Two systems, plus Water and Power
The City pays into two pension systems through its budget:
- LACERS, the Los Angeles City Employees' Retirement System, established by the Charter in 1937 for civilian employees. All regular full-time and certified part-time City employees are eligible, except Department of Water and Power staff and sworn fire and police. Since 1999 it has also run the retiree health insurance program.
- LAFPP, Los Angeles Fire and Police Pensions, which runs the plan for sworn fire and police employees and certain Port Police and Airport Police. It reports 12,571 active members and 14,131 retirees and beneficiaries.
The Department of Water and Power has its own plan, set out separately in Part 2 of the Charter's pension article.
How the City's contribution is set
Each system has its own board, and the Charter makes the board responsible for the actuarial work. For LACERS, the board has an actuary value the fund's assets and liabilities, adopts assumptions such as the interest rate and mortality tables, and on that basis revises the rates of the City's contributions. It then sends the Mayor and Controller a budget with two main items: the City's contribution as a percentage of members' salaries, and an amount to pay off any unfunded liability over a period of up to 30 years. Employees contribute through payroll deductions at a rate set by ordinance, and paying LACERS benefits is a general obligation of the City.
LAFPP's budget is built in a similar way, tier by tier. Its board sends the Mayor, Council and Controller a budget that includes, for each tier, the City's share of the cost of members' benefits as a percentage of salaries, taken from the latest actuarial valuation, and an amount to pay down that tier's unfunded liability.
In the City budget
The City's financial policies, printed in the FY2026-27 adopted budget, say the City must make annual contributions to LACERS and LAFPP as part of the budget that fully fund both systems based on annual actuarial studies, and they note the risks of deferring contributions to future years.
Because each contribution is a percentage of salaries plus a payment toward any unfunded liability, both the rates the boards set and the size of the payroll they apply to affect what the City pays. The obligations page shows what the budget sets aside for pensions alongside debt and lawsuit payouts, and the payroll page shows pay and benefits by department.