BILL NUMBER: AB 1856 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MARCH 25, 2010
INTRODUCED BY Assembly Member Fong
FEBRUARY 12, 2010
An act to amend Section 21032 21050
of the Government Code, relating to public employees' retirement.
LEGISLATIVE COUNSEL'S DIGEST
AB 1856, as amended, Fong. Public employees' retirement.
The Public Employees' Retirement Law provides a comprehensive set
of rights and benefits based upon age, service credit, and final
compensation. Under the Public Employees' Retirement Law, members may
elect to receive service credit for various types of public service,
and this election is effective only if an appropriate payment, or
authorization for payment, of the contributions and interest required
for the credit is made. That law calculates retirement benefits
in part based on years of creditable service and authorizes a member
to receive additional service credits, as specified.
This bill would make a technical, nonsubstantive change to these
provisions.
This bill would authorize a member authorized to pay for credit
for service in after-tax installments to elect in writing, including
by verified electronic transaction, at any time prior to retirement,
to suspend after-tax installment payments for a period not to exceed
12 months or to prospectively cancel payment of the remaining unpaid
balance for those installment payments, as specified. The bill would
require that installment payments automatically resume at the end of
the suspension period, or earlier if requested by the member. The
bill would prohibit an additional suspension of those installment
payments for the same service for 3 years following the resumption of
installment payments. The bill would require that the balance due at
the end of a suspension period be recalculated to include interest
accrued during the suspension.
Vote: majority. Appropriation: no. Fiscal committee: no
yes . State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 21050 of the
Government Code is amended to read:
21050. (a) An election by a member to receive credit for service
under this part, in addition to his or her current and prior service
credit, shall be effective only if accompanied by a lump-sum payment
or an authorization for payments, other than a lump-sum payment, in
accordance with regulations of the board.
(b) If a member electing to receive credit for service under this
part is authorized to pay for that service in installment payments
beginning on or after January 1, 2004, the amount of the installment
payments shall include an actuarial adjustment, as determined by the
chief actuary, as necessary to take into account the provisions of
Section 21037. The amount of the actuarial adjustment may not exceed
one-half of 1 percent of the total installment payment.
(c) (1) A member authorized to pay for credit for service in
after-tax installments may elect in writing, including by verified
electronic transaction, at any time prior to retirement, to suspend
after-tax installment payments for a period not to exceed 12 months.
Installment payments shall automatically resume at the end of the
suspension period, or earlier if requested by the member. A member
may not elect an additional suspension of those installment payments
for the same service for three years following the resumption of
installment payments.
(2) The balance due at the end of a suspension period shall be
recalculated to include interest accrued during the suspension.
(3) A member who retires during the suspension period may, prior
to retirement, do either of the following:
(A) Make a lump sum payment for the recalculated balance due.
(B) Cancel installment payments in the manner specified in
subdivision (d).
(4) Failure by a member to make the lump sum payment or the
election to cancel installment payments, will result in the
resumption of installment payments as of his or her date of
retirement.
(d) A member authorized to pay for credit for service in after-tax
installments may elect in writing, including verified electronic
transaction, at any time prior to retirement, to prospectively cancel
payment of the remaining unpaid balance for those installment
payments.
(1) An election shall be effective upon the earlier of the member'
s retirement date, or the first day of the month following approval
by the system of the election.
(2) Service credited to the member's account will be reduced in
proportion to the balance of the total amount remaining unpaid on the
effective date of the cancellation. If the member elects to cancel
during or at the end of a suspension period, the balance shall
include any interest accrued and unpaid during the suspension period.
(3) Installment payments may not be cancelled for any of the
following:
(A) Contribution or service credit adjustments required by law or
agreement.
(B) A tier election pursuant to Article 2 (commencing with Section
21070) of Chapter 12 of Part 3 of Division 5 of Title 2.
(C) The purchase of service credit subject to a community property
division by way of court judgment, domestic relations or other court
order or settlement agreement.
(e) If a member who has not elected to suspend installment
payments pursuant to subdivision (c) fails to make after-tax
installment payments when due for a period of 12 months, the board
may cancel the remaining unpaid balance in the same manner and with
the same effect as if the member had elected to cancel his or her
installment payments pursuant to subdivision (d).
(f) At any time prior to retirement, a member may elect to
purchase that portion of the service credit not credited to his or
her account as a result of a cancellation executed pursuant to
subdivision (d) or (e). A member who elects to purchase that service
credit shall make the contributions as specified in Section 21052.
SECTION 1. Section 21032 of the Government Code
is amended to read:
21032. A member may elect at any time prior to retirement, in
accordance with regulations of the board, to receive credit for
public service, under any of the definitions in this article, in
addition to his or her current and prior service credit. An election
shall be effective only if accompanied by a lump-sum payment of the
contributions and interest required for the credit or by
authorization for immediate institution of payroll deduction of
installment payment of the contributions and interest. The right of
election is subject to Sections 20894 and 20961, and shall be
ineffective with respect to any time or employment for which the
member subsequently becomes entitled to or eligible to elect to
receive service credit in another system supported in whole or in
part from public funds, in which case the accumulated contributions
on deposit for the period of service credit shall be paid to the
member.