BILL NUMBER: AB 989 CHAPTERED
BILL TEXT
CHAPTER 459
FILED WITH SECRETARY OF STATE OCTOBER 1, 2013
APPROVED BY GOVERNOR OCTOBER 1, 2013
PASSED THE SENATE AUGUST 19, 2013
PASSED THE ASSEMBLY AUGUST 30, 2013
AMENDED IN SENATE JUNE 17, 2013
AMENDED IN SENATE MAY 14, 2013
INTRODUCED BY Assembly Member Mullin
FEBRUARY 22, 2013
An act to amend Sections 22309, 22661, 22662, 22663, 22801, 23104,
23203, 24615, and 26214 of, and to add Section 22337 to, the
Education Code, relating to state teachers' retirement.
LEGISLATIVE COUNSEL'S DIGEST
AB 989, Mullin. State teachers' retirement: account statements.
The State Teachers' Retirement Law creates the State Teachers'
Retirement System (STRS) for the purpose of providing retirement
benefits to teachers and other people employed in connection with the
schools. STRS is administrated by the Teachers' Retirement Board,
which is required to issue each active and inactive member, no less
frequently than annually, as specified, a statement of the member's
individual Defined Benefit Program and Defined Benefit Supplement
Program accounts, if the system has the member's mailing address.
Existing law permits the board to make the account statement
available by secured access through the system's Internet Web site.
Existing law creates the Cash Balance Benefit Program, also referred
to as the cash balance plan, administrated by the Teachers'
Retirement Board, to provide a retirement plan for teachers working
less than half time. Existing law requires the board, in connection
with the cash balance plan, to provide each participant a statement
regarding the balance of his or her account with the plan at the
close of the year, as specified.
This bill would permit the board to make an electronic delivery of
the account statements described above, subject to specified
requirements. The bill would permit the system to designate
electronic delivery of the account statements the default method by
which active and inactive members and participants receive the
information in the statements. The bill would require the system to
notify the affected parties that they have the right to request
delivery by mail, and that unless the affected party elects, in a
manner specified by the board, delivery will be provided
electronically. The bill would provide that, until this designation
is made, delivery by mail is the default delivery method, except as
specified. The bill would apply similar authorizations and
requirements regarding electronic delivery of communications and
other actions to provisions regarding refund of retirement
contributions, redeposit of retirement contributions, and the
purchase of service credit. If specified provisions mandate that
actions be taken within a certain number of days of a mailing date
and electronic delivery has been substituted for mail, the bill would
require that date of electronic delivery be substituted for mailing
date for purposes of measuring when those actions are to be taken.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 22309 of the Education Code is amended to read:
22309. (a) Except as provided in subdivision (c), the system
shall make available to each active and inactive member, at least
annually after the close of the school year, a statement of the
member's individual Defined Benefit Program and Defined Benefit
Supplement accounts. The system shall mail a copy of the member's
statement, provided the employer or member has informed the system of
the member's current mailing address and the member has not
requested to receive that annual statement electronically, in lieu of
mailing.
(b) The system shall periodically make a good faith effort to
locate inactive members to provide these members with information
concerning any benefit for which they may be eligible.
(c) The mode of issuance described in subdivision (a) is subject
to Section 22337.
SEC. 2. Section 22337 is added to the Education Code, to read:
22337. (a) The requirements and procedures described in this
section shall apply, to the extent that they are applicable, to the
following sections:
(1) Section 22309.
(2) Section 22661.
(3) Section 22662.
(4) Section 22663.
(5) Section 22801.
(6) Section 23104.
(7) Section 23203.
(8) Section 24615.
(9) Section 26214.
(b) A communication or other action described in a section listed
in subdivision (a) may be made by electronic delivery pursuant to the
requirements of this section. The system may designate electronic
delivery the default method of communication or other action with
regard to these sections, provided that the system notifies the
parties affected that they have the right to request delivery by mail
and that, unless the affected party elects, in a manner specified by
the system, to continue delivery by mail, delivery shall be provided
electronically.
(c) Prior to the designation described in subdivision (b), mail
shall continue to be the default method of communication unless the
member, nonmember spouse, participant, nonparticipant spouse, or
beneficiary has requested that he or she receive that communication
electronically, pursuant to a procedure specified by the system.
(d) If a provision in a section listed in subdivision (a) requires
that action be taken within a specified number of days of a mailing
date, and electronic delivery has been substituted for delivery by
mail, date of electronic delivery shall substitute for date of
mailing for purposes of measuring the number of days within which an
action is to be taken.
SEC. 3. Section 22661 of the Education Code is amended to read:
22661. (a) The nonmember spouse who is awarded a separate account
under this part shall have the right to a refund of the accumulated
retirement contributions in the account under the Defined Benefit
Program, and a return of the Defined Benefit Supplement account
balance, of the nonmember spouse under this part.
(b) The nonmember spouse shall file an application on a form
provided by the system to obtain a refund or lump-sum payment.
(c) Except as provided in subdivision (i), the refund of
accumulated retirement contributions in the account under the Defined
Benefit Program and the return of the accumulated Defined Benefit
Supplement account balance under this part are effective when the
system deposits in the United States mail an initial warrant drawn in
favor of the nonmember spouse and addressed to the latest address
for the nonmember spouse on file with the system.
(d) Except as provided in subdivision (i), if the nonmember spouse
has elected on a form provided by the system to transfer all or a
specified portion of the accumulated retirement contributions or
accumulated Defined Benefit Supplement account balance 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. Sec. 402), deposit in the United States mail of a notice
that the requested transfer has been made constitutes a refund of the
nonmember spouse's accumulated retirement contributions as defined
in Section 22161.5 or the return of the accumulated Defined Benefit
Supplement account balance. This subdivision shall not apply to a
nonmember domestic partner, consistent with Section 402 of the
Internal Revenue Code.
(e) The nonmember spouse is deemed to have permanently waived all
rights and benefits pertaining to the service credit, accumulated
retirement contributions, and accumulated Defined Benefit Supplement
account balance under this part when the refund and lump-sum payment
become effective.
(f) The nonmember spouse may not cancel a refund or lump-sum
payment under this part after it is effective.
(g) The nonmember spouse shall not have a right to elect to
redeposit the refunded accumulated retirement contributions under
this part after the refund is effective, to redeposit under Section
22662 or purchase additional service credit under Section 22663 after
the refund becomes effective, or to redeposit the accumulated
Defined Benefit Supplement account balance after the lump-sum payment
becomes effective.
(h) If the total service credit in the separate account of the
nonmember spouse under the Defined Benefit Program, including service
credit purchased under Sections 22662 and 22663, is less than two
and one-half years, the system shall refund the accumulated
retirement contributions in the account.
(i) The mode of deposit described in subdivision (c) and the mode
of notice described in subdivision (d) are subject to Section 22337.
SEC. 4. Section 22662 of the Education Code is amended to read:
22662. The nonmember spouse who is awarded a separate account
under the Defined Benefit Program may redeposit accumulated
retirement contributions previously refunded to the member in
accordance with the determination of the court pursuant to Section
22652.
(a) The nonmember spouse may redeposit under the Defined Benefit
Program only those accumulated retirement contributions that were
previously refunded to the member and in which the court has
determined the nonmember spouse has a community property interest.
(b) The nonmember spouse shall inform the system in writing of his
or her intent to redeposit within 180 days after the judgment or
court order that specifies the redeposit rights of the nonmember
spouse is entered. Except as provided in subdivision (g), the
nonmember spouse's election to redeposit shall be made on a form
provided by the system within 30 days after the system mails an
election form and the billing.
(c) If the nonmember spouse elects to redeposit under the Defined
Benefit Program, he or she shall repay all or a portion of the member'
s refunded accumulated retirement contributions that were awarded to
the nonmember spouse and shall pay regular interest from the date of
the refund to the date payment of the redeposit is completed.
(d) All payments shall be received by the system before the
effective date of the nonmember spouse's retirement under this part.
If any payment due because of the election is not received at the
system's headquarters office, as established pursuant to Section
22375, within 120 days of its due date, the election shall be
canceled and any payments made under the election shall be returned
to the nonmember spouse.
(e) The right of the nonmember spouse to redeposit shall be
subject to Section 23203.
(f) The member shall not have a right to redeposit the share of
the nonmember spouse in the previously refunded accumulated
retirement contributions under this part whether or not the nonmember
spouse elects to redeposit. However, any accumulated retirement
contributions previously refunded under this part and not explicitly
awarded to the nonmember spouse under this part by the judgment or
court order shall be deemed the exclusive property of the member.
(g) The measurement of time within which the election to redeposit
described in subdivision (b) shall be made is subject to Section
22337.
SEC. 5. Section 22663 of the Education Code is amended to read:
22663. The nonmember spouse who is awarded a separate account
under this part has the right to purchase additional service credit
in accordance with the determination of the court pursuant to Section
22652.
(a) The nonmember spouse may purchase only the service credit that
the court, pursuant to Section 22652, has determined to be the
community property interest of the nonmember spouse.
(b) The nonmember spouse shall inform the system in writing of his
or her intent to purchase additional service credit within 180 days
after the date the judgment or court order addressing the right of
the nonmember spouse to purchase additional service credit is
entered. Except as provided in subdivision (f), the nonmember spouse
shall elect to purchase additional service credit on a form provided
by the system within 30 days after the system mails an election form
and billing.
(c) If the nonmember spouse elects to purchase additional service
credit, he or she shall pay, prior to retirement under this part, all
contributions with respect to the additional service at the
contribution rate for additional service credit in effect at the time
of election and regular interest from July 1 of the year following
the year upon which contributions are based.
(1) (A) The nonmember spouse shall purchase additional service
credit by paying the required contributions and interest in one lump
sum, or in not more than 120 monthly installments, provided that no
installment, except the final installment, is less than twenty-five
dollars ($25). Regular interest shall be charged on the monthly,
unpaid balance if the nonmember spouse pays in installments.
(B) If any payment due, because of the election, is not received
at the system's headquarters office, as established pursuant to
Section 22375, within 120 days of its due date, the election shall be
canceled and any payments made under the election shall be returned
to the nonmember spouse.
(2) The contributions shall be based on the member's compensation
earnable in the most recent school year during which the member was
employed, preceding the date of separation established by the court
pursuant to Section 22652.
(3) All payments of contributions and interest shall be received
by the system before the effective date of the retirement of the
nonmember spouse.
(d) The nonmember spouse does not have a right to purchase
additional service credit under this part after the effective date of
a refund of the accumulated retirement contributions in the separate
account of the nonmember spouse.
(e) The member does not have a right to purchase the community
property interest of the nonmember spouse of additional service
credit under this part whether or not the nonmember spouse elects to
purchase the additional service credit. However, any additional
service credit eligible for purchase that is not explicitly awarded
to the nonmember spouse by the judgment or court order shall be
deemed the exclusive property of the member.
(f) The measurement of time within which the election to purchase
additional service credit described in subdivision (b) shall be made
is subject to Section 22337.
SEC. 6. Section 22801 of the Education Code is amended to read:
22801. (a) A member who requests to purchase additional service
credit as provided in this chapter and Chapter 14.2 (commencing with
Section 22820) shall pay, prior to retirement, all contributions with
respect to that service at the contribution rate for additional
service credit, adopted by the board as a plan amendment, in effect
on the date of the request to purchase additional service credit. If
the system is unable to inform the member or beneficiary of the
amount required to purchase additional service credit prior to the
effective date of the applicable allowance, the member or beneficiary
may make the required payment within 30 working days after the date
of mailing of the statement of contributions and interest required or
the effective date of the appropriate allowance, whichever is later,
except as provided in subdivision (i). The payment shall be paid in
full before a member or beneficiary receives any adjustment in the
appropriate allowance due because of that payment. Contributions
shall be made in a lump sum, or in not more than 120 monthly
installments, not to exceed ten years. No installment, except the
final installment, shall be less than twenty-five dollars ($25).
(b) If the member is employed to perform creditable service
subject to coverage by the Defined Benefit Program on the date of the
request to purchase additional service credit, the contributions
shall be based upon the compensation earnable in the current school
year or either of the two immediately preceding school years,
whichever is highest.
(c) If the member is not employed to perform creditable service
subject to coverage by the Defined Benefit Program on the date of the
request to purchase additional service credit, the contributions
shall be based upon the compensation earnable in the last school year
of credited service or either of the two immediately preceding
school years, whichever is highest, and additional regular interest
shall be added to the contributions from July 1 of the subsequent
year in which the member last performed creditable service subject to
coverage by the Defined Benefit Program to 20 days after the date of
the request.
(d) The employer may pay the amount required as employer
contributions for additional service credited under paragraphs (7),
(8), (9), and (10) of subdivision (a) of Section 22803.
(e) The Public Employees' Retirement System shall transfer the
actuarial present value of the assets of a person who makes an
election pursuant to paragraph (11) of subdivision (a) of Section
22803.
(f) Regular interest shall be charged on the monthly unpaid
balance if the member pays in installments. Regular interest may not
be charged or be payable for the period of a delay caused by the
system's inability or failure to determine and inform the member or
beneficiary of the amount of contributions and interest that is
payable. The period of delay shall commence on the 20th day following
the day on which the member or beneficiary who wishes to make
payment evidences in writing to the system that he or she is ready,
willing, and able to make payment to the system. The period of delay
shall cease on the first day of the month following the mailing of
notification of contributions and interest payable.
(g) If the payment described in subdivision (a) is not received at
the system's headquarters office, as described in Section 22375,
within 120 days of the due date, the election pursuant to this
section shall be canceled. The member shall receive credit for
additional service based on the payments that were made or the member
may request a return of his or her payments.
(h) If the election to purchase additional service credit is
canceled as described in subdivision (g), the member may, prior to
the effective date of his or her retirement, elect to purchase
additional service credit pursuant to this section.
(i) The measurement of time within which the purchase of
additional service credit described in subdivision (a) shall be made
is subject to Section 22337.
SEC. 7. 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) Except as provided in subdivision (e), 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. 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) Except as provided in subdivision (e), 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) Except as provided in subdivision (e), 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.
(e) The mode of notice described in subdivision (b) and the
measurement of time within which the return of total gross
distribution amounts described in subdivisions (c) and (d) shall be
made are subject to Section 22337.
SEC. 8. Section 23203 of the Education Code is amended to read:
23203. (a) A member who elects to redeposit refunded accumulated
retirement contributions shall pay, prior to retirement, all
contributions and interest as determined under Section 23200.
(b) If the system is unable to inform the member or beneficiary of
the amount required to redeposit the refunded accumulated retirement
contributions prior to the effective date of the applicable
allowance, the member or beneficiary may make the required payment
within 30 working days after the date of mailing of the statement of
contributions and interest required or the effective date of the
appropriate allowance, whichever is later, except as provided in
subdivision (d). The payment shall be paid in full before a member or
beneficiary receives any adjustment in the appropriate allowance due
because of that payment.
(c) Redeposit of refunded accumulated retirement contributions
shall be made in one sum, or in not more than 120 monthly
installments, not to exceed ten years, provided that no installment,
except the final installment, is less than twenty-five dollars ($25).
(d) The measurement of time within which a redeposit described in
subdivision (b) shall be made is subject to Section 22337.
SEC. 9. Section 24615 of the Education Code is amended to read:
24615. (a) If the system determines that contributions are due
under this part from a retired member, disabled member, or a person
who has died, and the person is unable to pay the amount due, the
system may withhold all or part of subsequent payments due the
retired member, disabled member, or survivor, until the amounts
withheld equal the contributions due plus regular interest to the
date of payment. Total contributions plus regular interest due shall
be recovered by the system within 18 months.
(b) Any payment of contributions that a member or beneficiary is
required by law to make to the system shall be paid upon receipt of
written notice from the system, except as provided in subdivision
(c). Payment may be made either in a lump sum or installments, as
permitted by the system. Payment of contributions due the system not
discovered or unpaid, for whatever reason, prior to the time of
retirement, disability, or death shall be paid prior to granting an
allowance or benefit to the member or beneficiary unless, in the
opinion of the board, the making of the payment prior to receipt of
an allowance or benefit would impose an undue hardship, in which case
payment may be made by the system withholding not more than 18
consecutive monthly installments from payments due from the system.
Those installments may not be less than twenty-five dollars ($25) per
month, except for the last installment, which may be less than
twenty-five dollars ($25).
(c) The mode of notice and the measurement of time within which a
redeposit described in subdivision (b) shall be made is subject to
Section 22337.
SEC. 10. Section 26214 of the Education Code is amended to read:
26214. (a) Except as provided in subdivision (b), the system
shall make available, after the end of the plan year, to each
participant having a balance in his or her employee account or
employer account, a statement setting forth the balance as of the
close of the plan year and amounts credited for the year. The system
shall mail a copy of the participant's statement, provided that the
employer or participant has informed the system of the participant's
current mailing address and the participant has not requested to
receive that statement electronically, in lieu of mailing.
(b) The mode of issuance described in subdivision (a) is subject
to Section 22337.