Amended in Assembly August 26, 2013

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 delete 19144,end delete 20636, 20636.1, 20677.4, 20683.2, 20691, 20692, 20693, 20731, 20737, 20891, 20909, 21010, 21011, 21033, 21052, 21060, 21070.5, 21070.6, 21070.7, 21092, 21150,begin delete 21202,end delete 22760,begin delete 22772,end delete 75005, and 75505 of, to add Section 20004 to,begin delete 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 delete 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 Public Employees’ 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 delete 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.end delete The billbegin insert wouldend insert 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.

begin insert

This bill would incorporate changes to Section 22760 of the Government Code that would become operative if both this bill and AB 410 are both chaptered and this bill is chaptered last.

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
P3    1or provisions of the Legislators’ Retirement Law. To the extent
2applicable, the board shall also administer this system in
3conformance with the California Public Employees’ Pension
4Reform Act of 2013 (Article 4 (commencing with Section 7522)
5of Chapter 21 of Division 7 of Title 1) to the same extent and with
6the same effect as if the provisions of the act are contained in the
7Legislators’ Retirement Law. If the Board of Administration of
8the Public Employees’ Retirement System determines that there
9is a conflict between the provisions of the California Public
10Employees’ Pension Reform Act of 2013 and this chapter, the
11provisions of the California Public Employees’ Pension Reform
12Act of 2013 shall control.

begin delete
13

SEC. 2.  

Section 19144 of the Government Code is amended
14to read:

15

19144.  

Subject to Article 8 (commencing with Section 21220)
16of Chapter 12 of Part 3, a person who has retired from state civil
17service may be employed temporarily in a civil service position
18at any time following retirement, provided that the position is
19either:

20(a) In the class in which the person had permanent or
21probationary status or a career executive assignment appointment
22at the time of retirement.

23(b) In another class to which the person could have been
24permanently transferred, reinstated, or demoted at the time of
25retirement.

end delete
26

begin deleteSEC. 3.end delete
27begin insertSEC. 2.end insert  

Section 20004 is added to the Government Code, to
28read:

29

20004.  

(a) It is the intent of the Legislature, in enacting this
30section and amending this part, to comply with, and implement
31the provisions of, the California Public Employees’ Pension
32Reform Act of 2013 (Article 4 (commencing with Section 7522)
33of Chapter 21 of Division 7 of Title 1) to ensure the continued
34ability of the board to invest the retirement fund and administer
35the system in conformity with its duties and responsibilities and
36to ensure that members are provided with the retirement and related
37benefits to which they are entitled pursuant to law.

38(b) To achieve the purposes set forth in subdivision (a), the
39board shall have all powers reasonably necessary to invest the
40assets associated with, and to administer and implement the
P4    1provisions of, the California Public Employees’ Pension Reform
2Act of 2013, to the extent and with the same effect as if the
3provisions of the act are contained in the Public Employees’
4Retirement Law. All laws governing the investment of the
5retirement fund, and the organization, procedures, and
6administrative duties and responsibilities of the board shall be
7applicable to the board in its administration of the California Public
8Employees’ Pension Reform Act of 2013, to the extent these laws
9are not in conflict with, or are not inconsistent with, the act. If the
10board determines that there is a conflict between the provisions of
11the California Public Employees’ Pension Reform Act of 2013
12and the Public Employees’ Retirement Law, the provisions of the
13California Public Employees’ Pension Reform Act of 2013 shall
14control.

15(c) Nothing in this section shall be construed to amend,
16supersede, limit, or extend the application of the provisions of the
17California Public Employees’ Pension Reform Act of 2013.

18

begin deleteSEC. 4.end delete
19begin insertSEC. 3.end insert  

Section 20636 of the Government Code is amended
20to read:

21

20636.  

(a) “Compensation earnable” by a member means the
22payrate and special compensation of the member, as defined by
23subdivisions (b), (c), and (g), and as limited by Section 21752.5.

24(b) (1) “Payrate” means the normal monthly rate of pay or base
25pay of the member paid in cash to similarly situated members of
26the same group or class of employment for services rendered on
27a full-time basis during normal working hours, pursuant to publicly
28available pay schedules. “Payrate,” for a member who is not in a
29group or class, means the monthly rate of pay or base pay of the
30member, paid in cash and pursuant to publicly available pay
31schedules, for services rendered on a full-time basis during normal
32working hours, subject to the limitations of paragraph (2) of
33subdivision (e).

34(2) “Payrate” shall include an amount deducted from a member’s
35salary for any of the following:

36(A) Participation in a deferred compensation plan.

37(B) Payment for participation in a retirement plan that meets
38the requirements of Section 401(k) of Title 26 of the United States
39Code.

P5    1(C) Payment into a money purchase pension plan and trust that
2meets the requirements of Section 401(a) of Title 26 of the United
3States Code.

4(D) Participation in a flexible benefits program.

5(3) The computation for a leave without pay of a member shall
6be based on the compensation earnable by him or her at the
7beginning of the absence.

8(4) The computation for time prior to entering state service shall
9be based on the compensation earnable by him or her in the position
10first held by him or her in state service.

11(c) (1) Special compensation of a member includes a payment
12received for special skills, knowledge, abilities, work assignment,
13workdays or hours, or other work conditions.

14(2) Special compensation shall be limited to that which is
15received by a member pursuant to a labor policy or agreement or
16as otherwise required by state or federal law, to similarly situated
17members of a group or class of employment that is in addition to
18payrate. If an individual is not part of a group or class, special
19compensation shall be limited to that which the board determines
20is received by similarly situated members in the closest related
21group or class that is in addition to payrate, subject to the
22limitations of paragraph (2) of subdivision (e).

23(3) Special compensation shall be for services rendered during
24normal working hours and, when reported to the board, the
25employer shall identify the pay period in which the special
26compensation was earned.

27(4) Special compensation may include the full monetary value
28of normal contributions paid to the board by the employer, on
29behalf of the member and pursuant to Section 20691, if the
30employer’s labor policy or agreement specifically provides for the
31inclusion of the normal contribution payment in compensation
32earnable.

33(5) The monetary value of a service or noncash advantage
34furnished by the employer to the member, except as expressly and
35specifically provided in this part, is not special compensation unless
36regulations promulgated by the board specifically determine that
37value to be “special compensation.”

38(6) The board shall promulgate regulations that delineate more
39specifically and exclusively what constitutes “special
40compensation” as used in this section. A uniform allowance, the
P6    1monetary value of employer-provided uniforms, holiday pay, and
2premium pay for hours worked within the normally scheduled or
3regular working hours that are in excess of the statutory maximum
4workweek or work period applicable to the employee under Section
5201 and following of Title 29 of the United States Code shall be
6included as special compensation and appropriately defined in
7those regulations.

8(7) Special compensation does not include any of the following:

9(A) Final settlement pay.

10(B) Payments made for additional services rendered outside of
11normal working hours, whether paid in lump sum or otherwise.

12(C) Other payments the board has not affirmatively determined
13to be special compensation.

14(d) Notwithstanding any other provision of law, payrate and
15special compensation schedules, ordinances, or similar documents
16shall be public records available for public scrutiny.

17(e) (1) As used in this part, “group or class of employment”
18means a number of employees considered together because they
19share similarities in job duties, work location, collective bargaining
20unit, or other logical work-related grouping. One employee may
21not be considered a group or class.

22(2) Increases in compensation earnable granted to an employee
23who is not in a group or class shall be limited during the final
24compensation period applicable to the employees, as well as the
25two years immediately preceding the final compensation period,
26to the average increase in compensation earnable during the same
27period reported by the employer for all employees who are in the
28same membership classification, except as may otherwise be
29determined pursuant to regulations adopted by the board that
30establish reasonable standards for granting exceptions.

31(f) As used in this part, “final settlement pay” means pay or
32cash conversions of employee benefits that are in excess of
33compensation earnable, that are granted or awarded to a member
34in connection with, or in anticipation of, a separation from
35employment. The board shall promulgate regulations that delineate
36more specifically what constitutes final settlement pay.

37(g) (1) Notwithstanding subdivision (a), “compensation
38earnable” for state members means the average monthly
39compensation, as determined by the board, upon the basis of the
40average time put in by members in the same group or class of
P7    1employment and at the same rate of pay, and is composed of the
2payrate and special compensation of the member. The computation
3for an absence of a member shall be based on the compensation
4earnable by him or her at the beginning of the absence and for time
5prior to entering state service shall be based on the compensation
6earnable by him or her in the position first held by him or her in
7that state service.

8(2) Notwithstanding subdivision (b), “payrate” for state members
9means the average monthly remuneration paid in cash out of funds
10paid by the employer to similarly situated members of the same
11group or class of employment, in payment for the member’s
12services or for time during which the member is excused from
13work because of holidays, sick leave, vacation, compensating time
14off, or leave of absence. “Payrate” for state members shall include:

15(A) An amount deducted from a member’s salary for any of the
16following:

17(i) Participation in a deferred compensation plan established
18pursuant to Chapter 4 (commencing with Section 19993) of Part
192.6.

20(ii) Payment for participation in a retirement plan that meets
21the requirements of Section 401(k) of Title 26 of the United States
22Code.

23(iii) 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(iv) Participation in a flexible benefits program.

27(B) A payment in cash by the member’s employer to one other
28than an employee for the purpose of purchasing an annuity contract
29for a member under an annuity plan that meets the requirements
30of Section 403(b) of Title 26 of the United States Code.

31(C) Employer “pick up” of member contributions that meets
32the requirements of Section 414(h)(2) of Title 26 of the United
33States Code.

34(D) Disability or workers’ compensation payments to safety
35members in accordance with Section 4800 of the Labor Code.

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

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

P8    1(3) Notwithstanding subdivision (c), “special compensation”
2for state members shall mean all of the following:

3(A) The monetary value, as determined by the board, of living
4quarters, board, lodging, fuel, laundry, and other advantages of
5any nature furnished to a member by his or her employer in
6payment for the member’s services.

7(B) Compensation for performing normally required duties,
8such as holiday pay, bonuses (for duties performed on regular work
9shift), educational incentive pay, maintenance and noncash
10payments, out-of-class pay, marksmanship pay, hazard pay,
11motorcycle pay, paramedic pay, emergency medical technician
12pay, Peace Officer Standards and Training (POST) certificate pay,
13and split shift differential.

14(C) Compensation for uniforms, except as provided in Section
1520632.

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

18(4) “Payrate” and “special compensation” for state members do
19not include any of the following:

20(A) The provision by the state employer of a medical or hospital
21service or care plan or insurance plan for its employees (other than
22the purchase of annuity contracts as described below in this
23subdivision), a contribution by the employer to meet the premium
24or charge for that plan, or a payment into a private fund to provide
25health and welfare benefits for employees.

26(B) A payment by the state employer of the employee portion
27of taxes imposed by the Federal Insurance Contribution Act.

28(C) Amounts not available for payment of salaries and that are
29applied by the employer for the purchase of annuity contracts
30including those that meet the requirements of Section 403(b) of
31Title 26 of the United States Code.

32(D) Benefits paid pursuant to Article 5 (commencing with
33Section 19878) of Chapter 2.5 of Part 2.6.

34(E) Employer payments that are to be credited as employee
35contributions for benefits provided by this system, or employer
36payments that are to be credited to employee accounts in deferred
37compensation plans. The amounts deducted from a member’s
38wages for participation in a deferred compensation plan may not
39be considered to be “employer payments.”

P9    1(F) Payments for unused vacation, annual leave, personal leave,
2sick leave, or compensating time off, whether paid in lump sum
3or otherwise.

4(G) Final settlement pay.

5(H) Payments for overtime, including pay in lieu of vacation or
6holiday.

7(I) Compensation for additional services outside regular duties,
8such as standby pay, callback pay, court duty, allowance for
9automobiles, and bonuses for duties performed after the member’s
10regular work shift.

11(J) Amounts not available for payment of salaries and that are
12applied by the employer for any of the following:

13(i) The purchase of a retirement plan that meets the requirements
14of Section 401(k) of Title 26 of the United States Code.

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

18(K) Payments made by the employer to or on behalf of its
19employees who have elected to be covered by a flexible benefits
20program, where those payments reflect amounts that exceed the
21employee’s salary.

22(L) Other payments the board may determine are not “payrate”
23or “special compensation.”

24(5) If the provisions of this subdivision, including the board’s
25determinations pursuant to subparagraph (F) of paragraph (2) and
26subparagraph (D) of paragraph (3), are in conflict with the
27provisions of a memorandum of understanding reached pursuant
28to Section 3517.5 or 3560, the memorandum of understanding
29shall be controlling without further legislative action, except that
30if the provisions of a memorandum of understanding require the
31expenditure of funds, those provisions may not become effective
32unless approved by the Legislature in the annual Budget Act. No
33memorandum of understanding reached pursuant to Section 3517.5
34or 3560 may exclude from the definition of either “payrate” or
35“special compensation” a member’s base salary payments or
36payments for time during which the member is excused from work
37because of holidays, sick leave, vacation, compensating time off,
38or leave of absence. If items of compensation earnable are included
39by memorandum of understanding as “payrate” or “special
40compensation” for retirement purposes for represented and higher
P10   1education employees pursuant to this paragraph, the Department
2of Human Resources or the Trustees of the California State
3University shall obtain approval from the board for that inclusion.

4(6) (A) Subparagraph (B) of paragraph (3) prescribes that
5compensation earnable includes compensation for performing
6normally required duties, such as holiday pay, bonuses (for duties
7performed on regular work shift), educational incentive pay,
8maintenance and noncash payments, out-of-class pay,
9marksmanship pay, hazard pay, motorcycle pay, paramedic pay,
10emergency medical technician pay, POST certificate pay, and split
11shift differential; and includes compensation for uniforms, except
12as provided in Section 20632; and subparagraph (I) of paragraph
13(4) excludes from compensation earnable compensation for
14additional services outside regular duties, such as standby pay,
15callback pay, court duty, allowance for automobile, and bonuses
16for duties performed after regular work shift.

17(B) Notwithstanding subparagraph (A), the Department of
18Human Resources shall determine which payments and allowances
19that are paid by the state employer shall be considered
20compensation for retirement purposes for an employee who either
21is excluded from the definition of state employee in Section 3513,
22or is a nonelected officer or employee of the executive branch of
23government who is not a member of the civil service.

24(C) Notwithstanding subparagraph (A), the Trustees of the
25California State University shall determine which payments and
26allowances that are paid by the trustees shall be considered
27compensation for retirement purposes for a managerial employee,
28as defined in Section 3562, or supervisory employee as defined in
29Section 3580.3.

30(h) This section shall not apply to a new member, as defined in
31Section 7522.04.

32

begin deleteSEC. 5.end delete
33begin insertSEC. 4.end insert  

Section 20636.1 of the Government Code is amended
34to read:

35

20636.1.  

(a) Notwithstanding Section 20636, and Section
3645102 of the Education Code, “compensation earnable” by a school
37member means the payrate and special compensation of the
38member, as defined by subdivisions (b) and (c), and as limited by
39Section 21752.5.

P11   1(b) (1) “Payrate” means the normal monthly rate of pay or base
2pay of the member paid in cash to similarly situated members of
3the same group or class of employment for services rendered on
4a full-time basis during normal working hours. For purposes of
5this part, for classified members, full-time employment is 40 hours
6per week, and payments for services rendered, not to exceed 40
7hours per week, shall be reported as compensation earnable for all
8months of the year in which work is performed. “Payrate,” for a
9member who is not in a group or class, means the monthly rate of
10pay or base pay of the member, paid in cash and pursuant to
11publicly available pay schedules, for services rendered on a
12full-time basis during normal working hours, subject to the
13limitations of paragraph (2) of subdivision (e).

14(A) “Payrate” shall include an amount deducted from a
15member’s salary for any of the following:

16(i) Participation in a deferred compensation plan.

17(ii) Payment for participation in a retirement plan that meets
18the requirements of Section 401(k) or 403(b) of Title 26 of the
19United States Code.

20(iii) Payment into a money purchase pension plan and trust that
21meets the requirements of Section 401(a) of Title 26 of the United
22States Code.

23(iv) Participation in a flexible benefits program.

24(B) For the purposes of this section, “classified members” shall
25mean members who retain membership under this system while
26employed with a school employer in positions not subject to
27coverage under the Defined Benefit Program under the State
28Teachers’ Retirement System.

29(C) For the purposes of this section, and Sections 20962 and
3020966, “certificated members” shall mean members who retain
31membership under this system while employed in positions subject
32to coverage under the Defined Benefit Program under the State
33Teachers’ Retirement System.

34(2) The computation for any leave without pay of a member
35shall be based on the compensation earnable by him or her at the
36beginning of the absence.

37(3) The computation for time prior to entering state service shall
38be based on the compensation earnable by him or her in the position
39first held by him or her in state service.

P12   1(c) (1) Special compensation of a school member includes any
2payment received for special skills, knowledge, abilities, work
3assignment, workdays or hours, or other work conditions.

4(2) Special compensation shall be limited to that which is
5received by a member pursuant to a labor policy or agreement or
6as otherwise required by state or federal law, to similarly situated
7members of a group or class of employment that is in addition to
8payrate. If an individual is not part of a group or class, special
9compensation shall be limited to that which the board determines
10is received by similarly situated members in the closest related
11group or class that is in addition to payrate, subject to the
12limitations of paragraph (2) of subdivision (e).

13(3) Special compensation shall be for services rendered during
14normal working hours and, when reported to the board, the
15employer shall identify the pay period in which the special
16compensation was earned.

17(4) Special compensation may include the full monetary value
18of normal contributions paid to the board by the employer, on
19behalf of the member and pursuant to Section 20691, provided
20that the employer’s labor policy or agreement specifically provides
21for the inclusion of the normal contribution payment in
22compensation earnable.

23(5) The monetary value of any service or noncash advantage
24furnished by the employer to the member, except as expressly and
25specifically provided in this part, shall not be special compensation
26unless regulations promulgated by the board specifically determine
27that value to be “special compensation.”

28(6) The board shall promulgate regulations that delineate more
29specifically and exclusively what constitutes “special
30compensation” as used in this section. A uniform allowance, the
31monetary value of employer-provided uniforms, holiday pay, and
32premium pay for hours worked within the normally scheduled or
33regular working hours that are in excess of the statutory maximum
34workweek or work period applicable to the employee under Section
35201 and following of Title 29 of the United States Code shall be
36included as special compensation and appropriately defined in
37those regulations.

38(7) Special compensation does not include any of the following:

39(A) Final settlement pay.

P13   1(B) Payments made for additional services rendered outside of
2normal working hours, whether paid in lump sum or otherwise.

3(C) Any other payments the board has not affirmatively
4determined to be special compensation.

5(d) Notwithstanding any other provision of law, payrate and
6special compensation schedules, ordinances, or similar documents
7shall be public records available for public scrutiny.

8(e) (1) As used in this part, “group or class of employment”
9means a number of employees considered together because they
10share similarities in job duties, work location, collective bargaining
11unit, or other logical work-related grouping. Under no
12circumstances shall one employee be considered a group or class.

13(2) Increases in compensation earnable granted to any employee
14who is not in a group or class shall be limited during the final
15compensation period applicable to the employees, as well as the
16two years immediately preceding the final compensation period,
17to the average increase in compensation earnable during the same
18period reported by the employer for all employees who are in the
19same membership classification, except as may otherwise be
20determined pursuant to regulations adopted by the board that
21establish reasonable standards for granting exceptions.

22(f) As used in this part, “final settlement pay” means any pay
23or cash conversions of employee benefits that are in excess of
24compensation earnable, that are granted or awarded to a member
25in connection with or in anticipation of a separation from
26employment. The board shall promulgate regulations that delineate
27more specifically what constitutes final settlement pay.

28(g) This section shall not apply to a new member, as defined in
29Section 7522.04.

30

begin deleteSEC. 6.end delete
31begin insertSEC. 5.end insert  

Section 20677.4 of the Government Code is amended
32to read:

33

20677.4.  

(a) (1) The normal rate of contribution for a state
34miscellaneous or state industrial member whose service is not
35included in the federal system shall be 6 percent of the
36compensation in excess of three hundred seventeen dollars ($317)
37per month paid to that member for service rendered on or after
38July 1, 1976.

39(2) The normal rate of contribution for a state miscellaneous or
40state industrial member, who has elected to be subject to Section
P14   121353.5 and whose service is not included in the federal system,
2shall be 6 percent of the member’s compensation.

3(3) The normal rate of contribution as established under this
4subdivision for a member whose service is included in the federal
5 system, and whose service retirement allowance is reduced under
6Section 21354.1, because of that inclusion, shall be reduced by
7one-third as applied to compensation not exceeding four hundred
8dollars ($400) per month for service after the date of execution of
9the agreement including service in the federal system and prior to
10termination of the agreement with respect to the coverage group
11to which he or she belongs.

12(b) The normal rate of contribution for a state miscellaneous or
13state industrial member whose service has been included in the
14federal system shall be 5 percent of compensation in excess of five
15hundred thirteen dollars ($513) per month paid that member for
16service rendered on or after July 1, 1976.

17(c) The normal rate of contribution for a state miscellaneous or
18state industrial member who is subject to Section 21076, 21076.5,
19or 21077 shall be determined in the manner described in Section
2020683.2.

21(d) A member who elected to become subject to Section 21353
22solely for service rendered on or after the effective date of the
23election, as authorized by subdivision (c) of Section 21070 during
24the period between November 1, 1988, and October 31, 1989, is
25not required to make the contributions specified in Section 21073.

26(e) A member who elects to become subject to Section 21354.1,
27as applicable, shall contribute at the rate specified in paragraph
28(1) of subdivision (a) or paragraph (1) of subdivision (b), as
29determined by the member’s status with the federal system, and
30the rate shall be applied from the first of the month following the
31date of the election. A member who makes the election shall also
32contribute for service prior to the date the contribution rate was
33applied, in the manner specified in Section 21073 or 21073.1, as
34 applicable.

35(f) If the provisions of this section are in conflict with the
36provisions of a memorandum of understanding reached pursuant
37to Section 3517.5, the memorandum of understanding shall be
38controlling without further legislative action, except that if the
39provisions of a memorandum of understanding require the
40expenditure of funds, the provisions shall not become effective
P15   1unless and until approved by the Legislature in the annual Budget
2Act.

3(g) The Director of Human Resources may establish the normal
4rate of contribution for a state employee who is excepted from the
5definition of “state employee” in subdivision (c) of Section 3513,
6and an officer or employee of the executive branch of state
7government who is not a member of the civil service. The normal
8rate of contribution shall be the same for all members identified
9in this subdivision. The contribution rate shall be effective the
10beginning of the pay period indicated by the Director of Human
11Resources but shall be no earlier than the beginning of the pay
12period following the date the board receives notification.

13

begin deleteSEC. 7.end delete
14begin insertSEC. 6.end insert  

Section 20683.2 of the Government Code is amended
15to read:

16

20683.2.  

Equal sharing of normal costs between the state
17employer and public employees shall be the standard. It shall be
18the standard that employees pay at least 50 percent of normal costs
19and that employers not pay any of the required employee
20contribution. Equal sharing of normal costs is currently the standard
21for most state employees.

22(a) Notwithstanding any other section of this code, or other
23provision of law in conflict with this section, except as provided
24in Section 7522.30, normal contribution rates for defined benefit
25plans for state employees of public employers as defined in
26paragraph (1) of subdivision (i) of Section 7522.04, excluding the
27California State University, shall be determined as follows:

28(1) Normal cost contribution rates shall increase as follows:

29(A) The contribution rate for state peace officer/firefighter
30members in State Bargaining Unit 6 and for state safety members
31in State Bargaining Units 1, 3, 4, 7, 9, 10, 11, 14, 15, 17, 20, and
3221 will increase by 1.0 percentage point on July 1, 2013, and will
33increase by an additional 1.0 percentage point on July 1, 2014.

34(B) The contribution rate for state peace officer/firefighter
35members in State Bargaining Units 7 and 8 will increase by 1.5
36percentage points on July 1, 2013, and will increase by an
37additional 1.5 percentage points on July 1, 2014.

38(C) The contribution rate for state industrial members in State
39Bargaining Units 1, 3, 4, 6, 9, 10, 11, 14, 15, 17, and 20 will
40increase by 1.0 percentage point on July 1, 2013.

P16   1(D) The contribution rate for state miscellaneous and industrial
2members that have elected the Second Tier benefit formula will
3increase by 1.5 percentage points annually starting July 1, 2013,
4until the contribution rate is equal to at least 50 percent of normal
5costs rounded up to the nearest one-fourth of 1 percent. The final
6annual increase in the contribution rate shall be adjusted to less
7than 1.5 percent as appropriate.

8(E) The contribution rate for state safety members in State
9Bargaining Unit 2 and state miscellaneous members in State
10Bargaining Unit 5 will increase by 1.0 percentage point on July 1,
112013.

12(F) The contribution rate for patrol members in State Bargaining
13Unit 5 will increase by 1.5 percentage points on July 1, 2013.

14(2) Consistent with paragraph (1), the normal rate of contribution
15shall be adjusted accordingly for related state employees who are
16exempted from the definition of “state employee,” or officers and
17employees of the executive, legislative, or judicial branch of state
18government who are not members of the civil service.

19(b) Calculation of employee contribution rate increases pursuant
20to this section shall be based upon compensation calculations
21established pursuant to Sections 20671 to 20694, inclusive.

22(c) In addition to the actuarially required contribution, savings
23realized by the state employer as a result of the employee
24contribution rate increases required by this section shall be
25allocated to any unfunded liability, subject to appropriation in the
26annual Budget Act.

27

begin deleteSEC. 8.end delete
28begin insertSEC. 7.end insert  

Section 20691 of the Government Code is amended
29to read:

30

20691.  

(a) (1) Except as provided in subdivision (b),
31notwithstanding any other law, a contracting agency or school
32employer may pay all or a portion of the normal contributions
33required to be paid by a member. Where the member is included
34in a group or class of employment, the payment shall be for all
35members in the group or class of employment. If an individual is
36not part of a group or class, the payment shall be limited to the
37amount that the board determines is payable to similarly situated
38members in the closest related group or class, subject to the
39limitations of paragraph (2) of subdivision (e) of Section 20636.
P17   1The payments shall be reported simply as normal contributions
2and shall be credited to member accounts.

3(2) Nothing in this subdivision shall be construed to limit the
4authority of a contracting agency or school employer to periodically
5increase, reduce, or eliminate the payment by the contracting
6agency or school employer of all or a portion of the normal
7contributions required to be paid by members, as authorized by
8this section.

9(b) Notwithstanding subdivision (a), employers shall not pay a
10portion of the normal contributions for members who are subject
11to subdivision (c) of Section 7522.30, except where authorized
12pursuant to subdivision (f) of Section 7522.30.

13

begin deleteSEC. 9.end delete
14begin insertSEC. 8.end insert  

Section 20692 of the Government Code is amended
15to read:

16

20692.  

(a) Where a contracting agency employer or a school
17employer has elected to pay all or a portion of the normal
18contributions of members of a group or class of employment
19pursuant to Section 20691, the employer may, pursuant to a labor
20policy or agreement, stop paying those contributions during the
21final compensation period applicable to the members and, instead,
22increase the payrate of the members by an amount equal to the
23normal contributions paid by the employer on behalf of the
24employees in the pay period immediately prior to the final
25compensation period or increase the payrate of the members by
26an amount established by a labor policy or agreement in existence
27and in effect on June 30, 1993. That amount shall not exceed the
28amount of the normal member contributions that are required to
29 be paid by the members.

30(b) This section shall not apply to any contracting agency or to
31any school employer unless and until the contracting agency or
32the school employer elects to be subject to this section by
33amendment to its contract made in the manner prescribed for
34approval of contracts, except an election among the employees is
35not required. In the case of contracts made after July 1, 1994, the
36section shall not apply unless incorporated by express provision
37in the contract. However, no school employer may act pursuant to
38this section unless and until the board approves a request for the
39amendment of the contract of a school employer to authorize
40termination of the payment. A school employer shall not submit
P18   1a request for a contract amendment unless there is on file a request
2to terminate that payment from the county superintendent of
3schools office and each school district, community college district,
4and other school entity within the jurisdiction of that school
5employer.

6(c) Before adopting this provision, the governing body of a
7contracting agency or school employer shall, with timely public
8notice, place the consideration of this section on the agendas of
9two consecutive public meetings of the governing body, at which
10time, full disclosure shall be made of the nature of the benefit, the
11additional employer contributions, and the funding therefor. Only
12after the second of these public meetings may the governing body
13adopt this section. The employer shall notify the board of the
14employer’s compliance with this subdivision at the time of the
15governing body’s application to adopt this section.

16(d) Persons hired after the effective date of an employer’s
17contract amendment to include this section shall be informed by
18the employer of how this benefit relates to their total compensation
19and benefit package.

20(e) The additional employer contributions required under this
21section shall be computed as a level percentage of member
22compensation. The additional contribution rate required at the time
23this section is added to a contract shall not be less than the sum of
24(1) the actuarial normal cost, plus (2) in the case of a contract
25amendment, the additional contribution required to amortize the
26increase in accrued liability attributable to the benefit elected under
27this section over the unfunded actuarial liability period currently
28in the agency’s contract, commencing from the date this section
29becomes effective in the agency’s contract.

30(f) For the purposes of this section, all contributions, liabilities,
31actuarial interest rates, and other valuation factors necessary to
32calculate the employer’s contribution shall be determined on the
33basis of actuarial assumptions and methods which, in combination,
34provide the board’s best estimate of anticipated experience under
35the system. The board has the exclusive power and duty to make
36these determinations.

37(g) Within 30 days of notification from the board to the
38contracting agency or school employer of the additional employer
39contributions required pursuant to this section, the contracting
40agency or school employer, or a recognized employee organization,
P19   1or both, may file with the board a request for a review of the
2determination of the calculation of the additional employer
3contributions. The board shall promulgate regulations governing
4the conduct of the review, that shall include the means by which
5an employer or recognized employee organization may submit
6independent actuarial evidence regarding the additional
7contribution required by this section. The board shall make the
8final determination on the additional employer contributions needed
9to fund this contract amendment.

10(h) This section shall not apply to a new member as defined in
11Section 7522.04.

12

begin deleteSEC. 10.end delete
13begin insertSEC. 9.end insert  

Section 20693 of the Government Code is amended
14to read:

15

20693.  

(a) Except as provided in subdivision (b),
16notwithstanding any other law, the state or the Regents of the
17University of California may pay all or a portion of the normal
18contributions required to be paid by a state member. The payments
19shall be reported as employer-paid normal contributions and shall
20be credited to member accounts. Nothing in this subdivision shall
21be construed to limit the authority of the state to periodically
22increase, reduce, or eliminate the payment by the state of all or a
23portion of the normal contributions required to be paid by a state
24member, as authorized by this section.

25This section shall be subject to any applicable
26collective-bargaining laws.

27(b) Notwithstanding subdivision (a), employers shall not pay a
28portion of the normal contributions for members who are subject
29to subdivision (c) of Section 7522.30, except where authorized
30pursuant to subdivision (f) of Section 7522.30.

31

begin deleteSEC. 11.end delete
32begin insertSEC. 10.end insert  

Section 20731 of the Government Code is amended
33to read:

34

20731.  

(a) Notwithstanding any other provision of this part,
35a member who is credited with less than the years of service
36specified in Article 1 (commencing with Section 21060) of Chapter
3712 who enters employment as a member of a public retirement
38system supported, in whole or in part, by state funds, including
39the University of California Retirement System, or as a member
40of a county retirement system, within six months of leaving state
P20   1service, shall have the right to elect to leave accumulated
2contributions on deposit in the retirement fund. Failure to make
3an election to withdraw accumulated contributions shall be deemed
4an election to leave accumulated contributions on deposit in the
5retirement fund. This section shall also apply to a member who is
6subject to Section 21076 or 21076.5.

7(b) (1) An election to allow accumulated contributions to remain
8in the retirement fund may be revoked by the member at any time,
9except any of the following:

10(A) While the member is employed in state service in a position
11in which the member is not excluded from membership with respect
12to that service.

13(B) While the member is in service as a member of a public
14retirement system supported, in whole or in part, by state funds,
15including the University of California Retirement System.

16(C) While the member is in service, entered within six months
17after discontinuing state service, as a member of a county
18retirement system.

19(2) All accumulated contributions in a member’s account up to
20the time of revocation shall be distributed in accordance with an
21election pursuant to Section 20735.

22(3) A member who is permanently separated from all service
23covered by the system, who is not subject to paragraph (1), and
24who attains 70 years of age shall be provided with an election to
25withdraw contributions or, if vested, an election to either apply
26for service retirement or to withdraw contributions. Failure to apply
27for service retirement or to make an election to withdraw
28contributions within 90 days shall be deemed an election to
29withdraw contributions. If the person fails to either apply for
30service retirement or elect to withdraw contributions, or cannot,
31with reasonable diligence, be located, the accumulated
32contributions shall be distributed in accordance with Section 21500.

33(c) A member whose membership continues under this section
34is subject to the same age and disability requirements as apply to
35other members for service or for disability retirement. After the
36qualification of the member for retirement by reason of age, which
37shall be the lowest age applicable to any membership category in
38which the member has credited service, or disability, the member
39shall be entitled to receive a retirement allowance based upon the
40amount of the member’s accumulated contributions and service
P21   1standing to the member’s credit at the time of retirement and on
2the employer contributions held for the member and calculated in
3the same manner as for other members, except that the provisions
4in this part for minimum service and disability retirement
5allowances shall not apply to the member, unless the member
6meets the minimum service requirements. If a basic death benefit
7becomes payable under Article 1 (commencing with Section
821490), Article 2 (commencing with Section 21530), and Article
95 (commencing with Section 21620) of Chapter 14 because of
10death before retirement of a member, the average annual
11compensation earnable in the year preceding the date of termination
12of that service, rather than in the year preceding death, shall be
13used in computing the benefit under Articles 1, 2, and 5 of Chapter
1414.

15The provisions of this section, as it read prior to June 21, 1971,
16shall continue with respect to a member whose membership
17continued under this section on that date.

18

begin deleteSEC. 12.end delete
19begin insertSEC. 11.end insert  

Section 20737 of the Government Code is amended
20to read:

21

20737.  

The account of a member who elects to be subject to
22Section 21076 or 21076.5 shall be paid current year interest through
23the effective date of that election for service rendered as a state
24miscellaneous or state industrial member. Interest subsequent to
25the effective date of that election shall accrue at a rate determined
26by the board. The member shall not receive his or her accumulated
27contributions plus interest until the time of retirement or upon
28request after permanent separation from state service. Interest shall
29be paid through the day prior to retirement or through the date on
30which the claim is filed with the Controller. This section does not
31apply to a member who elects to be subject to Section 21077.

32

begin deleteSEC. 13.end delete
33begin insertSEC. 12.end insert  

Section 20891 of the Government Code is amended
34to read:

35

20891.  

Section 20066 and subdivisions (a) and (b) of Section
3620068 shall not apply to a state miscellaneous or state industrial
37member subject to Section 21076, 21076.5, or 21077 who becomes
38a patrol member, a state safety member, or a state peace
39officer/firefighter member as a result of an amendment to this part
40defining those members, or is reclassified as a state peace
P22   1officer/firefighter member pursuant tobegin delete Sectionsend deletebegin insert Sectionend insert 20395 or
220398, unless the member elects to: (a) deposit in the retirement
3fund an amount equal to any accumulated contributions that he or
4she withdrew pursuant to Section 20737, plus an amount equal to
5 the interest which would have been credited to his or her account,
6to the date of completion of payments, had those contributions not
7been withdrawn; and (b) deposit in the retirement fund the amount
8that he or she would have contributed had he or she not been
9subject to subdivision (c) of Section 20677, plus an amount equal
10to the interest, to the date of completion of payments, which would
11have been credited to those contributions had he or she been subject
12to subdivision (a) or (b) of Section 20677.

13

begin deleteSEC. 14.end delete
14begin insertSEC. 13.end insert  

Section 20909 of the Government Code is amended
15to read:

16

20909.  

(a) A member who has at least five years of credited
17state service, may elect, by written notice filed with the board, to
18make contributions pursuant to this section and receive not less
19than one year, nor more than five years, in one-year increments,
20of additional retirement service credit in the retirement system.

21(b) A member may elect to receive this additional retirement
22service credit at any time prior to retirement by making the
23contributions as specified in Sections 21050 and 21052. A member
24may not elect additional retirement service credit under this section
25more than once.

26(c) For purposes of this section, “additional retirement service
27credit” means time that does not qualify as public service, military
28service, leave of absence, or any other time recognized for service
29credit by the retirement system.

30(d) Additional retirement service credit elected pursuant to this
31section may not be counted to meet the minimum qualifications
32for service or disability retirement or for health care benefits, or
33any other benefits based upon years of service credited to the
34member.

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

36(1) A member while he or she is employed in state service at
37the time of the additional retirement service credit election.

38(2) A member of the system defined in Section 20324.

39(f) For purposes of this section, “state service” means service
40as defined in Section 20069.

P23   1(g) This section shall apply only to an application to purchase
2additional retirement credit that was received by the system prior
3to January 1, 2013, that is subsequently approved by the system.

4

begin deleteSEC. 15.end delete
5begin insertSEC. 14.end insert  

Section 21010 of the Government Code is amended
6to read:

7

21010.  

Unless otherwise provided in this article, a member
8electing to receive service credit for time during which he or she
9was absent from state service shall contribute in a lump sum or by
10installments over that period and subject to such minimum
11payments as may be prescribed by regulations of the board, an
12amount equal to (a) the contributions he or she would have made
13to this system for the period for which current service credit is
14granted, assuming that the rate of contribution under his or her
15employer’s formula at the rate age applicable to him or her at the
16beginning of his or her first subsequent period of service in
17membership and his or her compensation earnable on that date had
18applied to him or her during the period for which credit is granted,
19plus (b) those added contributions as may be specially required
20under this article as a condition for crediting a particular absence,
21plus (c) the interest that would have accrued to those contributions
22if they had been on deposit at the beginning date of his or her first
23subsequent period of service in membership, from that date until
24the date of completion of payments. The beginning date of the first
25subsequent period of service for purposes of computation of
26contributions and interest shall be deemed to be the end of the
27period of service credited for a member who has no subsequent
28return to service. For a member who is subject to Section 21076
29or 21076.5, and Section 21077, the service and contribution rate
30to be used for purposes of computation shall be deemed to be the
31service and contribution rate that would have been used had the
32member not been subject to Section 21076 or 21076.5, and Section
3321077.

34Service shall be credited as current or prior service, or both, as
35it would be credited if the member had been in state service during
36his or her absence. All contributions of a member under this article
37shall be considered to be and shall be administered as normal
38contributions.

P24   1

begin deleteSEC. 16.end delete
2begin insertSEC. 15.end insert  

Section 21011 of the Government Code is amended
3to read:

4

21011.  

Notwithstanding Section 21010, for a member electing
5to receive service credit for time during which he or she was absent
6from state service who is subject to Section 21076 or 21076.5, and
7Section 21077, the contribution rate to be used for the purposes
8of computation shall be deemed to be the contribution rate that
9would have been used had the member not been subject to Section
1021076 or 21076.5, and Section 21077.

11

begin deleteSEC. 17.end delete
12begin insertSEC. 16.end insert  

Section 21033 of the Government Code is amended
13to read:

14

21033.  

A member electing to receive credit for public service
15shall contribute in a lump sum or by installment payments over
16that period and subject to minimum payments as may be prescribed
17by regulations of the board an amount equal to (a) the contributions
18he or she would have made to this system for the period for which
19current service credit is granted, assuming that the rate of
20contribution under his or her employer’s formula at the rate age
21applicable to him or her at the beginning of his or her first
22subsequent period of service in membership and his or her
23compensation earnable on that date had applied to him or her
24during the period for which credit is granted, plus (b) the added
25contribution that may be specially required under this article as a
26condition for crediting particular public service, plus (c) the interest
27which would have accrued to those contributions if they had been
28deposited at the beginning date of his or her first subsequent period
29of service in membership, from that date until the date of
30completion of payments, and (d) if he or she elects to contribute
31in other than one sum, interest on the unpaid balance of the amount
32payable to the retirement fund, beginning on the date of the election
33to receive credit. The beginning date of the first subsequent period
34of service for purposes of computation of contribution and interest
35shall be deemed to be the end of the period of service credited for
36a member who has no subsequent return to service. For a member
37who is subject to Section 21076 or 21076.5, and Section 21077,
38the service and contribution rate to be used for purposes of
39computation shall be deemed to be the service and contribution
P25   1rate that would have been used had the member not been subject
2to Section 21076 or 21076.5, and Section 21077.

3

begin deleteSEC. 18.end delete
4begin insertSEC. 17.end insert  

Section 21052 of the Government Code is amended
5to read:

6

21052.  

A member or retired former employee who elects to
7receive service credit subject to this section shall contribute, in
8accordance with Section 21050, an amount equal to the increase
9in employer liability, using the payrate and other factors affecting
10liability on the date of the request for costing of the service credit.
11The methodology for calculating the amount of the contribution
12shall be determined by the chief actuary and approved by the board.
13A member or retired former employee electing to receive service
14credit for service subject to Section 21076, 21076.5, or 21077 shall
15pay the contributions as described.

16

begin deleteSEC. 19.end delete
17begin insertSEC. 18.end insert  

Section 21060 of the Government Code is amended
18to read:

19

21060.  

(a) A member shall be retired for service upon his or
20her written application to the board if he or she has attained begin deleteageend delete
21 50begin insert years of ageend insert and is credited with five years of state service,
22except as provided in Sections 7522.20, 21061, 21062, and 21074.

23(b) For purposes of this section, “state service” includes service
24to the state for which the member, pursuant to Section 20281.5,
25did not receive credit.

26(c) For a member who has accrued service credit subject to the
27benefit formula in Section 7522.20 and who has also accrued
28service credit, within this retirement system, subject to a benefit
29formula with a minimum retirement age earlier than 52 years of
30age, the member shall receive an actuarially reduced equivalent
31benefit, upon retirement, for service subject to Section 7522.20,
32if the member retires before 52 years of age but at, or after, the
33minimum age of retirement permitted for other service within this
34retirement system and the member is credited with at least five
35years of service.

36

begin deleteSEC. 20.end delete
37begin insertSEC. 19.end insert  

Section 21070.5 of the Government Code is amended
38to read:

39

21070.5.  

(a) Notwithstanding any other provision of this
40article, a person who, on or after January 1, 2000, becomes a state
P26   1miscellaneous or state industrial member of the system because
2the person (1) is first employed by the state, (2) returns to
3employment with the state from a break in service of more than
490 days, or (3) returns to employment with the state after ceasing
5to be a member pursuant to Section 20340 or 21075, shall be
6subject to the benefits provided by Section 21354.1, unless the
7person elects within 180 days of membership as a state
8miscellaneous or state industrial member to be subject to the
9Second Tier benefits provided for in Section 21076 or 21076.5,
10as applicable. This section shall only apply to state miscellaneous
11and state industrial members who are (1) excluded from the
12definition of state employee in subdivision (c) of Section 3513,
13(2) employed by the executive branch of government and are not
14members of the civil service, or (3) included in the definition of
15state employee in subdivision (c) of Section 3513.

16(b) The effective date of the election shall be the first day of the
17month following the date the election is received by the system
18and shall be applicable to state service rendered on and after that
19date. Any election filed with the board pursuant to this section
20shall also be signed by the spouse of the member.

21(c) A member who makes an election authorized by this section
22shall not be precluded from making a subsequent election pursuant
23to Section 21073.7 to be subject to the benefits provided by Section
2421354.1.

25(d) Operation and application of this section are subject to the
26limitations set forth in Section 21251.13.

27(e) For a member subject to Section 20281.5, the 180-day
28election period shall not commence until the first day of the first
29pay period commencing 24 months after becoming a member of
30the system.

31

begin deleteSEC. 21.end delete
32begin insertSEC. 20.end insert  

Section 21070.6 of the Government Code is amended
33to read:

34

21070.6.  

(a) A member who is subject to Section 21076,
3521076.5, or 21077 may be credited at no cost with all previous
36state miscellaneous or state industrial service eligible to be credited
37under Second Tier benefits. A member who is entitled to service
38credit under this section shall apply for and identify time periods
39for that service to the board.

P27   1(b) Operation and application of this section are subject to the
2limitations set forth in Section 21251.13.

3(c) This section shall only apply to service credit associated
4with employment periods prior to July 1, 2013.

5

begin deleteSEC. 22.end delete
6begin insertSEC. 21.end insert  

Section 21070.7 of the Government Code is amended
7to read:

8

21070.7.  

Notwithstanding any other provision of this part,
9Sections 21076, 21076.5, and 21077 shall not apply to service with
10the California National Guard or service as a National Guard
11member regardless of any prior membership status or previous
12election made.

13

begin deleteSEC. 23.end delete
14begin insertSEC. 22.end insert  

Section 21092 of the Government Code is amended
15to read:

16

21092.  

(a) The normal rate of contribution for a local
17miscellaneous member subject to this article shall be 2 percent of
18compensation paid the member. A contracting agency may pay all
19or a portion of the member’s normal contributions, pursuant to
20Section 20691.

21(b) Notwithstanding subdivision (a), a new member, as defined
22in Section 7522.04, shall have a contribution rate of at least 50
23percent of the normal cost, pursuant to Section 7522.30.

24

begin deleteSEC. 24.end delete
25begin insertSEC. 23.end insert  

Section 21150 of the Government Code is amended
26to read:

27

21150.  

(a) A member incapacitated for the performance of
28duty shall be retired for disability pursuant to this chapter if he or
29she is credited with five years of state service, regardless of age,
30unless the person has elected to become subject to Section 21076,
3121076.5, or 21077.

32(b) A member subject to Section 21076, 21076.5, or 21077 who
33becomes incapacitated for the performance of duty shall be retired
34for disability pursuant to this chapter if he or she is credited with
3510 years of state service, regardless of age, except that a member
36may retire for disability if he or she had five years of state service
37prior to January 1, 1985.

38(c) For purposes of this section, “state service” includes service
39to the state for which the member, pursuant to Section 20281.5,
40did not receive credit.

begin delete
P28   1

SEC. 25.  

Section 21202 of the Government Code is amended to
2read:

3

21202.  

A person employed in violation of Section 21221 shall
4be reinstated to membership in the category in which, and on the
5date on which, the unlawful employment occurred.

6

SEC. 26.  

Article 8 (commencing with Section 21220) of
7Chapter 12 of Part 3 of Division 5 of Title 2 of the Government
8Code
is repealed.

9

SEC. 27.  

Article 8 (commencing with Section 21220) is added
10to Chapter 12 of Part 3 of Division 5 of Title 2 of the Government
11Code
, to read:

12 

13Article 8.  Employment After Retirement
14

 

15

21220.  

This article shall be deemed to comply with Article 4
16of Chapter 21 of Division 7 of Title 1, known as the California
17Public Employees’ Pension Reform Act of 2013, and shall be
18considered to further its purposes, including, but not limited to,
19the purposes of Sections 7522.56 and 7522.57.

20

21221.  

(a) This section shall apply to any person who is
21receiving a pension benefit from this system.

22(b) A retired person shall not serve, be employed by, or be
23employed through a contract directly by, a public employer in this
24system if the retiree receives the benefit without reinstatement
25from retirement, except as permitted by this article.

26(c) A person who retires from a public employer in this system
27may serve without reinstatement from retirement or loss or
28interruption of benefits provided by this system upon appointment
29by the appointing power or the governing body of a public
30employer either during an emergency to prevent stoppage of public
31business or because the retired person has skills needed to perform
32work of limited duration.

33(d) (1) Appointments of the person authorized under this section
34shall not exceed a total for all employers in this system of 960
35hours in a fiscal year. The monthly rate of pay for the employment
36shall not be less than the minimum, nor exceed the maximum, paid
37by the employer to other employees performing comparable duties,
38divided by 173.333 to equal an hourly rate. A retired person
39appointed pursuant to this section shall not receive any benefit,
40incentive, compensation in lieu of benefits, or other form of
P29   1compensation in addition to the hourly pay rate. A retired person
2whose employment without reinstatement is authorized by this
3section shall acquire no service credit or retirement rights under
4this section with respect to the employment unless he or she
5reinstates from retirement.

6(2) Appointments of the person authorized under this section
7as a member of the academic staff of the California State University
8shall not exceed a total for all employers in this system of 960
9hours in a fiscal year or 50 percent of the hours the member worked
10during the last fiscal year of service prior to retirement, whichever
11is less. The monthly rate of pay for the employment shall not be
12less than the minimum, nor exceed the maximum, paid by the
13employer to other employees performing comparable duties,
14divided by 173.333 to equal an hourly rate. A retired person
15appointed pursuant to this section shall not receive any benefit,
16incentive, compensation in lieu of benefits, or other form of
17compensation in addition to the hourly pay rate. A retired person
18whose employment without reinstatement is authorized by this
19section shall acquire no service credit or retirement rights under
20this section with respect to the employment unless he or she
21reinstates from retirement.

22(e) (1) Notwithstanding subdivision (c), any retired person shall
23not be eligible to serve or be employed by a public employer in
24this system if, during the 12-month period prior to an appointment
25described in this section, the retired person received any
26unemployment insurance compensation arising out of prior
27employment subject to this article with a public employer. A retiree
28shall certify in writing to the employer upon accepting an offer of
29employment that he or she is in compliance with this requirement.

30(2) A retired person who accepts an appointment after receiving
31unemployment insurance compensation as described in this
32subdivision shall terminate that employment on the last day of the
33current pay period and shall not be eligible for reappointment
34subject to this section for a period of 12 months following the last
35day of employment.

36

21222.  

(a) A retired person shall not be eligible to be employed
37pursuant to this article for a period of 180 days following the date
38of retirement unless he or she meets one of the following
39conditions:

P30   1(1) The public employer certifies the nature of the employment
2and that the appointment is necessary to fill a critically needed
3position before 180 days has passed and the appointment has been
4approved by the governing body of the employer in a public
5meeting. The appointment may not be placed on a consent calendar.

6(2) The state employer certifies the nature of the employment
7and that the appointment is necessary to fill a critically needed
8state employment position before 180 days has passed and the
9appointment has been approved by the Department of Human
10Resources. The department may establish a process to delegate
11appointing authority to individual state agencies, but shall audit
12the process to determine if abuses of the system occur. If necessary,
13the department may assume an agency’s appointing authority for
14retired workers and may charge the department an appropriate
15amount for administering that authority.

16(3) The retiree is eligible to participate in the Faculty Early
17Retirement Program pursuant to a collective bargaining agreement
18with the California State University that existed prior to January
191, 2013, or has been included in subsequent agreements.

20(4) The retiree is a public safety officer or firefighter hired to
21perform a function or functions regularly performed by a public
22safety officer or firefighter.

23(b) A retired person who accepted a retirement incentive upon
24retirement shall not be eligible to be employed pursuant to this
25section for a period of 180 days following the date of retirement
26and subdivision (a) shall not apply.

27

21223.  

A retired person who has not attained the normal
28retirement age shall have a bona fide separation in service to the
29extent required by the Internal Revenue Code, and the regulations
30promulgated thereunder, before working after retirement pursuant
31to this article. The board shall establish, by regulation, the criteria
32under which a bona fide separation is satisfied.

33

21224.  

(a) A person employed in violation of this article shall
34be reinstated to membership in the category in which, and on the
35date on which, the unlawful employment occurred.

36(b) Upon reinstatement, the retired member employed in
37violation of this article shall:

38(1) Reimburse this system for any retirement allowance received
39during the period or periods of employment that are in violation
40of law.

P31   1(2) Pay to this system an amount of money equal to the
2employee contributions that would otherwise have been paid during
3the period or periods of unlawful employment, plus interest
4thereon.

5(3) Contribute toward reimbursement of this system for
6administrative expenses incurred in responding to this situation,
7to the extent the member is determined by the executive officer to
8be at fault.

9(c) Any public employer in this system that employs a retired
10member in violation of this article shall, upon reinstatement of the
11retired member:

12(1) Pay to this system an amount of money equal to employer
13contributions that would otherwise have been paid for the period
14or periods of time that the member is employed in violation of this
15article, plus interest thereon.

16(2) Contribute toward reimbursement of this system for
17administrative expenses incurred in responding to this situation,
18to the extent the employer is determined by the executive officer
19of this system to be at fault.

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

22

21225.  

(a) This section shall apply to any retired person who
23is receiving a pension benefit from a public retirement system and
24is first appointed on or after January 1, 2013, to a salaried position
25on a state board or commission.

26(b) A person who is retired from a public retirement system
27may serve without reinstatement from retirement or loss or
28interruption of benefits provided that appointment is to a part-time
29state board or commission. A retired person whose employment
30without reinstatement is authorized by this subdivision shall acquire
31no benefits, service credit, or retirement rights with respect to the
32employment. Unless otherwise defined in statute, for the purpose
33of this section, a part-time appointment shall mean an appointment
34with a salary of no more than sixty thousand dollars ($60,000)
35annually, which shall be increased in any fiscal year in which a
36general salary increase is provided for state employees. The amount
37of the increase provided by this section shall be comparable to,
38but shall not exceed, the percentage of the general salary increases
39provided for state employees during that fiscal year.

P32   1(c) A person who is retired from the Public Employees’
2Retirement System shall not serve on a full-time basis on a state
3board or commission without reinstatement unless that person
4serves as a nonsalaried member of the board or commission and
5receives only per diem authorized to all members of the board or
6commission. A person who serves as a nonsalaried member of a
7board or commission shall not earn any service credit or benefits
8in the Public Employees’ Retirement System or make contributions
9with respect to the service performed.

10(d) A person retired from a public retirement system other than
11the Public Employees’ Retirement System who is appointed on a
12full-time basis to a state board or commission shall choose one of
13the following options:

14(1) The person may serve as a nonsalaried member of the board
15or commission and continue to receive his or her retirement
16allowance, in addition to any per diem authorized to all members
17of the board or commission. The person shall not earn service
18credit or benefits in the Public Employees’ Retirement System and
19shall not make contributions with respect to the service performed.

20(2) (A) The person may suspend his or her retirement allowance
21or allowances and instate as a new member of the Public
22Employees’ Retirement System for the service performed on the
23board or commission. The pensionable compensation earned
24pursuant to this paragraph shall not be eligible for reciprocity with
25any other retirement system or plan.

26(B) Upon retiring for service after serving on the board or
27commission, the appointee shall be entitled to reinstatement of any
28suspended benefits, including employer provided retiree health
29benefits, that he or she was entitled to at the time of being
30appointed to the board or commission.

31(e) Notwithstanding subdivisions (c) and (d), a person who
32retires from a public employer may serve without reinstatement
33from retirement or loss or interruption of benefits provided by the
34retirement system upon appointment to a full-time state board
35pursuant to Section 5075 of the Penal Code.

36

21230.  

A retired person may serve without reinstatement from
37retirement or loss or interruption of benefits provided by this
38system, as follows:

39(a) (1) As a subordinate judicial officer whose position, upon
40retirement, is converted to a judgeship pursuant to Section 69615,
P33   1and he or she returns to work in the converted position, and the
2employer is a trial court.

3(2) As a retiree who takes office as a judge of a court of record
4pursuant to Article VI of the California Constitution or a retiree
5of the Judges’ Retirement System I or the Judges’ Retirement
6System II who is appointed to serve as a retired judge.

7(b) (1) As an elective officer.

8(2) If a retired person serves without reinstatement from
9retirement in an elective office and part or all of his or her
10retirement allowance is based on service in that elective office,
11the portion of the allowance based on service in that elective office
12shall be suspended during incumbency in that elective office. The
13entire retirement allowance shall be paid for time on and after the
14person vacates the elective office in the monthly amount payable
15had the allowance not been suspended. The governing body of
16every employer other than the state shall cause immediate notice
17to be given to this system of the election of any retired person to
18an office of the employer.

end delete
19

begin deleteSEC. 28.end delete
20begin insertSEC. 24.end insert  

Section 22760 of the Government Code is amended
21to read:

22

22760.  

“Annuitant” means:

23(a) A person, other than a National Guard member defined in
24Section 20380.5, who has retired within 120 days of separation
25from employment and who receives a retirement allowance under
26any state or University of California retirement system to which
27the state was a contributing party.

28(b) A surviving family member receiving an allowance in place
29of an annuitant who has retired as provided in subdivision (a), or
30as the survivor of a deceased employee under Section 21541,
3121546, 21547, or 21547.7, or similar provisions of any other state
32retirement system.

33(c) A person who has retired within 120 days of separation from
34employment with a contracting agency as defined in Section 22768
35and who receives a retirement allowance from the retirement
36system provided by the employer, or a surviving family member
37who receives the retirement allowance in place of the deceased.

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

P34   1(e) A person who was a state member for 30 years or more and
2who, at the time of retirement, was a local member employed by
3a contracting agency.

4(f) A Member of the Legislature or an elective officer of the
5state whose office is provided by the California Constitution, who
6has at least eight years of credited service, and who meets the
7following conditions:

8(1) Permanently separates from state service on or after January
91, 1988, and not more than 10 years before or 10 years after his
10or her minimum age for service retirement, or is an inactive
11member of the Legislators’ Retirement System pursuant to Section
129355.2.

13(2) Receives a retirement allowance under a state retirement
14system supported in whole or in part by state funds other than the
15University of California Retirement System.

16(g) An exempt employee who meets all of the following
17conditions:

18(1) Has at least 10 years of credited state service that includes
19at least 2 years of credited service while an exempt employee.

20(2) Permanently separates from state service on or after January
211, 1988, and not more than 10 years before or 10 years after his
22or her minimum age for service retirement.

23(3) Receives a retirement allowance under a state retirement
24system supported in whole or in part by state funds other than the
25University of California Retirement System.

26(h) A person receiving a survivor allowance pursuant to Article
273 (commencing with Section 21570) of Chapter 14 of Part 3
28provided that he or she was eligible to enroll in a health benefit
29plan on the date of the member’s death, on whose account the
30survivor allowance is payable.

31(i) (1) A family member of a deceased retired member of the
32State Teachers’ Retirement Plan, if the deceased member meets
33the following conditions:

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

35(B) Retired before the member’s school employer elected to
36contract for health benefit coverage under this part.

37(C) Prior to his or her death, received a retirement allowance
38that did not provide for a survivor allowance to family members.

39(2) The family member shall elect coverage as an annuitant
40within one calendar year from the date that the deceased member’s
P35   1school employer elected to contract for health benefit coverage
2under this part.

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

5begin insert

begin insertSEC. 24.5.end insert  

end insert

begin insertSection 22760 of the end insertbegin insertGovernment Codeend insertbegin insert is amended
6to read:end insert

7

22760.  

“Annuitant” means:

8(a) A person, other than a National Guard member defined in
9Section 20380.5, who has retired within 120 days of separation
10from employment and who receives a retirement allowance under
11any state or University of California retirement system to which
12the state was a contributing party.

13(b) A surviving family member receiving an allowance in place
14of an annuitant who has retired as provided in subdivision (a), or
15as the survivor of a deceased employee under Section 21541,
1621546, 21547, or 21547.7, or similar provisions of any other state
17retirement system.

18(c) A person who has retired within 120 days of separation from
19employment with a contracting agency as defined in Section 22768
20begin insert or, if applicable, consistent with the provisions of subdivision (b)
21of Section 22893,end insert
and who receives a retirement allowance from
22the retirement system provided bybegin delete theend deletebegin insert thatend insert employer, or a surviving
23family member who receives the retirement allowance in place of
24the deceased.

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

27(e) A person who was a state member for 30 years or more and
28who, at the time of retirement, was a local member employed by
29a contracting agency.

30(f) A Member of the Legislature or an elective officer of the
31state whose office is provided by the California Constitution, who
32has at least eight years of credited service, and who meets the
33following conditions:

34(1) Permanently separates from state service on or after January
351, 1988, and not more than 10 years before or 10 years after his
36or her minimum age for service retirement, or is an inactive
37member of the Legislators’ Retirement System pursuant to Section
389355.2.

P36   1(2) Receives a retirement allowance under a state retirement
2system supported in whole or in part by state funds other than the
3University of California Retirement System.

4(g) An exempt employee who meets all of the following
5conditions:

6(1) Has at least 10 years of credited state service that includes
7at least 2 years of credited service while an exempt employee.

8(2) Permanently separates from state service on or after January
91, 1988, and not more than 10 years before or 10 years after his
10or her minimum age for service retirement.

11(3) Receives a retirement allowance under a state retirement
12system supported in whole or in part by state funds other than the
13University of California Retirement System.

14(h) A person receiving a survivor allowance pursuant to Article
153 (commencing with Section 21570) of Chapter 14 of Part 3
16provided that he or she was eligible to enroll in a health benefit
17plan on the date of the member’s death, on whose account the
18survivor allowance is payable.

19(i) (1) A family member of a deceased retired member of the
20State Teachers’ Retirement Plan, if the deceased member meets
21the following conditions:

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

23(B) Retired before the member’s school employer elected to
24contract for health benefit coverage under this part.

25(C) Prior to his or her death, received a retirement allowance
26that did not provide for a survivor allowance to family members.

27(2) The family member shall elect coverage as an annuitant
28within one calendar year from the date that the deceased member’s
29school employer elected to contract for health benefit coverage
30under this part.

begin insert

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

end insert
begin delete
33

SEC. 29.  

Section 22772 of the Government Code is amended
34to read:

35

22772.  

(a) “Employee” means:

36(1) An officer or employee of the state or of any agency,
37department, authority, or instrumentality of the state, including
38the University of California.

39(2) An employee who is employed by a contracting agency and
40participates in a publicly funded retirement system provided by
P37   1the contracting agency, or an officer or official of a contracting
2agency.

3(3) A teaching associate, lecturer, coach, or interpreter employed
4by the California State University who is appointed to work in an
5academic year classification for at least six weighted teaching units
6for one semester, or for at least six weighted teaching units for two
7or more consecutive quarter terms. This paragraph does not apply
8to a state member employed by the California State University,
9unless provided for in a memorandum of understanding reached
10pursuant to Chapter 12 (commencing with Section 3560) of
11Division 4 of Title 1 or authorized by the Trustees of the California
12State University for employees excluded from collective
13bargaining.

14(4) All employees in job classes specified in subdivision (a) of
15Section 14876.

16(b) Except as otherwise provided by this part, “employee” does
17not include any of the following:

18(1) A person employed on an intermittent, irregular, or less than
19half-time basis, or an employee similarly situated.

20(2) A National Guard member described in Section 20380.5.

end delete
21

begin deleteSEC. 30.end delete
22begin insertSEC. 25.end insert  

Section 75005 of the Government Code is amended
23to read:

24

75005.  

Notwithstanding any other provision of law, this chapter
25shall be administered and governed by the Board of Administration
26of the Public Employees’ Retirement System in accordance with
27the Public Employees’ Retirement Law to the same extent and
28with the same effect as if those provisions are contained in the
29Judges’ Retirement Law, except for those provisions which provide
30for the payment of an allowance or other benefit and except for
31those provisions which conflict with any provision of the Judges’
32Retirement Law. To the extent applicable, the Board of
33Administration of the Public Employees’ Retirement System shall
34also administer this chapter in conformance with the California
35Public Employees’ Pension Reform Act of 2013 (Article 4
36(commencing with Section 7522) of Chapter 21 of Division 7 of
37Title 1) to the same extent and with the same effect as if the
38provisions of the act are contained in the Judges’ Retirement Law.
39If the Board of Administration of the Public Employees’
40Retirement System determines that there is a conflict between the
P38   1provisions of the California Public Employees’ Pension Reform
2Act of 2013 and this chapter, the provisions of the California Public
3Employees’ Pension Reform Act of 2013 shall control. “State
4Controller” or “Controller” as used in this chapter, or any other
5provision of law relating to the chapter, shall be construed to refer
6to and mean the “Board of Administration of the Public Employees’
7Retirement System”; however, the Controller shall continue to
8perform the duties prescribed in Sections 75092, 75097, 75101,
9and 75102.

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

13

begin deleteSEC. 31.end delete
14begin insertSEC. 26.end insert  

Section 75505 of the Government Code is amended
15to read:

16

75505.  

(a) This chapter shall be administered and governed
17pursuant to the Public Employees’ Retirement Law to the same
18extent and with the same effect as if those provisions are contained
19in this chapter, except for those provisions that provide for the
20payment of an allowance or other benefit and except for those
21provisions that conflict with any provision of this chapter. To the
22extent applicable, the Board of Administration of the Public
23Employees’ Retirement System shall administer this chapter in
24conformance with the California Public Employees’ Pension
25Reform Act of 2013 (Article 4 (commencing with Section 7522)
26of Chapter 21 of Division 7 of Title 1) to the same extent and with
27the same effect as if the provisions of the act are contained in the
28Judges’ Retirement System II Law. If the Board of Administration
29of the Public Employees’ Retirement System determines that there
30is a conflict between the provisions of the California Public
31Employees’ Pension Reform Act of 2013 and this chapter, the
32provisions of the California Public Employees’ Pension Reform
33Act of 2013 shall control.

34(b) All payments from the Judges’ Retirement System II Fund
35shall be made upon warrants drawn by the Controller upon
36demands by the Board of Administration of the Public Employees’
37Retirement System.

38begin insert

begin insertSEC. 27.end insert  

end insert
begin insert

Section 24.5 of this bill incorporates amendments to
39Section 22760 of the Government Code proposed by both this bill
40and Assembly Bill 410. It shall only become operative if (1) both
P39   1bills are enacted and become effective on or before January 1,
22014, (2) each bill amends Section 22760 of the Government Code,
3and (3) this bill is enacted after Assembly Bill 410, in which case
4Section 24 of this bill shall not become operative.

end insert


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