Water and Power Employees' Retirement Plan
News from the WPERP
DISCREPANCY IN JUNE
2011 RETIREMENT ALLOWANCE
This is to let you know, the Retirement Plan Office is aware of the discrepancy in the YTD fields reflected on your checks. We are in the process of having this fixed. We expect to have the YTD fields adjusted for your July check (payable August 1).
Please be assured that this error will not affect your 1099s.
We are sorry for any inconvenience this may have caused you. If you have any questions, please contact us at:
The Health Plans Office is handling any issues related to your premium and subsidy. The Health Plans Office may be contacted at (213) 367-2023.
Message from Health Plans Office:
For those transitioning to UnitedHealthcare (UHC), you should have received a letter from the Health Plans Office regarding your coverage. You may contact UHC directly beginning July 1, 2011 as follows:
CHANGE IN INTEREST CREDITING
Effective April 2011, Regular and Additional Contributions of members of the Retirement Plan will be credited at 7.75% interest rate instead of the previous 8%. The change in the interest rate is in accordance with a Plan amendment which was needed to reflect the projected future earnings of the Retirement Fund’s investment portfolio.
The change in the interest crediting rate will have no impact on the calculation of formula retirements which are based on highest average salary, years of service, age and the applicable retirement factor. There is minimal impact on the voluntary Additional Annuity program. For more details, please refer to the Summary Plan Description.
Correction to Retired Employees' Association
The 2009 Retired Employees' Association Holiday Party is scheduled for Saturday, December 5, 2009. Seating is limited to those people who have sent in their checks by November 21, 2009.
Effective September 2009, the Retirement Board meetings will be held on the second and fourth Wednesday of each month per Board Resolution Number 10-18 adopted August 19, 2009.
Notice to Retirees
The retirement allowance you received dated April 1, 2009 was based on the new tax withholding tables established by the U.S. Department of the Treasury. The new tables reduced the amount of income tax withheld and, as a result, many retirees received a higher net allowance than the previous month. The reduction in withholdings is part of the Making Work Pay credit and other tax changes resulting from the American Recovery and Reinvestment Act of 2009.
If you are concerned that the reduced withholding may not cover your taxes for the year, you can increase the amount withheld by either claiming fewer withholding allowances or requesting additional amounts to be withheld. To change your withholding, contact the Retirement Office at (800) 367-7164 to get a new tax withholding card. Fill out the card and send it back to the Retirement Office.
The Water and Power Employees’ Retirement Plan (WPERP) recently underwent a management audit. This audit was completed in accordance with City Charter Section 1112 which requires that the City of Los Angeles conduct a management audit of each of the City’s three pension and retirement systems every five years. The required audit examines whether the pension or retirement system is operating in the most efficient and economical manner and evaluates the asset allocation of the system.
The Controller’s Office released the audit of the Water and Power Employees’ Retirement Plan (WPERP) last week and is available for review at:
The audits of the City’s two other retirement plans were completed last year. All three audits were conducted by the same consultant, Independent Fiduciary Services (IFS).
IFS found the DWP Retirement Plan well-funded and well-managed, but made recommendations for improvements in several areas including governance, investments and training. The Retirement Plan is not obligated to adopt these recommendations; any action taken will only be after thorough review by the WPERP Board of Administration.
The audits for all three City retirement systems also contained recommendations related to combining two or possibly all three of the systems. Any such consolidation would require a change in the City Charter. Before being put on an election ballot, public hearings would be held to determine the merits of the proposal and whether or not it is consistent with state Constitutional protections for retirement systems.
The Retirement Office recently received inquiries from members regarding the health of the Retirement Plan and the safety of their retirement income. We want to assure you that your retirement income is guaranteed for life under the City Charter and by your pension plan, which has the full backing of the Department of Water and Power. Although the Retirement portfolio will continue to change in value, fluctuations in the market have no bearing on the Department’s obligation to pay your retirement allowance, which is a solidly established legal requirement.
It is important to note that the pension plan portfolio is invested in various investments which provide the needed diversification to manage risks and achieve our long–term investment objectives. Further, the Retirement Plan employs experienced investment professionals who carefully monitor investment performance on an on-going basis and determine if changes are needed to our investment strategy.