BILL NUMBER: AB 1099 CHAPTERED 10/02/01 CHAPTER 433 FILED WITH SECRETARY OF STATE OCTOBER 2, 2001 APPROVED BY GOVERNOR OCTOBER 2, 2001 PASSED THE ASSEMBLY SEPTEMBER 12, 2001 PASSED THE SENATE SEPTEMBER 10, 2001 AMENDED IN SENATE AUGUST 30, 2001 AMENDED IN SENATE JULY 2, 2001 AMENDED IN ASSEMBLY MAY 31, 2001 AMENDED IN ASSEMBLY APRIL 2, 2001 INTRODUCED BY Assembly Member Havice FEBRUARY 23, 2001 An act to amend Sections 20639, 22970.16, 31835, 31840.8, 75071, 75521, and 75571 of, and to add Sections 75030.9, 75073, 75079.5, 75506.5, 75528, and 75573 to, the Government Code, relating to judges' retirement, and making an appropriation therefor. LEGISLATIVE COUNSEL'S DIGEST AB 1099, Havice. Judges' retirement: benefits. (1) Existing law establishes reciprocity between specified public retirement systems, thereby allowing a member of more than one qualifying system to use the compensation earned while a member of one of those reciprocal systems to calculate benefits under the other system, subject to specified limitations. Under the Public Employees' Retirement Law, compensation earnable during any period of service as a member of specified retirement systems is considered compensation earnable as a member of the Public Employees' Retirement System for purposes of computing final compensation for the member, as specified. Under the County Employees Retirement Law of 1937, the average compensation during any period of service as a member of a reciprocal retirement system is considered compensation earnable for a member for purposes of determining final compensation, as specified. This bill would add the Judges' Retirement System II to these provisions of the Public Employees' Retirement Law and would add both the Judges' Retirement System and the Judges' Retirement System II to these provisions of the County Employees Retirement Law of 1937. The bill would further require a judge to have a minimum of 6 years of judicial service to be eligible for benefits provided by retiring concurrently from specified reciprocal retirement systems. (2) Under the Public Employees' Retirement Law, specified state and local employees and legislators are eligible to participate in the Supplemental Contributions Program, as specified. Participant contributions under the program are deposited in the Supplemental Contributions Program Fund, a continuously appropriated fund. This bill would authorize judges who are members of the Judges' Retirement System or the Judges' Retirement System II to participate in that program, thereby making an appropriation. (3) The Judges' Retirement System authorizes a judge to elect, at any time prior to retirement, to make contributions to the system and receive service credit for all time served as a federal judicial officer, subject to specified limitations. This bill would additionally permit a judge to elect to make contributions and receive service credit for all of the time in which the judge served as a full-time subordinate judicial officer prior to becoming a judge, as specified. By increasing the amount of money deposited into the Judges' Retirement Fund, a continuously appropriated fund, the bill would make an appropriation. (4) Under the existing Judges' Retirement System and Judges' Retirement System II, judges may elect from among 4 optional settlements, 2 of which provide for a retirement allowance payable until the judge's death and a specified continuing allowance payable to the judge's surviving spouse for life. This bill would provide that if a judge elected either of those 2 optional settlements to be effective after January 1, 2002, and if the judge's spouse predeceases the judge or the judge's total interest in the system is awarded to the retired judge in proceedings for dissolution of marriage, annulment, or legal separation, the judge's retirement allowance shall be adjusted to the amount that would have been paid had the judge not elected the optional settlement. The bill would also authorize those judges, at the time of electing the optional settlement, to waive the right to the adjustment that would be made upon the death of the judge's spouse or upon the dissolution, annulment, or legal separation of the judge and his or her spouse, as specified. (5) The existing Judges' Retirement System II Law prescribes retirement benefits for judges who are first elected or appointed to judicial office on or after November 9, 1994, which benefits are based, in part, on the period of service, as defined, of the judge. During their service, those judges are required to make specified contributions to the Judges' Retirement System II Fund, a continuously appropriated special fund. This bill would permit a judge to elect to make contributions and receive service credit for the time in which the judge served as a full-time subordinate judicial officer, subject to the payment by the judge of additional contributions and other specified conditions. By increasing the amount of money deposited into the Judges' Retirement System II Fund, the bill would make an appropriation. Appropriation: yes. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 20639 of the Government Code is amended to read: 20639. The compensation earnable during any period of service as a member of the Judges' Retirement System, the Judges' Retirement System II, the Legislators' Retirement System, or the Defined Benefit Program of the State Teachers' Retirement Plan shall be considered compensation earnable as a member of this system for purposes of computing final compensation for the member, if he or she retires concurrently under both systems. A member shall be deemed to have retired concurrently under this system and under the Defined Benefit Program of the State Teachers' Retirement Plan, if the member is enrolled as a disabled member under the Defined Benefit Program of the State Teachers' Retirement Plan and for retirement under this system on the same effective date. SEC. 2. Section 22970.16 of the Government Code is amended to read: 22970.16. (a) "Eligible employee" means: (1) Any person employed by the state, the university, a school employer, or a contracting agency who is a member of the system as defined pursuant to the provisions of Chapter 4 (commencing with Section 20370) of Part 3. (2) Any legislator, as defined pursuant to Section 9351.3, who is a member of the Legislators' Retirement System. (3) Any judge, as defined in Sections 75002 and 75502, who is a member of the Judges' Retirement System or the Judges' Retirement System II. (b) The board shall determine when the members of the system who are employed by a school employer or a contracting agency shall become eligible employees. SEC. 3. Section 31835 of the Government Code is amended to read: 31835. The average compensation during any period of service as a member of the Public Employees' Retirement System, a member of the Judges' Retirement System or Judges' Retirement System II, a member of a retirement system established under this chapter in another county, a member of the State Teachers' Retirement System, or a member of a retirement system of any other public agency of the state that has established reciprocity with the Public Employees' Retirement System subject to the conditions of Section 31840.2, shall be considered compensation earnable by a member for purposes of computing final compensation for that member provided: (1) The period intervening between active memberships in the respective systems does not exceed 90 days, or 6 months if Section 31840.4 applies. That period shall not include any time during which the member was prohibited by law from becoming a member of the system of another county. Notwithstanding anything in this chapter to the contrary, the 90-day or 6-month restriction referred to in this section or any other provision of this chapter effecting deferred retirement shall not be applicable to any members who left county or district service prior to October 1, 1949, and subsequently redeposited. (2) He or she retires concurrently under both systems and is credited with the period of service under that other system at the time of retirement. The provisions of this section shall be applicable to all members and beneficiaries of the system. SEC. 4. Section 31840.8 of the Government Code is amended to read: 31840.8. The provisions of this chapter extending rights to a member of a county retirement system established under this chapter by reason of his or her membership in the Public Employees' Retirement System shall also apply to members of the State Teachers' Retirement System Defined Benefit Plan, the Judges' Retirement System, and the Judges' Retirement System II. SEC. 5. Section 75030.9 is added to the Government Code, to read: 75030.9. (a) A judge may elect, by written election filed with the board at any time prior to retirement, to make contributions and receive service credit for all of the time he or she served as a full-time subordinate judicial officer, as defined in Section 71601, prior to becoming a judge, excluding any period of time for which the judge is receiving, or is entitled to receive, a retirement allowance from any other public retirement system. (b) A judge electing to receive credit for service pursuant to subdivision (a) shall, at the time of filing his or her election, pay to the Judges' Retirement Fund, a sum equal to the actuarial present value of the increase in benefits due to the additional service. The amount shall be determined by the Judges' Retirement System in accordance with this section. SEC. 6. Section 75071 of the Government Code is amended to read: 75071. (a) Optional settlement one consists of the right to have a retirement allowance paid him or her until his or her death and if he or she dies before he or she receives the amount of his or her accumulated contributions at retirement, to have the balance at death paid to his or her surviving spouse, his or her surviving adult children in equal shares, or his or her estate. (b) (1) Optional settlement two consists of the right to have a retirement allowance paid him or her until his or her death and thereafter to his or her surviving spouse for life. (2) If the judge's spouse predeceases the judge and the judge elected this optional settlement to be effective on or after January 1, 2002, the judge's allowance shall be adjusted effective the first day of the month following the death of the spouse to reflect the benefit that would have been paid had the judge not elected an optional settlement. (3) If the marriage of a retired judge is dissolved or annulled or if the retired judge and his or her spouse are legally separated and the judgment dividing their community property awards the total interest in this system to the retired judge, and the retired judge elected this optional settlement to be effective on or after January 1, 2002, the retired judge's allowance shall be adjusted effective the first day of the month following the filing of the judgment with the board to reflect the benefit that would have been paid had the judge not elected an optional settlement. (c) (1) Optional settlement three consists of the right to have a retirement allowance paid him or her until his or her death, and thereafter to have one-half of his or her retirement allowance paid to his or her surviving spouse for life. (2) If the judge's spouse predeceases the judge and the judge elected this optional settlement to be effective on or after January 1, 2002, the judge's allowance shall be adjusted effective the first day of the month following the death of the spouse to reflect the benefit that would have been paid had the judge not elected an optional settlement. (3) If the marriage of a retired judge is dissolved or annulled or if the retired judge and his or her spouse are legally separated and the judgment dividing their community property awards the total interest in this system to the retired judge, and the retired judge elected this optional settlement to be effective on or after January 1, 2002, the retired judge's allowance shall be adjusted effective the first day of the month following the filing of the judgment with the board to reflect the benefit that would have been paid had the judge not elected an optional settlement. (d) Optional settlement four consists of other benefits that are the actuarial equivalent of his or her retirement allowance, that he or she may select subject to the approval of the Judges' Retirement System. SEC. 7. Section 75073 is added to the Government Code, to read: 75073. A judge who elects to receive optional settlement two or three may concurrently and irrevocably elect to waive the provision for an increase to his or her allowance, as specified in subdivisions (b) and (c) of Section 75071, and shall, instead, have his or her allowance based upon the waiver of this benefit. SEC. 8. Section 75079.5 is added to the Government Code, to read: 75079.5. Notwithstanding any other provision of this part, a judge who retires on or after January 1, 2002, and who elects to retire pursuant to Section 75025 shall have the right to elect an optional settlement pursuant to Article 3.5 (commencing with Section 75070). SEC. 9. Section 75506.5 is added to the Government Code, to read: 75506.5. (a) Any judge may elect, by written election filed with the board at any time prior to retirement, to make contributions, and receive service credit for, all of the time he or she served as a full-time subordinate judicial officer, as defined in Section 71601, prior to becoming a judge, excluding any period of time for which the judge is receiving, or is entitled to receive, a retirement allowance from any other public retirement system. (b) A judge electing to receive credit for service pursuant to this section shall, at the time of filing his or her election, pay into the Judges' Retirement Fund II, a sum equal to the actuarial present value of the increase in benefits due to the additional service. The amount shall be determined by the board in accordance with this section. SEC. 10. 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) 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. (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 66540) of Chapter 2 and are eligible for benefits provided under Section 22816.31. (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. 11. Section 75528 is added to the Government Code, to read: 75528. A judge must have a minimum of six years of judicial service to be eligible for benefits provided by retiring concurrently from this system and the Public Employees' Retirement System or a retirement system subject to the County Employees Retirement Law of 1937 pursuant to Section 20639 or 31840.8. SEC. 12. Section 75571 of the Government Code is amended to read: 75571. (a) Optional settlement one consists of the right to have a retirement allowance paid him or her until his or her death and if he or she dies before he or she receives the amount of his or her accumulated contributions at retirement, to have the balance at death paid to his or her surviving spouse or estate. (b) (1) Optional settlement two consists of the right to have a retirement allowance paid him or her until his or her death and thereafter to his or her surviving spouse for life. (2) If the judge's spouse predeceases the judge and the judge elected this optional settlement to be effective on or after January 1, 2002, the judge's allowance shall be adjusted effective the first day of the month following the death of the spouse to reflect the benefit that would have been paid had the judge not elected an optional settlement. (3) If the marriage of a retired judge is dissolved or annulled or if the retired judge and his or her spouse are legally separated and the judgment dividing their community property awards the total interest in this system to the retired judge, and the retired judge elected this optional settlement to be effective on or after January 1, 2002, the retired judge's allowance shall be adjusted effective the first day of the month following the filing of the judgment with the board to reflect the benefit that would have been paid had the judge not elected an optional settlement. (c) (1) Optional settlement three consists of the right to have a retirement allowance paid him or her until his or her death, and thereafter to have one-half of his or her retirement allowance paid to his or her surviving spouse for life. (2) If the judge's spouse predeceases the judge and the judge elected this optional settlement to be effective on or after January 1, 2002, the judge's allowance shall be adjusted effective the first day of the month following the death of the spouse to reflect the benefit that would have been paid had the judge not elected an optional settlement. (3) If the marriage of a retired judge is dissolved or annulled or if the retired judge and his or her spouse are legally separated and the judgment dividing their community property awards the total interest in this system to the retired judge, and the retired judge elected this optional settlement to be effective on or after January 1, 2002, the retired judge's allowance shall be adjusted effective the first day of the month following the filing of the judgment with the board to reflect the benefit that would have been paid had the judge not elected an optional settlement. (d) Optional settlement four consists of other benefits that are the actuarial equivalent of his or her retirement allowance, that he or she may select subject to the approval of the board. SEC. 13. Section 75573 is added to the Government Code, to read: 75573. A judge who elects to receive optional settlement two or three may concurrently and irrevocably elect to waive the provision for an increase to his or her allowance, as specified in subdivisions (b) and (c) of Section 75571, and shall, instead, have his or her allowance based upon the waiver of this benefit.