Bill Text: CA SB277 | 2013-2014 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: State Peace Officers' and Firefighters' Defined

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Passed) 2013-10-11 - Chaptered by Secretary of State. Chapter 755, Statutes of 2013. [SB277 Detail]

Download: California-2013-SB277-Amended.html

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BILL NUMBER: SB 277	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  JUNE 18, 2013
	AMENDED IN SENATE  MAY 13, 2013
	AMENDED IN SENATE  MARCH 21, 2013

INTRODUCED BY   Senator Beall

                        FEBRUARY 14, 2013

   An act to amend Sections 22960.99, 22970.10, 
22970.19,22970.58,   22970.19, 22970.31, 22970.58, 
22970.60, 22970.62, 22970.855, and 22970.89 of, to add Section
22960.4 to, and to repeal Section 22960.100 of, the Government Code,
relating to public employees' retirement, and making an appropriation
therefor.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 277, as amended, Beall. State Peace Officers' and Firefighters'
Defined Contribution Plan.
   Existing law establishes the State Peace Officers' and
Firefighters' Defined Contribution Plan for state peace
officer/firefighter members in State Bargaining Unit 6, the
California Correctional Peace Officers Association, and others as
specified. Under existing law, the plan applies to state peace
officer and firefighter members in State Bargaining Unit 8 who have
become subject by a memorandum of understanding. Existing law
authorizes the plan to be provided to state peace officers or
firefighters who meet stated criteria, if the Department of Human
Resources has approved their inclusion for coverage. The moneys in
the State Peace Officers' and Firefighters' Defined Contribution Plan
Fund are continuously appropriated. Existing law entitles a
participant in the plan to a lump-sum distribution of the balance of
his or her account, or installment payments if he or she is entitled
to $5,000 or more, upon separation from all service for the employer
for any reason other than death, disability, or retirement.
   Existing law requires the Board of Administration of the Public
Employees' Retirement System to administer the Supplemental
Contributions Program and requires contributions by eligible
employees, as defined, participating in the program to be deposited
in the Supplemental Contributions Program Fund, a continuously
appropriated fund.
   This bill would require that contributions to the State Peace
Officers' and Firefighters' Defined Contribution Plan cease, prohibit
new members from participating in the plan, and would require that
the plan be terminated as prescribed. The bill would repeal those
provisions extending plan coverage to State Bargaining Unit 8 and
certain state peace officers or firefighters. The bill would require
all moneys in the State Peace Officers' and Firefighters' Defined
Contribution Plan Fund to be distributed, as specified, including
requiring that, if not elected otherwise, amounts that become payable
from the fund be rolled over under existing federal law to the
Supplemental Contributions Program. The bill would provide for
rollover contributions to separate rollover contribution accounts in
the Supplemental Contributions Program, as specified, and would
provide for the distribution of amounts held in the participant's
account.  The 
    The  bill would authorize participants to elect
investment fund options, as specified, in the Supplemental
Contributions Program.  The bill would provide that a fiduciary
of the program is not   liable for losses resulting from
investments in fund options selected by participants or provided to
participants who fail to select an option.  The bill would
require that certain rollover contributions be invested in the
applicable target retirement date fund investment fund option
available until the participant elects another investment fund
option. The bill would also make various clarifying and technical
changes in the Supplemental Contributions Program. By changing the
circumstances under which moneys in the State Peace Officers' and
Firefighters' Defined Contribution Fund would be distributed, and by
providing for an increase in contributions to the Supplemental
Contributions Program, this bill would make an appropriation.
   Vote: majority. Appropriation: yes. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 22960.4 is added to the Government Code, to
read:
   22960.4.  (a) The Legislature finds and declares that an agreement
between the exclusive representative of state peace officer and
firefighter members in State Bargaining Unit 6 and the employer has
eliminated the employer contributions to the plan provided in Section
22960.60.
   (b) The following shall occur:
   (1) All contributions to the plan shall cease.
   (2) New participants shall be prohibited from participating in the
plan.
   (3) The plan shall be terminated on the later of January 1, 2014,
or upon obtaining appropriate approvals from the Internal Revenue
Service, including a favorable determination letter on plan
termination from the Internal Revenue Service.
   (4) Subject to paragraph (3), all moneys in the fund shall be
distributed in accordance with this part and federal law. If not
elected otherwise, amounts that become payable from the fund under
this section shall be rolled over under Section 401(a)(31) of Title
26 of the United States Code to the Supplemental Contributions
Program established in accordance with Section 22970.
  SEC. 2.  Section 22960.99 of the Government Code is amended to
read:
   22960.99.  (a) The plan's obligations to a participant,
beneficiary, or nonparticipant spouse who has applied for a lump-sum
benefit cease upon distribution of the lump-sum benefit.
   (1) Deposit in the United States mail of a warrant drawn in favor
of the participant, beneficiary, or nonparticipant spouse and
addressed to the latest address on file for that person constitutes
distribution of the benefit.
   (2) Deposit in the United States mail of a notice that the
requested electronic funds transfer has been made as directed by the
participant, beneficiary, or nonparticipant spouse constitutes
distribution of the benefit.
   (3) If the participant, beneficiary, or nonparticipant spouse has
elected on a form prescribed by the board to transfer all or a
specific portion of the account that is eligible for a direct
trustee-to-trustee transfer under Section 401(a)(31) of Title 26 of
the United States Code, deposit in the United States mail of a notice
that the requested transfer has been made constitutes distribution
of the benefit.
   (b) The plan's obligations to a participant, beneficiary, or
nonparticipant spouse who elected to receive a benefit in the form of
installment payments or an annuity cease upon distribution of the
final payment.
   (1) Deposit in the United States mail of a warrant drawn in favor
of the participant, beneficiary, or nonparticipant spouse and
addressed to the latest address on file for that person constitutes
distribution of the benefit.
   (2) Deposit in the United States mail of a notice that the
requested electronic funds transfer has been made as directed by the
participant, beneficiary, or nonparticipant spouse constitutes
distribution of the benefit.
   (c) Distribution under paragraph (1), (2), or (3) of subdivision
(a) or paragraph (1) or (2) of subdivision (b) pursuant to the board'
s determination in good faith of the existence, identity, or other
facts relating to entitlement of persons constitutes a complete
discharge and release of the board, system, and plan from liability
for payments.
   (d) Distribution under paragraph (4) of subdivision (b) of Section
22960.4 constitutes a complete discharge and release of the board,
system, and plan from liability for payments, and the board and
system shall not be treated as fiduciaries with respect to a transfer
of funds from the plan to the Supplemental Contributions Program in
accordance with Section 22970.
  SEC. 3.  Section 22960.100 of the Government Code is repealed.
  SEC. 4.  Section 22970.10 of the Government Code is amended to
read:
   22970.10.  "Account" means the account maintained with respect to
the participant that reflects the aggregate value of the following
amounts credited to the participant:
   (a) Employee after-tax contributions to the plan.
   (b) Net earnings of the Supplemental Contributions Program
allocable to the participant.
   (c) Any amount credited to the participant's account by reason of
a transfer or a rollover from another plan or arrangement in
accordance with applicable laws.
  SEC. 5.  Section 22970.19 of the Government Code is amended to
read:
   22970.19.  "Net earnings" means the income earned, or losses
incurred, after asset management fees, on the applicable investment
fund options offered under the Supplemental Contributions Program,
less the costs of administering the plan.
   SEC. 6.    Section 22970.31 of the  
Government Code   is amended to read: 
   22970.31.  (a) The board shall adopt a plan instrument embodying
the material terms and conditions of the plan consistent with this
part and the applicable provisions of Title 26 of the United States
Code.
   (b) The board may, as it deems necessary or appropriate, amend the
plan consistent with this part and the applicable provisions of
Title 26 of the United States Code. 
   (c) A fiduciary of the plan shall not be liable for any loss that
results from the individual investment fund option selected by a
participant or the plan's designated default option for investment of
contributions by participants who do not provide affirmative
instruction on how to invest their contributions. 
   SEC. 6.   SEC. 7.   Section 22970.58 of
the Government Code is amended to read:
   22970.58.  The board may permit a participant to transfer funds,
including eligible rollover contributions, from an eligible
retirement plan into this plan to the extent that the transfers are
allowed under applicable federal and state laws, and pursuant to the
terms and conditions established by the board. The plan may accept
rollover contributions made in accordance with paragraph (4) of
subdivision (b) of Section 22960.4  ,  if the board
establishes a separate rollover contribution account for each
participant or beneficiary who makes such rollover contributions for
the purpose of holding those contributions. Rollover contributions
made in accordance with paragraph (4) of subdivision (b) of Section
22960.4, shall be invested in the applicable target retirement date
fund investment fund option available under the plan until the
participant elects another investment fund option available under the
plan in accordance with the terms and conditions established by the
board.
   SEC. 7.   SEC. 8.   Section 22970.60 of
the Government Code is amended to read:
   22970.60.  (a) Contributions made to the plan by the participant
shall be credited to the participant's account.
   (b) Subject to the terms and conditions established by the board,
a participant may elect to have all or a portion of the participant's
account in one or more investment fund options available under the
plan.
   SEC. 8.   SEC. 9.   Section 22970.62 of
the Government Code is amended to read:
   22970.62.  The net earnings of the applicable investment fund
option available under the plan shall be allocated to the participant'
s account as of each valuation date.
   SEC. 9.   SEC. 10.   Section 22970.855
of the Government Code is amended to read:
   22970.855.  The board may permit a participant to withdraw some or
all of his or her after-tax contributions without requiring the
participant to terminate from the plan to the extent that this
in-service distribution is allowed under applicable federal and state
laws, and pursuant to the terms and conditions established by the
board. A participant may apply for a distribution of amounts held in
the participant's separate rollover contribution account established
pursuant to Section 22970.58 at any time before that participant's
termination of employment, to the extent that an in-service
distribution is allowed under applicable federal and state law, and
pursuant to the terms and conditions established by the board.
   SEC. 10.   SEC. 11.   Section 22970.89
of the Government Code is amended to read:
   22970.89.  (a) The plan's obligations to a participant,
beneficiary, or nonparticipant spouse who elected a lump-sum
distribution cease upon distribution of the lump-sum benefit.
   (1) Deposit in the United States mail of a warrant drawn in favor
of the participant, beneficiary, or nonparticipant spouse and
addressed to the latest address on file for that person constitutes
distribution of the benefit.
   (2) Deposit in the United States mail of a notice that the
requested electronic funds transfer has been made as directed by the
participant, beneficiary, or nonparticipant spouse constitutes
distribution of the benefit.
   (3) If the participant, beneficiary, or nonparticipant spouse has
elected on a form prescribed by the board to transfer all or a
specific portion of the account that is eligible for a direct
trustee-to-trustee transfer under Section 401(a)(31) of Title 26 of
the United States Code to the trustee of an eligible retirement plan,
deposit in the United States mail of a notice that the requested
transfer has been made constitutes distribution of the benefit.
   (b) The plan's obligations to a participant or beneficiary who
elected to receive a benefit in the form of partial distributions
cease upon distribution of the final payment.
   (1) Deposit in the United States mail of a warrant drawn in favor
of the participant or beneficiary and addressed to the latest address
on file for that person constitutes distribution of the benefit.
   (2) Deposit in the United States mail of a notice that the
requested electronic funds transfer has been made as directed by the
participant or beneficiary constitutes distribution of the benefit.
   (c) Distribution under paragraph (1), (2), or (3) of subdivision
(a) or paragraph (1) or (2) of subdivision (b) pursuant to the board'
s determination in good faith of the existence, identity, or other
facts relating to entitlement of persons constitutes a complete
discharge and release of the board, system, and plan from liability
for payments.
   (d) This section shall not apply to a permissible in-service
distribution pursuant to Section 22970.855 if the participant account
is only partially distributed.