Amended in Assembly June 17, 2013

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 19144,end insert 20636, 20636.1, 20677.4, 20683.2, 20691,begin insert 20692,end insert 20693, 20731, 20737, 20891,begin insert 20909,end insert 21010, 21011, 21033, 21052,begin insert 21060, end insert21070.5, 21070.6, 21070.7,begin insert 21092,end insert 21150,begin insert 21202,end insert 22760,begin insert 22772,end insert 75005, and 75505 of,begin delete andend delete to add Section 20004 to,begin insert and to repeal and add Article 8 (commencing with Section 21220) to Chapter 12 of Part 3 of Division 5 of Title 2 of,end insert 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 Law (PERL) 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. Existing law establishes the Publicbegin delete Employeeend deletebegin insert Employeesend insertbegin insertend insert Medical and Hospital Care Act (PEMHCA) for the purpose of providing postemployment health care benefits to specified retirees.

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. The bill would make various changes in PERL and in PEMHCA to conform with the requirements of PEPRA.begin insert The bill would repeal and add provisions addressing employment after retirement to provide for conformance with the requirements of PEPRA, subject to specified exceptions including provisions accounting for the suspension and payment of the retirement allowance of an elective officer. The bill prescribe requirements for the calculation of the retirement allowance of members with service in different retirement systems, at least one of which is subject to PEPRA, with different minimum retirement ages, when the member retires before 52 years of age, as specified.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 the Legislators’ Retirement Law, except for those provisions
9which provide for the payment of an allowance or other benefit
10and except for those provisions which conflict with any provision
11or provisions of the Legislators’ Retirement Law. To the extent
12applicable, the board shall also administer this system in
13conformance with the California Public Employees’ Pension
14Reform Act of 2013 (Article 4 (commencing with Section 7522)
P3    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
3Legislators’ Retirement Law. If the Board of Administration of
4the 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.

9begin insert

begin insertSEC. 2.end insert  

end insert

begin insertSection 19144 of the end insertbegin insertGovernment Codeend insertbegin insert is amended to
10read:end insert

11

19144.  

Subject tobegin delete Sections 21223 and 21224end deletebegin insert Article 8
12(commencing with Section 21220) of Chapter 12 of Part 3end insert
, a person
13who has retired from state civil service may be employed
14temporarily in a civil service position at any time following
15retirement, provided that the position is either:

16(a) In the class in which the person had permanent or
17probationary status or a career executive assignment appointment
18at the time of retirement.

19(b) In another class to which the person could have been
20permanently transferred, reinstated, or demoted at the time of
21retirement.

22

begin deleteSEC. 2.end delete
23begin insertSEC. 3.end insert  

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
28Reform Act of 2013 (Article 4 (commencing with Section 7522)
29of Chapter 21 of Division 7 of Title 1) to ensure the continued
30ability of the board to invest the retirement fund and administer
31the system in conformity with its duties and responsibilities and
32to ensure that members are provided with the retirement and related
33benefits to which they are entitled pursuant to law.

34(b) To achieve the purposes set forth in subdivision (a), the
35board shall have all powers reasonably necessary to invest the
36assets associated with, and to administer and implement the
37provisions of, the California Public Employees’ Pension Reform
38Act of 2013, to the extent and with the same effect as if the
39provisions of the act are contained in the Public Employees’
40Retirement Law. All laws governing the investment of the
P4    1retirement fund, and the organization, procedures, and
2administrative duties and responsibilities of the board shall be
3applicable to the board in its administration of the California Public
4Employees’ Pension Reform Act of 2013, to the extent these laws
5are not in conflict with, or are not inconsistent with, the act. If the
6board determines that there is a conflict between the provisions of
7the California Public Employees’ Pension Reform Act of 2013
8and the Public Employees’ Retirement Law, the provisions of the
9California Public Employees’ Pension Reform Act of 2013 shall
10control.

11(c) Nothing in this section shall be construed to amend,
12supersede, limit, or extend the application of the provisions of the
13California Public Employees’ Pension Reform Act of 2013.

14

begin deleteSEC. 3.end delete
15begin insertSEC. 4.end insert  

Section 20636 of the Government Code is amended
16to read:

17

20636.  

(a) “Compensation earnable” by a member means the
18payrate and special compensation of the member, as defined by
19subdivisions (b), (c), and (g), and as limited by Section 21752.5.

20(b) (1) “Payrate” means the normal monthly rate of pay or base
21pay of the member paid in cash to similarly situated members of
22the same group or class of employment for services rendered on
23a full-time basis during normal working hours, pursuant to publicly
24available pay schedules. “Payrate,” for a member who is not in a
25group or class, means the monthly rate of pay or base pay of the
26member, paid in cash and pursuant to publicly available pay
27schedules, for services rendered on a full-time basis during normal
28working hours, subject to the limitations of paragraph (2) of
29subdivision (e).

30(2) “Payrate” shall include an amount deducted from a member’s
31salary for any of the following:

32(A) Participation in a deferred compensation plan.

33(B) Payment for participation in a retirement plan that meets
34the requirements of Section 401(k) of Title 26 of the United States
35Code.

36(C) Payment into a money purchase pension plan and trust that
37meets the requirements of Section 401(a) of Title 26 of the United
38States Code.

39(D) Participation in a flexible benefits program.

P5    1(3) The computation for a leave without pay of a member shall
2be based on the compensation earnable by him or her at the
3beginning of the absence.

4(4) 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 member includes a payment
8received for special skills, knowledge, abilities, work assignment,
9workdays 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, if the
26employer’s labor policy or agreement specifically provides for the
27inclusion of the normal contribution payment in compensation
28earnable.

29(5) The monetary value of a service or noncash advantage
30furnished by the employer to the member, except as expressly and
31specifically provided in this part, is not special compensation unless
32regulations promulgated by the board specifically determine that
33value 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
P6    1201begin delete et seq.end deletebegin insert and followingend insert of Title 29 of the United States Code
2shall be included as special compensation and appropriately defined
3in those regulations.

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) Other payments the board has not affirmatively determined
9to 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. One employee may
17not be considered a group or class.

18(2) Increases in compensation earnable granted to an 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 pay or
28cash 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.

33(g) (1) Notwithstanding subdivision (a), “compensation
34earnable” for state members means the average monthly
35compensation, as determined by the board, upon the basis of the
36average time put in by members in the same group or class of
37employment and at the same rate of pay, and is composed of the
38payrate and special compensation of the member. The computation
39for an absence of a member shall be based on the compensation
40earnable by him or her at the beginning of the absence and for time
P7    1prior to entering state service shall be based on the compensation
2earnable by him or her in the position first held by him or her in
3that state service.

4(2) Notwithstanding subdivision (b), “payrate” for state members
5 means the average monthly remuneration paid in cash out of funds
6paid by the employer to similarly situated members of the same
7group or class of employment, in payment for the member’s
8services or for time during which the member is excused from
9work because of holidays, sick leave, vacation, compensating time
10off, or leave of absence. “Payrate” for state members shall include:

11(A) An amount deducted from a member’s salary for any of the
12following:

13(i) Participation in a deferred compensation plan established
14pursuant to Chapter 4 (commencing with Section 19993) of Part
152.6.

16(ii) Payment for participation in a retirement plan that meets
17the requirements of Section 401(k) of Title 26 of the United States
18Code.

19(iii) Payment into a money purchase pension plan and trust that
20meets the requirements of Section 401(a) of Title 26 of the United
21States Code.

22(iv) Participation in a flexible benefits program.

23(B) A payment in cash by the member’s employer to one other
24than an employee for the purpose of purchasing an annuity contract
25for a member under an annuity plan that meets the requirements
26of Section 403(b) of Title 26 of the United States Code.

27(C) Employer “pick up” of member contributions that meets
28the requirements of Section 414(h)(2) of Title 26 of the United
29States Code.

30(D) Disability or workers’ compensation payments to safety
31members in accordance with Section 4800 of the Labor Code.

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

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

36(3) Notwithstanding subdivision (c), “special compensation”
37for state members shall mean all of the following:

38(A) The monetary value, as determined by the board, of living
39quarters, board, lodging, fuel, laundry, and other advantages of
P8    1any nature furnished to a member by his or her employer in
2payment for the member’s services.

3(B) Compensation for performing normally required duties,
4such as holiday pay, bonuses (for duties performed on regular work
5shift), educational incentive pay, maintenance and noncash
6payments, out-of-class pay, marksmanship pay, hazard pay,
7motorcycle pay, paramedic pay, emergency medical technician
8pay, Peace Officer Standards and Training (POST) certificate pay,
9and split shift differential.

10(C) Compensation for uniforms, except as provided in Section
1120632.

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

14(4) “Payrate” and “special compensation” for state members do
15not include any of the following:

16(A) The provision by the state employer of a medical or hospital
17service or care plan or insurance plan for its employees (other than
18the purchase of annuity contracts as described below in this
19subdivision), a contribution by the employer to meet the premium
20or charge for that plan, or a payment into a private fund to provide
21health and welfare benefits for employees.

22(B) A payment by the state employer of the employee portion
23of taxes imposed by the Federal Insurance Contribution Act.

24(C) Amounts not available for payment of salaries and that are
25applied by the employer for the purchase of annuity contracts
26including those that meet the requirements of Section 403(b) of
27Title 26 of the United States Code.

28(D) Benefits paid pursuant to Article 5 (commencing with
29Section 19878) of Chapter 2.5 of Part 2.6.

30(E) Employer payments that are to be credited as employee
31contributions for benefits provided by this system, or employer
32payments that are to be credited to employee accounts in deferred
33compensation plans. The amounts deducted from a member’s
34wages for participation in a deferred compensation plan may not
35be considered to be “employer payments.”

36(F) Payments for unused vacation, annual leave, personal leave,
37sick leave, or compensating time off, whether paid in lump sum
38or otherwise.

39(G) Final settlement pay.

P9    1(H) Payments for overtime, including pay in lieu of vacation or
2holiday.

3(I) Compensation for additional services outside regular duties,
4such as standby pay, callback pay, court duty, allowance for
5automobiles, and bonuses for duties performed after the member’s
6regular work shift.

7(J) Amounts not available for payment of salaries and that are
8applied by the employer for any of the following:

9(i) The purchase of a retirement plan that meets the requirements
10of Section 401(k) of Title 26 of the United States Code.

11(ii) Payment into a money purchase pension plan and trust that
12meets the requirements of Section 401(a) of Title 26 of the United
13States Code.

14(K) Payments made by the employer to or on behalf of its
15employees who have elected to be covered by a flexible benefits
16program, where those payments reflect amounts that exceed the
17employee’s salary.

18(L) Other payments the board may determine are not “payrate”
19or “special compensation.”

20(5) If the provisions of this subdivision, including the board’s
21determinations pursuant to subparagraph (F) of paragraph (2) and
22subparagraph (D) of paragraph (3), are in conflict with the
23provisions of a memorandum of understanding reached pursuant
24to Section 3517.5 or 3560, the memorandum of understanding
25shall be controlling without further legislative action, except that
26if the provisions of a memorandum of understanding require the
27expenditure of funds, those provisions may not become effective
28unless approved by the Legislature in the annual Budget Act. No
29memorandum of understanding reached pursuant to Section 3517.5
30or 3560 may exclude from the definition of either “payrate” or
31“special compensation” a member’s base salary payments or
32payments for time during which the member is excused from work
33because of holidays, sick leave, vacation, compensating time off,
34or leave of absence. If items of compensation earnable are included
35by memorandum of understanding as “payrate” or “special
36compensation” for retirement purposes for represented and higher
37education employees pursuant to this paragraph, the Department
38of Human Resources or the Trustees of the California State
39University shall obtain approval from the board for that inclusion.

P10   1(6) (A) Subparagraph (B) of paragraph (3) prescribes that
2compensation earnable includes compensation for performing
3normally required duties, such as holiday pay, bonuses (for duties
4performed on regular work shift), educational incentive pay,
5maintenance and noncash payments, out-of-class pay,
6marksmanship pay, hazard pay, motorcycle pay, paramedic pay,
7emergency medical technician pay, POST certificate pay, and split
8shift differential; and includes compensation for uniforms, except
9as provided in Section 20632; and subparagraph (I) of paragraph
10(4) excludes from compensation earnable compensation for
11additional services outside regular duties, such as standby pay,
12callback pay, court duty, allowance for automobile, and bonuses
13for duties performed after regular work shift.

14(B) Notwithstanding subparagraph (A), the Department of
15Human Resources shall determine which payments and allowances
16that are paid by the state employer shall be considered
17compensation for retirement purposes for an employee who either
18is excluded from the definition of state employee in Section 3513,
19or is a nonelected officer or employee of the executive branch of
20government who is not a member of the civil service.

21(C) Notwithstanding subparagraph (A), the Trustees of the
22California State University shall determine which payments and
23allowances that are paid by the trustees shall be considered
24compensation for retirement purposes for a managerial employee,
25as defined in Section 3562, or supervisory employee as defined in
26Section 3580.3.

27(h) This section shall not apply to a new member, as defined in
28Section 7522.04.

29

begin deleteSEC. 4.end delete
30begin insertSEC. 5.end insert  

Section 20636.1 of the Government Code is amended
31to read:

32

20636.1.  

(a) Notwithstanding Section 20636, and Section
3345102 of the Education Code, “compensation earnable” by a school
34member means the payrate and special compensation of the
35member, as defined by subdivisions (b) and (c), and as limited by
36Section 21752.5.

37(b) (1) “Payrate” means the normal monthly rate of pay or base
38pay of the member paid in cash to similarly situated members of
39the same group or class of employment for services rendered on
40a full-time basis during normal working hours. For purposes of
P11   1this part, for classified members, full-time employment is 40 hours
2per week, and payments for services rendered, not to exceed 40
3hours per week, shall be reported as compensation earnable for all
4months of the year in which work is performed. “Payrate,” for a
5member who is not in a group or class, means the monthly rate of
6pay or base pay of the member, paid in cash and pursuant to
7publicly available pay schedules, for services rendered on a
8full-time basis during normal working hours, subject to the
9limitations of paragraph (2) of subdivision (e).

10(A) “Payrate” shall include an amount deducted from a
11member’s salary for any of the following:

12(i) Participation in a deferred compensation plan.

13(ii) Payment for participation in a retirement plan that meets
14the requirements of Section 401(k) or 403(b) of Title 26 of the
15United States Code.

16(iii) Payment into a money purchase pension plan and trust that
17meets the requirements of Section 401(a) of Title 26 of the United
18States Code.

19(iv) Participation in a flexible benefits program.

20(B) For the purposes of this section, “classified members” shall
21mean members who retain membership under this system while
22employed with a school employer in positions not subject to
23coverage under the Defined Benefit Program under the State
24Teachers’ Retirement System.

25(C) For the purposes of this section, and Sections 20962 and
2620966, “certificated members” shall mean members who retain
27membership under this system while employed in positions subject
28to coverage under the Defined Benefit Program under the State
29Teachers’ Retirement System.

30(2) The computation for any leave without pay of a member
31shall be based on the compensation earnable by him or her at the
32beginning of the absence.

33(3) The computation for time prior to entering state service shall
34be based on the compensation earnable by him or her in the position
35first held by him or her in state service.

36(c) (1) Special compensation of a school member includes any
37payment received for special skills, knowledge, abilities, work
38assignment, workdays or hours, or other work conditions.

39(2) Special compensation shall be limited to that which is
40received by a member pursuant to a labor policy or agreement or
P12   1as otherwise required by state or federal law, to similarly situated
2members of a group or class of employment that is in addition to
3payrate. If an individual is not part of a group or class, special
4compensation shall be limited to that which the board determines
5is received by similarly situated members in the closest related
6group or class that is in addition to payrate, subject to the
7limitations of paragraph (2) of subdivision (e).

8(3) Special compensation shall be for services rendered during
9normal working hours and, when reported to the board, the
10employer shall identify the pay period in which the special
11compensation was earned.

12(4) Special compensation may include the full monetary value
13of normal contributions paid to the board by the employer, on
14behalf of the member and pursuant to Section 20691, provided
15that the employer’s labor policy or agreement specifically provides
16for the inclusion of the normal contribution payment in
17compensation earnable.

18(5) The monetary value of any service or noncash advantage
19furnished by the employer to the member, except as expressly and
20specifically provided in this part, shall not be special compensation
21unless regulations promulgated by the board specifically determine
22that value to be “special compensation.”

23(6) The board shall promulgate regulations that delineate more
24specifically and exclusively what constitutes “special
25compensation” as used in this section. A uniform allowance, the
26monetary value of employer-provided uniforms, holiday pay, and
27premium pay for hours worked within the normally scheduled or
28regular working hours that are in excess of the statutory maximum
29workweek or work period applicable to the employee under Section
30201begin delete et seq.end deletebegin insert and followingend insert of Title 29 of the United States Code
31shall be included as special compensation and appropriately defined
32in those regulations.

33(7) Special compensation does not include any of the following:

34(A) Final settlement pay.

35(B) Payments made for additional services rendered outside of
36normal working hours, whether paid in lump sum or otherwise.

37(C) Any other payments the board has not affirmatively
38determined to be special compensation.

P13   1(d) Notwithstanding any other provision of law, payrate and
2special compensation schedules, ordinances, or similar documents
3shall be public records available for public scrutiny.

4(e) (1) As used in this part, “group or class of employment”
5means a number of employees considered together because they
6share similarities in job duties, work location, collective bargaining
7unit, or other logical work-related grouping. Under no
8circumstances shall one employee be considered a group or class.

9(2) Increases in compensation earnable granted to any employee
10who is not in a group or class shall be limited during the final
11compensation period applicable to the employees, as well as the
12two years immediately preceding the final compensation period,
13to the average increase in compensation earnable during the same
14period reported by the employer for all employees who are in the
15same membership classification, except as may otherwise be
16determined pursuant to regulations adopted by the board that
17establish reasonable standards for granting exceptions.

18(f) As used in this part, “final settlement pay” means any pay
19or cash conversions of employee benefits that are in excess of
20compensation earnable, that are granted or awarded to a member
21in connection with or in anticipation of a separation from
22employment. The board shall promulgate regulations that delineate
23more specifically what constitutes final settlement pay.

24(g) This section shall not apply to a new member, as defined in
25Section 7522.04.

26

begin deleteSEC. 5.end delete
27begin insertSEC. 6.end insert  

Section 20677.4 of the Government Code is amended
28to read:

29

20677.4.  

(a) (1) The normal rate of contribution for a state
30miscellaneous or state industrial member whose service is not
31included in the federal system shall be 6 percent of the
32compensation in excess of three hundred seventeen dollars ($317)
33per month paid to that member for service rendered on or after
34July 1, 1976.

35(2) The normal rate of contribution for a state miscellaneous or
36state industrial member, who has elected to be subject to Section
3721353.5 and whose service is not included in the federal system,
38shall be 6 percent of the member’s compensation.

39(3) The normal rate of contribution as established under this
40subdivision for a member whose service is included in the federal
P14   1 system, and whose service retirement allowance is reduced under
2Section 21354.1, because of that inclusion, shall be reduced by
3one-third as applied to compensation not exceeding four hundred
4dollars ($400) per month for service after the date of execution of
5the agreement including service in the federal system and prior to
6termination of the agreement with respect to the coverage group
7to which he or she belongs.

8(b) The normal rate of contribution for a state miscellaneous or
9state industrial member whose service has been included in the
10federal system shall be 5 percent of compensation in excess of five
11hundred thirteen dollars ($513) per month paid that member for
12service rendered on or after July 1, 1976.

13(c) The normal rate of contribution for a state miscellaneous or
14state industrial member who is subject to Section 21076, 21076.5,
15or 21077 shall be determined in the manner described in Section
1620683.2.

17(d) A member who elected to become subject to Section 21353
18solely for service rendered on or after the effective date of the
19election, as authorized by subdivision (c) of Section 21070 during
20the period between November 1, 1988, and October 31, 1989, is
21not required to make the contributions specified in Section 21073.

22(e) A member who elects to become subject to Section 21354.1,
23as applicable, shall contribute at the rate specified in paragraph
24(1) of subdivision (a) or paragraph (1) of subdivision (b), as
25determined by the member’s status with the federal system, and
26the rate shall be applied from the first of the month following the
27date of the election. A member who makes the election shall also
28contribute for service prior to the date the contribution rate was
29applied, in the manner specified in Section 21073 or 21073.1, as
30 applicable.

31(f) If the provisions of this section are in conflict with the
32provisions of a memorandum of understanding reached pursuant
33to Section 3517.5, the memorandum of understanding shall be
34controlling without further legislative action, except that if the
35provisions of a memorandum of understanding require the
36expenditure of funds, the provisions shall not become effective
37unless and until approved by the Legislature in the annual Budget
38Act.

39(g) The Director of Human Resources may establish the normal
40rate of contribution for a state employee who is excepted from the
P15   1definition of “state employee” in subdivision (c) of Section 3513,
2and an officer or employee of the executive branch of state
3government who is not a member of the civil service. The normal
4rate of contribution shall be the same for all members identified
5in this subdivision. The contribution rate shall be effective the
6beginning of the pay period indicated by the Director of Human
7Resources but shall be no earlier than the beginning of the pay
8period following the date the board receives notification.

9

begin deleteSEC. 6.end delete
10begin insertSEC. 7.end insert  

Section 20683.2 of the Government Code is amended
11to read:

12

20683.2.  

Equal sharing of normal costs between the state
13employer and public employees shall be the standard. It shall be
14the standard that employees pay at least 50 percent of normal costs
15and that employers not pay any of the required employee
16contribution. Equal sharing of normal costs is currently the standard
17for most state employees.

18(a) Notwithstanding any other section of this code, or other
19provision of law in conflict with this section, except as provided
20in Section 7522.30, normal contribution rates for defined benefit
21plans for state employees of public employers as defined in
22paragraph (1) of subdivision (i) of Section 7522.04, excluding the
23California State University, shall be determined as follows:

24(1) Normal cost contribution rates shall increase as follows:

25(A) The contribution rate forbegin delete State Peace Officer/Firefighterend delete
26begin insert state peace officer/firefighter end insert members in State Bargaining Unit
276 and forbegin delete State Safetyend deletebegin insert state safetyend insert members in State Bargaining
28Units 1, 3, 4, 7, 9, 10, 11, 14, 15, 17, 20, and 21 will increase by
291.0 percentage point on July 1, 2013, and will increase by an
30additional 1.0 percentage point on July 1, 2014.

31(B) The contribution rate forbegin delete State Peace Officer/Firefighterend delete
32begin insert state peace officer/firefighter end insert members in State Bargaining Units
337 and 8 will increase by 1.5 percentage points on July 1, 2013, and
34will increase by an additional 1.5 percentage points on July 1,
352014.

36(C) The contribution rate for state industrial members in State
37Bargaining Units 1, 3, 4, 6, 9, 10, 11, 14, 15, 17, and 20 will
38increase by 1.0 percentage point on July 1, 2013.

39(D) The contribution rate for state miscellaneous and industrial
40members that have elected the Second Tier benefit formula will
P16   1increase by 1.5 percentage points annually starting July 1, 2013,
2until the contribution rate is equal to at least 50 percent of normal
3costs rounded up to the nearest one-fourth of 1 percent. The final
4annual increase in the contribution rate shall be adjusted to less
5than 1.5 percent as appropriate.

6(E) The contribution rate forbegin delete State Safetyend deletebegin insert state safetyend insert members
7in State Bargaining Unit 2 and state miscellaneous members in
8State Bargaining Unit 5 will increase by 1.0 percentage point on
9July 1, 2013.

10(F) The contribution rate forbegin delete Patrolend deletebegin insert patrolend insert members in State
11Bargaining Unit 5 will increase by 1.5 percentage points on July
121, 2013.

13(2) Consistent with paragraph (1), the normal rate of contribution
14shall be adjusted accordingly for related state employees who are
15exempted from the definition of “state employee,” or officers and
16employees of the executive, legislative, or judicial branch of state
17government who are not members of the civil service.

18(b) Calculation of employee contribution rate increases pursuant
19to this section shall be based upon compensation calculations
20established pursuant to Sections 20671 to 20694, inclusive.

21(c) In addition to the actuarially required contribution, savings
22realized by the state employer as a result of the employee
23contribution rate increases required by this section shall be
24allocated to any unfunded liability, subject to appropriation in the
25annual Budget Act.

26

begin deleteSEC. 7.end delete
27begin insertSEC. 8.end insert  

Section 20691 of the Government Code is amended
28to read:

29

20691.  

(a) (1) Except as provided in subdivision (b),
30notwithstanding any other law, a contracting agency or school
31employer may pay all or a portion of the normal contributions
32required to be paid by a member. Where the member is included
33in a group or class of employment, the payment shall be for all
34members in the group or class of employment. If an individual is
35not part of a group or class, the payment shall be limited to the
36amount that the board determines is payable to similarly situated
37members in the closest related group or class, subject to the
38limitations of paragraph (2) of subdivision (e) of Section 20636.
39The payments shall be reported simply as normal contributions
40and shall be credited to member accounts.

P17   1(2) Nothing in this subdivision shall be construed to limit the
2authority of a contracting agency or school employer to periodically
3increase, reduce, or eliminate the payment by the contracting
4agency or school employer of all or a portion of the normal
5contributions required to be paid by members, as authorized by
6this section.

7(b) Notwithstanding subdivision (a), employers shall not pay a
8portion of the normal contributions for members who are subject
9to subdivision (c) of Section 7522.30, except where authorized
10pursuant to subdivision (f) of Section 7522.30.

11begin insert

begin insertSEC. 9.end insert  

end insert

begin insertSection 20692 of the end insertbegin insertGovernment Codeend insertbegin insert is amended to
12read:end insert

13

20692.  

(a) Where a contracting agency employer or a school
14employer has elected to pay all or a portion of the normal
15contributions of members of a group or class of employment
16pursuant to Section 20691, the employer may, pursuant to a labor
17policy or agreement, stop paying those contributions during the
18final compensation period applicable to the members and, instead,
19increase the payrate of the members by an amount equal to the
20normal contributions paid by the employer on behalf of the
21employees in the pay period immediately prior to the final
22compensation period or increase the payrate of the members by
23an amount established by a labor policy or agreement in existence
24and in effect on June 30, 1993. That amount shall not exceed the
25amount of the normal member contributions that are required to
26 be paid by the members.

27(b) This section shall not apply to any contracting agency or to
28any school employer unless and until the contracting agency or
29the school employer elects to be subject to this section by
30amendment to its contract made in the manner prescribed for
31approval of contracts, except an election among the employees is
32not required. In the case of contracts made after July 1, 1994, the
33section shall not apply unless incorporated by express provision
34in the contract. However, no school employer may act pursuant to
35this section unless and until the board approves a request for the
36amendment of the contract of a school employer to authorize
37termination of the payment. A school employer shall not submit
38a request for a contract amendment unless there is on file a request
39to terminate that payment from the county superintendent of
40schools office and each school district, community college district,
P18   1and other school entity within the jurisdiction of that school
2employer.

3(c) Before adopting this provision, the governing body of a
4contracting agency or school employer shall, with timely public
5notice, place the consideration of this section on the agendas of
6two consecutive public meetings of the governing body, at which
7time, full disclosure shall be made of the nature of the benefit, the
8additional employer contributions, and the funding therefor. Only
9after the second of these public meetings may the governing body
10adopt this section. The employer shall notify the board of the
11employer’s compliance with this subdivision at the time of the
12governing body’s application to adopt this section.

13(d) Persons hired after the effective date of an employer’s
14contract amendment to include this section shall be informed by
15the employer of how this benefit relates to their total compensation
16and benefit package.

17(e) The additional employer contributions required under this
18section shall be computed as a level percentage of member
19compensation. The additional contribution rate required at the time
20this section is added to a contract shall not be less than the sum of
21(1) the actuarial normal cost, plus (2) in the case of a contract
22amendment, the additional contribution required to amortize the
23increase in accrued liability attributable to the benefit elected under
24this section over the unfunded actuarial liability period currently
25in the agency’s contract, commencing from the date this section
26becomes effective in the agency’s contract.

27(f) For the purposes of this section, all contributions, liabilities,
28actuarial interest rates, and other valuation factors necessary to
29calculate the employer’s contribution shall be determined on the
30basis of actuarial assumptions and methods which, in combination,
31provide the board’s best estimate of anticipated experience under
32the system. The board has the exclusive power and duty to make
33these determinations.

34(g) Within 30 days of notification from the board to the
35contracting agency or school employer of the additional employer
36contributions required pursuant to this section, the contracting
37agency or school employer, or a recognized employee organization,
38or both, may file with the board a request for a review of the
39determination of the calculation of the additional employer
40contributions. The board shall promulgate regulations governing
P19   1the conduct of the review, that shall include the means by which
2an employer or recognized employee organization may submit
3independent actuarial evidence regarding the additional
4contribution required by this section. The board shall make the
5final determination on the additional employer contributions needed
6to fund this contract amendment.

begin insert

7(h) This section shall not apply to a new member as defined in
8Section 7522.04.

end insert
9

begin deleteSEC. 8.end delete
10begin insertSEC. 10.end insert  

Section 20693 of the Government Code is amended
11to read:

12

20693.  

(a) Except as provided in subdivision (b),
13notwithstanding any other law, the state or the Regents of the
14University of California may pay all or a portion of the normal
15contributions required to be paid by a state member. The payments
16shall be reported as employer-paid normal contributions and shall
17be credited to member accounts. Nothing in this subdivision shall
18be construed to limit the authority of the state to periodically
19increase, reduce, or eliminate the payment by the state of all or a
20portion of the normal contributions required to be paid by a state
21member, as authorized by this section.

22This section shall be subject to any applicable
23collective-bargaining laws.

24(b) Notwithstanding subdivision (a), employers shall not pay a
25portion of the normal contributions for members who are subject
26to subdivision (c) of Section 7522.30, except where authorized
27pursuant to subdivision (f) of Section 7522.30.

28

begin deleteSEC. 9.end delete
29begin insertSEC. 11.end insert  

Section 20731 of the Government Code is amended
30to read:

31

20731.  

(a) Notwithstanding any other provision of this part,
32a member who is credited with less than the years of service
33specified in Article 1 (commencing with Section 21060) of Chapter
3412 who enters employment as a member of a public retirement
35system supported, in whole or in part, by state funds, including
36the University of California Retirement System, or as a member
37of a county retirement system, within six months of leaving state
38service, shall have the right to elect to leave accumulated
39contributions on deposit in the retirement fund. Failure to make
40an election to withdraw accumulated contributions shall be deemed
P20   1an election to leave accumulated contributions on deposit in the
2retirement fund. This section shall also apply to a member who is
3subject to Section 21076 or 21076.5.

4(b) (1) An election to allow accumulated contributions to remain
5in the retirement fund may be revoked by the member at any time,
6except any of the following:

7(A) While the member is employed in state service in a position
8in which the member is not excluded from membership with respect
9to that service.

10(B) While the member is in service as a member of a public
11retirement system supported, in whole or in part, by state funds,
12including the University of California Retirement System.

13(C) While the member is in service, entered within six months
14after discontinuing state service, as a member of a county
15retirement system.

16(2) All accumulated contributions in a member’s account up to
17the time of revocation shall be distributed in accordance with an
18election pursuant to Section 20735.

19(3) A member who is permanently separated from all service
20covered by the system, who is not subject to paragraph (1), and
21who attains 70 years of age shall be provided with an election to
22withdraw contributions or, if vested, an election to either apply
23for service retirement or to withdraw contributions. Failure to apply
24for service retirement or to make an election to withdraw
25contributions within 90 days shall be deemed an election to
26withdraw contributions. If the person fails to either apply for
27service retirement or elect to withdraw contributions, or cannot,
28with reasonable diligence, be located, the accumulated
29contributions shall be distributed in accordance with Section 21500.

30(c) A member whose membership continues under this section
31is subject to the same age and disability requirements as apply to
32other members for service or for disability retirement. After the
33qualification of the member for retirement by reason of age, which
34shall be the lowest age applicable to any membership category in
35which the member has credited service, or disability, the member
36shall be entitled to receive a retirement allowance based upon the
37amount of the member’s accumulated contributions and service
38standing to the member’s credit at the time of retirement and on
39the employer contributions held for the member and calculated in
40the same manner as for other members, except that the provisions
P21   1in this part for minimum service and disability retirement
2allowances shall not apply to the member, unless the member
3meets the minimum service requirements. If a basic death benefit
4becomes payable under Article 1 (commencing with Section
521490), Article 2 (commencing with Section 21530), and Article
65 (commencing with Section 21620) of Chapter 14 because of
7death before retirement of a member, the average annual
8compensation earnable in the year preceding the date of termination
9of that service, rather than in the year preceding death, shall be
10used in computing the benefit under Articles 1, 2, and 5 of Chapter
1114.

12The provisions of this section, as it read prior to June 21, 1971,
13shall continue with respect to a member whose membership
14continued under this section on that date.

15

begin deleteSEC. 10.end delete
16begin insertSEC. 12.end insert  

Section 20737 of the Government Code is amended
17to read:

18

20737.  

The account of a member who elects to be subject to
19Section 21076 or 21076.5 shall be paid current year interest through
20the effective date of that election for service rendered as a state
21miscellaneous or state industrial member. Interest subsequent to
22the effective date of that election shall accrue at a rate determined
23by the board. The member shall not receive his or her accumulated
24contributions plus interest until the time of retirement or upon
25request after permanent separation from state service. Interest shall
26be paid through the day prior to retirement or through the date on
27which the claim is filed with the Controller. This section does not
28apply to a member who elects to be subject to Section 21077.

29

begin deleteSEC. 11.end delete
30begin insertSEC. 13.end insert  

Section 20891 of the Government Code is amended
31to read:

32

20891.  

Section 20066 and subdivisions (a) and (b) of Section
3320068 shall not apply to a state miscellaneous or state industrial
34member subject to Section 21076, 21076.5, or 21077 who becomes
35a patrol member, a state safety member, or a state peace
36officer/firefighter member as a result of an amendment to this part
37defining those members, or is reclassified as a state peace
38officer/firefighter member pursuant to Sections 20395 or 20398,
39unless the member elects to: (a) deposit in the retirement fund an
40amount equal to any accumulated contributions that he or she
P22   1withdrew pursuant to Section 20737, plus an amount equal to the
2interest which would have been credited to his or her account, to
3the date of completion of payments, had those contributions not
4been withdrawn;begin delete and,end deletebegin insert andend insert (b) deposit in the retirement fund the
5amount that he or she would have contributed had he or she not
6been subject to subdivision (c) of Section 20677, plus an amount
7equal to the interest, to the date of completion of payments, which
8would have been credited to those contributions had he or she been
9subject to subdivision (a) or (b) of Section 20677.

10begin insert

begin insertSEC. 14.end insert  

end insert

begin insertSection 20909 of the end insertbegin insertGovernment Codeend insertbegin insert is amended
11to read:end insert

12

20909.  

(a) A member who has at least five years of credited
13state service, may elect, by written notice filed with the board, to
14make contributions pursuant to this section and receive not less
15than one year, nor more than five years, in one-year increments,
16of additional retirement service credit in the retirement system.

17(b) A member may elect to receive this additional retirement
18service credit at any time prior to retirement by making the
19contributions as specified in Sections 21050 and 21052. A member
20may not elect additional retirement service credit under this section
21more than once.

22(c) For purposes of this section, “additional retirement service
23credit” means time that does not qualify as public service, military
24service, leave of absence, or any other time recognized for service
25credit by the retirement system.

26(d) Additional retirement service credit elected pursuant to this
27section may not be counted to meet the minimum qualifications
28for service or disability retirement or for health care benefits, or
29any other benefits based upon years of service credited to the
30member.

31(e) This section only applies to the following members:

32(1) A member while he or she is employed in state service at
33the time of the additional retirement service credit election.

34(2) A member of the system defined in Section 20324.

35(f) For purposes of this section, “state service” means service
36as defined in Section 20069.

begin insert

37(g) This section shall apply only to an application to purchase
38additional retirement credit that was received by the system prior
39to January 1, 2013, that is subsequently approved by the system.

end insert
P23   1

begin deleteSEC. 12.end delete
2begin insertSEC. 15.end insert  

Section 21010 of the Government Code is amended
3to read:

4

21010.  

Unless otherwise provided in this article, a member
5electing to receive service credit for time during which he or she
6was absent from state service shall contribute in a lump sum or by
7installments over that period and subject to such minimum
8payments as may be prescribed by regulations of the board, an
9amount equal to (a) the contributions he or she would have made
10to this system for the period for which current service credit is
11granted, assuming that the rate of contribution under his or her
12employer’s formula at the rate age applicable to him or her at the
13beginning of his or her first subsequent period of service in
14membership and his or her compensation earnable on that date had
15applied to him or her during the period for which credit is granted,
16plus (b) those added contributions as may be specially required
17under this article as a condition for crediting a particular absence,
18plus (c) the interest that would have accrued to those contributions
19if they had been on deposit at the beginning date of his or her first
20subsequent period of service in membership, from that date until
21the date of completion of payments. The beginning date of the first
22subsequent period of service for purposes of computation of
23contributions and interest shall be deemed to be the end of the
24period of service credited for a member who has no subsequent
25return to service. For a member who is subject to Section 21076
26or 21076.5, and Section 21077, the service and contribution rate
27to be used for purposes of computation shall be deemed to be the
28service and contribution rate that would have been used had the
29member not been subject to Section 21076 or 21076.5, and Section
3021077.

31Service shall be credited as current or prior service, or both, as
32it would be credited if the member had been in state service during
33his or her absence. All contributions of a member under this article
34shall be considered to be and shall be administered as normal
35contributions.

36

begin deleteSEC. 13.end delete
37begin insertSEC. 16.end insert  

Section 21011 of the Government Code is amended
38to read:

39

21011.  

Notwithstanding Section 21010, for a member electing
40to receive service credit for time during which he or she was absent
P24   1from state service who is subject to Section 21076 or 21076.5, and
2Section 21077, the contribution rate to be used for the purposes
3of computation shall be deemed to be the contribution rate that
4would have been used had the member not been subject to Section
521076 or 21076.5, and Section 21077.

6

begin deleteSEC. 14.end delete
7begin insertSEC. 17.end insert  

Section 21033 of the Government Code is amended
8to read:

9

21033.  

A member electing to receive credit for public service
10shall contribute in a lump sum or by installment payments over
11that period and subject to minimum payments as may be prescribed
12by regulations of the board an amount equal to (a) the contributions
13he or she would have made to this system for the period for which
14current service credit is granted, assuming that the rate of
15contribution under his or her employer’s formula at the rate age
16applicable to him or her at the beginning of his or her first
17subsequent period of service in membership and his or her
18compensation earnable on that date had applied to him or her
19during the period for which credit is granted, plus (b) the added
20contribution that may be specially required under this article as a
21condition for crediting particular public service, plus (c) the interest
22which would have accrued to those contributions if they had been
23deposited at the beginning date of his or her first subsequent period
24of service in membership, from that date until the date of
25completion of payments, and (d) if he or she elects to contribute
26in other than one sum, interest on the unpaid balance of the amount
27payable to the retirement fund, beginning on the date of the election
28to receive credit. The beginning date of the first subsequent period
29of service for purposes of computation of contribution and interest
30shall be deemed to be the end of the period of service credited for
31a member who has no subsequent return to service. For a member
32who is subject to Section 21076 or 21076.5, and Section 21077,
33the service and contribution rate to be used for purposes of
34computation shall be deemed to be the service and contribution
35rate that would have been used had the member not been subject
36to Section 21076 or 21076.5, and Section 21077.

37

begin deleteSEC. 15.end delete
38begin insertSEC. 18.end insert  

Section 21052 of the Government Code is amended
39to read:

P25   1

21052.  

A member or retired former employee who elects to
2receive service credit subject to this section shall contribute, in
3accordance with Section 21050, an amount equal to the increase
4in employer liability, using the payrate and other factors affecting
5liability on the date of the request for costing of the service credit.
6The methodology for calculating the amount of the contribution
7shall be determined by the chief actuary and approved by the board.
8A member or retired former employee electing to receive service
9credit for service subject to Section 21076, 21076.5, or 21077 shall
10pay the contributions as described.

11begin insert

begin insertSEC. 19.end insert  

end insert

begin insertSection 21060 of the end insertbegin insertGovernment Codeend insertbegin insert is amended
12to read:end insert

13

21060.  

(a) A member shall be retired for service upon his or
14her written application to the board if he or she has attained age
1550 and is credited with five years of state service, except as
16provided in Sectionsbegin insert 7522.20,end insert 21061, 21062, and 21074.

17(b) For purposes of this section, “state service” includes service
18to the state for which the member, pursuant to Section 20281.5,
19did not receive credit.

begin insert

20(c) For a member who has accrued service credit subject to the
21benefit formula in Section 7522.20 and who has also accrued
22service credit, within this retirement system, subject to a benefit
23formula with a minimum retirement age earlier than 52 years of
24age, the member shall receive an actuarially reduced equivalent
25benefit, upon retirement, for service subject to Section 7522.20, if
26the member retires before 52 years of age but at, or after, the
27minimum age of retirement permitted for other service within this
28retirement system and the member is credited with at least five
29years of service.

end insert
30

begin deleteSEC. 16.end delete
31begin insertSEC. 20.end insert  

Section 21070.5 of the Government Code is amended
32to read:

33

21070.5.  

(a) Notwithstanding any other provision of this
34article, a person who, on or after January 1, 2000, becomes a state
35miscellaneous or state industrial member of the system because
36the person (1) is first employed by the state, (2) returns to
37employment with the state from a break in service of more than
3890 days, or (3) returns to employment with the state after ceasing
39to be a member pursuant to Section 20340 or 21075, shall be
40subject to the benefits provided by Section 21354.1, unless the
P26   1person elects within 180 days of membership as a state
2miscellaneous or state industrial member to be subject to the
3Second Tier benefits provided for in Section 21076 or 21076.5,
4as applicable. This section shall only apply to state miscellaneous
5and state industrial members who are (1) excluded from the
6definition of state employee in subdivision (c) of Section 3513,
7(2) employed by the executive branch of government and are not
8members of the civil service, or (3) included in the definition of
9state employee in subdivision (c) of Section 3513.

10(b) The effective date of the election shall be the first day of the
11month following the date the election is received by the system
12and shall be applicable to state service rendered on and after that
13date. Any election filed with the board pursuant to this section
14shall also be signed by the spouse of the member.

15(c) A member who makes an election authorized by this section
16shall not be precluded from making a subsequent election pursuant
17to Section 21073.7 to be subject to the benefits provided by Section
1821354.1.

19(d) Operation and application of this section are subject to the
20limitations set forth in Section 21251.13.

21(e) For a member subject to Section 20281.5, the 180-day
22election period shall not commence until the first day of the first
23pay period commencing 24 months after becoming a member of
24the system.

25

begin deleteSEC. 17.end delete
26begin insertSEC. 21.end insert  

Section 21070.6 of the Government Code is amended
27to read:

28

21070.6.  

(a) A member who is subject to Section 21076,
2921076.5, or 21077 may be credited at no cost with all previous
30state miscellaneous or state industrial service eligible to be credited
31under Second Tier benefits. A member who is entitled to service
32credit under this section shall apply for and identify time periods
33for that service to the board.

34(b) Operation and application of this section are subject to the
35limitations set forth in Section 21251.13.

36(c) This section shall only apply to service credit associated
37with employment periods prior to July 1, 2013.

38

begin deleteSEC. 18.end delete
39begin insertSEC. 22.end insert  

Section 21070.7 of the Government Code is amended
40to read:

P27   1

21070.7.  

Notwithstanding any other provision of this part,
2Sections 21076,begin delete 2076.5,end deletebegin insert 21076.5,end insert and 21077 shall not apply to
3service with the California National Guard or service as a National
4Guard member regardless of any prior membership status or
5previous election made.

6begin insert

begin insertSEC. 23.end insert  

end insert

begin insertSection 21092 of the end insertbegin insertGovernment Codeend insertbegin insert is amended
7to read:end insert

8

21092.  

begin insert(a)end insertbegin insertend insert The normal rate of contribution for a local
9miscellaneous member subject to this article shall be 2 percent of
10compensation paid the member. A contracting agency may pay all
11or a portion of the member’s normal contributions, pursuant to
12Section 20691.

begin insert

13(b) Notwithstanding subdivision (a), a new member, as defined
14in Section 7522.04, shall have a contribution rate of at least 50
15percent of the normal cost, pursuant to Section 7522.30.

end insert
16

begin deleteSEC. 19.end delete
17begin insertSEC. 24.end insert  

Section 21150 of the Government Code is amended
18to read:

19

21150.  

(a) A member incapacitated for the performance of
20duty shall be retired for disability pursuant to this chapter if he or
21she is credited with five years of state service, regardless of age,
22unless the person has elected to become subject to Section 21076,
2321076.5, or 21077.

24(b) A member subject to Section 21076, 21076.5, or 21077 who
25becomes incapacitated for the performance of duty shall be retired
26for disability pursuant to this chapter if he or she is credited with
2710 years of state service, regardless of age, except that a member
28may retire for disability if he or she had five years of state service
29prior to January 1, 1985.

30(c) For purposes of this section, “state service” includes service
31to the state for which the member, pursuant to Section 20281.5,
32did not receive credit.

33begin insert

begin insertSEC. 25.end insert  

end insert

begin insertSection 21202 of the end insertbegin insertGovernment Codeend insertbegin insert is amended
34to read:end insert

35

21202.  

A person employed in violation of Sectionbegin delete 21220end deletebegin insert 21221end insert
36 shall be reinstated to membership in the category in which, and
37on the date on which, the unlawful employment occurred.

38begin insert

begin insertSEC. 26.end insert  

end insert

begin insertArticle 8 (commencing with Section 21220) of Chapter
3912 of Part 3 of Division 5 of Title 2 of the end insert
begin insertGovernment Codeend insertbegin insert is
40repealed.end insert

P28   1begin insert

begin insertSEC. 27.end insert  

end insert

begin insertArticle 8 (commencing with Section 21220) is added
2to Chapter 12 of Part 3 of Division 5 of Title 2 of the end insert
begin insertGovernment
3Code
end insert
begin insert, to read:end insert

begin insert

4 

5Article begin insert8.end insert  Employment After Retirement
6

 

7

begin insert21220.end insert  

This article shall be deemed to comply with Article 4
8of Chapter 21 of Division 7 of Title 1, known as the California
9Public Employees’ Pension Reform Act of 2013, and shall be
10considered to further its purposes, including, but not limited to,
11the purposes of Sections 7522.56 and 7522.57.

12

begin insert21221.end insert  

(a) This section shall apply to any person who is
13receiving a pension benefit from this system.

14(b) A retired person shall not serve, be employed by, or be
15employed through a contract directly by, a public employer in this
16system if the retiree receives the benefit without reinstatement from
17retirement, except as permitted by this article.

18(c) A person who retires from a public employer in this system
19may serve without reinstatement from retirement or loss or
20interruption of benefits provided by this system upon appointment
21by the appointing power or the governing body of a public
22employer either during an emergency to prevent stoppage of public
23business or because the retired person has skills needed to perform
24work of limited duration.

25(d) (1) Appointments of the person authorized under this section
26shall not exceed a total for all employers in this system of 960
27hours in a fiscal year. The monthly rate of pay for the employment
28shall not be less than the minimum, nor exceed the maximum, paid
29by the employer to other employees performing comparable duties,
30divided by 173.333 to equal an hourly rate. A retired person
31appointed pursuant to this section shall not receive any benefit,
32incentive, compensation in lieu of benefits, or other form of
33compensation in addition to the hourly pay rate. A retired person
34whose employment without reinstatement is authorized by this
35section shall acquire no service credit or retirement rights under
36this section with respect to the employment unless he or she
37reinstates from retirement.

38(2) Appointments of the person authorized under this section
39as a member of the academic staff of the California State University
40shall not exceed a total for all employers in this system of 960
P29   1hours in a fiscal year or 50 percent of the hours the member
2worked during the last fiscal year of service prior to retirement,
3whichever is less. The monthly rate of pay for the employment
4shall not be less than the minimum, nor exceed the maximum, paid
5by the employer to other employees performing comparable duties,
6divided by 173.333 to equal an hourly rate. A retired person
7appointed pursuant to this section shall not receive any benefit,
8incentive, compensation in lieu of benefits, or other form of
9compensation in addition to the hourly pay rate. A retired person
10whose employment without reinstatement is authorized by this
11section shall acquire no service credit or retirement rights under
12this section with respect to the employment unless he or she
13reinstates from retirement.

14(e) (1) Notwithstanding subdivision (c), any retired person shall
15not be eligible to serve or be employed by a public employer in
16this system if, during the 12-month period prior to an appointment
17described in this section, the retired person received any
18unemployment insurance compensation arising out of prior
19employment subject to this article with a public employer. A retiree
20shall certify in writing to the employer upon accepting an offer of
21employment that he or she is in compliance with this requirement.

22(2) A retired person who accepts an appointment after receiving
23unemployment insurance compensation as described in this
24subdivision shall terminate that employment on the last day of the
25current pay period and shall not be eligible for reappointment
26subject to this section for a period of 12 months following the last
27day of employment.

28

begin insert21222.end insert  

(a) A retired person shall not be eligible to be employed
29pursuant to this article for a period of 180 days following the date
30of retirement unless he or she meets one of the following
31conditions:

32(1) The public employer certifies the nature of the employment
33and that the appointment is necessary to fill a critically needed
34position before 180 days has passed and the appointment has been
35approved by the governing body of the employer in a public
36meeting. The appointment may not be placed on a consent
37calendar.

38(2) The state employer certifies the nature of the employment
39and that the appointment is necessary to fill a critically needed
40state employment position before 180 days has passed and the
P30   1appointment has been approved by the Department of Human
2Resources. The department may establish a process to delegate
3appointing authority to individual state agencies, but shall audit
4the process to determine if abuses of the system occur. If necessary,
5the department may assume an agency’s appointing authority for
6retired workers and may charge the department an appropriate
7amount for administering that authority.

8(3) The retiree is eligible to participate in the Faculty Early
9Retirement Program pursuant to a collective bargaining agreement
10with the California State University that existed prior to January
111, 2013, or has been included in subsequent agreements.

12(4) The retiree is a public safety officer or firefighter hired to
13perform a function or functions regularly performed by a public
14safety officer or firefighter.

15(b) A retired person who accepted a retirement incentive upon
16retirement shall not be eligible to be employed pursuant to this
17section for a period of 180 days following the date of retirement
18and subdivision (a) shall not apply.

19

begin insert21223.end insert  

A retired person who has not attained the normal
20retirement age shall have a bona fide separation in service to the
21extent required by the Internal Revenue Code, and the regulations
22promulgated thereunder, before working after retirement pursuant
23to this article. The board shall establish, by regulation, the criteria
24under which a bona fide separation is satisfied.

25

begin insert21224.end insert  

(a) A person employed in violation of this article shall
26be reinstated to membership in the category in which, and on the
27date on which, the unlawful employment occurred.

28(b) Upon reinstatement, the retired member employed in
29violation of this article shall:

30(1) Reimburse this system for any retirement allowance received
31during the period or periods of employment that are in violation
32of law.

33(2) Pay to this system an amount of money equal to the employee
34contributions that would otherwise have been paid during the
35period or periods of unlawful employment, plus interest thereon.

36(3) Contribute toward reimbursement of this system for
37administrative expenses incurred in responding to this situation,
38to the extent the member is determined by the executive officer to
39be at fault.

P31   1(c) Any public employer in this system that employs a retired
2member in violation of this article shall, upon reinstatement of the
3retired member:

4(1) Pay to this system an amount of money equal to employer
5contributions that would otherwise have been paid for the period
6or periods of time that the member is employed in violation of this
7article, plus interest thereon.

8(2) Contribute toward reimbursement of this system for
9administrative expenses incurred in responding to this situation,
10to the extent the employer is determined by the executive officer
11of this system to be at fault.

12(d) This section shall not apply to violations under subdivision
13(e) of Section 21221.

14

begin insert21225.end insert  

(a) This section shall apply to any retired person who
15is receiving a pension benefit from a public retirement system and
16is first appointed on or after January 1, 2013, to a salaried position
17on a state board or commission.

18(b) A person who is retired from a public retirement system may
19serve without reinstatement from retirement or loss or interruption
20of benefits provided that appointment is to a part-time state board
21or commission. A retired person whose employment without
22reinstatement is authorized by this subdivision shall acquire no
23benefits, service credit, or retirement rights with respect to the
24employment. Unless otherwise defined in statute, for the purpose
25of this section, a part-time appointment shall mean an appointment
26with a salary of no more than sixty thousand dollars ($60,000)
27annually, which shall be increased in any fiscal year in which a
28general salary increase is provided for state employees. The
29amount of the increase provided by this section shall be
30comparable to, but shall not exceed, the percentage of the general
31salary increases provided for state employees during that fiscal
32year.

33(c) A person who is retired from the Public Employees’
34Retirement System shall not serve on a full-time basis on a state
35board or commission without reinstatement unless that person
36serves as a nonsalaried member of the board or commission and
37receives only per diem authorized to all members of the board or
38commission. A person who serves as a nonsalaried member of a
39board or commission shall not earn any service credit or benefits
P32   1in the Public Employees’ Retirement System or make contributions
2with respect to the service performed.

3(d) A person retired from a public retirement system other than
4the Public Employees’ Retirement System who is appointed on a
5full-time basis to a state board or commission shall choose one of
6the following options:

7(1) The person may serve as a nonsalaried member of the board
8or commission and continue to receive his or her retirement
9allowance, in addition to any per diem authorized to all members
10of the board or commission. The person shall not earn service
11credit or benefits in the Public Employees’ Retirement System and
12shall not make contributions with respect to the service performed.

13(2) (A) The person may suspend his or her retirement allowance
14or allowances and instate as a new member of the Public
15Employees’ Retirement System for the service performed on the
16board or commission. The pensionable compensation earned
17pursuant to this paragraph shall not be eligible for reciprocity
18with any other retirement system or plan.

19(B) Upon retiring for service after serving on the board or
20commission, the appointee shall be entitled to reinstatement of any
21suspended benefits, including employer provided retiree health
22benefits, that he or she was entitled to at the time of being
23appointed to the board or commission.

24(e) Notwithstanding subdivisions (c) and (d), a person who
25retires from a public employer may serve without reinstatement
26from retirement or loss or interruption of benefits provided by the
27retirement system upon appointment to a full-time state board
28pursuant to Section 5075 of the Penal Code.

29

begin insert21230.end insert  

A retired person may serve without reinstatement from
30retirement or loss or interruption of benefits provided by this
31system, as follows:

32(a) (1) As a subordinate judicial officer whose position, upon
33retirement, is converted to a judgeship pursuant to Section 69615,
34and he or she returns to work in the converted position, and the
35employer is a trial court.

36(2) As a retiree who takes office as a judge of a court of record
37pursuant to Article VI of the California Constitution or a retiree
38of the Judges’ Retirement System I or the Judges’ Retirement
39System II who is appointed to serve as a retired judge.

40(b) (1) As an elective officer.

P33   1(2) If a retired person serves without reinstatement from
2retirement in an elective office and part or all of his or her
3retirement allowance is based on service in that elective office,
4the portion of the allowance based on service in that elective office
5shall be suspended during incumbency in that elective office. The
6entire retirement allowance shall be paid for time on and after the
7person vacates the elective office in the monthly amount payable
8had the allowance not been suspended. The governing body of
9every employer other than the state shall cause immediate notice
10to be given to this system of the election of any retired person to
11an office of the employer.

end insert
12

begin deleteSEC. 20.end delete
13begin insertSEC. 28.end insert  

Section 22760 of the Government Code is amended
14to read:

15

22760.  

“Annuitant” means:

16(a) A person, other than a National Guard member defined in
17Section 20380.5, who has retired within 120 days of separation
18from employment and who receives a retirement allowance under
19any state or University of California retirement system to which
20the state was a contributing party.

21(b) A surviving family member receiving an allowance in place
22of an annuitant who has retired as provided in subdivision (a), or
23as the survivor of a deceased employee under Section 21541,
2421546, 21547, or 21547.7, or similar provisions of any other state
25retirement system.

26(c) A person who has retired within 120 days of separation from
27employment with a contracting agency as defined in Section 22768
28and who receives a retirement allowance from the retirement
29system provided by the employer, or a surviving family member
30who receives the retirement allowance in place of the deceased.

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

33(e) A person who was a state member for 30 years or more and
34who, at the time of retirement, was a local member employed by
35a contracting agency.

36(f) A Member of the Legislature or an elective officer of the
37state whose office is provided by the California Constitution, who
38has at least eight years of credited service, and who meets the
39following conditions:

P34   1(1) Permanently separates from state service on or after January
21, 1988, and not more than 10 years before or 10 years after his
3or her minimum age for service retirement, or is an inactive
4member of the Legislators’ Retirement System pursuant to Section
59355.2.

6(2) Receives a retirement allowance under a state retirement
7system supported in whole or in part by state funds other than the
8University of California Retirement System.

9(g) An exempt employee who meets all of the following
10conditions:

11(1) Has at least 10 years of credited state service that includes
12at least two years of credited service while an exempt employee.

13(2) Permanently separates from state service on or after January
141, 1988, and not more than 10 years before or 10 years after his
15or her minimum age for service retirement.

16(3) Receives a retirement allowance under a state retirement
17system supported in whole or in part by state funds other than the
18University of California Retirement System.

19(h) A person receiving a survivor allowance pursuant to Article
203 (commencing with Section 21570) of Chapter 14 of Part 3
21provided that he or she was eligible to enroll in a health benefit
22plan on the date of the member’s death, on whose account the
23survivor allowance is payable.

24(i) (1) A family member of a deceased retired member of the
25State Teachers’ Retirement Plan, if the deceased member meets
26the following conditions:

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

28(B) Retired before the member’s school employer elected to
29contract for health benefit coverage under this part.

30(C) Prior to his or her death, received a retirement allowance
31that did not provide for a survivor allowance to family members.

32(2) The family member shall elect coverage as an annuitant
33within one calendar year from the date that the deceased member’s
34school employer elected to contract for health benefit coverage
35under this part.

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

38begin insert

begin insertSEC. 29.end insert  

end insert

begin insertSection 22772 of the end insertbegin insertGovernment Codeend insertbegin insert is amended
39to read:end insert

40

22772.  

(a) “Employee” means:

P35   1(1) An officer or employee of the state or of any agency,
2department, authority, or instrumentality of the state, including
3the University of California.

4(2) An employee who is employed by a contracting agency and
5participates in a publicly funded retirement system provided by
6the contracting agency, or an officer or official of a contracting
7agency.

begin delete

8(3) An annuitant receiving a retirement allowance pursuant to
9Section 21228 who is employed by a contracting agency.

end delete
begin delete

10(4)

end delete

11begin insert(3)end insert A teaching associate, lecturer, coach, or interpreter employed
12by the California State University who is appointed to work in an
13academic year classification for at least six weighted teaching units
14for one semester, or for at least six weighted teaching units for two
15or more consecutive quarter terms. This paragraph does not apply
16to a state member employed by the California State University,
17unless provided for in a memorandum of understanding reached
18pursuant to Chapter 12 (commencing with Section 3560) of
19Division 4 of Title 1 or authorized by the Trustees of the California
20State University for employees excluded from collective
21bargaining.

begin delete

22(5)

end delete

23begin insert(4)end insert All employees in job classes specified in subdivision (a) of
24Section 14876.

25(b) Except as otherwise provided by this part, “employee” does
26not include any of the following:

27(1) A person employed on an intermittent, irregular, or less than
28half-time basis, or an employee similarly situated.

29(2) A National Guard member described in Section 20380.5.

30

begin deleteSEC. 21.end delete
31begin insertSEC. 30.end insert  

Section 75005 of the Government Code is amended
32to read:

33

75005.  

Notwithstanding any other provision of law, this chapter
34shall be administered and governed by the Board of Administration
35of the Public Employees’ Retirement System in accordance with
36the Public Employees’ Retirement Law to the same extent and
37with the same effect as if those provisions are contained in the
38Judges’ Retirement Law, except for those provisions which provide
39for the payment of an allowance or other benefit and except for
40those provisions which conflict with any provision of the Judges’
P36   1Retirement Law. To the extent applicable, the Board of
2Administration of the Public Employees’ Retirement System shall
3also administer this chapter in conformance with the California
4Public Employees’ Pension Reform Act of 2013 (Article 4
5(commencing with Section 7522) of Chapter 21 of Division 7 of
6Title 1) to the same extent and with the same effect as if the
7provisions of the act are contained in the Judges’ Retirement Law.
8If the Board of Administration of the Public Employees’
9Retirement System determines that there is a conflict between the
10provisions of the California Public Employees’ Pension Reform
11Act of 2013 and this chapter, the provisions of the California Public
12Employees’ Pension Reform Act of 2013 shall control. “State
13Controller” or “Controller” as used in this chapter, or any other
14provision of law relating to the chapter, shall be construed to refer
15to and mean the “Board of Administration of the Public Employees’
16Retirement System”; however, the Controller shall continue to
17perform the duties prescribed in Sections 75092, 75097, 75101,
18and 75102.

19All payments from the Judges’ Retirement Fund shall be made
20upon warrants drawn by the Controller upon demands by the Board
21of Administration of the Public Employees’ Retirement System.

22

begin deleteSEC. 22.end delete
23begin insertSEC. 31.end insert  

Section 75505 of the Government Code is amended
24to read:

25

75505.  

(a) This chapter shall be administered and governed
26pursuant to the Public Employees’ Retirement Law to the same
27extent and with the same effect as if those provisions are contained
28in this chapter, except for those provisions that provide for the
29payment of an allowance or other benefit and except for those
30provisions that conflict with any provision of this chapter. To the
31extent applicable, the Board of Administration of the Public
32Employees’ Retirement System shall administer this chapter in
33conformance with the California Public Employees’ Pension
34Reform Act of 2013 (Article 4 (commencing with Section 7522)
35of Chapter 21 of Division 7 of Title 1) to the same extent and with
36the same effect as if the provisions of the act are contained in the
37Judges’ Retirement System II Law. If the Board of Administration
38of the Public Employees’ Retirement System determines that there
39is a conflict between the provisions of the California Public
40Employees’ Pension Reform Act of 2013 and this chapter, the
P37   1provisions of the California Public Employees’ Pension Reform
2Act of 2013 shall control.

3(b) All payments from the Judges’ Retirement System II Fund
4shall be made upon warrants drawn by the Controller upon
5demands by the Board of Administration of the Public Employees’
6Retirement System.



O

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