Bill Text: CA SB656 | 2017-2018 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Judges’ Retirement System II: deferred retirement.

Spectrum: Bipartisan Bill

Status: (Vetoed) 2018-09-30 - In Senate. Consideration of Governor's veto pending. [SB656 Detail]

Download: California-2017-SB656-Amended.html

Amended  IN  Senate  January 23, 2018
Amended  IN  Senate  January 03, 2018

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Senate Bill No. 656


Introduced by Senator Senators Moorlach and Lara
(Principal coauthor: Assembly Member Brough)

February 17, 2017


An act to amend Sections 22760, 22814, 75521, and 75522 of, and to add Section 75522.5 to, the Government Code, relating to judges’ retirement, and making an appropriation therefor.


LEGISLATIVE COUNSEL'S DIGEST


SB 656, as amended, Moorlach. Judges’ Retirement System II: deferred retirement.
(1) Existing law establishes the Judges’ Retirement System II, which the Board of Retirement of the Public Employees’ Retirement System administers. Existing law authorizes a judge who is a member of the system and who retires upon attaining both 65 years of age and 20 or more years of service, or upon attaining 70 years of age with a minimum of 5 years of service, to elect from specified retirement benefits including a monthly pension. Existing law requires a judge who leaves judicial office after accruing 5 or more years of service, but who has not reached the applicable age of retirement, to be paid a lump sum equal to monetary credits that accrued while he or she was in office, as specified. Existing law authorizes a judge who, among other things, separates from office after accruing 5 or more years of service and has not reached 65 years of age to continue health care benefits if he or she assumes certain payments.
This bill would authorize a judge who has attained 60 years of age with a minimum of 5 years of service, or who has accrued 20 or more years of service, to retire and to elect to receive a monthly pension that would be deferred until the judge reaches retirement age, as specified. The bill would prohibit a judge who elects to retire in this manner from receiving benefits until he or she reaches the applicable retirement age and would prescribe procedures to apply if the judge fails to elect within 30 days of separation. The bill would authorize the board to charge an administrative fee, as specified, to a judge who elects to apply these provisions.
(2) Existing law establishes the Public Employees’ Medical and Hospital Care Act (PEMHCA) for the purpose of providing health care benefits to employees and annuitants, as defined. PEMHCA defines an annuitant for purposes of receiving postretirement health benefits as including, among others, a person who retires within 120 days of separation from public employment and a judge who receives the above-described lump sum payment of monetary credits. Contributions and premiums paid under PEMHCA are deposited in the Public Employee’s Employees’ Contingency Reserve Fund, which is continuously appropriated.
This bill would authorize a judge who makes the election to retire as described above, to continue health care benefits upon separation from office if he or she assumes specified payments. The bill would include these judges within the definition of annuitant, thereby authorizing them to receive applicable postretirement health benefits. By authorizing the use of continuously appropriated funds for a new purpose, and additional amounts to be deposited into a continuously appropriated fund, this bill would make an appropriation.
Vote: MAJORITY   Appropriation: YES   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 This act shall be known as the Judicial Fairness Act of 2017. 2018.

SEC. 2.

 Section 22760 of the Government Code is amended to read:

22760.
 “Annuitant” means:
(a) A person, other than a National Guard member defined in Section 20380.5, who has retired within 120 days of separation from employment and who receives a retirement allowance under any state or University of California retirement system to which the state was a contributing party.
(b) A surviving family member receiving an allowance in place of an annuitant who has retired as provided in subdivision (a), or as the survivor of a deceased employee under Section 21541, 21546, 21547, or 21547.7, or similar provisions of any other state retirement system.
(c) A person who has retired within 120 days of separation from employment with a contracting agency as defined in Section 22768 or, if applicable, consistent with the provisions of subdivision (b) of Section 22893, and who receives a retirement allowance from the retirement system provided by that employer, or a surviving family member who receives the retirement allowance in place of the deceased.
(d) A judge who receives the benefits provided by subdivision (e) of Section 75522 or retires pursuant to Section 75522.5.
(e) A person who was a state member for 30 years or more and who, at the time of retirement, was a local member employed by a contracting agency.
(f) A Member of the Legislature or an elective officer of the state whose office is provided by the California Constitution, who has at least eight years of credited service, and who meets the following conditions:
(1) Permanently separates from state service on or after January 1, 1988, and not more than 10 years before or 10 years after his or her minimum age for service retirement, or is an inactive member of the Legislators’ Retirement System pursuant to Section 9355.2.
(2) Receives a retirement allowance under a state retirement system supported in whole or in part by state funds other than the University of California Retirement System.
(g) An exempt employee who meets all of the following conditions:
(1) Has at least 10 years of credited state service that includes at least 2 years of credited service while an exempt employee.
(2) Permanently separates from state service on or after January 1, 1988, and not more than 10 years before or 10 years after his or her minimum age for service retirement.
(3) Receives a retirement allowance under a state retirement system supported in whole or in part by state funds other than the University of California Retirement System.
(h) A person receiving a survivor allowance pursuant to Article 3 (commencing with Section 21570) of Chapter 14 of Part 3 provided that he or she was eligible to enroll in a health benefit plan on the date of the member’s death, on whose account the survivor allowance is payable.
(i) (1) A family member of a deceased retired member of the State Teachers’ Retirement Plan, if the deceased member meets the following conditions:
(A) Retired within 120 days of separation from employment.
(B) Retired before the member’s school employer elected to contract for health benefit coverage under this part.
(C) Prior to his or her death, received a retirement allowance that did not provide for a survivor allowance to family members.
(2) The family member shall elect coverage as an annuitant within one calendar year from the date that the deceased member’s school employer elected to contract for health benefit coverage under this part.
(j) A person who reinstates benefits pursuant to subparagraph (B) of paragraph (2) of subdivision (d) of Section 7522.57.

SEC. 3.

 Section 22814 of the Government Code is amended to read:

22814.
 (a) A judge who retires pursuant to Chapter 11 (commencing with Section 75000) of Title 8, but is not yet receiving a pension, may continue his or her coverage and the coverage of any family members for the duration of the leave of absence, upon his or her application and upon assuming payment of the contributions otherwise required of the employer.
(b) (1) A judge who leaves judicial office pursuant to subdivision (b) of Section 75521, or who retires pursuant to Section 75522.5 and who has not attained 65 years of age may continue his or her coverage and the coverage of any family members upon assuming payment of the contributions otherwise required of the employer. The judge shall also pay an additional 2 percent of the premium amount to cover administrative expenses incurred by the system or the Department of Human Resources.
(2) An election to continue coverage under this subdivision shall be made within 60 days of permanent separation. A retired judge who cancels that coverage may not reenroll.
(3) Upon attaining 65 years of age, a retired judge who has continuous and uninterrupted coverage pursuant to this subdivision shall be entitled to the applicable employer contribution.

SEC. 4.

 Section 75521 of the Government Code is amended to read:

75521.
 (a) A judge who leaves judicial office before accruing at least five years of service shall be paid the amount of his or her contributions to the system, and no other amount.
(b) (1) Except as provided in paragraph (2), a judge who leaves judicial office after accruing five or more years of service and who is not eligible to elect to retire under Section 75522 shall be paid the amount of his or her monetary credits determined pursuant to Section 75520, including the credits added under subdivision (b) of that section computed to the last day of the month preceding the date of distribution, and no other amount.
(2) A judge who meets the requirements of paragraph (1) and who is not otherwise eligible for retirement under Section 75522 may elect to retire under Section 75522.5.
(c) Judges who leave office as described in subdivision (b) are “retired judges” for purposes of a concurrent retirement with respect to the benefits provided under Section 20639 and assignment pursuant to Article 2 (commencing with Section 68540.7) of Chapter 2 and are eligible for benefits provided under Section 22814.
(d) After a judge has withdrawn his or her accumulated contributions or the amount of his or her monetary credits upon leaving judicial office, the service shall not count in the event he or she later becomes a judge again, until he or she pays into the Judges’ Retirement System II Fund the amount withdrawn, plus interest thereon at the rate of interest then being required to be paid by members of the Public Employees’ Retirement System under Section 20750 from the date of withdrawal to the date of payment.

SEC. 5.

 Section 75522 of the Government Code is amended to read:

75522.
 (a) A judge with at least five years of service may retire pursuant to either of the following:
(1) A judge is eligible to retire pursuant to this section upon attaining both 65 years of age and 20 or more years of service, or upon attaining 70 years of age with a minimum of five 5 years of service.
(2) A judge may elect to retire under Section 75522.5, provided that he or she meets the requirements of that section.
(b) The office of a judge who retires under this section becomes vacant on the date of the retirement.
(c) A judge who retires pursuant to this section shall, within 30 days after the effective date of the retirement, elect to receive either the benefits provided by subdivision (d) or the benefits provided by subdivision (e). Under rules adopted by the board, the time for the election may be extended in cases of illness or other hardship, but once made, the election shall be final and irrevocable.
(d) The judge may elect to receive for life a monthly retirement allowance equal to the benefit factor multiplied by the judge’s final compensation multiplied by the number of years of service credit.
(1) The benefit factor for a judge eligible to retire pursuant to this section equals 3.75 percent per year of service.
(2) In no event shall the retirement allowance at the time of retirement exceed 75 percent of the judge’s final compensation.
(e) The judge may elect to receive the amount of his or her monetary credits determined pursuant to Section 75520, including the credits added under subdivision (b) of that section computed to the last day of the month preceding the date of distribution. Under rules adopted by the board, the judge may elect to receive that amount in a single payment, or may direct that it be paid in an annuity of actuarially equivalent value for the judge’s life or in one of the optional forms provided for in Section 75571 if the judge retires on or before December 31, 2017, or Section 75571.5 if the judge retires on or after January 1, 2018.
(f) If a retired judge fails or refuses to make an election pursuant to subdivision (c) within the time allowed, he or she shall be deemed to have elected to receive a monthly retirement allowance under subdivision (d).

SEC. 6.

 Section 75522.5 is added to the Government Code, to read:

75522.5.
 (a) A judge who has attained 60 years of age with a minimum of five 5 years of service, or who has accrued 20 or more years of service, may elect to retire subject to the requirements of this section.
(b) (1) A judge who leaves judicial office after accruing five or more years of service may retire and elect to leave his or her monetary credits determined pursuant to Section 75520 with the system, including additional amounts credited to the judge’s account pursuant to subdivision (b) of that section, and defer receiving pension benefits until attaining 70 years of age, at which time, the judge shall receive a service retirement to be calculated as described in Section 75522.
(2) A judge who leaves judicial office after accruing 20 or more years of service may retire and elect to leave his or her monetary credits determined pursuant to Section 75520 with the system, including additional amounts credited to the judge’s account pursuant to subdivision (b) of that section, and defer receiving pension benefits until attaining 65 years of age, at which time, upon election pursuant to subdivision (c), the judge shall receive a service retirement to be calculated as described in Section 75522.
(c) (1) A judge who wishes to retire and defer receiving benefits pursuant to this section shall make an election to do so within 30 days of separation. If a judge fails or refuses to make an election within 30 days of separation, the following shall apply:
(A) If the judge is not eligible to retire under Section 75522, Section 75521 shall apply.
(B) If the judge is eligible to retire under Section 75522, he or she shall be deemed to have elected to receive a monthly retirement allowance under subdivision (d) of Section 75522.
(2) Under the rules adopted by the board, the time within which an election shall be made may be extended in cases of illness or other hardship, but once made, the election shall be final and irrevocable.
(d) The board may charge a judge who elects to retire pursuant to this section a fee to cover the administrative costs to the system, including costs associated with health care coverage that a judge may elect pursuant to Section 22814, not to exceed the reasonable amount of those costs.

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