Required Minimum Distributions

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If you are no longer working but have not yet retired, you must begin receiving required minimum distributions (RMDs) from your retirement plan(s) when you reach the federally designated RMD age.

RMDs apply to defined benefits plans, like LACERA’s, as well as defined contribution plans, like Empower 401(k) and 457(b) deferred compensation plans, but the RMDs are applied differently. See more about RMDs as applies to defined benefit plans and defined contribution plans below.

The purpose of RMDs is to ensure that individuals eventually pay taxes on the money they have saved in tax-deferred retirement accounts. RMDs are mandatory; you cannot opt out.

See the difference in RMDs for defined benefit plans and defined contribution plans below.

Current RMD Age

The current RMD age is 73.It applies to individuals with birthdates from January 1, 1951 to December 31, 1959.

Federal legislation determines the RMD age threshold, which is subject to change.

How the RMD Is Applied to LACERA Defined Benefit Plans

  • Active LACERA and reciprocal members: If you continue to work after reaching the applicable RMD age, you are not subject to RMDs until April 1 of the calendar year following your employment termination date.
  • LACERA and reciprocal members who are no longer working, but not yet retired: You must either apply for retirement to receive your monthly benefit or withdraw your contributions by April 1 of the calendar year after you reach the federally designated RMD age.

If you are no longer working but have not yet retired and will be subject to the RMD, here are more important dates and information to know.

  • Your latest eligible retirement date is March 1prior to the required beginning date.
  • If you are a contributory member who wants to withdraw your contributions and forgo a monthly benefit, LACERA must receive a withdrawal application before March 1prior to the required beginning date. The contributions cannot be withdrawn if the application is received after this date.
  • If LACERA does not receive your retirement application or withdrawal application before March 1 prior to the required beginning date, LACERA will file for retirement on your be half and begin paying an unmodified monthly allowance (provided we have verified your current contact and address information). The first monthly benefit payment will be made by the April 1 required beginning date. You will not be able to change the retirement option once we begin paying you.

Before RMDs Begin: LACERA Will Try to Contact You

If you have not submitted an application to retire or withdraw your contributions within two years of your required beginning date, LACERA will notify you regarding your minimum distributions and options—so make sure LACERA has your current contact information. You can contact us or log in to My LACERA to update your profile.

Regardless of whether you have left County service or joined a reciprocal system, it’s vitally important that LACERA always has your current information so we can contact you or your beneficiaries about various retirement matters and available benefits.

How RMDs Apply to Defined Contribution Plans

When you reach the designated RMD age, you are required to start taking a determined percentage of your defined contribution plan’s account balance and pay tax on your distributions. The RMD percentage for any year is based on the IRS RMD life expectancy tables.

For more information about your defined contribution plan RMDs, contact Empower at 800-947-0845.

How Mandatory RMDs Could Affect Your Other Benefits

If you postpone your LACERA retirement and begin receiving other income-based benefits such as Social Security or housing that is only eligible to individuals with an income below a certain threshold, you need to be aware that the additional income you will be required to receive when you reach the RMD age could unexpectedly impact your situation if you are not prepared. Remember, you cannot opt out of receiving the RMD, even if it impacts these other benefits. To help prevent unwelcome surprises down the road, it is important to plan ahead and consider future LACERA RMD income when making financial decisions.

If you have any questions about how RMDs may affect you, or if you need any other assistance, contact us or log into your My LACERA account and send us a secure message.