to dissolution of marriage or termination of a registered domestic partnership. Orders dividing retirement benefits are often called Qualified Domestic Relations Orders, or QDROs; however, LACERA is exempt from the provisions of the Employee Retirement Income Security Act (ERISA), and orders dividing LACERA benefits are called Domestic Relations Order or DROs.
REQUESTING INFORMATION ABOUT LACERA BENEFITS
LACERA is a defined benefit plan under which a member accumulates service credit. Each LACERA member receives an Annual Benefit Statement which details the member’s accumulated service credit, contributions, and credited interest. Members can also request information about their accounts by sending a written request to LACERA. A person other than the Member can request the Member’s account information by either 1) providing written authorization, signed and dated by the Member within the 30 days prior to the information request or which is specifically valid for a longer time period; or 2) submitting a subpoena and Notice to Consumer, along with a $15 check for witness fees to the LACERA.
JOINDER REQUIRED FOR LACERA
LACERA must be joined before a DRO can be implemented. Joinder is a legal process that names a third-party claimant to a divorce case; LACERA is a third-party claimant to any dissolution case which involves LACERA benefits. The joinder will put LACERA on notice of the pending dissolution action and forthcoming DRO, and will give the court jurisdiction over LACERA. A joinder will also place a hold on a active member’s account which will remain in place until the member retires. The hold will prevent payment of a member’s benefit or a refund of accumulated contributions and interest until a DRO is received. If needed, QDRO Helper can file the necessary joinder documents for you for an additional fee.
LACERA RETIREMENT OPTIONS / OPTIONAL RETIREMENT ALLOWANCES
Various alternatives to the Unmodified Retirement Allowance are available under the County Employees Retirement Law of 1937 (CERL). The different options allow for variations in determining how retirement and survivor benefits are paid, and who can be designated as a beneficiary. Options 1-4 are summarized below:
• Option 1 (Government Code § 31761): If the member dies prior to receiving the contributions he or she paid into the retirement fund, Option 1 provides a single lump-sum payment (remaining balance of member’s accumulated contributions) to any named beneficiary. It does not provide a monthly survivor allowance. (Not available to Plan E members.)
• Option 2 (Government Code § 31762): Provides one named beneficiary with 100 percent of the member’s benefit, calculated on the date of death.
• Option 3 (Government Code § 31763): Provides one named beneficiary with 50 percent of the member’s benefit, calculated on the date of death.
• Option 4 (Government Code § 31764): Provides a customized lifetime benefit to one or more named beneficiaries via either a set monthly income or a fixed percentage of the member’s monthly allowance. The cost of customizing a benefit under Option 4 may be shared between the retired member and the non-member or the court may require one party to bear the cost.
Many divorcing members opt for Option 4 because it allows a member to name multiple beneficiaries amongst whom survivor benefits can be distributed – this can allow for survivor benefits to be paid to both a current spouse and the member’s former spouse.
TIME RULE FORMULA FOR DIVIDING LACERA BENEFITS
The most common method of dividing LACERA benefits is known as the Time Rule Formula. This formula will provide that the non-member spouse’s share of the LACERA benefits is 50% times a fraction where the numerator is the number of months of LACERA service from the date of marriage to the date of separation, and the denominator is the total months of LACERA service accrued at the member’s retirement.
The Time Rule Formula will also apply if a member terminates employment and elects to receive a refund of accumulated contributions; providing the non-member spouse with a community property share of such refund of contributions.
QUESTIONS ABOUT DIVIDING LACERA BENEFITS?
If you have questions about dividing LACERA benefits or if you would like to get started on your DRO today, please call QDRO Helper at 619-786-QDRO (619-786-7376) or click here to request a new client package for a LACERA DRO. We are happy to assist clients throughout California – no in office appointments needed.
DISCLAIMER: Any legal information on this blog has been prepared by QDRO Helper for informational purposes only and should not be construed as legal advice. The material posted on this website is not intended to create, and receipt of it does not constitute, an attorney-client relationship, and readers should not act upon it without seeking professional counsel. Note also that sending an e-mail to QDRO Helper does not create an attorney-client relationship, and none will be formed unless there is an express agreement between the firm and the individual.