Month: January 2021

All eligible DROP participants, retired members, and beneficiaries are subject to an annual cost of living adjustment (“COLA”). The COLA takes effect on July 1 of every year and the adjustment is received accordingly in the July 31st pension payment/DROP account deposit.

Pursuant to the City of Los Angeles Charter and Administrative Code, the LAFPP COLA is based on the annual change in the Consumer Price Index (CPI) as published by the U.S. Bureau of Labor Statistics. Specifically, we look at the change in the CPI for the Los Angeles-Long Beach-Anaheim area for the 12-month period beginning in March through February of the following year.

The LAFPP COLA is calculated differently from the COLA calculated by the Social Security Administration (SSA). Both COLAs are based on changes in the CPI determined by the Bureau of Labor Statistics; however, both the period measured and the population indexes used by SSA are different.

LAFPP determines eligibility requirements and how the COLA is applied based on the member’s tier.

	COLA Maximum	COLA Bank
Tiers 1 and 2	Uncapped	No
Tiers 3 and 4	+/- 3%	No
Tiers 5 and 6	+/- 3%	Yes

• Tiers 1 and 2 have an uncapped COLA and are subject to a full COLA increase/decrease.
• Tiers 3 and 4 have a 3% COLA cap and cannot incur an increase/decrease beyond the cap.
• Tiers 5 and 6 have a 3% COLA cap and cannot incur an increase/decrease beyond the cap. In addition, they also have a COLA Bank to store any increases in the CPI greater than 3%, which can be applied in future years when the CPI is below 3%.

First-year retirees and DROP participants in Tiers 3-6 receive a COLA that is prorated by the number of complete months between their retirement effective date (or DROP entry date) and the following July 1.

What is a negative COLA?

In the event that the CPI is negative for the 12-month period used to measure the COLA (i.e., deflation), the LAFPP COLA would also be negative and the monthly pension benefit would be decreased by the negative COLA percentage. Any decrease is subject to the same provisions as an increase. It cannot exceed the 3% cap for Tiers 3-6, and Tiers 5 and 6 may use their COLA banks to offset the decrease, if a balance is available. Tiers 1 and 2 do not have a COLA cap and would incur the full decrease.

For all members, it is important to note that in the event of a negative COLA, the pension amount will not be reduced to less than the member’s or qualified survivor’s original pension amount.

To date, LAFPP members have never been affected by a negative COLA, however, in 2009 there was a 0.00% COLA and in 2015 it was 0.10%. The Bureau of Labor Statistics has made several changes to the CPI over the years and the most significant changes were last made in 2018. For more information, you may visit the Bureau of Labor Statistics website at www.bls.gov/cpi and look for Regional Resources under CPI Data to find the Los Angeles area. Step-by-step instructions on How to Access CPI Data is available. A summary of Historical COLA Percentages is also available for viewing.

For any other inquiries, please contact the Retirement Services Section at (213) 279-3125 or rs@lafpp.com.

The 2020 Form 1099-R is now available for retired members on MyLAFPP. It is the easiest and fastest way to view and print your tax statement without waiting for delivery to your mailing address.

If you have not created a MyLAFPP account, you will need a PIN number to register. Please contact the Communications & Education Section at (213) 279-3155 or send an email to pensions@lafpp.com with your contact number and we will return your call during business hours.

We recommend viewing and downloading your Form 1099-R on a computer.

• Log in to MyLAFPP
  • Forgot username: https://www.lafpp.com/post/forgot-username
  • Forgot password: https://www.lafpp.com/post/forgot-password
• Click Forms and Correspondence
• Click Statements
• Locate “1099-Tax Year 2020”
• Click “Document” to open and download your 1099-R

For the full guide with screenshots visit here: https://www.lafpp.com/post/how-download-form-1099r

Hard Copy Form 1099-R

The Form 1099-R was mailed on Friday, January 29, 2021 to the mailing address we have on file for you.

Please allow at least one week for your tax statement to be delivered to your mailing address before contacting LAFPP. 

Some members may receive more than one 1099-R tax form in a year. Here are some of the possible reasons:

1. You exited DROP and received at least one monthly pension payment in the same year (one 1099-R for DROP, one 1099-R for monthly pension payments)
2. You have a non-tax dependent covered on your LAFPP-subsidized health insurance plan (e.g., domestic partner or child of a domestic partner)
3. Your IRS tax distribution code changed during the year (e.g., when member attains 59 ½ years old by June of the same year)
4. You moved to a different state during the year
5. You received pension payments based on your City service and from a qualified domestic relations order (QDRO) or as a beneficiary

Contact Information

Form 1099-R Questions:  
Contact the Retirement Services Section at (213) 279-3125 or rs@lafpp.com.

MyLAFPP Questions:
Contact the Communications & Education Section at (213) 279-3155 or pensions@lafpp.com.

SPECIAL NOTICE: This article only applies to retired members of the Los Angeles Fire & Police Pension Plan

The Centers for Medicare and Medicaid Services (CMS) has increased the standard Medicare Part B monthly premium to $148.50 effective January 1, 2021; however, you may pay a different amount determined by CMS.

• If you are a new Medicare Part B enrollee in 2021, you will be reimbursed the standard monthly premium of $148.50 and do not need to provide additional documentation.  
• If you received a Medicare Part B reimbursement of $144.60 on your pension check in 2020, you do not need to provide documentation and your Part B reimbursement will automatically increase to $148.50 for 2021. 
• If you received less than a $144.60 Medicare Part B reimbursement on your pension check in 2020, LAFPP will notify you by email or mail with instructions on how to update your Part B premium amount on record.
   

To update your Part B reimbursement for the 2021 calendar year, please submit a copy of your:

• Social Security New Benefit Amount statement for 2021; or
• Next Medicare monthly or quarterly billing statement (if you do not receive Social Security benefits)

To update your Part B reimbursement for premiums paid during the 2020 calendar year, please submit a copy of your:

• Social Security Form 1099 for 2020; or
• First Medicare monthly or quarterly billing statement for 2020

Please send all documents to LAFPP’s Medical and Dental Benefits Section via:

• Email to: mdb@lafpp.com;
• Fax to: (213) 628-7782; or
• Mail to: Department of Fire and Police Pensions, Attn: Medical & Dental Benefits, 701 E. 3rd Street, Suite 200, Los Angeles, CA 90013

Due to the anticipated high volume of submissions, it may take at least three months to process your Part B documentation and update your reimbursement amount on your LAFPP pension payment.

As a reminder, Part B reimbursement only applies to Retirees or Qualified Survivors who are eligible for an LAFPP health subsidy and are enrolled in both Medicare Parts A and B. Any additional Part B penalties or fees charged by CMS are not eligible for reimbursement.

January 2021 begins with more good news for LAFPP! As of January 12, 2021, the Fund reached an unaudited market value in excess of $28.3 billion dollars. This greatly exceeds the $25 billion total as of January 2020, just before the stock market declined due to the COVID-19 pandemic. The rebound in the Plan’s market value is due to the strong recovery in the equity markets and the City’s annual contribution payment received in July 2020.

You should also be assured that the Board and staff continually monitor your pension fund, which is invested for the long term. There is a strategic asset allocation plan in place with ongoing adjustments to manage periodic fluctuations.

Thank you for your dedication and service as first responders to the residents of Los Angeles. For any questions or concerns, please contact us at (213) 279-3000, (844) 88-LAFPP, or at Pensions@lafpp.com.

LAFPP continues to be one of the largest public safety pension funds in the U.S. The Plan administers retirement and health subsidy benefits for over 26,000 current and retired public safety employees and their beneficiaries for the City of Los Angeles.