b'LOS ANGELES FIRE AND POLICE PENSION SYSTEM NOTES TO FINANCIAL STATEMENTS JUNE 30, 2024 AND 2023NOTE 1DESCRIPTION OF THE PLANS (Continued)Pension Plan (Continued)Tier 6 members must be at least age 50 with 20 or more years of service to be entitled to a service pension.Annual pension benefits are equal to 40% of their two-year average compensation, increasing for each year of service over 20 years, to a maximum of 90% for 33 years.Tier 6 provides for post-employment COLAs based on the CPI to a maximum of 3% per year.However, any increase in the CPI greater than 3% per year is placed into a COLA bank for use in years in which the increase in CPI is less than 3%.The City Council may also grant an ad-hoc COLA no more than every three years, subject to certain conditions.Members who terminate their employment are entitled to a refund of contributions plus Board-approved interest if they do not qualify for a pension or if they waive their pension entitlements.Health Subsidy PlanMembers of the System are entitled to post-employment health subsidy benefits under Sections 1330, 1428, 1518,1618,and1718oftheCityCharter;Section4.2018oftheAdministrativeCode;andrelated ordinances.Healthsubsidybenefitsareavailabletomembersandtheircovereddependents(e.g., spouses/domestic partners and/or children) on disability and service retirement.Effective January 1, 2000, qualified surviving spouses/domestic partners are eligible for health subsidy benefits. Members who retire from the System with at least 10 years of service are eligible for health subsidy benefits.For retirement effective dates prior to July 1, 1998, regular benefits begin at age 60. For retirement effective dates on or after July 1, 1998, regular benefits begin at age 55. Tier 6 members who retire on a service-connected disability pension are eligible for a minimum health subsidy at age 55 if they have fewer than 10 years of service.Administrative Code Section 4.1154 (e) provides that, on an annual basis beginning in 2006, the Board is authorized to make discretionary changes to the maximum monthly subsidy, so long as no increase exceeds the lesser of a 7% increase or the actuarial assumed rate for medical inflation for pre-65 health benefits established by the Board for the applicable fiscal year.The maximum monthly subsidy for fiscal years 2024 and 2023 was $2,169.79 and $2,046.97, respectively. The System also reimburses the basic Medicare Part B premium for any pensioner enrolled in Medicare Parts A and B, and eligible to receive a subsidy. The System began pre-funding the health subsidy benefits effective with the 1989-1990 plan year.Full funding was phased in over four years. Effective July 1, 2008, actual employer contributions and benefit payments relating to health subsidy benefits are separately accounted for to comply with Internal Revenue Code Section 401(h).On January 11, 2022, the City Council passed Ordinance No. 187351 to amend Chapter 11.5 of Division 4 of the Los Angeles Administrative Code to establish the Los Angeles Fire and Police Pensions Retiree Health Care Fund (LAFPP Health Care Fund) for the sole purpose of funding retiree health care benefits for eligible retirees and beneficiaries of the System.The City and the Board of Fire and Police Pension Commissioners entered into a trust agreement, providingthe LAFPP Health Care Fund as an alternative funding mechanism to the pre-existing LAFPP Health Care CoverageAccount(401(h)account).Thismeasurewasaimedtoensurethelong-termviabilityand sustainability of retiree health care benefits for the Fire and Police Pension Plan.18 SECTION 2 Financials 35'