Amended in Assembly September 3, 2013

Amended in Senate February 6, 2013

Senate Bill No. 13

Introduced by Senator Beall

December 3, 2012

An act to amend Sections 7522.02, 7522.04, 7522.10, 7522.25, 7522.30, begin insert 7522.32, end insert 7522.34, 7522.40, 7522.43, 7522.56, 7522.72, 7522.74, begin delete 20281.5, end delete begin insert 20683.2, end insert 21400, 31494.1, 31800, 31808, and 31812 of, and to repeal Section 7522.66 of, the Government Code, relating to public employees’ retirement, and declaring the urgency thereof, to take effect immediately.

LEGISLATIVE COUNSEL’S DIGEST

SB 13, as amended, Beall. Public employees’ retirement benefits.

(1) The Public Employees’ Retirement Law (PERL) establishes the Public Employees’ Retirement System (PERS) and the Teachers’ Retirement Law establishes the State Teachers’ Retirement System for the purpose of providing pension benefits to specified public employees. Existing law also establishes the Judges’ Retirement System II which provides pension benefits to elected judges and the Legislators’ Retirement System which provides pension benefits to elective officers of the state other than judges and to legislative statutory officers. The County Employees Retirement Law of 1937 authorizes counties to establish retirement systems pursuant to its provisions in order to provide pension benefits to county, city, and district employees.

The California Public Employees’ Pension Reform Act of 2013 (PEPRA), on and after January 1, 2013, requires a public retirement system, as defined, to modify its plan or plans to comply with the act and, among other provisions, establishes new retirement formulas that may not be exceeded by a public employer offering a defined benefit pension plan, setting the maximum benefit allowable for employees first hired on or after January 1, 2013, as a formula commonly known as 2.5% at age 67 for nonsafety members, one of 3 formulas for safety members, 2% at age 57, 2.5% at age 57, or 2.7% at age 57, and 1.25% at age 67 for new state miscellaneous or industrial members who elect to be in Tier 2. Under PEPRA, the Judges’ Retirement System begin delete I end delete and the Judges’ Retirement System II are not required to adopt the defined benefit formula contained in certain other provisions.

This bill would correct an erroneous cross-reference in the above provision and would instead specify that the Judges’ Retirement System begin delete I end delete and the Judges’ Retirement System II are not required to adopt the defined benefit formula contained in other provisions for nonsafety and safety members. begin insert The bill would except from PEPRA certain multiemployer plans authorized under, and regulated by, specified federal law. end insert The bill would clarify the application of PEPRA to employees who were employed prior to January 1, 2013, who have service credit in a different retirement system begin insert or who change positions for the same employer without a break in service, as specified end insert . The bill would authorize a public retirement system to adopt regulations and resolutions in order to modify its retirement plan or plans to conform with PEPRA.

(2) PEPRA authorizes a public employer offering a retirement benefit plan consisting solely of a defined contribution plan prior to January 1, 2013, to continue to offer that plan instead of the defined benefit plan required pursuant to PEPRA. However, PEPRA requires an employer that adopts a new defined benefit pension plan or defined benefit formula on or after January 1, 2013, to conform the plan or formula to the requirements of PEPRA or be determined and certified by the retirement system’s chief actuary and the system’s board to have no greater risk and no greater cost to the employer than the defined benefit formula and to be approved by the Legislature. Under that law, new members of the employer’s plan may only participate in the defined contribution plan that was in place before January 1, 2013, or a defined contribution plan or defined benefit formula that conforms to the requirements of PEPRA.

This bill would specify that the above provisions are not to be construed to prohibit an employer from offering a defined contribution plan on or after January 1, 2013, either with or without a defined benefit plan, if the employer did not offer a defined contribution plan prior to that date.

(3) PEPRA begin delete limits the end delete begin insert defines end insert pensionable compensation begin insert for new members and limits payments and compensation end insert that may be used to calculate a defined benefit for new members and provides that this number shall be adjusted based on changes to the Consumer Price Index for All Urban Consumers. PEPRA permits an employer to provide a contribution to a defined contribution plan for compensation that is in excess of that limit subject to other limits described in federal law. begin insert PEPRA excludes specified payments from the definition of pensionable compensation. end insert

This bill would specify the method by which adjustments to pensionable compensation limits based on the Consumer Price Index are to be made begin insert and which consumer price index is to be used for this purpose end insert . The bill would revise how limits on an employer’s contributions to a defined contribution plan are to be determined, as specified, and would specifically authorize a retirement system to limit the pensionable compensation used to calculate contributions for new members in this regard. begin insert The bill would specify that the exclusions from pensionable compensation apply to new members. The bill would prescribe requirements for exclusions from pensionable compensation that are collectively bargained with represented employees or imposed on nonrepresented employees. end insert

(4) On and after January 1, 2013, PEPRA requires each retirement system that offers a defined benefit plan for safety members of the system to use one or more of specified defined benefit formulas and requires an employer to offer one or more of those formulas to new employees who are safety employees eligible for membership in the program.

This bill would instead require an employer to offer one or more of those formulas to new members who are safety employees.

(5) On and after January 1, 2013, PEPRA requires new employees of specified public employers, the California State University, and the judicial branch who participate in a defined benefit plan to have an initial contribution rate of at least 50% of the normal cost rate for that defined benefit plan, rounded to the nearest 1⁄4 of 1%, or the current contribution rate of similarly situated employees, whichever is greater.

This bill would make that provision applicable to new members employed by those entities and new members employed by the Legislature. begin insert The bill would except from these provisions a judge who was elected to office prior to January 1, 2013, despite not assuming that office and becoming a member of the Judges’ Retirement System II for the first time until January 1, 2013, or after that date. end insert The bill would also specify that this contribution rate for new members shall be the greater of the above 2 rates, if the greater, current contribution rate has been agreed to through the collective bargaining process. The bill would specify, with regard to the definition of normal cost, that a retirement system’s actuary may use either of 2 rates of contribution, as may be applicable to the retirement system. The bill would require that, for purposes of calculating the normal cost rate, the actuarial valuation of retirement benefits begin delete include end delete begin insert includes end insert any elements that impact the actuarial determination of the normal cost, including, but not limited to, the retirement formula, eligibility and vesting criteria, ancillary benefit provisions, and any automatic cost-of-living adjustments.

begin insert

(6) PEPRA provides, for the purpose of determining a retirement benefit paid to a person who first becomes a member of a public retirement system on or after January 1, 2013, that final compensation means the member’s highest average annual pensionable compensation earned, as defined, during a period of at least 36 consecutive months, or at least 3 school years, as specified.

end insert begin insert

This bill would provide for the purpose defining final compensation, as described above, the school years are to be consecutive.

end insert begin delete

(6)

end delete

begin insert (7) end insert  PEPRA prohibits a public employer from providing a retirement health benefit vesting schedule to a manager or an employee or officer who is excluded from collective bargaining that is more advantageous than that provided generally to other public employees of the same employer who are in related membership classifications.

This bill would clarify that these provisions do not require an employer to change the vesting schedule of any employee who was subject to a specific retiree health benefit vesting schedule prior to January 1, 2013, or who had a contractual agreement prior to January 1, 2013, for a specific retiree health vesting schedule begin insert and make technical changes end insert .

begin delete

(7)

end delete

begin insert (8) end insert  On and after January 1, 2013, PEPRA prohibits a public employer from offering a plan of replacement benefits for members and any survivors or beneficiaries whose retirement benefits are limited by specified federal law. On and after January 1, 2013, PEPRA makes that prohibition and certain other provisions related to replacement benefits applicable to new employees.

This bill would instead make those provisions applicable to new members.

begin delete

(8)

end delete

begin insert (9) end insert  PEPRA generally prohibits a retired person who retires from a public employer from serving, being employed by, or being employed through a contract directly by, a public employer in the same retirement system from which the retiree receives a pension benefit without reinstatement, subject to certain exceptions and limitations. The act prohibits reemployment of a retiree pursuant to these provisions for a period of 180 days following the date of retirement unless he or she falls within certain exceptions to the prohibition, of which one is that the retiree is a public safety officer or a firefighter.

This bill would clarify that, for a retiree who is a public safety officer or a firefighter, he or she must be hired to perform a function or functions regularly performed by a safety officer or firefighter.

begin delete

(9)

end delete

begin insert (10) end insert  PEPRA, until January 1, 2018, authorizes a safety member of a public retirement system who retires for industrial disability to receive a disability retirement equal to the greater of specified benefit amounts.

This bill would repeal the above provision.

begin delete

(10)

end delete

begin insert (11) end insert  PEPRA requires that a public employee, including one who is elected or appointed to a public office, who is convicted of any state or federal felony for conduct arising out of, or in the performance of, his or her official duties in pursuit of the office or appointment, or in connection with obtaining salary, disability retirement, service retirement, or other benefits, forfeit rights, and benefits earned or accrued from the earliest date of the commission of the felony to the forfeiture date, as specified.

This bill would provide that these provisions supplement the application of specified forfeiture provisions with respect to a judge and, if there is a conflict, the provisions that result in the greatest forfeiture or provide the most stringent procedural requirements shall apply.

begin delete

(11) Under PERL, a person who becomes a state miscellaneous member or state industrial member of PERS after August 11, 2004, does not immediately make contributions or receive service credit for his or her service until after the first 24 months of employment, except in specified circumstances. This provision, as modified by PEPRA, does not apply to a person who first becomes a state miscellaneous member or state industrial member on or after July 1, 2013.

end delete begin delete

This bill would instead specify that this provision does not apply to a person who first becomes a state miscellaneous member or state industrial member on or after January 1, 2013.

end delete begin insert

(12) PERL prescribes increases in required employee defined benefit plan contributions, in relation to the normal cost of benefits, for specified bargaining units. PERL requires that contribution rates for employees who are exempted from the definition of state employee and for officers and employees of the executive, legislative, or judicial branches of government who are not members of the civil service be adjusted consistent with those provisions.

end insert begin insert

This bill would apply the provisions described above to state employees excluded from collective bargaining. The bill would authorize the California State University, on or after January 1, 2018, to require that its member employees pay up to certain percentages of the normal cost of benefits, depending on employment classification, as specified.

end insert begin delete

(12)

end delete

begin insert (13) end insert  Under PEPRA, a state safety member of PERS who retires on or after January 1, 2013, for industrial disability receives a disability retirement benefit equal to the greater of certain benefits, including, among others, 50% of his or her final compensation, plus an annuity purchased with his or her accumulated contributions, if any.

This bill would clarify that the portion of the industrial disability retirement benefit described above refers to an annuity purchased with the member’s accumulated additional contributions.

begin delete

(13)

end delete

begin insert (14) end insert  The County Employees Retirement Law of 1937 (CERL) establishes an alternative retirement plan that is applicable to Los Angeles, which includes both contributory and noncontributory plans. CERL prescribes specified formulas for computation of the retirement allowance payable for a service retirement, and for the computation of contributions, for certain members, including those to whom the federal Social Security Act applies.

This bill begin insert would end insert make a technical change in the alternate retirement plan that is applicable to Los Angeles. The bill would specify that certain begin delete the end delete formulas prescribed by CERL do not apply to a person who becomes a member of a county retirement system under a benefit plan subject to PEPRA, as specified.

begin delete

(14)

end delete

begin insert (15) end insert  This bill would make legislative findings and declarations regarding its relation to existing law and intended application.

begin delete

(15)

end delete

begin insert (16) end insert  This bill would declare that it is to take effect immediately as an urgency statute.

Vote: 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.  

The Legislature finds and declares that this act
clarifies the California Public Employees’ Pension Reform Act of
2013, is declaratory of existing law, and is intended to apply
concurrently with the initial operation of that act.

SEC. 2.  

Section 7522.02 of the Government Code is amended
to read:

7522.02.  

(a) (1) Notwithstanding any other law, except as
provided in this article, on and after January 1, 2013, this article
shall apply to all state and local public retirement systems and to
their participating employers, including the Public Employees’
Retirement System, the State Teachers’ Retirement System, the
Legislators’ Retirement System, the Judges’ Retirement System
begin delete I end delete , the Judges’ Retirement System II, county and district retirement
systems created pursuant to the County Employees Retirement
Law of 1937, independent public retirement systems, and to
individual retirement plans offered by public employers. However,
this article shall be subject to the Internal Revenue Code and
Section 17 of Article XVI of the California Constitution. The
administration of the requirements of this article shall comply with
applicable provisions of the Internal Revenue Code and the
Revenue and Taxation Code.

(2) Notwithstanding paragraph (1), this article shall not apply
to the entities described in Section 9 of Article IX of, and Sections
4 and 5 of Article XI of, the California Constitution, except to the
extent that these entities continue to be participating employers in
any retirement system governed by state statute. Accordingly, any
retirement plan approved before January 1, 2013, by the voters of
any entity excluded from coverage by this section shall not be
affected by this article.

begin insert

(3) Notwithstanding paragraph (1), this article shall not apply
to a multiemployer plan authorized by Section 302(c)(5) of the
Taft-Harley Act (29 U.S.C. Sec. 186(c)(5)) if the public employer
began participation in that plan prior to January 1, 2013, and the
plan is regulated by the Employee Retirement Income Security Act
of 1974.

end insert

(b) The benefit plan required by this article shall apply to public
employees who are new members as defined in Section 7522.04.

(c)  begin insert (1) end insert begin insert   end insert Individuals who were employed by any public employer
before January 1, 2013, and who became employed by a subsequent
public employer for the first time on or after January 1, 2013, shall
be subject to the retirement plan that would have been available
to employees of the subsequent employer who were first employed
by the subsequent employer on or before December 31, 2012, if
the individual was subject to concurrent membership for which
creditable service was performed in the previous six months or
reciprocity established under any of the following provisions:

begin delete

(1)

end delete

begin insert (A) end insert  Article 5 (commencing with Section 20350) of Chapter 3
of Part 3 of Division 5 of Title 2.

begin delete

(2)

end delete

begin insert (B) end insert  Chapter 3 (commencing with Section 31450) of Part 3 of
Division 4 of Title 3.

begin delete

(3)

end delete

begin insert (C) end insert  Any agreement between public retirement systems to provide
reciprocity to members of the systems.

begin delete

(4)

end delete

begin insert (D) end insert  Section 22115.2 of the Education Code.

begin insert

(2) An individual who was employed before January 1, 2013,
and who, without a separation from employment, changed
employment positions and became subject to a different defined
benefit plan in a different public retirement system offered by his
or her employer shall be subject to that defined benefit plan as it
would have been available to employees who were first employed
on or before December 31, 2012.

end insert

(d) If a public employer, before January 1, 2013, offers a defined
benefit pension plan that provides a defined benefit formula with
a lower benefit factor at normal retirement age and results in a
lower normal cost than the defined benefit formula required by
this article, that employer may continue to offer that defined benefit
formula instead of the defined benefit formula required by this
article, and shall not be subject to the requirements of Section
7522.10 for pensionable compensation subject to that formula.
However, if the employer adopts a new defined benefit formula
on or after January 1, 2013, that formula must conform to the
requirements of this article or must be determined and certified by
the retirement system’s chief actuary and the retirement board to
have no greater risk and no greater cost to the employer than the
defined benefit formula required by this article and must be
approved by the Legislature. New members of the defined benefit
plan may only participate in the lower cost defined benefit formula
that was in place before January 1, 2013, or a defined benefit
formula that conforms to the requirements of this article or is
approved by the Legislature as provided in this subdivision.

(e) If a public employer, before January 1, 2013, offers a
retirement benefit plan that consists solely of a defined contribution
plan, that employer may continue to offer that plan instead of the
defined benefit pension plan required by this article. However, if
the employer adopts a new defined benefit pension plan or defined
benefit formula on or after January 1, 2013, that plan or formula
must conform to the requirements of this article or must be
determined and certified by the retirement system’s chief actuary
and the system’s board to have no greater risk and no greater cost
to the employer than the defined benefit formula required by this
article and must be approved by the Legislature. New members of
the employer’s plan may only participate in the defined
contribution plan that was in place before January 1, 2013, or a
defined contribution plan or defined benefit formula that conforms
to the requirements of this article. This subdivision shall not be
construed to prohibit an employer from offering a defined
contribution plan on or after January 1, 2013, either with or without
a defined benefit plan, whether or not the employer offered a
defined contribution plan prior to that date.

(f) The Judges’ Retirement System begin delete I end delete and the Judges’ Retirement
System II shall not be required to adopt the defined benefit formula
required by Section 7522.20 or 7522.25 or the compensation
limitations defined in Section 7522.10.

(g) This article shall not be construed to provide membership
in any public retirement system for an individual who would not
otherwise be eligible for membership under that system’s
applicable rules or laws.

(h) On and after January 1, 2013, each public retirement system
shall modify its plan or plans to comply with the requirements of
this article and may adopt regulations or resolutions for this
purpose.

SEC. 3.  

Section 7522.04 of the Government Code is amended
to read:

7522.04.  

For the purposes of this article:

(a) “Defined benefit formula” means a formula used by the
retirement system to determine a retirement benefit based on age,
years of service, and pensionable compensation earned by an
employee up to the limit defined in Section 7522.10.

(b) “Employee contributions” means the contributions to a public
retirement system required to be paid by a member of the system,
as fixed by law, regulation, administrative action, contract, contract
amendment, or other written agreement recognized by the
retirement system as establishing an employee contribution.

(c) “Federal system” means the old age, survivors, disability,
and health insurance provisions of the federal Social Security Act
(42 U.S.C. Sec. 301 et seq.).

(d) “Member” means a public employee who is a member of
any type of a public retirement system or plan.

(e) “New employee” means either of the following:

(1) An employee, including one who is elected or appointed, of
a public employer who is employed for the first time by any public
employer on or after January 1, 2013, and who was not employed
by any other public employer prior to that date.

(2) An employee, including one who is elected or appointed, of
a public employer who is employed for the first time by any public
employer on or after January 1, 2013, and who was employed by
another public employer prior to that date, but who was not subject
to reciprocity under subdivision (c) of Section 7522.02.

(f) “New member” means any of the following:

(1) An individual who becomes a member of any public
retirement system for the first time on or after January 1, 2013,
and who was not a member of any other public retirement system
prior to that date.

(2) An individual who becomes a member of a public retirement
system for the first time on or after January 1, 2013, and who was
a member of another public retirement system prior to that date,
but who was not subject to reciprocity under subdivision (c) of
Section 7522.02.

(3) An individual who was an active member in a retirement
system and who, after a break in service of more than six months,
returned to active membership in that system with a new employer.
For purposes of this subdivision, a change in employment between
state entities or from one school employer to another shall not be
considered as service with a new employer.

(g) “Normal cost” means the portion of the present value of
projected benefits under the defined benefit that is attributable to
the current year of service, as determined by the public retirement
system’s actuary according to the most recently completed
valuation. For the purpose of determining normal cost, the system’s
actuary may use a single rate of contribution or an age-based rate
of contribution as is applicable to that retirement system.

(h) “Public employee” means an officer, including one who is
elected or appointed, or an employee of a public employer.

(i) “Public employer” means:

(1) The state and every state entity, including, but not limited
to, the Legislature, the judicial branch, including judicial officers,
and the California State University.

(2) Any political subdivision of the state, or agency or
instrumentality of the state or subdivision of the state, including,
but not limited to, a city, county, city and county, a charter city, a
charter county, school district, community college district, joint
powers authority, joint powers agency, and any public agency,
authority, board, commission, or district.

(3) Any charter school that elects or is required to participate
in a public retirement system.

(j) “Public retirement system” means any pension or retirement
system of a public employer, including, but not limited to, an
independent retirement plan offered by a public employer that the
public employer participates in or offers to its employees for the
purpose of providing retirement benefits, or a system of benefits
for public employees that is governed by Section 401(a) of Title
26 of the United States Code.

SEC. 4.  

Section 7522.10 of the Government Code is amended
to read:

7522.10.  

(a) On and after January 1, 2013, each public
retirement system shall modify its plan or plans to comply with
the requirements of this section for each public employer that
participates in the system.

(b) Whenever pensionable compensation, as defined in Section
7522.34, is used in the calculation of a benefit, the pensionable
compensation shall be subject to the limitations set forth in
subdivision (c).

(c) The pensionable compensation used to calculate the defined
benefit paid to a new member who retires from the system shall
not exceed the following applicable percentage of the contribution
and benefit base specified in Section 430(b) of Title 42 of the
United States Code on January 1, 2013:

(1) One hundred percent for a member whose service is included
in the federal system.

(2) One hundred twenty percent for a member whose service is
not included in the federal system.

(d) (1) The retirement system shall adjust the pensionable
compensation described in subdivision (c) based on the annual
changes to the Consumer Price Index for All Urban begin delete Consumers, end delete
begin insert Consumers: U.S. City Average, end insert calculated by dividing the
Consumer Price Index for All Urban begin delete Consumers end delete begin insert Consumers: U.S.
City Average, end insert for the month of September in the calendar year
preceding the adjustment by the Consumer Price Index for All
Urban begin delete Consumers end delete begin insert Consumers: U.S. City Average, end insert for the month
of September of the previous year rounded to the nearest
thousandth. The adjustment shall be effective annually on January
1, beginning in 2014.

(2) The Legislature reserves the right to modify the requirements
of this subdivision with regard to all public employees subject to
this section, except that the Legislature may not modify these
provisions in a manner that would result in a decrease in benefits
accrued prior to the effective date of the modification.

(e) A public employer shall not offer a defined benefit or any
combination of defined benefits, including a defined benefit offered
by a private provider, on compensation in excess of the limitation
in subdivision (c).

(f) (1) Subject to the limitation in subdivision (c) of Section
7522.42, a public employer may provide a contribution to a defined
contribution plan for compensation in excess of the limitation in
subdivision (c) provided the plan and the contribution meet the
requirements and limits of federal law.

(2) A public employee who receives an employer contribution
to a defined contribution plan shall not have a vested right to
continue receiving the employer contribution.

(g) Any employer contributions to any employee defined
contribution plan above the pensionable compensation limits in
subdivision (c) shall not exceed the employer’s contribution rate,
as a percentage of pay, required to fund the defined benefit plan
for income subject to the limitation in subdivision (c) of Section
7522.42.

(h) The retirement system begin delete may end delete begin insert shall end insert limit the pensionable
compensation used to calculate the contributions required of begin insert an
employer or end insert a new member to the amount of compensation that
would be used for calculating a defined benefit as set forth in
subdivision (c) or (d).

SEC. 5.  

Section 7522.25 of the Government Code is amended
to read:

7522.25.  

(a) Each retirement system that offers a defined
benefit plan for safety members of the system shall use one or
more of the defined benefit formulas prescribed by this section. A
member may retire for service under any of the formulas in this
section after five years of service and upon reaching 50 years of
age.

(b) The Basic Safety Plan shall provide a pension at retirement
for service equal to the percentage of the member’s final
compensation set forth opposite the member’s age at retirement,
taken to the preceding quarter year, in the following table,
multiplied by the number of years of service in the system as a
safety member.

 

Age at Retirement	Fraction
50	1.426
501⁄4	1.447
501⁄2	1.467
503⁄4	1.488
51	1.508
511⁄4	1.529
511⁄2	1.549
513⁄4	1.570
52	1.590
521⁄4	1.611
521⁄2	1.631
523⁄4	1.652
53	1.672
531⁄4	1.693
531⁄2	1.713
533⁄4	1.734
54	1.754
541⁄4	1.775
541⁄2	1.795
543⁄4	1.816
55	1.836
551⁄4	1.857
551⁄2	1.877
553⁄4	1.898
56	1.918
561⁄4	1.939
561⁄2	1.959
563⁄4	1.980
57 and over	2.000

 

(c) The Safety Option Plan One shall provide a pension at
retirement for service equal to the percentage of the member’s
final compensation set forth opposite the member’s age at
retirement, taken to the preceding quarter year, in the following
table, multiplied by the number of years of service in the system
as a safety member.

 

Age at Retirement	Fraction
50	2.000
501⁄4	2.018
501⁄2	2.036
503⁄4	2.054
51	2.071
511⁄4	2.089
511⁄2	2.107
513⁄4	2.125
52	2.143
521⁄4	2.161
521⁄2	2.179
523⁄4	2.196
53	2.214
531⁄4	2.232
531⁄2	2.250
533⁄4	2.268
54	2.286
541⁄4	2.304
541⁄2	2.321
543⁄4	2.339
55	2.357
551⁄4	2.375
551⁄2	2.393
553⁄4	2.411
56	2.429
561⁄4	2.446
561⁄2	2.464
563⁄4	2.482
57 and over	2.500

 

(d) The Safety Option Plan Two shall provide a pension at
retirement for service equal to the percentage of the member’s
final compensation set forth opposite the member’s age at
retirement, taken to the preceding quarter year, in the following
table, multiplied by the number of years of service in the system
as a safety member.

 

Age at Retirement	Fraction
50	2.000
501⁄4	2.025
501⁄2	2.050
503⁄4	2.075
51	2.100
511⁄4	2.125
511⁄2	2.150
513⁄4	2.175
52	2.200
521⁄4	2.225
521⁄2	2.250
523⁄4	2.275
53	2.300
531⁄4	2.325
531⁄2	2.350
533⁄4	2.375
54	2.400
541⁄4	2.425
541⁄2	2.450
543⁄4	2.475
55	2.500
551⁄4	2.525
551⁄2	2.550
553⁄4	2.575
56	2.600
561⁄4	2.625
561⁄2	2.650
563⁄4	2.675
57 and over	2.700

 

(e)  On and after January 1, 2013, an employer shall offer one
or more of the safety formulas prescribed by this section to new
members who are safety employees. The formula offered shall be
the formula that is closest to, and provides a lower benefit at 55
years of age than, the formula provided to members in the same
retirement classification offered by the employer on December
31, 2012.

(f) On and after January 1, 2013, an employer and its employees
subject to Safety Option Plan One or Safety Option Plan Two may
agree in a memorandum of understanding to be subject to Safety
Option Plan One or the Basic Safety Plan, subject to the following:

(1) The lower plan shall apply to members first employed on
or after the effective date of the lower plan, and shall be agreed to
in a memorandum of understanding that has been collectively
bargained in accordance with applicable laws.

(2) A retirement plan contract amendment with a public
retirement system to alter a retirement formula pursuant to this
subdivision shall not be implemented by the employer in the
absence of a memorandum of understanding that has been
collectively bargained in accordance with applicable laws.

(3) An employer shall not use impasse procedures to impose
the lower plan.

(4) An employer shall not provide a different defined benefit
for nonrepresented, managerial, or supervisory employees than
the employer provides for other public employees, including
represented employees, of the same employer who are in the same
membership classifications.

(g) Pensionable compensation used to calculate the defined
benefit shall be limited as described in Section 7522.10.

SEC. 6.  

Section 7522.30 of the Government Code is amended
to read:

7522.30.  

(a) This section shall apply to all public employers
and to all new members. Equal sharing of normal costs between
public employers and public employees shall be the standard. The
standard shall be that employees pay at least 50 percent of normal
costs and that employers not pay any of the required employee
contribution.

(b) The “normal cost rate” shall mean the annual actuarially
determined normal cost for the plan of retirement benefits provided
to the new member and shall be established based on the actuarial
assumptions used to determine the liabilities and costs as part of
the annual actuarial valuation. The plan of retirement benefits shall
include any elements that would impact the actuarial determination
of the normal cost, including, but not limited to, the retirement
formula, eligibility and vesting criteria, ancillary benefit provisions,
and any automatic cost-of-living adjustments as determined by the
public retirement system.

(c)  begin insert (1) end insert begin insert   end insert New members employed by those public employers
defined in paragraphs (2) and (3) of subdivision (i) of Section
7522.04, the Legislature, the California State University, and the
judicial branch who participate in a defined benefit plan shall have
an initial contribution rate of at least 50 percent of the normal cost
rate for that defined benefit plan, rounded to the nearest quarter
of 1 percent, begin delete or the current contribution rate of similarly situated
employees, whichever is greater, if the greater current end delete begin insert unless a
greater end insert contribution rate has been agreed to pursuant to the
requirements in subdivision (e). This contribution shall not be paid
by the employer on the employee’s behalf.

begin insert

(2) For purposes of this subdivision, “new member” does not
include a member who is a judge who was elected to office prior
to January 1, 2013, despite assuming the office of judge, and
becoming a member of the Judges’ Retirement System II, for the
first time on or after that date.

end insert

(d) Notwithstanding subdivision (c), once established, the
employee contribution rate described in subdivision (c) shall not
be adjusted on account of a change to the normal cost rate unless
the normal cost rate increases or decreases by more than 1 percent
of payroll above or below the normal cost rate in effect at the time
the employee contribution rate is first established or, if later, the
normal cost rate in effect at the time of the last adjustment to the
employee contribution rate under this section.

(e) Notwithstanding subdivision (c), employee contributions
may be more than one-half of the normal cost rate if the increase
has been agreed to through the collective bargaining process,
subject to the following conditions:

(1) The employer shall not contribute at a greater rate to the
plan for nonrepresented, managerial, or supervisory employees
than the employer contributes for other public employees, including
represented employees, of the same employer who are in related
retirement membership classifications.

(2) The employer shall not increase an employee contribution
rate in the absence of a memorandum of understanding that has
been collectively bargained in accordance with applicable laws.

(3) The employer shall not use impasse procedures to increase
an employee contribution rate above the rate required by this
section.

(f) If the terms of a contract, including a memorandum of
understanding, between a public employer and its public
employees, that is in effect on January 1, 2013, would be impaired
by any provision of this section, that provision shall not apply to
the public employer and public employees subject to that contract
until the expiration of that contract. A renewal, amendment, or
any other extension of that contract shall be subject to the
requirements of this section.

begin insert

begin insert SEC. 7. end insert   

end insert

begin insert Section 7522.32 of the end insert begin insert Government Code end insert begin insert is amended
to read: end insert

7522.32.  

For the purposes of determining a retirement benefit
to be paid to a new member of a public retirement system, the
following shall apply:

(a) Final compensation shall mean the highest average annual
pensionable compensation earned by the member during a period
of at least 36 consecutive months, or at least three begin insert consecutive end insert
school years if applicable, immediately preceding his or her
retirement or last separation from service if earlier, or during any
other period of at least 36 consecutive months begin insert , or at least three
consecutive school years if applicable, end insert during the member’s
applicable service that the member designates on the application
for retirement.

(b) On or after January 1, 2013, an employer shall not modify
a benefit plan to permit a calculation of final compensation on a
basis of less than the average annual compensation earned by the
member during a consecutive 36-month period, or three school
years if applicable, for members who have been subject to at least
a 36-month or three-school-year calculation prior to that date.

begin delete SEC. 7. end delete
begin insert SEC. 8. end insert   

Section 7522.34 of the Government Code is amended
to read:

7522.34.  

(a) “Pensionable compensation” of a new member
of any public retirement system means the normal monthly rate
of pay or base pay of the member paid in cash to similarly situated
members of the same group or class of employment for services
rendered on a full-time basis during normal working hours,
pursuant to publicly available pay schedules begin insert , subject to the
limitations of subdivision (c) end insert .

(b) Compensation that has been deferred shall be deemed
pensionable compensation when earned rather than when paid.

(c)  begin delete “Pensionable end delete begin insert Notwithstanding any other law, “pensionable end insert
compensation” of a new member does not include the following:

(1) Any compensation determined by the board to have been
paid to increase a member’s retirement benefit under that system.

(2) Compensation that had previously been provided in kind to
the member by the employer or paid directly by the employer to
a third party other than the retirement system for the benefit of the
member and which was converted to and received by the member
in the form of a cash payment.

(3) Any one-time or ad hoc payments made to a member.

(4) Severance or any other payment that is granted or awarded
to a member in connection with or in anticipation of a separation
from employment, but is received by the member while employed.

(5) Payments for unused vacation, annual leave, personal leave,
sick leave, or compensatory time off, however denominated,
whether paid in a lump sum or otherwise, regardless of when
reported or paid.

(6) Payments for additional services rendered outside of normal
working hours, whether paid in a lump sum or otherwise.

(7) Any employer-provided allowance, reimbursement, or
payment, including, but not limited to, one made for housing,
vehicle, or uniforms.

(8) Compensation for overtime work, other than as defined in
Section 207(k) of Title 29 of the United States Code.

(9) Employer contributions to deferred compensation or defined
contribution plans.

(10) Any bonus paid in addition to the compensation described
in subdivision (a).

(11) Any other form of compensation a public retirement board
determines is inconsistent with the requirements of subdivision
(a).

(12) Any other form of compensation a public retirement board
determines should not be pensionable compensation.

begin insert

(13) (A) Any form of compensation identified that has been
agreed to be nonpensionable pursuant to a memorandum of
understanding for employees bound by the memorandum of
understanding. The employer subject to the memorandum of
understanding shall inform the retirement system of the excluded
compensation and provide a copy of the memorandum of
understanding.

end insert begin insert

(B) The employer may determine if excluded compensation
identified in subparagraph (A) shall apply to nonrepresented
employees who are aligned with employees subject to the
memorandum of understanding described in subparagraph (A).
The employer shall inform the retirement system of the inclusion
of this compensation and provide a copy of the public pay schedule
detailing the exclusion.

end insert

begin delete SEC. 8. end delete
begin insert SEC. 9. end insert   

Section 7522.40 of the Government Code is amended
to read:

7522.40.  

(a) A public employer shall not provide to a public
employee who is elected or appointed, a trustee, excluded from
collective bargaining, exempt from civil service, or a manager any
begin delete retiree health benefit end delete vesting schedule begin insert for the employer contribution
payable for postretirement health benefits end insert that is more
advantageous than that provided generally to other public
employees, including represented employees, of the same public
employer who are in related retirement membership classifications.

(b) This section shall not require an employer to change the
vesting schedule begin insert for the employer contribution payable for
postretirement health benefits end insert of any begin insert public end insert employee who was
subject to a specific begin delete retiree health benefit end delete vesting schedule begin insert pursuant
to statute, collective bargaining agreement or resolution for these
employer contributions end insert prior to January 1, 2013, or who had a
contractual agreement with an employer prior to January 1, 2013,
for a specific begin delete retiree health end delete vesting schedule begin insert for these employer
contributions end insert .

begin delete SEC. 9. end delete
begin insert SEC. 10. end insert   

Section 7522.43 of the Government Code is amended
to read:

7522.43.  

(a) A public employer shall not offer a plan of
replacement benefits for members and any survivors or
beneficiaries whose retirement benefits are limited by Section 415
of Title 26 of the United States Code. This section shall apply to
new members.

(b) A public retirement system may continue to administer a
plan of replacement benefits for employees first hired prior to
January 1, 2013.

(c) A public employer that does not offer a plan of replacement
benefits prior to January 1, 2013, shall not offer such a plan for
any employee on or after January 1, 2013.

(d) A public employer that offers a plan of replacement benefits
prior to January 1, 2013, shall not offer such a plan to any
additional employee group to which the plan was not provided
prior to January 1, 2013.

begin delete SEC. 10. end delete
begin insert SEC. 11. end insert   

Section 7522.56 of the Government Code is amended
to read:

7522.56.  

(a) This section shall apply to any person who is
receiving a pension benefit from a public retirement system and
shall supersede any other provision in conflict with this section.

(b) A retired person shall not serve, be employed by, or be
employed through a contract directly by, a public employer in the
same public retirement system from which the retiree receives the
benefit without reinstatement from retirement, except as permitted
by this section.

(c) A person who retires from a public employer may serve
without reinstatement from retirement or loss or interruption of
benefits provided by the retirement system upon appointment by
the appointing power of a public employer either during an
emergency to prevent stoppage of public business or because the
retired person has skills needed to perform work of limited
duration.

(d) Appointments of the person authorized under this section
shall not exceed a total for all employers in that public retirement
system of 960 hours or other equivalent limit, in a calendar or
fiscal year, depending on the administrator of the system. The rate
of pay for the employment shall not be less than the minimum,
nor exceed the maximum, paid by the employer to other employees
performing comparable duties, divided by 173.333 to equal an
hourly rate. A retired person whose employment without
reinstatement is authorized by this section shall acquire no service
credit or retirement rights under this section with respect to the
employment unless he or she reinstates from retirement.

(e) (1) Notwithstanding subdivision (c), any retired person shall
not be eligible to serve or be employed by a public employer if,
during the 12-month period prior to an appointment described in
this section, the retired person received any unemployment
insurance compensation arising out of prior employment subject
to this section with a public employer. A retiree shall certify in
writing to the employer upon accepting an offer of employment
that he or she is in compliance with this requirement.

(2) A retired person who accepts an appointment after receiving
unemployment insurance compensation as described in this
subdivision shall terminate that employment on the last day of the
current pay period and shall not be eligible for reappointment
subject to this section for a period of 12 months following the last
day of employment.

(f) A retired person shall not be eligible to be employed pursuant
to this section for a period of 180 days following the date of
retirement unless he or she meets one of the following conditions:

(1) The employer certifies the nature of the employment and
that the appointment is necessary to fill a critically needed position
before 180 days begin delete has end delete begin insert have end insert passed and the appointment has been
approved by the governing body of the employer in a public
meeting. The appointment may not be placed on a consent calendar.

(2) The state employer certifies the nature of the employment
and that the appointment is necessary to fill a critically needed
state employment position before 180 days begin delete has end delete begin insert have end insert passed and
the appointment has been approved by the Department of Human
Resources. The department may establish a process to delegate
appointing authority to individual state agencies, but shall audit
the process to determine if abuses of the system occur. If necessary,
the department may assume an agency’s appointing authority for
retired workers and may charge the department an appropriate
amount for administering that authority.

(3) The retiree is eligible to participate in the Faculty Early
Retirement Program pursuant to a collective bargaining agreement
with the California State University that existed prior to January
1, 2013, or has been included in subsequent agreements.

(4) The retiree is a public safety officer or firefighter hired to
perform a function or functions regularly performed by a begin insert public end insert
safety officer or firefighter.

(g) A retired person who accepted a retirement incentive upon
retirement shall not be eligible to be employed pursuant to this
section for a period of 180 days following the date of retirement
and subdivision (f) shall not apply.

(h) This section shall not apply to a person who is retired from
the State Teachers’ Retirement System, and who is subject to
Section 24214, 24214.5, or 26812 of the Education Code.

(i) This section shall not apply to (1) a subordinate judicial
officer whose position, upon retirement, is converted to a judgeship
pursuant to Section 69615, and he or she returns to work in the
converted position, and the employer is a trial court, or (2) a retiree
who takes office as a judge of a court of record pursuant to Article
VI of the California Constitution or a retiree of the Judges’
Retirement System begin delete I end delete or the Judges’ Retirement System II who is
appointed to serve as a retired judge.

begin delete SEC. 11. end delete
begin insert SEC. 12. end insert   

Section 7522.66 of the Government Code is repealed.

begin delete SEC. 12. end delete
begin insert SEC. 13. end insert   

Section 7522.72 of the Government Code is amended
to read:

7522.72.  

(a) This section shall apply to a public employee first
employed by a public employer or first elected or appointed to an
office before January 1, 2013, and, on and after that date, Section
7522.70 shall not apply.

(b) (1) If a public employee is convicted by a state or federal
trial court of any felony under state or federal law for conduct
arising out of or in the performance of his or her official duties, in
pursuit of the office or appointment, or in connection with
obtaining salary, disability retirement, service retirement, or other
benefits, he or she shall forfeit all accrued rights and benefits in
any public retirement system in which he or she is a member to
the extent provided in subdivision (c) and shall not accrue further
benefits in that public retirement system, effective on the date of
the conviction.

(2) If a public employee who has contact with children as part
of begin insert his or end insert her official duties is convicted of a felony that was
committed within the scope of his or her official duties against or
involving a child who he or she has contact with as part of his or
her official duties, he or she shall forfeit all accrued rights and
benefits in any public retirement system in which he or she is a
member to the extent provided in subdivision (c) and shall not
accrue further benefits in that public retirement system, effective
on the date of the conviction.

(c) (1) A public employee shall forfeit all the rights and benefits
earned or accrued from the earliest date of the commission of any
felony described in subdivision (b) to the forfeiture date, inclusive.
The begin delete retirement end delete begin insert rights and end insert benefits shall remain forfeited
notwithstanding any reduction in sentence or expungement of the
conviction following the date of the public employee’s conviction.
begin delete Retirement end delete begin insert Rights and end insert benefits attributable to service performed
prior to the date of the first commission of the felony for which
the public employee was convicted shall not be forfeited as a result
of this section.

(2) For purposes of this subdivision, “forfeiture date” means
the date of the conviction.

(d) (1) Any contributions to the public retirement system made
by the public employee described in subdivision (b) on or after
the earliest date of the commission of any felony described in
subdivision (b) shall be returned, without interest, to the public
employee upon the occurrence of a distribution event unless
otherwise ordered by a court or determined by the pension
administrator.

(2) Any funds returned to the public employee pursuant to
subdivision (d) shall be disbursed by electronic funds transfer to
an account of the public employee, in a manner conforming with
the requirements of the Internal Revenue Code, and the public
retirement system shall notify the court and the district attorney
at least three business days before that disbursement of funds.

(3) For the purposes of this subdivision, a “distribution event”
means any of the following:

(A) Separation from employment.

(B) Death of the member.

(C) Retirement of the member.

(e) (1) Upon conviction, a public employee as described in
subdivision (b) and the prosecuting agency shall notify the public
employer who employed the public employee at the time of the
commission of the felony within 60 days of the felony conviction
of all of the following information:

(A) The date of conviction.

(B) The date of the first known commission of the felony.

(2) The operation of this section is not dependent upon the
performance of the notification obligations specified in this
subdivision.

(f) The public employer that employs or employed a public
employee described in subdivision (b) and that public employee
shall each notify the public retirement system in which the public
employee is a member of that public employee’s conviction within
90 days of the conviction. The operation of this section is not
dependent upon the performance of the notification obligations
specified in this subdivision.

(g) A public retirement system may assess a public employer a
reasonable amount to reimburse the cost of audit, adjustment, or
correction, if it determines that the public employer failed to
comply with this section.

(h) If a public employee’s conviction is reversed and that
decision is final, the employee shall be entitled to do either of the
following:

(1) Recover the forfeited begin delete retirement end delete begin insert rights and end insert benefits as
adjusted for the contributions received pursuant to subdivision (d).

(2) Redeposit those contributions and interest begin insert that would have
accrued during the forfeiture period end insert , as determined by the system
actuary, and then recover the full amount of the forfeited begin insert rights
and end insert benefits.

(i) The forfeiture of rights and benefits provided in this section,
with respect to judges, are in addition to and supplement the
forfeitures and other requirements provided in Section 75033.2,
75062, 75526, or 75563. If there is a conflict between this section
and Section 75033.2, 75062, 75526, or 75563, the provisions that
result in the greatest forfeiture or provide the most stringent
procedural requirements to the claim of a judge shall apply.

(j) A public employee first employed by a public employer or
first elected or appointed to an office on or after January 1, 2013,
shall be subject to Section 7522.74.

begin delete SEC. 13. end delete
begin insert SEC. 14. end insert   

Section 7522.74 of the Government Code is amended
to read:

7522.74.  

(a) This section shall apply to a public employee first
employed by a public employer or first elected or appointed to an
office on or after January 1, 2013, and on and after that date,
Section 7522.70 shall not apply.

(b) (1) If a public employee is convicted by a state or federal
trial court of any felony under state or federal law for conduct
arising out of or in the performance of his or her official duties, in
pursuit of the office or appointment, or in connection with
obtaining salary, disability retirement, service retirement, or other
benefits, he or she shall forfeit all accrued rights and benefits in
any public retirement system in which he or she is a member to
the extent provided in subdivision (c) and shall not accrue further
benefits in that public retirement system, effective on the date of
the conviction.

(2) If a public employee who has contact with children as part
of his or her official duties is convicted of a felony that was
committed within the scope of his or her official duties against or
involving a child who he or she has contact with as part of his or
her official duties, he or she shall forfeit all accrued rights and
benefits in any public retirement system in which he or she is a
member to the extent provided in subdivision (c) and shall not
accrue further benefits in that public retirement system, effective
on the date of the conviction.

(c) (1) A public employee shall forfeit all the rights and benefits
earned or accrued from the earliest date of the commission of any
felony described in subdivision (b) to the forfeiture date, inclusive.
The begin delete retirement end delete begin insert rights and end insert benefits shall remain forfeited
notwithstanding any reduction in sentence or expungement of the
conviction following the date of the public employee’s conviction.
begin delete Retirement end delete begin insert Rights and end insert benefits attributable to service performed
prior to the date of the first commission of the felony for which
the public employee was convicted shall not be forfeited as a result
of this section.

(2) For purposes of this subdivision, “forfeiture date” means
the date of the conviction.

(d) (1) Any contributions to the public retirement system made
by the public employee described in subdivision (b) on or after
the earliest date of the commission of any felony described in
subdivision (b) shall be returned, without interest, to the public
employee upon the occurrence of a distribution event unless
otherwise ordered by a court or determined by the pension
administrator.

(2) Any funds returned to the public employee pursuant to
subdivision (d) shall be disbursed by electronic funds transfer to
an account of the public employee, in a manner conforming with
the requirements of the Internal Revenue Code, and the public
retirement system shall notify the court and the district attorney
at least three business days before that disbursement of funds.

(3) For the purposes of this subdivision, a “distribution event”
means any of the following:

(A) Separation from employment.

(B) Death of the member.

(C) Retirement of the member.

(e) (1) Upon conviction, a public employee as described in
subdivision (b) and the prosecuting agency shall notify the public
employer who employed the public employee at the time of the
commission of the felony within 60 days of the felony conviction
of all of the following information:

(A) The date of conviction.

(B) The date of the first known commission of the felony.

(2) The operation of this section is not dependent upon the
performance of the notification obligations specified in this
subdivision.

(f) The public employer that employs or employed a public
employee described in subdivision (b) and that public employee
shall each notify the public retirement system in which the public
employee is a member of that public employee’s conviction within
90 days of the conviction. The operation of this section is not
dependent upon the performance of the notification obligations
specified in this subdivision.

(g) A public retirement system may assess a public employer a
reasonable amount to reimburse the cost of audit, adjustment, or
correction, if it determines that the public employer failed to
comply with this section.

(h) If a public employee’s conviction is reversed and that
decision is final, the employee shall be entitled to do either of the
following:

(1) Recover the forfeited begin delete retirement end delete begin insert rights and end insert benefits as
adjusted for the contributions received pursuant to subdivision (d).

(2) Redeposit those contributions and interest begin insert that would have
accrued during the forfeiture period end insert , as determined by the system
actuary, and then recover the full amount of the forfeited begin insert rights
and end insert benefits.

(i) The forfeiture of rights and benefits provided in this section,
with respect to judges, are in addition to and supplement the
forfeitures and other requirements provided in Section 75033.2,
75062, 75526, or 75563. If there is a conflict between this section
and Section 75033.2, 75062, 75526, or 75563, the provisions that
result in the greatest forfeiture or provide the most stringent
procedural requirements to the claim of a judge shall apply.

(j) A public employee first employed by a public employer or
first elected or appointed to an office before January 1, 2013, shall
be subject to Section 7522.72.

begin delete

SEC. 14.  

Section 20281.5 of the Government Code is amended
to read:

20281.5.  

(a) Notwithstanding Section 20281, a person who
becomes a state miscellaneous member or state industrial member
of the system on or after the effective date of this section because
the person is first employed by the state and qualifies for
membership shall be subject to the provisions of this section.

(b) Members subject to this section shall not accrue credit for
service in the system and shall not make employee contributions
to the system, including the contributions set forth in Section
20677.4, for employment with the state until the first day of the
first pay period commencing 24 months after becoming a member
of the system.

(c) Notwithstanding subdivision (a), this section shall not apply
to any of the following:

(1) Persons who are already members or annuitants of the system
at the time they are first employed by the state.

(2) Employees of the California State University, or the
legislative or judicial branch of state government.

(3) Members of the Judges’ Retirement System, the Judges’
Retirement System II, the Legislators’ Retirement System, the
State Teachers’ Retirement System, or the University of California
Retirement Plan.

(4) Persons who are members of a reciprocal retirement system
and whose employment was subject to a reciprocal retirement
system within the six months prior to membership in this system.

(5) Persons whose service is not included in the federal system.

(6) Persons who are employed by the Department of the
California Highway Patrol as students at the department’s training
school established pursuant to Section 2262 of the Vehicle Code.

(7) Persons who had ceased to be members pursuant to Section
20340 or 21075.

(8) Persons who are National Guard members pursuant to
Section 20380.5.

(d) A separation of employment does not alter the 24-month
period described by subdivision (b). A member who separates
from state employment shall remain subject to this section if he
or she returns to state employment as a state miscellaneous or state
industrial member within that 24-month period.

(e) Any regulations adopted by the board to implement the
requirements of this section shall not be subject to the review and
approval of the Office of Administrative Law, pursuant to Chapter
3.5 (commencing with Section 11340) of Part 1 of Division 3. The
regulations shall become effective immediately upon filing with
the Secretary of State.

(f) This section shall not apply to any person who first becomes
a state miscellaneous member or a state industrial member on or
after January 1, 2013.

end delete

begin insert

begin insert SEC. 15. end insert   

end insert

begin insert Section 20683.2 of the end insert begin insert Government Code end insert begin insert is amended
to read: end insert

20683.2.  

Equal sharing of normal costs between the state
employer and public employees shall be the standard. It shall be
the standard that employees pay at least 50 percent of normal costs
and that employers not pay any of the required employee
contribution. Equal sharing of normal costs is currently the standard
for most state employees.

(a) Notwithstanding any other section of this code, or other
provision of law in conflict with this section, except as provided
in Section 7522.30, normal contribution rates for defined benefit
plans for state employees of public employers as defined in
paragraph (1) of subdivision (i) of Section 7522.04, excluding the
California State University, begin insert which shall be subject to subdivision
(b), end insert shall be determined as follows:

(1) Normal cost contribution rates shall increase as follows:

(A) The contribution rate for State Peace Officer/Firefighter
members in State Bargaining Unit 6 and for State Safety members
in State Bargaining Units 1, 3, 4, 7, 9, 10, 11, 14, 15, 17, 20, and
21 will increase by 1.0 percentage point on July 1, 2013, and will
increase by an additional 1.0 percentage point on July 1, 2014.

(B) The contribution rate for State Peace Officer/Firefighter
members in State Bargaining Units 7 and 8 will increase by 1.5
percentage points on July 1, 2013, and will increase by an
additional 1.5 percentage points on July 1, 2014.

(C) The contribution rate for state industrial members in State
Bargaining Units 1, 3, 4, 6, 9, 10, 11, 14, 15, 17, and 20 will
increase by 1.0 percentage point on July 1, 2013.

(D) The contribution rate for state miscellaneous and industrial
members that have elected the Second Tier benefit formula will
increase by 1.5 percentage points annually starting July 1, 2013.
The final annual increase in the contribution rate shall be adjusted
as appropriate.

(E) The contribution rate for State Safety members in State
Bargaining Unit 2 and state miscellaneous members in State
Bargaining Unit 5 will increase by 1.0 percentage point on July 1,
2013.

(F) The contribution rate for Patrol members in State Bargaining
Unit 5 will increase by 1.5 percentage points on July 1, 2013.

(2) Consistent with paragraph (1), the normal rate of contribution
shall be adjusted accordingly for related state employees who are
exempted from the definition of “state employee,” begin insert who are
excluded from collective bargaining, end insert or begin insert who are end insert officers begin delete and end delete begin insert or end insert
employees of the executive, legislative, or judicial branch of state
government who are not members of the civil service.

begin insert

(b) On and after January 1, 2018, the California State University
may require that members pay at least 50 percent of the normal
cost of benefits, provided that their contribution shall be no more
than 8 percent of pay for miscellaneous members subject to Section
21354.1, no more than 11 percent of pay for safety members, and
no more than 13 percent of pay for peace officer/firefighter
members.

end insert begin insert

(A) Before implementing any change pursuant to this paragraph,
for any represented employees, the employer shall complete the
good faith bargaining process as required by Chapter 12
(commencing with Section 3560) of Division 4 of Title 1, including
any impasse procedures requiring mediation and factfinding.

end insert begin insert

(B) Nothing in this section shall preclude employees of the
California State University from agreeing to contribute more than
the costs described in this subdivision for any benefit.

end insert begin insert

(C) The Legislature authorizes to the California State University
to increase member contribution rates pursuant to this paragraph,
while reserving the right to adjust contribution rates under Section
20689 of the Government Code.

end insert begin delete

(b)

end delete

begin insert (c) end insert  Calculation of employee contribution rate increases pursuant
to this section shall be based upon compensation calculations
established pursuant to Sections 20671 to 20694, inclusive.

begin delete

(c)

end delete

begin insert (d) end insert  In addition to the actuarially required contribution, savings
realized by the state employer as a result of the employee
contribution rate increases required by this section shall be
allocated to any unfunded liability, subject to appropriation in the
annual Budget Act.

begin delete SEC. 15. end delete
begin insert SEC. 16. end insert   

Section 21400 of the Government Code is amended
to read:

21400.  

(a) A safety member who retires on or after January
1, 2013, for industrial disability shall receive a disability retirement
benefit equal to the greater of the following:

(1) Fifty percent of his or her final compensation, plus an annuity
purchased with his or her accumulated additional contributions, if
any.

(2) A service retirement allowance, if he or she is qualified for
service retirement.

(3) An actuarially reduced factor, as determined by the actuary,
for each quarter year that his or her service age is less than 50
years, multiplied by the number of years of safety service subject
to the applicable formula, if he or she is not qualified for service
retirement.

(4) Nothing in this section shall require a member to receive a
lower benefit than he or she would have received prior to January
1, 2013, as the law provided prior to that date.

(b) This section shall remain in effect only until January 1, 2018,
and as of that date is repealed, unless a later enacted statute, that
is enacted before January 1, 2018, deletes or extends that date.

begin delete SEC. 16. end delete
begin insert SEC. 17. end insert   

Section 31494.1 of the Government Code is amended
to read:

31494.1.  

(a) In accordance with the provisions of this section,
general members, whose retirement benefits are governed by the
noncontributory plan created by this article, may transfer to the
contributory plan. Contributory plan shall mean Retirement Plan
D. Transfer may be made by election upon written application
executed by the member and filed with the board on or before the
election date and shall be effective on the transfer date, subject to
the terms and conditions set forth in this section. The election date
shall be that date identified in the resolution adopted by the board
of supervisors declaring this section to be operative. The transfer
date shall be that date on which the member completes deposit of
all contributions required by Section 31494.3. The election is
voluntary and may be revoked upon written notice received by the
board prior to the transfer date.

(b) The retirement benefits of members electing to transfer and
transferred members shall be governed and defined by this section.
In the event of conflict, this section shall supersede and prevail
over other provisions, or application of provisions, otherwise
contained in this article.

(c) Transferred members relinquish, waive, and forfeit any and
all vested or accrued benefits available under any other retirement
plan provided to members of the retirement system, and shall be
entitled only to the benefits available under the contributory plan.

(d) Transferred members shall receive retirement service credit
for that period of service with the employer, for which the members
were otherwise eligible to receive credit under the plan created by
this article. Transferred members shall also receive retirement
service credit for that period of service for which the member made
contributions pursuant to Section 31490.5.

(e) Transferred members may receive retirement service credit
for service other than that with the employer, for which the
members were credited or were eligible to receive credit under the
plan created by this article, by written application executed by the
member and filed with the board on or before the election date.

(f) The employer, the members who have elected to transfer,
and transferred members shall make contributions to the retirement
fund in accordance with the rates, and in the same manner, as
prescribed under the contributory plan. The monthly contributions
shall commence for the month next following the transfer date or
that date 120 days after the election date, whichever is earlier.

(g) For purposes of calculating member contributions required
under Section 31494.3, the entry age of a transferred member shall
be that entry age as reflected in the retirement records maintained
on behalf of the board.

(h) Failure of a member to deposit the contributions at the time
and in the manner required by subdivision (a) of Section 31494.3
shall result in the cancellation of his or her election to transfer.

(i) Failure of a member to deposit the contributions at the time
and in the manner required by subdivision (b) or (c) of Section
31494.3 shall result in the cancellation and forfeiture of his or her
right to elect credit for other service under subdivision (e).

(j) Prior to the transfer date, the rights to retirement, disability,
survivors, and death benefits of members who have made the
election to transfer shall remain the same as defined and governed
by this article. If those members die, terminate service, or make
application for retirement prior to the transfer date, or fail to deposit
all required contributions as required by Section 31494.3, all
member contributions and regular interest shall be refunded to the
member or member’s survivor.

(k) Notwithstanding any other provision contained in this section
or Section 31494.3, in the event of the death of a member who has
elected to transfer prior to the transfer date, the spouse of the
member, or the minor children of the member if no spouse survives
the member, may elect to pay the balance of contributions required
by Section 31494.3, and if the contributions are deposited in the
retirement fund within 120 days after the death of the member, the
spouse of the member, or if no spouse survives the member, the
minor children of the member, shall be entitled to rights and
benefits as if the deceased member had deposited all contributions
required by Section 31494.3.

(l) Prior to the transfer date, the rights to retirement, disability,
survivors, and death benefits of members who have made the
election to transfer shall remain the same as defined and governed
by this article. If those members die, terminate service, or make
application for retirement prior to the transfer date, all member
contributions and regular interest shall be refunded to the member
or the member’s survivor.

(m) This section shall be operative at such time or times as may
be mutually agreed to in memoranda of understanding executed
by the employer and employee representatives if the board of
supervisors adopts, by majority vote, a resolution declaring that
the section shall be operative.

begin delete SEC. 17. end delete
begin insert SEC. 18. end insert   

Section 31800 of the Government Code is amended
to read:

31800.  

(a) Except as provided in subdivision (b), the provisions
of this article shall be applicable to any member who is subject to
the federal old age and survivors insurance provisions of the begin insert federal end insert
Social Security Act, when the governing board of the county or
district in which the member is employed adopts by majority vote
a resolution providing that this article shall be applicable to all
members in such county or district who are subject to the federal
system. The provisions of this article shall become fully effective
and operative on the date specified in such resolution; provided,
however, such resolution shall have received prior approval by
majority affirmative vote of eligible members employed by the
county or district in a referendum conducted in accordance with
the provisions of Article begin delete 2, Chapter 2, Part 4, Division 5, end delete begin insert 2 of
Chapter 2 of Part 4 of Division 5 end insert of Title 2 of this code. Nothing
in this article shall be construed as negating or in any way affecting
the validity of a referendum vote conducted prior to the enactment
of this article, whereby a majority of members employed by a
county or district voted in favor of federal old age and survivors
insurance coverage on a purely additive or supplemental basis.

(b) Notwithstanding subdivision (a), this article shall not be
applied to any member or to the service, contributions, or benefits
of any member that, on or after January 1, 2013, is subject to the
provisions of the California Public Employees’ Pension Reform
Act begin insert of 2013 end insert . Nothing herein shall preclude a member who is subject
to the California Public Employees’ Pension Reform Act begin insert of 2013 end insert
and whose position is included in an agreement between the state
and federal government for coverage under the old age and
survivors insurance provisions of the begin insert federal end insert Social Security Act
from also being subject to that federal system as a supplementation
system under which the social security benefits shall be in addition
to unintegrated retirement benefits.

begin delete SEC. 18. end delete
begin insert SEC. 19. end insert   

Section 31808 of the Government Code is amended
to read:

31808.  

(a) Except as provided in subdivision begin delete (d) end delete begin insert (c) end insert , in any
county or district subject to the provisions of Section 31676.1,
31676.11, 31676.13, or 31676.14, the retirement allowance payable
for retirement service rendered prior to the effective date of the
resolution mentioned in Section 31800 shall be computed in
accordance with the provisions of Section 31676.1, 31676.11,
31676.13, or 31676.14, whichever is applicable. Except as provided
in subdivision (b), the retirement allowance with respect to service
performed after May 31, 1957, shall equal the total of the
following:

(1) The fraction of one-ninetieth of the first three hundred fifty
dollars ($350) monthly of the member’s final compensation set
forth in the table appearing in Section 31676.1, 31676.11,
31676.13, or 31676.14, whichever is applicable, in the column
applicable to the member’s age at retirement taken to the preceding
completed quarter year multiplied by the number of years of
creditable service as provided therein.

(2) The fraction of one-sixtieth of any remaining portion of the
member’s final compensation set forth in the table appearing in
Section 31676.1, 31676.11, 31676.13, or 31676.14, whichever is
applicable, in the column applicable to the member’s age at
retirement taken to the preceding completed quarter year multiplied
by the number of years of creditable service.

(b) With respect to persons who become members of a county
retirement system after the effective date of the amendments to
this section enacted at the 1979-80 Regular Session, the retirement
allowance shall equal the following:

(1) The fraction of one-ninetieth of the first one thousand fifty
dollars ($1,050) monthly of the member’s final compensation set
forth in the table appearing in Section 31676.1, 31676.11,
31676.13, or 31676.14, whichever is applicable, in the column
applicable to the member’s age at retirement taken to the preceding
completed quarter year multiplied by the number of years of
creditable service as provided therein.

(2) The fraction of one-sixtieth of any remaining portion of the
member’s final compensation set forth in the table appearing in
Section 31676.1, 31676.11, 31676.13, or 31676.14, whichever is
applicable, in the column applicable to the member’s age at
retirement taken to the preceding completed quarter year multiplied
by the number of years of creditable service.

(3) This subdivision may be made applicable in any county of
over six million population on the first day of the month after the
board of supervisors of such county adopts by majority vote a
resolution providing that this subdivision shall become applicable
in such county.

(c) This section shall not apply to the retirement allowance of
a person who becomes a member of a county retirement system
under a benefit plan established pursuant to Section 7522.20 or
7522.25.

begin delete SEC. 19. end delete
begin insert SEC. 20. end insert   

Section 31812 of the Government Code is amended
to read:

31812.  

(a) Except as provided in subdivision begin delete (d) end delete begin insert (c) end insert , each
member shall continue to contribute as provided for in Article 6
(commencing with Section 31620) or (in case of those members
defined in Sections 31470.2, begin delete 31470.4 end delete begin insert 31470.4, end insert and 31470.6) Article
6.8 (commencing with Section 31639) of this chapter less an
amount equal to one-third of that portion of such contribution
which is payable with respect to the first three hundred fifty dollars
($350) monthly wage, or in counties where the board of supervisors
pursuant to subdivision (b) of Section 31808.6 elects to compute
the retirement allowance of safety members according to the
provisions of Section 31664, each safety member shall make
contributions as provided for in Article 6.8 of this chapter with
respect to all of his begin insert or her end insert monthly wage.

(b) (1) With respect to persons who become members of a
county retirement system after the effective date of the amendments
to this section enacted at the 1979-80 Regular Session, each
member shall contribute as provided for in Article 6 (commencing
with Section 31620) or (in case of those members defined in
Sections 31470.2, begin delete 31470.4 end delete begin insert 31470.4, end insert and 31470.6) Article 6.8
(commencing with Section 31639) of this chapter less an amount
equal to one-third of that portion of such contribution which is
payable with respect to the first one thousand fifty dollars ($1,050)
monthly wage, or in counties where the board of supervisors
pursuant to subdivision (b) of Section 31808.6 elects to compute
the retirement allowance of safety members according to the
provisions of Section 31664, each safety member shall make
contributions as provided for in Article 6.8 of this chapter with
respect to all of his begin insert or her end insert monthly wage.

(2) This subdivision may be made applicable in any county of
over six million population on the first day of the month after the
board of supervisors of such county adopts by majority vote a
resolution providing that this subdivision shall become applicable
in such county.

(c) This section shall not apply to the retirement allowance of
a person who becomes a member of a county retirement system
under a benefit plan established pursuant to Section 7522.20 or
7522.25.

begin delete SEC. 20. end delete
begin insert SEC. 21. end insert   

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 to address technical problems and avoid costly and
unnecessary changes to retirement systems in implementing the
California Public Employees’ Pension Reform Act of 2013
(Chapter 296 of the Statutes of 2012), it is necessary for this act
to take effect immediately.