BILL NUMBER: SB 349	AMENDED
	BILL TEXT

	AMENDED IN SENATE  APRIL 27, 2011

INTRODUCED BY   Senator Negrete McLeod

                        FEBRUARY 15, 2011

   An act to amend Sections  22303,  22404, 22851, 
22905, 23006,  23100, 23101, 23103, 23104, 23801, 23802, 23851,
23852, 23854, 24001, 24002, 24003, 24102, 24103,  24201.5, 
24204, 24205, 24214, 24214.5,  24216, 24216.5, 24216.6,
 24300.1, 24309, 24600,  and 26505 of, and 
 25012, 26301, 26302, and 26303 of,  to add Sections
22161.3, 22853.5, 26812, and 26813 to,  and to repeal Section
26505 of,  the Education Code, relating to teachers' retirement.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 349, as amended, Negrete McLeod. State Teachers' Retirement
Plan.
   (1) Existing law permits the Teachers' Retirement Board, which
administers the State Teachers' Retirement System (STRS) and the
State Teachers' Retirement Plan, to establish an amount, not to
exceed $10, below which the system may dispense with the processing
of benefit payments or the collection of benefit overpayments.
   This bill would extend this authority to other payments and
overpayments provided under the plan in addition to those related to
benefits. 
   (2) Existing law permits STRS to contract with employers in the
system to provide retirement counseling and provides that documents
received in this connection by an official contracted office or by a
benefits counsellor, as specified, are deemed to have been received
by the STRS headquarters.  
   This bill would revise these provisions to clarify that employees
of the system may provide these retirement counseling services and
make conforming changes.  
   (2) 
    (3)  Existing law grants a member of STRS who returns to
employment after performing uniformed services, as defined, certain
rights and benefits, including treatment as if there was no break in
the member's service to his or her employers for the period of the
uniformed services and having that period of uniformed service count
towards vesting and eligibility in the defined benefit program.
   This bill would extend certain of these rights and benefits to a
member who dies during uniformed services, would require that
qualified military service, as defined, be counted for the purpose of
vesting and eligibility for membership if the member dies during
that service, and would prescribe how this service is to be
calculated. The bill would permit this service to apply to the
payment of certain death benefits to a beneficiary, and to survivor
benefits, under specified circumstances. 
   (4) Existing law permits the Teachers' Retirement Board to assess
penalties against employers participating in the Defined Benefit
Program or the Cash Balance Benefit Program if the employers fail to
provide monthly reports in an acceptable form. Existing law provides
that the amount of the penalties is based on the sum of the employer
and employee contributions required, as specified, at a rate of
interest equal to the regular interest rate or a fee of $500,
whichever is greater.  
   This bill would delete the reference to the $500 fee and base the
penalties solely on the contributions and rate of interest, as
described above. The bill would also authorize the assessment of
penalties, as specified, for late or improper contribution
adjustments with regard to the Cash Balance Benefit Program, and
would deem these amounts as interest earned.  
   (3) 
    (5)  Existing law requires, upon a termination of a
member's employment by any cause other than death, disability, or
retirement, that certain amounts be paid to the member, including his
or her accumulated retirement contributions and annuity deposits.
   This bill would require that these payments be made upon
termination of employment generally and the member's election to be
paid. The bill would authorize a reduction in the payment of
accumulated retirement benefits by the amount of retirement or
disability benefits paid. The bill would also provide that specified
beneficiary designations would be invalidated upon a refund of
accumulated retirement contributions and would prescribe how the
refund request would be made or determined by the board. 
   (4) 
    (6)  Existing law permits a member of STRS to apply for
a disability allowance if certain requirements are met, including
that the member has neither attained normal retirement age, nor
possesses sufficient unused sick leave days to receive creditable
compensation on account of sick leave to reach normal retirement age.

   This bill would make technical changes in these provisions.

   (5) 
    (7)  Existing law requires a member of STRS to provide
medical documentation to substantiate the impairment qualifying the
member for a disability allowance or retirement. Existing law permits
the system to order a medical examination of a member to determine
whether the member is incapacitated for performance of service and
prescribes procedures for this purpose.
   This bill would also authorize the system to order also a review
of medical documentation in this regard. The bill would also make
technical changes these provisions. 
   (6) 
    (8)  Existing law prescribes the conditions under which
a STRS service retirement allowance becomes effective and requires,
in this regard, that the effective date be no earlier than the first
day of the month in which the application is received at the system's
headquarters office.
   This bill would  delete the requirement described above
  make various technical changes in the requirements
that a member must meet for a service requirement to become effective
in specified situations, including instances when service credit is
purchased and when an application for disability benefits is made
 . 
   (7) 
    (9)  Existing law permits a member retiring prior to 60
years of age, who has attained 55 years of age, to elect to receive ½
of the service retirement allowance for normal retirement age for a
limited time and then revert to the full retirement allowance for
normal retirement age. Existing law excepts from this authorization
members retiring for service pending a disability.
   This bill would also except from this authorization members
retiring for service following reinstatement, members who perform
creditable service for 2 or more years after reinstatement, and
members who retire after a prior disability retirement is terminated,
among others. 
   (8) 
    (10)  Existing law permits a retired member of STRS to
perform specified activities as an employee of an employer in the
system, as an employee of a 3rd party, or as an independent
contractor within the California public school system, but prohibits
the member from making contributions to the retirement fund or
accruing service credit based on compensation earned from that
service. Existing law conditions this authorization on a variety of
factors including limitations on the rate of pay of the member and
the total amount of compensation.
   This bill would also permit a retired member, pursuant to the
limitations described above, to perform the work of county and
district superintendents who are responsible for the supervision of
persons or administration of certain duties and to perform trustee
work for the Cash Balance Benefit Program. 
   (9) Existing law exempts certain members of STRS retired for
service who are appointed as a trustee or administrator of specific
programs, including those relating to underperforming schools, from
specified limitations on postretirement compensation. Existing law
conditions these exemptions on the submission of documentation
required by the system to substantiate the eligibility of the member
no later than June 30 of the school year for which the exemption is
to apply.  
   This bill would provide that this documentation be submitted no
later than 60 calendar days after the member commences performing
creditable service.  
   (10) Existing law exempts a retired member of STRS from certain
compensation limitations if various conditions are met, among them
that the member provide service in specified capacities, including
the Pre-Internship Teaching Program.  
   This bill would delete the Pre-Internship Teaching Program from
the permitted forms of service in this regard. 
   (11) Existing law permits a member of STRS, prior to the effective
date of his or her retirement, to elect an option that provides an
actuarially modified retirement allowance payable throughout the life
of the member and the member's option beneficiary or beneficiaries.
Existing law also prescribes how a member may change or cancel these
options.
   This bill would revise when these designations, changes, or
cancellations must be submitted.
   (12) Existing law provides that a child's portion of a STRS
retirement allowance begins to accrue on the effective date of that
allowance and ceases on the earlier of either the termination of the
child's eligibility or the termination of the allowance.
   This bill would prescribe when a child's portion of a disability
retirement allowance terminates.
   (13) Existing law establishes the Cash Balance Benefit Program,
administered by the State Teachers' Retirement Board, as a separate
benefit program within the State Teachers' Retirement Plan.
   This bill would permit a member retired for service under the Cash
Balance Benefit Program to perform specified activities as an
employee of an employer in the system, as an employee of a 3rd party,
or as an independent contractor within the California public school
system, but would prohibit the member from making contributions to
the retirement fund  or accruing service credit based on
compensation earned from that service  . The bill would
condition this authorization on a variety of factors including
limitations on the rate of pay of the member and the total amount of
compensation, as well as on the employer maintaining accurate records
in this regard, among other things.  The bill would also repeal
provisions that require that a participant in the Cash Balance
Benefit Program who becomes reemployed under certain conditions have
his or her annuity terminated. 
   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 22161.3 is added to the Education Code, to
read:
   22161.3.  Qualified military service is military service as
defined in subdivision (u) of Section 414 of Title 26 of the United
States Code.
   SEC. 2.    Section 22303 of the   Education
Code   is amended to read: 
   22303.  (a) Due to an increase in the demand for retirement
counseling services, the system, notwithstanding any other provision
of law, may contract with a county superintendent or other employer
to provide retirement counseling. Retired public employees may be
employed on a part-time basis for that purpose, unless and until the
study required by subdivision (b) of Section 7 of Chapter 1532 of the
Statutes of 1985 recommends against the employment of retired public
employees for these purposes. This authorization is subject to the
availability of funds appropriated for that purpose in the annual
Budget Act.
   (b) The board may, by resolution, designate one or more official
 contracted offices or benefits counselors that 
 representatives who  provide retirement counseling pursuant
to subdivision (a)  , or as an employee of the system,  to
receive documents submitted pursuant to this part, Part 13.5
(commencing with Section 25900), or Part 14 (commencing with Section
26000). Notwithstanding any other provision of law, any document
received by  an official contracted office or a benefits
counselor designated by the board   a designated system
representative during regular counseling office business hours or in
the course of performing counseling services  pursuant to this
subdivision  during the office's regular business hours or
any benefits counseling activity  shall be deemed to have
been received by the system's headquarters office, as established
pursuant to Section 22375, on the date received by the 
officially  designated  official contracted office or
benefits counselor   system representative  .
   SEC. 2.   SEC. 3.   Section 22404 of the
Education Code is amended to read:
   22404.  (a) Notwithstanding any other provision of this part or
Part 14 (commencing with  Sec.   Section 
26000) to the contrary, the board may establish by plan amendment a
specified amount or amounts, not to exceed ten dollars ($10), below
which the system may dispense with the processing of benefit or other
payments or collection of benefit or other overpayments that result
from adjustments made to the benefit or other amount paid to a
member, participant, or beneficiary.
   (b) When the cumulative dollar amount associated with one or more
benefit or other adjustments equals or exceeds the amount described
in subdivision (a), that amount shall be paid to, or collected from,
the member, participant, or beneficiary. That cumulative amount paid
or collected shall not be credited with interest.
   SEC. 3.   SEC. 4.   Section 22851 of the
Education Code is amended to read:
   22851.  The right to pension benefits under this part of a member
who dies or who returns to employment with the same employer which
had employed the member immediately prior to the eligible period of
service in the uniformed services, and is subject to Chapter 43
(commencing with Section 4301) of Title 38 of the United States Code
shall be determined under this section.
   (a) (1) A reemployed or deceased member shall be treated as not
having incurred a break in service by reason of that member's
eligible period or periods of service in the uniformed services.
   (2) (A) Each eligible period of service served by a member in the
uniformed services shall, upon return to employment, with the same
employer which had employed the member immediately prior to the
eligible period of service in the uniformed services, or upon death,
be deemed to constitute service with the employer or employers toward
plan vesting and eligibility for membership in the Defined Benefit
Program.
   (B) In cases of death during qualified military service, service
shall be calculated under Section 22853.5 and shall be used
exclusively for plan vesting and eligibility for membership purposes.
Service that is deemed to the member in this way shall not be used
for benefit calculations based on service credit balances.
   (3) A member who returns to employment, with the same employer
which had employed the member immediately prior to the eligible
period of service in the uniformed services shall not be entitled to
any benefits under this part in respect of service in the uniformed
services to which the member would not otherwise have been entitled
had the member remained continuously employed and not undertaken such
service in the uniformed services.
   (b) For purposes of calculating benefits, a member who returns to
employment with the same employer which had employed the member
immediately prior to the eligible period of service in the uniformed
services shall be entitled to service credit under this part for the
eligible period of service in the uniformed services upon his or her
payment of the member contributions required under Section 22901 that
otherwise would have been due for such period of service had the
member remained continuously employed and not undertaken such service
in the uniformed services. No such payment of member contributions
may exceed the amount the member would have been required to
contribute under this part had the member not served in the uniformed
services and had remained continuously employed by the employer
throughout the eligible period of service in the uniformed services.
If a member fails to remit the member contributions that would have
been required under Section 22901 in respect of the eligible period
of service in the uniformed services no service credit shall be
provided under this part for the period to which the omitted
contributions relate.
   (c) Any payment of member contributions to the Defined Benefit
Program in this section shall be made by the member during the period
beginning with the date of return to employment and may continue for
three times the period of the member's eligible service in the
uniformed services, not to exceed five years. Any payment of member
contributions to the Defined Benefit Program in this section by a
member who returned to employment prior to January 1, 1997, and
qualifies for benefits in accordance with the Uniformed Services
Employment and Reemployment Rights Act of 1994 (Chapter 43
(commencing with Section 4301) of Title 38 of the United States
Code), shall be made by the member during the period beginning with
the date of notification of eligibility by the employer to the system
and may continue for three times the period of the member's eligible
service in the uniformed services, not to exceed five years. Any
subsequent request to purchase this service shall be subject to the
provisions of Chapter 14 (commencing with Section 22800). If all
contributions due under this part are not paid to the plan with
respect to the Defined Benefit Program within the specified repayment
period and in accordance with subdivision (b) of Section 22851 the
contributions shall be returned to the member at the end of the
repayment period. Interest on member contributions made for the
eligible period of service in the uniformed services shall not be
credited under this part until after the contributions due are paid
and then only prospectively to the member's account in accordance
with Section 22216.
   SEC. 4.  SEC. 5.   Section 
22853   22853.5  is added to the Education Code, to
read:
    22853.   22853.5.   For purposes of
computing service to award to members who die during qualified
military service, service shall be computed as follows:
   (a) The service credit the member would have received for the
eligible period of service through the beginning of the period of
qualified military leave through the date of death.
   (b) In the event the service credit earnable is not reasonably
certain, vesting credit shall be based on the member's average
service credit earned during the 12-month period immediately
preceding the eligible period of service in the uniformed services
or, if shorter, the period of employment immediately preceding that
period of service.
   SEC. 6.    Section 22905 of the   Education
Code   is amended to read: 
   22905.  (a) Member contributions pursuant to Section 22901,
employer contributions pursuant to Section 22903 or 22904, and member
contributions made by an employer pursuant to Section 22909 shall be
credited to the member's individual account under the Defined
Benefit Program or the Defined Benefit Supplement Program, whichever
is applicable pursuant to the provisions of this part.
   (b) Member and employer contributions  , exclusive of
contributions pursuant to Section 22951,  on a member's
compensation under the following circumstances shall be credited to
the member's Defined Benefit Supplement account:
   (1) Compensation for creditable service that exceeds one year in a
school year.
   (2) Compensation that is consistent with subdivision (b) of
Section 22119.2.
   (3) Compensation that is payable for a specified number of times
as limited by law, a collective bargaining agreement, or an
employment agreement.
   (c) A member may not make voluntary pretax or posttax
contributions under the Defined Benefit Supplement Program, except as
provided in subdivision (d), nor may a member redeposit amounts
previously distributed based on the balance in the member's Defined
Benefit Supplement account.
   (d) Member and employer contributions pursuant to paragraph (1) of
subdivision (b) under the Defined Benefit Supplement Program shall
be credited to the accounts of members as of July 1 each year
following a determination by the system under the provisions of this
part that those contributions should be credited to the Defined
Benefit Supplement Program. Any other contributions under the Defined
Benefit Supplement Program pursuant to paragraph (2) or (3) of
subdivision (b), shall be credited to the individual account of the
member upon receipt by the system. Contributions to a member's
Defined Benefit Supplement account shall be identified separately
from the member's contributions credited under the Defined Benefit
Program.
   (e) The provisions of this section shall become operative on July
1, 2002, if the revenue limit cost-of-living adjustment computed by
the Superintendent of Public Instruction for the 2001-02 fiscal year
is equal to or greater than 3.5 percent. Otherwise this section shall
become operative on July 1, 2003.
   SEC. 7.    Section 23006 of the   Education
Code   is amended to read: 
   23006.  (a) If a county superintendent of schools or employing
agency or school district or community college district that reports
directly to the system, submits monthly reports, as specified by
Section 23004, late, as defined in Section 23005, or in unacceptable
form, the board shall, in accordance with regulations, assess
penalties.
   (b) The board shall, in accordance with regulations, assess
penalties, based on the sum of the employer and employee
contributions required under this part by the report, for late or
unacceptable submission of reports, at a rate of interest equal to
the regular interest rate  or a fee of five hundred dollars
($500), whichever is greater  .
   SEC. 5.   SEC. 8.   Section 23100 of the
Education Code is amended to read:
   23100.  (a) Upon termination of employment, a member may elect to
be paid, pursuant to this part, each of the following:
   (1) The member's accumulated retirement contributions made after
June 30, 1935.
   (2) The member's accumulated annuity deposit contributions.
   (3) An amount equal to the balance of credits in the member's
Defined Benefit Supplement account.
   (b) Accumulated retirement contributions and accumulated annuity
deposit contributions shall include credited interest through the
date of payment.
   (c) Accumulated retirement contributions shall be reduced by the
amount of retirement or disability benefits paid to a member pursuant
to this part.
   SEC. 6.   SEC. 9.   Section 23101 of the
Education Code is amended to read:
   23101.  (a) When a member's accumulated retirement contributions
are refunded, as provided in Section 23100, all rights to benefits
pertaining to the service credit represented by those contributions
under this part are forfeited. Those rights and benefits, based upon
service performed prior to refund, shall not be restored until the
member has redeposited the total of the refunded accumulated
retirement contributions, and paid the regular interest thereon as
provided in Chapter 19 (commencing with Section 23200).
   (b) In addition to the rights and benefits described in
subdivision (a), any beneficiary designation made by a member
pursuant to Chapter 20 (commencing with Section 23300) and Chapter 28
(commencing with Section 24300) under this part shall be invalidated
upon the refund of the member's accumulated retirement
contributions.
   SEC. 7.   SEC. 10.   Section 23103 of
the Education Code is amended to read:
   23103.  Refunds to a member shall be made upon request of the
member on a properly executed form prescribed by the system, or may
be made without a request if it is determined by the board that the
member's employment is permanently terminated and the member does not
have enough credited service under the Defined Benefit Program to
qualify for service retirement under this part.
   SEC. 8.   SEC. 11.   Section 23104 of
the Education Code is amended to read:
   23104.  (a) Deposit in the United States mail of an initial
warrant drawn as directed by the member as a refund of contributions
upon termination of employment, and addressed to the address directed
by the member, constitutes a return of the member's accumulated
retirement contributions under this part.
   (b) If the member has elected on a form provided by the system to
transfer all or a specified portion of the accumulated retirement
contributions that are eligible for direct trustee-to-trustee
transfer to the trustee of a qualified plan under Section 402 of the
Internal Revenue Code of 1986 (26 U.S.C.A. Sec. 402), deposit in the
United States mail of a notice that the requested transfer has been
made constitutes a return of the member's accumulated retirement
contributions under this part.
   (c) For refunds not involving direct trustee-to-trustee transfers,
if the member returns the total gross distribution amount to the
system's headquarters office, as established pursuant to Section
22375, within 30 days from the mailing date, the refund shall be
canceled and the person shall be restored as a member of the Defined
Benefit Program with all the rights and privileges under this part
restored.
   (d) For refunds involving direct trustee-to-trustee transfers, if
the member returns the warrant drawn to the trustee of the qualified
plan or the trustee returns the amount of the qualified refund and,
if applicable, any additional amounts necessary to equal, but in no
event to exceed, the total gross distribution amount to the system's
headquarters office, as established pursuant to Section 22375, within
30 days from the mailing date, the refund shall be canceled and the
person shall be restored as a member of the Defined Benefit Program
with all the rights and privileges under this part restored.
   SEC. 9.   SEC. 12.   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,
including service deemed to the member under subparagraph (B) of
paragraph (2) of subdivision (a) of Section 22851, at least one of
which had been earned 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) 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 creditable
compensation was paid, if the member was on an approved leave of
absence without compensation for reasons other than disability.
   (6) While on a leave of absence to perform qualified military
service, if the death occurred on or after January 1, 2007.
   (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. 10.   SEC. 13.   Section 23802 of
the Education Code is amended to read:
   23802.  (a) Upon receipt of proof of death of a member who has no
preretirement option in effect, and who either does not meet the
eligibility requirements set forth in Section 23804, or meets the
eligibility requirements set forth in Section 23804 but has no
eligible survivors for a family allowance as specified in Section
23805 or 23806, there shall be paid to the beneficiary both of the
following:
   (1) The accumulated retirement contributions after July 1, 1935.
   (2) The accumulated annuity deposit contributions.
   (b) Accumulated contributions include credited interest through
the date of payment.
   SEC. 11.   SEC. 14.   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 a
member, who had one or more years of credited service, including
service deemed to the member under subparagraph (B) of paragraph (2)
of subdivision (a) of Section 22851, at least one of which had been
earned 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.
   (4) While on a leave of absence to perform qualified military
service, if the death occurred on or after January 1, 2007.
   (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. 12.   SEC. 15.   Section 23852 of
the Education Code is amended to read:
   23852.  Upon receipt of proof of death of a member who has no
preretirement option in effect:
   (a) The surviving spouse may elect to receive either of the
following:
   (1) The member's accumulated retirement contributions in a lump
sum.
   (2) If the member meets the provisions set forth in Section 23854,
the survivor benefit allowance pursuant to Sections 23854 and 23855.

   (b) If there is no surviving spouse, and the member meets the
provisions set forth in Section 23854, then each dependent child
shall receive the child's portion of the survivor benefit allowance
pursuant to Sections 23854, 23855, and 23856. The child's portion of
the survivor benefit allowance shall be paid in lieu of the return of
the member's accumulated retirement contributions.
   (c) If there is no surviving spouse or dependent child to receive
a benefit under subdivision (a) or (b), the member's accumulated
retirement contributions shall be paid to the member's beneficiary in
a lump sum.
   (d) The member's accumulated annuity deposit contributions shall
be paid to the member's beneficiary in a lump sum.
   (e) The payment of accumulated contributions in a lump sum shall
include credited interest through the date of payment.
   SEC. 13.   SEC. 16.   Section 23854 of
the Education Code is amended to read:
   23854.  (a) A survivor benefit allowance is payable upon receipt
of proof of death of a member, as defined in Section 23850, who had
one or more years of credited service, including deemed service under
subparagraph (B) of paragraph (2) of subdivision (a) of Section
22851, at least one of which had been earned subsequent to the most
recent refund of accumulated retirement contributions.
   (b) For the survivor benefit allowance to be payable upon the
death of a member, all of the following conditions shall be met at
the time of death:
   (1) Death occurred after October 15, 1992.
   (2) A preretirement election of an option is not in effect.
   (3) Death occurs during any one of the following periods:
   (A) While in employment for which compensation is paid.
   (B) Within four months after termination of service or termination
of employment, whichever occurs first.
   (C) Within four months after termination of disability allowance.
   (D) Within four months after reinstatement from disability
retirement.
   (E) Within 12 months following the last day for which compensation
was paid if the member was on an approved leave of absence without
compensation for reasons other than disability.
   (F) While on a leave of absence to perform qualified military
service, if the death occurred on or after January 1, 2007.
   (4) At least one-half year of credited service had been performed
subsequent to the end of the last break in service, if a break in
service of more than one year had occurred.
   (5) At least one year of credited service had been performed
subsequent to the last reinstatement date, if reinstated from service
retirement.
   (c) The survivor benefit allowance shall be paid in lieu of the
return of the member's accumulated retirement contributions.
   (d) The survivor benefit allowance may be terminated, if all
eligible beneficiaries formally waive their rights in accordance with
the requirements established by the system.
   SEC. 14.   SEC. 17.   Section 24001 of
the Education Code is amended to read:
   24001.  (a) (1) A member may apply for a disability allowance
under the Defined Benefit Program, upon written application for
disability allowance to the board on a properly executed form
provided by the system, if the member has five or more years of
credited service and if all of the following requirements are met:
   (A) At least four years were credited for actual performance of
service subject to coverage under the Defined Benefit Program. Credit
received because of workers' compensation payments shall be counted
toward the four-year requirement in accordance with Section 22710.
   (B) The last five years of credited service were performed in this
state.
   (C) Except as described in subdivision (d) of Section 24201.5, at
least one year was credited for service performed subsequent to the
date on which the member terminated the service retirement allowance
under Section 24208.
   (D) At least one year was credited for service performed
subsequent to the most recent refund of accumulated retirement
contributions.
   (E) The member has neither attained normal retirement age, nor
possesses sufficient unused sick leave days to receive creditable
compensation on account of sick leave to normal retirement age.
   (F) The member is not applying for a disability allowance because
of a physical or mental condition known to exist at the time the most
recent membership in the Defined Benefit Program commenced and
remains substantially unchanged at the time of application.
   (2) A member who becomes disabled prior to normal retirement age,
who has sick leave which will extend beyond normal retirement age,
and who has a dependent child, 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.
   (b) Nothing in subdivision (a) shall affect the right of a member
to a disability allowance under this part if the reason that the
member is credited with less than four years of actual service
performed subject to coverage under the Defined Benefit Program is
due to an on-the-job injury or a disease that occurred while the
member was employed and the four-year requirement can be satisfied by
credit obtained under Chapter 14 (commencing with Section 22800) or
Chapter 14.5 (commencing with Section 22850) in addition to any
credit received from workers' compensation payments.
   (c) Nothing in subdivision (a) shall affect the right of a member
under this part who has less than five years of credited service to a
disability allowance if the following conditions are met:
   (1) The member has at least one year of credited service performed
in this state.
   (2) The disability is the direct result of an unlawful act of
bodily injury that was perpetrated on his or her person by another
human being while the member was performing his or her official
duties in a position subject to coverage under the Defined Benefit
Program.
   (3) The member provides documentation of the unlawful act in the
form of an official police report or official employer incident
report.
   (d) A member who is eligible to apply for a disability allowance
pursuant to this section may also apply for a service retirement
pending a determination of his or her application for disability as
described in Section 24201.5.
   SEC. 15.   SEC. 18.   Section 24002 of
the Education Code is amended to read:
                             24002.  (a) 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
submitted on a properly executed form prescribed by the system during
any one of the following periods:
   (1) While the member is employed or on a compensated leave of
absence.
   (2) 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.
   (3) 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.
   (4) 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 paragraph (2) 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.
   (b) A member is not qualified to receive a disability allowance if
the member is applying 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. 16.   SEC. 19.   Section 24003 of
the Education Code is amended to read:
   24003.  (a) The member shall provide medical documentation to
substantiate the impairment qualifying the member for the disability
allowance.
   (b) On receipt of an application for disability allowance under
this part, the system may order a medical examination or review of
medical documentation of a member to determine whether the member is
incapacitated for performance of service. The medical examination or
review of medical documentation shall be conducted by a practicing
physician, selected by the board, with expertise in the member's
impairment and the board shall pay all costs associated with the
examination or review of medical documentation. If the member refuses
to submit to the required medical examination or review of medical
documentation, the application for disability allowance shall be
rejected. If a medical examination is ordered:
    (1) The member shall either remain in this state, or return to
this state at the member's own expense, to undergo the medical
examination, or the application shall be rejected, unless this
requirement is waived by the board. The board shall pay all other
reasonable costs related to travel and meals in accordance with the
rates set for state employees by the Department of Personnel
Administration.
   (2) If the member is too ill to be examined, the system shall
postpone the examination until the member can be examined. The member
or the member's treating physician shall inform the system, in
writing, when the medical examination can be rescheduled.
   (c) The system may reject the disability allowance application
under this part if the member fails to provide requested medical
documentation to substantiate a disability, as defined in Section
22126, within 45 days from the date of the request or within 30 days
from the time that a legally designated representative is empowered
to act on behalf of a member who is mentally or physically
incapacitated.
   (d) If the board determines that a member who has applied for a
disability allowance under this part may perform service in the
member's former position of employment or in a comparable level
position with the assistance of reasonable accommodation, the board
may require the member to request reasonable accommodation from the
employer. Failure of the member to request reasonable accommodation,
as directed by the board, may be grounds for cancellation of the
disability allowance application.
   (e) If the employer fails or refuses to provide reasonable
accommodation, the board may require the member to pursue an
administrative appeal of the employer's denial as a condition for
receiving a disability allowance under this part.
   (f) The system shall inform the member of the rejection or
cancellation of the member's disability allowance application under
this part within 30 days after that determination is made by the
system.
   (g) In determining whether a member meets the definition of
disability pursuant to Section 22126, the board shall make a
determination on the basis of competent medical documentation and
shall not use the awarding of a disability allowance as a substitute
for the disciplinary process.
   SEC. 17.   SEC. 20.   Section 24102 of
the Education Code is amended to read:
   24102.  (a) 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 submitted on a
properly executed form prescribed by the system during any one of the
following periods:
   (1) While the member is employed or on a compensated leave of
absence.
   (2) 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.
   (3) 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.
   (4) 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 paragraph (2) 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.
   (b) The member is not qualified to receive a disability allowance
if the member is applying 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. 18.   SEC. 21.   Section 24103 of
the Education Code is amended to read:
   24103.  (a) The member shall provide medical documentation
substantiating the impairment qualifying the member for the
disability retirement under this part.
   (b) On receipt of an application for disability retirement under
this part, the system may order a medical examination or review of
medical documentation of a member to determine whether the member is
incapacitated for performance of service. The medical examination or
review of medical documentation shall be conducted by a practicing
physician, selected by the board, with expertise in the member's
impairment, and the board shall pay all costs associated with the
examination or review of medical documentation. If the member refuses
to submit to the required medical examination or review of medical
documentation, the application for disability retirement shall be
rejected. If a medical examination is ordered:
    (1) The member shall either remain in this state, or return to
this state at the member's own expense, to undergo the medical
examination or the application shall be rejected, unless this
requirement is waived by the board. The board shall pay all other
reasonable costs related to travel and meals in accordance with the
rates set for state employees by the Department of Personnel
Administration.
   (2) If the member is too ill to be examined, the system shall
postpone the examination until the member can be examined. The member
or the member's treating physician shall inform the system, in
writing, when the medical examination can be rescheduled.
   (c) The system may reject the disability retirement application
under this part if the member fails to provide requested medical
documentation to substantiate a disability, as defined in Section
22126, within 45 days from the date of the request or within 30 days
from the time that a legally designated representative is empowered
to act on behalf of a member who is mentally or physically
incapacitated.
   (d) If the board determines that a member who has applied for
disability retirement under this part may perform service in the
member's former position of employment or in a comparable level
position with the assistance of reasonable accommodation, the board
may require the member to request reasonable accommodation from the
employer. Failure of the member to request reasonable accommodation,
as directed by the board, may be grounds for cancellation of the
disability retirement application under this part.
   (e) If the employer fails or refuses to provide reasonable
accommodation, the board may require the member to pursue an
administrative appeal of the employer's denial as a condition for
receiving a disability retirement allowance under this part.
   (f) The system shall inform the member of the rejection or
cancellation of the member's disability retirement allowance
application under this part within 30 days after that determination
is made by the system.
   (g) In determining whether a member meets the definition of
disability pursuant to Section 22126, the board shall make a
determination on the basis of competent medical documentation and
shall not use the awarding of a disability retirement as a substitute
for the disciplinary process. 
  SEC. 19.    Section 24204 of the Education Code is
amended to read:
   24204.  A service retirement allowance under this part shall
become effective upon any date designated by the member, provided all
of the following conditions are met:
   (a) An application for service retirement allowance is filed on a
form provided by the system, which is executed no earlier than six
months before the effective date of retirement allowance.
   (b) The effective date is later than the last day of creditable
service for which compensation is payable to the member.
   (c) The effective date is no earlier than one year following the
date on which the retirement allowance was terminated under Section
24208, or subdivision (a) of Section 24117.
   (d) The effective date is no earlier than the date upon and
continuously after which the member is determined to the satisfaction
of the board to have been mentally incompetent.
   (e) A member who files an application for service retirement may
change or cancel his or her retirement application, as long as the
form provided by the system is received in the system's headquarters
office, established pursuant to Section 22375, no later than the last
day of the month in which the retirement date is effective.

   SEC. 22.    Section 24201.5 of the  
Education Code   is amended to read: 
   24201.5.  (a) A member who is eligible and applies for a
disability allowance or retirement pursuant to Section 24001 or 24101
may apply to receive a service retirement allowance pending the
determination of his or her application for disability, subject to
all of the following:
   (1) The member is eligible to retire for service under Section
24201 or 24203.
   (2) The member submits the application on a form provided by the
system, subject to all of the following:
   (A) The application is executed no earlier than  the date the
application for disability benefits is executed and no earlier than
 six months before the effective date of the retirement
allowance  and the   . 
    (B)     The  effective date is no
earlier than the first day of the month in which the application 
for disability benefits  is received at the system's
headquarters office, as established pursuant to Section 22375.

   (B) 
    (C)  The effective date is later than the last day of
creditable service for which compensation is payable to the member.

   (C) 
    (D)  The effective date is no earlier than one year
following the date on which a retirement allowance was terminated
pursuant to Section 24208 or subdivision (a) of Section 24117.
   (3) The effective date of the service retirement allowance can be
no earlier than the date upon and continuously after which the member
is determined to the satisfaction of the board to have been mentally
incompetent.
   (4) A member who applies for service retirement under this section
is not eligible to receive a lump-sum payment and an actuarially
reduced monthly allowance pursuant to Section 24221.
   (5) A member who applies for service retirement under this section
is not eligible to receive an allowance calculated pursuant to
Section 24205.
   (6) (A) Except as described in subparagraph (B), a member who
applies for service retirement under this section shall not receive
service credit for each day of accumulated and unused leave of
absence for illness or injury or for education pursuant to Section
22717 or 22717.5.
   (B) If the application for disability is denied, the member's
service retirement allowance shall be adjusted to the effective date
of the service retirement to include service credited pursuant to
Section 22717 or 22717.5.
   (7) If the application for disability is denied, a member who
applies for a service retirement allowance under this section is
subject to all of the following:
   (A) Unless otherwise provided in this part, a member who, on his
or her application for service retirement, elects an option pursuant
to Section 24300.1 or 24307 may not change or revoke that option.
   (B) If the member receives a modified service retirement allowance
based on the election of an option pursuant to Section 24300.1 or
24307, that modified service retirement allowance shall continue in
effect and unchanged.
   (C) If the member did not elect an option pursuant to Section
24300.1 or 24307 and receives an unmodified service retirement
allowance, that unmodified service retirement allowance shall
continue in effect and unchanged.
   (b) A member who applies for service retirement under this section
may change or cancel his or her service retirement application
pursuant to Section 24204, or may terminate his or her service
retirement allowance pursuant to Section 24208.
   (c) A member may not cancel his or her application for disability
prior to a determination of that application unless he or she submits
a written request to the system's headquarters office, as
established pursuant to Section 22375. If a member elects to cancel
his or her service retirement application or elects to terminate his
or her service retirement allowance as described in subdivision (b),
that election shall not cancel the application for disability.
   (d) (1) Paragraph (3) of subdivision (a) of Sections 24001 and
24101 shall not apply to a member who cancels an application for
service retirement pursuant to Section 24204 or who terminates a
service retirement allowance pursuant to Section 24208, if all of the
following apply:
   (A) The member earned at least one year of credited service
subsequent to the most recent terminated service retirement
allowance.
   (B) The member's application for disability under this section is
pending determination by the board.
   (2) If the member's application for disability under this section
is denied, paragraph (3) of subdivision (a) of Sections 24001 and
24101 shall apply if the member submits a new application for
disability.
   (e) (1) If the board approves the application for disability, and
notwithstanding subdivision (f) of Section 24204, the board shall
cancel the member's application for service retirement and shall
authorize payment of a disability allowance or disability retirement.

   (2) If the board approves the application for disability and the
member has received service retirement allowance payments under this
part, the effective date for the disability allowance or disability
retirement shall be the same as the effective date of the service
retirement allowance.
   (f) If a member who applies for service retirement under this
section dies prior to a determination by the board on the application
for disability, the member shall be considered retired for service
at the time of death, and any subsequent benefits shall be paid
accordingly.
   (g) If a member who applies for service retirement under this
section dies after the board has approved the member's application
for disability, the member shall be considered a disabled member, or
retired for disability, at the time of death, and any subsequent
benefits shall be paid accordingly, even if the member died prior to
receiving notification of the approval of his or her application for
disability.
   (h) If the member changes or cancels his or her service retirement
application or terminates his or her service retirement allowance as
described in subdivision (b), the system shall make appropriate
adjustments to the applicable service retirement allowance,
disability allowance, or disability retirement allowance, retroactive
to the effective date of the disability allowance or disability
retirement allowance. Subdivision (a) of Section 24617 shall not
apply.
   (i) The system may recover a service retirement allowance
overpayment made to a member by deducting that overpayment from any
subsequent disability benefit payable to the member.
   (j) Nothing in this section shall be construed to allow a member
or beneficiary to receive more than one type of retirement or
disability allowance for the same period of time.
   SEC. 23.    Section 24204 of the  Education
Code   is amended to read: 
   24204.   (a)    A service retirement allowance
under this part shall become effective upon any date designated by
the member, provided all of the following conditions are met:

   (a) 
    (1)  An application for service retirement allowance is
filed on a form provided by the system, which is executed no earlier
than six months before the effective date of retirement allowance.

   (b) 
    (2)  The effective date is later than the last day of
creditable service for which compensation is payable to the member.

   (c) The effective date is no earlier than the first day of the
month in which the application is received at the system's
headquarters office, as established pursuant to Section 22375.
 
   (d) 
    (3)  The effective date is no earlier than one year
following the date on which the retirement allowance was terminated
under Section 24208, or subdivision (a) of Section 24117. 
   (e) 
    (4)  The effective date is no earlier than the date upon
and continuously after which the member is determined to the
satisfaction of the board to have been mentally incompetent. 
   (5) The effective date is no earlier than the date upon which the
member completes payment of a service credit purchase pursuant to
Section 22801, 22820, or 22826, or payment of a redeposit of
contributions pursuant to Section 23200, except as provided in
Section 22801 or 22829.  
   (6) The effective date is no earlier than the first day of the
month in which the application for disability benefits is received at
the system's headquarters office, as established pursuant to Section
22375, if the application is made pursuant to Section 24201.5. 

   (f) 
    (b)  A member who files an application for service
retirement may change or cancel his or her retirement application, as
long as the form provided by the system is received in the system's
headquarters office, established pursuant to Section 22375, no later
than  the last day of the month in which the retirement date
is effective   30 days from the date the member's
initial benefit payment for the member's most recent retirement under
the Defined Benefit Program is paid by the system  . 
   (c) The retirement date of a member retiring on and after January
1, 2012, shall be no earlier than January 1, 2012. 
   SEC. 20.   SEC. 24.   Section 24205 of
the Education Code is amended to read:
   24205.  A member retiring prior to 60 years of age, and who has
attained 55 years of age, may elect to receive one-half of the
service retirement allowance for normal retirement age for a limited
time and then revert to the full retirement allowance for normal
retirement age.
   (a) The retirement allowance shall be based on service credit and
final compensation as of the date of retirement for service and shall
be calculated with the factor for normal retirement age.
   (b) If the member elects a joint and survivor option under Section
24300 or 24300.1, the actuarial reduction shall be based on the
member's and beneficiary's ages as of the effective date of the early
retirement. If the member elected a preretirement option under
Section 24307, the actuarial reduction shall be based on the member's
and beneficiary's ages as determined by the provisions of that
section.
   (c) One-half of the retirement allowance as of 60 years of age
shall be paid for a period of time equal to twice the elapsed time
between the effective date of retirement and the date of the retired
member's 60th birthday.
   (d) The full retirement allowance as calculated under subdivision
(a) or (b) shall begin to accrue as of the first of the month
following the reduction period as specified in subdivision (c). The
full retirement allowance shall not begin to accrue prior to this
time under any circumstances, including, but not limited to, divorce
or death of the named beneficiary.
   (e) The annual improvement factor provided for in Sections 22140
and 22141 shall be based upon the retirement allowance as calculated
under subdivision (a) or (b). The improvement factor shall begin to
accrue on September 1 following the retired member's 60th birthday.
These increases shall be accumulated and shall become payable when
the full retirement allowance for normal retirement age first becomes
payable.
   (f) Any ad hoc benefit increase with an effective date prior to
the retired member's 60th birthday shall not affect an allowance
payable under this section. Only those ad hoc improvements with
effective dates on or after the retired member's 60th birthday shall
be accrued and accumulated and shall first become payable when the
full retirement allowance for normal retirement age becomes payable.
   (g) The cancellation of an option election in accordance with
Section 24305 shall not cancel the election under this section. Upon
cancellation of the joint and survivor option, one-half of the
retired member's retirement allowance as calculated under subdivision
(a) shall become payable for the balance of the reduction period
specified in subdivision (c).
   (h) If a retired member who has elected a joint and survivor
option dies during the period when the reduced allowance is payable,
the beneficiary shall receive one-half of the allowance payable to
the beneficiary until the date when the retired member would have
received the full retirement allowance for normal retirement age. At
that time, the beneficiary's allowance shall be increased to the full
amount payable to the beneficiary plus the appropriate annual
improvement factor increases and ad hoc increases.
   (i) This section shall not apply to a member who retires for
service pursuant to Section 24201.5, 24209, 24209.3, 24210, 24211, or
24212.
   SEC. 21.   SEC. 25.   Section 24214 of
the Education Code, as amended by Section 1 of Chapter 306 of the
Statutes of 2009, is amended to read:
   24214.  (a) A member retired for service under this part may
perform the activities identified in subdivision (a) or (b) of
Section 22119.5, or subdivision (a) or (b) of Section 26113, as an
employee of an employer, as an employee of a third party, or as an
independent contractor within the California public school system,
but the member shall not make contributions to the retirement fund or
accrue service credit based on compensation earned from that
service. The employer shall maintain accurate records of the earnings
of the retired member and report those earnings monthly to the
system and retired member as described in Section 22461.
   (b) If a member is retired for service under this part, the rate
of pay for service performed by that member as an employee of the
employer, as an employee of a third party, or as an independent
contractor shall not be less than the minimum, nor exceed that paid
by the employer to other employees performing comparable duties.
   (c) A member retired for service under this part shall not be
required to reinstate for performing the activities identified in
subdivision (a) or (b) of Section 22119.5 as an employee of an
employer, as an employee of a third party, or as an independent
contractor within the California public school system.
   (d) A member retired for service under this part may earn
compensation for performing activities identified in subdivision (a)
or (b) of Section 22119.5 in any one school year up to the limitation
specified in subdivision (f) as an employee of an employer, as an
employee of a third party, or an independent contractor, within the
California public school system, without a reduction in his or her
retirement allowance.
   (e) (1) The postretirement compensation limitation provisions set
forth in this section are not applicable to compensation earned by a
member retired for service under this part who has returned to work
after the date of retirement and, for a period of at least 12
consecutive months, has not performed the activities identified in
subdivision (a) or (b) of Section 22119.5 as an employee of an
employer, as an employee of a third party, or as an independent
contractor within the California public school system. For the
purpose of this paragraph, the period of 12 consecutive months shall
begin no earlier than the effective date of the member's most recent
retirement.
   (2) The postretirement compensation limitation provisions set
forth in this section are not applicable to compensation earned for
the performance of the activities described in subdivision (a) for
                                       which the employer is not
eligible to receive state apportionment or to compensation that is
not creditable pursuant to Section 22119.2.
   (f) The limitation that shall apply to the compensation for
performance of the activities identified in subdivision (a) or (b) of
Section 22119.5 by a member retired for service under this part
either as an employee of an employer, an employee of a third party,
or as an independent contractor shall, in any one school year, be an
amount calculated by the board each July 1 equal to twenty-two
thousand dollars ($22,000) adjusted by the percentage change in the
average compensation earnable of active members of the Defined
Benefit Program, as determined by the system, from the 1998-99 fiscal
year to the fiscal year ending in the previous calendar year.
   (g) 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 (f), as an employee of an employer, as an employee of a
third party, or as an independent contractor, within the California
public school system, and if that compensation is not exempt from
that limitation under subdivision (e) or any other provisions of law,
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 shall not exceed the amount of the
annual allowance payable under this part for the fiscal year in which
the excess compensation was earned.
   (h) The amendments to this section enacted during the 1995-96
Regular Session shall be deemed to have become operative on July 1,
1996.
   (i) This section shall remain in effect only until June 30, 2012,
and shall be repealed on January 1, 2013, unless a later enacted
statute deletes or extends that date.
   SEC. 22.   SEC. 26.   Section 24214 of
the Education Code, as amended by Section 2 of Chapter 306 of the
Statutes of 2009, is amended to read:
   24214.  (a) A member retired for service under this part may
perform the activities identified in subdivision (a) or (b) of
Section 22119.5, or subdivision (a) or (b) of Section 26113, as an
employee of an employer, as an employee of a third party, or as an
independent contractor within the California public school system,
but the member shall not make contributions to the retirement fund or
accrue service credit based on compensation earned from that
service. The employer shall maintain accurate records of the earnings
of the retired member and report those earnings monthly to the
system and retired member as described in Section 22461.
   (b) If a member is retired for service under this part, the rate
of pay for service performed by that member as an employee of the
employer, as an employee of a third party, or as an independent
contractor within the California public school system shall not be
less than the minimum, nor exceed that paid by the employer to other
employees performing comparable duties.
   (c) A member retired for service under this part shall not be
required to reinstate for performing the activities identified in
subdivision (a) or (b) of Section 22119.5 as an employee of an
employer, as an employee of a third party, or as an independent
contractor within the California public school system.
   (d) A member retired for service under this part may earn
compensation for performing activities identified in subdivision (a)
or (b) of Section 22119.5 in any one school year up to the limitation
specified in subdivision (f) as an employee of an employer, as an
employee of a third party, or an independent contractor, within the
California public school system, without a reduction in his or her
retirement allowance.
   (e) The postretirement compensation limitation provisions set
forth in this section are not applicable to compensation earned for
the performance of the activities described in subdivision (a) for
which the employer is not eligible to receive state apportionment or
to compensation that is not creditable pursuant to Section 22119.2.
   (f) The limitation that shall apply to the compensation for
performance of the activities identified in subdivision (a) or (b) of
Section 22119.5 by a member retired for service under this part
either as an employee of an employer, an employee of a third party,
or as an independent contractor shall, in any one school year, be an
amount calculated by the board each July 1 equal to twenty-two
thousand dollars ($22,000) adjusted by the percentage change in the
average compensation earnable of active members of the Defined
Benefit Program, as determined by the system, from the 1998-99 fiscal
year to the fiscal year ending in the previous calendar year.
   (g) 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 (f), 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.
   (h) The language of this section derived from the amendments to
the section of this number added by Chapter 394 of the Statutes of
1995, enacted during the 1995-96 Regular Session, is deemed to have
become operative on July 1, 1996.
   (i)  This section shall become operative on July 1, 2012.
   SEC. 23.   SEC. 27.   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 the most
recent retirement of 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. 24.    Section 24216 of the Education Code is
amended to read:
   24216.  (a) (1) A member retired for service under this part who
is appointed as a trustee or administrator by the Superintendent
pursuant to Section 41320.1, or who is appointed as a trustee
pursuant to the Local Educational Agency Intervention provisions
(Article 3.1 (commencing with Section 52055.57) of Chapter 6.1 of
Part 28 of Title 2), or a member retired for service who is assigned
by a county superintendent of schools pursuant to Article 2
(commencing with Section 42122) of Chapter 6 of Part 24, shall be
exempt from subdivisions (d) and (f) of Section 24214 for a maximum
period of 24 consecutive months.
   (2) The period of exemption shall commence on the date the member
retired for service is appointed or assigned to the position and
shall end no more than 24 consecutive months from that date, after
which the limitation specified in subdivisions (d) and (f) of Section
24214 shall apply.
   (3) An exemption under this subdivision shall be granted by the
system providing that the Superintendent or the county superintendent
of schools submits documentation required by the system to
substantiate the eligibility of the member retired for service for an
exemption under this subdivision. The documentation shall be
received by the system no later than 60 calendar days after the
member retired for service commences creditable service.
   (b) (1) A member retired for service under this part who is
employed by an employer to perform creditable service in an emergency
situation to fill a vacant administrative position requiring highly
specialized skills shall be exempt from the provisions of
subdivisions (d) and (f) of Section 24214 for creditable service
performed up to one-half of the full-time position, if the vacancy
occurred due to circumstances beyond the control of the employer.
   (2) The period of exemption shall commence on the date the member
retired for service is appointed or assigned to the position and
shall end no more than 24 consecutive months from that date, after
which the limitation specified in subdivisions (d) and (f) of Section
24214 shall apply.
   (3) An exemption under this subdivision shall be granted by the
system subject to the following conditions:
   (A) The recruitment process to fill the vacancy on a permanent
basis is expected to extend over several months.
   (B) The employment is reported in a public meeting of the
governing body of the employer.
   (C) The employer submits documentation required by the system to
substantiate the eligibility of the member retired for service for an
exemption under this subdivision. The documentation shall be
received by the system no later than 60 calendar days after the
member retired for service commences creditable service.
   (4) An exemption under this subdivision shall not be granted to a
member retired for service whose termination of employment with the
employer is the basis for the vacant administrative position.
   (c) This section does not apply to any person who has received
additional service credit pursuant to Section 22715 or 22716.
   (d) A person who has received additional service credit pursuant
to Section 22714 shall be ineligible for one year from the effective
date of retirement for the exemption provided in this section for
service performed in any school district, community college district,
or county office of education in the state.
   (e) This section shall remain in effect only until June 30, 2012,
and shall be repealed on January 1, 2013, unless a later enacted
statute deletes or extends that date.  
  SEC. 25.    Section 24216.5 of the Education Code
is amended to read:
   24216.5.  (a) The compensation earned by a member who retired for
service under this part shall be exempt from subdivisions (d), (f),
and (g) of Section 24214, if all of the following conditions are met:

   (1) The member retired for service with an effective date on or
before January 1, 2009.
   (2) The member retired for service is employed by a school
district to provide any of the following:
   (A) Direct classroom instruction to pupils enrolled in
kindergarten or any of grades 1 to 12, inclusive.
   (B) Support and assessment for new teachers through the Beginning
Teacher Support and Assessment program authorized by Section 44279.1.

   (C) Support to individuals completing student teaching
assignments.
   (D) Support to individuals participating in the following
programs:
   (i) Alternative certification programs authorized pursuant to
Article 11 (commencing with Section 44380) of Chapter 2 of Part 25.
   (ii) School Paraprofessional Teacher Training Program established
pursuant to Article 12 (commencing with Section 44390) of Chapter 2
of Part 25.
   (E) Instruction and pupil services provided to pupils enrolled in
special education programs authorized pursuant to Part 30 (commencing
with Section 56000) of Division 4 of Title 2.
   (F) Instruction to pupils enrolled in English language learner
programs authorized pursuant to Chapter 3 (commencing with Section
300), Chapter 4 (commencing with Section 400), and Chapter 6
(commencing with Section 430) of Part 1 of Division 1.
   (3) All members retired for service whose employment with a school
district meets the conditions specified in this section shall be
treated as a distinct class of temporary employees within the
existing bargaining unit whose service may not be included in
computing the service required as a prerequisite to attainment of or
eligibility for classification as a permanent employee of a school
district. The compensation for service performed by this class of
employees shall be established in accordance with subdivision (b) of
Section 24214 and agreed to in the collective bargaining agreement
between the employing school district and the exclusive
representative for the existing bargaining unit within which these
temporary employees of the school district are treated as a distinct
class.
   (4) The employing school district submits documentation required
by the system to substantiate the eligibility of the temporary
employment of a member retired for service for the exemption under
this subdivision. The documentation shall be received by the system
no later than 60 calendar days after the member retired for service
commences creditable service.
   (b) A school district that employs a member retired for service
pursuant to this section shall maintain accurate records of the
retired member's compensation earned and shall report that
compensation monthly to the system regardless of the method of
payment or the source of funds from which the compensation is paid.
   (c) This section does not apply to the compensation earned for
creditable service performed by a member retired for service for a
community college district.
   (d) This section shall remain in effect only until June 30, 2012,
and shall be repealed as of January 1, 2013, unless a later enacted
statute deletes or extends that date.  
  SEC. 26.    Section 24216.6 of the Education Code
is amended to read:
   24216.6.  (a) The compensation earned by a member who retired for
service under this part shall be exempt from subdivisions (d), (f),
and (g) of Section 24214, if all of the following conditions are met:

   (1) The member retired for service with an effective date on or
before January 1, 2009.
   (2) The member retired for service is employed by a school
district to provide direct remedial instruction to pupils in grades 2
to 12, inclusive. "Remedial instruction" means the programs
specified in Sections 37252 and 37252.2.
   (3) All members retired for service whose employment with a school
district meets the conditions specified in this section shall be
treated as a distinct class of temporary employees within the
existing bargaining unit whose service may not be included in
computing the service required as a prerequisite to attainment of or
eligibility for classification as a permanent employee of a school
district. The compensation for service performed by this class of
employees shall be established in accordance with subdivision (b) of
Section 24214 and agreed to in the collective bargaining agreement
between the employing school district and the exclusive
representative for the existing bargaining unit within which these
temporary employees of the school district are treated as a distinct
class.
   (4) The employing school district submits documentation required
by the system to substantiate the eligibility of the temporary
employment of a member retired for service for the exemption under
this subdivision. That documentation shall be on a properly executed
form provided by the system and shall be received by the system no
later than 60 calendar days after the member retired for service
commences creditable service.
   (b) A school district that employs a member retired for service
pursuant to this section shall maintain accurate records of the
retired member's compensation earned and shall report that
compensation monthly to the system regardless of the method of
payment or the source of funds from which the compensation is paid.
   (c) This section does not apply to the compensation earned for
creditable service performed by a member retired for service for a
county office of education or a community college district.
   (d) This section shall remain in effect only until June 30, 2012,
and shall be repealed as of January 1, 2013, unless a later enacted
statute deletes or extends that date. 
   SEC. 27.   SEC. 28.   Section 24300.1 of
the Education Code is amended to read:
   24300.1.  (a) A member may, upon application for 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 filed with the system on or before the
last day of the month of the member's  retirement 
application  . Except as otherwise provided by this chapter, the
option shall become effective on the member's retirement date.
   (c) A member may revoke or change an election of an option
 at any time prior to the last day of the month of the
effective date of the member's retirement under this part 
 no later than 30 days from the date the member's initial benefit
payment for the member's most recent retirement under the Defined
Benefit Program is paid by the system . 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.
   (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.
   (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.
   (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.
   (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. 28.   SEC. 29.   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 
before the last day of the month of the effective date of retirement
under this part or during the period between termination of the
retirement allowance pursuant to Section 24117 or 24208 and the last
day of the month of the effective date of the subsequent retirement
under this part   no later than 30 days from the date
the member's initial benefit payment for the member's most recent
retirement under the Defined Benefit Program is paid by the system
 . The change or cancellation shall become effective as of the
date of the member's signature  or the day prior to the member's
retirement date, whichever is earlier  .
   (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. 29.   SEC. 30.   Section 24600 of
the Education Code is amended to read:
   24600.  (a) A retirement allowance under this part begins to
accrue on the effective date of the member's retirement and ceases on
the earlier of the day of the member's death or the day on which the
retirement allowance is terminated for a reason other than the
member's death.
   (b) A retirement allowance payable to an option beneficiary under
this part begins to accrue on the day following the day of the
retired member's death and ceases on the day of the option
beneficiary's death.
   (c) A disability allowance under this part begins to accrue on the
effective date of the member's disability allowance and ceases on
the earlier of the day of the member's death or the day on which the
disability allowance is terminated for a reason other than the member'
s death.
   (d) A family allowance under this part begins to accrue on the day
following the day of the member's death and ceases on the day of the
event that terminates eligibility for the allowance.
   (e) A survivor benefit allowance payable to a surviving spouse
under this part pursuant to Chapter 23 (commencing with Section
23850) begins to accrue on the day the member would have attained 60
years of age or on the day following the day of the member's death,
as elected by the surviving spouse, and ceases on the day of the
surviving spouse's death.
   (f) (1) Except as provided in paragraph (2), a child's portion of
an allowance under this part begins to accrue on the effective date
of that allowance and ceases on the earlier of either the termination
of the child's eligibility or the termination of the allowance.
   (2) A child's portion of a disability retirement allowance under
Chapter 26 (commencing with Section 24100) ceases on the earlier of
either:
   (A) The termination date of the child's eligibility.
   (B) The termination of the allowance for reasons other than death.

   (g) Supplemental payments issued under this part pursuant to
Sections 24412 and 24415 to retired members, disabled members, and
beneficiaries shall begin to accrue pursuant to Sections 24412 and
24415 and shall cease to accrue as of the termination dates specified
in subdivisions (a) to (f), inclusive, of this section.
   (h) Notwithstanding any other provision of this part or other law,
distributions payable under the plan with respect to the Defined
Benefit Program and the Defined Benefit Supplement Program shall be
made in accordance with applicable provisions of the Internal Revenue
Code of 1986 and related regulations. The required beginning date of
benefit payments that represent the entire interest of the member in
the plan with respect to the Defined Benefit Program and the Defined
Benefit Supplement Program shall be either:
   (1) In the case of a refund of contributions, as described in
Chapter 18 (commencing with Section 23100) of this part and
distribution of an amount equal to the balance of credits in a member'
s Defined Benefit Supplement account, as described in Chapter 38
(commencing with Section 25000) of this part, not later than April 1
of the calendar year following the later of (A) the calendar year in
which the member attains the age at which the Internal Revenue Code
of 1986 requires a distribution of benefits or (B) the calendar year
in which the member terminates employment within the meaning of
subdivision (i).
   (2) In the case of a retirement allowance, as defined in Section
22166, not later than April 1 of the calendar year following the
later of (A) the calendar year in which the member attains the age at
which the Internal Revenue Code of 1986 requires a distribution of
benefits or (B) the calendar year in which the member terminates
employment within the meaning of subdivision (i), to continue over
the life of the member or the lives of the member and the member's
option beneficiary, or over the life expectancy of the member or the
life expectancy of the member and the member's option beneficiary.
   (i) For purposes of subdivision (h), the phrase "terminates
employment" means the later of:
   (1) The date the member ceases to perform creditable service
subject to coverage under this plan.
   (2) The date the member ceases employment in a position subject to
coverage under another public retirement system in this state if the
compensation earnable while a member of the other system may be
considered in the determination of final compensation pursuant to
Section 22134, 22135, or 22136.
   SEC. 31.    Section 25012 of the   Education
Code   is amended to read: 
   25012.  (a) An annuity payable under the Defined Benefit
Supplement Program shall be determined as a value actuarially
equivalent to the balance of credits in the member's Defined Benefit
Supplement  Program  account on the  member's retirement
 date  the benefit becomes payable  and after
any lump-sum payment. If a single life annuity is elected, the
annuity shall be calculated using the age of the member on the 
member's retirement  date  the benefit becomes payable
 . A member may elect a single life annuity only if the
member did not elect to receive a modified allowance pursuant to
Section 24300 or 24300.1. If a joint and survivor annuity is elected,
the annuity shall be calculated using the age of the member and the
age of the member's beneficiary on the  member's retirement 
date  the benefit becomes payable  . A member may
elect a joint and survivor annuity only if the member elected to
receive a modified allowance pursuant to Section 24300 or 24300.1.
   (b) The beneficiary designation made pursuant to Section 24307 is
not applicable to benefits payable under this chapter.
   SEC. 32.    Section 26301 of the   Education
Code   is amended to read: 
   26301.  (a) Employers shall report contributions paid on behalf of
each participant in each pay period, along with all other
information required by the system no later than 10 working days
following the last day of the pay period in which the salary was
earned, and the report shall be delinquent immediately thereafter.
That report shall be submitted electronically in an encrypted format
provided by the system that ensures the security of the transmitted
participant data.
   (b) The board shall, in accordance with regulations, assess a
penalty against the employer for a report submitted late or in an
unacceptable form. The penalty shall be based upon the sum of the
employee and employer contributions required to be reported under
this part at a rate of interest equal to the regular interest rate,
accruing on the balance for the period between the time the report
was due and the time an acceptable report is actually received by the
system  , or a fee of five hundred dollars ($500), whichever
is greater  .
   SEC. 33.    Section 26302 of the   Education
Code   is amended to read: 
   26302.  (a)    If more or less than the
contributions required by this part are paid to the plan based on
salary paid to a participant, proper adjustment shall be made by the
employer within 60 days of discovery or of notification by the
system, and any contributions deducted in error from the participant'
s salary shall be returned to the participant by the employer within
the same time period. 
   (b) The board shall, in accordance with regulations, assess
penalties for late or improper adjustments pursuant to Section 26301.
These penalties shall be assessed at a rate equal to the penalties
imposed under subdivision (b) of Section 26301 and shall be deemed to
be interest earned in the year in which the penalty is received.

   SEC. 34.   Section 26303 of the   Education
Code   is amended to read: 
   26303.  (a) Employers shall transmit to the plan the employee
contributions and employer contributions with respect to the Cash
Balance Benefit Program for salary paid to each participant during
the pay period no later than 10 working days following the last day
of the pay period in which the salary was earned.
   (b) Payments shall be delinquent on the 11th working day
thereafter, and interest shall begin to accrue at the regular
interest rate from that day until payment for the contributions and
interest is received in full by the system. The board  , in
accordance with regulations,  shall collect interest for late
payment from the employer under this subdivision. 
  SEC. 30.    Section 26505 of the Education Code is
amended to read:
   26505.  If a participant who has retired and is receiving an
annuity under the Cash Balance Benefit Program becomes reemployed
prior to 60 years of age to perform creditable service subject to
coverage by the plan, the annuity shall be terminated, the employee
account and the employer account of the participant shall be credited
with respective balances that reflect the actuarial equivalent of
the participant's retirement benefit as of the date of the
reemployment and the Annuitant Reserve shall be reduced by the amount
of the credits. If a participant who has retired and is receiving an
annuity under the Cash Balance Benefit Program becomes reemployed on
or after age 60 to perform creditable service under the plan, the
annuity shall continue. 
   SEC. 35.    Section 26505 of the  Education
Code   is repealed.  
   26505.  If a participant who has retired and is receiving an
annuity under the Cash Balance Benefit Program becomes reemployed
prior to 60 years of age or becomes reemployed on or after 60 years
of age but within one year of his or her retirement date, to perform
creditable service subject to coverage by the plan, the annuity shall
be terminated, the employee account and the employer account of the
participant shall be credited with respective balances that reflect
the actuarial equivalent of the participant's retirement benefit as
of the date of the reemployment and the Annuitant Reserve shall be
reduced by the amount of the credits. If a participant who has
retired and is receiving an annuity under the Cash Balance Benefit
Program becomes reemployed on or after age 60 and more than one year
after retirement to perform creditable service under the plan, the
annuity shall continue and employee contributions and employer
contributions for the creditable service shall be made to the plan
and shall be credited to new employee and employer accounts
established on behalf of the participant. 
   SEC. 31.   SEC. 36.   Section 26812 is
added to the Education Code, to read:
   26812.  (a) A participant retired for service under this part may
perform the activities identified in subdivision (a) or (b) of
Section 26113 as an employee of an employer, as an employee of a
third party, or as an independent contractor within the California
public school system, but the participant shall not make
contributions to  the plan or accrue service credit based on
compensation earned from that service  the plan  .
The employer shall maintain accurate records of the earnings of the
retired member and report those earnings monthly to the system and
retired member  as described in Section 22461  .
   (b) If a participant is retired for service under this part, the
rate of pay for service performed by that member as an employee of
the employer, as an employee of a third party, or as an independent
contractor shall not be less than the minimum, nor exceed that paid
by the employer to other employees performing comparable duties.
   (c) A participant retired for service under this part shall not be
required to reinstate for performing the activities identified in
subdivision (a) or (b) of Section 26113 as an employee of an
employer, as an employee of a third party, or as an independent
contractor within the California public school system.
   (d) If a participant retired for service under this part  and
receiving an annuity under the Cash   Balance Benefit
Program  is below normal retirement age and earns compensation
for performing activities identified in subdivision (a) or (b) of
Section 26113 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 participant's annuity shall be reduced by
the amount of the compensation. This reduction shall only be made for
compensation earned during the first 180 calendar days after a
participant retired for service under this part, if the participant
is below normal retirement age at the time the compensation is
earned. The amount of the reduction may be equal to the monthly
annuity payable but shall not exceed the amount of the annual annuity
payable under this part for the fiscal year in which the
compensation was earned.
   SEC. 32.   SEC. 37.   Section 26813 is
added to the Education Code, to read:
   26813.  A member retired for service under the Defined Benefit
Program may perform the activities identified in subdivision (a) or
(b) of Section 22119.5 and subdivision (a) or (b) of Section 26113 in
any one school year up to the limitation specified in Sections 24214
and 24214.5 as an employee of an employer, as an employee of a third
party, or as an independent contractor within the California public
school system, but the member may   shall 
not make contributions to the fund  or accrue service credit
based on compensation earned from that service  . The
employer shall maintain accurate records of the earnings of the
retired member and report those earnings monthly to the system and
retired member as described in Section 22461.
   SEC. 33.   SEC. 38.   Any section of any
other act enacted by the Legislature during the 2011 calendar year
that takes effect on or before January 1, 2012, and that amends,
amends and renumbers, adds, repeals and adds, or repeals a section
that is amended, amended and renumbered, added, repealed and added,
or repealed by this act, shall prevail over this act, whether that
act is enacted prior to or subsequent to the enactment of this act.
The repeal, or repeal and addition, of any article, chapter, part,
title, or division of any code by this act shall not become operative
if any section of any other act that is enacted by the Legislature
during the 2010 calendar year and takes effect on or before January
1, 2012, amends, amends and renumbers, adds, repeals and adds, or
repeals any section contained in that article, chapter, part, title,
or division.