Month: December 2022

Retired/DROP Members – December 2022 Newsletter

• 2023 Health & Dental Subsidy Updates
• Medicare Enrollment Requirement for Subsidy
• New IRS Tax Withholding Form W-4P for 2023
• Tax Season – Form 1099-R Information

In January 2022, the Internal Revenue Service (IRS) released a new 2022 Form W-4P – Withholding Certificate for Periodic Pension or Annuity Payments and a new 2022 Form W-4R – Withholding Certificate for Nonperiodic Payments and Eligible Rollover Distributions.

Use of the new forms was optional for tax year 2022 but LAFPP is required to use them beginning January 1, 2023.

Note for California State Tax Withholding

The revised Form W-4P must be used for federal tax withholding only and may no longer be used for California state tax withholding. The California Franchise Tax Board has not updated its form, DE 4P – Withholding Certificate for Pension or Annuity Payments. As such, LAFPP has created a new form for pensioners to elect or make changes to California state tax withholding.

This form is available for download from the LAFPP website at Income Tax Withholding Form.

Form Submission Deadlines

If you plan to submit changes to your federal and/or California state tax withholding, please adhere to the following guidelines:

• The revised IRS Form W-4P for federal tax withholding and the new LAFPP California State Income Tax Withholding Form must be used to elect federal and California state tax withholding if effective on or after January 1, 2023. 
• Changes to federal tax withholding submitted electronically via MyLAFPP on or after December 16, 2022 will be submitted under the new Form W-4P, that is effective January 1, 2023.

FREQUENTLY ASKED QUESTIONS

LAFPP remains focused and committed to keeping member data/information safe and secure. As more and more members conduct business online, we recognize the increased need to manage cybersecurity risks and have adopted a strategic cybersecurity initiative to mitigate those risks.

How does LAFPP protect you?

• LAFPP frequently conducts network vulnerability assessment testing and institutes best practices in securing member data;  
• Conducts periodic department-wide staff training; and,  
• Makes continuous enhancements to our cybersecurity program to improve and defend against cyber-attacks, including implementation of a 2-Factor Authentication (2FA) member portal login. 

What can you do to secure your LAFPP information?

Protecting your information is a shared responsibility and cybersecurity starts with you. Here are some tips to protect your personal information with LAFPP:

MyLAFPP

• Register online to view and maintain your personal information through the MyLAFPP member web portal. 
• Keep your contact information up to date to receive timely notices in the event that we may need to reach you. Download forms to update your information from our website or submit a change request via the member portal.  
• Utilize strong passwords by creating passwords that use a combination of upper and lower case letters, numbers, and special characters. Consider a password manager to help create and track passwords. It is advisable not to share, reuse, or repeat passwords.  

Direct Deposit

• Consider enrolling in direct deposit, which saves time and is more secure than paper checks. 
• Check with your bank and confirm that your monthly pension is being deposited regularly.  
• Contact LAFPP if you are not receiving your monthly itemized pension statement, which is mailed to your address on file. 
• Update your bank account and tax withholding information by downloading forms from our website or utilizing MyLAFPP. 

Contacting LAFPP

• Do not include any personally identifiable information (PII) in your email messages, such as Social Security numbers, dates of birth, driver’s license numbers, or addresses. 
• Consider encrypting your emails before sending to LAFPP, especially when attaching files for Health Insurance Premium Reimbursement (HIPR) requests. 
• For enhanced security during phone calls, staff will confirm your identity by requesting your date of birth, mailing address, last 4 digits of your Social Security Number, and a security question known only to you.  

Reminder: LAFPP will never initiate a phone call, email, or text message to request your MyLAFPP login credentials or any other personal information.

Do not respond to phone calls or click on links requesting your personal information. When in doubt, contact LAFPP directly by dialing (213) 279-3000 or (844) 88-LAFPP or by sending an email to pensions@lafpp.com.

SPECIAL NOTICE: This article only applies to eligible retired members of Los Angeles Fire and Police Pensions and respective Qualified Surviving Spouses/Domestic Partners.

The Centers for Medicare and Medicaid Services (CMS) has decreased the standard Medicare Part B monthly premium to $164.90 effective January 1, 2023; however, you may pay a different amount determined by CMS.

• If you are a new Medicare Part B enrollee in 2023, you will be reimbursed the standard monthly premium of $164.90 and will only need to provide a copy of your Medicare card.  
• If you received a Medicare Reimbursement less than $164.90 on your pension check in 2022, you will need to provide documentation to update your Part B reimbursement for 2023. 
• If you received a Medicare Reimbursement of $164.90 or more on your pension check in 2022, your reimbursement amount will be automatically adjusted on your December 31, 2022 pension check.

To update your Part B reimbursement for the 2023 calendar year: 

Please submit a copy of:

• The first page of your Social Security New Benefit Amount statement for 2023; or
• Your 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 2022 calendar year: 

Please submit a copy of your:

• Social Security Form 1099 for 2022; or
• Your first Medicare monthly or quarterly billing statement for 2022

Please redact any birthdate or SSN information and 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 approximately 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 Retired Members 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.

Frequently Asked Questions

1. How do I know if I am eligible for Part B reimbursement?

You must be a retired member or qualified survivor who is receiving a pension and is eligible for a health subsidy, and enrolled in both Medicare Parts A and B.

2. What document do I need to submit to receive my correct Part B reimbursement amount?

You must submit a copy of your Social Security benefits verification statement (your “New Benefit Amount”) or a copy of a 2023 Centers for Medicare and Medicaid Services (CMS) billing statement.     

3. My spouse (non-LAFPP member) is currently enrolled in Medicare Parts A and B.  Does he/she need to submit Medicare Part B premium documentation?

No.  Only the retired member or Qualified Survivor enrolled in Parts A and B is eligible for Medicare Part B premium reimbursement. 

4. I received a letter stating that I pay a higher Part B premium based on my income level (Income-Related Monthly Adjustment Amount – “IRMAA”). May I submit this letter as proof of my Part B premium?

Yes.  You may submit a copy of the first page of your IRMAA letter if it contains your name, address and 2023 monthly Medicare Part B premium deduction.  LAFPP does not reimburse IRMAA fees, so your Part B reimbursement will not exceed the 2023 standard monthly premium of $164.90.  

5. I receive a monthly Social Security payment, but I did not receive/cannot locate my “New Benefit Amount” Statement from Social Security.  What should I do?

You may call or visit your local Social Security Administration (SSA) office. You may also access proof of your 2023 Medicare Part B basic premium online at the SSA website: www.ssa.gov/myaccount. You may be required to create or register your SSA account. Please note that once you have an online account, your SSA notifications will be emailed to you.

6. When do I need to provide LAFPP documentation of my Part B Premium?

You may submit your documentation as soon as it is available and receive a retroactive reimbursement for up to twelve (12) pension roll months from the date your submission is received. 

If you have additional questions about your Medicare Part B reimbursement, please contact the Medical and Dental Benefits Section at (213) 279-3115, toll free at (844) 88-LAFPP ext. 3115, or via email to mdb@lafpp.com. 

Based on the actuarial report for the period ending June 30, 2022, the combined funded ratio for pension and health benefits is 95.0%, up from 92.5% the previous year. This marks the fifth consecutive year that the combined funded ratio has increased for the System. The pension benefit funded ratio is now 98.0%, up from 96.8%, and the retiree health benefit funded ratio increased from 64.7% to 74.3%. The favorable results indicate that the Plan remains strong despite another volatile year marked by the continuing COVID-19 pandemic, high inflation, and financial market volatility.

Every year a valuation of the LAFPP fund is performed by the Board’s actuary. The valuation reviews the System’s assets and liabilities and establishes the City’s (including the Harbor and Airport Departments) contribution to the fund for each fiscal year. The City’s combined contribution rate for July 15, 2023, will decrease by 1.26% of sworn payroll, from 41.67% to 40.41%. The contribution rate decrease is due to a higher than expected return on the valuation value of assets (after smoothing), lower than expected salary increases for active members, higher than expected employer contributions, and lower health plan premiums and subsidies than projected in the prior valuation. The overall unfunded liabilities have decreased from $2.1 billion to $1.5 billion.

The actuarial valuation reports can be found on the Financial Reports page of our website.