BILL NUMBER: AB 2240 CHAPTERED 07/24/06 CHAPTER 117 FILED WITH SECRETARY OF STATE JULY 24, 2006 APPROVED BY GOVERNOR JULY 24, 2006 PASSED THE SENATE JUNE 26, 2006 PASSED THE ASSEMBLY APRIL 6, 2006 INTRODUCED BY Committee on Public Employees, Retirement and Social Security (Torrico (Chair), Jones, Mullin, and Negrete McLeod) FEBRUARY 22, 2006 An act to amend Sections 31485.7, 31485.8, 31486.2, and 31489, and to add Sections 31486.35 and 31490.6 to, the Government Code, relating to county employees' retirement. LEGISLATIVE COUNSEL'S DIGEST AB 2240, Committee on Public Employees, Retirement and Social Security County employees' retirement: additional retirement credit. Existing law, the County Employees Retirement Law of 1937, establishes noncontributory retirement plans for employees in specified counties. Retirement benefits under those plans are calculated, in part, based upon a member's years of service credit. Under existing law, if approved by the county board of supervisors, a member of those plans in the Counties of Santa Barbara and Los Angeles may receive service credit for time that would not otherwise be recognized, including prior service with another public agency, and upon payment by the member of specified contributions to the retirement fund. This bill would additionally provide that the board of supervisors in the Counties of Santa Barbara and Los Angeles may provide that a member of a noncontributory plan may receive up to 5 years of service credit for additional retirement credit, as defined, upon payment of additional contributions prior to retirement, or in certain circumstances, within 120 days after retirement, by lump sum or by installment payments over a period of up to 10 years and subject to other conditions, as specified. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 31485.7 of the Government Code is amended to read: 31485.7. (a) Notwithstanding any other contrary provision of this chapter, a member who elects to purchase retirement service credit under Section 31486.3, 31486.35, 31499.3, 31499.13, 31641.1, 31641.5, 31646, 31652, or 31658, or under the regulations adopted by the board pursuant to Section 31643 or 31644 shall complete that purchase within 120 days after the effective date of his or her retirement. (b) This section is not operative in any county until the board of supervisors, by resolution, makes this section applicable in the county. SEC. 2. Section 31485.8 of the Government Code is amended to read: 31485.8. (a) Notwithstanding any other contrary provision of this chapter, a member who elects to purchase retirement service credit under Section 31490.5, 31490.6, 31494.3, 31494.5, 31641.1, 31641.5, 31646, 31652, or 31658, or under the regulations adopted by the board pursuant to Section 31643 or 31644 shall complete that purchase within 120 days after the effective date of his or her retirement. (b) This section applies only to a county of the first class, as defined by Section 28020, as amended by Chapter 1204 of the Statutes of 1971, and Section 28022, as amended by Chapter 43 of the Statutes of 1961. SEC. 3. Section 31486.2 of the Government Code is amended to read: 31486.2. (a) (1) Except as otherwise provided in Section 31486.3 or 31486.35, there shall be no general members' contributions under the plan created by this article. (2) A member who transfers to the retirement plan created by this article shall have refunded, within a reasonable period of time, not to exceed nine months from the date of receipt of election to transfer by the board, the member's accumulated contributions, together with interest thereon, which are credited to the member's account. Interest shall be credited to the June 30 or December 31 date, whichever is later, immediately preceding the date of the refund warrant. A refund under this section shall be payable to the member. (3) A member who has five or more years of county service as defined in subdivision (g) of Section 31486.1 may elect to leave his or her contributions on deposit for service retirement benefits only. (b) (1) Except as provided in Sections 31486.3 and 31486.9 and under reciprocal provisions of this article, a member who was in public service prior to becoming a member may not elect to receive credit in this retirement plan for that public service time, and may not receive credit for that prior public service. (2) Absence from work without pay may not be considered as breaking the continuity of service. SEC. 4. Section 31486.35 is added to the Government Code, to read: 31486.35. (a) An active member may elect, by written notice filed with the board, to make contributions pursuant to this section and to receive up to five years of service credit in the retirement system for additional retirement credit, if the member has completed at least five years of credited service with that retirement system. (b) As used in this section, "additional retirement credit" means time that does not otherwise qualify as county service, public service, military service, medical leave of absence, or any other time recognized for service credit by the retirement system. (c) Notwithstanding any other provision of this chapter, service credit for additional retirement credit may not be counted to meet the minimum qualifications for service retirement or for purposes of establishing eligibility for benefits based on 30 years of service, additional ad hoc cost-of-living benefits based on service credit, health care benefits, or any other benefits based upon service credit. (d) A member who elects to make contributions and receive service credit for additional retirement credit shall contribute to the retirement fund, prior to the effective date of his or her retirement, by lump-sum payment or by installment payments over a period not to exceed 10 years, an amount that, at the time of commencement of purchase, in the opinion of the board and the actuary, is sufficient to not place any additional financial burden upon the retirement system. (e) No member may receive service credit under this section for additional retirement credit that he or she has not completed payment pursuant to subdivision (d) before the effective date of his or her retirement or, if applicable, prior to the date provided in Section 31485.7. Subject to the limitations of United States Internal Revenue Service regulations, a member who has elected to make payment in installments may complete payment by lump sum at any time prior to the effective date of his or her retirement. (f) Sums paid by a member pursuant to this section shall be considered to be and administered as contributions by the member. (g) This section is not operative in a county until the board of supervisors, by resolution adopted by majority vote, makes this section applicable in the county. SEC. 5. Section 31489 of the Government Code is amended to read: 31489. (a) Except as otherwise provided in Section 31490.5 or 31490.6, there shall be no general members' contributions under the plan created by this article. (b) A member who transfers to the retirement plan created by this article shall have refunded, within a reasonable period of time, not to exceed nine months from the date of receipt of election to transfer by the board, the member's accumulated contributions, together with interest thereon, which are credited to the member's account. Interest shall be credited to the June 30 or December 31 date, whichever is later, immediately preceding the date of the refund warrant. A refund under this section shall be payable to the member. SEC. 6. Section 31490.6 is added to the Government Code, to read: 31490.6. (a) An active member may elect, by written notice filed with the board, to make contributions pursuant to this section and to receive up to five years of service credit in the retirement system for additional retirement credit, if the member has completed at least five years of credited service with that retirement system. (b) As used in this section, "additional retirement credit" means time that does not otherwise qualify as county service, public service, military service, medical leave of absence, or any other time recognized for service credit by the retirement system. (c) Notwithstanding any other provision of this chapter, service credit for additional retirement credit may not be counted to meet the minimum qualifications for service retirement or for purposes of establishing eligibility for benefits based on 30 years of service, additional ad hoc cost-of-living benefits based on service credit, health care benefits, or any other benefits based upon service credit. (d) A member who elects to make contributions and receive service credit for additional retirement credit shall contribute to the retirement fund, prior to the effective date of his or her retirement, by lump-sum payment or by installment payments over a period not to exceed 10 years, an amount that, at the time of commencement of purchase, in the opinion of the board and the actuary, is sufficient to not place any additional financial burden upon the retirement system. (e) No member may receive service credit under this section for additional retirement credit that he or she has not completed payment pursuant to subdivision (d) before the effective date of his or her retirement or, if applicable, prior to the date provided in Section 31485.8. Subject to the limitations of United States Internal Revenue Service regulations, a member who has elected to make payment in installments may complete payment by lump sum at any time prior to the effective date of his or her retirement. (f) Sums paid by a member pursuant to this section shall be considered to be and administered as contributions by the member. (g) This section is not operative until the board of supervisors, by resolution adopted by majority vote, makes this section operative in the county.