Amended in Assembly September 11, 2013

Amended in Assembly September 6, 2013

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, 7522.32, 7522.34, 7522.40, 7522.43, 7522.56, 7522.72, 7522.74, 20683.2, 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 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 and the Judges’ Retirement System II are not required to adopt the defined benefit formula contained in other provisions for nonsafety and safety members. The bill would except from PEPRA certain multiemployer plans authorized under, and regulated by, specified federal law. The bill would also except from PEPRA public employees whose collective bargaining rights are subject to specified provisions of federal law until a specified federal district court decision on certification by the United States Secretary of Labor, or his or her designee, or until January 1, 2015, whichever is sooner. The bill would also provide that if a federal district court upholds the determination of the United States Secretary of Labor, or his or her designee, that application of PEPRA to those public employees precludes certification, those employees are excepted from PEPRA. 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 or who change positions for the same employer without a break in service, as specified. 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 defines pensionable compensation for new members and limits payments and compensation 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. PEPRA excludes specified payments from the definition of pensionable compensation.

This bill would specify the method by which adjustments to pensionable compensation limits based on the Consumer Price Index are to be made and which consumer price index is to be used for this purpose. 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. 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 begin insert state end insert employees or imposed on nonrepresented begin insert state end insert employees.

(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. 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 includes 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.

(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.

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

(7) 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 and make technical changes.

(8) 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.

(9) 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.

(10) 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.

(11) 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.

(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. begin insert PERL requires that savings realized from specified employee contribution increases be allocated, upon appropriation by the Legislature, to any unfunded liability. end 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, begin delete 2018, end delete begin insert 2019, end insert to require that its member employees pay up to certain percentages of the normal cost of benefits, depending on employment classification, as specified. begin insert The bill would except savings realized by the California State University as a result of increased employee contribution rates from allocation to unfunded liability and would make a statement of intent in this regard. end insert

(13) 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.

(14) 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 would make a technical change in the alternate retirement plan that is applicable to Los Angeles. The bill would specify that certain 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.

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

(16) 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,
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.

(3) (A) Notwithstanding paragraph (1), this article shall not
apply to a public employee whose interests are protected under
Section 5333(b) of Title 49 of the United States Code until a federal
district court rules that the United States Secretary of Labor, or
his or her designee, erred in determining that the application of
this article precludes certification under that section, or until
January 1, 2015, whichever is sooner.

(B) If a federal district court upholds the determination of the
United States Secretary of Labor, or his or her designee, that
application of this article precludes him or her from providing a
certification under Section 5333(b) of Title 49 of the United States
Code, this article shall not apply to a public employee specified
in subparagraph (A).

(4) Notwithstanding paragraph (1), this article shall not apply
to a multiemployer plan authorized by Section 302(c)(5) of the
Taft-Hartley 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.

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

(c) (1) 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:

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

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

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

(D) Section 22115.2 of the Education Code.

(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.

(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 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 Consumers:
U.S. City Average, calculated by dividing the Consumer Price
Index for All Urban Consumers: U.S. City Average, for the month
of September in the calendar year preceding the adjustment by the
Consumer Price Index for All Urban Consumers: U.S. City
Average, 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 shall limit the pensionable
compensation used to calculate the contributions required of an
employer or 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) 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, unless a greater 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.

(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.

SEC. 7.  

Section 7522.32 of the Government Code is amended
to read:

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 consecutive
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, or at least three
consecutive school years if applicable, 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.

SEC. 8.  

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, subject to the
limitations of subdivision (c).

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

(c) Notwithstanding any other law, “pensionable 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.

(13) (A) Any form of compensation identified that has been
agreed to be nonpensionable pursuant to a memorandum of
understanding for begin insert state end insert employees bound by the memorandum of
understanding. The begin insert state end insert 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.

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

SEC. 9.  

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
vesting schedule for the employer contribution payable for
postretirement health benefits 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 for the employer contribution payable for
postretirement health benefits of any public employee who was
subject to a specific vesting schedule pursuant to statute, collective
bargaining agreement begin insert , end insert or resolution for these employer
contributions prior to January 1, 2013, or who had a contractual
agreement with an employer prior to January 1, 2013, for a specific
vesting schedule for these employer contributions.

SEC. 10.  

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.

SEC. 11.  

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 have 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 have 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 public
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 or the Judges’ Retirement System II who is
appointed to serve as a retired judge.

SEC. 12.  

Section 7522.66 of the Government Code is repealed.

SEC. 13.  

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 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 rights and benefits shall remain forfeited notwithstanding any
reduction in sentence or expungement of the conviction following
the date of the public employee’s conviction. Rights and 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 rights and benefits as adjusted for the
contributions received pursuant to subdivision (d).

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

SEC. 14.  

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 rights and benefits shall remain forfeited notwithstanding any
reduction in sentence or expungement of the conviction following
the date of the public employee’s conviction. Rights and 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 rights and benefits as adjusted for the
contributions received pursuant to subdivision (d).

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

SEC. 15.  

Section 20683.2 of the Government Code is amended
to read:

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, which shall be subject to subdivision
(b), 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,” who are
excluded from collective bargaining, or who are officers or
employees of the executive, legislative, or judicial branch of state
government who are not members of the civil service.

(b) On and after January 1, begin delete 2018, end delete begin insert 2019, end insert 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.

(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.

(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.

(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.

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

(d) In addition to the actuarially required contribution, savings
realized by the state employer begin insert , excluding savings realized by the
California State University, end insert as a result of the employee contribution
rate increases required begin insert or authorized end insert by this section shall be
allocated to any unfunded liability, subject to appropriation in the
annual Budget Act. begin insert It is the intent of the Legislature that any
savings realized from a change in contribution rates at the
California State University pursuant to this section be retained by
the university. end insert

SEC. 16.  

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.

SEC. 17.  

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.

SEC. 18.  

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 federal
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 2 of Chapter 2 of Part 4 of Division 5 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 of 2013. Nothing herein shall preclude a member who is
subject to the California Public Employees’ Pension Reform Act
of 2013 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 federal 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.

SEC. 19.  

Section 31808 of the Government Code is amended
to read:

31808.  

(a) Except as provided in subdivision (c), 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.

SEC. 20.  

Section 31812 of the Government Code is amended
to read:

31812.  

(a) Except as provided in subdivision (c), 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, 31470.4, 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 or her 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, 31470.4, 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 or her
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.

SEC. 21.  

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.