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Know Your Benefits: Supplemental Benefit Plans

SEIU Local 721 has negotiated health and welfare and pension benefits for Los Angeles County workers and their families. Many of these benefits were enhanced in the last round of negotiations and are codified in the Union’s 2006-09 Fringe Benefits Agreement . This article provides an overview of two defined contribution pension plans, the Horizons Plan which supplements the LACERA retirement plans available to permanent County workers, and the Pension Savings Plan designed exclusively for temporary and recurrent workers. Both of these plans include a County match or contribution so you are urged to participate fully in your eligible plan.

Horizons Deferred Compensation and Thrift Plan
Los Angeles County workers are eligible to receive a guaranteed retirement pension (known as a defined benefit) from the Los Angeles County Employees Retirement Association (LACERA) retirement system.[1] The Horizons Deferred Compensation and Thrift Plan was designed to provide supplemental retirement benefits by providing investment returns earned on voluntary payroll salary deductions (your plan contribution). The Horizons Plan was established in 1991 as a tax deferral plan pursuant to Section 457 (b) of the Internal Revenue Code (IRC). This means that your plan contributions are “pretax” and reduce your taxable income, thus reducing your current income taxes and increasing the amount of money you can afford to contribute to the Plan.[2] Each Horizons contribution is matched by the County on a dollar for dollar benefit up to 4% of salary. Your plan contributions, County match, and any earnings on them are immediately 100% vested. Because the Horizons Plan retirement benefits are based on the participant’s salary contributions, it is a “defined contribution” plan.[3] County workers enrolling in the Horizons Plan defer part of their salary on a pre-tax basis and direct their monthly contribution to a menu of investment options.

Plan Overview
  • Provides supplemental retirement benefits
  • Your monthly contribution lowers your taxable income
  • You choose your investment options
  • County matches your contribution dollar for dollar
  • Immediate 100% vesting of your contribution, County match, and earnings

To enroll in the Horizons Plan or for more information, please call (800) 786-6464 or log on to www.countyla.com.

Pension Savings Plan
The Pension Savings Plan is also an IRC 457(b) plan and was established as a retirement plan in lieu of participation in the Social Security System for part-time and temporary employees who are not eligible for the LACERA defined benefit retirement plans.[4] All County workers in a non-permanent status are required to participate in the Pension Savings Plan. Plan contributions are invested in the Trust Fund and the Plan benefit is distributed at termination of service or retirement.

Plan Overview
  • The County provides a monthly contribution of 3% of compensation
  • The Plan Participant’s mandatory contribution is 4.5% of compensation
  • The Plan Participant may increase his contribution beyond 4.5% of compensation
  • If the Plan Participant gains permanent status, he/she may transfer (roll-over) their Plan earnings to the Horizons Plan

For more information regarding the Pension Savings Plan please call (213) 738-2242 or log on to http://dhr.lacounty.info.

Wanted:
County Workers Willing to Safeguard and Promote Supplemental Pension Plans

TheHorizons Plan and the PensionSavings Plan are governed by jointlabor-management committees known as thePlan Administrative Committees(PAC). These PAC Members serve as plan trusteesand fiduciaries. The PACis responsible for ensuring the prudent administrationof the Plan,determining the investment structure, and selecting theinvestmentmanagers.

The Union contract provides that SEIU Local721 can appoint its representatives as PAC Members and PACMember Alternates. If you are interested in serving as a Plan Trustee oneither of these two Plans, please contact Ramon Rubalcava ,SEIU Local721 Director of Research and Policy Ramon Rubalcava , at (213) 368-8606for more information and an application.


End notes

[1] Only permanent County workers are eligible for LACERA retirement benefits.
[2] All plan contributions and investment earnings accumulated are tax deferred. They are not taxable until you beginning receiving Horizons benefits at retirement.
[3] LACERA plans are “defined benefit” plans because the retirement benefit is guaranteed and can be calculated based on several factors at retirement such as age, salary, and years in service.
[4] Los Angeles County does not participate in Social Security. However, the Federal government requires all public sector employers to either participate in Social Security or have a social security comparable plan. Accordingly, the Pension Saving Plan was established in 1992 as a Social Security offset program.