Amended in Senate April 11, 2013

Amended in Senate March 18, 2013

Senate BillNo. 220


Introduced by Senator Beall

February 11, 2013


An act to amend Sections 9353,begin insert 20636, 20636.1, 20677.4, 20683.2, 20691, 20693, 20731, 20737, 20891, 21010, 21011, 21033, 21052, 21070.5, 21070.6, 21070.7, 21150, 22760,end insert 75005, and 75505 of, and to add Section 20004 to, the Government Code, relating to public employees’ retirement.

LEGISLATIVE COUNSEL’S DIGEST

SB 220, as amended, Beall. California Public Employees’ Pension Reform Act of 2013: administration.

The Public Employees’ Retirement Lawbegin insert (PERL)end insert establishes the Public Employees’ Retirement System (PERS) for the purpose of providing pension benefits to specified public employees. Existing law also establishes the Judges’ Retirement System and Judges’ Retirement System II, which provide pension benefits to judges, as defined, and the Legislators’ Retirement System, which provides pension benefits to specified elective officers of the state, other than judges, and to legislative statutory officers. Existing law requires that these systems be administered by the Board of Administration of PERS. Existing law, the California Public Employees’ Pension Reform Act of 2013 (PEPRA), on and after January 1, 2013, generally requires a public retirement system, as defined, to modify its plan or plans to comply with the act, as specified.begin insert Existing law establishes the Public Employee Medical and Hospital Care Act (PEMHCA) for the purpose of providing postemployment health care benefits to specified retirees.end insert

This bill would require the Board of Administration of PERS to administer each of the retirement systems described above in conformance with PEPRA as if the provisions of the act were contained in the provisions governing those systems. The bill would provide that if the board determines that there is a conflict between the provisions of PEPRA and respective provisions of those systems, the provisions of PEPRA control.begin insert The bill would make various changes in PERL and in PEMHCA to conform with the requirements of PEPRA.end insert

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

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

P2    1

SECTION 1.  

Section 9353 of the Government Code is amended
2to read:

3

9353.  

This system shall be administered by the Board of
4Administration of the Public Employees’ Retirement System. The
5board shall administer this system in accordance with the
6provisions of the Public Employees’ Retirement Law to the same
7extent and with the same effect as if those provisions are contained
8in thebegin delete Legislator’send deletebegin insert Legislators’end insert Retirement Law, except for those
9provisions which provide for the payment of an allowance or other
10benefit and except for those provisions which conflict with any
11provision or provisions of the Legislators’ Retirement Law. To
12the extent applicable, the board shall also administer this system
13in conformance with the California Public Employees’ Pension
14Reform Act of 2013 (Article 4 (commencing with Section 7522)
15of Chapter 21 of Division 7 of Title 1) to the same extent and with
16the same effect as if the provisions of the act are contained in the
17Legislators’ Retirement Law. If the Board of Administration of
18the Public Employees’ Retirement System determines that there
19is a conflict between the provisions of the California Public
20Employees’ Pension Reform Act of 2013 and this chapter, the
21provisions of the California Public Employees’ Pension Reform
22Act of 2013 shall control.

23

SEC. 2.  

Section 20004 is added to the Government Code, to
24read:

25

20004.  

(a) It is the intent of the Legislature, in enacting this
26section and amending this part, to comply with, and implement
27the provisions of, the California Public Employees’ Pension
P3    1Reform Act of 2013 (Article 4 (commencing with Section 7522)
2of Chapter 21 of Division 7 of Title 1) to ensure the continued
3ability of the board to invest the retirement fund and administer
4the system in conformity with its duties and responsibilities and
5to ensure that members are provided with the retirement and related
6benefits to which they are entitled pursuant to law.

7(b) To achieve the purposes set forth in subdivision (a), the
8board shall have all powers reasonably necessary to invest the
9assets associated with, and to administer and implement the
10 provisions of, the California Public Employees’ Pension Reform
11Act of 2013, to the extent and with the same effect as if the
12provisions of the act are contained in the Public Employees’
13Retirement Law. All laws governing the investment of the
14retirement fund, and the organization, procedures, and
15administrative duties and responsibilities of the board shall be
16applicable to the board in its administration of the California Public
17Employees’ Pension Reform Act of 2013, to the extent these laws
18are not in conflict with, or are not inconsistent with, the act. If the
19board determines that there is a conflict between the provisions of
20the California Public Employees’ Pension Reform Act of 2013
21and the Public Employees’ Retirement Law, the provisions of the
22California Public Employees’ Pension Reform Act of 2013 shall
23control.

24(c) Nothing in this section shall be construed to amend,
25supersede, limit, or extend the application of the provisions of the
26 California Public Employees’ Pension Reform Act of 2013.

27begin insert

begin insertSEC. 3.end insert  

end insert

begin insertSection 20636 of the end insertbegin insertGovernment Codeend insertbegin insert is amended to
28read:end insert

29

20636.  

(a) “Compensation earnable” by a member means the
30payrate and special compensation of the member, as defined by
31subdivisions (b), (c), and (g), and as limited by Section 21752.5.

32(b) (1) “Payrate” means the normal monthly rate of pay or base
33pay of the member paid in cash to similarly situated members of
34the same group or class of employment for services rendered on
35a full-time basis during normal working hours, pursuant to publicly
36available pay schedules. “Payrate,” for a member who is not in a
37group or class, means the monthly rate of pay or base pay of the
38member, paid in cash and pursuant to publicly available pay
39schedules, for services rendered on a full-time basis during normal
P4    1working hours, subject to the limitations of paragraph (2) of
2subdivision (e).

3(2) “Payrate” shall include an amount deducted from a member’s
4salary for any of the following:

5(A) Participation in a deferred compensation plan.

6(B) Payment for participation in a retirement plan that meets
7the requirements of Section 401(k) of Title 26 of the United States
8Code.

9(C) Payment into a money purchase pension plan and trust that
10meets the requirements of Section 401(a) of Title 26 of the United
11States Code.

12(D) Participation in a flexible benefits program.

13(3) The computation for a leave without pay of a member shall
14be based on the compensation earnable by him or her at the
15beginning of the absence.

16(4) The computation for time prior to entering state service shall
17be based on the compensation earnable by him or her in the position
18first held by him or her in state service.

19(c) (1) Special compensation of a member includes a payment
20received for special skills, knowledge, abilities, work assignment,
21workdays or hours, or other work conditions.

22(2) Special compensation shall be limited to that which is
23received by a member pursuant to a labor policy or agreement or
24as otherwise required by state or federal law, to similarly situated
25members of a group or class of employment that is in addition to
26payrate. If an individual is not part of a group or class, special
27compensation shall be limited to that which the board determines
28is received by similarly situated members in the closest related
29group or class that is in addition to payrate, subject to the
30limitations of paragraph (2) of subdivision (e).

31(3) Special compensation shall be for services rendered during
32normal working hours and, when reported to the board, the
33employer shall identify the pay period in which the special
34compensation was earned.

35(4) Special compensation may include the full monetary value
36of normal contributions paid to the board by the employer, on
37behalf of the member and pursuant to Section 20691, if the
38employer’s labor policy or agreement specifically provides for the
39inclusion of the normal contribution payment in compensation
40earnable.

P5    1(5) The monetary value of a service or noncash advantage
2furnished by the employer to the member, except as expressly and
3specifically provided in this part, is not special compensation unless
4regulations promulgated by the board specifically determine that
5value to be “special compensation.”

6(6) The board shall promulgate regulations that delineate more
7specifically and exclusively what constitutes “special
8compensation” as used in this section. A uniform allowance, the
9monetary value of employer-provided uniforms, holiday pay, and
10premium pay for hours worked within the normally scheduled or
11regular working hours that are in excess of the statutory maximum
12workweek or work period applicable to the employee under Section
13201 et seq. of Title 29 of the United States Code shall be included
14as special compensation and appropriately defined in those
15regulations.

16(7) Special compensation does not include any of the following:

17(A) Final settlement pay.

18(B) Payments made for additional services rendered outside of
19normal working hours, whether paid in lump sum or otherwise.

20(C) Other payments the board has not affirmatively determined
21to be special compensation.

22(d) Notwithstanding any other provision of law, payrate and
23special compensation schedules, ordinances, or similar documents
24shall be public records available for public scrutiny.

25(e) (1) As used in this part, “group or class of employment”
26means a number of employees considered together because they
27share similarities in job duties, work location, collective bargaining
28unit, or other logical work-related grouping. One employee may
29not be considered a group or class.

30(2) Increases in compensation earnable granted to an employee
31who is not in a group or class shall be limited during the final
32compensation period applicable to the employees, as well as the
33two years immediately preceding the final compensation period,
34to the average increase in compensation earnable during the same
35period reported by the employer for all employees who are in the
36same membership classification, except as may otherwise be
37determined pursuant to regulations adopted by the board that
38establish reasonable standards for granting exceptions.

39(f) As used in this part, “final settlement pay” means pay or
40cash conversions of employee benefits that are in excess of
P6    1compensation earnable, that are granted or awarded to a member
2in connection with, or in anticipation of, a separation from
3employment. The board shall promulgate regulations that delineate
4more specifically what constitutes final settlement pay.

5(g) (1) Notwithstanding subdivision (a), “compensation
6earnable” for state members means the average monthly
7compensation, as determined by the board, upon the basis of the
8average time put in by members in the same group or class of
9employment and at the same rate of pay, and is composed of the
10payrate and special compensation of the member. The computation
11for an absence of a member shall be based on the compensation
12earnable by him or her at the beginning of the absence and for time
13prior to entering state service shall be based on the compensation
14earnable by him or her in the position first held by him or her in
15that state service.

16(2) Notwithstanding subdivision (b), “payrate” for state members
17means the average monthly remuneration paid in cash out of funds
18paid by the employer to similarly situated members of the same
19group or class of employment, in payment for the member’s
20services or for time during which the member is excused from
21work because of holidays, sick leave, vacation, compensating time
22off, or leave of absence. “Payrate” for state members shall include:

23(A) An amount deducted from a member’s salary for any of the
24following:

25(i) Participation in a deferred compensation plan established
26pursuant to Chapter 4 (commencing with Section 19993) of Part
272.6.

28(ii) Payment for participation in a retirement plan that meets
29the requirements of Section 401(k) of Title 26 of the United States
30Code.

31(iii) Payment into a money purchase pension plan and trust that
32meets the requirements of Section 401(a) of Title 26 of the United
33States Code.

34(iv) Participation in a flexible benefits program.

35(B) A payment in cash by the member’s employer to one other
36than an employee for the purpose of purchasing an annuity contract
37for a member under an annuity plan that meets the requirements
38of Section 403(b) of Title 26 of the United States Code.

P7    1(C) Employer “pick up” of member contributions that meets
2the requirements of Section 414(h)(2) of Title 26 of the United
3States Code.

4(D) Disability or workers’ compensation payments to safety
5members in accordance with Section 4800 of the Labor Code.

6(E) Temporary industrial disability payments pursuant to Article
74 (commencing with Section 19869) of Chapter 2.5 of Part 2.6.

8(F) Other payments the board may determine to be within
9“payrate.”

10(3) Notwithstanding subdivision (c), “special compensation”
11for state members shall mean all of the following:

12(A) The monetary value, as determined by the board, of living
13quarters, board, lodging, fuel, laundry, and other advantages of
14any nature furnished to a member by his or her employer in
15payment for the member’s services.

16(B) Compensation for performing normally required duties,
17such as holiday pay, bonuses (for duties performed on regular work
18shift), educational incentive pay, maintenance and noncash
19payments, out-of-class pay, marksmanship pay, hazard pay,
20motorcycle pay, paramedic pay, emergency medical technician
21pay, Peace Officer Standards and Training (POST) certificate pay,
22and split shift differential.

23(C) Compensation for uniforms, except as provided in Section
2420632.

25(D) Other payments the board may determine to be within
26“special compensation.”

27(4) “Payrate” and “special compensation” for state members do
28not include any of the following:

29(A) The provision by the state employer of a medical or hospital
30service or care plan or insurance plan for its employees (other than
31the purchase of annuity contracts as described below in this
32subdivision), a contribution by the employer to meet the premium
33or charge for that plan, or a payment into a private fund to provide
34health and welfare benefits for employees.

35(B) A payment by the state employer of the employee portion
36of taxes imposed by the Federal Insurance Contribution Act.

37(C) Amounts not available for payment of salaries and that are
38applied by the employer for the purchase of annuity contracts
39including those that meet the requirements of Section 403(b) of
40Title 26 of the United States Code.

P8    1(D) Benefits paid pursuant to Article 5 (commencing with
2Section 19878) of Chapter 2.5 of Part 2.6.

3(E) Employer payments that are to be credited as employee
4contributions for benefits provided by this system, or employer
5payments that are to be credited to employee accounts in deferred
6compensation plans. The amounts deducted from a member’s
7wages for participation in a deferred compensation plan may not
8be considered to be “employer payments.”

9(F) Payments for unused vacation, annual leave, personal leave,
10sick leave, or compensating time off, whether paid in lump sum
11or otherwise.

12(G) Final settlement pay.

13(H) Payments for overtime, including pay in lieu of vacation or
14holiday.

15(I) Compensation for additional services outside regular duties,
16such as standby pay, callback pay, court duty, allowance for
17automobiles, and bonuses for duties performed after the member’s
18regular work shift.

19(J) Amounts not available for payment of salaries and that are
20applied by the employer for any of the following:

21(i) The purchase of a retirement plan that meets the requirements
22of Section 401(k) of Title 26 of the United States Code.

23(ii) Payment into a money purchase pension plan and trust that
24meets the requirements of Section 401(a) of Title 26 of the United
25States Code.

26(K) Payments made by the employer to or on behalf of its
27employees who have elected to be covered by a flexible benefits
28program, where those payments reflect amounts that exceed the
29employee’s salary.

30(L) Other payments the board may determine are not “payrate”
31or “special compensation.”

32(5) If the provisions of this subdivision, including the board’s
33determinations pursuant to subparagraph (F) of paragraph (2) and
34subparagraph (D) of paragraph (3), are in conflict with the
35provisions of a memorandum of understanding reached pursuant
36to Section 3517.5 or 3560, the memorandum of understanding
37shall be controlling without further legislative action, except that
38if the provisions of a memorandum of understanding require the
39expenditure of funds, those provisions may not become effective
40unless approved by the Legislature in the annual Budget Act. No
P9    1memorandum of understanding reached pursuant to Section 3517.5
2or 3560 may exclude from the definition of either “payrate” or
3“special compensation” a member’s base salary payments or
4payments for time during which the member is excused from work
5because of holidays, sick leave, vacation, compensating time off,
6or leave of absence. If items of compensation earnable are included
7by memorandum of understanding as “payrate” or “special
8compensation” for retirement purposes for represented and higher
9education employees pursuant to this paragraph, the Department
10of Human Resources or the Trustees of the California State
11University shall obtain approval from the board for that inclusion.

12(6) (A) Subparagraph (B) of paragraph (3) prescribes that
13compensation earnable includes compensation for performing
14normally required duties, such as holiday pay, bonuses (for duties
15performed on regular work shift), educational incentive pay,
16maintenance and noncash payments, out-of-class pay,
17marksmanship pay, hazard pay, motorcycle pay, paramedic pay,
18emergency medical technician pay, POST certificate pay, and split
19shift differential; and includes compensation for uniforms, except
20as provided in Section 20632; and subparagraph (I) of paragraph
21(4) excludes from compensation earnable compensation for
22additional services outside regular duties, such as standby pay,
23callback pay, court duty, allowance for automobile, and bonuses
24for duties performed after regular work shift.

25(B) Notwithstanding subparagraph (A), the Department of
26Human Resources shall determine which payments and allowances
27that are paid by the state employer shall be considered
28compensation for retirement purposes for an employee who either
29is excluded from the definition of state employee in Section 3513,
30or is a nonelected officer or employee of the executive branch of
31government who is not a member of the civil service.

32(C) Notwithstanding subparagraph (A), the Trustees of the
33California State University shall determine which payments and
34allowances that are paid by the trustees shall be considered
35compensation for retirement purposes for a managerial employee,
36as defined in Section 3562, or supervisory employee as defined in
37Section 3580.3.

begin insert

38(h) This section shall not apply to a new member, as defined in
39Section 7522.04.

end insert
P10   1begin insert

begin insertSEC. 4.end insert  

end insert

begin insertSection 20636.1 of the end insertbegin insertGovernment Codeend insertbegin insert is amended
2to read:end insert

3

20636.1.  

(a) Notwithstanding Section 20636, and Section
445102 of the Education Code, “compensation earnable” by a school
5member means the payrate and special compensation of the
6member, as defined by subdivisions (b) and (c), and as limited by
7Section 21752.5.

8(b) (1) “Payrate” means the normal monthly rate of pay or base
9pay of the member paid in cash to similarly situated members of
10the same group or class of employment for services rendered on
11a full-time basis during normal working hours. For purposes of
12this part, for classified members, full-time employment is 40 hours
13per week, and payments for services rendered, not to exceed 40
14hours per week, shall be reported as compensation earnable for all
15months of the year in which work is performed. “Payrate,” for a
16member who is not in a group or class, means the monthly rate of
17pay or base pay of the member, paid in cash and pursuant to
18publicly available pay schedules, for services rendered on a
19full-time basis during normal working hours, subject to the
20limitations of paragraph (2) of subdivision (e).

21(A) “Payrate” shall include an amount deducted from a
22member’s salary for any of the following:

23(i) Participation in a deferred compensation plan.

24(ii) Payment for participation in a retirement plan that meets
25the requirements of Section 401(k) or 403(b) of Title 26 of the
26United States Code.

27(iii) Payment into a money purchase pension plan and trust that
28meets the requirements of Section 401(a) of Title 26 of the United
29States Code.

30(iv) Participation in a flexible benefits program.

31(B) For the purposes of this section, “classified members” shall
32mean members who retain membership under this system while
33employed with a school employer in positions not subject to
34coverage under the Defined Benefit Program under the State
35Teachers’ Retirement System.

36(C) For the purposes of this section, and Sections 20962 and
3720966, “certificated members” shall mean members who retain
38membership under this system while employed in positions subject
39to coverage under the Defined Benefit Program under the State
40Teachers’ Retirement System.

P11   1(2) The computation for any leave without pay of a member
2shall be based on the compensation earnable by him or her at the
3beginning of the absence.

4(3) The computation for time prior to entering state service shall
5be based on the compensation earnable by him or her in the position
6first held by him or her in state service.

7(c) (1) Special compensation of a school member includes any
8payment received for special skills, knowledge, abilities, work
9assignment, workdays or hours, or other work conditions.

10(2) Special compensation shall be limited to that which is
11received by a member pursuant to a labor policy or agreement or
12as otherwise required by state or federal law, to similarly situated
13members of a group or class of employment that is in addition to
14payrate. If an individual is not part of a group or class, special
15compensation shall be limited to that which the board determines
16is received by similarly situated members in the closest related
17group or class that is in addition to payrate, subject to the
18limitations of paragraph (2) of subdivision (e).

19(3) Special compensation shall be for services rendered during
20normal working hours and, when reported to the board, the
21employer shall identify the pay period in which the special
22compensation was earned.

23(4) Special compensation may include the full monetary value
24of normal contributions paid to the board by the employer, on
25behalf of the member and pursuant to Section 20691, provided
26that the employer’s labor policy or agreement specifically provides
27for the inclusion of the normal contribution payment in
28compensation earnable.

29(5) The monetary value of any service or noncash advantage
30furnished by the employer to the member, except as expressly and
31specifically provided in this part, shall not be special compensation
32unless regulations promulgated by the board specifically determine
33that value to be “special compensation.”

34(6) The board shall promulgate regulations that delineate more
35specifically and exclusively what constitutes “special
36compensation” as used in this section. A uniform allowance, the
37monetary value of employer-provided uniforms, holiday pay, and
38premium pay for hours worked within the normally scheduled or
39regular working hours that are in excess of the statutory maximum
40workweek or work period applicable to the employee under Section
P12   1201 et seq. of Title 29 of the United States Code shall be included
2as special compensation and appropriately defined in those
3regulations.

4(7) Special compensation does not include any of the following:

5(A) Final settlement pay.

6(B) Payments made for additional services rendered outside of
7normal working hours, whether paid in lump sum or otherwise.

8(C) Any other payments the board has not affirmatively
9determined to be special compensation.

10(d) Notwithstanding any other provision of law, payrate and
11special compensation schedules, ordinances, or similar documents
12shall be public records available for public scrutiny.

13(e) (1) As used in this part, “group or class of employment”
14means a number of employees considered together because they
15share similarities in job duties, work location, collective bargaining
16unit, or other logical work-related grouping. Under no
17circumstances shall one employee be considered a group or class.

18(2) Increases in compensation earnable granted to any employee
19who is not in a group or class shall be limited during the final
20compensation period applicable to the employees, as well as the
21two years immediately preceding the final compensation period,
22to the average increase in compensation earnable during the same
23period reported by the employer for all employees who are in the
24same membership classification, except as may otherwise be
25determined pursuant to regulations adopted by the board that
26establish reasonable standards for granting exceptions.

27(f) As used in this part, “final settlement pay” means any pay
28or cash conversions of employee benefits that are in excess of
29compensation earnable, that are granted or awarded to a member
30in connection with or in anticipation of a separation from
31employment. The board shall promulgate regulations that delineate
32more specifically what constitutes final settlement pay.

begin insert

33(g) This section shall not apply to a new member, as defined in
34Section 7522.04.

end insert
35begin insert

begin insertSEC. 5.end insert  

end insert

begin insertSection 20677.4 of the end insertbegin insertGovernment Codeend insertbegin insert is amended
36to read:end insert

37

20677.4.  

(a) (1) The normal rate of contribution for a state
38miscellaneous or state industrial member whose service is not
39included in the federal system shall be 6 percent of the
40compensation in excess of three hundred seventeen dollars ($317)
P13   1per month paid to that member for service rendered on or after
2July 1, 1976.

3(2) The normal rate of contribution for a state miscellaneous or
4state industrial member, who has elected to be subject to Section
521353.5 and whose service is not included in the federal system,
6shall be 6 percent of the member’s compensation.

7(3) The normal rate of contribution as established under this
8subdivision for a member whose service is included in the federal
9system, and whose service retirement allowance is reduced under
10Section 21354.1, because of that inclusion, shall be reduced by
11one-third as applied to compensation not exceeding four hundred
12dollars ($400) per month for service after the date of execution of
13the agreement including service in the federal system and prior to
14termination of the agreement with respect to the coverage group
15to which he or she belongs.

16(b) The normal rate of contribution for a state miscellaneous or
17state industrial member whose service has been included in the
18federal system shall be 5 percent of compensation in excess of five
19hundred thirteen dollars ($513) per month paid that member for
20service rendered on or after July 1, 1976.

21(c) The normal rate of contribution for a state miscellaneous or
22state industrial member who is subject to Section 21076begin insert, 21076.5,end insert
23 or 21077 shall bebegin delete 0 percentend deletebegin insert determined in the manner described
24in Section 20683.2end insert
.

25(d) A member who elected to become subject to Section 21353
26solely for service rendered on or after the effective date of the
27election, as authorized by subdivision (c) of Section 21070 during
28the period between November 1, 1988, and October 31, 1989, is
29not required to make the contributions specified in Section 21073.

30(e) A member who elects to become subject to Section 21354.1,
31as applicable, shall contribute at the rate specified in paragraph
32(1) of subdivision (a) or paragraph (1) of subdivision (b), as
33determined by the member’s status with the federal system, and
34the rate shall be applied from the first of the month following the
35date of the election. A member who makes the election shall also
36contribute for service prior to the date the contribution rate was
37applied, in the manner specified in Section 21073 or 21073.1, as
38applicable.

39(f) If the provisions of this section are in conflict with the
40provisions of a memorandum of understanding reached pursuant
P14   1to Section 3517.5, the memorandum of understanding shall be
2controlling without further legislative action, except that if the
3provisions of a memorandum of understanding require the
4expenditure of funds, the provisions shall not become effective
5unless and until approved by the Legislature in the annual Budget
6Act.

7(g) The Director of Human Resources may establish the normal
8rate of contribution for a state employee who is excepted from the
9definition of “state employee” in subdivision (c) of Section 3513,
10and an officer or employee of the executive branch of state
11government who is not a member of the civil service. The normal
12rate of contribution shall be the same for all members identified
13in this subdivision. The contribution rate shall be effective the
14beginning of the pay period indicated by the Director of Human
15Resources but shall be no earlier than the beginning of the pay
16period following the date the board receives notification.

17begin insert

begin insertSEC. 6.end insert  

end insert

begin insertSection 20683.2 of the end insertbegin insertGovernment Codeend insertbegin insert is amended
18to read:end insert

19

20683.2.  

Equal sharing of normal costs between the state
20employer and public employees shall be the standard. It shall be
21the standard that employees pay at least 50 percent of normal costs
22and that employers not pay any of the required employee
23contribution. Equal sharing of normal costs is currently the standard
24for most state employees.

25(a) Notwithstanding any other section of this code, or other
26provision of law in conflict with this section, except as provided
27in Section 7522.30, normal contribution rates for defined benefit
28plans for state employees of public employers as defined in
29paragraph (1) of subdivision (i) of Section 7522.04, excluding the
30California State University, shall be determined as follows:

31(1) Normal cost contribution rates shall increase as follows:

32(A) The contribution rate for State Peace Officer/Firefighter
33members in State Bargaining Unit 6 and for State Safety members
34in State Bargaining Units 1, 3, 4, 7, 9, 10, 11, 14, 15, 17, 20, and
3521 will increase by 1.0 percentage point on July 1, 2013, and will
36increase by an additional 1.0 percentage point on July 1, 2014.

37(B) The contribution rate for State Peace Officer/Firefighter
38members in State Bargaining Units 7 and 8 will increase by 1.5
39percentage points on July 1, 2013, and will increase by an
40additional 1.5 percentage points on July 1, 2014.

P15   1(C) The contribution rate for state industrial members in State
2Bargaining Units 1, 3, 4, 6, 9, 10, 11, 14, 15, 17, and 20 will
3increase by 1.0 percentage point on July 1, 2013.

4(D) The contribution rate for state miscellaneous and industrial
5members that have elected the Second Tier benefit formula will
6increase by 1.5 percentage points annually starting July 1, 2013begin insert,
7until the contribution rate is equal to at least 50 percent of normal
8costs rounded up to the nearest one-fourth of 1 percentend insert
. The final
9annual increase in the contribution rate shall be adjustedbegin insert to less
10than 1.5 percentend insert
as appropriate.

11(E) The contribution rate for State Safety members in State
12Bargaining Unit 2 and state miscellaneous members in State
13Bargaining Unit 5 will increase by 1.0 percentage point on July 1,
142013.

15(F) The contribution rate for Patrol members in State Bargaining
16Unit 5 will increase by 1.5 percentage points on July 1, 2013.

17(2) Consistent with paragraph (1), the normal rate of contribution
18shall be adjusted accordingly for related state employees who are
19exempted from the definition of “state employee,” or officers and
20employees of the executive, legislative, or judicial branch of state
21government who are not members of the civil service.

22(b) Calculation of employee contribution rate increases pursuant
23to this section shall be based upon compensation calculations
24established pursuant to Sections 20671 to 20694, inclusive.

25(c) In addition to the actuarially required contribution, savings
26realized by the state employer as a result of the employee
27 contribution rate increases required by this section shall be
28allocated to any unfunded liability, subject to appropriation in the
29annual Budget Act.

30begin insert

begin insertSEC. 7.end insert  

end insert

begin insertSection 20691 of the end insertbegin insertGovernment Codeend insertbegin insert is amended to
31read:end insert

32

20691.  

begin deleteNotwithstanding end deletebegin insert(a)end insertbegin insertend insertbegin insert(1)end insertbegin insertend insertbegin insertExcept as provided in
33subdivision (b), notwithstanding end insert
any otherbegin delete provision ofend delete law, a
34contracting agency or school employer may pay all or a portion
35of the normal contributions required to be paid by a member.
36Where the member is included in a group or class of employment,
37the payment shall be for all members in the group or class of
38employment. If an individual is not part of a group or class, the
39payment shall be limited to the amount that the board determines
40is payable to similarly situated members in the closest related group
P16   1or class, subject to the limitations of paragraph (2) of subdivision
2(e) of Section 20636. The payments shall be reported simply as
3normal contributions and shall be credited to member accounts.

begin delete

4Nothing

end delete

5begin insert(2)end insertbegin insertend insertbegin insertNothingend insert in thisbegin delete sectionend deletebegin insert subdivisionend insert shall be construed to
6limit the authority of a contracting agency or school employer to
7periodically increase, reduce, or eliminate the payment by the
8contracting agency or school employer of all or a portion of the
9normal contributions required to be paid by members, as authorized
10by this section.

begin insert

11(b) Notwithstanding subdivision (a), employers shall not pay a
12portion of the normal contributions for members who are subject
13to subdivision (c) of Section 7522.30, except where authorized
14pursuant to subdivision (f) of Section 7522.30.

end insert
15begin insert

begin insertSEC. 8.end insert  

end insert

begin insertSection 20693 of the end insertbegin insertGovernment Codeend insertbegin insert is amended to
16read:end insert

17

20693.  

begin deleteNotwithstanding end deletebegin insert(a)end insertbegin insertend insertbegin insertExcept as provided in subdivision
18(b), notwithstanding end insert
any otherbegin delete provision ofend delete law, the state or the
19Regents of the University of California may pay all or a portion
20of the normal contributions required to be paid by a state member.
21The payments shall be reported as employer-paid normal
22contributions and shall be credited to member accounts. Nothing
23in thisbegin delete sectionend deletebegin insert subdivisionend insert shall be construed to limit the authority
24of the state to periodically increase, reduce, or eliminate the
25payment by the state of all or a portion of the normal contributions
26required to be paid by a state member, as authorized by this section.

27This section shall be subject to any applicable
28collective-bargaining laws.

begin insert

29(b) Notwithstanding subdivision (a), employers shall not pay a
30portion of the normal contributions for members who are subject
31to subdivision (c) of Section 7522.30, except where authorized
32pursuant to subdivision (f) of Section 7522.30.

end insert
33begin insert

begin insertSEC. 9.end insert  

end insert

begin insertSection 20731 of the end insertbegin insertGovernment Codeend insertbegin insert is amended to
34read:end insert

35

20731.  

(a) Notwithstanding any other provision of this part,
36a member who is credited with less than the years of service
37specified in Article 1 (commencing with Section 21060) of Chapter
3812 who enters employment as a member of a public retirement
39system supported, in whole or in part, by state funds, including
40the University of California Retirement System, or as a member
P17   1of a county retirement system, within six months of leaving state
2service, shall have the right to elect to leave accumulated
3contributions on deposit in the retirement fund. Failure to make
4an election to withdraw accumulated contributions shall be deemed
5an election to leave accumulated contributions on deposit in the
6retirement fund. This section shall also apply to a member who is
7subject to begin delete Section 21076, except that no election to leave
8contributions on deposit is required for service that is subject toend delete

9 Section 21076begin insert or 21076.5end insert.

10(b) (1) An election to allow accumulated contributions to remain
11in the retirement fund may be revoked by the member at any time,
12except any of the following:

13(A) While the member is employed in state service in a position
14in which the member is not excluded from membership with respect
15to that service.

16(B) While the member is in service as a member of a public
17retirement system supported, in whole or in part, by state funds,
18including the University of California Retirement System.

19(C) While the member is in service, entered within six months
20after discontinuing state service, as a member of a county
21retirement system.

22(2) All accumulated contributions in a member’s account up to
23the time of revocation shall be distributed in accordance with an
24election pursuant to Section 20735.

25(3) A member who is permanently separated from all service
26covered by the system, who is not subject to paragraph (1), and
27who attains 70 years of age shall be provided with an election to
28withdraw contributions or, if vested, an election to either apply
29for service retirement or to withdraw contributions. Failure to apply
30for service retirement or to make an election to withdraw
31contributions within 90 days shall be deemed an election to
32withdraw contributions. If the person fails to either apply for
33service retirement or elect to withdraw contributions, or cannot,
34with reasonable diligence, be located, the accumulated
35contributions shall be distributed in accordance with Section 21500.

36(c) A member whose membership continues under this section
37is subject to the same age and disability requirements as apply to
38other members for service or for disability retirement. After the
39qualification of the member for retirement by reason of age, which
40shall be the lowest age applicable to any membership category in
P18   1which the member has credited service, or disability, the member
2shall be entitled to receive a retirement allowance based upon the
3amount of the member’s accumulated contributions and service
4standing to the member’s credit at the time of retirement and on
5the employer contributions held for the member and calculated in
6the same manner as for other members, except that the provisions
7in this part for minimum service and disability retirement
8allowances shall not apply to the member, unless the member
9meets the minimum service requirements. If a basic death benefit
10becomes payable under Article 1 (commencing with Section
1121490), Article 2 (commencing with Section 21530), and Article
125 (commencing with Section 21620) of Chapter 14 because of
13death before retirement of a member, the average annual
14compensation earnable in the year preceding the date of termination
15of that service, rather than in the year preceding death, shall be
16used in computing the benefit under Articles 1, 2, and 5 of Chapter
1714.

18The provisions of this section, as it read prior to June 21, 1971,
19shall continue with respect to a member whose membership
20continued under this section on that date.

21begin insert

begin insertSEC. 10.end insert  

end insert

begin insertSection 20737 of the end insertbegin insertGovernment Codeend insertbegin insert is amended
22to read:end insert

23

20737.  

The account of a member who elects to be subject to
24Section 21076begin insert or 21076.5end insert shall be paid current year interest
25through the effective date of that election for service rendered as
26a state miscellaneous or state industrial member. Interest
27subsequent to the effective date of that election shall accrue at a
28rate determined by the board. The member shall not receive his or
29her accumulated contributions plus interest until the time of
30retirement or upon request after permanent separation from state
31service. Interest shall be paid through the day prior to retirement
32or through the date on which the claim is filed with the Controller.
33This section does not apply to a member who elects to be subject
34to Section 21077.

35begin insert

begin insertSEC. 11.end insert  

end insert

begin insertSection 20891 of the end insertbegin insertGovernment Codeend insertbegin insert is amended
36to read:end insert

37

20891.  

Section 20066 and subdivisions (a) and (b) of Section
3820068 shall not apply to a state miscellaneous or state industrial
39member subject to Sectionbegin delete 21076 or Sectionend deletebegin insert 21076, 21076.5, orend insert
40 21077 who becomes a patrol member, a state safety member, or
P19   1a state peace officer/firefighter member as a result of an amendment
2to this part defining those members, or is reclassified as a state
3peace officer/firefighter member pursuant to Sections 20395 or
420398, unless the member elects to: (a) deposit in the retirement
5fund an amount equal to any accumulated contributions that he or
6she withdrew pursuant to Section 20737, plus an amount equal to
7the interest which would have been credited to his or her account,
8to the date of completion of payments, had those contributions not
9been withdrawn; and, (b) deposit in the retirement fund the amount
10that he or she would have contributed had he or she not been
11subject to subdivision (c) of Section 20677, plus an amount equal
12to the interest, to the date of completion of payments, which would
13have been credited to those contributions had he or she been subject
14to subdivision (a) or (b) of Section 20677.

15begin insert

begin insertSEC. 12.end insert  

end insert

begin insertSection 21010 of the end insertbegin insertGovernment Codeend insertbegin insert is amended
16to read:end insert

17

21010.  

Unless otherwise provided in this article, a member
18electing to receive service credit for time during which he or she
19was absent from state service shall contribute in a lump sum or by
20installments over that period and subject to such minimum
21payments as may be prescribed by regulations of the board, an
22amount equal to (a) the contributions he or she would have made
23to this system for the period for which current service credit is
24granted, assuming that the rate of contribution under his or her
25employer’s formula at the rate age applicable to him or her at the
26beginning of his or her first subsequent period of service in
27membership and his or her compensation earnable on that date had
28applied to him or her during the period for which credit is granted,
29plus (b) those added contributions as may be specially required
30under this article as a condition for crediting a particular absence,
31plus (c) the interest that would have accrued to those contributions
32if they had been on deposit at the beginning date of his or her first
33subsequent period of service in membership, from that date until
34the date of completion of payments. The beginning date of the first
35subsequent period of service for purposes of computation of
36contributions and interest shall be deemed to be the end of the
37period of service credited for a member who has no subsequent
38return to service. For a member who is subject tobegin delete Sections 21076
39andend delete
begin insert Section 21076 or 21076.5, and Sectionend insert 21077, the service and
40contribution rate to be used for purposes of computation shall be
P20   1deemed to be the service and contribution rate that would have
2been used had the member not been subject tobegin delete Sections 21076 andend delete
3begin insert Section 21076 or 21076.5, and Sectionend insert 21077.

4Service shall be credited as current or prior service, or both, as
5it would be credited if the member had been in state service during
6his or her absence. All contributions of a member under this article
7shall be considered to be and shall be administered as normal
8contributions.

9begin insert

begin insertSEC. 13.end insert  

end insert

begin insertSection 21011 of the end insertbegin insertGovernment Codeend insertbegin insert is amended
10to read:end insert

11

21011.  

Notwithstanding Section 21010, for a member electing
12to receive service credit for time during which he or she was absent
13from state service who is subject tobegin delete Sections 21076 andend deletebegin insert Section
1421076 or 21076.5, and Sectionend insert
21077, the contribution rate to be
15used for the purposes of computation shall be deemed to be the
16contribution rate that would have been used had the member not
17been subject tobegin delete Sections 21076 andend deletebegin insert Section 21076 or 21076.5, and
18Sectionend insert
21077.

19begin insert

begin insertSEC. 14.end insert  

end insert

begin insertSection 21033 of the end insertbegin insertGovernment Codeend insertbegin insert is amended
20to read:end insert

21

21033.  

A member electing to receive credit for public service
22shall contribute in a lump sum or by installment payments over
23that period and subject to minimum payments as may be prescribed
24by regulations of the board an amount equal to (a) the contributions
25he or she would have made to this system for the period for which
26current service credit is granted, assuming that the rate of
27contribution under his or her employer’s formula at the rate age
28applicable to him or her at the beginning of his or her first
29subsequent period of service in membership and his or her
30compensation earnable on that date had applied to him or her
31during the period for which credit is granted, plus (b) the added
32contribution that may be specially required under this article as a
33condition for crediting particular public service, plus (c) the interest
34which would have accrued to those contributions if they had been
35deposited at the beginning date of his or her first subsequent period
36of service in membership, from that date until the date of
37completion of payments, and (d) if he or she elects to contribute
38in other than one sum, interest on the unpaid balance of the amount
39payable to the retirement fund, beginning on the date of the election
40to receive credit. The beginning date of the first subsequent period
P21   1of service for purposes of computation of contribution and interest
2shall be deemed to be the end of the period of service credited for
3a member who has no subsequent return to service. For a member
4who is subject tobegin delete Sections 21076 andend deletebegin insert Section 21076 or 21076.5,
5and Sectionend insert
21077, the service and contribution rate to be used for
6purposes of computation shall be deemed to be the service and
7contribution rate that would have been used had the member not
8been subject tobegin delete Sections 21076 andend deletebegin insert Section 21076 or 21076.5, and
9Sectionend insert
21077.

10begin insert

begin insertSEC. 15.end insert  

end insert

begin insertSection 21052 of the end insertbegin insertGovernment Codeend insertbegin insert is amended
11to read:end insert

12

21052.  

A member or retired former employee who elects to
13receive service credit subject to this section shall contribute, in
14accordance with Section 21050, an amount equal to the increase
15in employer liability, using the payrate and other factors affecting
16liability on the date of the request for costing of the service credit.
17The methodology for calculating the amount of the contribution
18shall be determined by the chief actuary and approved by the board.
19A member or retired former employee electing to receive service
20credit for service subject to Section 21076begin insert, 21076.5,end insert or 21077 shall
21pay the contributions as described.

22begin insert

begin insertSEC. 16.end insert  

end insert

begin insertSection 21070.5 of the end insertbegin insertGovernment Codeend insertbegin insert is amended
23to read:end insert

24

21070.5.  

(a) Notwithstanding any other provision of this
25article, a person who, on or after January 1, 2000, becomes a state
26miscellaneous or state industrial member of the system because
27the person (1) is first employed by the state, (2) returns to
28employment with the state from a break in service of more than
2990 days, or (3) returns to employment with the state after ceasing
30to be a member pursuant to Section 20340 or 21075, shall be
31subject to the benefits provided by Section 21354.1, unless the
32person elects within 180 days of membership as a state
33miscellaneous or state industrial member to be subject to the
34Second Tier benefits provided for in Section 21076begin insert or 21076.5,
35as applicableend insert
. This section shall only apply to state miscellaneous
36and state industrial members who are (1) excluded from the
37definition of state employee in subdivision (c) of Section 3513,
38(2) employed by the executive branch of government and are not
39members of the civil service, or (3) included in the definition of
40state employee in subdivision (c) of Section 3513.

P22   1(b) The effective date of the election shall be the first day of the
2month following the date the election is received by the system
3and shall be applicable to state service rendered on and after that
4date. Any election filed with the board pursuant to this section
5shall also be signed by the spouse of the member.

6(c) A member who makes an election authorized by this section
7shall not be precluded from making a subsequent election pursuant
8to Section 21073.7 to be subject to the benefits provided by Section
921354.1.

10(d) Operation and application of this section are subject to the
11limitations set forth in Section 21251.13.

12(e) For a member subject to Section 20281.5, the 180-day
13election period shall not commence until the first day of the first
14pay period commencing 24 months after becoming a member of
15the system.

16begin insert

begin insertSEC. 17.end insert  

end insert

begin insertSection 21070.6 of the end insertbegin insertGovernment Codeend insertbegin insert is amended
17to read:end insert

18

21070.6.  

(a) A member who is subject to Section 21076begin insert,
1921076.5,end insert
or 21077 may be credited at no cost with all previous
20state miscellaneous or state industrial service eligible to be credited
21under Second Tier benefits. A member who is entitled to service
22credit under this section shall apply for and identify time periods
23for that service to the board.

24(b) Operation and application of this section are subject to the
25limitations set forth in Section 21251.13.

begin insert

26(c) This section shall only apply to service credit associated
27with employment periods prior to July 1, 2013.

end insert
28begin insert

begin insertSEC. 18.end insert  

end insert

begin insertSection 21070.7 of the end insertbegin insertGovernment Codeend insertbegin insert is amended
29to read:end insert

30

21070.7.  

Notwithstanding any other provision of this part,
31Sections 21076begin insert, 2076.5,end insert and 21077 shall not apply to service with
32the California National Guard or service as a National Guard
33member regardless of any prior membership status or previous
34election made.

35begin insert

begin insertSEC. 19.end insert  

end insert

begin insertSection 21150 of the end insertbegin insertGovernment Codeend insertbegin insert is amended
36to read:end insert

37

21150.  

(a) A member incapacitated for the performance of
38duty shall be retired for disability pursuant to this chapter if he or
39she is credited with five years of state service, regardless of age,
P23   1unless the person has elected to become subject to Section 21076begin insert,
221076.5,end insert
or 21077.

3(b) A member subject to Section 21076begin insert, 21076.5,end insert or 21077 who
4becomes incapacitated for the performance of duty shall be retired
5for disability pursuant to this chapter if he or she is credited with
610 years of state service, regardless of age, except that a member
7may retire for disability if he or she had five years of state service
8prior to January 1, 1985.

9(c) For purposes of this section, “state service” includes service
10to the state for which the member, pursuant to Section 20281.5,
11did not receive credit.

12begin insert

begin insertSEC. 20.end insert  

end insert

begin insertSection 22760 of the end insertbegin insertGovernment Codeend insertbegin insert is amended
13to read:end insert

14

22760.  

“Annuitant” means:

15(a) A person, other than a National Guard member defined in
16Section 20380.5, who has retired within 120 days of separation
17from employment and who receives a retirement allowance under
18any state or University of California retirement system to which
19the state was a contributing party.

20(b) A surviving family member receiving an allowance in place
21of an annuitant who has retired as provided in subdivision (a), or
22as the survivor of a deceased employee under Section 21541,
2321546, 21547, or 21547.7, or similar provisions of any other state
24retirement system.

25(c) A person who has retired within 120 days of separation from
26employment with a contracting agency as defined in Section 22768
27and who receives a retirement allowance from the retirement
28system provided by the employer, or a surviving family member
29who receives the retirement allowance in place of the deceased.

30(d) A judge who receives the benefits provided by subdivision
31(e) of Section 75522.

32(e) A person who was a state member for 30 years or more and
33who, at the time of retirement, was a local member employed by
34a contracting agency.

35(f) A Member of the Legislature or an elective officer of the
36state whose office is provided by the California Constitution, who
37has at least eight years of credited service, and who meets the
38following conditions:

39(1) Permanently separates from state service on or after January
401, 1988, and not more than 10 years before or 10 years after his
P24   1or her minimum age for service retirement, or is an inactive
2member of the Legislators’ Retirement System pursuant to Section
39355.2.

4(2) Receives a retirement allowance under a state retirement
5system supported in whole or in part by state funds other than the
6University of California Retirement System.

7(g) An exempt employee who meets all of the following
8conditions:

9(1) Has at least 10 years of credited state service that includes
10at least two years of credited service while an exempt employee.

11(2) Permanently separates from state service on or after January
121, 1988, and not more than 10 years before or 10 years after his
13or her minimum age for service retirement.

14(3) Receives a retirement allowance under a state retirement
15system supported in whole or in part by state funds other than the
16University of California Retirement System.

17(h) A person receiving a survivor allowance pursuant to Article
183 (commencing with Section 21570) of Chapter 14 of Part 3
19provided that he or she was eligible to enroll in a health benefit
20plan on the date of the member’s death, on whose account the
21survivor allowance is payable.

22(i) (1) A family member of a deceased retired member of the
23State Teachers’ Retirement Plan, if the deceased member meets
24the following conditions:

25(A) Retired within 120 days of separation from employment.

26(B) Retired before the member’s school employer elected to
27contract for health benefit coverage under this part.

28(C) Prior to his or her death, received a retirement allowance
29that did not provide for a survivor allowance to family members.

30(2) The family member shall elect coverage as an annuitant
31within one calendar year from the date that the deceased member’s
32school employer elected to contract for health benefit coverage
33under this part.

begin insert

34(j) A person who reinstates benefits pursuant to subparagraph
35(ii) of paragraph (2) of subdivision (d) of Section 7522.57.

end insert
36

begin deleteSEC. 3.end delete
37begin insertSEC. 21.end insert  

Section 75005 of the Government Code is amended
38to read:

39

75005.  

Notwithstanding any other provision of law, this chapter
40shall be administered and governed by the Board of Administration
P25   1of the Public Employees’ Retirement System in accordance with
2the Public Employees’ Retirement Law to the same extent and
3with the same effect as if those provisions are contained in the
4Judges’ Retirement Law, except for those provisions which provide
5for the payment of an allowance or other benefit and except for
6those provisions which conflict with any provision of the Judges’
7Retirement Law. To the extent applicable, the Board of
8Administration of the Public Employees’ Retirement System shall
9also administer this chapter in conformance with the California
10Public Employees’ Pension Reform Act of 2013 (Article 4
11(commencing with Section 7522) of Chapter 21 of Division 7 of
12Title 1) to the same extent and with the same effect as if the
13provisions of the act are contained in the Judges’ Retirement Law.
14If the Board of Administration of the Public Employees’
15Retirement System determines that there is a conflict between the
16provisions of the California Public Employees’ Pension Reform
17Act of 2013 and this chapter, the provisions of the California Public
18Employees’ Pension Reform Act of 2013 shall control. “State
19Controller” or “Controller” as used in this chapter, or any other
20provision of law relating to the chapter, shall be construed to refer
21to and mean the “Board of Administration of the Public Employees’
22Retirement System”; however, the Controller shall continue to
23perform the duties prescribed in Sections 75092, 75097, 75101,
24and 75102.

25All payments from the Judges’ Retirement Fund shall be made
26upon warrants drawn by the Controller upon demands by the Board
27of Administration of the Public Employees’ Retirement System.

28

begin deleteSEC. 4.end delete
29begin insertSEC. 22.end insert  

Section 75505 of the Government Code is amended
30to read:

31

75505.  

(a) This chapter shall be administered and governed
32pursuant to the Public Employees’ Retirement Law to the same
33extent and with the same effect as if those provisions are contained
34in this chapter, except for those provisions that provide for the
35payment of an allowance or other benefit and except for those
36provisions that conflict with any provision of this chapter. To the
37extent applicable, the Board of Administration of the Public
38Employees’ Retirement System shall administer this chapter in
39conformance with the California Public Employees’ Pension
40Reform Act of 2013 (Article 4 (commencing with Section 7522)
P26   1of Chapter 21 of Division 7 of Title 1) to the same extent and with
2the same effect as if the provisions of the act are contained in the
3Judges’ Retirement System II Law. If the Board of Administration
4of the Public Employees’ Retirement System determines that there
5is a conflict between the provisions of the California Public
6Employees’ Pension Reform Act of 2013 and this chapter, the
7provisions of the California Public Employees’ Pension Reform
8Act of 2013 shall control.

9(b) All payments from the Judges’ Retirement System II Fund
10shall be made upon warrants drawn by the Controller upon
11demands by the Board of Administration of the Public Employees’
12Retirement System.



O

    97