BILL NUMBER: AB 611 AMENDED
BILL TEXT
AMENDED IN SENATE JUNE 17, 2014
INTRODUCED BY Assembly Member Bonta
FEBRUARY 20, 2013
An act to amend Section 22950 of the Education Code,
relating to state teachers' retirement. 22960.4 of,
and to add Sections 22960.05 and 22960.51 to, the Government Code,
relating to public employees' retirement, and declaring the urgency
thereof, to take effect immediatel y.
LEGISLATIVE COUNSEL'S DIGEST
AB 611, as amended, Bonta. State teachers' retirement.
State Peace Officers' and Firefighters' Defined
Contribution Plan.
Existing law requires that contributions to the State Peace
Officers' and Firefighters' Defined Contribution Plan cease,
prohibits new members from participating in the plan, and requires
that the plan be terminated, as prescribed. Existing law requires
that moneys in the State Peace Officers' and Firefighters' Defined
Contribution Plan Fund be distributed, as specified and in accordance
with federal law, including requiring that amounts payable from the
fund be rolled over to the Supplemental Contributions Program, if not
elected otherwise.
This bill would require that the plan be terminated effective June
1, 2014, subject to obtaining appropriate approvals from the
Internal Revenue Service. The bill would state that the bill is
intended to constitute a governmental plan under federal tax law, as
specified. Consistent with specified federal law, the bill would
prohibit the corpus or income of the plan's trust from being diverted
to purposes other than the exclusive benefit of the members or their
beneficiaries or there being a reversion of trust funds, except as
federal law permits.
This bill would declare that it is to take effect immediately as
an urgency statute.
The State Teachers' Retirement System provides pension benefits
based in part upon credited service. Existing law states that by
accepting employment to perform creditable service, a member consents
to make contributions for service and compensation. The Teachers'
Retirement Law requires the employer to contribute monthly to the
system 8% of the creditable compensation upon which members'
contributions are based. The Teachers' Retirement Law requires
portions of the employer contributions to be deposited in the
Teachers' Retirement Fund and the Teachers' Health Benefits Fund.
Existing law authorizes a limited amount from the employer
contributions to also be deposited into the Teachers' Retirement
Program Development Fund.
This bill would make that deposit into the Teachers' Retirement
Program Development Fund a required deposit.
Vote: majority 2/3 . Appropriation:
no. Fiscal committee: yes. State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 22960.4 of the
Government Code is amended to read:
22960.4. (a) The Legislature finds and declares that an agreement
between the exclusive representative of state peace officer and
firefighter members in State Bargaining Unit 6 and the employer has
eliminated the employer contributions to the plan provided in Section
22960.60.
(b) The following shall occur:
(1) All contributions to the plan shall cease.
(2) New participants shall be prohibited from participating in the
plan.
(3) The plan shall be terminated on the later of January
effective June 1, 2014, or upon
subject to obtaining appropriate approvals from
the Internal Revenue Service, including a favorable determination
letter on plan termination from the Internal Revenue Service.
(4) Subject to paragraph (3), all moneys in the fund shall be
distributed in accordance with this part and federal law. If not
elected otherwise, amounts that become payable from the fund under
this section shall be rolled over under Section 401(a)(31) of Title
26 of the United States Code to the Supplemental Contributions
Program established in accordance with Section 22970.
SEC. 2. Section 22960.05 is added to the
Government Code , to read:
22960.05. The plan is intended to constitute a governmental plan
as defined by Section 414(d) of the Internal Revenue Code (26 U.S.C.
Sec. 414(d)) and, as such, the plan and all benefits payable
thereunder are intended to satisfy all requirements of Section 401(a)
of the Internal Revenue Code (26 U.S.C. Sec. 401(a)) that apply to
the plan.
SEC. 3. Section 22960.51 is added to the
Government Code , to read:
22960.51. Consistent with the requirements of Section 401(a)(2)
of the Internal Revenue Code (26 U.S.C. Sec. 401(a)(2)), the corpus
or income of the plan's trust shall not be diverted to, or used for,
purposes other than the exclusive benefit of the members or their
beneficiaries nor shall there be a reversion of trust funds except as
permitted by Revenue Ruling 91-4, 1991-1 C.B. 57, by the Internal
Revenue Service.
SEC. 4. This act is an urgency statute necessary
for the immediate preservation of the public peace, health, or safety
within the meaning of Article IV of the Constitution and shall go
into immediate effect. The facts constituting the necessity are:
In order that the members of the State Peace Officers' and
Firefighters' Defined Contribution Plan may receive the distributions
that are due to them at the earliest possible time, it is necessary
that this act take effect immediately.
SECTION 1. Section 22950 of the Education Code
is amended to read:
22950. (a) Employers shall contribute monthly to the system 8
percent of the creditable compensation upon which members'
contributions under this part are based.
(b) From the contributions required under subdivision (a), there
shall be deposited in the Teachers' Retirement Fund an amount,
determined by the board, that is not less than the amount, determined
in an actuarial valuation of the Defined Benefit Program pursuant to
Section 22311.5, necessary to finance the liabilities associated
with the benefits of the Defined Benefit Program over the funding
period adopted by the board, after taking into account the
contributions made pursuant to Sections 22901, 22951, and 22955.
(c) The amount of contributions required under subdivision (a)
that is not deposited in the Teachers' Retirement Fund pursuant to
subdivision (b) shall be deposited directly into the Teachers' Health
Benefits Fund, as established in Section 25930, and shall not be
deposited into or transferred from the Teachers' Retirement Fund.
(d) (1) Notwithstanding subdivisions (b) and (c), there shall be
deposited into the Teachers' Retirement Program Development Fund, as
established in Section 22307.5, from the contributions required under
subdivision (a), an amount determined by the board, not to exceed
the limit specified in paragraph (2).
(2) The balance of deposits into the Teachers' Retirement Program
Development Fund, minus the subsequent transfer of funds, with
interest, into the Teachers' Retirement Fund pursuant to subdivision
(e) of Section 22307.5, shall not exceed 0.01 percent of the total of
the creditable compensation of the fiscal year ending in the
immediately preceding calendar year upon which member's contributions
to the Defined Benefit Program are based.
(3) The deposits described in this subdivision shall not be
deposited into, or transferred from, the Teachers' Retirement Fund.