BILL NUMBER: AB 2766 CHAPTERED 09/26/02 CHAPTER 883 FILED WITH SECRETARY OF STATE SEPTEMBER 26, 2002 APPROVED BY GOVERNOR SEPTEMBER 25, 2002 PASSED THE ASSEMBLY AUGUST 20, 2002 PASSED THE SENATE AUGUST 14, 2002 AMENDED IN SENATE AUGUST 8, 2002 AMENDED IN SENATE JUNE 18, 2002 INTRODUCED BY Assembly Member Runner FEBRUARY 25, 2002 An act to amend Section 45309 of, and to add Sections 31629.5, 31831.3, 45310.6, 45310.7, 53216.8, and 53217.10 to, the Government Code, relating to public employees' retirement. LEGISLATIVE COUNSEL'S DIGEST AB 2766, Runner. Public employees' retirement: accumulated contributions. Existing law provides members of certain public retirement systems, whose retirement benefits have vested, with the right, upon leaving service and entering the employment of a reciprocal retirement system within a specified timeframe, to leave accumulated contributions on deposit in the retirement fund, subject to specific limitations. Existing law also permits a former member of a public retirement system, under specified circumstances, to elect to redeposit in the retirement fund an amount equal to the accumulated contributions that he or she withdrew upon termination of employment. This bill would expand those rights to provide a member of a county, city, or local agency retirement system, who is credited with less than the number of service years required for benefits to vest, with the right to elect to leave his or her accumulated contributions, as defined, on deposit in the retirement fund, subject to specified conditions. The bill would additionally grant a former member of one of those retirement systems who is or was engaged in active law enforcement or firefighting and prevention service, as specified, and who, for specified reasons, did not leave his or her accumulated contributions within the retirement fund, the right to redeposit those withdrawn contributions, if he or she is an active member of a specified reciprocal public retirement system at the time of redeposit. The bill would set forth the findings and declarations of the Legislature and would make related, conforming changes. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. The Legislature finds and declares all of the following: (a) As a matter of statewide importance, the safety and welfare of the people of California require that California's current and former local public safety officers are granted redeposit rights for retirement purposes to ensure that the highest quality police officers and firefighters are attracted to, and retained in, positions of public service, and in order to ensure that the administration of these duties is of the highest caliber and integrity. (b) There is a public obligation to provide retirement compensation to public safety officers who selflessly risk their lives on a daily basis to ensure the safety and the well-being of the public. (c) As a matter of statewide importance, it is necessary to ensure that local public safety officers who are incapacitated in the performance of their duties or by age, be replaced by the most qualified public safety officers, and it is necessary to recognize that retirement benefits impact this endeavor. (d) Furthermore, due to the state's compelling interest in ensuring that the state's public agencies recruit and retain the highest caliber of public employees, it is essential that employees who take breaks from public employment to gain valuable experience in the private sector or to increase their skills and abilities by increasing their education level are not required to forfeit retirement benefits to do so, but are allowed to retain the service credit they earn as public employees in order to encourage them to return to public employment and continue to serve the public. (e) To these ends, it is the intent of the Legislature in enacting this act to enable current and former local public safety officers to redeposit formerly withdrawn contributions for past public service in order to obtain a retirement benefit for that service and to ensure that local public employees have the ability to retain retirement contributions on deposit. SEC. 2. Section 31629.5 is added to the Government Code, to read: 31629.5. (a) Notwithstanding Sections 31628 and 31629, on or after January 1, 2003, a member who is credited with less than the number of years of service required for vesting shall have the right to elect to leave accumulated contributions on deposit in the retirement fund. Failure to make an election to withdraw accumulated contributions shall be deemed an election to leave accumulated contributions on deposit in the retirement fund. (b) An election to allow accumulated contributions to remain in the retirement fund may be revoked by the member at any time except: (1) while the member is employed in county service in a position in which the member is not excluded from membership in this system with respect to that service; (2) while the member is in service as a member of a public retirement system supported, in whole or in part, by state funds; or (3) while the member is in service, entered within six months after discontinuing county service, as a member of a reciprocal retirement system. All accumulated contributions contributed up to the time of revocation may then be withdrawn. (c) A member whose membership continues under this section is subject to the same age, service, and disability requirements that apply to other members for service or disability retirement. After the qualification of the member for retirement by reason of age, which shall be the lowest age applicable to any membership category in which the member has credited service, or disability, the member shall be entitled to receive a retirement allowance based upon the amount of the member's accumulated contributions and service standing to the member's credit at the time of retirement and on the employer contributions held for the member and calculated in the same manner as for other members. (d) Service, solely for purposes of meeting minimum service qualifications for service or disability retirement, shall also include service credited as an employee of a reciprocal system when the member retires concurrently from all reciprocal retirement systems. A member whose combined service from all reciprocal retirement systems does not meet the minimum service qualifications may not receive a service or disability retirement from this system. (e) Notwithstanding Section 31467, for purposes of this section, "accumulated contributions" means the sum of all member contributions standing to the credit of a member's individual account, and interest thereon. SEC. 3. Section 31831.3 is added to the Government Code, to read: 31831.3. (a) Notwithstanding Sections 31831.1 and 31831.2, any former member who left county or district service and became a member of a retirement system established under this chapter in another county or district, or a reciprocal retirement system, or a retirement system established under the Public Employees' Retirement Law, and who did not elect to, or was not eligible to, leave his or her contributions on deposit pursuant to Article 9 (commencing with Section 31700), may elect to redeposit those contributions if he or she is an active member of a county retirement system, the Public Employees' Retirement System, or another reciprocal retirement system at the time of redeposit. A former member may exercise this right by redepositing in the retirement fund of the county or district he or she left, the amount of accumulated contributions and interest that he or she withdrew from that retirement fund plus regular interest thereon from the date of separation. (b) A former member who redeposits under this section shall have the same rights as a member who elected to leave his or her accumulated contributions on deposit in the fund. The deferred retirement allowance of the member shall be determined in accordance with the provisions of this chapter applicable to a member retiring directly from county employment on the date of his or her retirement. (c) A former member who redeposits under this section shall be entitled to a reduced age at entry, commencing with contributions payable the first day of the month following the date the association receives notice of the redeposit, only to the extent provided in Section 31833. (d) This section does not apply to the following: (1) A member or former member who is retired. (2) A former member who is not in the service of an employer making him or her a member of a retirement system established under this chapter in another county or district, a retirement system established under the Public Employees' Retirement Law, or another reciprocal retirement system. (e) This section shall only apply to either of the following: (1) A former member who is in the service of an employer as an officer or employee of a law enforcement agency or fire department whose principal duties consist of active law enforcement or firefighting and prevention service, but excluding one whose principal duties are those of a telephone operator, clerk, stenographer, machinist, mechanic, or otherwise, and whose functions do not clearly come within the scope of active law enforcement or firefighting and prevention service, even though the officer or employee is subject to occasional call, or is occasionally called upon, to perform duties within the scope of active law enforcement or firefighting and prevention service. (2) A former member who is in the service of an employer and seeks to redeposit contributions for past employment as an officer or employee of a law enforcement agency or fire department in this system whose principal duties consisted of active law enforcement or firefighting and prevention service, but excluding one whose principal duties were those of a telephone operator, clerk, stenographer, machinist, mechanic, or otherwise, and whose functions did not clearly come within the scope of active law enforcement or firefighting and prevention service, even though the officer or employee was subject to occasional call, or was occasionally called upon, to perform duties within the scope of active law enforcement or firefighting and prevention service. (f) For purposes of this section, a "former member" is a member who left county or district service and who did not elect to, or was not eligible to, leave his or her contributions on deposit pursuant to Article 9 (commencing with Section 31700). (g) Each retirement system shall establish criteria to determine the eligibility of a former member to redeposit contributions, and the amount of contributions that may be redeposited, pursuant to this section in those cases in which the system no longer maintains complete records with respect to the former member. SEC. 4. Section 45309 of the Government Code is amended to read: 45309. Among other matters, the ordinance establishing the system shall provide for: (a) The amount of benefits to be paid to any officers or employees, or their beneficiaries, and the terms and conditions upon which the benefits will be paid. (b) The contribution to be paid by the officers or employees to the pension and retirement fund. (c) The contribution to be paid by the city to the pension and retirement fund, which, exclusive of contributions paid on account of service rendered prior to the effective date of the ordinance, shall not exceed the total contribution paid to the pension and retirement fund by the officers and employees. (d) The personnel of the retirement board, which shall consist of not less than five members, at least two of whom shall be elected by the officers and employees who are included in the retirement system. (e) The adoption of regulations for the administration of the system by the retirement board. (f) The refunding to any officer or employee who withdraws from the system, prior to retirement, of the amount of his or her contribution and the interest credited to his or her contribution upon the officer's or employee's request following withdrawal from the system. SEC. 5. Section 45310.6 is added to the Government Code, to read: 45310.6. When a city has established a reciprocal retirement system under this chapter, the following shall apply: (a) Any former member who left service under that system and became a member of a reciprocal retirement system or a retirement system established under the Public Employees' Retirement Law, and who did not elect to, or was not eligible to, leave his or her contributions on deposit, may elect to redeposit those contributions if he or she is an active member of a reciprocal retirement system or the Public Employees' Retirement System at the time of redeposit. A former member may exercise this right by redepositing in the retirement fund of the city he or she left, the amount of accumulated contributions and interest that he or she withdrew from that retirement fund plus regular interest thereon from the date of separation. (b) A former member who redeposits under this section shall have the same rights as a member who elected to leave his or her accumulated contributions on deposit in the fund. The deferred retirement allowance of the member shall be determined in accordance with provisions applicable to a member retiring directly from city employment on the date of his or her retirement. (c) A former member who redeposits under this section shall be entitled to a reduced age at entry, commencing with contributions payable the first day of the month following the date the association receives notice of the redeposit, if applicable. (d) This section does not apply to either of the following: (1) A member or former member who is retired. (2) A former member who is not in the service of an employer making him or her a member of a retirement system established under the Public Employees' Retirement Law or a reciprocal retirement system. (e) This section shall only apply to either of the following: (1) A former member who is in the service of an employer as an officer or employee of a law enforcement agency or fire department whose principal duties consist of active law enforcement or firefighting and prevention service, but excluding one whose principal duties are those of a telephone operator, clerk, stenographer, machinist, mechanic, or otherwise, and whose functions do not clearly come within the scope of active law enforcement or firefighting and prevention service, even though the officer or employee is subject to occasional call, or is occasionally called upon, to perform duties within the scope of active law enforcement or firefighting and prevention service. (2) A former member who is in the service of an employer and seeks to redeposit contributions for past employment as an officer or employee of a law enforcement agency or fire department in the city's retirement system whose principal duties consisted of active law enforcement or firefighting and prevention service, but excluding one whose principal duties were those of a telephone operator, clerk, stenographer, machinist, mechanic, or otherwise, and whose functions did not clearly come within the scope of active law enforcement or firefighting and prevention service, even though the officer or employee was subject to occasional call, or was occasionally called upon, to perform duties within the scope of active law enforcement or firefighting and prevention service. (f) For purposes of this section, a "former member" is a member who left service under a retirement system established under this chapter and who did not elect to, or was not eligible to, leave his or her contributions on deposit with the system. (g) Each city retirement system subject to this section shall establish criteria to determine the eligibility of a former member to redeposit contributions, and the amount of contributions that may be redeposited, in those cases in which the system no longer maintains complete records with respect to the former member. (h) It is the intent of the Legislature in enacting this section to recognize a statewide public obligation to all those whose duties as local public safety officers expose them to more than ordinary risks through their contribution to ensuring public safety and to ensure that those who do serve or have served as local public safety officers shall have the ability to receive pension benefits for past public service in other jurisdictions within the state. SEC. 6. Section 45310.7 is added to the Government Code, to read: 45310.7. (a) On or after January 1, 2003, a member who is credited with less than the number of years of service required for vesting shall have the right to elect to leave accumulated contributions on deposit in the retirement fund of the city's retirement system. Failure to make an election to withdraw accumulated contributions shall be deemed an election to leave accumulated contributions on deposit in the system's retirement fund. (b) An election to allow accumulated contributions to remain in the system's retirement fund may be revoked by the member at any time except: (1) while the member is employed in service in a position in which the member is not excluded from membership in the system with respect to that service; (2) while the member is in service as a member of a public retirement system supported, in whole or in part, by state funds; or (3) while the member is in service in a reciprocal retirement system, entered within six months after discontinuing service in the city's retirement system. All accumulated contributions made up to the time of revocation may then be withdrawn. (c) A member whose membership continues under this section is subject to the same age, service, and disability requirements as apply to other members for service or disability retirement. After the qualification of the member for retirement by reason of age, which shall be the lowest age applicable to any membership category in which the member has credited service, or disability, the member shall be entitled to receive a retirement allowance based upon the amount of the member's accumulated contributions and service standing to the member's credit at the time of retirement and on the employer contributions held for the member and calculated in the same manner as for other members. (d) Service, solely for purposes of meeting minimum service qualifications for service or disability retirement, shall also include service credited as an employee of a reciprocal system when the member retires concurrently from all reciprocal retirement systems. A member whose combined service from all reciprocal retirement systems does not meet the minimum service qualifications may not receive a service or disability retirement from this system. (e) For purposes of this section, "accumulated contributions" means the sum of all member contributions standing to the credit of a member's individual account, and interest thereon. (f) It is the intent of the Legislature in enacting this section to recognize that the state has a compelling interest in ensuring that its public agencies recruit and retain the highest caliber of public employees by allowing local public employees to retain the service credit that they earned through their service as local public employees in order to encourage them to return to public employment and continue to serve the public. SEC. 7. Section 53216.8 is added to the Government Code, to read: 53216.8. (a) Any former member who left the service of a local agency with established reciprocity, and who became a member of a county retirement system, a retirement system established under the Public Employees' Retirement Law, or another reciprocal retirement system and who did not elect to, or was not eligible to, leave his or her contributions on deposit, may elect to redeposit those contributions if he or she is an active member of a reciprocal retirement system or the Public Employees' Retirement System at the time of redeposit. A former member may exercise this right by redepositing in the retirement fund of the local agency he or she left, the amount of accumulated contributions and interest that he or she withdrew from that retirement fund plus regular interest thereon from the date of separation. (b) A former member who redeposits under this section shall have the same rights as a member who elected to leave his or her accumulated contributions on deposit in the local agency's fund. The deferred retirement allowance of the member shall be determined in accordance with provisions applicable to a member retiring directly from local agency employment on the date of his or her retirement. (c) A former member who redeposits under this section shall be entitled to a reduced age at entry, commencing with contributions payable the first day of the month following the date the local agency receives notice of the redeposit, if applicable. (d) This section does not apply to either of the following: (1) A member or former member who is retired. (2) A former member who is not in the service of an employer making him or her a member of a county retirement system, a retirement system established under the Public Employees' Retirement Law, or another reciprocal retirement system. (e) This section shall only apply to either of the following: (1) A former member who is in the service of an employer as an officer or employee of a law enforcement agency or fire department whose principal duties consist of active law enforcement or firefighting and prevention service, but excluding one whose principal duties are those of a telephone operator, clerk, stenographer, machinist, mechanic, or otherwise, and whose functions do not clearly come within the scope of active law enforcement or firefighting and prevention service, even though the officer or employee is subject to occasional call, or is occasionally called upon, to perform duties within the scope of active law enforcement or firefighting and prevention service. (2) A former member who is in the service of an employer and seeks to redeposit contributions for past employment as an officer or employee of a law enforcement agency or fire department in this system whose principal duties consisted of active law enforcement or firefighting and prevention service, but excluding one whose principal duties were those of a telephone operator, clerk, stenographer, machinist, mechanic, or otherwise, and whose functions did not clearly come within the scope of active law enforcement or firefighting and prevention service, even though the officer or employee was subject to occasional call, or was occasionally called upon, to perform duties within the scope of active law enforcement or firefighting and prevention service. (f) For purposes of this section, a "former member" is a member who left service under a retirement system established under this chapter and who did not elect to, or was not eligible to, leave his or her contributions on deposit. (g) Each retirement system subject to this section shall establish criteria to determine the eligibility of a former member to redeposit contributions, and the amount of contributions that may be redeposited, in those cases in which the system no longer maintains complete records with respect to the former member. (h) It is the intent of the Legislature in enacting this section to recognize a statewide public obligation to all those whose duties as local public safety officers expose them to more than ordinary risks through their contribution to ensuring public safety and to ensure that those who do serve or have served as local public safety officers shall have the ability to receive pension benefits for past public service in other jurisdictions within the state. SEC. 8. Section 53217.10 is added to the Government Code, to read: 53217.10. (a) On or after January 1, 2003, a member who is credited with less than the number of years of service required for vesting shall have the right to elect to leave accumulated contributions on deposit in the local agency's retirement fund. Failure to make an election to withdraw accumulated contributions shall be deemed an election to leave accumulated contributions on deposit in the retirement fund. (b) An election to allow accumulated contributions to remain in the retirement fund may be revoked by the member at any time except: (1) while the member is employed in service in a position in which the member is not excluded from membership in the local system retirement fund with respect to that service; (2) while the member is in service as a member of public retirement system supported, in whole or in part, by state funds; or (3) while the member is in service, entered within six months after discontinuing county service, as a member of a reciprocal retirement system. All accumulated contributions contributed up to the time of revocation may then be withdrawn. (c) A member whose membership continues under this section is subject to the same age, service, and disability requirements as apply to other members for service or disability retirement. After the qualification of the member for retirement by reason of age, which shall be the lowest age applicable to any membership category in which the member has credited service, disability, the member shall be entitled to receive a retirement allowance based upon the amount of the member's accumulated contributions and service standing to the member's credit at the time of retirement and on the employer contributions held for the member and calculated in the same manner as for other members. (d) Service, solely for purposes of meeting minimum service qualifications for service or disability retirement, shall also include service credited as an employee of a reciprocal system when the member retires concurrently from all reciprocal retirement systems. A member whose combined service from all reciprocal retirement systems does not meet the minimum service qualifications may not receive a service or disability retirement from this system. (e) For purposes of this section, "accumulated contributions" means the sum of all member contributions standing to the credit of a member's individual account, and interest thereon. (f) It is the intent of the Legislature in enacting this section to recognize that the state has a compelling interest in ensuring that its public agencies recruit and retain the highest caliber of public employees by allowing local public employees to retain the service credit that they earned through their service as local public employees in order to encourage them to return to public employment and continue to serve the public.