BILL NUMBER: AB 2260 INTRODUCED
BILL TEXT
INTRODUCED BY Committee on Public Employees, Retirement and Social
Security (Hernandez (Chair), Furutani (Vice Chair), Beall, and
Torrico)
FEBRUARY 18, 2010
An act to amend Sections 22126, 22212.5, 22380, 22713, 22803,
22901, 23801, 23851, 24002, 24005, 24018, 24102, 24105, 24119,
24214.5, 24300.1, 24309, 24607, and 27406 of the Education Code,
relating to state teachers' retirement.
LEGISLATIVE COUNSEL'S DIGEST
AB 2260, as introduced, Committee on Public Employees, Retirement
and Social Security. State teachers' retirement: administration:
benefits.
The State Teachers' Retirement Law, which is administered by the
Teachers' Retirement Board, prescribes a comprehensive system of
rights and benefits for its members, including disability benefits,
retirement, death benefits, and absences under the Family Medical
Leave Act.
This bill would make clarifying changes to those provisions of
law, including changes that would identify employees whom subject to
conflict of interest provisions, provide that a cancellation or
change in a retirement option may not be made on the effective date
of a member's retirement, clarify that applications for disability
retirement are required to be submitted on properly executed forms,
and conform those provisions with applicable provisions of federal
law.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 22126 of the Education Code is amended to read:
22126. "Disability" or "disabled" means any medically
determinable physical or mental impairment that is permanent or that
can be expected to last continuously for at least 12 months, measured
from the onset of the disability, but no earlier than the day
following the last day of actual performance of service
that prevents a member from performing the member's usual duties for
the member's employer, the member's usual duties for the member's
employer with reasonable modifications, or the duties of a comparable
level position for which the member is qualified or can become
qualified within a reasonable period of time by education, training,
or experience. Any impairment from a willful self-inflicted injury
shall not constitute a disability.
SEC. 2. Section 22212.5 of the Education Code is amended to read:
22212.5. (a) Except as otherwise provided in subdivision (d),
this section shall apply to the following positions in the system:
chief executive officer, system actuary, general counsel, chief
investment officer, and other investment officers and portfolio
managers whose positions are designated managerial pursuant to
Section 18801.1 of the Government Code.
(b) Notwithstanding Sections 19816, 19825, 19826, 19829, and 19832
of the Government Code, the board shall fix the compensation for the
positions specified in subdivision (a). In so doing, the board shall
be guided by the principles contained in Sections 19826 and 19829 of
the Government Code, consistent with its fiduciary responsibility to
its members to recruit and retain highly qualified and effective
employees for these positions.
(c) When a position specified in subdivision (a) is filled through
a general civil service appointment, it shall be filled from an
eligible list based on an examination that was held on an open basis,
and tenure in those positions shall be subject to the provisions of
Article 2 (commencing with Section 19590) of Chapter 7 of Part 2 of
Division 5 of Title 2 of the Government Code. In addition to the
causes for action specified in that article, the board may take
action under the article for causes related to its fiduciary
responsibility to its members, including the employee's failure to
meet specified performance objectives.
(d) An individual who held a position designated in subdivision
(a), or was a member of the board, a chief of staff, a
deputy chief executive officer, chief financial
officer, or an assistant executive officer
was in an equivalent senior management position , shall
not, for a period of two years after leaving that position, for
compensation, act as agent or attorney for, or otherwise represent,
any other person, except the state, by making any formal or informal
appearance before or by making any oral or written communication to
the board, or any officer or employee thereof, if the appearance or
communication is made for the purpose of influencing administrative
or legislative action or any action or proceeding involving the
issuance, amendment, awarding, or revocation of a permit, license,
grant, contract, or sale or purchase of goods or property.
SEC. 3. Section 22380 of the Education Code is amended to read:
22380. (a) The board shall establish a building account for the
transfer of money appropriated for that purpose from the retirement
fund for the construction or remodeling of buildings and improvements
thereon, maintenance, repair, and improvement thereof. For
accounting purposes, the board shall pay rental to the building
account in an amount sufficient to repay all costs of acquisition,
construction, and maintenance of space used by the board plus
interest to the retirement fund.
(b) The board may contract with the Department of General Services
for the purchase of insurance against loss of, or damage to, the
property or the loss of use or occupancy of the building, liability
insurance, and other insurance that is customarily carried on state
office buildings. Premiums for this insurance shall be paid from the
building account.
(c) The land, building, equipment, and improvements thereon, shall
constitute an investment , in lieu of facilities operations
cost, in the retirement fund of the system and
shall be carried on the books thereof as such in
accordance with generally accepted accounting practices
principles .
SEC. 4. Section 22713 of the Education Code is amended to read:
22713. (a) Notwithstanding any other provision of this chapter,
the governing board of a school district or a community college
district or a county superintendent of schools may establish
regulations that allow an employee who is a member of the Defined
Benefit Program to reduce his or her workload from full time to part
time, and receive the service credit the member would have received
if the member had been employed on a full-time basis and have his or
her retirement allowance, as well as other benefits that the member
is entitled to under this part, based, in part, on final compensation
determined from the compensation earnable the member would have been
entitled to if the member had been employed on a full-time basis,
and as further specified in Sections 44922, 87483, and 89516.
(b) The regulations shall include, but may not be limited to, the
following:
(1) The option to reduce the member's workload shall be exercised
at the request of the member and may be revoked only with the mutual
consent of the employer and the member. The agreement to reduce a
member's workload shall be in effect at the beginning of the school
year.
(2) The member shall have been employed on a full-time basis to
perform creditable service subject to coverage under the Defined
Benefit Program and have a minimum of 10 years of credited service
prior to the reduction in workload. Additionally, the member shall
have five years of full-time employment immediately preceding the
reduction in workload.
(3) The member may not have had a break in service during the five
years immediately preceding the reduction in workload. For purposes
of this subdivision, sabbaticals, other approved leaves of absence,
and unpaid absences from the performance of creditable service for
personal reasons from full-time employment do not constitute a break
in service. For purposes of this subdivision, the period of time
during which a member is retired for service shall constitute a break
in service and a member who reinstates from retirement shall be
required to be employed on a full-time basis to perform creditable
service for at least five school years immediately preceding the
reduction in workload.
(4) The member shall have reached 55 years of age prior to the
reduction in workload.
(5) The reduced workload shall be performed for a period of time,
as specified in the regulations, up to and including 10 years. The
period of time specified in the regulations may not exceed 10 years.
(6) The reduced workload shall be equal to at least one-half of
the time the employer requires for full-time employment in accordance
with Section 22138.5 pursuant to the member's contract of employment
during his or her last school year of full-time employment preceding
the reduction in workload.
(7) The member shall be paid creditable compensation that is the
pro rata share of the creditable compensation the member would have
been paid had the member not reduced his or her workload.
(c) Prior to the reduction of a member's workload under this
section, the employer, in conjunction with the administrative staff
of the State Teachers' Retirement Plan and the Public Employees'
Retirement System, shall verify the member's eligibility for the
reduced workload program.
(d) For each school year the member's workload is reduced pursuant
to this section, the member shall make contributions to the Teachers'
Retirement Fund in the amount that the member would have contributed
if the member had performed creditable service on a full-time basis
and if that service was subject to coverage under the Defined Benefit
Program.
(e) For each school year the member's workload is reduced pursuant
to this section, the employer shall contribute to the Teachers'
Retirement Fund at a rate adopted by the board as a plan amendment
with respect to the Defined Benefit Program an amount based upon the
creditable compensation that would have been paid to the member if
the member had performed creditable service on a full-time basis and
if that service was subject to coverage under the Defined Benefit
Program.
(f) The employer shall maintain the necessary records to
separately identify each member who participates in the reduced
workload program pursuant to this section.
(g) A member who retires or otherwise separates from service prior
to the end of the school year shall be in violation of this section
and the member's service credit for that period of the contract shall
be computed in accordance with Section 22701.
(h) A member performing service in accordance with this section
may not terminate his or her agreement pursuant to paragraph (1) of
subdivision (b) if the employer has a formalized agreement to pick up
member contributions pursuant to Section 22903. A member may
terminate the agreement only if the employee takes one of the
following actions:
(1) Terminates service.
(2) Retires from service under the Defined Benefit Program.
(3) Continues to perform service pursuant to this section under a
new arrangement to perform creditable service for at least one-half
of the time the employer requires for full-time employment in
accordance with Section 22138.5.
(4) Returns to full-time employment.
SEC. 5. Section 22803 of the Education Code is amended to read:
22803. (a) A member, other than a retired member, may request to
purchase service credit for any of the following:
(1) Service performed in a teaching position in the University of
California or California State University that is not covered by
another public retirement system.
(2) Service performed in a certificated teaching position in a
child care center operated by a county superintendent of schools or a
school district in this state.
(3) Service performed in a teaching position in the California
School for the Deaf or the California School for the Blind, or in
special classes maintained by the public schools of this state for
the instruction of the deaf, the hard of hearing, the blind, or the
semisighted.
(4) Service performed in a certificated teaching position in a
federally supported and administered Indian school in this state.
(5) Time served, not to exceed two years, in a certificated
teaching position in a job corps center administered by the United
States government in this state if the member was employed to perform
creditable service subject to coverage under the Defined Benefit
Program within one year prior to entering the job corps and returned
to employment to perform creditable service subject to coverage under
the Defined Benefit Program within six months following the date of
termination of service in the job corps.
(6) Time served, not to exceed two years, in a teaching position
as a member of the Peace Corps if the member was employed to perform
creditable service subject to coverage under the Defined Benefit
Program within one year prior to entering the Peace Corps and
returned to employment to perform creditable service subject to
coverage under the Defined Benefit Program within six months
following the date of termination of service in the Peace Corps.
(7) Time spent on a sabbatical leave, approved by an employer in
this state after meeting the requirements of Section 44969.
(8) Time spent on an approved leave, approved by an employer in
this state, to participate in any program under the federal Mutual
Educational and Cultural Exchange Program.
(9) Time spent on leave approved by an employer in this state as
maternity or paternity leave, not to exceed 24 consecutive months,
regardless of whether or not the leave was taken before or after the
addition of this subdivision.
(10) Time spent on an employer-approved leave based on the
guidelines for the Family and Medical Leave Act or the California
Family Rights Act, or both, up to four months
a total of 12 workweeks in any 12-month period.
(11) Time spent employed by the Board of Governors of the
California Community Colleges in a position subject to coverage by
the Public Employees' Retirement System between July 1, 1991, and
December 31, 1997, provided the member has elected to return to
coverage under the State Teachers' Retirement System pursuant to
Section 20309 of the Government Code.
(b) In no event shall the member receive credit for service or
time described in paragraphs (1) to (11), inclusive, of subdivision
(a) if the member has received or is eligible to receive credit for
the same service or time in the Cash Balance Benefit Program under
Part 14 (commencing with Section 26000) or another public retirement
system.
SEC. 6. Section 22901 of the Education Code is amended to read:
22901. (a) Each member of the Defined
Benefit Program shall contribute to the retirement fund an amount
equivalent to 8 percent of the member's creditable compensation.
(b) Notwithstanding Section 22905, any member contributions for
service performed during the 2010-11 school year with a service
period ending after December 31, 2010, shall be credited pursuant to
subdivision (a).
SEC. 7. Section 23801 of the Education Code is amended to read:
23801. (a) A death payment of no less than five thousand dollars
($5,000) shall be paid to the beneficiary upon receipt of proof of
death of a member who had one or more years of credited service, at
least one of which had been performed subsequent to the most recent
refund of accumulated retirement contributions, if the member died
during any one of the following periods:
(1) While in creditable employment for which
compensation is paid.
(2) While disabled, if the disability had been continuous from the
last day for which creditable compensation had been paid.
(3) Within four months after termination of creditable
service or termination of employment, whichever occurs first.
(4) Within four months after termination of a disability allowance
if no service was performed after the termination.
(5) Within 12 months of the last day for which credita
ble compensation was paid, if the member was on an
approved leave of absence without compensation for reasons other than
disability or military service.
(b) A death payment pursuant to this section shall not be payable
for the death of a member that occurs within one year commencing with
the effective date of reinstatement from service retirement pursuant
to Section 24208.
(c) The board may adjust the death payment amount following each
actuarial valuation based on changes in the All Urban California
Consumer Price Index and adopt any adjusted amount as a plan
amendment.
(d) A beneficiary may waive his or her right to the death payment
in accordance with the requirements established by the system.
SEC. 8. Section 23851 of the Education Code is amended to read:
23851. (a) A death payment of not less than twenty thousand
dollars ($20,000) shall be paid to the beneficiary, as designated
pursuant to Section 23300, upon receipt of proof of death of
an active a member, who had one or more years
of credited service, at least one of which had been performed
subsequent to the most recent refund of accumulated retirement
contributions, if the member died during any one of the following
periods:
(1) While in employment for which creditable compensation is paid.
(2) Within four months after termination of creditable service or
termination of employment, whichever occurs first.
(3) Within 12 months of the last day for which creditable
compensation was paid, if the member was on an approved leave of
absence without creditable compensation for reasons other than
disability or military service.
(b) A death payment pursuant to this section shall not be payable
for the death of a member that occurs within one year commencing with
the effective date of termination of the service retirement
allowance pursuant to Section 24208 or during the six calendar months
commencing with the effective date of termination of the disability
retirement allowance pursuant to Section 24117.
(c) The board may adjust the death payment amount following each
actuarial valuation based on changes in the All Urban California
Consumer Price Index and adopt as a plan amendment with respect to
the Defined Benefit Program any adjusted amount.
(d) A designated beneficiary may waive the right to the death
payment in accordance with the requirements established by the
system.
SEC. 9. Section 24002 of the Education Code is amended to read:
24002. The board may authorize payment of a disability allowance
to any member who is qualified upon application under this part by
the member, the member's guardian or conservator, or the member's
employer, if the application is made
submitted on a properly executed form prescribed by the system
during any one of the following periods:
(a) While the member is employed or on a compensated leave of
absence.
(b) While the member is physically or mentally incapacitated for
performance of service and the incapacity has been continuous from
the last day of actual performance of service for which compensation
is payable to the member.
(c) While the member is on a leave of absence without
compensation, granted for reason other than mental or physical
incapacity for performance of service, and within four months after
the last day of actual performance of service for which compensation
is payable to the member, or within 12 months of that date if the
member is on an employer-approved leave to study at an approved
college or university.
(d) Within four months after the termination of the member's
employment subject to coverage under the Defined Benefit Program, if
the application was not made under subdivision (b) and was not made
more than four months after the last day of actual performance of
service for which compensation is payable to the member.
(e) A member with a dependent child, who becomes disabled prior to
normal retirement age, and whose sick leave will extend beyond
normal retirement age, may be awarded a disability allowance with an
effective date after normal retirement age, if the application is
filed prior to attaining normal retirement age.
(f) The member is not applying for a disability allowance because
of a physical or mental condition that existed at the time the most
recent membership in the Defined Benefit Program commenced and which
remains substantially unchanged at the time of application.
SEC. 10. Section 24005 of the Education Code is amended to read:
24005. (a) A disability allowance under this part shall become
effective upon any date designated by the member, provided all of the
following conditions are met:
(1) An application for disability allowance is filed on a
properly executed form provided
prescribed by the system.
(2) The effective date is later than the last day of creditable
service for which compensation is payable to the member.
(3) The effective date is no earlier than either the first day of
the month in which the application is received by the system's
headquarters office, as established pursuant to Section 22375, or the
date upon and continuously after which the member is determined to
the satisfaction of the board to have been mentally incompetent.
(b) If the member is employed to perform creditable service
subject to coverage under the Defined Benefit Program at the time the
disability allowance is approved under this part, the member shall
notify the system in writing, within 90 days, of the last day on
which the member will perform service. If the member does not respond
within 90 days, or if the last day on which service will be
performed is more than 90 days after the date the system notifies the
member of approval of the disability allowance, the member's
application for a disability allowance shall be rejected and a
disability allowance shall not be payable to the member.
SEC. 11. Section 24018 of the Education Code is amended to read:
24018. When a disabled member returns to work in his or her
former position of employment or in a comparable level position and
within six months of return experiences a recurrence of the original
disability, that can be medically substantiated, it shall be
considered, for the purpose of determining the duration of the
disability, that the condition had its onset as of the date the
member first became disabled. The former disability allowance under
this part shall again become payable as of the later of the first day
of the month in which the recurrence of the disability occurred or
the last day of creditable service for which compensation
is payable to the member provided the member complies with the
provisions of Section 24003.
SEC. 12. Section 24102 of the Education Code is amended to read:
24102. The board may authorize payment of a disability retirement
allowance under this part to any member who is qualified upon
application by the member, the member's guardian or conservator, or
the member's employer, if the application is made
submitted on a properly executed form prescribed by the system
during any one of the following periods:
(a) While the member is employed or on a compensated leave of
absence.
(b) While the member is physically or mentally incapacitated for
performance of service and the incapacity has been continuous from
the last day of actual performance of service for which compensation
is payable to the member.
(c) While the member is on a leave of absence without
compensation, granted for reason other than mental or physical
incapacity for performance of service, and within four months after
the last day of actual performance of service for which compensation
is payable to the member, or within 12 months of that date if the
member was on an employer-approved leave to study at an approved
college or university.
(d) Within four months after the termination of the member's
employment subject to coverage under the Defined Benefit Program, if
the application was not made under subdivision (b) and was not made
more than four months after the last day of actual performance of
service for which compensation is payable to the member.
(e) The member is not applying for a disability retirement
allowance because of a physical or mental condition that existed at
the time the most recent membership in the Defined Benefit Program
commenced and which remains substantially unchanged at the time of
application.
SEC. 13. Section 24105 of the Education Code is amended to read:
24105. (a) A disability retirement allowance under this part
shall become effective upon any date designated by the member,
provided that all of the following conditions are met:
(1) An application for disability retirement is filed on a
properly executed form provided
prescribed by the system.
(2) The effective date is later than the last day of
creditable service for which compensation is payable to the
member.
(3) The effective date is no earlier than either the first day of
the month in which the application is received at the system's
headquarters office, as established pursuant to Section 22375, or the
date upon and continuously after which the member is determined to
the satisfaction of the board to have been mentally incompetent.
(b) If a member's application for disability retirement under this
part does not contain an election of either an unmodified allowance
or an allowance modified under an option and if the member
subsequently submits an election, but not within the 30-day period
established pursuant to Section 24301, the board shall set a benefit
effective date which is no earlier than the first day of the month in
which the subsequent election is received by the system. If the
member fails to submit an election pursuant to Section 24301 and
within six months of the date the acknowledgment notice is mailed
pursuant to Section 24301, the member's application for disability
retirement under this part shall be rejected.
(c) If the member is employed to perform creditable service
subject to coverage under the Defined Benefit Program at the time the
disability retirement is approved, the member shall notify the
system in writing, within 90 days, of the last day on which the
member will perform service. If the member does not respond within 90
days, or if the last day on which service will be performed is more
than 90 days after the date the system notifies the member of the
approval of disability retirement, the member's application for
disability retirement shall be rejected and a disability retirement
allowance shall not be payable to the member.
SEC. 14. Section 24119 of the Education Code is amended to read:
24119. When a member retired for disability under this part
returns to work in the member's former position of employment or in a
comparable level position and within six months of return
experiences a recurrence of the original disability, which can be
medically substantiated, it shall be considered, for the purpose of
determining the duration of the disability, that the condition had
its onset as of the date the member first became disabled. The former
disability retirement allowance shall again become payable as of the
later of the first day of the month in which the recurrence of the
disability occurred or the last day of creditable service
for which compensation is payable to the member, provided the member
complies with Section 24103.
SEC. 15. Section 24214.5 of the Education Code is amended to read:
24214.5. (a) Notwithstanding Section 24214, as of July 1, 2010,
the postretirement compensation limitation that shall apply to the
compensation for performance of the activities identified in
subdivision (a) or (b) of Section 22119.5 either as an employee of an
employer, an employee of a third party, or as an independent
contractor , within the California public school system,
shall be zero dollars ($0) during the first six calendar months after
a member retired for service under this part, if the member is below
normal retirement
age at the time the compensation is earned.
(b) If a member retired for service under this part earns
compensation for performing activities identified in subdivision (a)
or (b) of Section 22119.5 in excess of the limitation specified in
subdivision (a), as an employee of an employer, as an employee of a
third party, or as an independent contractor, within the California
public school system, the member's retirement allowance shall be
reduced by the amount of the excess compensation. The amount of the
reduction may be equal to the monthly allowance payable but may not
exceed the amount of the annual allowance payable under this part for
the fiscal year in which the excess compensation was earned.
SEC. 16. Section 24300.1 of the Education Code is amended to read:
24300.1. (a) A member may, prior to the effective date of his or
her retirement, elect an option pursuant to this part that would
provide an actuarially modified retirement allowance payable
throughout the life of the member and the member's option beneficiary
or beneficiaries, as follows:
(1) One hundred percent beneficiary option. The modified
retirement allowance shall be paid to the member and upon the member'
s death, 100 percent of the modified allowance shall continue to be
paid to the option beneficiary.
(2) Seventy-five percent beneficiary option. The modified
retirement allowance shall be paid to the member and upon the member'
s death, 75 percent of the modified allowance shall continue to be
paid to the option beneficiary. Pursuant to Section 401(a)(9) of the
Internal Revenue Code, unless the option beneficiary is the member's
spouse or former spouse who has been awarded a community property
interest in the benefits of the member under this part, the member
may not designate an option beneficiary under this option who is more
than exactly 19 years younger than the member.
(3) Fifty percent beneficiary option. The modified retirement
allowance shall be paid to the member and upon the death of the
member, 50 percent of the modified allowance shall continue to be
paid to the option beneficiary.
(4) Compound option. The member may designate multiple option
beneficiaries or one or multiple option beneficiaries with a
designated percentage to remain unmodified. The member shall elect an
option as described in paragraph (1), (2), or (3) for each
designated option beneficiary that would provide an actuarially
modified retirement allowance payable throughout the lives of the
member and the member's option beneficiary or beneficiaries.
(A) The modified retirement allowance shall be paid to the member
as long as the member and at least one option beneficiary is living.
Upon the member's death, an allowance shall be paid to each surviving
option beneficiary in accordance with the option elected respective
to that option beneficiary. If an option beneficiary predeceases the
member, the member's allowance shall be adjusted in accordance with
the option elected for the deceased option beneficiary.
(B) The member shall specify the percent of the unmodified
allowance that will be modified by the election of each option
described in paragraph (1), (2), or (3) of this subdivision. The
percent of the unmodified allowance that is not modified by an
option, if any, shall be payable to the member. The sum of the
percentages specified for the option beneficiary or beneficiaries and
the member's remaining unmodified allowance, if any, shall equal 100
percent.
(C) The member's election of the Compound Option is subject to all
of the following:
(i) Pursuant to Section 401(a)(9) of the Internal Revenue Code,
unless the option beneficiary is the member's spouse or former spouse
who has been awarded a community property interest in the member's
benefits under this part, the member may not designate an option
beneficiary under the 100 percent beneficiary option within this
compound option who is more than exactly 10 years younger than the
member.
(ii) Pursuant to Section 401(a)(9) of the Internal Revenue Code,
unless the option beneficiary is the member's spouse or former spouse
who has been awarded a community property interest in the member's
benefits under this part, the member may not designate an option
beneficiary under the 75 percent beneficiary option within this
compound option who is more than exactly 19 years younger than the
member.
(b) For purposes of this section, the
member shall designate an option beneficiary on a properly executed
form prescribed by the system, which shall be duly executed and filed
with the system at the time of the member's retirement.
(c) A member may revoke or change an election of an option at any
time prior to the effective date of the member's retirement under
this part. A revocation of an option may not be made in derogation of
a spouse's or a former spouse's community property rights as
specified in a court order.
(b)
(d) If an option beneficiary designated pursuant to
paragraphs (1) to (3), inclusive, of subdivision (a) predeceases the
member, the retirement allowance shall be paid to the member without
modification for the option. If the option beneficiary predeceases
the member, the member may designate a new option beneficiary. The
effective date of the new designation shall be six months following
the date of notification is received by the board, provided both the
member and the designated option beneficiary are then living.
Notification shall be on a properly executed form provided by the
system. The designation of the new option beneficiary pursuant to
this subdivision is subject to an actuarial modification of the
unmodified retirement allowance and may not result in additional
liability to the fund. The new option beneficiary cannot be an
existing option beneficiary.
(c)
(e ) Notwithstanding Section 297 or 299.2 of
the Family Code, a spouse described in paragraphs (2) and (4) of
subdivision (a) does not include the domestic partner of the member,
pursuant to Section 7 of Title 1 of the United States Code.
(d)
(f) If there is a determination of community property
rights as described in Chapter 12 (commencing with Section 22650) of
this part on or before December 31, 2006, the member may elect the
option that is required by the judgment or court order. Nothing in
this part shall permit the member to change the option to the
detriment of the community property interest of the nonmember spouse.
(e)
(g) The board may evaluate the existing options and
annuities provided pursuant to this section, Chapter 38 (commencing
with Section 25000) of this part, and Part 14 (commencing with
Section 26000) and adopt, as a plan amendment, any appropriate
changes to the options and annuities based on the needs of the
members, participants, and their beneficiaries, including, but not
limited to, providing economic security for beneficiaries and
reducing the complexity of the options and annuities. The changes to
the options and annuities may have no net actuarial impact on the
retirement fund and the board may establish any eligibility criteria
the board deems necessary to prevent an adverse actuarial impact to
the fund. The board shall designate the effective date of the plan
amendment, which shall be at least 18 months after the amendment is
adopted by the board, and notwithstanding any other provision of this
section, the options and annuities available to members and
participants eligible to retire pursuant to this part and Part 14
(commencing with Section 26000), after the effective date of the plan
amendment made pursuant to this subdivision, shall reflect the
changes adopted as a plan amendment to this subdivision.
SEC. 17. Section 24309 of the Education Code is amended to read:
24309. (a) A member may change or cancel the election of an
option made pursuant to Section 24307. The change or cancellation
shall be on a properly executed form provided by the system and
received at the system's headquarters office, as established pursuant
to Section 22375, within 30 days of the date of the member's
signature and, if applicable, the spouse's signature, and on
or before the effective date of retirement under this part
or during the period between termination of the retirement allowance
pursuant to Section 24208 or 24117 and the effective date of the
subsequent retirement under this part. The change or cancellation
shall become effective as of the date of the member's signature.
(1) Any change to an election of an option shall be made according
to Section 24307 and shall be considered a new preretirement
election of an option.
(2) Regardless of how the member elects to receive his or her
retirement allowance, a change made to an election of an option or a
cancellation of an option shall result in the reduction of that
allowance by an amount determined by the board to be the actuarial
equivalent of the coverage the member received as a result of the
preretirement election and that does not result in any adverse
funding to the plan.
(b) If the option beneficiary designated in the preretirement
election of an option pursuant to Section 24307 dies prior to the
member's retirement, the preretirement election shall be canceled as
of the day following the date of death and the member's subsequent
retirement allowance under this part shall be subject to the
allowance reduction prescribed in this section.
(c) If the option elected pursuant to Section 24307 is Option 8 as
described in paragraph (7) of subdivision (a) of Section 24300 or
the compound option as described in paragraph (4) of subdivision (a)
of Section 24300.1, a member may cancel the designation of an option
beneficiary. If the member cancels the designation of the option
beneficiary or the option beneficiary predeceases the member prior to
the member's retirement, the member may elect to receive that
portion of the retirement allowance without modification for the
option or elect one or multiple new or existing option beneficiaries
as described in Section 24307. Any change or cancellation of the
designation of the option beneficiary under this subdivision shall
result in the allowance reduction prescribed in this section.
SEC. 18. Section 24607 of the Education Code is amended to read:
24607. Any warrant in an amount less than two thousand
dollars ($2,000) paid payment issued by the
system under this part, for the month in which a retired member or
disabled member dies, or any subsequent month shall
not be invalidated be revoked by the
system , except upon the request of the beneficiary of the
retired member or disabled member .
SEC. 19. Section 27406 of the Education Code is amended to read:
27406. The nonparticipant spouse who is awarded separate nominal
accounts with respect to the Cash Balance Benefit Program shall have
the right to a lump-sum distribution of amounts credited to the
account.
(a) The nonparticipant spouse shall file an application on a form
provided by the system to obtain the distribution.
(b) The distribution is effective when the system deposits in the
United States mail a warrant drawn in favor of the nonparticipant
spouse and addressed to the latest address for the nonparticipant
spouse on file with the system.
(c) If the nonparticipant spouse has elected on a form provided by
the system to transfer all or a specified portion of the accounts
that are eligible for direct trustee-to-trustee transfer under
Section 401(a)(31) of Title 26 of the United States Code to the
trustee of a qualified plan under Section 402 of Title 26 of the
United States Code, deposit in the United States mail of a notice
that the requested transfer has been made constitutes a distribution
of the nonparticipant spouse's credit balance from the separate
nominal accounts. This subdivision shall not apply to a
nonparticipant partner consistent with Section 402 of the Internal R
evenue Code.
(d) The nonparticipant spouse is deemed to have permanently waived
all rights to an annuity when the distribution becomes effective.
(e) The nonparticipant spouse may not cancel a distribution after
the distribution is effective.
(f) The nonparticipant spouse shall have no right to elect to
redeposit the distribution after the distribution is effective.