ll constitute, and be administered as, a Bona Fide Separation Pay Plan under Internal Revenue Code Section 457(e)(11). Any tax liabilities arising from any Accumulated Sick and Vacation Time payments and/or Separation Payments shall be the sole responsibility of the person(s) receiving the payments. (ii) The Severance Payment shall be paid by the City, and the cost of the Severance Payment shall remain a cost of the City. The Separation Payment shall also be paid by the City. However, the cost of the Separation Payment shall be an obligation of the LACERS members, and shall be recouped by the City through the provisions set forth below in Section 4.1033(a)(9)(i)-(iii). (iii) Neither the Severance Payment nor the Separation Payment shall be considered a retirement benefit. (9) The ERIP actuarial cost, as determined by the LACERS actuary, and the total cost of the Separation Payments shall, together, be known as the “ERIP Cost Obligation.” The ERIP Cost Obligation shall be an obligation of the LACERS members. The LACERS actuary has determined the preliminary ERIP Cost Obligation to be $271 million, as presented in the actuarial report dated September 25, 2009, based on a projection of 2,229 ERIP Eligible Filers actually retiring and Grandfathered Participants actually receiving the ERIP benefits. (i) LACERS members’ payment of the ERIP Cost Obligation shall commence on July 1, 2011, and end on June 30, 2026, or when the ERIP Cost Obligation is fully paid, whichever comes first. The payment shall consist of a one percent (1%) increase in the LACERS active employee retirement contribution rate of six percent (6%) (of which one-half percent (0.5%) is the survivor contribution portion), so that the total LACERS active employee retirement contribution rate shall be seven percent (7%) for all LACERS members. After all ERIP Eligible Filers actually retiring under the ERIP have retired, the LACERS actuary shall re-calculate the ERIP Cost Obligation based on the number of ERIP Eligible Filers actually retiring and Grandfathered Participants actually receiving the ERIP benefits, using the same methodology used to determine the preliminary ERIP Cost Obligation. However, the City reserves the right to increase the LACERS active employee contribution rate for new City hires, in accordance with all applicable laws and practices.