Amended in Senate March 21, 2013

Senate BillNo. 277


Introduced by Senator Beall

February 14, 2013


An actbegin delete to add Section 22960.4 to, andend delete to amend Sections 22960.99, 22970.58, and 22970.855 of,begin insert to add Section 22960.4 to, and to repeal Section 22960.100 of,end insert the Government Code, relating to public employees’ retirement, and making an appropriation therefor.

LEGISLATIVE COUNSEL’S DIGEST

SB 277, as amended, Beall. State Peace Officers’ and Firefighters’ Defined Contribution Plan.

Existing law establishes the State Peace Officers’ and Firefighters’ Defined Contribution Plan for state peace officer/firefighter members in State Bargaining Unit 6, the California Correctional Peace Officers Association, and others as specified.begin insert Under existing law, the plan applies to state peace officer and firefighter members in State Bargaining Unit 8 who have become subject by a memorandum of understanding. Existing law authorizes the plan to be provided to state peace officers or firefighters who meet stated criteria, if the Department of Human Resources has approved their inclusion for coverage.end insert The moneys in the State Peace Officers’ and Firefighters’ Defined Contribution Plan Fund are continuously appropriated. Existing law entitles a participant in the plan to a lump-sum distribution of the balance of his or her account, or installment payments if he or she is entitled to $5,000 or more, upon separation from all service for the employer for any reason other than death, disability, or retirement.

Existing law requires the Board of Administration of the Public Employees’ Retirement System to administer the Supplemental Contributions Program and requires contributions by eligible employees, as defined, participating in the program to be deposited in the Supplemental Contributions Program Fund, a continuously appropriated fund.

This bill would require that contributions to the State Peace Officers’ and Firefighters’ Defined Contribution Plan cease, prohibit new members from participating in the plan, and would require that the plan be terminated as prescribed.begin insert The bill would repeal those provisions extending plan coverage to State Bargaining Unit 8 and certain state peace officers or firefighters.end insert The bill would require all moneys in the State Peace Officers’ and Firefighters’ Defined Contribution Plan Fund to be distributed, as specified, including requiring that, if not elected otherwise, amounts that become payable from the fund be rolled over under existing federal law to the Supplemental Contributions Program. The bill would provide for rollover contributions to separate rollover contribution accounts in the Supplemental Contributions Program, as specified, and would provide for the distribution of amounts held in the participant’s account. By changing the circumstances under which moneys in the State Peace Officers’ and Firefighters’ Defined Contribution Fund would be distributed, and by providing for an increase in contributions to the Supplemental Contributions Program, this bill would make an appropriation.

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

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

P2    1

SECTION 1.  

Section 22960.4 is added to the Government
2Code
, to read:

3

22960.4.  

(a) The Legislature finds and declares that an
4agreement between the exclusive representative of state peace
5officer and firefighter members inbegin insert Stateend insert Bargaining Unit 6 and the
6employer has eliminated the employer contributions to the plan
7provided in Section 22960.60.

8(b) The following shall occur:

9(1) All contributions to the plan shall cease.

10(2) New participants shall be prohibited from participating in
11the plan.

12(3) The plan shall be terminated on the later of January 1, 2014,
13or upon obtaining appropriate approvals from the Internal Revenue
P3    1Service, including a favorable determination letter on plan
2termination from the Internal Revenue Service.

3(4) Subject to paragraph (3), all moneys in the fund shall be
4distributed in accordance with this part and federal law. If not
5elected otherwise, amounts that become payable from the fund
6under this section shall be rolled over under Section 401(a)(31) of
7Title 26 of the United States Code to the Supplemental
8Contributions Program established in accordance with Section
922970.

10

SEC. 2.  

Section 22960.99 of the Government Code is amended
11to read:

12

22960.99.  

(a) The plan’s obligations to a participant,
13beneficiary, or nonparticipant spouse who has applied for a
14lump-sum benefit cease upon distribution of the lump-sum benefit.

15(1) Deposit in the United States mail of a warrant drawn in favor
16of the participant, beneficiary, or nonparticipant spouse and
17addressed to the latest address on file for that person constitutes
18distribution of the benefit.

19(2) Deposit in the United States mail of a notice that the
20requested electronic funds transfer has been made as directed by
21the participant, beneficiary, or nonparticipant spouse constitutes
22distribution of the benefit.

23(3) If the participant, beneficiary, or nonparticipant spouse has
24elected on a form prescribed by the board to transfer all or a
25specific portion of the account that is eligible for a direct
26trustee-to-trustee transfer under Section 401(a)(31) of Title 26 of
27the United States Code, deposit in the United States mail of a notice
28that the requested transfer has been made constitutes distribution
29of the benefit.

30(b) The plan’s obligations to a participant, beneficiary, or
31nonparticipant spouse who elected to receive a benefit in the form
32of installment payments or an annuity cease upon distribution of
33the final payment.

34(1) Deposit in the United States mail of a warrant drawn in favor
35of the participant, beneficiary, or nonparticipant spouse and
36addressed to the latest address on file for that person constitutes
37distribution of the benefit.

38(2) Deposit in the United States mail of a notice that the
39requested electronic funds transfer has been made as directed by
P4    1the participant, beneficiary, or nonparticipant spouse constitutes
2distribution of the benefit.

3(c) Distribution under paragraph (1), (2), or (3) of subdivision
4(a) or paragraph (1) or (2) of subdivision (b) pursuant to the board’s
5determination in good faith of the existence, identity, or other facts
6relating to entitlement of persons constitutes a complete discharge
7and release of the board, system, and plan from liability for
8payments.

9(d) Distribution under paragraph (4) of subdivision (b) of Section
1022960.4 constitutes a complete discharge and release of the board,
11system, and plan from liability for payments, and the board and
12system shall not be treated as fiduciaries with respect to a transfer
13of funds from the plan to the Supplemental Contributions Program
14in accordance with Section 22970.

15begin insert

begin insertSEC. 3.end insert  

end insert

begin insertSection 22960.100 of the end insertbegin insertGovernment Codeend insertbegin insert is repealed.end insert

begin delete
16

22960.100.  

(a) Notwithstanding any other provision of law,
17the plan established by this part shall also apply to state peace
18officer and firefighter members in State Bargaining Unit 8 who
19have become subject to this part by a memorandum of
20understanding, as provided in Section 3517.5.

21(b) The plan may also be provided to state peace officers or
22firefighters who are either excluded from the definition of state
23employee in subdivision (c) of Section 3513, or are nonelected
24officers or employees of the executive branch of government and
25are not members of the civil service, and who supervise employees
26in a bargaining unit that is subject to this part, provided that the
27Department of Human Resources has approved their inclusion for
28 coverage under this part.

end delete
29

begin deleteSEC. 3.end delete
30begin insertSEC. 4.end insert  

Section 22970.58 of the Government Code is amended
31to read:

32

22970.58.  

The board may amend the plan to permit a participant
33to transfer funds from an eligible retirement plan into this plan to
34the extent that the transfers are allowed under applicable federal
35and state laws, and pursuant to the terms and conditions established
36by the board. The plan may accept rollover contributions made in
37accordance with paragraph (4) of subdivision (b) of Section
3822960.4, if the boardbegin delete amends the plan to establishend deletebegin insert establishesend insert a
39separate rollover contribution account for each participant or
P5    1beneficiary who makes such rollover contributions for the purpose
2of holding those contributions.

3

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

Section 22970.855 of the Government Code is amended
5to read:

6

22970.855.  

The board may amend the plan to permit a
7participant to withdraw some or all of his or her after-tax
8contributions without requiring the participant to terminate from
9the plan to the extent that this in-service distribution is allowed
10under applicable federal and state laws, and pursuant to the terms
11and conditions established by the board. A participant may apply
12for a distribution of amounts held in the participant’s separate
13rollover contribution account established pursuant to Section
1422970.58 at any time before that participant’s termination of
15employment, to the extent that an in-service distribution is allowed
16under applicable federal and state law, and pursuant to the terms
17and conditions established by the board.



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