BILL NUMBER: AB 1902 CHAPTERED
BILL TEXT
CHAPTER 86
FILED WITH SECRETARY OF STATE JULY 15, 2010
APPROVED BY GOVERNOR JULY 15, 2010
PASSED THE SENATE JULY 1, 2010
PASSED THE ASSEMBLY MAY 10, 2010
AMENDED IN ASSEMBLY MARCH 9, 2010
INTRODUCED BY Assembly Member Portantino
FEBRUARY 16, 2010
An act to amend Sections 31488, 31490, and 31494.5 of, and to add
Section 31495.6 to, the Government Code, relating to county employees'
retirement.
LEGISLATIVE COUNSEL'S DIGEST
AB 1902, Portantino. County employees' retirement: Los Angeles
County.
Existing law establishes retirement plans, known as Retirement
Plan D and Retirement Plan E, that are applicable in the retirement
system in Los Angeles County and prescribe procedures for members to
transfer between those plans. Under existing law, a member who
transfers from Retirement Plan E to Retirement Plan D, as specified,
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 2 continuous years of active service
after his or her most recent transfer date, or (2) earned 5 years of
retirement service credit under Retirement Plan D after his or her
most recent transfer date. Existing law also provides that 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 specified, 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.
This bill would instead provide that a member who transfers from
Retirement Plan E to Retirement Plan D, as specified, and who becomes
disabled and has not completed the 2 continuous years of active
service or earned 5 years of retirement service credit under
Retirement Plan D after his or her most recent transfer date (1) may
apply for and receive only a deferred or service retirement
allowance, or (2) may elect to transfer prospectively back to
Retirement Plan E, and for the purposes of calculating his or her
retirement benefits under this section, shall in lieu of credit under
Retirement Plan D be credited with service under Retirement Plan E,
as specified, 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 up to the earlier of the date he or she
retires or no longer qualifies for disability benefits.
Existing law defines the age at time of entrance into the
retirement system for a person who enters within 90 days, except as
specified, of last rendering service as a member of the Public
Employees' Retirement System, another retirement system established
under the County Employees Retirement Law of 1937, the State Teachers'
Retirement System, or a retirement system of any other public agency
of the state that has established reciprocity with the Public
Employees' Retirement System subject to specified conditions, and who
retains his membership in such other system or systems, as the age
at entry into the first such other system. Existing law also defines
the member's age at the time of entrance into the retirement system
for a person who, after entering, redeposits the contributions he or
she withdrew from the Public Employees' Retirement System, and who
otherwise meets all requirements for reciprocity under this article
by reason of his or her membership in the Public Employees'
Retirement System, as his or her age at entry into the Public
Employees' Retirement System, commencing with the pay period
immediately following receipt of confirmation from the Public
Employees' Retirement System that all withdrawn contributions have
been redeposited.
This bill would authorize a nonretired member to use current,
forfeited, and vested membership periods, as specified, when meeting
the reciprocity requirements for purposes of determining age of
entry.
Existing law prohibits a member of Retirement Plan E from being
credited with service for any period of time, in excess of 22
consecutive workdays, in which the member is absent from work without
pay, except as specified.
This bill would instead prohibit a member from being credited with
service for any payroll period, in which no compensation is received
by the member, except as specified.
Existing law requires a member to have completed 10 years of
service to be vested under Retirement Plan E. Under existing law, for
the purposes of calculating those 10 years of service, an unpaid
leave of absence of not to exceed one year, or a leave of absence for
which an employee receives any benefit that has been approved by the
employer, is not considered an interruption of service, except that
the period of time of unpaid leave in excess of 22 consecutive
workdays is not considered as service in calculating other specified
benefits.
This bill would instead provide that a payroll period in which no
compensation is received by a member shall not be considered as
service in calculating those other benefits.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 31488 of the Government Code is amended to
read:
31488. Unless the context otherwise requires, the definitions
contained in this section, govern the construction of this article.
(a) As used in subdivisions (f) and (g) of Section 31491,
subdivisions (b) and (c) of Section 31492, and Section 31495, "board"
means the board of investments. In all other cases, "board" means
the board of retirement.
(b) "Employer" means the county or district or agency whose
employees are members of the retirement system of the county.
(c) "Federal system" means the Old Age and Survivors Insurance
provisions of the Social Security Act.
(d) "Final compensation" means the average annual compensation
earnable by a general member during any three years, whether or not
consecutive, elected by the member at or before the time an
application for retirement is filed or, if no election is made,
during the three years in which the member or former member last
earned compensation preceding retirement. If a member or former
member has less than three years of service, final compensation shall
be determined by dividing total compensation by the number of months
of service credited to the member or former member and multiplying
by 12. In no event shall final compensation include any disability
benefits received by the member or former member under a disability
plan provided by the employer.
(e) "Member" or "general member" means an employee hired on a
monthly permanent basis of at least three-quarter time, as defined by
the employer, except an employee eligible for safety membership.
(f) "Primary insurance amount" means the monthly retirement
benefit payable under the federal system at the age at which full
retirement benefits are available under the federal system. This age
is deemed to be age 65 until June 30, 1983.
(g) "Service" means the period of uninterrupted employment of a
member and the time in which a member or former member (1) is totally
disabled, and (2) is receiving disability benefits or is eligible to
receive disability benefits either during or after any elimination
or qualifying period, under a disability plan provided by the
employer.
Except as otherwise herein provided, a member shall not be
credited with service for any payroll period in which no compensation
is received by the member.
Unless otherwise provided, service shall not include military
service or public service other than service with the employer.
SEC. 2. Section 31490 of the Government Code is amended to read:
31490. (a) Except as provided in Sections 31490.5 and 31494, 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
shall not receive credit for that prior public service.
(b) Absence from work or termination of employment while an
eligible employee or disability beneficiary, as defined by a
disability plan provided by the employer, shall not be considered as
breaking the continuity of service.
(c) For the purposes of subdivision (b) of Section 31491, an
unpaid leave of absence of not to exceed one year, or a leave of
absence for which an employee receives any benefit that has been
approved by the employer, shall not be considered an interruption of
service. However, a payroll period in which no compensation is
received by a member shall not be considered as service in
calculating the benefits otherwise provided under this article.
SEC. 3. Section 31494.5 of the Government Code is amended 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.
Notwithstanding any other provision to the contrary, a member who
becomes disabled and does not meet either of these conditions (1) may
apply for and receive only a deferred or service retirement
allowance, or (2) may elect to transfer prospectively back to
Retirement Plan E, and for the purposes of calculating his or her
retirement benefits under this section, shall in lieu of credit under
Retirement Plan D 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 up to the earlier of the date he or she retires or no longer
qualifies for disability benefits. 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 into Retirement Plan
D or after earning five years of retirement service credit under
Retirement Plan D after that 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. 4. Section 31495.6 is added to the Government Code, to read:
31495.6. A member may use current, forfeited, and vested
membership periods earned under this chapter when meeting the
reciprocity requirements for purposes of determining age of entry, as
defined in Sections 31833 and 31833.1. This section shall not apply
to members who are retired from this system.