Bill Text: CA AB991 | 2015-2016 | Regular Session | Chaptered
Bill Title: State teachers' retirement.
Sponsorship: Partisan Bill (Democrat 5)
Status: (Passed) 2015-07-16 - Chaptered by Secretary of State - Chapter 123, Statutes of 2015. [AB991 Detail]
Download: California-2015-AB991-Chaptered.html
BILL NUMBER: AB 991 CHAPTERED
BILL TEXT
CHAPTER 123
FILED WITH SECRETARY OF STATE JULY 16, 2015
APPROVED BY GOVERNOR JULY 16, 2015
PASSED THE SENATE JUNE 29, 2015
PASSED THE ASSEMBLY JULY 2, 2015
AMENDED IN SENATE JUNE 1, 2015
INTRODUCED BY Committee on Public Employees, Retirement, and Social
Security (Assembly Members Bonta (Chair), Cooley, Jones-Sawyer, O'
Donnell, and Rendon)
FEBRUARY 26, 2015
An act to amend Sections 22001.5, 22119.2, 22119.3, 22121, 22141,
22404, 22509, 22515, 22711, 22714, 22717, 22900, 22903, 22950, 23001,
24114, 24209, 24209.3, 24210, 24211, 24212, 24213, 24214, 24214.5,
26000, 26002.5, 26132, 26139.5, 26400, 26401, 26506, 26806, 26807.6,
26812, 26906.6, 27100, 44987, and 87768.5 of, and to add Sections
22144.3 and 26142.5 to, the Education Code, relating to state
teachers' retirement.
LEGISLATIVE COUNSEL'S DIGEST
AB 991, Committee on Public Employees, Retirement, and Social
Security. State teachers' retirement.
Existing law, the Teachers' Retirement Law, establishes the State
Teachers' Retirement System (STRS) and creates the Defined Benefit
Program of the State Teachers' Retirement Plan, which provides a
defined benefit to members of the program, based on final
compensation, credited service, and age at retirement, subject to
certain variations. STRS is governed by the Teachers' Retirement
Board. Existing law defines credited service for these purposes as
service from which required contributions have been paid. Existing
law permits the board to amend the plan to dispense with payment for
amounts less than $10. Existing law permits specified employers
participating in STRS, if it is in the best interests of the school
district or office of education, to grant an additional 2 years of
service credit in order to encourage retirement, if specified
conditions are met. Existing law authorizes specified payments made
pursuant to the Teachers' Retirement Law, including disability
retirement benefits and compensation for postretirement activities,
to be reduced if they are in excess of specified limits. Existing law
permits members retired for disability or service from STRS to
perform member activities without reinstatement into the system if
certain conditions are met. Existing law prescribes different
retirement allowance formulations for members who retire after
reinstating from retirement depending on the circumstances of their
service after reinstatement, and whether they return to employment
subject to the Defined Benefit Program, among other factors.
This bill would revise the definition of credited service for
purposes of STRS to include service for which required contributions
would have been made in absence of specified federal limits. The bill
would define leave of absence as a period of leave to which a member
is entitled that is expressly authorized or required pursuant to
specified provisions. The bill would revise the provisions
authorizing the board to dispense with the payment for amounts less
than $10 to be more specific in regard to the types of payments and
to include adjustments to those payments. The bill would require, in
regard to the grant of additional service credit to encourage
retirement, that necessary documentation be provided to the
retirement system within a specified time.
This bill would also make various technical changes to accurately
cross-reference current law regarding contributions to fund the
system. The bill would specify how reductions in payments are to be
made in connection with the amount received in a particular month.
The bill would provide that the election of membership in the Defined
Benefit Program by certain people, including substitute teachers, is
not terminated until the person receives a refund of contributions.
The bill would make various technical, conforming, and correctional
changes to provisions relating to retirement allowance formulations
for members who reinstate after retiring, and who retire after
receiving a disability allowance, including changing the member's age
at retirement to refer to the member's age on the last day of the
month the allowance will begin. The bill would make other technical,
conforming changes, and corrections.
Existing law establishes the Cash Balance Benefit Program,
administered by the Teachers' Retirement Board, as a separate benefit
program within the State Teachers' Retirement Plan in order to
provide a retirement plan for persons employed to perform creditable
service for less than 50% of full-time service. Existing law states
legislative findings and declarations regarding the purpose of the
Cash Balance Plan offered pursuant to the program. Existing law
defines a participant for these purposes and prescribes the
circumstances pursuant to which a person is permitted to participate
in the program and how participation may be terminated and service
may be subject to the Defined Benefit Program offered by STRS.
Existing law provides that the normal form of retirement benefit
under the Cash Balance Benefit Program is a lump-sum payment.
This bill would revise the statement of legislative findings
regarding the Cash Balance Benefit Program to specify that it applies
to a person working for an employer, except a community college
district, that offers the plan, a person who is employed on temporary
basis, as specified, by a community college district offering the
plan, or a person employed as a substitute employee. The bill would
revise the definition of a participant in the plan to require that he
or she has not received a lump-sum retirement benefit, as specified.
The bill would define the system's headquarters office for purposes
of the program. The bill would revise the circumstances pursuant to
which a person providing creditable service would be eligible to
participate in the plan with reference to whether a person has
elected an alternative retirement program, whether a participant's
employment with a community college district precludes continued
participation in the plan, and how a substitute employee may become
and remain a member of the plan. The bill would authorize a member of
the Defined Benefit Program employed to perform creditable service
as a substitute to elect to have that service covered under the Cash
Balance Benefit Program, subject to certain conditions.
This bill would also prohibit payment of a lump-sum retirement
benefit before 180 days have elapsed following termination of
employment and would require automatic termination of an application
for the retirement benefit based on the participant performing
creditable service with 180 days of terminating employment, except as
specified. The bill would specify how reductions in payments under
the Cash Balance Benefit Program are to be made in connection with
the amount received in a particular month. The bill would require,
with regard to a participant retired for service, that the retired
participant application for the retirement benefit be canceled
automatically if he or she is anticipated to receive the retirement
in a lump-sum payment and earns compensation for performing
creditable service with 180 days after termination of employment. The
bill would make other technical, conforming changes, and corrections
in the Cash Balance Benefit Program.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 22001.5 of the Education Code is amended to
read:
22001.5. The Legislature hereby finds and declares that on July
1, 1996, the State Teachers' Retirement System Cash Balance Plan was
created and established to provide a retirement plan for persons
employed by an employer offering the Cash Balance Plan, excluding
community college districts, to perform creditable service for less
than 50 percent of the full-time equivalent for the position or
employed by a community college district offering the Cash Balance
Plan to perform creditable service on a temporary basis pursuant to
Section 87474, 87478, 87480, 87481, 87482, or 87482.5, or employed by
an employer offering the Cash Balance Plan to perform creditable
service as a substitute employee. The persons eligible for the Cash
Balance Plan were excluded from mandatory membership in the State
Teachers' Retirement System Defined Benefit Plan. Both plans are
administered by the Teachers' Retirement Board. Prior to the creation
and establishment of the Cash Balance Plan, the State Teachers'
Retirement System Defined Benefit Plan had been identified simply as
the State Teachers' Retirement System. As a result, the system was
identified as both the administrative body and the retirement plan.
The State Teachers' Retirement Law was amended to identify the
retirement plan as the State Teachers' Retirement System Defined
Benefit Plan in order to distinguish that plan from the Cash Balance
Plan. Because both plans were intended to provide for the retirement
of teachers and other persons employed in connection with public
schools of this state and schools supported by this state, a merger
of these two plans is now hereby made for the purpose of establishing
a single retirement plan that shall be known and may be cited as the
State Teachers' Retirement Plan consisting of the different benefit
programs set forth in this part and Part 14 (commencing with Section
26000). This plan shall be administered by the Teachers' Retirement
Board as set forth in this part and Part 14 (commencing with Section
26000). This part, together with Part 14 (commencing with Section
26000) shall be known and may be cited as the Teachers' Retirement
Law.
SEC. 2. Section 22119.2 of the Education Code is amended to read:
22119.2. (a) "Creditable compensation" means remuneration that is
paid in cash by an employer to all persons in the same class of
employees for performing creditable service in that position.
Creditable compensation shall include:
(1) Salary or wages paid in accordance with a publicly available
written contractual agreement, including, but not limited to, a
salary schedule or employment agreement.
(2) Remuneration that is paid in addition to salary or wages,
provided it is paid to all persons who are in the same class of
employees in the same dollar amount, the same percentage of salary or
wages, or the same percentage of the amount being distributed.
(3) Remuneration that is paid for the use of sick leave, vacation
leave, or an employer-approved compensated leave of absence, except
as provided in paragraph (4) of subdivision (c).
(4) Member contributions that are picked up by an employer
pursuant to Section 22903 or 22904.
(5) Amounts that are deducted from a member's remuneration,
including, but not limited to, deductions for participation in a
deferred compensation plan; deductions to purchase an annuity
contract, tax-deferred retirement plan, or insurance program; and
contributions to a plan that meets the requirements of Section 125,
401(a), 401(k), 403(b), 457(b), or 457(f) of Title 26 of the United
States Code.
(6) Any other payments the board determines to be "creditable
compensation."
(b) Any creditable compensation determined by the system to have
been paid to enhance a member's benefits shall not be credited under
the Defined Benefit Program. Contributions on that compensation shall
be credited to the Defined Benefit Supplement Program. A presumption
by the system that creditable compensation was paid to enhance a
member's benefits may be rebutted by the member or by the employer on
behalf of the member. Upon receipt of sufficient evidence to the
contrary, a presumption by the system that creditable compensation
was paid to enhance the member's benefits may be reversed.
(c) "Creditable compensation" does not mean and shall not include:
(1) Remuneration that is not paid in cash or is not paid to all
persons who are in the same class of employees.
(2) Remuneration that is paid for service that is not creditable
service pursuant to Section 22119.5.
(3) Remuneration that is paid in addition to salary or wages if it
is not paid to all persons in the same class of employees in the
same dollar amount, the same percentage of salary or wages, or the
same percentage of the amount being distributed pursuant to paragraph
(2) of subdivision (a).
(4) Remuneration that is paid in exchange for the relinquishment
of unused accumulated leave.
(5) Payments, including, but not limited to, those for
participation in a deferred compensation plan; to purchase an annuity
contract, tax-deferred retirement plan, or insurance program; and
for contributions to a plan that meets the requirements of Section
125, 401(a), 401(k), 403(b), 457(b), or 457(f) of Title 26 of the
United States Code when the cost is covered by an employer and is not
deducted from the member's salary.
(6) Fringe benefits provided by an employer.
(7) Expenses paid or reimbursed by an employer.
(8) Severance pay, including lump-sum and installment payments, or
money paid in excess of salary or wages to a member as compensatory
damages or as a compromise settlement.
(9) Any other payments the board determines not to be "creditable
compensation."
(d) An employer or individual who knowingly or willfully reports
compensation in a manner inconsistent with subdivision (a) or (c) may
be subject to prosecution for fraud, theft, or embezzlement in
accordance with the Penal Code. The system may establish procedures
to ensure that compensation reported by an employer is in compliance
with this section.
(e) For purposes of this section, remuneration shall be considered
paid if distributed to any person in the same class of employees who
meets the qualifications or requirements specified in a publicly
available written contractual agreement, including, but not limited
to, a collective bargaining agreement or an employment agreement, as
a condition of receiving the remuneration.
(f) This definition of "creditable compensation" reflects sound
principles that support the integrity of the retirement fund. Those
principles include, but are not limited to, consistent treatment of
compensation throughout a member's career, consistent treatment of
compensation among an entire class of employees, consistent treatment
of compensation for the position, preventing adverse selection, and
excluding from compensation earnable remuneration that is paid to
enhance a member's benefits. The system shall determine the
appropriate crediting of contributions between the Defined Benefit
Program and the Defined Benefit Supplement Program according to these
principles, to the extent not otherwise specified pursuant to this
part.
(g) The section shall become operative on July 1, 2002.
(h) This section shall not apply to a member subject to the
California Public Employees' Pension Reform Act of 2013.
SEC. 3. Section 22119.3 of the Education Code is amended to read:
22119.3. (a) "Creditable compensation" for members who are
subject to the California Public Employees' Pension Reform Act of
2013 means remuneration that is paid each pay period in which
creditable service is performed for that position. Creditable
compensation shall be paid in cash by an employer to all persons in
the same class of employees in accordance with a publicly available
written contractual agreement, including, but not limited to, a
salary schedule or employment agreement. Creditable compensation
shall include:
(1) Remuneration that is paid for the use of sick leave, vacation
leave, or an employer-approved compensated leave of absence, except
as provided in paragraph (4) of subdivision (b).
(2) Member contributions that are picked up by an employer
pursuant to Section 22903 or 22904.
(3) Amounts that are deducted from a member's remuneration,
including, but not limited to, deductions for participation in a
deferred compensation plan; deductions to purchase an annuity
contract, tax-deferred retirement plan, or insurance program; and
contributions to a plan that meets the requirements of Section 125,
401(a), 401(k), 403(b), 457(b), or 457(f) of Title 26 of the United
States Code.
(4) Notwithstanding paragraphs (6) and (8) of subdivision (c) of
Section 7522.34 of the Government Code, remuneration that is paid for
creditable service that exceeds one year in a school year.
(b) "Creditable compensation" does not mean and shall not include:
(1) Remuneration that is not paid in cash or is not paid to all
persons who are in the same class of employees.
(2) Remuneration that is paid for service that is not creditable
service pursuant to Section 22119.5.
(3) Remuneration that is not paid each pay period in which
creditable service is performed for that position.
(4) Remuneration that is paid in exchange for the relinquishment
of unused accumulated leave.
(5) Payments, including, but not limited to, those for
participation in a deferred compensation plan; to purchase an annuity
contract, tax-deferred retirement plan, or insurance program; and
for contributions to a plan that meets the requirements of Section
125, 401(a), 401(k), 403(b), 457(b), or 457(f) of Title 26 of the
United States Code when the cost is covered by an employer.
(6) Fringe benefits provided by an employer.
(7) Expenses paid or reimbursed by an employer.
(8) Severance pay, including lump sum and installment payments, or
money paid in excess of salary or wages to a member as compensatory
damages or as a compromise settlement.
(9) Creditable compensation determined by the system to have been
paid to enhance a member's benefit.
(10) Compensation paid to the member in lieu of benefits provided
to the member by the employer or paid directly by the employer to a
third party other than the system for the benefit of the member.
(11) Any one-time or ad hoc payments made to a member.
(12) Any employer-provided allowance, reimbursement, or payment,
including, but not limited to, one made for housing, vehicle, or
uniform.
(13) Any bonus paid in addition to compensation described in
subdivision (a).
(14) Any other payments the board determines not to be "creditable
compensation."
(c) (1) Except for purposes of calculating credited service in the
Defined Benefit Program and for reporting compensation earnable on
or after January 1, 2013, creditable compensation in any fiscal year
shall not exceed:
(A) One hundred twenty percent of the "contribution and benefit
base," as determined under Section 430(b) of the Social Security Act
(42 U.S.C. Sec. 430(b)), on January 1, 2013, for a member whose
service is not included in the federal system.
(B) One hundred percent of the "contribution and benefit base," as
determined under Section 430(b) of the Social Security Act (42
U.S.C. Sec. 430(b)), on January 1, 2013, for a member whose service
is included in the federal system pursuant to any changes in state or
federal law enacted on or after January 1, 2013.
(2) The system shall adjust the limit based on the annual changes
to the Consumer Price Index for All Urban Consumers: U.S. City
Average, calculated by dividing the Consumer Price Index for All
Urban Consumers: U.S. City Average for the month of February in the
fiscal year preceding the adjustment by the Consumer Price Index for
All Urban Consumers: U.S. City Average for the month of February of
the previous year rounded to the nearest thousandth. Notwithstanding
paragraph (1) of subdivision (d) of Section 7522.10 of the Government
Code, the adjustment shall be effective annually on July 1,
beginning July 1, 2014.
(3) The Legislature reserves the right to modify the requirements
of this subdivision with regard to all members subject to this
subdivision, except that the Legislature may not modify these
provisions in a manner that would result in a decrease in benefits
accrued prior to the effective date of the modification.
(4) This subdivision shall apply to compensation paid during the
2013-14 fiscal year and each fiscal year thereafter.
(d) An employer or individual who knowingly or willfully reports
compensation in a manner inconsistent with subdivision (a) or (b) may
be subject to prosecution for fraud, theft, or embezzlement in
accordance with the Penal Code. The system may establish procedures
to ensure that compensation reported by an employer is in compliance
with this section.
(e) For purposes of this section, remuneration shall be considered
paid if distributed to any person in the same class of employees who
meets the qualifications or requirements specified in a publicly
available written contractual agreement, including, but not limited
to, a collective bargaining agreement or an employment agreement, as
a condition of receiving the remuneration.
(f) This definition of "creditable compensation" reflects sound
principles that support the integrity of the retirement fund. Those
principles include, but are not limited to, consistent treatment of
compensation throughout a member's career, consistent treatment of
compensation among an entire class of employees, consistent treatment
of compensation for the position, preventing adverse selection, and
excluding from creditable compensation remuneration that is paid to
enhance a member's benefits. The system shall determine the
appropriate crediting of contributions according to these principles,
to the extent not otherwise specified pursuant to this part. A
presumption by the system that creditable compensation was paid to
enhance the member's benefits may be rebutted by the member or by the
employer on behalf of the member. Upon receipt of sufficient
evidence to the contrary, a presumption by the system that creditable
compensation was paid to enhance the member's benefits may be
reversed.
SEC. 4. Section 22121 of the Education Code is amended to read:
22121. (a) "Credited service" means service for which the
required contributions have been paid and service for which required
contributions would have been paid in absence of the limit prescribed
by Section 401(a)(17) of Title 26 of the United States Code as
described in Section 22317.5.
(b) "Credited service" for members who are subject to the
California Public Employees' Pension Reform Act of 2013 means service
for which required contributions have been paid and service for
which required contributions would have been paid in absence of the
limit established by subdivision (c) of Section 22119.3.
(c) "Credited service" for the limited purpose of determining
eligibility for benefits pursuant to Section 22134.5, 24203.5, or
24203.6 also includes up to two-tenths of one year of service granted
pursuant to Section 22717.
SEC. 5. Section 22141 of the Education Code is amended to read:
22141. (a) Notwithstanding Section 22140, "improvement factor"
means an increase of 2 percent in benefits provided under Sections
24408 and 24409 for each year commencing September 1, 1981, and under
Section 24410.5 for each year commencing September 1, 2001, and
under Sections 24410.6 and 24410.7 for each year commencing September
1, 2002. The improvement factor shall not be compounded nor shall it
be applicable to annuities payable from the accumulated annuity
deposit contributions or the accumulated tax-sheltered annuity
contributions. The Legislature reserves the right to adjust the
amount of the improvement factor up or down as the economic
conditions dictate. No adjustments of the improvement factor shall
reduce the monthly retirement allowance or benefit below that which
would be payable to the recipient under this part had this section
not been enacted.
(b) Beginning July 1, 2014, the improvement factor shall vest for
an active member in any calendar year in which active members paid
increased member contributions pursuant to Section 22901.7.
(c) If, for any reason, the increased employee contribution
referenced in subdivision (b), and as required by subdivisions (a)
and (b) of Section 22901.7, ceases to be legally required to be made
pursuant to the act that added this subdivision, then the Legislature
reserves the right to adjust the amount of the improvement factor up
or down as the economic conditions dictate for all members who
retire on or after January 1, 2014. No adjustments of the improvement
factor shall reduce the monthly retirement allowance or benefit
below that which would be payable to the recipient under this part
had this section not been enacted.
(d) For members who retired before the calendar year in which
Section 22901.7 was added, the Legislature reserves the right to
adjust the amount of the improvement factor up or down as the
economic conditions dictate. No adjustments of the improvement factor
shall reduce the monthly retirement allowance or benefit below that
which would be payable to the recipient under this part had this
section not been enacted.
SEC. 6. Section 22144.3 is added to the Education Code, to read:
22144.3. "Leave of absence" means a period of leave to which a
member is entitled that is expressly authorized or required by
Chapter 4 (commencing with Section 44800) of Part 25 of Division 3 of
Title 2, or Chapter 1 (commencing with Section 87000) or Chapter 3
(commencing with Section 87400) of Part 51 of Division 7 of Title 3.
SEC. 7. Section 22404 of the Education Code is amended to read:
22404. (a) Notwithstanding any other provision of this part or
Part 14 (commencing with Section 26000) to the contrary, the board
may establish by plan amendment a specified amount or amounts, not to
exceed ten dollars ($10), below which the system may dispense with:
(1) The processing of a benefit payment, an annuity payment, or
any other payment, including adjustments to those payments, payable
to a member, participant, or beneficiary.
(2) The collection of a benefit overpayment, annuity overpayment,
or any other overpayments paid to a member, participant, or
beneficiary.
(b) When the cumulative dollar amount associated with one or more
benefit payments or overpayments, annuity payments or overpayments,
or other payments or overpayments equals or exceeds the amount
described in subdivision (a), that amount shall be paid to, or
collected from, the member, participant, or beneficiary. That
cumulative amount paid or collected shall not be credited with
interest.
SEC. 8. Section 22509 of the Education Code is amended to read:
22509. (a) Within 10 working days of the date of hire of an
employee who has the right to make an election pursuant to Section
22508 or 22508.5, the employer shall inform the employee of the right
to make an election and shall make available to the employee written
information provided by each retirement system concerning the
benefits provided under that retirement system to assist the employee
in making an election.
(b) Any election made pursuant to subdivision (a) of Section 22508
or subdivision (a) of Section 22508.5 shall be filed with the office
of the State Teachers' Retirement System and a copy of the election
shall be filed with the other public retirement system. Any election
made pursuant to subdivision (c) of Section 22508 or subdivision (b)
of Section 22508.5 shall be filed with the office of the Public
Employees' Retirement System and a copy of the election shall be
filed with the office of this system.
(c) Any election made pursuant to Section 22508 or Section 22508.5
shall become effective as of the first day of employment in the
position that qualified the employee to make an election.
SEC. 9. Section 22515 of the Education Code is amended to read:
22515. Persons excluded from membership pursuant to Sections
22601.5, 22602, and 22604 may elect membership in the Defined Benefit
Program at any time while employed to perform creditable service
subject to coverage under that program. The election shall be in
writing on a form prescribed by this system and shall be filed in the
office of this system prior to submission of contributions. The
election is irrevocable and shall remain in effect until the member
terminates employment and receives a refund of accumulated retirement
contributions. The amendments to this section enacted during the
1995-96 Regular Session shall be deemed to have become operative on
July 1, 1996.
SEC. 10. Section 22711 of the Education Code is amended to read:
22711. (a) A member under this part shall be granted service
credit for time during which the member serves as an elected officer
of an employee organization while on a compensated leave of absence
pursuant to Section 44987 or 87768.5, if all of the following
conditions are met:
(1) The member was employed and performed creditable service
subject to coverage under this Defined Benefit Program in the month
prior to commencement of the leave of absence.
(2) The member makes contributions to the Teachers' Retirement
Fund in the amount that the member would have contributed had the
member performed creditable service on a full-time basis during the
period the member served as an elected officer of the employee
organization.
(3) The member's employer contributes to the Teachers' Retirement
Fund at a rate adopted by the board as a plan amendment with respect
to the Defined Benefit Program an amount based upon the creditable
compensation that would have been paid to the member had the member
performed creditable service on a full-time basis during the period
the member served as an elected officer of the employee organization.
(b) The maximum service credit a member may receive pursuant to
this section shall not exceed 12 years.
SEC. 11. Section 22714 of the Education Code is amended to read:
22714. (a) Whenever the governing board of a school district or a
community college district or a county office of education, by
formal action, determines pursuant to Section 44929 or 87488 that,
because of impending curtailment of, or changes in, the manner of
performing services, the best interests of the district or county
office of education would be served by encouraging certificated
employees or academic employees to retire for service and that the
retirement will result in a net savings to the district or county
office of education, an additional two years of service credit shall
be granted under this part to a member of the Defined Benefit Program
if all of the following conditions exist:
(1) The member is credited with five or more years of service
credit and retires for service under Chapter 27 (commencing with
Section 24201) during a period of not more than 120 days or less than
60 days, commencing no sooner than the effective date of the formal
action of the employer that shall specify the period.
(2) The documentation required by this section is received by the
system no later than 30 calendar days after the last day of the
window period established in paragraph (1).
(3) (A) The employer transfers to the retirement fund an amount
determined by the Teachers' Retirement Board to equal the actuarial
equivalent of the difference between the allowance the member
receives after receipt of service credit pursuant to this section and
the amount the member would have received without the service credit
and an amount determined by the Teachers' Retirement Board to equal
the actuarial equivalent of the difference between the purchasing
power protection supplemental payment the member receives after
receipt of service credit pursuant to this section and the amount the
member would have received without the service credit. The payment
for purchasing power shall be deposited in the Supplemental Benefit
Maintenance Account established by Section 22400 and shall be subject
to Section 24415. The transfer to the retirement fund shall be made
in a manner and a time period, not to exceed eight years, that is
acceptable to the Teachers' Retirement Board. The employer shall
transfer the required amount for all eligible employees who retire
pursuant to this section.
(B) Regular interest shall be charged on the unpaid balance if the
employer makes the transfer to the retirement fund in installments.
(4) The employer transmits to the retirement fund the
administrative costs incurred by the system in implementing this
section, as determined by the Teachers' Retirement Board.
(5) The employer has considered the availability of teachers or
academic employees to fill the positions that would be vacated
pursuant to this section.
(b) (1) The school district shall demonstrate and certify to the
county superintendent that the formal action taken would result in a
net savings to the district.
(2) The county superintendent shall certify to the Teachers'
Retirement Board that the result specified in paragraph (1) can be
demonstrated. The certification shall include, but not be limited to,
the information specified in subdivision (c) of Section 14502.1.
(3) The school district shall reimburse the county superintendent
for all costs to the county superintendent that result from the
certification.
(c) (1) The county office of education shall demonstrate and
certify to the Superintendent of Public Instruction that the formal
action taken would result in a net savings to the county office of
education.
(2) The Superintendent of Public Instruction shall certify to the
Teachers' Retirement Board that the result specified in paragraph (1)
can be demonstrated. The certification shall include, but not be
limited to, the information specified in subdivision (c) of Section
14502.1.
(3) The Superintendent of Public Instruction may request
reimbursement from the county office of education for all
administrative costs that result from the certification.
(d) (1) The community college district shall demonstrate and
certify to the chancellor's office that the formal action taken would
result in a net savings to the district.
(2) The chancellor shall certify to the Teachers' Retirement Board
that the result specified in paragraph (1) can be demonstrated. The
certification shall include, but not be limited to, the information
specified in subdivision (c) of Section 84040.5.
(3) The chancellor may request reimbursement from the
community college district for all administrative costs that result
from the certification.
(e) The opportunity to be granted service credit pursuant to this
section shall be available to all members employed by the school
district, community college district, or county office of education
who meet the conditions set forth in this section.
(f) The amount of service credit shall be two years.
(g) Any member of the Defined Benefit Program who retires under
this part for service under Chapter 27 (commencing with Section
24201) with service credit granted under this section and who
subsequently reinstates shall forfeit the service credit granted
under this section.
(h) Any member of the Defined Benefit Program who retires under
this part for service under Chapter 27 (commencing with Section
24201) with service credit granted under this section and who takes
any job with the school district, community college district, or
county office of education that granted the member the service credit
less than five years after receiving the credit shall forfeit the
ongoing benefit he or she receives from the additional service credit
granted under this section.
(i) This section does not apply to any member otherwise eligible
if the member receives any unemployment insurance payments arising
out of employment with an employer subject to this part within one
year following the effective date of the formal action under
subdivision (a), or if the member is not otherwise eligible to retire
for service.
SEC. 12. Section 22717 of the Education Code is amended to read:
22717. (a) A member shall be granted credit at service retirement
for each day of accumulated and unused sick leave days for which
full salary is allowed to which the member was entitled on the member'
s final day of employment with the employer or employers subject to
coverage by the Defined Benefit Program during the last school year
in which he or she earned creditable compensation pursuant to Section
22119.2 or 22119.3. The system shall accept certification from each
employer with which the member has accumulated sick leave days for
that period, provided this leave has not been transferred to another
employer.
(b) The amount of service credit to be granted shall be determined
by dividing the number of days of accumulated and unused sick leave
days by the number of days of service the employer requires the
member's class of employees to perform in a school year during the
member's final year of creditable service subject to coverage by the
Defined Benefit Program, which shall not be less than the minimum
standard specified in Section 22138.5. The number of days shall not
include school and legal holidays. In no event shall the divisor be
less than 175. For members employed less than full time, the
standards identified in Section 22138.5 shall be considered as the
minimum full-time equivalent. For those standards identified in
Section 22138.5 that are applicable to teachers or instructors and
that are expressed only in terms of hours or instructional hours, the
number of hours or instructional hours shall be divided by six to
determine the number of days.
(c) When the member has made application for service retirement
under this part, the employer shall certify to the board, within 30
days following the effective date of the member's service retirement
or the date the application for retirement is received by the system'
s headquarters office, whichever is later, the number of days of
accumulated and unused sick leave days that the member was entitled
to on the final day of employment. The board may assess a penalty on
delinquent reports.
(d) This section shall be applicable to any person who retires on
or after January 1, 1999.
SEC. 13. Section 22900 of the Education Code is amended to read:
22900. By accepting employment to perform creditable service, a
person consents to make contributions pursuant to Sections 22901 and
22901.7 for service and compensation credited under this part.
SEC. 14. Section 22903 of the Education Code is amended to read:
22903. Notwithstanding Sections 22901, 22901.3, 22901.7, 22956,
and 23000, the state and each school district, community college
district, county board of education, and county superintendent of
schools, may pick up, for the sole purpose of deferring taxes, as
authorized by Section 414(h)(2) of the Internal Revenue Code of 1986
(26 U.S.C. Sec. 414(h)(2)) and Section 17501 of the Revenue and
Taxation Code, all of the contributions required to be paid under
this part by a member of the Defined Benefit Program, provided that
the contributions are deducted from the creditable compensation of
the member.
SEC. 15. Section 22950 of the Education Code is amended to read:
22950. (a) Employers shall contribute monthly to the system 8
percent of the creditable compensation upon which members'
contributions under this part are based.
(b) From the contributions required under subdivision (a), there
shall be deposited in the Teachers' Retirement Fund an amount,
determined by the board, that is not less than the amount, determined
in an actuarial valuation of the Defined Benefit Program pursuant to
Section 22311.5, necessary to finance the liabilities associated
with the benefits of the Defined Benefit Program over the funding
period adopted by the board, after taking into account the
contributions made pursuant to Sections 22901, 22901.7, 22950.5,
22951, 22955, and 22955.1.
(c) The amount of contributions required under subdivision (a)
that is not deposited in the Teachers' Retirement Fund pursuant to
subdivision (b) shall be deposited directly into the Teachers' Health
Benefits Fund, as established in Section 25930, and shall not be
deposited into or transferred from the Teachers' Retirement Fund.
(d) (1) Notwithstanding subdivisions (b) and (c), there may be
deposited into the Teachers' Retirement Program Development Fund, as
established in Section 22307.5, from the contributions required under
subdivision (a), an amount determined by the board, not to exceed
the limit specified in paragraph (2).
(2) The balance of deposits into the Teachers' Retirement Program
Development Fund, minus the subsequent transfer of funds, with
interest, into the Teachers' Retirement Fund pursuant to subdivision
(e) of Section 22307.5, shall not exceed 0.01 percent of the total of
the creditable compensation of the fiscal year ending in the
immediately preceding calendar year upon which member's contributions
to the Defined Benefit Program are based.
(3) The deposits described in this subdivision shall not be
deposited into, or transferred from, the Teachers' Retirement Fund.
SEC. 16. Section 23001 of the Education Code is amended to read:
23001. Each county superintendent, district superintendent,
chancellor of a community college district, or other employing agency
that reports directly to the system shall draw requisitions for
contributions required by Sections 22901, 22901.7, 22950, and 22950.5
in favor of the State Teachers' Retirement System, and the
requisitions, when allowed and signed by the county auditor, shall
constitute a warrant against the county treasury. The county
superintendent, district superintendent, chancellor of a community
college district, or other employing agency thereupon shall forward
the warrants to the board in the system's headquarters office. The
amounts received shall be deposited immediately in the State Treasury
to the Teachers' Retirement Fund.
SEC. 17. Section 24114 of the Education Code is amended to read:
24114. (a) A member receiving a disability retirement benefit
under this part may be employed or self-employed in any capacity,
notwithstanding Section 22132, but may not make contributions to the
retirement fund with respect to the Defined Benefit Program or accrue
service credit under this part based on earnings from any
employment.
(b) A member receiving a disability retirement benefit under this
part may earn in any one calendar year up to the limitation specified
in subdivision (c) without a reduction in his or her disability
retirement allowance.
(c) The limitation that shall apply to the earnings of a member
receiving a disability retirement benefit under this part shall be
fifteen thousand dollars ($15,000), in any one calendar year,
adjusted annually by the board effective each January 1 by the amount
of increase in the All Urban California Consumer Price Index using
December 1989 as the base.
(d) If a member receiving a disability retirement benefit under
this part earns in excess of the limitation specified in subdivision
(c) from all employment in any calendar year, notwithstanding Section
22132, his or her retirement allowance shall be reduced by the
amount of the excess earnings. The amount of the reduction in an
individual month shall be no more than the monthly allowance payable
in that month, and the total amount of the reduction shall not exceed
the amount of the annual allowance payable under this part for the
calendar year in which the excess compensation was earned.
(e) The earnings limitation specified in this section does not
apply to a member receiving a disability retirement benefit under
this part who is participating in an approved rehabilitation program
pursuant to Section 24111.
(f) This section does not apply to a member receiving a disability
retirement benefit under this part who began receiving a disability
retirement allowance prior to October 16, 1992.
SEC. 18. Section 24209 of the Education Code is amended to read:
24209. (a) Upon retirement for service following reinstatement,
the member shall receive a service retirement allowance equal to the
sum of both of the following:
(1) An amount equal to the monthly allowance the member was
eligible to receive immediately preceding the most recent
reinstatement, exclusive of any amounts payable pursuant to Section
22714 or 22715, increased by the improvement factor that would have
been applied to the allowance if the member had not reinstated.
(2) An amount calculated pursuant to Section 24202, 24202.5,
24202.6, 24203, 24203.5, or 24206 based on credited service accrued,
including any service granted pursuant to Section 22717 or 22717.5,
subsequent to the most recent reinstatement, the member's age on the
last day of the month in which the retirement allowance begins to
accrue, and final compensation.
(b) If the total amount of credited service accrued, other than
that accrued pursuant to Sections 22714, 22715, 22717, 22717.5, and
22826, is equal to or greater than 30 years, the amounts identified
in paragraphs (1), for members who initially retired on or after
January 1, 1999, and (2) of subdivision (a) shall be calculated
pursuant to Section 24203.5.
(c) If the total amount of credited service accrued, other than
that accrued pursuant to Sections 22714, 22715, 22717, 22717.5, and
22826, is equal to or greater than 30 years, upon retirement for
service following reinstatement, a member who retired pursuant to
Section 24213, and received the terminated disability allowance for
the prior retirement, shall receive a service retirement allowance
equal to the sum of the following:
(1) An amount based on the credited service accrued, including any
service granted pursuant to Section 22717 or 22717.5, prior to the
effective date of the disability allowance, the member's age at the
prior retirement increased by the factor provided in Section 24203.5,
and projected final compensation.
(2) An amount calculated pursuant to Section 24202, 24202.5,
24202.6, 24203.5, or 24206 based on credited service accrued,
including any service granted pursuant to Section 22717 or 22717.5,
subsequent to the reinstatement, the member's age on the last day of
the month in which the retirement allowance begins to accrue, and
final compensation using compensation earnable, or projected final
compensation, or a combination of both.
(d) For purposes of this section, final compensation shall not be
based on a determination of compensation earnable as described in
subdivision (e) of Section 22115.
SEC. 19. Section 24209.3 of the Education Code is amended to read:
24209.3. (a) Notwithstanding subdivision (a) of Section 24209,
and exclusive of any amounts payable during the prior retirement for
service pursuant to Section 22714, or 22715:
(1) A member who retired, other than pursuant to Section 24210,
24211, 24212, or 24213, and who reinstates and performs creditable
service, as defined in Section 22119.5, after the most recent
reinstatement, in an amount equal to two or more years of credited
service, shall, upon retirement for service on or after the effective
date of this section, receive a service retirement allowance equal
to the sum of the following:
(A) An amount calculated pursuant to this chapter based on
credited service accrued, including any service granted pursuant to
Section 22717 or 22717.5, prior to the most recent reinstatement,
using the member's age at the subsequent service retirement, from
which age shall be deducted the total time during which the member
was retired for service, and final compensation.
(B) An amount calculated pursuant to this chapter based on
credited service accrued, including any service granted pursuant to
Section 22717 or 22717.5, subsequent to the most recent
reinstatement, using the member's age on the last day of the month in
which the retirement allowance begins to accrue, and final
compensation.
(2) A member who retired pursuant to Section 24210 and who
reinstates and performs creditable service, as defined in Section
22119.5, after the most recent reinstatement, in an amount equal to
two or more years of credited service, shall, upon retirement for
service on or after the effective date of this section, receive a
service retirement allowance equal to the sum of the following:
(A) An amount calculated pursuant to this chapter based on
credited service accrued, including any service granted pursuant to
Section 22717 or 22717.5, prior to the effective date of the
disability retirement, using the member's age at the subsequent
service retirement, from which age shall be deducted the total time
during which the member was retired for service, and indexed final
compensation to the effective date of the initial service retirement.
(B) An amount calculated pursuant to this chapter based on the
credited service accrued, including any service granted pursuant to
Section 22717 or 22717.5, after termination of the disability
retirement, excluding credited service accrued or granted subsequent
to the most recent reinstatement, using the member's age at the
subsequent service retirement, from which age shall be deducted the
total time during which the member was retired for service, and final
compensation.
(C) An amount calculated pursuant to this chapter based on
credited service accrued, including any service granted pursuant to
Section 22717 or 22717.5, subsequent to the most recent
reinstatement, using the member's age on the last day of the month in
which the retirement allowance begins to accrue, and final
compensation.
(3) A member who retired pursuant to Section 24211 and who
reinstates and performs creditable service, as defined in Section
22119.5, after the most recent reinstatement, in an amount equal to
two or more years of credited service, shall, upon retirement for
service on or after the effective date of this section, receive a
service retirement allowance equal to the sum of the following:
(A) The greater of (i) the disability allowance the member was
eligible to receive immediately prior to termination of that
allowance, excluding the children's portion, or (ii) an amount
calculated pursuant to this chapter based on credited service accrued
prior to the effective date of the disability allowance, excluding
credited service accrued or granted pursuant to Section 22717 or
22717.5 or Chapter 14 (commencing with Section 22800) or Chapter 14.2
(commencing with Section 22820) or Chapter 19 (commencing with
Section 23200), using the member's age at the subsequent service
retirement, from which age shall be deducted the total time during
which the member was retired for service, and final compensation
using compensation earnable, or projected final compensation
earnable, or a combination of both.
(B) An amount equal to either of the following:
(i) For a member who was receiving a benefit pursuant to
subdivision (a) of Section 24211, an amount calculated pursuant to
this chapter based on credited service accrued at the time of the
retirement pursuant to Section 24211, excluding credited service
accrued or granted prior to the effective date of the disability
allowance or pursuant to Section 22717 or 22717.5 or Chapter 14
(commencing with Section 22800) or Chapter 14.2 (commencing with
Section 22820) or Chapter 19 (commencing with Section 23200), the
member's age at the subsequent service retirement, from which age
shall be deducted the total time during which the member was retired
for service, and final compensation using compensation earnable, or
projected final compensation, or a combination of both.
(ii) For a member who was receiving a benefit pursuant to
subdivision (b) of Section 24211, an amount calculated pursuant to
this chapter based on projected service at the time of the retirement
pursuant to Section 24211, excluding credited service accrued or
granted prior to the effective date of the disability allowance or
pursuant to Section 22717 or 22717.5 or Chapter 14 (commencing with
Section 22800) or Chapter 14.2 (commencing with Section 22820) or
Chapter 19 (commencing with Section 23200), the member's age at the
subsequent service retirement, from which age shall be deducted the
total time during which the member was retired for service, and final
compensation using compensation earnable, or projected final
compensation, or a combination of both.
(C) An amount based on any credited service accrued or granted
pursuant to Section 22717 or 22717.5 or Chapter 14 (commencing with
Section 22800) or Chapter 14.2 (commencing with Section 22820) or
Chapter 19 (commencing with Section 23200), at the time of the
retirement pursuant to Section 24211, using the member's age at the
subsequent service retirement, from which age shall be deducted the
total time during which the member was retired for service, and final
compensation using compensation earnable, or projected final
compensation, or a combination of both.
(D) An amount calculated pursuant to this chapter based on
credited service accrued subsequent to the most recent reinstatement,
including credited service accrued or granted pursuant to Section
22714, 22715, 22717, or 22717.5 or Chapter 14 (commencing with
Section 22800) or Chapter 14.2 (commencing with Section 22820) or
Chapter 19 (commencing with Section 23200), using the member's age on
the last day of the month in which the retirement allowance begins
to accrue, and final compensation using compensation earnable, or
projected final compensation, or a combination of both.
(4) A member who retired pursuant to Section 24212 or 24213 and
who reinstates and performs creditable service, as defined in Section
22119.5, after the most recent reinstatement, in an amount equal to
two or more years of credited service, shall, upon retirement for
service on or after the effective date of this section, receive a
service retirement allowance equal to the sum of the following:
(A) An amount calculated pursuant to this chapter based on the
member's projected service at the time of the retirement pursuant to
Section 24212 or 24213, including credited service accrued or granted
pursuant to Section 22717 or 22717.5 or Chapter 14 (commencing with
Section 22800) or Chapter 14.2 (commencing with Section 22820) or
Chapter 19 (commencing with Section 23200), using the member's age at
the subsequent service retirement, from which age shall be deducted
the total time during which the member was retired for service, and
final compensation using compensation earnable, or projected final
compensation, or a combination of both.
(B) An amount calculated pursuant to this chapter based on
credited service accrued subsequent to the most recent reinstatement,
including credited service accrued or granted pursuant to Section
22714, 22715, 22717, or 22717.5 or Chapter 14 (commencing with
Section 22800) or Chapter 14.2 (commencing with Section 22820) or
Chapter 19 (commencing with Section 23200), using the member's age on
the last day of the month in which the retirement allowance begins
to accrue, and final compensation using compensation earnable, or
projected final compensation, or a combination of both.
(b) If the total amount of credited service, other than projected
service, or service that accrued or was granted pursuant to Sections
22714, 22715, 22717, 22717.5, and 22826, is equal to or greater than
the number of years required to be eligible for an increased
allowance pursuant to this chapter or Section 22134.5, the amounts
identified in this section shall be calculated pursuant to the
section authorizing the increased benefit.
(c) For members receiving an allowance pursuant to Section 24410.5
or 24410.6, the amount payable pursuant to this section shall not be
less than the amount payable to the member as of the effective date
of reinstatement.
(d) The amount payable pursuant to this section shall not be less
than the amount that would be payable to the member pursuant to
Section 24209.
(e) For purposes of determining an allowance increase pursuant to
Sections 24415 and 24417, the calendar year of retirement shall be
the year of the subsequent retirement if the final compensation used
to calculate the allowance pursuant to this section is higher than
the final compensation used to calculate the allowance for the prior
retirement.
(f) The allowance paid pursuant to this section to a member
receiving a lump-sum payment pursuant to Section 24221 shall be
actuarially reduced to reflect that lump-sum payment.
(g) For purposes of this section, final compensation shall not be
based on a determination of compensation earnable as described in
subdivision (e) of Section 22115.
SEC. 20. Section 24210 of the Education Code is amended to read:
24210. Upon retirement for service following a prior disability
retirement granted pursuant to Chapter 26 (commencing with Section
24100) that was terminated, the member shall receive a service
retirement allowance calculated pursuant to Section 24202, 24202.5,
24202.6, 24203, 24203.5, 24203.6, or 24206 and equal to the sum of
both of the following:
(a) An amount based on credited service accrued, including any
service granted pursuant to Section 22717 or 22717.5, prior to the
effective date of the disability retirement, the member's age on the
last day of the month in which the retirement allowance begins to
accrue, and indexed final compensation to the effective date of the
service retirement.
(b) An amount based on the credited service accrued, including any
service granted pursuant to Section 22717 or 22717.5, after
termination of the disability retirement, the member's age on the
last day of the month in which the retirement allowance begins to
accrue, and final compensation.
SEC. 21. Section 24211 of the Education Code is amended to read:
24211. When a member who has been granted a disability allowance
under this part after June 30, 1972, returns to employment subject to
coverage under the Defined Benefit Program and performs:
(a) Less than three years of creditable service after termination
of the most recent disability allowance, the member shall receive a
retirement allowance which is the sum of the allowance calculated on
credited service accrued after the termination date of the disability
allowance, excluding credited service accrued or granted pursuant to
Section 22717 or 22717.5 or Chapter 14 (commencing with Section
22800) or Chapter 14.2 (commencing with Section 22820) or Chapter 19
(commencing with Section 23200), the age of the member on the last
day of the month in which the retirement allowance begins to accrue,
and final compensation using compensation earnable or projected final
compensation, or a combination of both, plus the greater of either
of the following:
(1) A service retirement allowance calculated on credited service
accrued as of the effective date of the disability allowance,
excluding credited service accrued or granted pursuant to Section
22717 or 22717.5 or Chapter 14 (commencing with Section 22800) or
Chapter 14.2 (commencing with Section 22820) or Chapter 19
(commencing with Section 23200), the member's age on the last day of
the month in which the retirement allowance begins to accrue, and
projected final compensation to the termination date of the
disability allowance.
(2) The disability allowance the member was eligible to receive
immediately prior to termination of the most recent disability
allowance, excluding children's portions.
(b) Three or more years of creditable service after termination of
the most recent disability allowance, the member shall receive a
retirement allowance that is the greater of the following:
(1) A service retirement allowance calculated on all actual and
projected service, excluding credited service accrued or granted
pursuant to Section 22717 or 22717.5 or Chapter 14 (commencing with
Section 22800) or Chapter 14.2 (commencing with Section 22820) or
Chapter 19 (commencing with Section 23200), the member's age on the
last day of the month in which the retirement allowance begins to
accrue, and final compensation using compensation earnable, or
projected final compensation, or a combination of both.
(2) The disability allowance the member was eligible to receive
immediately prior to termination of the most recent disability
allowance, excluding children's portions.
(c) The allowance shall be increased by an amount based on any
credited service accrued or granted pursuant to Section 22714, 22715,
22717, or 22717.5 or Chapter 14 (commencing with Section 22800) or
Chapter 14.2 (commencing with Section 22820) or Chapter 19
(commencing with Section 23200), the member's age on the last day of
the month in which the retirement allowance begins to accrue, and
final compensation using compensation earnable, or projected final
compensation, or a combination of both.
(d) If the total amount of credited service, other than projected
service or credited service that accrued or was granted pursuant to
Sections 22714, 22715, 22717, 22717.5, and 22826, is equal to or
greater than 30 years, the amounts identified in subdivisions (a) to
(c), inclusive, shall be
calculated pursuant to Sections 24203.5 and 24203.6.
(e) For purposes of this section, final compensation shall not be
based on a determination of compensation earnable as described in
subdivision (e) of Section 22115.
(f) Upon retirement, the member may elect to modify the service
retirement allowance payable in accordance with any option provided
under this part.
SEC. 22. Section 24212 of the Education Code is amended to read:
24212. (a) If a disability allowance granted under this part
after June 30, 1972, is terminated for reasons other than those
specified in Section 24213 and the member does not return to
employment subject to coverage under the Defined Benefit Program, the
member's service retirement allowance, when payable, shall be based
on projected service, excluding credited service accrued or granted
pursuant to Section 22717 or 22717.5 or Chapter 14 (commencing with
Section 22800) or Chapter 14.2 (commencing with Section 22820), or
Chapter 19 (commencing with Section 23200), projected final
compensation, and the member's age on the last day of the month in
which the retirement allowance begins to accrue. The allowance
payable under this section, excluding annuities payable from
accumulated annuity deposit contributions, shall not be greater than
the disability allowance the member was eligible to receive
immediately prior to the earlier of the termination of that allowance
or at normal retirement age, excluding children's portions.
(b) The allowance shall be increased by an amount based on any
credited service accrued or granted pursuant to Section 22717 or
22717.5 or Chapter 14 (commencing with Section 22800) or Chapter 14.2
(commencing with Section 22820) or Chapter 19 (commencing with
Section 23200), the member's age on the last day of the month in
which the retirement allowance begins to accrue, and final
compensation using compensation earnable, or projected final
compensation, or a combination of both.
(c) If the total amount of credited service, other than projected
service or credited service that accrued or was granted pursuant to
Sections 22717, 22717.5, and 22826, is equal to or greater than 30
years, the amounts identified in subdivisions (a) and (b) shall be
calculated pursuant to Sections 24203.5 and 24203.6.
(d) Upon retirement, the member may elect to modify the service
retirement allowance payable in accordance with any option provided
under this part.
SEC. 23. Section 24213 of the Education Code is amended to read:
24213. (a) When a member who has been granted a disability
allowance under this part after June 30, 1972, attains normal
retirement age, or at a later date when there is no dependent child,
the disability allowance shall be terminated and the member shall be
eligible for service retirement. The retirement allowance shall be
calculated on the projected final compensation and projected service
to normal retirement age, excluding credited service accrued or
granted pursuant to Section 22717 or 22717.5 or Chapter 14
(commencing with Section 22800) or Chapter 14.2 (commencing with
Section 22820) or Chapter 19 (commencing with Section 23200), and the
member's age on the last day of the month in which the retirement
allowance begins to accrue. The allowance payable under this section,
excluding annuities payable from accumulated annuity deposit
contributions, shall not be greater than the disability allowance the
member was eligible to receive immediately prior to normal
retirement age, excluding children's portions.
(b) The allowance shall be increased by an amount based on any
credited service accrued or granted pursuant to Section 22717 or
22717.5 or Chapter 14 (commencing with Section 22800) or Chapter 14.2
(commencing with Section 22820) or Chapter 19 (commencing with
Section 23200), the member's age on the last day of the month in
which the retirement allowance begins to accrue, and projected final
compensation to normal retirement age.
(c) If the total amount of credited service accrued, other than
projected service or credited service that accrued or was granted
pursuant to Sections 22717, 22717.5, and 22826, is equal to or
greater than 30 years, the amounts identified in subdivisions (a) and
(b) shall be calculated pursuant to Sections 24203.5 and 24203.6.
(d) Upon retirement, the member may elect to modify the service
retirement allowance payable in accordance with any option provided
under this part.
SEC. 24. Section 24214 of the Education Code, as amended by
Section 21 of Chapter 32 of the Statutes of 2014, is amended to read:
24214. (a) A member retired for service under this part may
perform retired member activities, but the member shall not make
contributions to the retirement fund or accrue service credit based
on compensation earned from that service. The employer shall maintain
accurate records of the earnings of the retired member and report
those earnings monthly to the system and retired member as described
in Section 22461.
(b) If a member is retired for service under this part, the
annualized rate of pay for retired member activities, performed by
that member shall not be less than the minimum, nor exceed the
maximum, paid by the employer to other employees performing
comparable duties.
(c) A member retired for service under this part shall not be
required to reinstate for performing retired member activities.
(d) A member retired for service under this part may earn
compensation for performing retired member activities in any one
school year up to the limitation specified in subdivision (f) without
a reduction in his or her retirement allowance.
(e) The postretirement compensation limitation provisions set
forth in this section are not applicable to compensation earned for
the performance of retired member activities that are not wholly or
in part supported by state, local, or federal funds.
(f) (1) The limitation that shall apply to the compensation paid
in cash to the retired member for performance of retired member
activities, excluding reimbursements paid by an employer for expenses
incurred by the member in which payment of the expenses by the
member is substantiated, shall, in any one school year, be an amount
calculated by the system each July 1 equal to one-half of the median
final compensation of all members who retired for service during the
fiscal year ending in the previous calendar year.
(2) For written agreements pertaining to the performance of
retired member activities entered into, extended, renewed, or amended
on or after January 1, 2014, the limitation in paragraph (1) shall
also apply to payments made for the performance of retired member
activities, including, but not limited to, those for participation in
a deferred compensation plan; to purchase an annuity contract,
tax-deferred retirement plan, or insurance program; and for
contributions to a plan that meets the requirements of Section 125,
401(a), 401(k), 403(b), 457(b), or 457(f) of Title 26 of the United
States Code when the cost is covered by an employer.
(g) If a member retired for service under this part earns
compensation for performing retired member activities, in excess of
the limitation specified in subdivision (f), and if that compensation
is not exempt from that limitation under subdivision (e) or (h) or
any other law, the member's retirement allowance shall be reduced by
the amount of the excess compensation. The amount of the reduction in
an individual month shall be no more than the monthly allowance
payable in that month, and the total amount of the reduction shall
not exceed the amount of the annual allowance payable under this part
for the fiscal year in which the excess compensation was earned
after any reduction made in accordance with subdivision (h) of
Section 24214.5.
(h) The limitation specified in this section is not applicable to
compensation paid to a member retired for service under this part who
has returned to work after the date of retirement:
(1) As a trustee appointed by the Superintendent pursuant to
Section 41320.1.
(2) As a fiscal adviser or fiscal expert appointed by a county
superintendent of schools pursuant to Article 2 (commencing with
Section 42122) of Chapter 6 of Part 24 of Division 3 of Title 2.
(3) As a receiver or trustee appointed by the state board pursuant
to Article 3.1 (commencing with Section 52055.57) of Chapter 6.1 of
Part 28 of Division 4 of Title 2.
(4) As a special trustee appointed by the Board of Governors of
the California Community Colleges pursuant to Section 84040.
(i) The Superintendent, the Executive Director of the State Board
of Education, the Chancellor of the California Community Colleges, or
the county superintendent of schools exercising the exemption
pursuant to subdivision (h) shall submit all documentation required
by the system to substantiate the eligibility of the retired member
for the exemption, including compliance with subdivisions (j) and
(k). The documentation shall be received by the system prior to the
retired member's performance of retired member activities.
(j) Subdivision (h) shall not apply to a retired member who has
not attained normal retirement age at the time the compensation is
earned by the member, received additional service credit pursuant to
Section 22714 or 22715, or received from any public employer any
financial inducement to retire in the previous six months. For
purposes of this section and Section 24214.5, "financial inducement
to retire" includes, but is not limited to, any form of compensation
or other payment that is paid directly or indirectly by a public
employer to the member, even if not in cash, either before or after
retirement, if the member retires for service on or before a specific
date or specific range of dates established by the public employer
on or before the date the inducement is offered. The system shall
liberally interpret this subdivision to further the Legislature's
intent to make subdivision (h) inapplicable to members if the member
received a financial incentive from any public employer to retire or
otherwise terminate employment with the public employer.
(k) The documentation required for subdivision (i) shall include
certification of the following:
(1) The position was first advertised for appointment to current
active or inactive members of the program with the necessary
qualifications to perform the requirements of the position and no
qualified current active or inactive member was available to be
appointed.
(2) The appointing authority made a good faith effort to hire a
retired member who reinstated to active membership for the position
at the same salary that was offered as first advertised pursuant to
paragraph (1).
(3) The appointing authority, having tried and failed to hire a
current active or inactive member or a reinstated retired member,
hired a retired member and the salary offered to the retired member
subject to this paragraph does not exceed the salary that was offered
as first advertised pursuant to paragraph (1).
(4) The salary paid shall be no greater than the salary offered to
current active members for the appointed position.
( l ) The amendments to this section enacted during the
1995-96 Regular Session shall be deemed to have become operative on
July 1, 1996.
(m) The amendments to this section enacted during the second year
of the 2011-12 Regular Session shall apply to compensation paid
during the 2012-13 and 2013-14 fiscal years.
(n) The amendments to this section enacted during the first year
of the 2013-14 Regular Session shall apply to compensation paid on or
after January 1, 2014.
(o) This section shall become inoperative on July 1, 2017, and, as
of January 1, 2018, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2018, deletes or
extends the dates on which it becomes inoperative and is repealed.
SEC. 25. Section 24214 of the Education Code, as amended by
Section 22 of Chapter 32 of the Statutes of 2014, is amended to read:
24214. (a) A member retired for service under this part may
perform retired member activities, but the member shall not make
contributions to the retirement fund or accrue service credit based
on compensation earned from that service. The employer shall maintain
accurate records of the earnings of the retired member and report
those earnings monthly to the system and retired member as described
in Section 22461.
(b) If a member is retired for service under this part, the
annualized rate of pay for retired member activities performed by
that member shall not be less than the minimum, nor exceed the
maximum, paid by the employer to other employees performing
comparable duties.
(c) A member retired for service under this part shall not be
required to reinstate for performing retired member activities.
(d) A member retired for service under this part may earn
compensation for performing retired member activities in any one
school year up to the limitation specified in subdivision (f) without
a reduction in his or her retirement allowance.
(e) The postretirement compensation limitation provisions set
forth in this section are not applicable to compensation earned for
the performance of retired member activities that are not wholly or
in part supported by state, local, or federal funds.
(f) (1) The limitation that shall apply to the compensation paid
in cash to the retired member for performance of retired member
activities, excluding reimbursements paid by an employer for expenses
incurred by the member in which payment of the expenses by the
member is substantiated, shall, in any one school year, be an amount
calculated by the system each July 1 equal to one-half of the median
final compensation of all members who retired for service during the
fiscal year ending in the previous calendar year.
(2) For written agreements pertaining to the performance of
retired member activities entered into, extended, renewed, or amended
on or after January 1, 2014, the limitation in paragraph (1) shall
also apply to payments made for the performance of retired member
activities, including, but not limited to, those for participation in
a deferred compensation plan; to purchase an annuity contract,
tax-deferred retirement plan, or insurance program; and for
contributions to a plan that meets the requirements of Section 125,
401(a), 401(k), 403(b), 457(b), or 457(f) of Title 26 of the United
States Code when the cost is covered by an employer.
(g) If a member retired for service under this part earns
compensation for performing retired member activities, in excess of
the limitation specified in subdivision (f), the member's retirement
allowance shall be reduced by the amount of the excess compensation.
The amount of the reduction in an individual month shall be no more
than the monthly allowance payable in that month, and the total
amount of the reduction shall not exceed the amount of the annual
allowance payable under this part for the fiscal year in which the
excess compensation was earned after any reduction made in accordance
with subdivision (h) of Section 24214.5.
(h) The language of this section derived from the amendments to
the section of this number added by Chapter 394 of the Statutes of
1995, enacted during the 1995-96 Regular Session, is deemed to have
become operative on July 1, 1996.
(i) This section shall become operative on July 1, 2017.
SEC. 26. Section 24214.5 of the Education Code is amended to read:
24214.5. (a) (1) Notwithstanding subdivision (f) of Section
24214, the postretirement compensation limitation that shall apply to
the compensation paid in cash to the retired member for performance
of retired member activities, excluding reimbursements paid by an
employer for expenses incurred by the member in which payment of the
expenses by the member is substantiated, shall be zero dollars ($0)
during the first 180 calendar days after the most recent retirement
of a member retired for service under this part.
(2) For written agreements pertaining to the performance of
retired member activities entered into, extended, renewed, or amended
on or after January 1, 2014, the limitation in paragraph (1) shall
also apply to payments made for the performance of retired member
activities, including, but not limited to, those for participation in
a deferred compensation plan; to purchase an annuity contract,
tax-deferred retirement plan, or insurance program; and for
contributions to a plan that meets the requirements of Section 125,
401(a), 401(k), 403(b), 457(b), or 457(f) of Title 26 of the United
States Code when the cost is covered by an employer.
(b) If the retired member has attained normal retirement age at
the time the compensation is earned, subdivision (a) shall not apply
and Section 24214 shall apply if the appointment has been approved by
the governing body of the employer in a public meeting, as reflected
in a resolution adopted by the governing body of the employer prior
to the performance of retired member activities, expressing its
intent to seek an exemption from the limitation specified in
subdivision (a). Approval of the appointment may not be placed on a
consent calendar. Notwithstanding any other provision of Article 3.5
(commencing with Section 6250) of Division 7 of Title 1 of the
Government Code or any state or federal law incorporated by
subdivision (k) of Section 6254 of the Government Code, the
resolution shall be subject to disclosure by the entity adopting the
resolution and the system. The resolution shall include the following
specific information and findings:
(1) The nature of the employment.
(2) A finding that the appointment is necessary to fill a
critically needed position before 180 calendar days have passed.
(3) A finding that the member is not ineligible for application of
this subdivision pursuant to subdivision (d).
(4) A finding that the termination of employment of the retired
member with the employer is not the basis for the need to acquire the
services of the member.
(c) Subdivision (b) shall not apply to a retired member whose
termination of employment with the employer is the basis for the need
to acquire the services of the member.
(d) Subdivision (b) shall not apply if the retired member received
additional service credit pursuant to Section 22714 or 22715 or
received from any public employer any financial inducement to retire.
For purposes of this section, "financial inducement to retire"
includes, but is not limited to, any form of compensation or other
payment that is paid directly or indirectly by a public employer to
the member, even if not in cash, either before or after retirement,
if the participant retires for service on or before a specific date
or specific range of dates established by a public employer on or
before the date the inducement is offered. The system shall liberally
interpret this subdivision to further the Legislature's intent to
make subdivision (b) inapplicable to members if the member received a
financial incentive from any public employer to retire or otherwise
terminate employment with a public employer.
(e) The Superintendent, the county superintendent of schools, or
the chief executive officer of a community college shall submit all
documentation required by the system to substantiate the eligibility
of the retired member for application of subdivision (b), including,
but not limited to, the resolution adopted pursuant to that
subdivision.
(f) The documentation required by this section shall be received
by the system prior to the retired member's performance of retired
member activities.
(g) Within 30 calendar days after the receipt of all documentation
required by the system pursuant to this section, the system shall
inform the entity seeking application of the exemption specified in
subdivision (b), and the retired member whether the compensation paid
to the member will be subject to the limitation specified in
subdivision (a).
(h) If a member retired for service under this part earns
compensation for performing retired member activities in excess of
the limitation specified in subdivision (a), the member's retirement
allowance shall be reduced by the amount of the excess compensation.
The amount of the reduction in an individual month shall be no more
than the monthly allowance payable in that month, and the total
amount of the reduction shall not exceed the amount of the allowance
payable during the first 180 calendar days, after a member retired
for service under this part.
(i) The amendments to this section enacted during the first year
of the 2013-14 Regular Session shall apply to compensation paid on or
after January 1, 2014.
SEC. 27. Section 26000 of the Education Code is amended to read:
26000. The Legislature hereby finds and declares that the State
Teachers' Retirement System Cash Balance Plan was created and
established on July 1, 1996, to provide a retirement plan for persons
employed by an employer offering the Cash Balance Plan, excluding a
community college district, to perform creditable service for less
than 50 percent of the full-time equivalent for the position, or
employed by a community college district offering the Cash Balance
Plan to perform creditable service on a temporary basis pursuant to
Section 87474, 87478, 87480, 87481, 87482, or 87482.5, or employed by
an employer offering the Cash Balance Plan to perform creditable
service as a substitute employee. The persons eligible for the Cash
Balance Plan were excluded from mandatory membership in the State
Teachers' Retirement System Defined Benefit Plan. Both plans are
administered by the Teachers' Retirement Board. Because both plans
were intended to provide for the retirement of teachers and other
persons employed in connection with the public schools of this state
and schools supported by this state, a merger of these two plans is
now hereby made for the purpose of establishing a single retirement
plan that shall be known and may be cited as the State Teachers'
Retirement Plan consisting of the different benefit programs set
forth in this part and Part 13 (commencing with Section 22000). The
plan shall be administered by the Teachers' Retirement Board as set
forth in this part and Part 13 (commencing with Section 22000). As a
result of this merger, a Cash Balance Benefit Program will be
provided under the State Teachers' Retirement Plan and that program
is set forth in this part.
The governing board of a school district, community college
district, or county office of education may, by formal action, elect
to provide the benefits of the Cash Balance Benefit Program under
this part for their employees.
SEC. 28. Section 26002.5 of the Education Code is amended to read:
26002.5. Except as excluded in subdivision (d) of Section 26807.5
or subdivision (c) of Section 26906.5, a person who is the
registered domestic partner of a member, as established pursuant to
Section 297 or 299.2 of the Family Code, shall be treated in the same
manner as a "spouse," as defined in Section 26140.
SEC. 29. Section 26132 of the Education Code is amended to read:
26132. "Participant" means a person who has performed creditable
service subject to coverage by the Cash Balance Benefit Program and
who has contributions credited under the Cash Balance Benefit Program
or is receiving an annuity under the Cash Balance Benefit Program by
reason of creditable service or has not yet met the conditions of
subdivision (b) of Section 26806.
SEC. 30. Section 26139.5 of the Education Code is amended to read:
26139.5. (a) "Salary," for participants subject to the California
Public Employees' Pension Reform Act of 2013, means remuneration
paid each pay period in cash by an employer to a participant for
creditable service performed in that position subject to coverage
under the Cash Balance Benefit Program in accordance with a publicly
available written contractual agreement, including, but not limited
to, a salary schedule or employment agreement, based on years of
training and years of experience as specified in Section 45028.
Salary shall include:
(1) Money paid for the participant's absence from performance of
creditable service as approved by an employer, except as provided in
paragraph (5) of subdivision (b).
(2) Employee contributions picked up by an employer pursuant to
Section 26502.
(3) Amounts deducted by an employer from the participant's salary,
including, but not limited to, deductions for participation in a
deferred compensation plan; deductions for the purchase of an annuity
contract, tax-deferred retirement plan, or other insurance program;
and deductions for participation in a plan that meets the
requirements of Section 125, 401(a), 401(k), 403(b), 457(b), or 457
(f) of Title 26 of the United States Code.
(4) Any other payments the board determines by plan amendment to
be "salary."
(b) "Salary" does not mean and shall not include:
(1) Money paid for service that is not creditable service.
(2) Money not paid each pay period in which creditable service is
performed for that position.
(3) Fringe benefits provided by an employer.
(4) Expenses paid or reimbursed by an employer.
(5) Money paid in exchange for the relinquishment of unused
accumulated leave.
(6) Severance pay, including lump-sum and installment payments, or
money paid in excess of salary to a participant as compensatory
damages or as a compromise settlement.
(7) Payments, including, but not limited to, those for
participation in a deferred compensation plan; to purchase an annuity
contract, tax-deferred retirement program, or other insurance
program; and for participation in a plan that meets the requirements
of Section 125, 401(a), 401(k), 403(b), 457(b), or 457(f) of Title 26
of the United States Code that are purchased by an employer for a
participant.
(8) Any payments determined by the system to have been made by an
employer to enhance a participant's benefits under the plan.
(9) Money paid to the participant in lieu of benefits provided to
the participant by the employer or paid directly by the employer to a
third party other than the system for the benefit of the
participant.
(10) Any one-time or ad hoc payments made to a participant.
(11) Any employer-provided allowance, reimbursement, or payment,
including, but not limited to, one made for housing, vehicle, or
uniform.
(12) Any bonus paid in addition to compensation described in
subdivision (a).
(13) Any other payments the board determines by plan amendment not
to be "salary."
(c) (1) Salary in any fiscal year shall not exceed:
(A) One hundred
twenty percent of the "contribution and benefit base," as determined
under Section 430(b) of the Social Security Act (42 U.S.C. Sec. 430
(b)), on January 1, 2013, for a participant whose service is not
included in the federal system.
(B) One hundred percent of the "contribution and benefit base," as
determined under Section 430(b) of the Social Security Act (42
U.S.C. Sec. 430(b)), on January 1, 2013, for a participant whose
service is included in the federal system pursuant to any changes in
state or federal law enacted on or after January 1, 2013.
(2) The system shall adjust the limit based on the annual changes
to the Consumer Price Index for All Urban Consumers: U.S. City
Average, calculated by dividing the Consumer Price Index for All
Urban Consumers: U.S. City Average for the month of February in the
fiscal year preceding the adjustment by the Consumer Price Index for
All Urban Consumers: U.S. City Average for the month of February of
the previous year rounded to the nearest thousandth. Notwithstanding
paragraph (1) of subdivision (d) of Section 7522.10 of the Government
Code, the adjustment shall be effective annually on July 1,
beginning July 1, 2014.
(3) The Legislature reserves the right to modify the requirements
of this subdivision with regard to all participants subject to this
subdivision, except that the Legislature may not modify these
provisions in a manner that would result in a decrease in benefits
accrued prior to the effective date of the modification.
(d) Any employer or person who knowingly or willfully reports
salary in a manner inconsistent with the provisions of subdivisions
(a) or (b) may be subject to prosecution for fraud, theft, or
embezzlement in accordance with provisions of the Penal Code. The
system may establish procedures to ensure that salary reported by an
employer is in compliance with this section.
(e) For purposes of this section, remuneration shall be considered
paid if distributed to any person in the same class of employees who
meets the qualifications or requirements specified in a publicly
available written contractual agreement, including, but not limited
to, a collective bargaining agreement or an employment agreement, as
a condition of receiving the remuneration.
SEC. 31. Section 26142.5 is added to the Education Code, to read:
26142.5. "System's headquarters office" means the office building
established as the permanent headquarters facility for the system,
pursuant to Section 22375.
SEC. 32. Section 26400 of the Education Code is amended to read:
26400. (a) (1) A person employed on a part-time basis by an
employer, excluding community college districts, to perform
creditable service for less than 50 percent of each full-time
position shall become a participant on the later of the first day
that creditable service is performed for an employer that provides
the Cash Balance Benefit Program or the effective date of the
employer's governing board's action to provide the Cash Balance
Benefit Program, provided that creditable service is not performed
for the same employer with whom the person is subject to mandatory
membership in the Defined Benefit Program, and that the person has
not made an election pursuant to subdivision (d).
(2) If the participant's basis of employment with an employer,
excluding community college districts, that provides the Cash Balance
Benefit Program changes to employment to perform creditable service
for 50 percent or more of the full-time position during one school
year with the same employer, creditable service performed for that
employer shall no longer be covered under the Cash Balance Benefit
Program as of the last day of the pay period in which the change in
the participant's basis of employment occurred. Creditable service
performed for that employer shall be subject to coverage by the
Defined Benefit Program as of the first day of the pay period
following the change in the participant's basis of employment.
(b) (1) A person employed on a temporary basis pursuant to Section
87474, 87478, 87480, 87481, 87482, or 87482.5 by a community college
district, who is not subject to mandatory membership in the Defined
Benefit Program pursuant to Section 22501, 22502, 22503, or 22504 for
each position with the same employer, shall become a participant on
the later of the first day that creditable service is performed for
an employer that provides the Cash Balance Benefit Program or the
effective date of the employer's governing board's action to provide
the Cash Balance Benefit Program, provided that the person has not
made an election pursuant to subdivision (d).
(2) If the participant's basis of employment with a community
college district changes to employment that is subject to mandatory
membership in the Defined Benefit Program pursuant to Section 22501,
22502, 22503, or 22504 during one school year with the same employer,
creditable service performed for that employer shall no longer be
covered under the Cash Balance Benefit Program as of the last day of
the pay period in which the change in the participant's basis of
employment occurred. Creditable service performed for that employer
shall be subject to coverage by the Defined Benefit Program as of the
first day of the pay period following the change in the participant'
s basis of employment.
(c) (1) Any person employed to perform creditable service as a
substitute employee for an employer shall become a participant on the
later of the first day that creditable service is performed for an
employer that provides the Cash Balance Benefit Program or the
effective date of the employer's governing board's action to provide
the Cash Balance Benefit Program, provided that creditable service is
not performed for the same employer with whom the person is subject
to mandatory membership in the Defined Benefit Program, and that the
person has not made an election pursuant to subdivision (d).
(2) If the participant's basis of employment as a substitute
employee for an employer changes to employment that is subject to
mandatory membership in the Defined Benefit Program pursuant to
Section 22501, 22502, 22503, or 22504 during one school year with the
same employer, creditable service performed for that employer shall
no longer be covered under the Cash Balance Benefit Program as of the
last day of the pay period in which the change in the participant's
basis of employment occurred. Creditable service performed for that
employer shall be subject to coverage under the Defined Benefit
Program as of the first day of the pay period following the change in
the participant's basis of employment.
(d) If the employer's governing board's action to provide the Cash
Balance Benefit Program gives employees the right to elect coverage
under the federal Social Security Act or an alternative retirement
plan offered by the employer in addition to the Cash Balance Benefit
Program, the employee may elect within 60 calendar days of the latest
of the first day that creditable service is performed, the date of
the employer's governing board's action to provide the Cash Balance
Benefit Program, or the effective date of the employer's governing
board's action to provide the Cash Balance Benefit Program to be
covered by the federal Social Security Act or to participate in the
alternative retirement plan in lieu of participating in the Cash
Balance Benefit Program. An election shall not preclude an employee
from participating in the Cash Balance Benefit Program at a later
date so long as the Cash Balance Benefit Program is provided by the
employer and the employee is eligible to participate in the Cash
Balance Benefit Program.
(e) If subdivision (d) is applicable, the employer shall inform
employees pursuant to subdivision (c) of Section 26300 of their right
to make an election and the election shall be made on a properly
executed form provided by the system and filed with the employer. The
employer shall retain a copy of the employee's signed election form
and mail the original election form to the system's headquarters
office. The election shall become effective on the later of the first
day that creditable service is performed or the effective date of
the employer's governing board's action to provide the Cash Balance
Benefit Program.
(f) If the governing board of an employer subsequently provides,
in addition to the Cash Balance Benefit Program, federal Social
Security Act coverage, a participant covered by the Cash Balance
Benefit Program who is performing creditable service for that
employer may elect to be covered by the federal Social Security Act
in lieu of the Cash Balance Benefit Program. That participant's
election shall be made within 60 calendar days of the date the
governing board acted to provide coverage under the federal Social
Security Act or the effective date of the governing board's action to
provide federal Social Security Act coverage, whichever is later. An
election under this subdivision may not preclude an employee from
participating in the Cash Balance Benefit Program at a later date if
the employee is eligible to participate in the Cash Balance Benefit
Program and the employer provides the Cash Balance Benefit Program.
(g) If the governing board of an employer provided federal Social
Security Act coverage with an effective date prior to January 1,
2007, and the employer offered the Cash Balance Benefit Program as of
the effective date of the governing board's action to provide
federal Social Security Act coverage, a participant who was
performing creditable service for that employer may elect to be
covered by the federal Social Security Act in lieu of the Cash
Balance Benefit Program. The participant's election shall be made on
or after March 1, 2008, and on or before May 1, 2008. The election to
participate in the federal Social Security Act shall be effective on
July 1, 2008. An election under this subdivision may not preclude an
employee from participating in the Cash Balance Benefit Program at a
later date if the employee is eligible to participate in the Cash
Balance Benefit Program and the employer provides the Cash Balance
Benefit Program.
(h) An election by an employee to terminate his or her
participation in the Cash Balance Benefit Program as described in
subdivision (f) or (g) shall be made on a properly executed form
provided by the system and filed with the employer. The employer
shall retain a copy of the employee's signed election form and mail
the original election form to the system's headquarters office.
SEC. 33. Section 26401 of the Education Code is amended to read:
26401. (a) A member of the Defined Benefit Program who is
employed to perform creditable service on a part-time basis for less
than 50 percent of each full-time position by an employer, excluding
a community college district, that provides the Cash Balance Benefit
Program may elect to become a participant for creditable service
subject to coverage under the Cash Balance Benefit Program for that
employer, provided that the creditable service is not performed for
the same employer with whom the member is also subject to mandatory
membership in the Defined Benefit Program.
(b) A member of the Defined Benefit Program who is employed
pursuant to Section 87474, 87478, 87480, 87481, 87482, or 87482.5 by
a community college district that provides the Cash Balance Benefit
Program may elect to become a participant for creditable service
subject to coverage under the Cash Balance Benefit Program for that
employer, provided that the creditable service is not performed for
the same employer with whom the member is also subject to mandatory
membership in the Defined Benefit Program.
(c) A member of the Defined Benefit Program who is employed to
perform creditable service as a substitute employee by an employer
that provides the Cash Balance Benefit Program may elect to become a
participant for creditable service subject to coverage under the Cash
Balance Benefit Program for that employer, provided that the
creditable service is not performed for the same employer with whom
the member is also subject to mandatory membership in the Defined
Benefit Program.
(d) The election shall be made on a properly executed form
provided by the system and shall be filed with the employer within 60
calendar days of the later of the first day of employment with an
employer that provides the Cash Balance Benefit Program, the date of
the employer's governing board's action to provide the Cash Balance
Benefit Program, or the effective date of the employer's governing
board's action to provide the Cash Balance Benefit Program.
(e) Employers shall make available to employees specified in
subdivisions (a) and (b) information and forms provided by the system
for making an election regarding participation. The employer shall
retain a copy of the employee's signed election form and mail the
original signed election form to the system's headquarters office.
The election shall become effective on the first day of the pay
period following the pay period in which the election is made.
(f) If an election is made pursuant to subdivision (a) and the
participant's basis of employment with that employer changes to
employment to perform creditable service for 50 percent or more of
the full-time position during one school year with the same employer,
creditable service performed for that employer shall no longer be
covered under the Cash Balance Benefit Program as of the last day of
the pay period in which the change in the participant's basis of
employment occurred. Creditable service performed for that employer
shall be subject to coverage under the Defined Benefit Program as of
the first day of the pay period following the change in the
participant's basis of employment.
(g) If an election is made pursuant to subdivision (b) and the
participant's basis of employment with the community college district
changes to employment that is subject to mandatory membership in the
Defined Benefit Program pursuant to Section 22501, 22502, 22503, or
22504 during one school year with the same employer, creditable
service performed for that employer shall no longer be covered under
the Cash Balance Benefit Program as of the last day of the pay period
in which the change in the participant's basis of employment
occurred. Creditable service performed for that employer shall be
subject to coverage under the Defined Benefit Program as of the first
day of the pay period following the change in the participant's
basis of employment.
(h) If an election is made pursuant to subdivision (c) and the
participant's basis of employment with that employer changes to
employment that is subject to mandatory membership in the Defined
Benefit Program pursuant to Section 22501, 22502, 22503, or 22504
during one school year with the same employer, creditable service
performed for that employer shall no longer be covered under the Cash
Balance Benefit Program as of the last day of the pay period in
which the change in the participant's basis of employment occurred.
Creditable service performed for that employer shall be subject to
coverage under the Defined Benefit Program as of the first day of the
pay period following the change in the participant's basis of
employment.
(i) (1) If an employee was excluded from participation in the Cash
Balance Benefit Program pursuant to Section 26401.5, as that section
read on December 31, 2000, for the same service, the employee may
elect to become a participant for creditable service subject to
coverage under the Cash Balance Benefit Program for that employer,
provided all of the following conditions are met:
(A) The employment is pursuant to Section 87474, 87478, 87480,
87481, 87482, or 87482.5.
(B) The employer offers the Cash Balance Benefit Program.
(C) The creditable service is not also subject to mandatory
membership in the Defined Benefit Program.
(2) Employers shall, on or before May 1, 2007, make available to
employees described in this subdivision, information and forms
provided by the system for making an election regarding
participation. The employee shall submit the form to the employer
within a 60-day election period designated by the employer. The
employer shall retain a copy of the employee's signed election form
and mail the original signed election form to the system's
headquarters office. The election shall become effective on the first
day of the pay period following the pay period in which the election
is made.
SEC. 34. Section 26506 of the Education Code is amended to read:
26506. (a) Except as provided in subdivision (b), participants
shall not make voluntary pretax or post-tax contributions into the
Cash Balance Benefit Program, nor shall participants redeposit
amounts previously distributed from employee accounts or employer
accounts.
(b) Pursuant to terms and conditions established by the board,
participants may be permitted to transfer funds from eligible
retirement plans into the Cash Balance Benefit Program to the extent
that the transfers are allowable under and are completed in a manner
prescribed by applicable federal and state laws, and any related
regulations.
(c) Funds deposited with the Cash Balance Benefit Program by a
participant pursuant to subdivision (b) shall be credited to the
participant and identified separately from credits in the participant'
s employee and employer accounts. Funds so deposited shall be treated
as credits to the participant's employee account for all other
purposes under this part.
SEC. 35. Section 26806 of the Education Code is amended to read:
26806. (a) The normal form of retirement benefit under this part
is a lump-sum payment. Upon distribution of the lump-sum payment to
the participant, no further benefits shall be payable from the plan
with respect to the Cash Balance Benefit Program.
(b) The lump-sum payment in subdivision (a) shall not be payable
before 180 calendar days have elapsed following the date of
termination of employment.
(c) Except as provided in subdivision (d) or subdivision (e) of
Section 26812, the application for the retirement benefit in the form
of a lump-sum payment shall be automatically canceled if the
participant performs creditable service within 180 calendar days
following the date of termination of employment.
(d) Subdivision (c) does not apply if the participant has reached
that age at which the Internal Revenue Code of 1986 requires a
distribution of benefits. A participant who has reached this age
shall receive a distribution commencing on the earlier of the date
that the participant has met the conditions of subdivision (b) or the
conditions of subdivision (c) of Section 26004.
SEC. 36. Section 26807.6 of the Education Code is amended to read:
26807.6. (a) A participant who retired and elected an annuity
pursuant to Section 26807 may elect to change annuities, subject to
all of the following:
(1) A participant who elected a single life annuity with or
without a cash refund feature or a period certain annuity may not
change his or her annuity.
(2) A participant who elected an annuity under paragraph (3) or
(4) of subdivision (b) of Section 26807 may elect an annuity under
paragraph (3) of subdivision (a) of Section 26807.5.
(3) The election of the participant under this section is made on
or after January 1, 2007, and prior to July 1, 2007.
(4) The participant designates the same annuity beneficiary that
was designated under the prior annuity elected by the participant, if
the annuity and annuity designation were effective on December 31,
2006.
(5) The annuity beneficiary is not afflicted with a known terminal
illness and the participant declares, under penalty of perjury under
the laws of this state, that to the best of his or her knowledge,
the annuity beneficiary is not afflicted with a known terminal
illness.
(6) The annuity beneficiary has not predeceased the participant as
of the effective date of the change in the annuity by the
participant.
(b) The change in the annuity by the participant shall be
effective on the date the election is signed, provided that the
election is on a properly executed form provided by the system and
that election is received at the system's headquarters office within
30 days after the date the election is signed.
(c) After receipt of a participant's election document, the system
shall mail an acknowledgment notice to the participant that sets
forth the new annuity elected by the participant.
(d) If the participant and the annuity beneficiary are alive and
not afflicted with a known terminal illness, a participant may cancel
the election to change annuities and elect to receive the benefit
according to the preexisting annuity election. After cancellation,
the participant may elect to make a one-time change from the
preexisting annuity to any other annuity provided by and subject to
the restrictions of paragraph (1), (2), (3), or (4) of subdivision
(a). The cancellation or the cancellation and one-time change shall
be made on a properly executed form provided by the system and shall
be received at the system's headquarters office no later than 30
calendar days following the date of mailing of the acknowledgment
notice. If the participant elects to make the one-time change
provided by this subdivision, the change shall be effective as of the
participant's signature date on the initial election to change.
(e) If the system is unable to mail an acknowledgment notice to
the participant on or before June 1, 2007, or prior to the end of the
election period, provided that the participant and the annuity
beneficiary are alive and not afflicted with a known terminal
illness, the system shall allow a participant to cancel the election
to change annuities and elect to receive the benefit according to the
preexisting annuity election. After cancellation, the participant
may elect to make a one-time change from the preexisting annuity to
any other annuity provided by and subject to the restrictions of
paragraph (1), (2), (3), or (4) of subdivision (a). The cancellation
or the cancellation and one-time change may be made after the end of
the election period if it is made on a properly executed form
provided by the system and is received at the system's headquarters
office no later than 30 calendar days following the date of mailing
of the acknowledgment notice. If the participant elects to make the
one-time change provided by this subdivision, the change shall be
effective as of the participant's signature date on the initial
election to change.
(f) If the participant elects to change his or her annuity as
described in subdivision (a) or (d), the participant's annuity shall
be modified in a manner determined by the board to prevent any
additional liability to the plan.
(g) References to a "participant" in paragraph (1) of subdivision
(a) shall apply to the nonmember spouse.
(h) The participant shall not change annuities in derogation of a
spouse's or former spouse's community property rights as specified in
a court order.
SEC. 37. Section 26812 of the Education Code is amended to read:
26812. (a) A participant retired for service under this part may
perform retired participant activities, but the participant shall not
make contributions to the plan or accrue service credit under the
Defined Benefit Program based on compensation earned from that
service. The employer shall maintain accurate records of the earnings
of the retired participant and report those earnings monthly to the
system and retired participant.
(b) If a participant is retired for service under this part, the
annualized rate of pay for retired participant activities performed
by that participant shall not be less than the minimum, nor exceed
the maximum, paid by the employer to other employees performing
comparable duties.
(c) A participant retired for service under this part shall not be
required to reinstate for performing retired participant activities.
(d) (1) If all of the following apply to a participant retired for
service under this part, the participant's annuity shall be reduced
by the amount of the compensation:
(A) The participant is receiving an annuity under the Cash Balance
Benefit Program.
(B) The participant is below normal retirement age or retired on
or after January 1, 2014.
(C) The participant earns compensation paid in cash for performing
retired participant activities, excluding reimbursements paid by an
employer for expenses incurred by the participant in which payment of
the expenses by the participant is substantiated.
(2) The reduction in paragraph (1) shall only be made for
compensation paid in cash during the first 180 calendar days after a
participant retired for service under this part. The amount of the
reduction in an individual month shall be no more than the monthly
annuity payable in that month, and the total amount of the reduction
shall not exceed the amount of the annuity payable during the first
180 calendar days after a participant retired for service under this
part. For written agreements pertaining to the performance of retired
participant activities entered into, extended, renewed, or amended
on or after January 1, 2014, the reduction in paragraph (1) shall
also be made for payments made for the performance of retired
participant activities, including, but not limited to, those for
participation in a deferred compensation plan; to purchase an annuity
contract, tax-deferred retirement plan, or insurance program; and
for contributions to a plan that meets the requirements of Section
125, 401(a), 401(k), 403(b), 457(b), or 457(f) of Title 26 of the
United States Code when the cost is covered by an employer.
(3) Subject to the limitation described in paragraph (4), if all
of the following apply to a participant retired for service under
this part, the participant's application for the retirement benefit
shall automatically be canceled:
(A) The participant is anticipated to receive the retirement
benefit in the form of a lump-sum payment.
(B) The participant earns compensation for performing creditable
service within 180 calendar days following the date of termination of
employment.
(4) Paragraph (3) does not apply if the participant has reached
that age at which the Internal Revenue Code of 1986 requires a
distribution of benefits. A participant who has reached that age
shall receive a distribution commencing on the earlier of the date
that the participant has met the conditions of subdivision (b) of
Section 26806 or the conditions of subdivision (c) of Section 26004.
(e) If the participant has attained normal retirement age at the
time the compensation is earned, subdivision (d) shall not apply if
the appointment has been
approved by the governing body of the employer in a public meeting,
as reflected in a resolution adopted by the governing body of the
employer prior to the performance of retired participant activities,
expressing its intent to seek an exemption from the limitation
specified in subdivision (d). Approval of the appointment shall not
be placed on a consent calendar. Notwithstanding any other provision
of Article 3.5 (commencing with Section 6250) of Division 7 of Title
1 of the Government Code or any state or federal law incorporated by
subdivision (k) of Section 6254 of the Government Code, the
resolution shall be subject to disclosure by the entity adopting the
resolution and the system. The resolution shall include the following
specific information and findings:
(1) The nature of the employment.
(2) A finding that the appointment is necessary to fill a
critically needed position before 180 calendar days have passed.
(3) A finding that the participant is not ineligible for
application of this subdivision pursuant to subdivision (g).
(4) A finding that the termination of employment of the retired
participant with the employer is not the basis for the need to
acquire the services of the participant.
(f) Subdivision (e) shall not apply to a retired participant whose
termination of employment with the employer is the basis for the
need to acquire the services of the participant.
(g) Subdivision (e) shall not apply if the participant received
additional service credit pursuant to Section 22714 or 22715 or
received from any public employer any financial inducement to retire.
For purposes of this section, "financial inducement to retire"
includes, but is not limited to, any form of compensation or other
payment that is paid directly or indirectly by a public employer to
the participant, even if not in cash, either before or after
retirement, if the participant retires for service on or before a
specific date or specific range of dates established by a public
employer on or before the date the inducement is offered. The system
shall liberally interpret this subdivision to further the Legislature'
s intent to make subdivision (e) inapplicable to participants if the
participant received a financial incentive from any public employer
to retire or otherwise terminate employment with a public employer.
(h) The superintendent, the county superintendent of schools, or
the chief executive officer of a community college shall submit all
documentation required by the system to substantiate the eligibility
of the retired participant for application of subdivision (e),
including, but not limited to, the resolution adopted pursuant to
that subdivision.
(i) The documentation required by this section shall be received
by the system prior to the retired participant's performance of
retired participant activities.
(j) Within 30 calendar days of the receipt of all documentation
required by the system pursuant to this section, the system shall
inform the entity seeking application of the exemption specified in
subdivision (e) and the retired participant whether the compensation
paid to the participant will be subject to the limitation specified
in subdivision (d).
SEC. 38. Section 26906.6 of the Education Code is amended to read:
26906.6. (a) A participant who is disabled and elected an annuity
pursuant to Section 26906 may elect to change annuities, subject to
all of the following:
(1) A participant who elected a single life annuity with or
without a cash refund feature or a period certain annuity may not
change his or her annuity.
(2) A participant who elected an annuity under paragraph (3) or
(4) of subdivision (b) of Section 26906 may elect an annuity under
paragraph (3) of subdivision (a) of Section 26906.5.
(3) The election by the participant under this section is made on
or after January 1, 2007, and prior to July 1, 2007.
(4) The participant designates the same annuity beneficiary that
was designated under the prior annuity elected by the participant, if
the annuity and the annuity beneficiary designation were effective
on December 31, 2006.
(5) The annuity beneficiary is not afflicted with a known terminal
illness and the participant declares, under penalty of perjury under
the laws of this state, that to the best of his or her knowledge,
the annuity beneficiary is not afflicted with a known terminal
illness.
(6) The annuity beneficiary has not predeceased the participant as
of the effective date of the change in the annuity by the
participant.
(b) The change in the annuity by the participant shall be
effective on the date the election is signed, provided that the
election is on a properly executed form provided by the system and
that election is received at the system's headquarters office within
30 days after the date the election is signed.
(c) After receipt of a participant's election document, the system
shall mail an acknowledgment notice to the participant that sets
forth the new annuity elected by the participant.
(d) If the participant and the annuity beneficiary are alive and
not afflicted with a known terminal illness, a participant may cancel
the election to change annuities and elect to receive the benefit
according to the preexisting annuity election. After cancellation,
the participant may elect to make a one-time change from the
preexisting annuity to any other annuity provided by and subject to
the restrictions of paragraph (1), (2), (3), or (4) of subdivision
(a). The cancellation or the cancellation and one-time change shall
be made on a properly executed form provided by the system and shall
be received at the system's headquarters office no later than 30
calendar days following the date of mailing of the acknowledgment
notice. If the participant elects to make the one-time change
provided by this subdivision, the change shall be effective as of the
participant's signature date on the initial election to change.
(e) If the system is unable to mail an acknowledgment notice to
the participant on or before June 1, 2007, or prior to the end of the
election period, provided that the participant and the annuity
beneficiary are alive and not afflicted with a known terminal
illness, the system shall allow a participant to cancel the election
to change annuities and elect to receive the benefit according to the
preexisting annuity election. After cancellation, the participant
may elect to make a one-time change from the preexisting annuity to
any other annuity provided by and subject to the restrictions of
paragraph (1), (2), (3), or (4) of subdivision (a). The cancellation
or the cancellation and one-time change may be made after the end of
the election period if it is made on a properly executed form
provided by the system and is received at the system's headquarters
office no later than 30 calendar days following the date of mailing
of the acknowledgment notice. If the participant elects to make the
one-time change provided by this subdivision, the change shall be
effective as of the participant's signature date on the initial
election to change.
(f) If the participant elects to change his or her annuity as
described in subdivision (a) or (d), the participant's annuity shall
be modified in a manner determined by the board to prevent any
additional liability to the plan.
(g) The participant shall not change annuities in derogation of a
spouse's or former spouse's community property rights as specified in
a court order.
SEC. 39. Section 27100 of the Education Code is amended to read:
27100. A participant may at any time designate or change the
designation of one or more primary beneficiaries and one or more
contingent beneficiaries to receive any lump-sum death benefit that
may be payable under the plan. The beneficiary for the lump-sum death
benefit under this part may be a person, trust, or the estate of the
participant. The beneficiary shall be designated on a form
prescribed by the system that is received in the system's
headquarters office before the participant's death.
SEC. 40. Section 44987 of the Education Code is amended to read:
44987. (a) The governing board of a school district shall grant
to any employee, upon request, a leave of absence without loss of
compensation for the purpose of enabling the employee to serve as an
elected officer of any local school district public employee
organization, or any statewide or national public employee
organization with which the local organization is affiliated.
The leave shall include, but is not limited to, absence for
purposes of attendance by the employee at periodic, stated, special,
or regular meetings of the body of the organization on which the
employee serves as an officer. Compensation during the leave shall
include retirement fund contributions required of the school district
as employer. The required employer contribution rate shall be the
rate adopted by the Teachers' Retirement Board as a plan amendment
with respect to the Defined Benefit Program as provided in Section
22711. The employee shall earn full service credit during the leave
of absence and shall pay member contributions as prescribed by
Section 22711. The maximum amount of the service credit earned may
not exceed twelve years. Any employee who serves as a full-time
officer of a public employee organization is not eligible for
disability benefits under the State Teachers' Retirement Plan while
on the leave of absence.
Following the school district's payment of the employee for the
leave of absence, the school district shall be reimbursed by the
employee organization of which the employee is an elected officer for
all compensation paid the employee on account of the leave.
Reimbursement by the employee organization shall be made within 10
days after its receipt of the school district's certification of
payment of compensation to the employee.
The leave of absence without loss of compensation provided for by
this section is in addition to the released time without loss of
compensation granted to representatives of an exclusive
representative by subdivision (c) of Section 3543.1 of the Government
Code.
For purposes of this section, "school district" also means "county
superintendent of schools."
(b) An employee who after August 31, 1978, was absent on account
of elected-officer service, shall receive full service credit in the
State Teachers' Retirement Plan; provided that, not later than April
30, 1981: (1) the employee makes a written request to the employer
for a leave of absence for the period of the elected-officer service,
and (2) the employee organization of which the employee is an
elected officer pays to the employee's school district an amount
equal to the required State Teachers' Retirement Plan member and
employer retirement contributions, as prescribed by this section.
The school district, following this written request and payment,
shall transmit the amount received to the State Teachers' Retirement
System, informing it of the period of the employee's leave of
absence. The State Teachers' Retirement System shall credit the
employee with all service credit earned for the period of the
elected-officer leave of absence.
If the employee has been compensated by the school district for
the period of the service, then, as a condition to the employee's
entitlement to service credit for this period, the school district
shall be reimbursed by the employee organization for the amount of
the compensation.
The provisions of this subdivision shall apply retroactively to
all service as an elective officer in a public employee organization
occurring after August 31, 1978.
SEC. 41. Section 87768.5 of the Education Code is amended to read:
87768.5. The governing board of a community college district
shall grant to any employee, upon request, a leave of absence without
loss of compensation for the purpose of enabling the employee to
serve as an elected officer of any local community college district
public employee organization, or of any statewide or national public
employee organization with which the local organization is
affiliated.
The leave shall include, but is not limited to, absence for
purposes of attendance by the employee at periodic, stated, special,
or regular meetings of the body of the organization on which the
employee serves as an officer. Compensation during the leave shall
include retirement fund contributions required of the community
college district as employer. Required retirement contributions shall
include the amount necessary to pay any unfunded liability cost for
the retirement plan. The employee shall earn full service credit
during the leave of absence and shall pay member contributions as
prescribed by Section 22901. The maximum amount of the service credit
earned shall not exceed 12 years. Any employee who serves as a
full-time officer of a public employee organization shall not be
eligible for disability benefits under the State Teachers' Retirement
System while on the leave of absence.
Following the community college district's payment of the employee
for the leave of absence, the community college district shall be
reimbursed by the employee organization of which the employee is an
elected officer for all compensation paid the employee on account of
the leave. Reimbursement by the employee organization shall be made
within 10 days after its receipt of the community college district's
certification of payment of compensation to the employee.
The leave of absence without loss of compensation provided for by
this section is in addition to the released time without loss of
compensation granted to representatives of an exclusive
representative by subdivision (c) of Section 3543.1 of the Government
Code.
SEC. 42. Any section of any other act enacted by the Legislature
during the 2015 calendar year that takes effect on or before January
1, 2016, and that amends, amends and renumbers, adds, repeals and
adds, or repeals a section that is amended, amended and renumbered,
added, repealed and added, or repealed by this act, shall prevail
over this act, whether that act is enacted prior to or subsequent to
the enactment of this act. The repeal, or repeal and addition, of any
article, chapter, part, title, or division of any code by this act
shall not become operative if any section of any other act that is
enacted by the Legislature during the 2015 calendar year and takes
effect on or before January 1, 2016, amends, amends and renumbers,
adds, repeals and adds, or repeals any section contained in that
article, chapter, part, title, or division.
