BILL NUMBER: AB 399 CHAPTERED 10/13/01 CHAPTER 778 FILED WITH SECRETARY OF STATE OCTOBER 13, 2001 APPROVED BY GOVERNOR OCTOBER 12, 2001 PASSED THE ASSEMBLY SEPTEMBER 14, 2001 PASSED THE SENATE SEPTEMBER 12, 2001 AMENDED IN SENATE SEPTEMBER 7, 2001 AMENDED IN SENATE SEPTEMBER 6, 2001 AMENDED IN SENATE JULY 5, 2001 AMENDED IN SENATE JUNE 6, 2001 AMENDED IN ASSEMBLY MAY 15, 2001 INTRODUCED BY Assembly Member Havice FEBRUARY 20, 2001 An act to amend Section 31494 of, and to add Sections 31461.45, 31462.3, 31491.3, 31492.1, 31492.2, 31494.2, 31494.5, 31495.5, 31760.12, 31760.13, 31765.2, 31765.3, 31781.12, 31781.13, 31785.4, and 31785.5 to, the Government Code, relating to county employees' retirement, and declaring the urgency thereof, to take effect immediately. LEGISLATIVE COUNSEL'S DIGEST AB 399, Havice. County employees' retirement: Los Angeles County. The County Employees Retirement Law of 1937 defines "final compensation" for purposes of calculating benefits under that law. This bill would provide a new definition of "final compensation" that would be applicable to certain employees who retire on or after July 1, 2001, under specified retirement plans sponsored by the retirement system in Los Angeles County. The County Employees Retirement Law of 1937 defines "compensation earnable" for purposes of calculating benefits under that law. This bill would provide a new definition of "compensation earnable" for purposes of calculating retirement benefits in Los Angeles County, to become operative upon the adoption of a specified resolution by the board of supervisors. Existing Law establishes a retirement plan, known as Retirement Plan E, that is applicable in the retirement system in Los Angeles County and prescribes procedures for members of other plans within the county system to transfer to that plan. Under that plan, the county board of retirement is authorized to adjust specified factors for calculating early retirement benefits. Also under that plan, specified reductions and adjustments are made to a member's pension amount based upon the member's primary insurance amount under specified provisions of the federal Social Security Act. This bill would, upon adoption of the bill's provisions by the county board of supervisors, (1) modify the procedures for members to transfer to Retirement Plan E and establish procedures for members in Retirement Plan E to transfer to another plan within the system, (2) modify the early retirement factors and eliminate the county board of retirement's authority to adjust those factors, (3) provide that the pension adjustment provisions relating to member's primary insurance amount shall be applicable when the member retires after attaining the age of 62 years, as specified, and (4) prescribe automatic and elective cost-of-living adjustments applicable to retirement or death allowances payable under Retirement Plan E. The County Employees Retirement Law of 1937 provides for various survivors' allowances that are equal to 50% or 60% of the deceased member's retirement allowance, as specified. This bill would authorize Los Angeles County, by a resolution adopted by a majority vote of the county board of supervisors, to increase each of those allowances to an amount equal to 55% or 65% of the deceased member's retirement allowance, as specified. The bill would declare that it is to take effect immediately as an urgency statute. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 31461.45 is added to the Government Code, to read: 31461.45. (a) This section applies only to a county of the first class, as defined by Section 28020. (b) "Compensation earnable" in a county of the first class shall include only those items of remuneration specifically included as a result of the court-approved settlement in (1) the consolidated cases of Los Angeles County Professional Peace Officers' Association, et al. v. Board of Retirement, Los Angeles County Employees' Retirement Association, (Los Angeles County Superior Court Case No. BS 051355) and Milton Cohen v. Board of Retirement, Los Angeles County Employees' Retirement Association, (Los Angeles County Superior Court Case No. BS 051774), (2) the case of Los Angeles County Fire Department Association of Chiefs, et al. v. Board of Retirement, Los Angeles County Employees' Retirement Association; County of Los Angeles, (Los Angeles County Superior Court Case No. BS 057432), and (3) the case of Cecil Bugh v. Board of Retirement, Los Angeles County Employees' Retirement System, (Los Angeles County Superior Court Case No. BS 055611), all of which were included in Coordination Proceeding Special Title (Rule 1550(b)), Retirement Cases, Judicial Council Coordination Proceeding No. 4049, even if a final judicial determination in that coordinated case, or any subsequent case, should conclude that any additional item of remuneration must be included in that definition with respect to any other county. Those items of remuneration in addition to base salary and the pensionable portion, if any, of cafeteria plan contributions, are set forth in Resolution No 01-001, adopted by the Board of Retirement on or before the effective date of this section and shall include only the following: Earnings Code No. Title 099 Patrol Station Retention Bonus 358 Temporary Promotion Bonus 359 Lifeguard Paramedic, Catalina 503 Uniform Allowance 504 Night Shift Differential 505 Coroner's Inquest Reporter 507 Co-Generation or Hydro-Electric Ops and Mtce 508 Henninger Flats Watchman 509 Freezer Work 510 Department Head Merit 511 Board of Supervisors Performance Lump Sum 512 Fire Suppression Transportation Truck Driver 514 Backhoe Operator 516 Explosives Work 517 Evening Shift Differential 518 Power Equipment Repair, Snow Conditions 519 Engineering Employees, Hazard Pay 520 Home Care Compensation 522 Custodian Acting As Watchman 523 DPD Deputy Director Recruitment Incentive 525 Contracting and Productivity Improvement Incentive for Managers 528 WEBCOM Press Operator 529 Power Equipment Operator, Fire Suppression 530 RN Extra Weekends Worked 531 Standby 532 Additional Responsibilities or Exceptional Performance 533 Power Sweeper Operator in Emergency Conditions 534 Power Plant Relief Engineer 535 Clinic Physician, First Hour and One-Half 536 Consulting Specialist, MD, & Mental Health Consultant, MD, First And Fifth Hours 538 RN Assigned as Acting or Relief Charge Nurse 539 RN Weekend Differential 540 Relief Nurse Holiday Differential (Hourly Item) 541 Relief Nurse Weekend Differential (Hourly Item) 544 Appraisers Laundry and Dry Cleaning Allowance 545 Heavy Duty Tow Truck Driver 546 Slurry Seal Truck Driver 547 Lifeguard Paramedic - Shift 548 Lifeguard Paramedic - Hourly 550 Incentive Awards For Medi-Cal Reimbursements, Health Services 551 Group Incentive Award, Treasurer Tax Collector 553 Pioneer Excavation, Tunnel Operations, Fire Suppression and Snow Removal - Construction Inspection and Surveying Groups 554 Pioneer Excavation, Tunnel Operations, Fire Suppression and Snow Removal 555 Scaffold or Swing Stage, 30 Feet Above Grade 556 High Scale and Rigging Operations, General 557 Evening Shift, Med Tech 558 Night Shift, Med Tech 565 Paramedic Recertification Bonus 567 Deputy Sheriff Reserve Annual Compensation 570 Home Care Program Standby 571 CSW Licensure Supervision 572 MOU Lump Sum Bonus 601 Lifeguard Paramedic, Relief 602 Supervising Transportation Deputy Performing Dispatcher Duties 603 Automotive Service Excellence Certificates 604 RN Mobile Intensive Care Certification 605 Custodian Floor Waxing Bonus 606 Fire Equipment Mechanic Assigned Field Repair Duties 607 SDPO Assigned Acting Director In A Camp 608 Bilingual Bonus 609 RN Assigned to Emergency Room 610 Antelope Valley Firefighting Crew 611 Tree Trimmer Supervisor, Power Operations 612 Shooting Bonus, Expert 613 Shooting Bonus, Distinguished Expert 614 Shooting Bonus, Marksman 615 Shooting Bonus, Sharpshooter 616 Antelope Valley Quarters, On Fire Call 617 Clinic Nurse Assigned to Probation Camp 618 Transportation Bus Driver, Sheriff 619 Lifeguard Paramedic 620 San Gabriel Dam Operator 621 Nurse Retention Incentive 622 Advanced Appraiser Certification 623 Probation Transcriber Typist Production Incentive 624 Bilingual Additional Bonus Children's Social Workers 625 Agriculture Inspectors Assigned to Standardization 626 Firefighter Paramedic not Assigned to a Paramedic Post 628 Bilingual Bonus for Other Than Monthly Employees 629 Mortuary Attendant at LAC/USC MC 630 Safety Police Educational/Longevity Incentive 632 Mental Health Workers Assigned to Sheriff's Detention Facilities 634 Supervising Detention Services Officer of the Day 635 Transportation Deputy Bus Driver, Probation 636 Sheriff's Station Commander Expenses 637 Professional Development Expenses 638 Probation Telecom Equipment Bonus 639 Intern Housing Allowance LAC/USC Med. Center 640 Children's Services ERCP Retention 641 Shooting Bonus, Expert - Reserve 642 Shooting Bonus, Distinguished Expert - Reserve 643 Shooting Bonus, Marksman - Reserve 644 Shooting Bonus, Sharpshooter - Reserve 645 Welder Certification Bonus 782 FLSA Premium Pay for Regularly Scheduled Work Assignment 903 Non-Elective Leave Buyback 910 Sick Buyback 911 Vacation Buyback 912 Holiday Buyback 913 Sick Pre-71 Buyback 914 Sick Buyback-Probation 56 - Hour 915 Vacation Buyback - 56 Hour 930 Special Paid Leave Buyback 931 Appraisers Leave Buyback 932 Intern/Resident Leave Buyback None Emp Suggest None Park, Nontaxable None Park, Taxable None Prior Salary None Transportation Allow None Traffic Mitigation Any such additional item of remuneration may subsequently be included in "compensation earnable" pursuant to a memorandum of understanding between a county of the first class and any of its recognized employee organizations or a resolution adopted by its board of supervisors. (c) No item of remuneration included in "compensation earnable" as a result of the court-approved settlement and as set forth in the resolution described above in subdivision (b) may be removed therefrom as a result of any subsequent judicial determination, except that a county of the first class and a recognized employee organization may agree only through a memorandum of understanding to exclude the item of remuneration from "compensation earnable" or the Board of Supervisors may adopt a resolution excluding the item of remuneration from "compensation earnable" with respect to nonrepresented employees. (d) This section shall not be operative in the county until the board of supervisors, by resolution adopted by a majority vote, makes the provisions of this section applicable in the county. SEC. 1.5. Section 31462.3 is added to the Government Code, to read: 31462.3. (a) For members participating in the designated plans who are employed by the County of Los Angeles on or after October 1, 2000, and who retire or die on or after July 1, 2001, "final compensation" means the average annual compensation earnable by a member during any year elected by the member at or before the time he or she files an application for retirement or, if the member fails to elect, during the year immediately preceding his or her retirement. (b) As used in this section, the "designated plans" means the retirement plans sponsored by the County of Los Angeles that are commonly known as Retirement Plans B, C, and D for general members and Retirement Plan B for safety members. (c) This section shall only be applicable to Los Angeles County and shall not become operative until the board of supervisors of that county elects, by resolution adopted by a majority vote, to make this section operative. SEC. 2. Section 31491.3 is added to the Government Code, to read: 31491.3. (a) Notwithstanding subdivision (f) of Section 31491, for those members retiring on or after the operative date of this section, the early retirement pension shall consist of an annual allowance payable in monthly installments for the life of the retired member in an amount that is the actuarial equivalent of the normal retirement pension to which the retired member would be entitled if otherwise eligible for normal retirement, which shall be computed by multiplying the normal retirement pension by the early retirement adjustment factor set forth opposite the member's age as of the birthday immediately preceding the date of retirement, in the following table: Age ERA Factor 55 ...................... .3748 56 ...................... .4109 57 ...................... .4511 58 ...................... .4957 59 ...................... .5454 60 ...................... .6009 61 ...................... .6631 62 ...................... .7328 63 ...................... .8113 64 ...................... .8998 (b) For those members retiring on or after the operative date of this section, paragraph (2) of subdivision (g) of Section 31491 shall not apply, but with regard to those members who have not attained the age of 62 years as of the date of retirement (1) future earnings in employment covered by the federal system shall be assumed to continue at the rate of pay received by the employee from the employer as of the date of retirement or the date of termination of employment of a vested member, whichever is applicable, until the member attains the age of 62 years, and (2) future wage bases, as defined by the federal system, shall be assumed to continue at the wage base in effect in the year of retirement or the year of termination of employment of a vested member, whichever is applicable, until the member attains the age of 62 years, and (3) cost-of-living increases in the year of retirement and delayed retirement credit provided under the federal system shall not be included in the calculation of the estimated primary insurance amount. (c) Notwithstanding subdivision (e) or subdivision (j) of Section 31491, any member who retires on or after the operative date of this section, and after attaining the age of 62 years may, as soon as possible but not later than six months following retirement, present evidence required by the board demonstrating the retired member's actual primary insurance amount. For purposes of this subdivision, the actual primary insurance amount shall be the amount actually payable under the federal system on the retired member's date of retirement without regard to delayed retirement credit or any deductions on account of work, or the estimate of that amount as set forth on a current earnings and benefits estimate statement provided by the Social Security Administration. Following receipt of that evidence, the board shall adjust the retired member's pension from the date of retirement to equal the amount of the pension to which he or she would have been entitled on that date had the estimated primary insurance amount equaled the actual primary insurance amount. (d) This section shall only be applicable to Los Angeles County and shall not become operative until the board of supervisors of that county elects, by resolution adopted by a majority vote, to make this section operative in the county. SEC. 3. Section 31492.1 is added to the Government Code, to read: 31492.1. (a) Notwithstanding the provisions of Section 31492, each monthly survivor allowance paid pursuant to subdivision (a) of Section 31492 on account of a member who retires on or after the operative date of this section shall be equal to 55 percent of the retirement pension, if not modified in accordance with the optional survivor allowance in subdivision (b) of that section. (b) This section shall only be applicable to Los Angeles County and shall not become operative until the board of supervisors of that county elects, by resolution adopted by a majority vote, to make this section operative in the county. SEC. 4. Section 31492.2 is added to the Government Code, to read: 31492.2. (a) Notwithstanding the provisions of Section 31492, each monthly survivor allowance paid on or after the operative date of this section pursuant to subdivision (a) of Section 31492 on account of a member who retires before the operative date of this section shall be equal to 55 percent of the retirement pension, if not modified in accordance with the optional survivor allowance in subdivision (b) of that section. (b) This section shall only be applicable to Los Angeles County and shall not become operative until the board of supervisors of that county elects, by resolution adopted by a majority vote, to make this section operative in the county. SEC. 5. Section 31494 of the Government Code is amended to read: 31494. (a) General members may elect to transfer to the retirement plan created by this article upon proper application executed by the member and filed with the board. That transfer is voluntary and shall be irrevocable. (b) The retirement benefits of the transferred members are governed and defined by this article. (c) Transferring members relinquish and waive any and all previously available vested or accrued retirement, survivor, disability and death benefits. However, notwithstanding any other provision of this article, transferring members shall receive credit for public service performed prior to the transfer, including service with the employer, military service, and other public service to which the member would otherwise be eligible under this chapter, except that member contributions shall not be collected. (d) This section shall be operative at any time or times as may be mutually agreed to in memoranda of understanding executed by the employer and employee representatives if the board of supervisors adopts, by majority vote, a resolution declaring that the section shall be operative. (e) This section shall be superseded by Section 31494.2 in any county when Section 31494.2 becomes operative in the county. SEC. 6. Section 31494.2 is added to the Government Code, to read: 31494.2. (a) A general member whose benefits are governed by Retirement Plan D may, during a period of active employment, elect to change plan membership and become a member, prospectively, in Retirement Plan E. The election shall be made upon written application signed by the member and filed with the board, pursuant to enrollment procedures and during an enrollment period established by the board, which enrollment period shall not occur more frequently than once every three years for that member. The change in plan membership shall be effective as of the transfer date, as defined in subdivision (d). Except as otherwise provided in this section, the rights and obligations of a member who elects to change membership under this section shall be governed by the terms of this article on and after the transfer date. Prior to the transfer date, the rights to retirement, survivors', or other benefits payable to a member and his or her survivors or beneficiaries shall continue to be governed by Retirement Plan D. (b) Except as otherwise provided in this section, effective as of the transfer date, a member who has transferred to Retirement Plan E pursuant to this section and his or her survivors or beneficiaries shall receive retirement, survivors', and other benefits that shall consist of: (1) the benefits to which they are entitled under the terms of Retirement Plan E, but based on the member's service credited only under that plan, and payable at the time and in the manner provided under Retirement Plan E, and (2) the benefits to which they would have been entitled under the terms of Retirement Plan D had the member remained a member of Retirement Plan D, but based on the member's service credited only under that plan, and payable at the time and in the manner provided under Retirement Plan D. Except as otherwise provided in this section, the calculation of the member's, survivors', or beneficiaries' benefits under each plan shall be subject to that plan's respective, separate terms, including, but not limited to, the definitions of "final compensation" and provisions establishing cost-of-living adjustments, establishing minimum retirement age and service requirements, and governing integration with federal social security payments. Notwithstanding the foregoing, the aggregate service credited under both retirement plans shall be taken into account for the purpose of determining eligibility for and vesting of benefits under each plan. (c) Notwithstanding any other provision of Retirement Plan D or Retirement Plan E: (1) A member who has transferred to Retirement Plan E pursuant to this section may not retire for disability and receive disability retirement benefits under Retirement Plan D. (2) If a member who has transferred to Retirement Plan E pursuant to this section dies prior to retirement, that member's survivor or beneficiary may not receive survivor or death benefits under Retirement Plan D but shall receive a refund of the member's contributions to Retirement Plan D together with all interest credited thereto. (d) As used in this section: (1) "Period of active employment" means a period during which the member is actively performing the duties of a full-time or part-time employee position or is on any authorized paid leave of absence, except a leave of absence during which the member is totally disabled and is receiving, or is eligible to receive, disability benefits, either during or after any elimination or qualifying period, under a disability plan provided by the employer. (2) "Retirement Plan D" means the contributory retirement plan otherwise available to new members of the system on the transfer date. (3) "Retirement Plan E" means the noncontributory retirement plan established under this article. (4) "Transfer date" means the first day of the first month that is at least 30 days after the date that the application is filed with the board to change plan membership under subdivision (a). (e) This section shall only be applicable to Los Angeles County and shall not become operative until the board of supervisors of that county elects, by resolution adopted by a majority vote, to make this section operative in the county. SEC. 7. Section 31494.5 is added to the Government Code, to read: 31494.5. (a) A general member whose benefits are governed by Retirement Plan E may, during a period of active employment, elect to change plan membership and become a member, prospectively, in Retirement Plan D. The election shall be made upon written application signed by the member and filed with the board, pursuant to enrollment procedures and during an enrollment period established by the board, which enrollment period shall not occur more frequently than once every three years for that member. The change in plan membership shall be effective as of the transfer date, as defined in subdivision (g). Except as otherwise provided in this section, the rights and obligations of a member who elects to change membership under this section shall be governed by the terms of Retirement Plan D on and after the transfer date. Prior to the transfer date, the rights to retirement, survivors', or other benefits payable to a member and his or her survivors or beneficiaries shall continue to be governed by Retirement Plan E. (b) If a member has made the election to change plans under subdivision (a), monthly contributions by the member and the employer under the terms of Retirement Plan D shall commence as of the transfer date. For the purposes of calculating the member's contribution rate under Retirement Plan D, his or her entry age shall be deemed to be his or her age at his or her birthday nearest the transfer date; however, if the member exchanges service credit in accordance with subdivision (c), with regard to contributions made for periods after that exchange, his or her entry age shall be adjusted and deemed to be the member's age at his or her birthday nearest the date on which begins the most recent period of unbroken service credited under Retirement Plan D, taking into account service purchased under subdivision (c). In no event shall the exchange of service under subdivision (c) affect the entry age with respect to, or the cost of, employee contributions made, or service purchased, prior to the exchange. (c) A general member who has elected to change plans under subdivision (a) also may elect to exchange, at that time or any time thereafter, but prior to the earlier of his or her application for retirement, termination from employment, or death, some portion designated in whole-month increments, or all of the service credited under Retirement Plan E for an equivalent amount of service credited under Retirement Plan D, provided, however, that the member may not exchange less than 12 months service or, if less, the total service credited under Retirement Plan E. The exchange shall be effective on the date when the member completes the purchase of that service by depositing in the retirement fund, by lump sum or regular monthly installments, over the period of time determined by a resolution adopted by a majority vote of the board of retirement, or both, but in any event prior to the earlier of his or her death or the date that is 120 days after the effective date of his or her retirement, the sum of: (1) the contributions the member would have made to the retirement fund under Retirement Plan D for that length of time for which the member shall receive credit as service under Retirement Plan D, computed in accordance with the rate of contribution applicable to the member under Retirement Plan D, based upon his or her entry age, and in the same manner prescribed under Retirement Plan D as if that plan had been in effect during the period for which the member shall receive service credit, and (2) the regular interest thereon. For the purposes of this subdivision, a member's entry age shall be deemed to be the member's age at his or her birthday nearest the date on which begins the most recent period of unbroken service credited under Retirement Plan D following completion of the service exchange under this subdivision. A member may receive credit for a period of service under only one plan and in no event shall a member receive credit for the same period of service under both Retirement Plan D and Retirement Plan E. A member who fails to complete the purchase of service as required under this subdivision shall be treated as completing an exchange of service under Retirement Plan E for an equivalent amount of service under Retirement Plan D only with regard to the service that actually has been purchased through completed deposit with the retirement fund of the requisite purchase amount, calculated in accordance with this subdivision. (d) Except as otherwise provided in this section, effective as of the transfer date, a member who has transferred to Retirement Plan D pursuant to this section and his or her survivors or beneficiaries shall receive retirement, disability, survivors', death, or other benefits that shall consist of: (1) the benefits to which they are entitled under the terms of Retirement Plan D, but based on the member's service credited only under that plan, and payable at the time and in the manner provided under Retirement Plan D, and (2) the benefits to which they would have been entitled under the terms of Retirement Plan E had the member remained a member of Retirement Plan E, but based on the member's service credited only under that plan, and payable at the time and in the manner provided under Retirement Plan E. Except as otherwise provided in this section, the calculation of the portion of a member's or beneficiary's benefit that is attributable to each plan is subject to that plan's respective, separate terms, including, but not limited to, the definitions of "final compensation" and provisions establishing cost-of-living adjustments, establishing minimum age and service requirements, and governing integration with federal social security payments. Notwithstanding the foregoing, the aggregate service credited under both Retirement Plan D and Retirement Plan E shall be taken into account for the purpose of determining eligibility for, and vesting of, benefits under each plan. (e) Notwithstanding any other provision of Retirement Plan D or Retirement Plan E, a member who transfers into Retirement Plan D under this section may retire for service-connected or nonservice-connected disability and receive disability benefits under Retirement Plan D only if he or she has either (1) completed two continuous years of active service after his or her most recent transfer date, or (2) earned five years of retirement service credit under Retirement Plan D after his or her most recent transfer date. A member who becomes disabled and retires before meeting either of these conditions (1) may apply for and receive only a deferred or service retirement allowance, and (2) for the purposes of calculating his or her retirement benefits under this section, shall be credited with service under Retirement Plan E as provided under subdivision (g) of Section 31488 during any period he or she is totally disabled and is receiving, or eligible to receive, disability benefits, either during or after any elimination or qualifying period, under a disability plan provided by the employer. If a member dies before he or she is eligible to retire and before completing either two continuous years of active service after the transfer date or earning five years of retirement service credit under Retirement Plan D after the transfer date, that member's beneficiary shall not be entitled to the survivor allowance under Section 31781.1 or 31781.12, if operative. (f) Notwithstanding any other provisions of Retirement Plan D or Retirement Plan E, a member who has transferred to Retirement Plan D pursuant to this section and who retires for disability when eligible under this section and Retirement Plan D, may not also retire for service and receive service retirement benefits under Retirement Plan E. However, for the purpose of calculating disability benefits under Retirement Plan D, the "sum to which he or she would be entitled as service retirement" or his or her "service retirement allowance," as those terms are used in Sections 31726, 31726.5, and 31727.4, shall consist of the blended benefit to which the member would be entitled under subdivision (d) if he or she retired for service, not just the service retirement benefit to which he or she would be entitled under Retirement Plan D. (g) As used in this section: (1) "Active service" means time spent on active, on-the-job performance of the duties of a full-time or part-time position and on any authorized paid leaves of absence; provided, however, that any authorized paid leave of absence or part-time service shall not constitute active service if the leave of absence or part-time service is necessitated by a preexisting disability, injury, or disease. The board of retirement shall determine whether or not a leave of absence or part-time service is necessitated by a preexisting disability, injury, or disease, and thus excluded from the member's active service, based upon evidence presented by the employer and the member upon request by the board. (2) "Entry age" means the age used for calculating the normal rate of contribution to Retirement Plan D with respect to a member who has transferred membership to Retirement Plan D under this section. (3) "Period of active employment" means a period during which the member is actively performing the duties of a full-time or part-time employee position or is on any authorized paid leave of absence, except a leave of absence during which the member is totally disabled and is receiving, or is eligible to receive, disability benefits, either during or after any elimination or qualifying period, under a disability plan provided by the employer. (4) "Retirement Plan D" means the contributory retirement plan otherwise available to new members of the retirement system on the transfer date. (5) "Retirement Plan E" means the noncontributory retirement plan established under this article. (6) "Transfer date" means the first day of the first month that is at least 30 days after the date that the application is filed with the board to change plan membership under subdivision (a). (h) This section shall only be applicable to Los Angeles County and shall not become operative until the board of supervisors of that county elects, by resolution adopted by a majority vote, to make this section operative in the county. SEC. 8. Section 31495.5 is added to the Government Code, to read: 31495.5. (a) Notwithstanding any other provision of this article, every retirement allowance or death allowance payable, on or after the operative date of this section, to or on account of any member of Retirement Plan E who retires or dies or who has retired or died shall, as of April 1 each year, be increased or decreased by an amount equal to that member's automatic COLA, as defined in subdivision (e) and as calculated by the board of retirement before April 1 of each year. No decrease in the cost of living shall reduce an allowance below the amount being received by the member or his or her beneficiary on the effective date of the allowance or the operative date of this section, whichever is later. (b) A Retirement Plan E member may elect to purchase an elective COLA, as defined in subdivision (e), with regard to some portion (designated in whole-month increments) or all of his or her months of Retirement Plan E service earned prior to the operative date of this section. The election shall be made upon written application signed by the member and filed with the board pursuant to election procedures and during election periods established by the board. The purchase of the elective COLA shall be effective only when the member has paid contributions necessary to purchase the designated amount of service for which he or she shall receive the elective COLA. The amount of required contributions shall be determined by the board, subject to the following: (1) The cost of purchasing service for elective COLA purposes shall be determined by the board of retirement such that no elective COLA liability shall be borne by the county and no diminution in the funding ratio of the system shall result. (2) The cost charged to the member for purchasing the elective COLA service shall be based upon the assumption that the member retires at the age of 65 years. (3) Members may pay for the elective COLA by lump-sum payment or monthly installments over a period to be determined by a resolution adopted by a majority vote of the board of retirement, or both, but in any event prior to the earlier of his or her death or the date that is 120 days after the effective date of his or her retirement. (4) If a member fails to timely complete the purchase of his or her elective COLA, he or she shall receive an elective COLA calculated only with regard to that amount of service actually purchased. (5) If a Retirement Plan E member dies prior to retirement, any contributions made toward the purchase of an elective COLA, and all interest credited thereto, shall be refunded to the deceased member's surviving spouse or, if there is no surviving spouse, to the deceased member's surviving child or children under the age of 18 years, divided among those children in equal amounts, or, if there is no surviving spouse or surviving child or children under the age of 18 years, to the deceased member's estate. (c) If a Retirement Plan E member elects and purchases an elective COLA, then, notwithstanding any other provision of this article, every Retirement Plan E allowance or postretirement death allowance payable on and after the operative date of this section, to or on account of that member who retires or dies or who has retired or died shall, as of April 1 of each year, be increased or decreased by an amount equal to that member's elective COLA as calculated by the board of retirement before April 1 of each year. No decrease in the cost of living shall reduce an allowance below the amount being received by the member or his or her beneficiary on the effective date of the allowance or this provision, whichever is later. Notwithstanding any other provisions of this section, if a member retires before attaining the age of 65 years, his or her elective COLA shall be actuarially reduced to reflect that earlier retirement age unless, within 120 days after his or her retirement, he or she contributes by lump-sum the amount necessary to complete the purchase of his or her elective COLA as determined by the board. If, upon a member's retirement, the board of retirement determines that a member has paid more contributions than necessary to purchase his or her elective COLA in accordance with subdivision (b), the member shall receive a refund of those excess contributions and all interest credited thereto. Upon retirement or termination of employment, but before he or she begins receiving his or her elective COLA, a member may revoke his or her election to purchase an elective COLA and receive a refund of any contributions made toward the purchase of the elective COLA and all interest credited thereto. (d) If a Retirement Plan E member or former member is totally disabled, begins receiving disability benefits, other than state-mandated benefits, under a disability plan provided by the employer on or after the operative date of this section, and, on or after that date, his or her employment terminates, then, for purposes of calculating the member's or former member's final compensation, his or her predisability compensation, as previously adjusted in accordance with this subdivision and paragraph (5) of subdivision (e), shall, as of April 1 of each year after his or her employment terminates and during a period for which he or she both remains totally disabled and earns "service" within the meaning of subdivision (g) of Section 31488, be increased or decreased by an amount equal to that member's or former member's predisability compensation adjustment as calculated by the board of retirement before April 1 of each year. (e) As used in this section: (1) "Automatic COLA" means, with respect to any member of Retirement Plan E, an amount equal to the allowance then being received (including any automatic or elective COLAs previously received), multiplied by a percentage (rounded to the nearest one-tenth of 1 percent) derived by taking the number of months of service the member earned on and after the operative date of this section, dividing by the member's total months of service, and multiplying by a percentage equal to the lesser of 2 percent or the percentage found by the board of retirement to approximate to the nearest one-half of 1 percent the percentage of annual increase or decrease in the cost of living as of January 1 of each year as shown by the then current CPI, as adjusted for the amount applied from a prior year. For purposes of applying this formula, the amount of any annual cost-of-living increase under the CPI in excess of the 2 percent maximum shall be accumulated and applied in future years in which the annual cost-of-living increase under the CPI is less than the 2 percent maximum. (2) "CPI" means the Bureau of Labor Statistics Consumer Price Index for All Urban Consumers for the area in which the county seat is situated. (3) "Elective COLA" means, with respect to any member of Retirement Plan E, an amount equal to the allowance then being received (including any automatic or elective COLAs previously received), multiplied by a percentage (rounded to the nearest one-tenth of 1 percent) derived by taking the number of months of service the member purchased in accordance with subdivision (b), dividing by the member's total months of service, and multiplying by a percentage equal to the lesser of 2 percent or the percentage found by the board of retirement to approximate to the nearest one-half of 1 percent the percentage of annual increase or decrease in the cost of living as of January 1 of each year as shown by the then current CPI, as adjusted for the amount applied from a prior year. For purposes of applying this formula, the amount of any annual cost-of-living increase under the CPI in excess of the 2 percent maximum shall be accumulated and applied in future years in which the annual cost-of-living increase under the CPI is less than the 2 percent maximum. (4) "Predisability compensation" means a member's last 12 months of compensation earnable preceding the date his or her employment terminates while he or she is receiving disability benefits, other than state-mandated benefits, under a disability plan provided by the employer because he or she is totally disabled. The employer shall provide the board of retirement with the information necessary for a member's predisability compensation to be determined. (5) "Predisability compensation adjustment" means, with respect to any member or former member of Retirement Plan E qualifying under subdivision (d), an amount equal to that member's or former member's predisability compensation as previously adjusted under this section, multiplied by a percentage equal to the lesser of 2 percent or the percentage found by the board of retirement to approximate to the nearest one-half of 1 percent the percentage of annual increase or decrease in the cost of living as of January 1, of each year as shown by the then current CPI, as adjusted for the amount applied from a prior year. For the purpose of applying this formula, the amount of any annual cost-of-living increase under the CPI in excess of the 2 percent maximum shall be accumulated and applied in future years in which the annual cost-of-living increase under the CPI is less than the 2 percent maximum. (f) This section shall only be applicable to Los Angeles County and shall not become operative until the board of supervisors of that county elects, by resolution adopted by a majority vote, to make this section operative in the county. SEC. 9. Section 31760.12 is added to the Government Code, to read: 31760.12. Notwithstanding Section 31760.1, each survivor allowance paid pursuant to Section 31760.1 on account of a member who retires on or after the operative date of this section shall be equal to 65 percent of the member's monthly retirement allowance, if not modified in accordance with one of the optional settlements specified in this article. This section shall only be applicable to Los Angeles County and shall not become operative until the board of supervisors of that county elects, by resolution adopted by a majority vote, to make this section operative in the county. SEC. 10. Section 31760.13 is added to the Government Code, to read: 31760.13. (a) Notwithstanding Section 31760.1, each survivor allowance paid on or after the operative date of this section pursuant to Section 31760.1 on account of a member who retires before the operative date of this section shall be equal to 65 percent of the member's monthly retirement allowance, if not modified in accordance with one of the optional settlements specified in this article, as adjusted for the net cost-of-living percentage increase, if any, awarded to that survivor prior to the operative date of this section. (b) This section shall only be applicable to Los Angeles County and shall not become operative until the board of supervisors of that county elects, by resolution adopted by a majority vote, to make this section operative in the county. SEC. 11. Section 31765.2 is added to the Government Code, to read: 31765.2. Notwithstanding Section 31765.1, each survivor allowance paid pursuant to Section 31765.1 on account of a member who dies on or after the operative date of this section shall be equal to 65 percent of the monthly retirement allowance to which the deceased member would have been entitled if he or she had retired on the date of death with a retirement allowance not modified in accordance with one of the optional settlements specified in this article. This section shall only be applicable to Los Angeles County and shall not become operative until the board of supervisors of that county elects, by resolution adopted by a majority vote, to make this section operative in the county. SEC. 12. Section 31765.3 is added to the Government Code, to read: 31765.3. (a) Notwithstanding Section 31765.1, each survivor allowance paid on or after the operative date of this section pursuant to Section 31765.1 on account of a member who dies before the operative date of this section shall be equal to 65 percent of the monthly retirement allowance to which the deceased member would have been entitled if he or she had retired on the date of death with a retirement allowance not modified in accordance with one of the optional settlements specified in this article, as adjusted for the net cost-of-living percentage increase, if any, awarded to that survivor prior to the operative date of this section. (b) This section shall only be applicable to Los Angeles County and shall not become operative until the board of supervisors of that county elects, by resolution adopted by a majority vote, to make this section operative in the county. SEC. 13. Section 31781.12 is added to the Government Code, to read: 31781.12. Notwithstanding Section 31781.1, each allowance paid pursuant to Section 31781.1 on account of a member who dies on or after the operative date of this section shall be equal to 65 percent of the monthly retirement allowance to which the deceased member would have been entitled, without modification in accordance with one of the optional settlements specified in this article, if he or she had retired, or been retired, by reason of a nonservice-connected disability as of the date of death. This section shall only be applicable to Los Angeles County and shall not become operative until the board of supervisors of that county elects, by resolution adopted by a majority vote, to make this section operative in the county. SEC. 14. Section 31781.13 is added to the Government Code, to read: 31781.13. (a) Notwithstanding Section 31781.1, each allowance paid on or after the operative date of this section pursuant to Section 31781.1 on account of a member who dies before the operative date of this section shall be equal to 65 percent of the monthly retirement allowance to which the deceased member would have been entitled, without modification in accordance with one of the optional settlements specified in this article, if he or she had retired, or been retired, by reason of a nonservice connected disability as of the date of death, adjusted for the net cost-of-living percentage increase, if any, awarded to that survivor prior to the operative date of this section. (b) This section shall only be applicable to Los Angeles County and shall not become operative until the board of supervisors of that county elects, by resolution adopted by a majority vote, to make this section operative in the county. SEC. 15. Section 31785.4 is added to the Government Code, to read: 31785.4. Notwithstanding Section 31785, each survivor allowance paid pursuant to Section 31785 on account of a safety member who retires on or after the operative date of this section shall be equal to 65 percent of the member's monthly retirement allowance, if not modified in accordance with one of the optional settlements specified in Article 11 (commencing with Section 31760). This section shall only be applicable to Los Angeles County and shall not become operative until the board of supervisors of that county elects, by resolution adopted by a majority vote, to make this section operative in the county. SEC. 16. Section 31785.5 is added to the Government Code, to read: 31785.5. (a) Notwithstanding Section 31785, each survivor allowance paid on or after the operative date of this section pursuant to Section 31785 on account of a safety member who retires before the operative date of this section shall be equal to 65 percent of the member's monthly retirement allowance, if not modified in accordance with one of the optional settlements specified in Article 11 (commencing with Section 31760), as adjusted for the net cost-of-living percentage increase, if any, awarded to that survivor prior to the operative date of this section. (b) This section shall only be applicable to Los Angeles County and shall not become operative until the board of supervisors of that county elects, by resolution adopted by a majority vote, to make this section operative in the county. SEC. 17. This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the Constitution and shall go into immediate effect. The facts constituting the necessity are: In order to implement the provisions of a memorandum of understanding that is currently in effect with respect to Los Angeles County employees, it is necessary that this act take effect immediately.