A tentative settlement has been reached which will significancy reduce the amount class members will be required to pay as attorneys’ fees from approximately 33% of your overpaid contributions to 19% and will expedite the distribution of the refunds. Please read this update throughly. It requires your immediate response.

As you may recall, Judge Victoria Chaney previously ruled that the Talbot Settlement provides sufficient relief to class members to enable them to pay the entire award of attorneys’ cost and fees. Although Class Counsel argued that a statutory award of cost and fees against LACERA is appropriate in this case and that the amount of such an award should be used to offset the cost and fees to be paid by class members, Judge Chaney denied this motion. Class counsel appealed the trial court’s decision, claiming that Judge Chaney abused her discretion under the County Employees Retirement Law and asking the appellate court to remand the issue back to the trial court with instructions to examine whether or not all or a portion of the costs and fees should be paid by LACERA.

Prior to the filing of opening briefs for the Court of Appeal, the parties participated in a mediation to explore whether or not a settlement could be reached on the Fee Shifting issue. Just before the mediated session, Class Counsel met with the class representatives to discuss the risk of litigation and determine what issues were of greatest importance to the class. The class representatives made it clear that while they would like to have LACERA pay at least a portion of the cost and fees, it also was important that any settlement offer be structured so that the settlement implementation could move forward on an expedited basis. We are happy to report that a settlement of the Fee Shifting issue has been reached (“The Fees Settlement”) and that it addresses all of the class representatives’ concerns.

Under the Fees Settlement, the costs and fees to be paid by class members will be reduced from approximately 33% of their overpaid contributions to a fixed 19%. The remaining costs and fees (approximately $2.2 million) will be paid by LACERA.

Judge Chaney’s ruling not only required the class to pay 100% of the costs and fees, but also stated that the costs and fees should be distributed on a pro rata basis, based on the overpaid contributions (“Refunds”) to be received by each class member. This method of distribution required that each class members’ Refund be known prior to any single class member receiving their Refund.

The problem with this method is that there are still disputed issues to be resolved between class members and LACERA, some of which will require a potentially lengthy arbitration hearing or court proceeding for final resolution. Under a pro rata distribution method, all class members would be forced to wait for their Refunds while these disputed issues are resolved. Under the Fees Settlement, however, those class members who do not have a dispute regarding their settlement recalculations will be able to receive their Refunds without delay, due to the fact that their portion of the costs and fees is fixed at 19% of their Refund. (Please note that IRS regulations prohibit active LACERA members from receiving a direct refund of their overpaid contributions. Instead, these members will receive a credit to their LACERA account which will accrue interest until their date of retirement.)

Two things still need to happen before the Fees Settlement can be finalized. First, the LACERA Board fo Retirement needs to review and approve the settlement, we expect this to be done at the Board’s August meeting. Second, we need to receive signed copies of the Fees Settlement Agreement from each and every class member who has elected to participate in the Talbot vs. LACERA settlement.

In order to expedite this process, Class Counsel will be mailing and emailing a copy of the Fees Settlement Agreement and Release to class members. A copy of this document also is available for download from this website.

Please date and sign the Settlement Agreement and Release on page four and return the signature page as soon as possible to:

Judy A. Friedman
1875 Century Park East, Suite H-5303
Los Angeles, California 90067

You also may fax your signature page to Judy at 310.557.5103

All releases must be received by Class Counsel in order to finalize the Fees Settlement and move forward with the Talbot Settlement implementation. If you have any questions regarding the Talbot case in general, or the Fees Settlement in particular, please feel free to give Judy a call at 310.557.5135 or email her at jfriedman@saban.com.

Remember, all class members must file a timely Revised Election Form and Release in order to participate in the Talbot vs. LACERA Settlement. This document was mailed to you by LACERA along with the Revised Calculation Worksheet, and is separate and apart from the Fees Settlement Agreement and Release mentioned above. To verify receipt of your Revised Election Form and Release, you can call LACERA directly (1-800-786-6464) or you can contact our offices.

Additional Settlement Information:

• The LACERA Settlement Agreement
• Who is eligible to participate in the Settlement?

Class Members' Contact Information:

• Update your Contact Information
• Sign up for Class Member Email Updates

• Litigation Chronology
• Class Notice re Certification as a Class Action & Notice of Privacy Rights (April 2003)
• The Talbot v. LACERA Third Amended Cross-Complaint
•  LACERA CLASS NOTICE re Preliminary Approval of proposed Settlement Agreement (Amended 11/04/05)