Updated October 2, 2026. Quick answer: A Los Angeles County Employees Retirement Association (LACERA) member has six options for taking the allowance at retirement: the Unmodified Option, which pays the most and gives an eligible survivor a fixed percentage, and five options that reduce the allowance to provide a beneficiary allowance or a lump sum. Option 4 is customized for named beneficiaries and cannot be changed after retirement. A member who leaves can keep contributions on deposit or withdraw them, which ends membership and forfeits future benefits, including disability. Service credit can be purchased, but cost rises with salary.
Two more California systems with their own decision pages, OCERS and LACERS: OCERS retirement decisions and LACERS retirement decisions.
Another California system with its own decision page: UCRP retirement decisions.
The six options
LACERA says: “When you retire, you have six options for how your allowance is distributed to you.” “The option you elect affects the amount of your retirement allowance, your survivor’s eligibility for LACERA-administered healthcare, and the amount of the continuing benefit payable to your spouse, domestic partner, or named beneficiary upon your death.”
| Option | Monthly allowance | Beneficiary |
|---|---|---|
| Unmodified Option | The highest monthly allowance | A fixed eligible survivor percentage |
| Customizable survivor option | A reduced allowance | A customizable eligible survivor percentage |
| Option with a lump-sum beneficiary payment | A reduced allowance | A lump-sum beneficiary payment of member contributions |
| Option with a 100 percent beneficiary allowance | A reduced allowance | A 100 percent beneficiary allowance |
| Option with a 50 percent beneficiary allowance | A reduced allowance | A 50 percent beneficiary allowance |
| Option 4 | A reduced allowance | A fixed beneficiary percentage or dollar amount |
The options page describes five of them in these words:
- “Provides the highest monthly retirement allowance and a fixed eligible survivor allowance percentage”
- “Provides a reduced monthly retirement allowance and a customizable eligible survivor allowance percentage”
- “Provides a reduced monthly retirement allowance and a lump-sum beneficiary payment of member contributions”
- “Provides a reduced monthly retirement allowance and a 100 percent beneficiary allowance”
- “Provides a reduced monthly retirement allowance and a 50 percent beneficiary allowance”
The page read does not name the options by number beyond Option 4, so confirm with LACERA which description matches which election form.
The statute does number the settlements. Government Code section 31761 says: “Optional settlement 1 consists of the right to elect in writing to have a retirement allowance paid to the member until the member’s death and, if the member dies before receiving in annuity payments the amount of the member’s accumulated contributions at retirement, to have the balance at death paid to the member’s estate or to the natural person, having an insurable interest in the member’s life, as the member nominates by written designation duly executed and filed with the board.”
Section 31762 says: “Optional settlement 2 consists of the right to elect in writing to have a retirement allowance paid to the member until the member’s death, and thereafter to the natural person, having an insurable interest in the member’s life, as the member nominates by written designation duly executed and filed with the board at the time of the member’s retirement.” Section 31763 says: “Optional settlement 3 consists of the right to elect in writing to have a retirement allowance paid to the member until the member’s death, and thereafter to have one-half of the member’s retirement allowance paid to the natural person, having an insurable interest in the member’s life, as the member nominates by written designation duly executed and filed with the board at the time of the member’s retirement.”
Section 31764 says: “Optional settlement 4 consists of the right to elect in writing to have a retirement allowance paid to the member until the member’s death and thereafter to have other benefits as are approved by the board, upon the advice of the actuary, continued throughout the life of and paid to the natural persons, having an insurable interest in the member’s life, as the member nominates by written designation duly executed and filed with the board at the time of retirement.” “The designation shall not, in the opinion of the board and the actuary, place any additional burden upon the retirement system.” The statutes do not say which of LACERA’s five descriptions above is which numbered settlement, or how LACERA’s customizable survivor option relates to these four, so the election form decides.
The Unmodified Option and the survivor allowance
LACERA says “The Unmodified Retirement Option provides you with the highest monthly retirement allowance you can receive, based on your age at retirement, amount of service credit, and final average compensation.” Its cost is on the survivor side: “Other options reduce the amount of the monthly benefit to which you are entitled in order to increase the benefit provided to your survivor in the event of your death.”
| Item | What LACERA says |
|---|---|
| Survivor allowance, Plans A, B, C, D and G | 65% of the allowance |
| Survivor allowance, Plan E | 55% of the allowance |
| Spouse or domestic partner must have been married or registered | At least 1 year before retirement |
| Minor child, if there is no eligible spouse or partner | Up to age 22 if unmarried and a full-time student |
| Pension Advance Option | More income before age 62; full Social Security benefit subtracted at 62 |
| Forced decision when no longer working | At age 73 |
| One-time death or burial benefit for any retiree | $5,000 |
The survivor percentage depends on the plan. “If you are a member of Plan A, B, C, D, or G, the survivor benefit is 65 percent of your allowance.” “For Plan E members, the survivor benefit is 55 percent.” The statutes show where those figures come from. Section 31760.1 sets the base continuance for the plans it covers at 60 percent, and section 31760.12 raises it to 65 percent for Los Angeles County members who retire on or after its operative date. Section 31492(a)(1) sets the base at 50 percent for Plan E, and section 31492.1 raises it to 55 percent. Both raises apply only once the county board of supervisors has adopted them by resolution. A computed example from an assumed $4,000 monthly allowance, not a LACERA figure: 65% is $2,600 a month and 55% is $2,200.
Who qualifies: “For your spouse or domestic partner to be eligible, you must be married or registered as domestic partners with the state of California for at least one year prior to your retirement.” “If there is no eligible spouse or domestic partner, your minor child is eligible for the allowance.” “Eligibility may be extended until age 22 if the child remains unmarried and is a full-time student in an accredited educational institution.” The statutes word the school-age limit differently for the two groups of plans, and both run it to the 22nd birthday. For the plans under section 31760.1, that section says: “Notwithstanding any other provisions of this section, the benefits otherwise payable to the children of the member shall be paid to those children up to the 22nd birthdays of the children if the children remain unmarried and are regularly enrolled as full-time students in an accredited school as determined by the board.” For Plan E, section 31492(a)(2) says: “Notwithstanding any other provisions of this subdivision, the allowance otherwise payable to the children of the retired member shall be paid to the children through the age of 21 years, if the children remain unmarried and are regularly enrolled as full-time students in any accredited school as determined by the board.” The choice is fixed: “With the Unmodified Retirement Option, you may not change your eligible spouse, domestic partner, or minor child as the beneficiary of the survivor allowance.” If you lose the eligible beneficiary and name a new one, LACERA says: “However, upon your death, your new beneficiary would only receive the remaining balance of the retirement contributions and related interest, if any, that you paid into the fund when you were employed, not a monthly continuing benefit.” “There are no accumulated contributions in Plan E, so changing the beneficiary after retirement does not apply.” After a divorce, “Note that in the event of a divorce or termination of partnership, a court order could supersede your new beneficiary designation and direct the benefit back to your ex-spouse or partner.”
Paperwork matters. “LACERA will accept your signed retirement election and honor the retirement date requested; however, we cannot process your application or provide retirement benefits until this documentation is provided.” Healthcare follows the designation: “At retirement, if you do not designate your eligible spouse, domestic partner, or minor child to receive a continuing benefit upon your death, he or she will not be eligible for LACERA-administered survivor healthcare.” Separately, “All LACERA retirees are entitled to designate someone to receive a one-time, $5,000 lump-sum death/burial benefit.” “This benefit is flexible, and you may change the named beneficiary after retirement.” Section 31789.3 limits the county-funded amount: “The board of supervisors shall, by resolution adopted by majority vote, fix and determine an amount that shall not exceed five thousand dollars ($5,000).” It is operative in a county only after the board of supervisors adopts it by resolution, so $5,000 is the most the statute allows and the county sets the amount.
Option 4
LACERA describes it this way: “Retirement Option 4 is a customized benefit option that allows you to receive a reduced allowance during your lifetime in order to provide a fixed percentage or set dollar amount for one or more of your named beneficiaries upon your death.” Who it suits: “This option may be advantageous if you want your monthly survivor benefit paid to more than one beneficiary. It may also be appropriate if you have been ordered by a court to name an ex-spouse as your beneficiary.” Who can be named: “Under Retirement Option 4, you may choose anyone with an insurable interest in your life as your beneficiary.” “People with an insurable interest in your life include those who depend on you for education, support, money, property, and/or services.”
The cost and the finality: “The reduction to your benefit is based on the difference in your age and the age of your beneficiaries. The greater your age difference, the greater the reduction.” “With Retirement Option 4, you may not change the beneficiaries of your retirement benefit after you retire. If your beneficiaries die before you, the reduction to your retirement allowance remains in effect.” The statute draws the same line. Section 31782 says: “The nomination of a beneficiary under this system, other than nominations under optional settlements 2, 3 and 4, may be revoked at the pleasure of the person who made it and a different beneficiary nominated by written designation duly executed and filed with the board.” One narrow exception exists in section 31760.8: a retired member who chose settlement 2, 3 or 4 may revise the beneficiary to provide for a spouse only if the member retired on or before the date the board made section 31760.2, 31785.1 or 31786.1 applicable in the county, was unmarried or had been married less than one year at retirement, and has a spouse who is at least 55 years of age and older than the original beneficiary, and only in a county whose board of retirement has made the section applicable by resolution. Whether that has happened at LACERA was not checked. On healthcare, “For survivor retiree healthcare, however, stricter eligibility rules apply.” For the general trade between a single-life and a survivor benefit, see single life versus joint and survivor.
The Pension Advance Option
One more choice sits beside the options. LACERA says “The Pension Advance Option is designed to provide you with additional retirement income from LACERA prior to age 62 and a reduced amount after 62.” “At 62, the full Social Security benefit is subtracted from the allowance.” “This option is not available to Plan E members.” The sources read do not give the amount of the advance or the reduction after 62, so a member should get LACERA’s estimate before electing it.
Leaving: contributions on deposit, withdrawal, or a benefit later
A member who leaves County service has three paths. First: “If you terminate service and leave your retirement contributions on deposit with LACERA, your contributions will continue to earn interest.” “If you leave County service for any reason prior to retirement, your future eligibility for retirement benefits depends on the amount of service credit you have accrued at the time you terminate service.” A forced decision comes at 73: “If you are no longer working and reach age 73, you must either begin taking the monthly retirement benefit (no minimum service requirement) or elect to withdraw your contributions (minus any applicable taxes).” And a planning point: “Also keep in mind that your plan has a maximum benefit age , and postponing your retirement after that age will not increase your benefit.” For a member credited with less than the service the system requires for vesting, section 31629.5(a) provides, on and after January 1, 2003, that “Failure to make an election to withdraw accumulated contributions shall be deemed an election to leave accumulated contributions on deposit in the retirement fund.” Under section 31629.5(b) the member may revoke the election to leave the contributions on deposit at any time, except while employed in county service in a position not excluded from membership, while in service as a member of a public retirement system supported in whole or in part by state funds, or while in service, entered within six months after discontinuing county service, as a member of a reciprocal retirement system.
Second, withdrawal. “If you are part of a contributory plan, you may withdraw your accumulated contributions from LACERA at any time (unless you return to County service or become employed in a reciprocal retirement system within six months).” Section 31628 adds: “The board may order payment in whole or in part withheld for a period not to exceed six months after date of separation.” Section 31629 says what happens to money nobody claims: “If a former member does not file proper application for the return of his accumulated contributions within five years after date of such notice to him, such accumulated contributions shall be deposited in and become a part of the current pension reserve fund, and thereafter the fund shall not be liable to such member for any portion of his accumulated contributions.” For a member credited with less than the service required for vesting, section 31629.5(a), quoted above, applies notwithstanding sections 31628 and 31629. The cost is stated in plain terms: “However, you should consider the consequences: withdrawing your contributions terminates your LACERA membership and you will forfeit any and all rights to future retirement benefits from LACERA, including disability benefits.” Taxes: “In addition, if you are under age 55, federal and state penalties for early withdrawal may apply.” The payment options: “Have LACERA issue a check directly to you minus 20 percent mandatory federal withholding tax and any applicable California state tax”, or “Defer taxes on the funds by rolling them over to an IRA or other employer’s qualified plan.” See also the 20 percent withholding rule.
Third, with reciprocity: “Contributory members who have established reciprocity with another agency leave their contributions on deposit with LACERA while contributing to their new plan.” A member who comes back: “If you terminate and return to service, you may be able to restore to a previous retirement plan by meeting certain conditions.” The general comparison of a refund and leaving the money is on pension refund versus leaving it in.
What the IRS adds on tax
A refund or lump sum from a public pension is a distribution, so the IRS rules apply on top of LACERA’s own. On withholding, the IRS says that a taxable eligible rollover distribution paid to you “is subject to mandatory income tax withholding (generally at a rate of 20%), even if you intend to roll it over later”, and that if you roll it over yourself “you’ll have to add funds from other sources equal to the amount withheld”. LACERA’s own page describes a rollover to an IRA or another employer’s qualified plan as the way to defer the tax. The rollover clock, if the money is paid to you: “you have 60 days from the date you receive it to roll it over to another eligible retirement plan”.
On early distributions the IRS says “the law imposes a 10% additional tax on certain early distributions from certain retirement plans”. Its list of exceptions includes “Distributions made to you after you separated from service with your employer after attainment of age 55” and “Distributions made to a qualified public safety employee from a governmental plan”. Whether an exception fits a particular refund depends on your own plan and facts, so confirm it with a tax preparer before you take one.
Service credit
LACERA defines the term: “Service credit is one of the factors used to calculate the allowance you will receive when you retire. The other factors are your retirement plan, age at retirement, and final compensation.” “There are two types of service credit: earned and purchased.” The types of purchase: “Service credit may be purchased for certain types of County service and non-County government service performed prior to LACERA membership (various eligibility requirements apply).” Timing: “It’s best to purchase service credit early in your career, since the cost increases as your salary rises over time.” The limit: “Purchasing non-County service will increase your total years of service credit, but will not count toward meeting the minimum service credit requirement to retire or to be eligible to apply for a nonservice-connected disability, pre-retirement survivor benefits, or to defer your retirement.” Plan E: “Plan E members may not purchase County and non-county employment prior to LACERA membership.” Why it matters beyond the allowance: “The County subsidizes retiree medical/dental insurance based on a member’s years of service credit; the more service credit you have, the more the County pays toward your premiums (certain exceptions apply).” To test whether a purchase pays for itself, see the pension buyback calculator.
What this page could not settle
- Vesting years, minimum retirement ages and member contribution rates are not stated in the five LACERA pages read.
- Cost-of-living adjustments are not stated in the pages read.
- The interest rate credited to contributions left on deposit is not stated.
- LACERA’s pages do not say whether a spouse must sign an option election. Section 31760.3 says: “An application for a refund of the member’s accumulated contributions, an election of optional settlement, or a change in beneficiary designation shall contain the signature of the current spouse of the member, unless the member declares, in writing under penalty of perjury, any of the following:” It then lists six declarations, the first being that the member is not married. The section is operative in a county only after its board of supervisors adopts it by resolution, and whether Los Angeles County has done so was not checked.
- LACERA’s pages do not give reduction percentages for the options other than the Unmodified Option, and sections 31761 to 31764 quoted above state none either, so the reduction comes from LACERA’s own estimate for your ages. There is no lump sum at retirement beyond the lump-sum beneficiary option and the burial benefit.
- The purchase cost formula is not stated; LACERA says only that cost rises with salary. For Los Angeles County, a county of the first class, section 31485.8(a) sets a deadline: “Notwithstanding any other provision of this chapter, a member who elects to purchase retirement service credit under Section 31490.5, 31490.6, 31494.3, 31494.5, 31641.1, 31641.5, 31646, 31652, or 31658, or under the regulations adopted by the board pursuant to Section 31643 or 31644 shall complete that purchase within 120 days after the effective date of his or her retirement.”
Common mistakes
- Taking the Unmodified Option without checking whether the survivor percentage for your plan covers what your household needs.
- Forgetting that the survivor and healthcare designation must be made at retirement, not afterwards.
- Choosing Option 4 and assuming the beneficiaries can be changed later; they cannot, and the reduction stays even if they die first.
- Withdrawing contributions without weighing the loss of all future LACERA benefits, including disability benefits.
- Waiting to buy service credit when its cost rises with salary.
Related on this site: California retirement taxes, CalPERS retirement decisions, a different system, CalSTRS retirement decisions, the teachers’ system and public pension retirement decisions by system.
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Answer againSources
- LACERA, Retirement Options: https://www.lacera.gov/retirement-planning/retirement-options
- LACERA, Service Credit: https://www.lacera.gov/active-service/service-credit
- LACERA, Terminating Service: https://www.lacera.gov/active-service/terminating-service
- LACERA, Unmodified Option: https://www.lacera.gov/retirement-planning/unmodified-option
- LACERA, Option 4: https://www.lacera.gov/retirement-planning/option-4
- California Government Code, County Employees Retirement Law of 1937, sections 31485.8, 31492, 31492.1, 31628, 31629, 31629.5, 31760.1, 31760.3, 31760.8, 31760.12, 31761 to 31764, 31782 and 31789.3, as printed in the 2024 CERL lawbook prepared by LACERA for the State Association of County Retirement Systems: https://cccera.gov/sites/main/files/file-attachments/2024_cerl_lawbook.pdf
- IRS, Topic no. 413, Rollovers from retirement plans (irs.gov): https://www.irs.gov/taxtopics/tc413
- IRS, Topic no. 558, Additional tax on early distributions from retirement plans other than IRAs (irs.gov): https://www.irs.gov/taxtopics/tc558
Sources: the primary documents linked above, read on October 2, 2026. The Government Code sections quoted above were read on October 24, 2026 in the 2024 edition of the lawbook; amendments after that edition were not checked. General information from each system’s own published materials, not legal, tax or financial advice. Your own member statement and the system’s current rules decide your benefit, and a pension counsellor at the system or a fee-only adviser is the right place to confirm anything consequential.