b'20012003 Charter changes were approved to: Annualactivememberstatementsofservice 1.EnabletheCityCounciltoestablishbycredit and recorded contributions were issued to ordinance a Deferred Retirement Option Planmembers for the first time since 1985.(DROP). Basedonrecentfederalandstatelegislation, 2.Combine all tiers into a single plan for fundingactivemembersmayusefundsfromdeferred purposes. compensation to purchase service credit.3.Require the City Council to create, by ordinance, a new Tier 5 pension plan effective January 1,2005 2002. On January 20, 2005, an ordinance was enacted 4.Allow surviving spouses who remarried priorallowingformerTier2memberswhohadprior toDecember5,1996tocollectsurvivorshipserviceasparamedicsorcivilianambulance benefits. personnelundertheLosAngelesCityEmploy-5.Enable the City Council to provide by ordinanceees Retirement System to purchase this period of a dental subsidy for retirees. service.In the March 2005 election, the voters approved 2002two Charter amendments. The first amendment authorized the City Council to adopt an ordinance By City Council ordinance, a new Tier 5 pensionto transfer the sworn Port Police Officers to Tier 5 plan became effective January 1. Active membersof Fire and Police Pensions.of existing tiers could elect to irrevocably transferThe second amendment provided the following:to Tier 5 during the period from January 2, 2002 to December 31, 2002.1.Instituted return-to-duty provisions similar to The DROP Program became effective May 1, 2002.those in Tier 2 to members in Tiers 3, 4, and 5.Adentalsubsidyforretireesbecameeffective2.AuthorizedtheCityCounciltoallowaCity January 1, 2002.DefrayalofEmployeeContributionsby Ordinance.ThismeanstheCitymaypaya EffectiveJanuary1,2001,retireesandsurvivingportion of the employee contributions to Tiers spouses/domestic partners not able to enroll in a3, 4, and 5, not to exceed 2% of the required Board-approved health plan because they live outcontributions in lieu of a salary increase or a of state or outside the service area of a Board-ap- portion of an increase. This provision is to be proved HMO became eligible to receive a healthusedduringMemorandumofUnderstand-insurance premium reimbursement. Administra- ing negotiations as part of a total economic tion of the program began in 2002, retroactive topackage and the cost will be evaluated at that the effective date. time.The first payment under the Excess Benefit Plan3.Authorized the City Council to set the maximum was made. This plan was first authorized in 1990 tosworn retiree health insurance premium subsi-supplement the benefits to certain employees todybyordinance.Priortothischange,the the extent such benefits are reduced by the limita- Charterlimitedthemaximumswornretiree tions on benefits imposed by Section 415 of thehealth insurance premium subsidy to the lesser Internal Revenue Code of 1986, as amended. Thisof the maximum active sworn member health plan is nonqualified under the Internal Revenuesubsidy or the maximum civilian retiree health Code. subsidy. The City Council can delegate authority for setting sworn retiree subsidies to the Board of Fire and Police Pension Commissioners.SECTION 9 Milestones 173'