Amended in Assembly April 23, 2013

Amended in Assembly April 1, 2013

California Legislature—2013–14 Regular Session

Assembly Bill No. 1380

Introduced by Committee on Public Employees, Retirement and Social Security (Bonta (Chair), Jones-Sawyer, Mullin, Rendon, and Wieckowski)

February 26, 2013

An act to amend Sections begin delete 31663.25 and end delete begin insert 31490.6, 31658, 31663.25, and end insert 31672 of, and to add Section 31672.3 to, the Government Code, relating to county employees’ retirement.

LEGISLATIVE COUNSEL’S DIGEST

AB 1380, as amended, Committee on Public Employees, Retirement and Social Security. County employees’ retirement.

The California Public Employees’ Pension Reform Act of 2013 (PEPRA) requires a public retirement system, as defined, to modify its pension plan or plans to comply with the act and, among other provisions, generally prohibits a public employer that offers a defined benefit plan from offering new employees defined benefit retirement formulas other than those established by the act. begin insert PEPRA prohibits the purchase of nonqualified service credit, as defined, unless the application to purchase the credit is received by the retirement system prior to January 1, 2013, and subsequently approved. end insert

Under the County Employees Retirement Law of 1937, a safety member of a county retirement system who has reached the applicable compulsory retirement age, if any, has completed 10 years of continued service and reached 50 years of age, or who has completed 20 years of service, may retire after filing a written application with the board of retirement, except as specified. The law authorizes a member of a county retirement system who has reached 70 years of age, has completed 10 years of services and has reached 55 years of age, or has completed 30 years of service, to retire after filing a written application with the board. begin insert The law authorizes an active member of a retirement system established pursuant to its provisions to make contributions and receive up to 5 years of service credit in additional retirement credit, as defined, by making a written application and by satisfying other requirements. end insert

This bill would begin insert limit provisions relating to purchase of additional retirement credit, as described above, to applications received prior to January 1, 2013, and subsequently approved. The bill would also end insert prohibit the application of the above-described authorizations begin insert regarding time of retirement end insert to a member who is subject to the PEPRA for that member’s membership in the county retirement system. The bill would also authorize a member who is subject to the PEPRA and has completed 5 years of service and has reached the minimum retirement age applicable to that member, or has reached 70 years of age, to retire upon filing a written application with the board, as specified.

Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Section 31490.6 of the end insert begin insert Government Code end insert begin insert is
amended to read: end insert

31490.6.  

(a) An active member may elect, by written notice
filed with the board, to make contributions pursuant to this section
and to receive up to five years of service credit in the retirement
system for additional retirement credit, if the member has
completed at least five years of credited service with that retirement
system.

(b) As used in this section, “additional retirement credit” means
time that does not otherwise qualify as county service, public
service, military service, medical leave of absence, or any other
time recognized for service credit by the retirement system.

(c) Notwithstanding any other provision of this chapter, service
credit for additional retirement credit may not be counted to meet
the minimum qualifications for service retirement or for purposes
of establishing eligibility for benefits based on 30 years of service,
additional ad hoc cost-of-living benefits based on service credit,
health care benefits, or any other benefits based upon service credit.

(d) A member who elects to make contributions and receive
service credit for additional retirement credit shall contribute to
the retirement fund, prior to the effective date of his or her
retirement, by lump-sum payment or by installment payments over
a period not to exceed 10 years, an amount that, at the time of
commencement of purchase, in the opinion of the board and the
actuary, is sufficient to not place any additional financial burden
upon the retirement system.

(e) No member may receive service credit under this section
for additional retirement credit that he or she has not completed
payment pursuant to subdivision (d) before the effective date of
his or her retirement or, if applicable, prior to the date provided in
Section 31485.8. Subject to the limitations of United States Internal
Revenue Service regulations, a member who has elected to make
payment in installments may complete payment by lump sum at
any time prior to the effective date of his or her retirement.

(f) Sums paid by a member pursuant to this section shall be
considered to be and administered as contributions by the member.

(g) This section is not operative until the board of supervisors,
by resolution adopted by majority vote, makes this section
operative in the county.

begin insert

(h) This section shall apply only to an application to purchase
additional retirement credit that was received by the retirement
system prior to January 1, 2013, that is subsequently approved by
the system.

end insert

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 31658 of the end insert begin insert Government Code end insert begin insert is amended to
read: end insert

31658.  

(a) An active member may elect, by written notice
filed with the board, to make contributions pursuant to this section
and to receive up to five years of service credit in the retirement
system for additional retirement credit, if the member has
completed at least five years of credited service with that retirement
system.

(b) As used in this section, “additional retirement credit” means
time that does not otherwise qualify as county service, public
service, military service, medical leave of absence, or any other
time recognized for service credit by the retirement system.

(c) Notwithstanding any other provision of this chapter, service
credit for additional retirement credit may not be counted to meet
the minimum qualifications for service or disability retirement or
for purposes of establishing eligibility for any benefits based on
30 years of service, additional ad hoc cost-of-living benefits based
on service credit, health care benefits, or any other benefits based
upon service credit.

(d) Any member who elects to make contributions and receive
service credit for additional retirement credit shall contribute to
the retirement fund, prior to the effective date of his or her
retirement, by lump-sum payment or by installment payments over
a period not to exceed 10 years, an amount that, at the time of
commencement of purchase, in the opinion of the board and the
actuary, is sufficient to not place any additional financial burden
upon the retirement system.

(e) No member may receive service credit under this section
for any additional retirement credit for which he or she has not
completed payment pursuant to subdivision (d) before the effective
date of his or her retirement. Subject to the limitations of United
States Internal Revenue Service regulations, a member who has
elected to make payment in installments may complete payment
by lump sum at any time prior to the effective date of his or her
retirement.

(f) Any sums paid by a member pursuant to this section shall
be considered to be and administered as contributions by the
member.

(g) This section is not operative in any county until the board
of supervisors, by resolution adopted by majority vote, makes this
section applicable in the county.

begin insert

(h) This section shall apply only to an application to purchase
additional retirement credit that was received by the retirement
system prior to January 1, 2013, that is subsequently approved by
the system.

end insert

begin delete SECTION 1. end delete
begin insert SEC. 3. end insert   

Section 31663.25 of the Government Code is amended
to read:

31663.25.  

(a) Except as provided in Section 31663.26, a safety
member who has reached the applicable compulsory age of
retirement, if any, or a safety member who has completed 10 years
of continuous service and who has reached the age of 50, or a
safety member who has completed 20 years of service regardless
of age, may be retired upon filing with the board a written
application setting forth the date upon which the member desires
his or her retirement to become effective which shall be not more
than 60 days after the date of filing the application.

(b) This section shall not apply to any member who is subject
to the provisions of the California Public Employees’ Pension
Reform Act of 2013 (Article 4 (commencing with Section 7522)
of Chapter 21 of Division 7 of Title 1) for all or any portion of that
member’s membership in the county retirement system.

begin delete SEC. 2. end delete
begin insert SEC. 4. end insert   

Section 31672 of the Government Code is amended
to read:

31672.  

(a) A member who has reached 70 years of age or a
member who has completed 10 years of service and who has
reached 55 years of age, or a member who has completed 30 years
of service regardless of age, may be retired upon filing with the
board a written application, setting forth the date upon which he
or she desires his or her retirement to become effective not earlier
than the date the application is filed with the board and not more
than 60 days after the date of filing the application. Fifty-five years
of age in the preceding sentence may be reduced to 50 years of
age in a county by resolution of the board of supervisors.

(b) This section shall not apply to any member who is subject
to the provisions of the California Public Employees’ Pension
Reform Act of 2013 (Article 4 (commencing with Section 7522)
of Chapter 21 of Division 7 of Title 1) for all or any portion of that
member’s membership in the county retirement system.

begin delete SEC. 3. end delete
begin insert SEC. 5. end insert   

Section 31672.3 is added to the Government Code, to
read:

31672.3.  

A member of a county retirement system who is
subject to the California Public Employees’ Pension Reform Act
of 2013 (Article 4 (commencing with Section 7522) of Chapter
21 of Division 7 of Title 1) for all or a portion of the member’s
membership in the county retirement system who has completed
five years of service and has reached the minimum retirement age
applicable to that member under the act, or has reached 70 years
of age, may be retired upon filing with the board a written
application, setting forth the date upon which the member desires
his or her retirement to become effective which shall be not more
than 60 days after the date of filing the application.