Amended in Senate April 10, 2014

Senate Bill No. 1220

Introduced by Senator Torres

February 20, 2014

An act to amend Sections 22109.5, begin delete 22119.5, end delete 22119.3, 22121, 22131, 22134, 22134.5, 22135, 22136, begin insert 22146.2, end insert 22516, 22655, 22662, 22663, 22664, 22801, 22826, 22828, 22905, begin insert 22909, end insert 23104, 24001, 24101, 24105, 24107, 24201.5, 24203.5, 24203.6, 24204, 24205, 24210, 24211, 24212, 24213, 24214.5, 24300, 24300.1, 24307, 24309, begin insert 24310, end insert 24402, 24412, 24415, 24600, 25015, begin insert 25100, end insert 26113, 26803, 27201, and 33050 of, to amend and renumber Sections 22106.2, 24300.2, 24300.5, 24300.6, 24301, 24302, 24303, 24304, 24305, 24305.5, 24306, 24306.5, 24306.7, 24308, 24311, 24312, 24312.1, and 24313 of, to amend, renumber, and add Section 22106.1 of, to amend and repeal Section 22119.5 of, to amend, renumber, and repeal Section 24305.3 of, and to add begin delete Section end delete begin insert Sections 24347 and end insert 24348 to, the Education Code, and to amend Section 1 of Chapter 559 of the Statutes of 2013, relating to state teachers’ retirement.

LEGISLATIVE COUNSEL’S DIGEST

SB 1220, as amended, Torres. State teachers’ retirement.

Existing law, the Teachers’ Retirement Law, establishes the State Teachers’ Retirement System (STRS) and creates the Defined Benefit Program of the State Teachers’ Retirement Plan, which provides a defined benefit to members of the program, based on final compensation, credited service, and age at retirement, subject to certain variations. STRS is administered by the Teachers’ Retirement Board. Existing law establishes the Supplemental Benefit Maintenance Account, among other provisions, for the purpose of restoring the purchasing power of allowances. Existing law establishes the Defined Benefit Supplement Program to provide additional benefits to members of the Defined Benefit Program. Existing law establishes the Cash Balance Benefit Program, administered by the Teachers’ Retirement Board, as a separate benefit program within the State Teachers’ Retirement Plan in order to provide a retirement plan for persons employed to perform creditable service for less than 50% of full-time service. Existing law permits a member of STRS to purchase service credit in certain instances and permits a person who has withdrawn membership in STRS to become a member again upon redeposit of contributions plus interest, as specified. Existing law permits a member of STRS to select among various options for the payment of benefits after the retired member dies, provides certain presumptions in this regard, and permits a member to revise a beneficiary designation pursuant to specific requirements and limitations. The begin insert California end insert Public Employees’ Pension Reform Act of 2013 (PEPRA) requires a public retirement system, as defined, to modify its plan or plans to comply with the act and, among other things, sets limits on the amount of compensation that may be used to calculate benefits.

This bill would amend the Teachers’ Retirement Law to provide a definition of base allowance for the purpose of determining specified supplemental benefits and revise the definition of a break in service to account for certain times not recognized as part of the school year. The bill would revise the definition of credited service to account for members whose contributions have been reduced because of PEPRA begin delete and end delete begin insert . The bill end insert would revise the definition of final compensation to account for the calculation of service based on months rather than years begin insert and require an employer to make a certification if a member’s salary was reduced because of reduction in school funds end insert . The bill would begin delete make end delete begin insert prescribe requirements for a joint powers authority in order for that authority to act as employer providing creditable service subject to the Defined Benefit Program of the State Teachers’ Retirement Plan. end insert

begin insert The bill would make end insert conforming changes in how member contributions are credited to reflect reductions applied when payments are determined to have been paid to enhance a member’s benefits. The bill would make various technical changes regarding disability allowances, disability retirements, and service retirements following disability retirements. The bill would revise and reorganize provisions relating begin insert to end insert a member’s right to elect among various options to provide an actuarially modified retirement allowance payable during the life of the member and the member’s chosen beneficiary or beneficiaries, particularly with regard to the election of a new beneficiary after the member’s retirement when the previous beneficiary has predeceased the member. The bill would grant a member who had retired and elected begin delete a specified option end delete begin insert certain options end insert and designated his or her same-sex spouse as the option beneficiary the right to elect to change his or her option subject to specified requirements. The bill would make numerous technical and conforming changes.

begin insert

Existing law requires the Teachers’ Retirement Board to establish a vendor registration process through which information about tax-deferred retirement investment products are made available for consideration by specified public employees, including those employed by local school districts and community college districts. Existing law defines vendor for this purpose.

end insert begin insert

This bill would revise the definition of vendor to mean any organization qualified to do business in California that offers a 403(b) product.

end insert

Existing law permits a governing board of a school district or a county board of education to request the State Board of Education waive provisions of the Education Code, but excepts from that authorization specified provisions, including provisions of the Teachers’ Retirement Law relating to STRS.

This bill would also except from this authorization provisions of the Teachers’ Retirement Law relating to the health care benefits program and the cash benefit program.

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

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

SECTION 1.  

Section 22106.1 of the Education Code is
amended and renumbered to read:

22106.2.  

“Base days” means the number of days of creditable
service required to earn one year of service credit.

SEC. 2.  

Section 22106.1 is added to the Education Code, to
read:

22106.1.  

For the purposes of determining supplemental benefits
pursuant to Sections 24412 and 24415, “base allowance” means
a begin delete member’s end delete monthly allowance under the Defined Benefit Program
prior to all allowance increases by this part and after modification
for an option, if applicable.

SEC. 3.  

Section 22106.2 of the Education Code is amended
and renumbered to read:

22106.3.  

“Base hours” means the number of hours of creditable
service required to earn one year of service credit.

SEC. 4.  

Section 22109.5 of the Education Code is amended to
read:

22109.5.  

“Break in service,” for purposes of determining a
member’s final compensation, means:

(a) With respect to service of a member employed as a full-time
employee and service performed by a member employed as a
part-time employee, any period of time covering a pay period
during which a member is on an unpaid leave of absence or a pay
period in which a member has not performed any creditable service.

(b) For a member who has been employed in a substitute
position:

(1) And has a change in assignment during a school year to a
full-time or part-time position, a break in service is determined on
the same basis as for the full-time or part-time employment during
the same school year.

(2) For less than 50 percent of their teaching career for which
service is credited, a break in service is determined on the same
basis as full-time employment.

(3) For more than 50 percent of their teaching career for which
service is credited, a break in service is any period of time within
a school year for which compensation is not paid and service is
not credited.

(c) If a member commenced performing service at the beginning
of a school term, the months not recognized as part of the school
term are not a break in service; however, if the member commenced
performing service after the school term began, or did not complete
the school term, the months not recognized as part of the school
term are a break in service. The school term shall be no less than
the days or hours specified as full time in Section 22138.5.

(d) Earnable salaries for a full pay period, but not beyond the
effective date of retirement, shall be used in determining final
compensation when the member performed service within that pay
period.

SEC. 5.  

Section 22119.3 of the Education Code is amended to
read:

22119.3.  

(a) “Creditable compensation” for members who are
subject to the California Public Employees’ Pension Reform Act
of 2013 means remuneration that is paid each pay period in which
creditable service is performed for that position. Creditable
compensation shall be paid in cash by an employer to all persons
in the same class of employees in accordance with a publicly
available written contractual agreement, including, but not limited
to, a salary schedule or employment agreement. Creditable
compensation shall include:

(1) Remuneration that is paid for the use of sick leave, vacation,
and other employer-approved leave, except as provided in
paragraph (4) of subdivision (b).

(2) Member contributions that are picked up by an employer
pursuant to Section 22903 or 22904.

(3) Amounts that are deducted from a member’s remuneration,
including, but not limited to, deductions for participation in a
deferred compensation plan; deductions to purchase an annuity
contract, tax-deferred retirement plan, or insurance program; and
contributions to a plan that meets the requirements of Section 125,
401(a), 401(k), 403(b), 457(b), or 457(f) of Title 26 of the United
States Code.

(4) Notwithstanding paragraphs (6) and (8) of subdivision (c)
of Section 7522.34 of the Government Code, remuneration that is
paid for creditable service that exceeds one year in a school year.

(b) “Creditable compensation” does not mean and shall not
include:

(1) Remuneration that is not paid in cash or is not paid to all
persons who are in the same class of employees.

(2) Remuneration that is paid for service that is not creditable
service pursuant to Section 22119.5.

(3) Remuneration that is not paid each pay period in which
creditable service is performed for that position.

(4) Remuneration that is paid in exchange for the relinquishment
of unused accumulated leave.

(5) Payments, including, but not limited to, those for
participation in a deferred compensation plan; to purchase an
annuity contract, tax-deferred retirement plan, or insurance
program; and for contributions to a plan that meets the requirements
of Section 125, 401(a), 401(k), 403(b), 457(b), or 457(f) of Title
26 of the United States Code when the cost is covered by an
employer.

(6) Fringe benefits provided by an employer.

(7) Expenses paid or reimbursed by an employer.

(8) Severance pay, including lump sum and installment
payments, or money paid in excess of salary or wages to a member
as compensatory damages or as a compromise settlement.

(9) Creditable compensation determined by the system to have
been paid to enhance a member’s benefit.

(10) Compensation paid to the member in lieu of benefits
provided to the member by the employer or paid directly by the
employer to a third party other than the system for the benefit of
the member.

(11) Any one-time or ad hoc payments made to a member.

(12) Any employer-provided allowance, reimbursement, or
payment, including, but not limited to, one made for housing,
vehicle, or uniform.

(13) Any bonus paid in addition to compensation described in
subdivision (a).

(14) Any other payments the board determines not to be
“creditable compensation.”

(c) (1) Except for purposes of calculating credited service in
the Defined Benefit Program and for reporting compensation
earnable on or after January 1, 2013, creditable compensation in
any fiscal year shall not exceed:

(A) One hundred twenty percent of the “contribution and benefit
base,” as determined under Section 430(b) of the Social Security
Act (42 U.S.C. Sec. 430(b)), on January 1, 2013, for a member
whose service is not included in the federal system.

(B) One hundred percent of the “contribution and benefit base,”
as determined under Section 430(b) of the Social Security Act (42
U.S.C. Sec. 430(b)), on January 1, 2013, for a member whose
service is included in the federal system pursuant to any changes
in state or federal law enacted on or after January 1, 2013.

(2) The system shall adjust the limit in paragraph (1) based on
the annual changes to the Consumer Price Index for All Urban
Consumers: U.S. City Average, calculated by dividing the
Consumer Price Index for All Urban Consumers: U.S. City
Average for the month of February in the fiscal year preceding the
adjustment by the Consumer Price Index for All Urban Consumers:
U.S. City Average for the month of February of the previous year
rounded to the nearest thousandth. Notwithstanding paragraph (1)
of subdivision (d) of Section 7522.10 of the Government Code,
the adjustment shall be effective annually on July 1, beginning
July 1, 2014.

(3) The Legislature reserves the right to modify the requirements
of this subdivision with regard to all members subject to this
subdivision, except that the Legislature may not modify these
provisions in a manner that would result in a decrease in benefits
accrued prior to the effective date of the modification.

(4) This subdivision shall apply to compensation paid during
the 2013-14 fiscal year and each fiscal year thereafter.

(d) An employer or individual who knowingly or willfully
reports compensation in a manner inconsistent with subdivision
(a) or (b) may be subject to prosecution for fraud, theft, or
embezzlement in accordance with the Penal Code. The system
may establish procedures to ensure that compensation reported by
an employer is in compliance with this section.

(e) For purposes of this section, remuneration shall be considered
paid if distributed to any person in the same class of employees
who meets the qualifications or requirements specified in a publicly
available written contractual agreement, including, but not limited
to, a collective bargaining agreement or an employment agreement,
as a condition of receiving the remuneration.

(f) This definition of “creditable compensation” reflects sound
principles that support the integrity of the retirement fund. Those
principles include, but are not limited to, consistent treatment of
compensation throughout a member’s career, consistent treatment
of compensation among an entire class of employees, consistent
treatment of compensation for the position, preventing adverse
selection, and excluding from creditable compensation
remuneration that is paid to enhance a member’s benefits. The
system shall determine the appropriate crediting of contributions
according to these principles, to the extent not otherwise specified
pursuant to this part. A presumption by the system that creditable
compensation was paid to enhance the member’s benefits may be
rebutted by the member or by the employer on behalf of the
member. Upon receipt of sufficient evidence to the contrary, a
presumption by the system that creditable compensation was paid
to enhance the member’s benefits may be reversed.

SEC. 6.  

Section 22119.5 of the Education Code, as amended
by Section 1 of Chapter 375 of the Statutes of 2002, is amended
to read:

22119.5.  

(a) “Creditable service” means any of the following
activities performed for an employer in a position requiring a
credential, certificate, or permit pursuant to this code, or under the
appropriate minimum standards adopted by the Board of Governors
of the California Community Colleges, or under the provisions of
an approved charter for the operation of a charter school for which
the charter school is eligible to receive state apportionment, or
pursuant to a contract between a community college district and
the United States Department of Defense to provide vocational
training:

(1) The work of teachers, instructors, district interns, and
academic employees employed in the instructional program for
pupils, including special programs such as adult education, regional
occupation programs, child care centers, and prekindergarten
programs pursuant to Section 22161.

(2) Education or vocational counseling, guidance, and placement
services.

(3) The work of directors, coordinators, and assistant
administrators who plan courses of study to be used in California
public schools, or research connected with the evaluation or
efficiency of the instructional program.

(4) The selection, collection, preparation, classification,
demonstration, or evaluation of instructional materials of any
course of study for use in the development of the instructional
program in California public schools, or other services related to
school curriculum.

(5) The examination, selection, in-service training, or assignment
of teachers, principals begin insert , end insert or other similar personnel involved in the
instructional program.

(6) School activities related to, and an outgrowth of, the
instructional and guidance program of the school when performed
in addition to other activities described in this section.

(7) The work of nurses, physicians, speech therapists,
psychologists, audiometrists, audiologists, and other school health
professionals.

(8) Services as a school librarian.

(9) The work of employees who are responsible for the
supervision of persons or administration of the duties described
in this section.

(b) “Creditable service” also means the work of superintendents
of California public schools.

(c) The board shall have final authority for determining
creditable service to cover any activities not already specified.

SEC. 7.  

Section 22119.5 of the Education Code, as added by
Section 1 of Chapter 394 of the Statutes of 1995, is repealed.

SEC. 8.  

Section 22121 of the Education Code is amended to
read:

22121.  

(a) “Credited service” means service for which the
required contributions have been paid.

(b) “Credited service” for members who are subject to the
California Public Employees’ Pension Reform Act of 2013 means
service for which required contributions have been paid and service
for which required contributions would have been paid in absence
of the limit established by subdivision (c) of Section 22119.3.

(c) “Credited service” for the limited purpose of determining
eligibility for benefits pursuant to Section 22134.5, 24203.5, or
24203.6 also includes up to two-tenths of one year of service
granted pursuant to Section 22717.

SEC. 9.  

Section 22131 of the Education Code is amended to
read:

22131.  

begin insert (a) end insert begin insert   end insert begin insert (1) end insert begin insert   end insert “Employer” or “employing agency” means
the state or any agency or political subdivision begin delete thereof end delete begin insert thereof,
including, but not limited to, a joint powers authority, end insert for which
creditable service subject to coverage by the plan is performed. begin delete In
the case of a joint powers authority, all entities included in the
authority shall be entities at which creditable service subject to
coverage by the plan is performed and each entity shall report
through the same county office of education. end delete

begin insert

(2) In the case of a joint powers authority, all of the following
criteria shall be met:

end insert begin insert

(A) The joint powers authority shall be formed pursuant to the
Joint Exercise of Powers Act (Chapter 5 (commencing with Section
6500) of Division 7 of Title 1 of the Government Code).

end insert begin insert

(B) All entities included in the joint powers authority shall be
entities at which creditable service subject to coverage by the plan
is performed.

end insert begin insert

(C) The joint powers authority shall report through a single
county office of education, with that county superintendent having
responsibility for activities specified under this part, including but
not limited to, reporting and remitting contributions.

end insert begin insert

(b) This section shall be administered in compliance with the
requirements defining a governmental plan set forth in Section
414(d) of the Internal Revenue Code of 1986 (26 U.S.C. Sec.
414(d)).

end insert

SEC. 10.  

Section 22134 of the Education Code is amended to
read:

22134.  

(a) “Final compensation” means the highest average
annual compensation earnable, as defined by Section 22115, by a
member during any period of 36 consecutive months while an
active member of the Defined Benefit Program or time during
which he or she was not a member but for which the member has
received credit under the Defined Benefit Program, except time
that was so credited for service performed outside this state prior
to July 1, 1944.

(b) For purposes of this section, periods of service separated by
breaks in service may be aggregated, if the periods of service are
consecutive except for the breaks.

(c) The determination of final compensation of a member who
is eligible for concurrent retirement as defined in Section 22115.5
shall take into consideration the compensation earnable while a
member of any other system, provided that both of the following
exist:

(1) Service under any other system was not performed during
the same pay period with service under the Defined Benefit
Program.

(2) Retirement under the Defined Benefit Program is concurrent
with the member’s retirement under any other system pursuant to
Section 22115.5.

(d) The compensation earnable for the first position in which
California service was credited shall be used when additional
compensation earnable is required for the purpose of determining
final compensation under Section 23805.

(e) If a member has received service credit for part-time service
performed prior to July 1, 1956, the member’s final compensation
shall be adjusted for that service in excess of one year by the ratio
that part-time service bears to full-time service.

(f) The board may specify a different final compensation with
respect to disability allowances, disability retirement allowances,
family allowances, and children’s portions of survivor benefit
allowances payable on and after January 1, 1978. The compensation
earnable for periods of part-time service shall be adjusted by the
ratio that part-time service bears to full-time service.

(g) The amendment of former Section 22127 made by Chapter
782 of the Statutes of 1982 does not constitute a change in, but is
declaratory of, the existing law.

SEC. 11.  

Section 22134.5 of the Education Code is amended
to read:

22134.5.  

(a) Notwithstanding Section 22134, “final
compensation” means the highest average annual compensation
earnable, as defined in Section 22115, by a member during any
period of 12 consecutive months while an active member of the
Defined Benefit Program or time during which he or she was not
a member but for which the member has received credit under the
Defined Benefit Program, except time that was so credited for
service performed outside this state prior to July 1, 1944.

(b) For purposes of this section, periods of service separated by
breaks in service may be aggregated, if the periods of service are
consecutive except for the breaks.

(c) The determination of final compensation of a member who
is eligible for concurrent retirement as defined in Section 22115.5
shall take into consideration the compensation earnable while a
member of any other system, provided that both of the following
exist:

(1) Service under any other system was not performed during
the same pay period with service under the Defined Benefit
Program.

(2) Retirement under the Defined Benefit Program is concurrent
with the member’s retirement under any other system pursuant to
Section 22115.5.

(d) If a member has received service credit for part-time service
performed prior to July 1, 1956, the member’s final compensation
shall be adjusted for that service in excess of one year by the ratio
that part-time service bears to full-time service.

(e) The board may specify a different final compensation with
respect to disability allowances, disability retirement allowances,
family allowances, and children’s portions of survivor benefit
allowances payable on and after January 1, 1978. The compensation
earnable for periods of part-time service shall be adjusted by the
ratio that part-time service bears to full-time service.

(f) This section shall apply to the following:

(1) A member who has 25 or more years of credited service,
excluding service credited pursuant to the following:

(A) Section 22714.

(B) Section 22715.

(C) Section 22717, except as provided in subdivision begin delete (b) end delete begin insert (c) end insert of
Section 22121.

(D) Section 22826.

(2) A nonmember spouse, if the member had 25 or more years
of credited service, as calculated in paragraph (1), on the date the
parties separated, as established in the judgment or court order
pursuant to Section 22652.

(3) This section shall not apply to a member subject to the
California Public Employees’ Pension Reform Act of 2013.

SEC. 12.  

Section 22135 of the Education Code is amended to
read:

22135.  

(a) Notwithstanding subdivision (a) of Section 22134,
“final compensation” means the highest average annual
compensation earnable, as defined by Section 22115, by an active
member who is a classroom teacher not subject to the California
Public Employees’ Pension Reform Act of 2013 and who retires,
becomes disabled, or dies, after June 30, 1990, during any period
of 12 consecutive months while an active member of the Defined
Benefit Program.

(b) Section 22134, except subdivision (a) of that section, shall
apply to classroom teachers who retire after June 30, 1990, and
any statutory reference to Section 22134 or “final compensation”
with respect to a classroom teacher who retires, becomes disabled,
or dies, after June 30, 1990, shall be deemed to be a reference to
this section.

(c) As used in this section, “classroom teacher” means any of
the following:

(1) All teachers and substitute teachers in positions requiring
certification qualifications who spend, during the last 10 years of
their employment with the same employer which immediately
precedes their retirement, 60 percent or more of their contract time
each year providing direct instruction. For the purpose of
determining continuity of employment within the meaning of this
subdivision, an authorized leave of absence for sabbatical or illness
or other collectively bargained or employer-approved leaves shall
not constitute a break in service.

(2) Other certificated personnel who spend, during the last 10
years of their employment with the same employer that
immediately precedes their retirement, 60 percent or more of their
contract time each year providing direct services to pupils,
including, but not limited to, librarians, counselors, nurses, speech
therapists, resource specialists, audiologists, audiometrists,
hygienists, optometrists, psychologists, driver safety instructors,
and personnel on special assignment to perform school attendance
and adjustment services.

(d) As used in this section, “classroom teacher” does not include
any of the following:

(1) Certificated employees whose job descriptions require an
administrative credential.

(2) Certificated employees whose job descriptions include
responsibility for supervision of certificated staff.

(3) Certificated employees who serve as advisers, coordinators,
consultants, or developers or planners of curricula, instructional
materials, or programs, who spend, during the last 10 years of their
employment with the same employer that immediately precedes
their retirement, less than 60 percent of their contract time in direct
instruction.

(4) Certificated employees whose job descriptions require
provision of direct instruction or services, but who are functioning
in nonteaching assignments.

(5) Classified employees.

(e) This section shall apply only to teachers employed by an
employer that has, pursuant to Chapter 10.7 (commencing with
Section 3540) of Division 4 of Title 1 of the Government Code,
entered into, extended, renewed, or amended a written agreement
with an exclusive representative, prior to January 1, 2014, that
makes this section applicable to all of its classroom teachers, as
defined in subdivision (c).

(f) The written agreement shall include a mechanism to pay for
all increases in allowances provided for by this section through
employer contributions or employee contributions or both, which
shall be collected and retained by the employer in a trust fund to
be used solely and exclusively to pay the system for all increases
in allowances provided by this section and related administrative
costs; and a mechanism for disposition of the employee’s
contributions if employment is terminated before retirement, and
for the establishment of a trust fund board. The trust fund board
shall administer the trust fund and shall be composed of an equal
number of members representing classroom teachers chosen by
the bargaining agent and the employer. If the employer agrees to
pay the total cost of increases in allowances, the establishment of
a trust fund and a trust fund board shall be optional to the employer.
The employer, within 30 days of receiving an invoice from the
system, shall reimburse the retirement fund the amount determined
by the Teachers’ Retirement Board to be the actuarial equivalent
of the difference between the allowance the member or beneficiary
receives pursuant to this section and the allowance the member or
beneficiary would have received if the member’s final
compensation had been computed under Section 22134 and the
proportionate share of the cost to the plan’s Defined Benefit
Program, as determined by the Teachers’ Retirement Board, of
administering this section. The payment shall include the cost of
all increases in allowances provided for by this section for all years
of service credited to the member as of the benefit effective date.
Interest shall be charged at the regular interest rate for any payment
not received within 30 days of receipt of the invoice. Payments
not received within 30 days after receipt of the invoice may be
collected pursuant to Section 23007.

(g) Upon the execution of the agreement, the employer shall
notify all certificated employees of the agreement and any
certificated employee of the employer, who is a member of the
Public Employees’ Retirement System pursuant to Section 22508,
that he or she may, within 60 days following the date of
notification, elect to terminate his or her membership in the Public
Employees’ Retirement System and become a member of this
plan’s Defined Benefit Program. However, only service credited
under the Defined Benefit Program subsequent to the date of that
election shall be subject to this section.

(h) An employer that agrees to become subject to this section,
shall, on a form and within the timeframes prescribed by the
system, certify the applicability of this section to a member
pursuant to the criteria set forth in this section when a retirement,
disability, or family allowance becomes payable.

(i) For a nonmember spouse, final compensation shall be
determined pursuant to paragraph (5) of subdivision (c) of Section
22664. The employer, within 30 days of receiving an invoice from
the system, shall reimburse the retirement fund pursuant to
subdivision (f). Interest shall be charged at the regular interest rate
for payments not received within the prescribed timeframe.
Payments not received within 30 days of invoicing may be
collected pursuant to Section 23007.

SEC. 13.  

Section 22136 of the Education Code is amended to
read:

22136.  

(a) “Final compensation” with respect to a member
whose salary while an active member was reduced because of a
reduction in school funds begin insert end insert begin insert as certified by the employer end insert means the
highest average annual compensation earnable, as defined by
Section 22115, by the member during any 36 months while
employed to perform creditable service subject to coverage by the
Defined Benefit begin delete Program if the member elects to be subject to this
section, as certified by the employer. end delete begin insert Program. end insert

(b) For the purposes of this section, periods of service separated
by breaks in service or periods in which a member’s salary was
reduced may be aggregated, if the periods of service are
consecutive except for the breaks or periods of the salary reduction.

begin insert

begin insert SEC. 14. end insert   

end insert

begin insert Section 22146.2 of the end insert begin insert Education Code end insert begin insert is amended
to read: end insert

22146.2.  

(a) Notwithstanding subdivision (f) of Section
7522.04 of the Government Code, “member subject to the
California Public Employees’ Pension Reform Act of 2013” means
a person who first becomes employed to perform creditable service
subject to coverage under the Defined Benefit Program on or after
January 1, 2013.

(b) A member as defined in subdivision (a) does not include a
person who was a member on or before December 31, 2012, of
the California Public Employees’ Retirement System, the
Legislators’ Retirement System, the University of California
Retirement System, a county retirement system established under
Chapter 3 (commencing with Section 31450) of Part 3 of Division
4 of Title 3 of the Government Code, or the San Francisco
Employees’ Retirement System, and the person performed service
in the other retirement system within the six months prior to begin delete the
commencement of end delete begin insert becoming employed to perform end insert creditable
service begin insert subject to coverage end insert under the Defined Benefit Program.

(c) This section shall be deemed to have become operative on
January 1, 2013.

begin delete SEC. 14. end delete
begin insert SEC. 15. end insert   

Section 22516 of the Education Code is amended to
read:

22516.  

(a) Nothing in this chapter shall be construed or applied
to exclude from membership in the Defined Benefit Program any
person employed to perform creditable service at a level that
requires mandatory membership in the program for which he or
she has the right to elect membership in the program or another
retirement system and who elects membership in the other
retirement system, or who is employed to perform creditable
service at a level that does not require mandatory membership in
the Defined Benefit Program.

(b) Service performed after becoming a member of another
retirement system shall not be credited to the member under this
part, nor shall contributions or benefits under this part be based
upon that service or the compensation received by the member
during that period of service, except as provided in the definition
of “final compensation” contained in Section 22134 or 22134.5.

begin delete SEC. 15. end delete
begin insert SEC. 16. end insert   

Section 22655 of the Education Code is amended to
read:

22655.  

(a) Upon the legal separation or dissolution of marriage
of a retired member, the court may include in the judgment or court
order a determination of the community property rights of the
parties in the retired member’s retirement allowance and, if
applicable, retirement benefit under this part consistent with this
section. Upon election under subparagraph (B) of paragraph (3)
of subdivision (a) of Section 2610 of the Family Code, the court
order awarding the nonmember spouse a community property share
in the retirement allowance or retirement benefit, or both, of a
retired member shall be consistent with this section.

(b) If the court does not award the entire retirement allowance
or retirement benefit under this part to the retired member and the
retired member is receiving a retirement allowance that has not
been modified pursuant to Section 24300 or 24300.1, a single life
annuity pursuant to Section 25011 or 25018, or a member only
annuity described in paragraph (1) of subdivision (a) of Sections
25011.1 and 25018.1, the court shall require only that the system
pay the nonmember spouse, by separate warrant, his or her
community property share of the retired member’s retirement
allowance or retirement benefit, or both, under this part.

(c) If the court does not award the entire retirement allowance
or retirement benefit under this part to the retired member and the
retired member is receiving an allowance that has been actuarially
modified pursuant to Section 24300 or 24300.1, or a joint and
survivor annuity pursuant to Section 25011, 25011.1, 25018, or
25018.1, the court shall order only one of the following:

(1) The retired member shall maintain the retirement allowance
or joint and survivor annuity, or both, under this part without
change.

(2) The retired member shall cancel the option that modified
the retirement allowance under this part pursuant to Section 24322
and elect a new joint and survivor option or designate a new
beneficiary or both, and the system shall pay the nonmember
spouse, by separate warrant, his or her community property share
of the retirement allowance payable to the retired member, the
option beneficiary, or both.

(3) The retired member shall cancel the joint and survivor
annuity under which the retirement benefit is being paid pursuant
to Section 24324, and elect a new joint and survivor annuity or
designate a new annuity beneficiary or both, based on the actuarial
equivalent of the member’s canceled annuity, and the system shall
pay the nonmember spouse, by separate warrant, his or her
community property share of the retirement benefit payable to the
retired member, the annuity beneficiary, or both.

(4) The retired member shall take the action specified in both
paragraphs (2) and (3).

(5) The retired member shall cancel the option that modified
the retirement allowance under this part pursuant to Section 24322
and elect an unmodified retirement allowance and the system shall
pay the nonmember spouse, by separate warrant, his or her
community property share of the retired member’s retirement
allowance under this part.

(6) The retired member shall cancel, pursuant to Section 24324,
the joint and survivor annuity under which the retirement benefit
is being paid, and elect a single life annuity, and the system shall
pay the nonmember spouse, by separate warrant, his or her
community property share of the retirement benefit payable to the
retired member.

(7) The retired member shall take the action specified in both
paragraphs (5) and (6).

(d) If the option beneficiary or annuity beneficiary or both under
this part, other than the nonmember spouse, predeceases the retired
member, the court shall order the retired member to designate a
new option beneficiary pursuant to Section 24323, or a new annuity
beneficiary pursuant to Section 24324 and shall order the system
to pay the nonmember spouse, by separate warrant, his or her share
of the community property interest in the retirement allowance or
retirement benefit payable to the retired member or the new option
beneficiary or annuity beneficiary or each of them.

(e) The right of the nonmember spouse to receive his or her
community property share of the retired member’s retirement
allowance or retirement benefit or both under this section shall
terminate upon the death of the nonmember spouse. However, the
nonmember spouse may designate a beneficiary under the Defined
Benefit Program and a payee under the Defined Benefit
Supplement Program to receive his or her community property
share of the retired member’s accumulated retirement contributions
and accumulated Defined Benefit Supplement account balance
under this part in the event that there are remaining accumulated
retirement contributions and a balance of credits in the member’s
Defined Benefit Supplement account to be paid upon the death of
the nonmember spouse.

begin delete SEC. 16. end delete
begin insert SEC. 17. end insert   

Section 22662 of the Education Code is amended to
read:

22662.  

The nonmember spouse who is awarded a separate
account under the Defined Benefit Program may redeposit
accumulated retirement contributions previously refunded to the
member in accordance with the determination of the court pursuant
to Section 22652.

(a) The nonmember spouse may redeposit under the Defined
Benefit Program only those accumulated retirement contributions
that were previously refunded to the member and in which the
court has determined the nonmember spouse has a community
property interest.

(b) The nonmember spouse shall inform the system in writing
of his or her intent to redeposit within 180 days after the judgment
or court order that specifies the redeposit rights of the nonmember
spouse is entered. Except as provided in subdivision (g), the
nonmember spouse’s election to redeposit shall be made on a form
provided by the system within 30 days after the system mails an
election form and the billing.

(c) If the nonmember spouse elects to redeposit under the
Defined Benefit Program, he or she shall repay all or a portion of
the member’s refunded accumulated retirement contributions that
were awarded to the nonmember spouse and shall pay regular
interest from the date of the refund to the date payment of the
redeposit is completed.

(d) All payments shall be received by the system before the
effective date of the nonmember spouse’s retirement under this
part. If any payment due because of the election is not received at
the system’s headquarters office within 120 days of its due date,
the election shall be canceled and any payments made under the
election shall be returned to the nonmember spouse.

(e) The right of the nonmember spouse to redeposit shall be
subject to Section 23203.

(f) The member shall not have a right to redeposit the share of
the nonmember spouse in the previously refunded accumulated
retirement contributions under this part whether or not the
nonmember spouse elects to redeposit. However, any accumulated
retirement contributions previously refunded under this part and
not explicitly awarded to the nonmember spouse under this part
by the judgment or court order shall be deemed the exclusive
property of the member.

(g) The measurement of time within which the election to
redeposit described in subdivision (b) shall be made is subject to
Section 22337.

begin delete SEC. 17. end delete
begin insert SEC. 18. end insert   

Section 22663 of the Education Code is amended to
read:

22663.  

The nonmember spouse who is awarded a separate
account under this part has the right to purchase additional service
credit in accordance with the determination of the court pursuant
to Section 22652.

(a) The nonmember spouse may purchase only the service credit
that the court, pursuant to Section 22652, has determined to be the
community property interest of the nonmember spouse.

(b) The nonmember spouse shall inform the system in writing
of his or her intent to purchase additional service credit within 180
days after the date the judgment or court order addressing the right
of the nonmember spouse to purchase additional service credit is
entered. Except as provided in subdivision (f), the nonmember
spouse shall elect to purchase additional service credit on a form
provided by the system within 30 days after the system mails an
election form and billing.

(c) If the nonmember spouse elects to purchase additional
service credit, he or she shall pay, prior to retirement under this
part, all contributions with respect to the additional service at the
contribution rate for additional service credit in effect at the time
of election and regular interest from July 1 of the year following
the year upon which contributions are based.

(1) (A) The nonmember spouse shall purchase additional service
credit by paying the required contributions and interest in one lump
sum, or in not more than 120 monthly installments, provided that
no installment, except the final installment, is less than twenty-five
dollars ($25). Regular interest shall be charged on the monthly,
unpaid balance if the nonmember spouse pays in installments.

(B) If any payment due, because of the election, is not received
at the system’s headquarters office within 120 days of its due date,
the election shall be canceled and any payments made under the
election shall be returned to the nonmember spouse.

(2) The contributions shall be based on the member’s
compensation earnable in the most recent school year during which
the member was employed, preceding the date of separation
established by the court pursuant to Section 22652.

(3) All payments of contributions and interest shall be received
by the system before the effective date of the retirement of the
nonmember spouse.

(d) The nonmember spouse does not have a right to purchase
additional service credit under this part after the effective date of
a refund of the accumulated retirement contributions in the separate
account of the nonmember spouse.

(e) The member does not have a right to purchase the community
property interest of the nonmember spouse of additional service
credit under this part whether or not the nonmember spouse elects
to purchase the additional service credit. However, any additional
service credit eligible for purchase that is not explicitly awarded
to the nonmember spouse by the judgment or court order shall be
deemed the exclusive property of the member.

(f) The measurement of time within which the election to
purchase additional service credit described in subdivision (b) shall
be made is subject to Section 22337.

begin delete SEC. 18. end delete
begin insert SEC. 19. end insert   

Section 22664 of the Education Code is amended to
read:

22664.  

The nonmember spouse who is awarded a separate
account shall have the right to a service retirement allowance and,
if applicable, a retirement benefit under this part.

(a) The nonmember spouse shall be eligible to retire for service
under this part if the following conditions are satisfied:

(1) The member had at least five years of credited service during
the period of marriage, at least one year of which had been
performed subsequent to the most recent refund to the member of
accumulated retirement contributions. The credited service may
include service credited to the account of the member as of the
date of the dissolution or legal separation, previously refunded
service, out-of-state service, and permissive service credit that the
member is eligible to purchase at the time of the dissolution or
legal separation.

(2) The nonmember spouse has at least begin delete 2 end delete begin delete 1⁄2 end delete begin insert two and one-half end insert
years of credited service in his or her separate account.

(3) The nonmember spouse has attained 55 years of age or more.

(b) A service retirement allowance of a nonmember spouse
under this part shall become effective upon a date designated by
the nonmember spouse, provided:

(1) The requirements of subdivision (a) are satisfied.

(2) The nonmember spouse has filed an application for service
retirement on a properly executed form provided by the system,
that is executed no earlier than six months before the effective date
of the retirement allowance.

(3) The effective date is no earlier than the first day of the month
that the application is received at the system’s headquarters office
and the effective date is after the date the judgment or court order
pursuant to Section 22652 was entered.

(c) (1) Upon service retirement at normal retirement age under
this part, the nonmember spouse shall receive a retirement
allowance that shall consist of an annual allowance payable in
monthly installments equal to 2 percent of final compensation for
each year of credited service.

(2) If the nonmember spouse’s retirement is effective at less
than normal retirement age and between early retirement age under
this part and normal retirement age, the retirement allowance shall
be reduced by one-half of 1 percent for each full month, or fraction
of a month, that will elapse until the nonmember spouse would
have reached normal retirement age.

(3) If the nonmember spouse’s service retirement is effective
at an age greater than normal retirement age and is effective on or
after January 1, 1999, the percentage of final compensation for
each year of credited service shall be determined pursuant to the
following table:

 

Age at Retirement	Percentage
60¼	2.033
60½	2.067
60¾	2.10
61	2.133
61¼	2.167
61½	2.20
61¾	2.233
62	2.267
62¼	2.30
62½	2.333
62¾	2.367
63 and over	2.40

 

(4) In computing the retirement allowance of the nonmember
spouse, the age of the nonmember spouse on the last day of the
month that the retirement allowance begins to accrue shall be used.

(5) Final compensation, for purposes of calculating the service
retirement allowance of the nonmember spouse under this
subdivision, shall be calculated according to the definition of final
compensation in Section 22134, 22134.5, 22135, or 22136,
whichever is applicable, and shall be based on the member’s
compensation earnable up to the date the parties separated, as
established in the judgment or court order pursuant to Section
22652. The nonmember spouse shall not be entitled to use any
other calculation of final compensation.

(d) Upon service retirement under this part, the nonmember
spouse shall receive a retirement benefit based on an amount equal
to the balance of credits in the nonmember spouse’s Defined
Benefit Supplement account on the date the retirement benefit
becomes payable.

(1) A retirement benefit shall be a lump-sum payment, or an
annuity payable in monthly installments, or a combination of both
a lump-sum payment and an annuity, as elected by the nonmember
spouse on the application for a retirement benefit. A retirement
benefit paid as an annuity under this chapter shall be subject to
Sections 22660, 25011, and 25011.1.

(2) Upon distribution of the entire retirement benefit in a
lump-sum payment, no other benefit shall be payable to the
nonmember spouse or the nonmember spouse’s beneficiary under
the Defined Benefit Supplement Program.

(e) If the member is or was receiving a disability allowance
under this part with an effective date before or on the date the
parties separated as established in the judgment or court order
pursuant to Section 22652, or at any time applies for and receives
a disability allowance with an effective date that is before or
coincides with the date the parties separated as established in the
judgment or court order pursuant to Section 22652, the nonmember
spouse shall not be eligible to retire until after the disability
allowance of the member terminates. If the member who is or was
receiving a disability allowance returns to employment to perform
creditable service subject to coverage under the Defined Benefit
Program or has his or her allowance terminated under Section
24015, the nonmember spouse may not be paid a retirement
allowance until at least six months after termination of the disability
allowance and the return of the member to employment to perform
creditable service subject to coverage under the Defined Benefit
Program, or the termination of the disability allowance and the
employment or self-employment of the member in any capacity,
notwithstanding Section 22132. If at the end of the six-month
period, the member has not had a recurrence of the original
disability or has not had his or her earnings fall below the amounts
described in Section 24015, the nonmember spouse may be paid
a retirement allowance if all other eligibility requirements are met.

(1) The retirement allowance of the nonmember spouse under
this subdivision shall be calculated as follows: the disability
allowance the member was receiving, exclusive of the portion for
dependent children, shall be divided between the share of the
member and the share of the nonmember spouse. The share of the
nonmember spouse shall be the amount obtained by multiplying
the disability allowance, exclusive of the portion for dependent
children, by the years of service credited to the separate account
of the nonmember spouse, including service projected to the date
of separation, and dividing by the projected service of the member.
The nonmember spouse’s retirement allowance shall be the lesser
of the share of the nonmember spouse under this subdivision or
the retirement allowance under subdivision (c).

(2) The share of the member shall be the total disability
allowance reduced by the share of the nonmember spouse. The
share of the member shall be considered the disability allowance
of the member for purposes of Section 24213.

(f) The nonmember spouse who receives a retirement allowance
is not a retired member under this part. However, the allowance
of the nonmember spouse shall be increased by application of the
improvement factor and shall be eligible for the application of
supplemental increases and other benefit maintenance provisions
under this part, including, but not limited to, Sections 24412 and
24415 based on the same criteria used for the application of these
benefit maintenance increases to the service retirement allowances
of members.

(g) Paragraphs (1) begin delete through end delete begin insert to end insert (3), inclusive, of subdivision (c)
shall not apply to a nonmember spouse of a member subject to the
California Public Employees’ Pension Reform Act of 2013. For a
person who is a nonmember spouse of a member subject to the
California Public Employees’ Pension Reform Act of 2013 and is
awarded a separate account, the retirement allowance shall equal
the percentage of final compensation for each year of credited
service that is equal to the percentage specified in Section 24202.6
based on the age of the nonmember spouse on the effective date
of the allowance.

begin delete SEC. 19. end delete
begin insert SEC. 20. end insert   

Section 22801 of the Education Code is amended to
read:

22801.  

(a) A member who requests to purchase additional
service credit as provided in this chapter and Chapter 14.2
(commencing with Section 22820) shall pay, prior to retirement,
all contributions with respect to that service at the contribution
rate for additional service credit, adopted by the board as a plan
amendment, in effect on the date of the request to purchase
additional service credit. If the system is unable to inform the
member or beneficiary of the amount required to purchase
additional service credit prior to the effective date of the applicable
allowance, the member or beneficiary may make the required
payment within 30 working days after the date of mailing of the
statement of contributions and interest required or the effective
date of the appropriate allowance, whichever is later, except as
provided in subdivision (i). The payment shall be paid in full before
a member or beneficiary receives any adjustment in the appropriate
allowance due because of that payment. Contributions shall be
made in a lump sum, or in not more than 120 monthly installments,
not to exceed ten years. No installment, except the final installment,
shall be less than twenty-five dollars ($25).

(b) If the member is employed to perform creditable service
subject to coverage by the Defined Benefit Program on the date
of the request to purchase additional service credit, the
contributions shall be based upon the compensation earnable in
the current school year or either of the two immediately preceding
school years, whichever is highest.

(c) If the member is not employed to perform creditable service
subject to coverage by the Defined Benefit Program on the date
of the request to purchase additional service credit, the
contributions shall be based upon the compensation earnable in
the last school year of credited service or either of the two
immediately preceding school years, whichever is highest, and
additional regular interest shall be added to the contributions from
July 1 of the subsequent year in which the member last performed
creditable service subject to coverage by the Defined Benefit
Program to 20 days after the date of the request.

(d) The employer may pay the amount required as employer
contributions for additional service credited under paragraphs (7),
(8), (9), and (10) of subdivision (a) of Section 22803.

(e) The Public Employees’ Retirement System shall transfer
the actuarial present value of the assets of a person who makes an
election pursuant to paragraph (11) of subdivision (a) of Section
22803.

(f) Regular interest shall be charged on the monthly unpaid
balance if the member pays in installments. Regular interest may
not be charged or be payable for the period of a delay caused by
the system’s inability or failure to determine and inform the
member or beneficiary of the amount of contributions and interest
that is payable. The period of delay shall commence on the 20th
day following the day on which the member or beneficiary who
wishes to make payment evidences in writing to the system that
he or she is ready, willing, and able to make payment to the system.
The period of delay shall cease on the first day of the month
following the mailing of notification of contributions and interest
payable.

(g) If the payment described in subdivision (a) is not received
at the system’s headquarters office within 120 days of the due date,
the election pursuant to this section shall be canceled. The member
shall receive credit for additional service based on the payments
that were made or the member may request a return of his or her
payments.

(h) If the election to purchase additional service credit is
canceled as described in subdivision (g), the member may, prior
to the effective date of his or her retirement, elect to purchase
additional service credit pursuant to this section.

(i) The measurement of time within which the purchase of
additional service credit described in subdivision (a) shall be made
is subject to Section 22337.

begin delete SEC. 20. end delete
begin insert SEC. 21. end insert   

Section 22826 of the Education Code is amended to
read:

22826.  

(a) A member, other than a retired member, may
request to purchase up to five years of nonqualified service credit
provided the member is vested in the Defined Benefit Program as
provided in Section 22156.

(b) A member who requests to purchase nonqualified service
credit as provided in this chapter shall contribute to the retirement
fund the actuarial cost of the service, including interest as
appropriate, as determined by the board based on the most recent
valuation of the plan with respect to the Defined Benefit Program
in effect on the date of the request, in accordance with subdivisions
(a), (f), (g), and (h) of Section 22801.

(c) This section shall apply only to an application to purchase
nonqualified service credit on a properly executed form provided
by the system and received at the system’s headquarters office
prior to January 1, 2013, that is subsequently approved by the
system.

begin delete SEC. 21. end delete
begin insert SEC. 22. end insert   

Section 22828 of the Education Code is amended to
read:

22828.  

A request to purchase out-of-state service credit
pursuant to Section 22827 must be received no later than June 30,
2009.

begin delete SEC. 22. end delete
begin insert SEC. 23. end insert   

Section 22905 of the Education Code is amended to
read:

22905.  

(a) Member contributions pursuant to Section 22901,
employer contributions pursuant to Section 22903 or 22904, and
member contributions made by an employer pursuant to Section
22909 shall be credited to the member’s individual account under
the Defined Benefit Program or the Defined Benefit Supplement
Program, whichever is applicable pursuant to the provisions of
this part.

(b) Except as provided in subdivision (f), member and employer
contributions, exclusive of contributions pursuant to Section 22951,
on a member’s compensation under the following circumstances
shall be credited to the member’s Defined Benefit Supplement
account:

(1) Compensation for creditable service that exceeds one year
in a school year.

(2) Compensation that is determined by the system to have been
paid to enhance a member’s benefits pursuant to subdivision (b)
of Section 22119.2 or to not reflect sound principles that support
the integrity of the retirement fund pursuant to subdivision (f) of
Section 22119.2.

(3) Compensation that is paid for a limited number of times as
specified by law, a collective bargaining agreement, or an
employment agreement.

(c) A member may not make voluntary pretax or posttax
contributions under the Defined Benefit Supplement Program,
except as provided in subdivision (d), nor may a member redeposit
amounts previously distributed based on the balance in the
member’s Defined Benefit Supplement account.

(d) Member and employer contributions pursuant to paragraph
(1) of subdivision (b) under the Defined Benefit Supplement
Program shall be credited to the accounts of members as of July
1 each year following a determination by the system under the
provisions of this part that those contributions should be credited
to the Defined Benefit Supplement Program. Any other
contributions under the Defined Benefit Supplement Program
pursuant to paragraph (2) or (3) of subdivision (b), shall be credited
to the individual account of the member upon receipt by the system.
Contributions to a member’s Defined Benefit Supplement account
shall be identified separately from the member’s contributions
credited under the Defined Benefit Program.

(e) The provisions of this section shall become operative on
July 1, 2002, if the revenue limit cost-of-living adjustment
computed by the Superintendent of Public Instruction for the
2001-02 fiscal year is equal to or greater than 3.5 percent.
Otherwise this section shall become operative on July 1, 2003.

(f) Paragraphs (2) and (3) of subdivision (b) shall not apply to
a member subject to the California Public Employees’ Pension
Reform Act of 2013.

begin insert

begin insert SEC. 24. end insert   

end insert

begin insert Section 22909 of the end insert begin insert Education Code end insert begin insert is amended to
read: end insert

22909.  

(a) Notwithstanding Sections 22901, 22956, and 23000,
an employer may pay all or a portion of the contributions required
to be paid by a member of the Defined Benefit Program. Where
the member is included in a group or class of employment in which
no members are subject to the California Public Employees’
Pension Reform Act of 2013, the payment shall be for all members
in the group or class of employment. The payments shall be
credited to member accounts pursuant to Section 22905. The
employer shall report contributions to the system as if the member
and the employer were paying the contributions in accordance
with this part, notwithstanding this section. For purposes of this
chapter, the member’s contributions shall be considered to be the
percentage of the member’s creditable compensation that would
have been paid pursuant to this chapter, notwithstanding this
section. Notwithstanding Section 22119.2, contributions paid
pursuant to this section may not be included in creditable
compensation.

(b) Nothing in this section shall be construed to limit the
authority of an employer to periodically increase, reduce, or
eliminate the payment by the employer of all or a portion of the
contributions required to be paid by members of the Defined
Benefit Program, as authorized by this section.

(c) This section shall only apply to an employer that is picking
up members’ contributions pursuant to Section 22903 or 22904.

(d) As of January 1, 2013, this section shall not apply if the
group or class of employment includes members who are subject
to the Public Employees’ Pension Reform Act of 2013. If the terms
of a written agreement with an exclusive representative begin insert or a written
employment agreement end insert that is in effect on January 1, 2013, would
be impaired by this subdivision, this subdivision shall not apply
to the employer and members subject to that written agreement
until the expiration of that written agreement. A renewal,
amendment, or any other extension of that written agreement shall
be subject to the requirements of this subdivision.

(e) As of January 1, 2014, this section shall not apply if the
group or class of employment does not include members who are
subject to the Public Employees’ Pension Reform Act begin insert of end insert 2013. If
the terms of a written agreement with an exclusive representative begin insert end insert
begin insert or a written employment agreement end insert that is in effect on January 1,
2014, would be impaired by this subdivision, this subdivision shall
not apply to the employer and members subject to that written
agreement until the expiration of that written agreement. A renewal,
amendment, or any other extension of that written agreement shall
be subject to the requirements of this subdivision.

begin delete SEC. 23. end delete
begin insert SEC. 25. end insert   

Section 23104 of the Education Code is amended to
read:

23104.  

(a) Deposit in the United States mail of an initial
warrant drawn as directed by the member as a refund of
contributions upon termination of employment, and addressed to
the address directed by the member, constitutes a return of the
member’s accumulated retirement contributions under this part.

(b) Except as provided in subdivision (e), if the member has
elected on a form provided by the system to transfer all or a
specified portion of the accumulated retirement contributions that
are eligible for direct trustee-to-trustee transfer to the trustee of a
qualified plan under Section 402 of the Internal Revenue Code of
1986 (26 U.S.C. Sec. 402), deposit in the United States mail of a
notice that the requested transfer has been made constitutes a return
of the member’s accumulated retirement contributions under this
part.

(c) Except as provided in subdivision (e), for refunds not
involving direct trustee-to-trustee transfers, if the member returns
the total gross distribution amount to the system’s headquarters
office within 30 days from the mailing date, the refund shall be
canceled and the person shall be restored as a member of the
Defined Benefit Program with all the rights and privileges under
this part restored.

(d) Except as provided in subdivision (e), for refunds involving
direct trustee-to-trustee transfers, if the member returns the warrant
drawn to the trustee of the qualified plan or the trustee returns the
amount of the qualified refund and, if applicable, any additional
amounts necessary to equal, but in no event to exceed, the total
gross distribution amount to the system’s headquarters office within
30 days from the mailing date, the refund shall be canceled and
the person shall be restored as a member of the Defined Benefit
Program with all the rights and privileges under this part restored.

(e) The mode of notice described in subdivision (b) and the
measurement of time within which the return of total gross
distribution amounts described in subdivisions (c) and (d) shall be
made are subject to Section 22337.

begin delete SEC. 24. end delete
begin insert SEC. 26. end insert   

Section 24001 of the Education Code is amended to
read:

24001.  

(a) (1) A member may apply for a disability allowance
under the Defined Benefit Program, upon written application for
disability allowance to the board on a properly executed form
provided by the system, if the member has five or more years of
credited service and if all of the following requirements are met:

(A) At least four years were credited for actual performance of
service subject to coverage under the Defined Benefit Program.
Credit received because of workers’ compensation payments shall
be counted toward the four-year requirement in accordance with
Section 22710.

(B) The last five years of credited service were performed in
this state.

(C) Except as described in subdivision (d) of Section 24201.5,
the member is not currently receiving a service retirement
allowance and at least one year was credited for service performed
subsequent to the date on which the member terminated a service
retirement allowance under Section 24208.

(D) At least one year was credited for service performed
subsequent to the most recent refund of accumulated retirement
contributions.

(E) The member has neither attained normal retirement age, nor
possesses sufficient unused sick leave days to receive creditable
compensation on account of sick leave to normal retirement age.

(F) The member is not applying for a disability allowance
because of a physical or mental condition known to exist at the
time the most recent membership in the Defined Benefit Program
commenced and remains substantially unchanged at the time of
application.

(2) A member who becomes disabled prior to normal retirement
age, who has sick leave which will extend beyond normal
retirement age, and who has a dependent child, may be awarded
a disability allowance with an effective date after normal retirement
age if the application is filed prior to attaining normal retirement
age.

(b) Nothing in subdivision (a) shall affect the right of a member
to a disability allowance under this part if the reason that the
member is credited with less than four years of actual service
performed subject to coverage under the Defined Benefit Program
is due to an on-the-job injury or a disease that occurred while the
member was employed and the four-year requirement can be
satisfied by credit obtained under Chapter 14 (commencing with
Section 22800) or Chapter 14.5 (commencing with Section 22850)
in addition to any credit received from workers’ compensation
payments.

(c) Nothing in subdivision (a) shall affect the right of a member
under this part who has less than five years of credited service to
a disability allowance if the following conditions are met:

(1) The member has at least one year of credited service
performed in this state.

(2) The disability is the direct result of an unlawful act of bodily
injury that was perpetrated on his or her person by another human
being while the member was performing his or her official duties
in a position subject to coverage under the Defined Benefit
Program.

(3) The member provides documentation of the unlawful act in
the form of an official police report or official employer incident
report.

(d) A member who is eligible to apply for a disability allowance
pursuant to this section may also apply for a service retirement
pending a determination of his or her application for disability as
described in Section 24201.5.

begin delete SEC. 25. end delete
begin insert SEC. 27. end insert   

Section 24101 of the Education Code is amended to
read:

24101.  

(a) A member may apply for a disability retirement
under this part, upon written application for disability retirement
to the board on a properly executed form provided by the system,
if the member has five or more years of credited service and if all
of the following requirements are met:

(1) At least four years were credited for actual service performed
subject to coverage under the Defined Benefit Program. Credit
received because of workers’ compensation payments shall be
counted toward the four-year requirement in accordance with
Section 22710.

(2) The last five years of credited service were performed in
this state.

(3) Except as described in subdivision (d) of Section 24201.5,
the member is not currently receiving a service retirement
allowance and at least one year of credited service was earned
subsequent to the date on which the member terminated a service
retirement allowance under Section 24208.

(4) At least one year of credited service was earned subsequent
to the date on which the member’s disability retirement was
terminated.

(5) At least one year of credited service was earned subsequent
to the most recent refund of accumulated retirement contributions.

(6) The member is not applying for a disability retirement
because of a physical or mental condition known to exist at the
time the most recent membership in the Defined Benefit Program
commenced and that remains substantially unchanged at the time
of application.

(b) Nothing in subdivision (a) shall affect the right of a member
to a disability retirement if the reason that the member has
performed less than four years of actual service is due to an
on-the-job injury or a disease while in employment subject to
coverage by the Defined Benefit Program and the four-year
requirement can be satisfied by credit obtained under Chapter 14
(commencing with Section 22800) or Chapter 14.5 (commencing
with Section 22850) in addition to any credit received from
workers’ compensation payments.

(c) Nothing in subdivision (a) shall affect the right of a member
under this part who has less than five years of credited service to
a disability retirement allowance if the following conditions are
met:

(1) The member has at least one year of credited service
performed in this state.

(2) The disability is a direct result of an unlawful act of bodily
injury that was perpetrated on his or her person by another human
being while the member was performing his or her official duties
in a position subject to coverage under the Defined Benefit
Program.

(3) The member provides documentation of the unlawful act in
the form of an official police report or official employer incident
report.

(d) A member who is eligible to apply for a disability retirement
pursuant to this section may also apply for a service retirement
pending a determination of his or her application for disability as
described in Section 24201.5.

begin delete SEC. 26. end delete
begin insert SEC. 28. end insert   

Section 24105 of the Education Code is amended to
read:

24105.  

(a) A disability retirement allowance under this part
shall become effective upon any date designated by the member,
provided that all of the following conditions are met:

(1) An application for disability retirement is filed on a properly
executed form prescribed by the system.

(2) The effective date is later than the last day of creditable
service for which compensation is payable to the member.

(3) The effective date is no earlier than either the first day of
the month in which the application is received at the system’s
headquarters office or the date upon and continuously after which
the member is determined to the satisfaction of the board to have
been mentally incompetent.

(4) The application for disability retirement contains an election
of either an unmodified allowance or an allowance modified under
an option as provided in Section 24332.

(b) If the member is employed to perform creditable service
subject to coverage under the Defined Benefit Program at the time
the disability retirement is approved, the member shall notify the
system in writing, within 90 days, of the last day on which the
member will perform service. If the member does not respond
within 90 days, or if the last day on which service will be
performed is more than 90 days after the date the system notifies
the member of the approval of disability retirement, the member’s
application for disability retirement shall be rejected and a
disability retirement allowance shall not be payable to the member.

begin delete SEC. 27. end delete
begin insert SEC. 29. end insert   

Section 24107 of the Education Code is amended to
read:

24107.  

A member retired for disability under this part may
elect an option pursuant to Section 24332 to modify the disability
retirement allowance payable pursuant to subdivision (a) of Section
24106.

begin delete SEC. 28. end delete
begin insert SEC. 30. end insert   

Section 24201.5 of the Education Code is amended
to read:

24201.5.  

(a) A member who is eligible and applies for a
disability allowance or retirement pursuant to Section 24001 or
24101 may apply to receive a service retirement allowance pending
the determination of his or her application for disability, subject
to all of the following:

(1) The member is eligible to retire for service under Section
24201 or 24203.

(2) The member submits the application on a form provided by
the system, subject to all of the following:

(A) The application is executed no earlier than the date the
application for disability benefits is executed and no earlier than
six months before the effective date of the retirement allowance.

(B) The effective date is no earlier than the first day of the month
in which the application for disability benefits is received at the
system’s headquarters office, unless the application for disability
benefits is denied or canceled and the member has indicated an
earlier service retirement date on the application to use if denied
or canceled. If the application for disability benefits is denied or
canceled, the service retirement date of a member who submits an
application for retirement pursuant to this section on or after
January 1, 2014, shall be no earlier than January 1, 2014.

(C) The effective date is later than the last day of creditable
service for which compensation is payable to the member.

(D) The effective date is no earlier than one year following the
date on which a retirement allowance was terminated pursuant to
Section 24208, unless the application for disability benefits is
denied or canceled and the member has indicated an earlier service
retirement date on the application to use if denied or canceled. If
the application for disability benefits is denied or canceled, the
service retirement date is no earlier than one day after the date on
which a retirement allowance was terminated pursuant to Section
24208, provided that the retirement allowance is terminated on or
after January 1, 2014.

(E) The effective date is no earlier than one year following the
date on which a retirement allowance was terminated pursuant to
subdivision (a) of Section 24117.

(3) The effective date of the service retirement allowance can
be no earlier than the date upon and continuously after which the
member is determined to the satisfaction of the board to have been
mentally incompetent.

(4) A member who applies for service retirement under this
section is not eligible to receive a lump-sum payment and an
actuarially reduced monthly allowance pursuant to Section 24221.

(5) A member who applies for service retirement under this
section is not eligible to receive an allowance calculated pursuant
to Section 24205.

(6) (A) Except as described in subparagraph (B), a member
who applies for service retirement under this section shall not
receive service credit for each day of accumulated and unused
leave of absence for illness or injury or for education pursuant to
Section 22717 or 22717.5.

(B) If the application for disability is denied or canceled, the
member’s service retirement allowance shall be adjusted to the
effective date of the service retirement to include service credited
pursuant to Section 22717 or 22717.5.

(7) If the application for disability is denied or canceled, a
member who applies for a service retirement allowance under this
section is subject to all of the following:

(A) Unless otherwise provided in this part, a member who, on
his or her application for service retirement, elects an option
pursuant to Section 24300.1 or 24307 may not change or revoke
that option.

(B) If the member receives a modified service retirement
allowance based on the election of an option pursuant to Section
24300.1 or 24307, that modified service retirement allowance shall
continue in effect and unchanged.

(C) If the member did not elect an option pursuant to Section
24300.1 or 24307 and receives an unmodified service retirement
allowance, that unmodified service retirement allowance shall
continue in effect and unchanged.

(b) A member who applies for service retirement under this
section may change or cancel his or her service retirement
application pursuant to Section 24204, or may terminate his or her
service retirement allowance pursuant to Section 24208.

(c) A member may not cancel his or her application for disability
prior to a determination of that application unless he or she submits
a written request to the system’s headquarters office. If a member
elects to cancel his or her service retirement application or elects
to terminate his or her service retirement allowance as described
in subdivision (b), that election shall not cancel the application for
disability.

(d) (1) Subparagraph (C) of paragraph (1) of subdivision (a)
of Section 24001 and paragraph (3) of subdivision (a) of Section
24101 shall not apply to a member who cancels an application for
service retirement pursuant to Section 24204 or who terminates a
service retirement allowance pursuant to Section 24208, if all of
the following apply:

(A) The member earned at least one year of credited service
subsequent to the most recent terminated service retirement
allowance.

(B) The member’s application for disability under this section
is pending determination by the board.

(2) If the member’s application for disability under this section
is denied or canceled, subparagraph (C) of paragraph (1) of
subdivision (a) of Section 24001 and paragraph (3) of subdivision
(a) of Section 24101 shall apply if the member submits a new
application for disability.

(e) (1) If the board approves the application for disability, and
notwithstanding subdivision (f) of Section 24204, the board shall
cancel the member’s application for service retirement and shall
authorize payment of a disability allowance or disability retirement.

(2) If the board approves the application for disability and the
member has received service retirement allowance payments under
this part, the effective date for the disability allowance or disability
retirement shall be the same as the effective date of the service
retirement allowance.

(f) If a member who applies for service retirement under this
section dies prior to a determination by the board on the application
for disability, the member shall be considered retired for service
at the time of death, and any subsequent benefits shall be paid
accordingly.

(g) If a member who applies for service retirement under this
section dies after the board has approved the member’s application
for disability, the member shall be considered a disabled member,
or retired for disability, at the time of death, and any subsequent
benefits shall be paid accordingly, even if the member died prior
to receiving notification of the approval of his or her application
for disability.

(h) If the member changes or cancels his or her service
retirement application or terminates his or her service retirement
allowance as described in subdivision (b), the system shall make
appropriate adjustments to the applicable service retirement
allowance, disability allowance, or disability retirement allowance,
retroactive to the effective date of the disability allowance or
disability retirement allowance. Subdivision (a) of Section 24617
shall not apply.

(i) The system may recover a service retirement allowance
overpayment made to a member by deducting that overpayment
from any subsequent disability benefit payable to the member.

(j) Nothing in this section shall be construed to allow a member
or beneficiary to receive more than one type of retirement or
disability allowance for the same period of time.

begin delete SEC. 29. end delete
begin insert SEC. 31. end insert   

Section 24203.5 of the Education Code is amended
to read:

24203.5.  

(a) The percentage of final compensation used to
compute the allowance pursuant to Section 24202.5, 24203, 24205,
24209, 24209.3, 24210, 24211, 24212, or 24213 of a member
retiring on or after January 1, 1999, who has 30 or more years of
credited service, shall be increased by two-tenths of 1 percentage
point, provided that the sum of the percentage of final
compensation used to compute the allowance, including any
adjustments for retiring before the normal retirement age, and the
additional percentage provided by this section does not exceed
2.40 percent.

(b) For purposes of establishing eligibility for the increased
allowance pursuant to this section only, credited service shall
exclude service credited pursuant to the following:

(1) Section 22714.

(2) Section 22715.

(3) Section 22717, except as provided in subdivision begin delete (b) end delete begin insert (c) end insert of
Section 22121.

(4) Section 22717.5.

(c) For purposes of establishing eligibility for the increased
allowance pursuant to this section only, credited service shall
include credited service that a court has ordered be awarded to a
nonmember spouse pursuant to Section 22652. A nonmember
spouse shall also be eligible for the increased allowance pursuant
to this section if the member had 30 or more years of credited
service on the date the parties separated, as established in the
judgment or court order pursuant to Section 22652.

(d) Nonqualified service credit for which contributions pursuant
to Section 22826 were made in a lump sum on or after January 1,
2000, or for which the first installment was made on or after
January 1, 2000, may not be included in determining the eligibility
for an increased allowance pursuant to this section.

begin delete SEC. 30. end delete
begin insert SEC. 32. end insert   

Section 24203.6 of the Education Code is amended
to read:

24203.6.  

(a) In addition to the amount otherwise payable
pursuant to Section 24202.5, 24203, 24203.5, 24205, 24209,
24209.3, 24210, 24211, 24212, or 24213, a member shall receive
an increase in the monthly allowance, prior to any modification
pursuant to Sections 24300, 24300.1, and 24309, in the amount
identified in subdivision (b), if the member meets all of the
following criteria:

(1) The member retires for service on or after January 1, 2001.

(2) Prior to January 1, 2011, the member has 30 or more years
of credited service, including any credited service that a court has
ordered be awarded to a nonmember spouse pursuant to Section
22652, but excluding service credited pursuant to the following:

(A) Section 22714.

(B) Section 22715.

(C) Section 22717, except as provided in subdivision begin delete (b) end delete begin insert (c) end insert of
Section 22121.

(D) Section 22717.5.

(E) Section 22826.

(3) The member is receiving an allowance subject to Section
24203.5.

(b) The amount of the increase in the monthly allowance shall
be based on the member’s years of credited service at the time of
retirement as follows:

 

30 years of credited service	$200
31 years of credited service	$300
32 or more years of credited service	$400

 

(c) This section also applies to a nonmember spouse, if all of
the following conditions are satisfied:

(1) The member is eligible for the allowance increase pursuant
to subdivisions (a) and (b) upon his or her retirement for service.

(2) On the date the parties separated, as established in the
judgment or court order pursuant to Section 22652, the member
had at least 30 years of credited service, excluding service credited
pursuant to the following:

(A) Section 22714.

(B) Section 22715.

(C) Section 22717, except as provided in subdivision begin delete (b) end delete begin insert (c) end insert of
Section 22121.

(D) Section 22717.5.

(E) Section 22826.

(3) The service credit of the member was divided into separate
accounts in the name of the member and the nonmember spouse
by a court pursuant to Section 22652. The amount identified in the
schedule in subdivision (b) and payable pursuant to this section,
that is based on the service credited during the marriage, shall be
divided and paid to the member and the nonmember spouse
proportionately according to the respective percentages of the
member’s service credit that were allocated to the member and the
nonmember spouse in the court’s order.

(d) The allowance increase provided under this section is not
subject to Sections 24415 and 24417, but is subject to Section
22140.

begin delete SEC. 31. end delete
begin insert SEC. 33. end insert   

Section 24204 of the Education Code is amended to
read:

24204.  

(a) A service retirement allowance under this part shall
become effective upon any date designated by the member,
provided all of the following conditions are met:

(1) An application for service retirement allowance is filed on
a form provided by the system, which is executed no earlier than
six months before the effective date of retirement allowance.

(2) The effective date is later than the last day of creditable
service for which compensation is payable to the member.

(3) The effective date is no earlier than one day after the date
on which the retirement allowance was terminated under Section
24208.

(4) The effective date is no earlier than one year following the
date on which the retirement allowance was terminated under
subdivision (a) of Section 24117.

(5) The effective date is no earlier than the date upon and
continuously after which the member is determined to the
satisfaction of the board to have been mentally incompetent.

(6) The effective date is no earlier than the date upon which the
member completes payment of a service credit purchase pursuant
to Section 22801, 22820, or 22826, or payment of a redeposit of
contributions pursuant to Section 23200, except as provided in
Section 22801 or 22829.

(b) A member who files an application for service retirement
may change or cancel his or her retirement application, as long as
the form provided by the system is received in the system’s
headquarters office no later than 30 days from the date the
member’s initial benefit payment for the member’s most recent
retirement under the Defined Benefit Program is paid by the
system. If a member cancels his or her retirement application, the
member shall return the total gross distribution amount of all
payments for the canceled retirement benefit to the system’s
headquarters office no later than 45 days from the date of the
member’s initial benefit payment and shall be liable for any adverse
tax consequences that may result from these actions.

(c) The retirement date of a member who files an application
for retirement pursuant to Section 24201 on or after January 1,
2012, shall be no earlier than January 1, 2012.

(d) Nothing in this section shall be construed to allow a member
to receive more than one type of retirement or disability allowance
for the same period of time by virtue of his or her own membership.

begin delete SEC. 32. end delete
begin insert SEC. 34. end insert   

Section 24205 of the Education Code is amended to
read:

24205.  

A member retiring prior to 60 years of age, and who
has attained 55 years of age, may elect to receive one-half of the
service retirement allowance for normal retirement age for a limited
time and then revert to the full retirement allowance for normal
retirement age.

(a) The retirement allowance shall be based on service credit
and final compensation as of the date of retirement for service and
shall be calculated with the factor for normal retirement age.

(b) If the member elects a joint and survivor option under
Section 24300 or 24300.1, the actuarial reduction shall be based
on the member’s and beneficiary’s ages as of the effective date of
the early retirement. If the member elected a preretirement option
under Section 24307, the actuarial reduction shall be based on the
member’s and beneficiary’s ages as determined by the provisions
of that section.

(c) One-half of the retirement allowance as of 60 years of age
shall be paid for a period of time equal to twice the elapsed time
between the effective date of retirement and the date of the retired
member’s 60th birthday.

(d) The full retirement allowance as calculated under subdivision
(a) or (b) shall begin to accrue as of the first of the month following
the reduction period as specified in subdivision (c). The full
retirement allowance shall not begin to accrue prior to this time
under any circumstances, including, but not limited to, divorce or
death of the named beneficiary.

(e) The annual improvement factor provided for in Sections
22140 and 22141 shall be based upon the retirement allowance as
calculated under subdivision (a) or (b). The improvement factor
shall begin to accrue on September 1 following the retired
member’s 60th birthday. These increases shall be accumulated
and shall become payable when the full retirement allowance for
normal retirement age first becomes payable.

(f) Any ad hoc benefit increase with an effective date prior to
the retired member’s 60th birthday shall not affect an allowance
payable under this section. Only those ad hoc improvements with
effective dates on or after the retired member’s 60th birthday shall
be accrued and accumulated and shall first become payable when
the full retirement allowance for normal retirement age becomes
payable.

(g) The cancellation of an option election in accordance with
Section 24322 shall not cancel the election under this section.
Upon cancellation of the joint and survivor option, one-half of the
retired member’s retirement allowance as calculated under
subdivision (a) shall become payable for the balance of the
reduction period specified in subdivision (c).

(h) If a retired member who has elected a joint and survivor
option dies during the period when the reduced allowance is
payable, the beneficiary shall receive one-half of the allowance
payable to the beneficiary until the date when the retired member
would have received the full retirement allowance for normal
retirement age. At that time, the beneficiary’s allowance shall be
increased to the full amount payable to the beneficiary plus the
appropriate annual improvement factor increases and ad hoc
increases.

(i) This section shall not apply to a member who retires for
service pursuant to Section 24201.5, 24209, 24209.3, 24210,
24211, or 24212.

(j) This section shall not apply to a member subject to the
California Public Employees’ Pension Reform Act of 2013.

begin delete SEC. 33. end delete
begin insert SEC. 35. end insert   

Section 24210 of the Education Code is amended to
read:

24210.  

Upon retirement for service following a prior disability
retirement granted pursuant to Chapter 26 (commencing with
Section 24100) that was terminated, the member shall receive a
service retirement allowance calculated pursuant to Section 24202,
24202.5, 24202.6, 24203, 24203.5, 24203.6, or 24206 and equal
to the sum of both of the following:

(a) An amount based on service credit accrued prior to the
effective date of the disability retirement, the member’s age as of
the effective date of the service retirement, and indexed final
compensation to the effective date of the service retirement.

(b) An amount based on the service credit accrued after
termination of the disability retirement, the member’s age as of
the effective date of service retirement, and final compensation.

begin delete SEC. 34. end delete
begin insert SEC. 36. end insert   

Section 24211 of the Education Code is amended to
read:

24211.  

When a member who has been granted a disability
allowance under this part after June 30, 1972, returns to
employment subject to coverage under the Defined Benefit
Program and performs:

(a) Less than three years of creditable service after termination
of the disability allowance, the member shall receive a retirement
allowance which is the sum of the allowance calculated on service
credit accrued after the termination date of the disability allowance,
excluding service credited pursuant to Sections 22717 and 22717.5
or Chapter 14 (commencing with Section 22800) or Chapter 14.2
(commencing with Section 22820) or Chapter 19 (commencing
with Section 23200), the age of the member on the last day of the
month in which the retirement allowance begins to accrue, and
final compensation using compensation earnable or projected final
compensation, or a combination of both, plus the greater of either
of the following:

(1) A service retirement allowance calculated on service credit
accrued as of the effective date of the disability allowance,
excluding service credited pursuant to Sections 22717 and 22717.5
or Chapter 14 (commencing with Section 22800) or Chapter 14.2
(commencing with Section 22820) or Chapter 19 (commencing
with Section 23200), the age of the member on the last day of the
month in which the retirement allowance begins to accrue, and
projected final compensation to the termination date of the
disability allowance.

(2) The disability allowance the member was eligible to receive
immediately prior to termination of that allowance, excluding
children’s portions.

(b) Three or more years of creditable service after termination
of the disability allowance, the member shall receive a retirement
allowance that is the greater of the following:

(1) A service retirement allowance calculated on all actual and
projected service excluding service credited pursuant to Sections
22717 and 22717.5 or Chapter 14 (commencing with Section
22800) or Chapter 14.2 (commencing with Section 22820) or
Chapter 19 (commencing with Section 23200), the age of the
member on the last day of the month in which the retirement
allowance begins to accrue, and final compensation using
compensation earnable, or projected final compensation, or a
combination of both.

(2) The disability allowance the member was receiving
immediately prior to termination of that allowance, excluding
children’s portions.

(c) The allowance shall be increased by an amount based on
any service credited pursuant to Sections 22714, 22715, 22717,
and 22717.5 or Chapter 14 (commencing with Section 22800) or
Chapter 14.2 (commencing with Section 22820) or Chapter 19
(commencing with Section 23200), and final compensation using
compensation earnable, or projected final compensation, or a
combination of both.

(d) If the total amount of credited service, other than projected
service or service that accrued pursuant to Sections 22714, 22715,
22717, 22717.5, and 22826, is equal to or greater than 30 years,
the amounts identified in subdivisions (a) and (b) shall be
calculated pursuant to Sections 24203.5 and 24203.6.

(e) For purposes of this section, final compensation shall not
be based on a determination of compensation earnable as described
in subdivision (e) of Section 22115.

(f) Upon retirement, the member may elect to modify the service
retirement allowance payable in accordance with any option
provided under this part.

begin delete SEC. 35. end delete
begin insert SEC. 37. end insert   

Section 24212 of the Education Code is amended to
read:

24212.  

(a) If a disability allowance granted under this part
after June 30, 1972, is terminated for reasons other than those
specified in Section 24213 and the member does not return to
employment subject to coverage under the Defined Benefit
Program, the member’s service retirement allowance, when
payable, shall be based on projected service, excluding service
credited pursuant to Sections 22717 and 22717.5 or Chapter 14
(commencing with Section 22800) or Chapter 14.2 (commencing
with Section 22820), or Chapter 19 (commencing with Section
23200), projected final compensation, and the age of the member
on the last day of the month in which the retirement allowance
begins to accrue. The allowance payable under this section,
excluding annuities payable from accumulated annuity deposit
contributions, shall not be greater than the terminated disability
allowance excluding children’s portions.

(b) The allowance shall be increased by an amount based on
any service credited pursuant to Sections 22714, 22715, 22717,
and 22717.5 or Chapter 14 (commencing with Section 22800) or
Chapter 14.2 (commencing with Section 22820) or Chapter 19
(commencing with Section 23200) and final compensation using
compensation earnable, or projected final compensation, or a
combination of both.

(c) If the total amount of credited service, other than projected
service or service that accrued pursuant to Sections 22714, 22715,
22717, 22717.5, and 22826, is equal to or greater than 30 years,
the amounts identified in subdivisions (a) and (b) shall be
calculated pursuant to Sections 24203.5 and 24203.6.

(d) Upon retirement, the member may elect to modify the service
retirement allowance payable in accordance with any option
provided under this part.

begin delete SEC. 36. end delete
begin insert SEC. 38. end insert   

Section 24213 of the Education Code is amended to
read:

24213.  

(a) When a member who has been granted a disability
allowance under this part after June 30, 1972, attains normal
retirement age, or at a later date when there is no dependent child,
the disability allowance shall be terminated and the member shall
be eligible for service retirement. The retirement allowance shall
be calculated on the projected final compensation and projected
service to normal retirement age, excluding service credited
pursuant to Sections 22717 and 22717.5, or Chapter 14
(commencing with Section 22800) or Chapter 14.2 (commencing
with Section 22820), or Chapter 19 (commencing with Section
23200), and the age of the member on the last day of the month
in which the retirement allowance begins to accrue. The allowance
payable under this section, excluding annuities payable from
accumulated annuity deposit contributions, shall not be greater
than the terminated disability begin delete allowance. The allowance shall be
increased by an amount based on any service credited pursuant to
Section 22714, 22715, 22717, or 22717.5, or Chapter 14
(commencing with Section 22800), Chapter 14.2 (commencing
with Section 22820), or Chapter 19 (commencing with Section
23200) and projected final compensation to normal retirement age, end delete
begin insert allowance, end insert excluding children’s portions.

begin insert

(b) The allowance shall be increased by an amount based on
any service credited pursuant to Section 22714, 22715, 22717, or
22717.5, or Chapter 14 (commencing with Section 22800), Chapter
14.2 (commencing with Section 22820), or Chapter 19
(commencing with Section 23200) and projected final
compensation to normal retirement age.

end insert begin insert

(c) If the total amount of credited service, other than projected
service or service that accrued pursuant to Sections 22714, 22715,
22717, 22717.5, and 22826, is equal to or greater than 30 years,
the amounts identified in subdivisions (a) and (b) shall be
calculated pursuant to Sections 24203.5 and 24203.6.

end insert begin delete

(b)

end delete

begin insert (d) end insert  Upon retirement, the member may elect to modify the service
retirement allowance payable in accordance with any option
provided under this part.

begin delete SEC. 37. end delete
begin insert SEC. 39. end insert   

Section 24214.5 of the Education Code is amended
to read:

24214.5.  

(a) (1) Notwithstanding subdivision (f) of Section
24214, the postretirement compensation limitation that shall apply
to the compensation paid in cash to the retired member for
performance of retired member activities, excluding
reimbursements paid by an employer for expenses incurred by the
member in which payment of the expenses by the member is
substantiated, shall be zero dollars ($0) during the first 180 calendar
days after the most recent retirement of a member retired for service
under this part.

(2) For written agreements pertaining to the performance of
retired member activities entered into, extended, renewed, or
amended on or after January 1, 2014, the limitation in paragraph
(1) shall also apply to payments, including, but not limited to,
those for participation in a deferred compensation plan; to purchase
an annuity contract, tax-deferred retirement plan, or insurance
program; and for contributions to a plan that meets the requirements
of Section 125, 401(a), 401(k), 403(b), 457(b), or 457(f) of Title
26 of the United States Code when the cost is covered by an
employer.

(b) If the retired member has attained normal retirement age at
the time the compensation is earned, subdivision (a) shall not apply
and Section 24214 shall apply if the appointment has been
approved by the governing body of the employer in a public
meeting, as reflected in a resolution adopted by the governing body
of the employer prior to the performance of retired member
activities, expressing its intent to seek an exemption from the
limitation specified in subdivision (a). Approval of the appointment
may not be placed on a consent calendar. Notwithstanding any
other provision of Article 3.5 (commencing with Section 6250) of
Division 7 of Title 1 of the Government Code or any state or
federal law incorporated by subdivision (k) of Section 6254 of the
Government Code, the resolution shall be subject to disclosure by
the entity adopting the resolution and the system. The resolution
shall include the following specific information and findings:

(1) The nature of the employment.

(2) A finding that the appointment is necessary to fill a critically
needed position before 180 calendar days have passed.

(3) A finding that the member is not ineligible for application
of this subdivision pursuant to subdivision (d).

(4) A finding that the termination of employment of the retired
member with the employer is not the basis for the need to acquire
the services of the member.

(c) Subdivision (b) shall not apply to a retired member whose
termination of employment with the employer is the basis for the
need to acquire the services of the member.

(d) Subdivision (b) shall not apply if the retired member received
additional service credit pursuant to Section 22714 or 22715 or
received from any public employer any financial inducement to
retire. For purposes of this section, “financial inducement to retire”
includes, but is not limited to, any form of compensation or other
payment that is paid directly or indirectly by a public employer to
the member, even if not in cash, either before or after retirement,
if the participant retires for service on or before a specific date or
specific range of dates established by a public employer on or
before the date the inducement is offered. The system shall liberally
interpret this subdivision to further the Legislature’s intent to make
subdivision (b) inapplicable to members if the member received
a financial incentive from any public employer to retire or
otherwise terminate employment with a public employer.

(e) The Superintendent, the county superintendent of schools,
or the chief executive officer of a community college shall submit
all documentation required by the system to substantiate the
eligibility of the retired member for application of subdivision (b),
including, but not limited to, the resolution adopted pursuant to
that subdivision.

(f) The documentation required by this section shall be received
by the system prior to the retired member’s performance of retired
member activities.

(g) Within 30 calendar days after the receipt of all
documentation required by the system pursuant to this section, the
system shall inform the entity seeking application of the exemption
specified in subdivision (b), and the retired member whether the
compensation paid to the member will be subject to the limitation
specified in subdivision (a).

(h) If a member retired for service under this part earns
compensation for performing retired member activities in excess
of the limitation specified in subdivision (a), the member’s
retirement allowance shall be reduced by the amount of the excess
compensation. The amount of the reduction may be equal to the
monthly allowance payable but may not exceed the amount of the
allowance payable during the first 180 calendar days, after a
member retired for service under this part.

(i) The amendments to this section enacted during the first year
of the 2013-14 Regular Session shall apply to compensation paid
on or after January 1, 2014.

begin delete SEC. 38. end delete
begin insert SEC. 40. end insert   

Section 24300 of the Education Code is amended to
read:

24300.  

(a) A member may, upon application for retirement,
elect an option pursuant to this part that would provide an
actuarially modified retirement allowance payable throughout the
life of the member and the member’s option beneficiary or
beneficiaries, as follows:

(1) Option 2. The modified retirement allowance shall be paid
to the retired member. Upon the retired member’s death, an
allowance equal to the modified amount that the retired member
was receiving shall be paid to the option beneficiary.

(2) Option 3. The modified retirement allowance shall be paid
to the retired member. Upon the retired member’s death, an
allowance equal to one-half of the modified amount that the retired
member was receiving shall be paid to the option beneficiary.

(3) Option 4. The modified retirement allowance shall be paid
to the retired member as long as both the retired member and the
option beneficiary are living. Upon the death of either the retired
member or the option beneficiary, an allowance equal to two-thirds
of the modified amount that the retired member was receiving shall
be paid to the surviving retired member or the surviving option
beneficiary.

(4) Option 5. The modified retirement allowance shall be paid
to the retired member as long as both the retired member and the
option beneficiary are living. Upon the death of either the retired
member or the option beneficiary, an allowance equal to one-half
of the modified amount that the retired member was receiving shall
be paid to the surviving retired member or surviving option
beneficiary.

(5) Option 6. The modified retirement allowance shall be paid
to the retired member and upon the retired member’s death, an
allowance equal to the modified amount that the retired member
was receiving shall be paid to the option beneficiary.

(6) Option 7. The modified retirement allowance shall be paid
to the retired member and upon the retired member’s death, an
allowance equal to one-half of the modified amount the retired
member was receiving shall be paid to the option beneficiary.

(7) Option 8. (A) A member may designate multiple option
beneficiaries. The member who has designated more than one
option beneficiary shall elect an option that the member is
authorized to elect subject to subdivision (e) for each beneficiary
designated that would provide an actuarially modified retirement
allowance payable throughout the lives of the member and the
member’s option beneficiaries upon the member’s death.

(B) The modified retirement allowance shall be paid to the
retired member as long as the retired member and at least one of
the option beneficiaries are living. Upon the retired member’s
death, an allowance shall be paid to each surviving option
beneficiary in accordance with the option elected respective to that
beneficiary. The member shall determine the percentage of the
unmodified allowance that will be modified by the election of
Option 2, Option 3, Option 4, Option 5, Option 6, or Option 7
within this option, the aggregate of which shall equal 100 percent
of the member’s unmodified allowance. The election of this option
is subject to approval by the board.

(C) A member who is a party to an action for legal separation
or dissolution of marriage and who is required by court order to
designate a spouse or former spouse as an option beneficiary may
designate his or her spouse or former spouse as a sole option
beneficiary under subparagraphs (A) and (B). The member shall
specify the option elected for the spouse or former spouse and the
percentage of his or her unmodified allowance to be modified by
the option, consistent with the court order. The percentage of the
member’s unmodified allowance that is not modified by the option
shall remain an unmodified allowance payable to the member. The
aggregate of the percentages specified for the option beneficiary
and the member’s remaining unmodified allowance, if any, shall
equal 100 percent.

(b) For purposes of this section, the member shall designate an
option beneficiary on a properly executed retirement application.
Except as otherwise provided by this chapter, the option shall
become effective on the member’s benefit effective date.

(c) A member may revoke or change an election of an option
at any time prior to the effective date of the member’s retirement
under this part. A revocation or change of an option may not be
made in derogation of a spouse’s or former spouse’s community
property rights as specified in a court order.

(d) On or before July 1, 2004, the board shall evaluate the
existing options and annuities provided pursuant to this section,
Chapter 38 (commencing with Section 25000) of this part, and
Part 14 (commencing with Section 26000) and adopt, as a plan
amendment, any appropriate changes to the options and annuities
based on the needs of members, participants, and their
beneficiaries, including, but not limited to, providing economic
security for beneficiaries and reducing complexity in the election
of options and annuities by members and participants. The changes
to the options and annuities may have no net actuarial impact on
the retirement fund, and the board may establish any eligibility
criteria it deems necessary to prevent an adverse actuarial impact
to the fund. The board shall designate the effective date of the plan
amendment, which shall be at least 18 months after the amendment
is adopted by the board, and notwithstanding any other provision
of this section, the options and annuities available to members and
participants eligible to retire pursuant to this part and Part 14
(commencing with Section 26000), after the effective date of the
plan amendment made pursuant to this subdivision, shall reflect
the changes adopted as a plan amendment pursuant to this
subdivision.

(e) Any member or participant who retired and elected an option
or a joint and survivor annuity, or who filed a preretirement election
of an option prior to the effective date of the plan amendment made
pursuant to subdivision (d), may elect to change to a different
option or joint and survivor annuity, as modified by the board as
a plan amendment pursuant to subdivision (d), if the member or
participant meets all the criteria established by the board to prevent
a change in an option or joint and survivor annuity from having
an adverse actuarial impact on the retirement fund, including, but
not limited to, the effective date of a new designation or limitations
on any changes if a member or participant, as the case may be, or
beneficiary, or both, is currently not living or afflicted with a
known terminal illness. The member or participant shall designate
the change during the six-month period that begins with the
effective date of the plan amendment, on a form prescribed by the
system. Any member changing an option election pursuant to this
subdivision is not subject to the allowance reduction prescribed
in Section 24309 or 24310 as a result of the election. If a member
or participant elects to change his or her option or joint and survivor
annuity under this subdivision, the member or participant shall
retain the same option beneficiary or beneficiaries as named in the
prior designation.

(f) The Legislature reserves the right to modify this section prior
to the effective date of the plan amendment made pursuant to
subdivision (d) to prevent any actuarial impact to the fund.

(g)  begin delete On end delete begin insert Except as described in subdivision (e) of Section 24300.1,
on end insert or after January 1, 2007, a member may not make a new election
for an option or joint and survivor annuity described in subdivision
(a).

(h) Any member with a retirement effective on or after January
1, 2007, shall elect an option from the options described in Section
24300.1. Any member making a new option election under the
provisions of Section 24320, 24321, 24322, or 24323 shall elect
an option from the options described in Section 24300.1 if the
effective date of the new option election is on or after January 1,
2007.

begin delete SEC. 39. end delete
begin insert SEC. 41. end insert   

Section 24300.1 of the Education Code is amended
to read:

24300.1.  

(a) A member may, upon application for retirement,
elect an option pursuant to this part that would provide an
actuarially modified retirement allowance payable throughout the
life of the member and the member’s option beneficiary or
beneficiaries, as follows:

(1) One hundred percent beneficiary option. The modified
retirement allowance shall be paid to the begin insert retired end insert member and upon
the begin delete retired end delete member’s death, 100 percent of the modified allowance
shall continue to be paid to the option beneficiary.

(2) Seventy-five percent beneficiary option. The modified
retirement allowance shall be paid to the begin insert retired end insert member and upon
the begin delete retired end delete member’s death, 75 percent of the modified allowance
shall continue to be paid to the option beneficiary. Pursuant to
Section 401(a)(9) of the Internal Revenue Code, unless the option
beneficiary is the member’s spouse or former spouse who has been
awarded a community property interest in the benefits of the
member under this part, the member may not designate an option
beneficiary under this option who is more than exactly 19 years
younger than the member.

(3) Fifty percent beneficiary option. The modified retirement
allowance shall be paid to the retired member and upon the
begin delete members’ end delete begin insert member’s end insert death, 50 percent of the modified allowance
shall continue to be paid to the option beneficiary.

(4) Compound option. The member may designate multiple
option beneficiaries or one or multiple option beneficiaries with
a designated percentage to remain unmodified. The member shall
elect an option as described in paragraph (1), (2), or (3) for each
designated option beneficiary that would provide an actuarially
modified retirement allowance payable throughout the lives of the
retired member and the member’s option beneficiary or
beneficiaries upon the member’s death.

(A) The modified retirement allowance shall be paid to the
member as long as the member and at least one option beneficiary
is living. Upon the member’s death, an allowance shall be paid to
each surviving option beneficiary in accordance with the option
elected respective to that option beneficiary.

(B) The member shall specify the percent of the unmodified
allowance that will be modified by the election of each option
described in paragraph (1), (2), or (3) of this subdivision. The
percent of the unmodified allowance that is not modified by an
option, if any, shall be payable to the member. The sum of the
percentages specified for the option beneficiary or beneficiaries
and the member’s remaining unmodified allowance, if any, shall
equal 100 percent.

(C) The member’s election of the compound option is subject
to all of the following:

(i) Pursuant to Section 401(a)(9) of the Internal Revenue Code,
unless the option beneficiary is the member’s spouse or former
spouse who has been awarded a community property interest in
the member’s benefits under this part, the member may not
designate an option beneficiary under the 100 percent beneficiary
option within this compound option who is more than exactly 10
years younger than the member.

(ii) Pursuant to Section 401(a)(9) of the Internal Revenue Code,
unless the option beneficiary is the member’s spouse or former
spouse who has been awarded a community property interest in
the member’s benefits under this part, the member may not
designate an option beneficiary under the 75 percent beneficiary
option within this compound option who is more than exactly 19
years younger than the member.

(b) For purposes of this section, the member shall designate an
option beneficiary on a properly executed retirement application.
Except as otherwise provided by this chapter, the option shall
become effective on the member’s benefit effective date.

(c) A member may revoke or change an election of an option
no later than 30 days from the date the member’s initial benefit
payment for the member’s most recent retirement under the Defined
Benefit Program is paid by the system. A revocation of an option
may not be made in derogation of a spouse’s or a former spouse’s
community property rights as specified in a court order.

(d) Notwithstanding Section 297 or 299.2 of the Family Code,
a spouse described in paragraphs (2) and (4) of subdivision (a)
does not include the domestic partner of the member, pursuant to
Section 7 of Title 1 of the United States Code.

(e) If there is a determination of community property rights as
described in Chapter 12 (commencing with Section 22650) of this
part on or before December 31, 2006, the member may elect the
option that is required by the judgment or court order. Nothing in
this part shall permit the member to change the option to the
detriment of the community property interest of the nonmember
spouse.

(f) The board may evaluate the existing options and annuities
provided pursuant to this section, Chapter 38 (commencing with
Section 25000) of this part, and Part 14 (commencing with Section
26000) and adopt, as a plan amendment, any appropriate changes
to the options and annuities based on the needs of the members,
participants, and their beneficiaries, including, but not limited to,
providing economic security for beneficiaries and reducing the
complexity of the options and annuities. The changes to the options
and annuities may have no net actuarial impact on the retirement
fund and the board may establish any eligibility criteria the board
deems necessary to prevent an adverse actuarial impact to the fund.
The board shall designate the effective date of the plan amendment,
which shall be at least 18 months after the amendment is adopted
by the board, and notwithstanding any other provision of this
section, the options and annuities available to members and
participants eligible to retire pursuant to this part and Part 14
(commencing with Section 26000), after the effective date of the
plan amendment made pursuant to this subdivision, shall reflect
the changes adopted as a plan amendment to this subdivision.

begin delete SEC. 40. end delete
begin insert SEC. 42. end insert   

Section 24300.2 of the Education Code is amended
and renumbered to read:

24345.  

(a) A member who retired and elected an option
pursuant to Section 24300 may elect to change options, subject to
all of the following:

(1) A member who elected Option 2 may elect to change to the
100-percent beneficiary option described in paragraph (1) or the
75-percent beneficiary option described in paragraph (2) of
subdivision (a) of Section 24300.1.

(2) A member who elected Option 3, Option 4, or Option 5 may
elect to change to the 75-percent beneficiary option described in
paragraph (2) or the 50-percent beneficiary option described in
paragraph (3) of subdivision (a) of Section 24300.1.

(3) A member who elected Option 6 or Option 7 may elect to
change to the 75-percent beneficiary option described in paragraph
(2) of subdivision (a) of Section 24300.1.

(4) A member who elected Option 8 may elect to have any
designated percentage of his or her unmodified allowance changed
in accordance with paragraph (1), (2), or (3).

(5) The election by a member under this section is made on or
after January 1, 2007, and prior to July 1, 2007.

(6) The member designates the same beneficiary that was
designated under the prior option elected by the member, if the
option and beneficiary designation were effective on or before
December 31, 2006.

(7) The member and the option beneficiary are not afflicted
with a known terminal illness and the member declares, under
penalty of perjury under the laws of this state, that to the best of
his or her knowledge, he or she and the option beneficiary are not
afflicted with a known terminal illness.

(8) The option beneficiary has not predeceased the member as
of the effective date of the change in the option by the member.

(b) The change in the option by the member shall be effective
on the date the election is signed, provided that the election is on
a properly executed form provided by the system and that election
is received at the system’s headquarters office within 30 days after
the date the election is signed.

(c) After receipt of a member’s election document, the system
shall mail an acknowledgment notice to the member that sets forth
the new option elected by the member.

(d) If the member and the option beneficiary are alive and not
afflicted with a known terminal illness, a member may cancel the
election to change options and elect to receive the benefit according
to the preexisting option election. After cancellation, the member
may elect to make a one-time change from the preexisting option
to any other option provided by and subject to the restrictions of
paragraph (1), (2), (3), or (4) of subdivision (a). The cancellation
or the cancellation and one-time change shall be made on a properly
executed form provided by the system and shall be received at the
system’s headquarters office no later than 30 calendar days
following the date of mailing of the acknowledgment notice. If
the member elects to make the one-time change provided by this
subdivision, the change shall be effective as of the member’s
signature date on the initial election to change.

(e) If the system is unable to mail an acknowledgment notice
to the member on or before June 1, 2007, or prior to the end of the
election period, provided that the member and the option
beneficiary are alive and not afflicted with a known terminal
illness, the system shall allow a member to cancel the election to
change options and elect to receive the benefit according to the
preexisting option election. After cancellation, the member may
elect to make a one-time change from the preexisting option to
any other option provided by and subject to the restrictions of
paragraph (1), (2), (3), or (4) of subdivision (a). The cancellation
or the cancellation and one-time change may be made after the
end of the election period if it is made on a properly executed form
provided by the system and is received at the system’s headquarters
office no later than 30 days following the date of the
acknowledgment notice. If the member elects to make the one-time
change provided by this subdivision, the change shall be effective
as of the member’s signature date on the initial election to change.

(f) If the member elects to change his or her option as described
in subdivision (a), the retirement allowance of the member shall
be modified in a manner determined by the board to prevent any
additional liability to the plan.

(g) The member shall not change options in derogation of a
spouse’s or former spouse’s community property rights as specified
in a court order.

begin delete SEC. 41. end delete
begin insert SEC. 43. end insert   

Section 24300.5 of the Education Code is amended
and renumbered to read:

begin delete 24345. end delete
begin insert 24331. end insert   

An option beneficiary who is receiving an allowance
pursuant to the option elected by the member may designate a
beneficiary to receive any allowance that has accrued and is unpaid,
and any remaining balance of the retired member’s accumulated
retirement contributions payable pursuant to Section 23881, upon
the death of the option beneficiary.

begin delete SEC. 42. end delete
begin insert SEC. 44. end insert   

Section 24300.6 of the Education Code is amended
and renumbered to read:

24321.  

(a) Any retired member who was unmarried and not
in a registered domestic partnership on the benefit effective date
who did not elect an option pursuant to Section 24300, 24300.1,
or 24307, and who thereafter marries or registers in a domestic
partnership, may, after the effective date of the member’s
retirement under this part, elect an option described in paragraph
(1), (2), or (3) of subdivision (a) of Section 24300.1, naming his
or her new spouse or registered domestic partner as the option
beneficiary, subject to all of the following:

(1) The retired member shall have been married or registered
in a domestic partnership for at least one year prior to making the
election of the option.

(2) The retired member shall notify the board, in writing on a
properly executed form provided by the system, of the election of
the option and the designation of the member’s new spouse or
registered domestic partner as the option beneficiary. That notice
shall include a certified copy of the marriage certificate or the
certificate of registration of domestic partnership.

(3) The election of an option under this section is subject to
approval by the board. A retired member may not elect a joint and
survivor option that would result in any additional liability to the
retirement fund. A retired member may not elect the compound
option described in paragraph (4) of subdivision (a) of Section
24300.1.

(4) The election shall be effective six months after the date the
notification is received by the board, provided that both the retired
member and the retired member’s designated spouse or registered
domestic partner are then living. If the effective date of the new
option election is on or after January 1, 2007, at the time of the
new election the retired member shall elect an option from the
options described in paragraph (1), (2), or (3) of subdivision (a)
of Section 24300.1. If, before the new election becomes effective,
the member terminates his or her benefit pursuant to Section 24208
or the retired member or the new option beneficiary dies, the new
election is void and the unmodified election remains in effect.

(b) The election of the option and designation of the option
beneficiary under this section shall result in an actuarial
modification of the member’s retirement allowance that shall be
payable through the life of the member and the member’s new
spouse or registered domestic partner. Modification of the
member’s retirement allowance pursuant to this section shall be
based on the ages of the retired member and the retired member’s
new spouse or registered domestic partner as of the effective date
of the election.

begin delete SEC. 43. end delete
begin insert SEC. 45. end insert   

Section 24301 of the Education Code is amended and
renumbered to read:

24332.  

(a) A member upon application for a disability
retirement pursuant to Chapter 26 (commencing with Section
24100), may elect, as provided in Section 24300 or 24300.1 to
receive an actuarially modified disability retirement allowance.

(b) For purposes of this section, the member shall either elect
to receive an unmodified allowance or designate an option
beneficiary on a properly executed form prescribed by the system,
either of which shall be filed with the system on or before the last
day of the month in which the member’s disability retirement is
approved by the system. The option shall become effective on the
effective date of the disability retirement allowance. The
modification of the disability retirement allowance under the option
elected shall be based on the ages of the retired member and the
designated option beneficiary as of the effective date of the
disability retirement. The modification shall be applicable only to
the disability retirement allowance payable pursuant to subdivision
(a) of Section 24106.

(c) Except as provided in Sections 24300, 24300.1, 24320,
24321, 24322, and 24323, a member may revoke or change an
election of an option no later than 30 days from the date of the
member’s initial disability retirement benefit payment.

(d) If a member dies prior to electing an unmodified allowance
or an option, the death benefits shall be payable under Chapter 23
(commencing with Section 23850), regardless of whether the
disability retirement application is or would have been approved.

begin delete SEC. 44. end delete
begin insert SEC. 46. end insert   

Section 24302 of the Education Code is amended and
renumbered to read:

24311.  

Upon termination of a service retirement allowance
pursuant to Section 24208, any option elected pursuant to Section
24300 or 24300.1 and in effect at the time of reinstatement shall
be considered to be a preretirement election of an option elected
as of the effective date of the most recent retirement and shall be
subject to the same provisions as an option elected under Section
24307.

begin delete SEC. 45. end delete
begin insert SEC. 47. end insert   

Section 24303 of the Education Code is amended and
renumbered to read:

24312.  

Termination of the service retirement allowance
pursuant to Section 24208 shall not cancel an option elected under
the provisions of Section 24307. The effective date of the option
shall remain the original election date pursuant to Section 24307.

begin delete SEC. 46. end delete
begin insert SEC. 48. end insert   

Section 24304 of the Education Code is amended and
renumbered to read:

24333.  

Upon termination of a disability retirement allowance
pursuant to Section 24117, any option elected at the time of
retirement pursuant to Section 24332 shall be void as of the
effective date of the reinstatement. The preretirement election of
option subsequent to termination of the allowance pursuant to
Section 24117 shall be subject to the following:

(a) A member may not make a preretirement election of option
pursuant to Section 24307 prior to becoming qualified to make
application for service retirement under Section 24201 or begin delete Section end delete
24203.

(b) A member who was receiving an unmodified disability
retirement allowance prior to termination of the allowance may
not make a preretirement election of option earlier than six months
following the date on which the disability retirement allowance
was terminated pursuant to Section 24117.

(c) A member who has elected an option pursuant to Section
24332, and is otherwise eligible to make a preretirement election
of an option, may make the election anytime during the six months
following the date on which the disability retirement allowance
was terminated pursuant to Section 24117. The member shall elect
the same option and designate the same option beneficiary as
designated under Section 24332 when making the election during
the six-month period following the date the disability retirement
allowance was terminated.

begin delete SEC. 47. end delete
begin insert SEC. 49. end insert   

Section 24305 of the Education Code is amended and
renumbered to read:

24322.  

(a) An option elected under Section 24300, 24300.1,
or 24307 may be canceled by a retired member if the option
beneficiary is the retired member’s spouse or former spouse and
a final decree of dissolution of marriage or a judgment of nullity
has been entered or an order of separate maintenance has been
made on or after January 1, 1978, by a court of competent
jurisdiction. A retired member may cancel the option before or
after issuance of the first retirement allowance payment.

(b) The retired member shall notify the board in writing of
cancellation of the option. Notification shall not be earlier than
the effective date of the decree, judgment, or order and shall include
a certified copy of the final decree of dissolution, or judgment of
nullity, or an order of separate maintenance, and any property
settlement agreement.

(c) Upon notification to the board, the retired member may elect:
(1) to receive the unmodified retirement allowance from the date
of receipt of the notification; or (2) a new joint and survivor option
under Section 24300.1 and may designate one or multiple new
option beneficiaries. Modification of the retirement allowance
because of the newly elected option or newly designated
beneficiary or beneficiaries shall be based on the ages of the retired
member and the new option beneficiary or beneficiaries as of the
effective date of the new option. The election of a new joint and
survivor option or the designation of a new option beneficiary or
beneficiaries shall be consistent with the final decree of dissolution,
judgment of nullity, order of separate maintenance, or property
settlement agreement, and shall not result in any additional liability
to the Teachers’ Retirement Fund. The effective date of the change
shall be the date notification is received by the board.

begin delete SEC. 48. end delete
begin insert SEC. 50. end insert   

Section 24305.3 of the Education Code, as amended
by Section 39 of Chapter 655 of the Statutes of 2006, is amended
and renumbered to read:

24324.  

(a) A member who is receiving a joint and survivor
annuity under the Defined Benefit Supplement Program may
change the annuity or the annuity beneficiary elected pursuant to
Section 25011, 25011.1, 25018, or 25018.1, provided all of the
following conditions are met:

(1) The annuity beneficiary is the member’s spouse or former
spouse.

(2) A final decree of dissolution of marriage is granted, or a
judgment of nullity is entered, or an order of separate maintenance
is made by a court of competent jurisdiction with respect to the
member and the spouse or former spouse on or after the beginning
of the initial plan year designated by the board pursuant to Section
22156.05.

(3) The change is consistent with the final decree of dissolution,
judgment of nullity, or order of separate maintenance.

(b) A member may change the annuity pursuant to subdivision
(a) before or after the first annuity payment is issued.

(c) The member shall notify the system in writing of the change
in the annuity. The notification shall not be earlier than the effective
date of the final decree of dissolution, judgment of nullity, or order
of separate maintenance and shall include a certified copy of the
final decree of dissolution, judgment of nullity, or order of separate
maintenance, and any property settlement agreement.

(d) A change in the annuity or annuity beneficiary or both shall
become effective on the date the notification of change is received
by the system. The annuity amount payable to the member upon
the change elected by the member shall be determined as of the
effective date of the change and shall be the actuarial equivalent
of the lump sum that would otherwise be payable to the member
as of the date of the change. If the member elects a joint and
survivor annuity, the amount payable under the annuity shall be
modified consistent with the annuity elected by the member.

begin delete SEC. 49. end delete
begin insert SEC. 51. end insert   

Section 24305.3 of the Education Code, as added by
Section 56 of Chapter 74 of the Statutes of 2000, is repealed.

begin delete SEC. 50. end delete
begin insert SEC. 52. end insert   

Section 24305.5 of the Education Code is amended
and renumbered to read:

24320.  

(a) An option elected under Section 24300 or 24300.1
may be canceled by a retired member if the option beneficiary is
not the retired member’s spouse or former spouse. A retired
member may cancel the option before or after issuance of the first
retirement allowance payment and shall designate his or her spouse
as the new option beneficiary and the same or a different joint and
survivor option described in Section 24300.1.

(b) The retired member shall notify the board, in writing on a
properly executed form provided by the system, of the designation
of the new option beneficiary. Notification shall include a certified
copy of the marriage certificate and a properly executed form for
the change.

(c) The effective date of the new election shall be six months
following the date notification is received by the board, provided
both the retired member and the new designated option beneficiary
are then living. If the effective date of the new option election is
on or after January 1, 2007, at the time of the new election the
retired member shall elect an option from the options described in
Section 24300.1. If, before the new election becomes effective,
the member terminates his or her benefit pursuant to Section 24208
or the retired member or the new option beneficiary dies, the new
election is void and the previous election remains in effect.

(d) The election of the option and designation of the option
beneficiaries under this section and Section 24300.1 shall be subject
to an actuarial modification of the retirement allowance. In no
event may a retired member elect a joint and survivor option that
would result in any additional liability to the fund. A retired
member may not elect the compound option described in paragraph
(4) of subdivision (a) of Section 24300.1. Modification of the
retirement allowance because of the new option beneficiary and
the new option shall be based on the ages of the retired member
and the new option beneficiary as of the effective date of the new
election.

begin delete SEC. 51. end delete
begin insert SEC. 53. end insert   

Section 24306 of the Education Code is amended and
renumbered to read:

24323.  

(a) If an option beneficiary designated in the election
of an Option 2 or Option 3 as described in Section 24300
predeceases the retired member, the retired member may elect a
new joint and survivor option described in paragraph (1), (2), (3),
or (4) of subdivision (a) of Section 24300.1 and designate one or
multiple new option beneficiaries.

(b) If an option beneficiary designated in the election of an
Option 4 or Option 5 as described in Section 24300 predeceases
the retired member, a retirement allowance adjusted for the
specified option shall be payable to the retired member and shall
commence to accrue to the retired member as of the day following
the date of the death of the option beneficiary. The retired member
may elect a new joint and survivor option described in paragraph
(1), (2), (3), or (4) of subdivision (a) of Section 24300.1 and
designate one or multiple new option beneficiaries.

(c) If an option beneficiary designated in the election of Option
2 or Option 3 within Option 8 as described in Section 24300,
predeceases the retired member, the retired member may elect a
new joint and survivor option described in paragraph (1), (2), or
(3) of subdivision (a) of Section 24300.1 and designate a new
option beneficiary for the portion of the retirement allowance that
was modified for the prior option beneficiary. The retired member
may not elect the compound option described in paragraph (4) of
subdivision (a) of Section 24300.1.

(d) If an option beneficiary designated in the election of Option
4 or begin insert Option end insert 5 within Option 8 as described in Section 24300
predeceases the retired member, a retirement allowance adjusted
for the specified option for the portion of the benefit allocated to
that beneficiary shall be payable to the retired member and shall
commence to accrue to the retired member as of the day following
the date of the death of the option beneficiary. The retired member
may elect a new joint and survivor option described in paragraph
(1), (2), or (3) of subdivision (a) of Section 24300.1 for that portion
of the retirement allowance that was modified for the prior option
beneficiary and designate a new option beneficiary. The retired
member may not elect the compound option described in paragraph
(4) of subdivision (a) of Section 24300.1.

(e) If an option beneficiary designated in the election of an
Option 6 or Option 7 or in the election of Option 6 or Option 7
within Option 8, pursuant to Section 24300 predeceases the retired
member, that portion of the retirement allowance attributable to
Option 6 or Option 7 without modification for the option shall be
payable to the retired member upon notification to the board and
shall commence to accrue to the retired member as of the day
following the date of the death of the option beneficiary. The retired
member may designate a new beneficiary for that portion of the
retirement allowance within the same option designated for the
prior beneficiary.

(f) If an option beneficiary designated in the election of an
option pursuant to paragraph (1), (2), (3), or (4) of subdivision (a)
of Section 24300.1 predeceases the begin insert retired end insert member, that portion
of the retirement allowance attributable to the option without
modification for the option shall be payable to the member upon
notification to the board and shall commence to accrue to the
retired member as of the day following the date of the death of the
option beneficiary. begin delete Notification to the board shall include proof
of death of the beneficiary. end delete The retired member may designate a
new beneficiary for that portion of the retirement allowance within
the same option designated for the prior beneficiary.

(g) The retired member shall submit proof of death of the prior
beneficiary before making a new beneficiary election under this
section. The effective date of any new election under this section
shall be six months following the date notification is received by
the board provided both the retired member and the newly
designated option beneficiary are living begin insert on end insert the date the new
election is to become effective. Notification shall be on a properly
executed form prescribed by the system for the new designation.

(h) If, before the new election becomes effective, the member
reinstates pursuant to Section 24208 or the retired member or new
option beneficiary dies, the new election is void.

(i) If the retired member is eligible to elect a new option and
the effective date of the new option election is on or after January
1, 2007, at the time of the new election the retired member shall
elect an option from the options described in Section 24300.1.

(j) The election of the new joint and survivor option under this
section and Section 24300.1 is subject to an actuarial modification
of the retirement allowance. In no event may a retired member
elect a joint and survivor option that would result in any additional
liability to the fund.

(k) The new option beneficiary cannot be an existing option
beneficiary for that member designated under paragraph (7) of
subdivision (a) of Section 24300 or paragraph (4) of subdivision
(a) of Section 24300.1.

begin delete SEC. 52. end delete
begin insert SEC. 54. end insert   

Section 24306.5 of the Education Code is amended
and renumbered to read:

24341.  

(a) A member who retired for service under Option 2
or Option 3 with an effective date prior to January 1, 1991, may
elect to change Option 2 to Option 6 or Option 3 to Option 7 under
all of the following conditions:

(1) The election is made during the six-month period
commencing July 1, 1994, and ending December 31, 1994.

(2) The same beneficiary under Option 2 or Option 3 is named
as beneficiary under Option 6 or Option 7.

(3) The change in options is consistent with Sections 22453 and
24322.

(4) The option beneficiary is not afflicted with any known
terminal illness and the retired member shall state under penalty
of perjury that to the best of his or her knowledge the option
beneficiary is not afflicted with any known terminal illness.

(5) The option beneficiary has not predeceased the retired
member as of the effective date of the change in options.

(b) The change in options shall be effective on the date the
election is signed, provided that the election is received at the
system’s headquarters office within 30 days after the date of the
signature.

(c) If an election to change options is made pursuant to this
section, the modified allowance shall be reduced in a manner
determined by the board to ensure that no additional liability shall
be incurred by the plan pursuant to this section.

begin delete SEC. 53. end delete
begin insert SEC. 55. end insert   

Section 24306.7 of the Education Code is amended
and renumbered to read:

begin delete 24324. end delete
begin insert 24342. end insert   

(a) Any member who retired for service under Option
4 or Option 5 with an effective date prior to January 1, 1991, may
elect to change Option 4 to Option 6 or Option 5 to Option 7 if all
of the following conditions are met:

(1) The election is made during the three-month period
commencing January 1, 1999, and ending March 31, 1999.

(2) The same beneficiary under Option 4 or Option 5 is named
as beneficiary under Option 6 or Option 7.

(3) The change in options is consistent with Sections 22453 and
24322.

(4) The option beneficiary is not afflicted with any known
terminal illness.

(5) The option beneficiary has not predeceased the retired
member as of the effective date of the change in option.

(6) The election to change the option under this section is
received at the system’s headquarters office at least 30 days prior
to the death of the option beneficiary.

(b) Failure to satisfy all of the conditions in subdivision (a) shall
render the change of election invalid.

(c) The change in options under this section shall be effective
on the date the election is signed, provided all the conditions set
forth in subdivision (a) are satisfied and the election is received at
the system’s headquarters office within 30 days after the date of
the signature.

(d) The election of a new joint and survivor option under this
section is subject to a further modification of the modified
retirement allowance. In no event may a retired member elect a
joint and survivor option that would result in any additional liability
to the fund.

begin delete SEC. 54. end delete
begin insert SEC. 56. end insert   

Section 24307 of the Education Code is amended to
read:

24307.  

(a) A member who qualifies to apply for retirement
under Section 24201 or 24203 may make a preretirement election
of an option, as provided in Section 24300.1 without right of
revocation or change after the benefit effective date, except as
provided in this part. The preretirement election of an option shall
become effective as of the date of the member’s signature on a
properly executed form prescribed by the system, subject to the
following requirements:

(1) The form includes the signature of the member’s spouse or
registered domestic partner, if applicable, and the signature is
dated.

(2) The date the form is received at the system’s headquarters
office is within 30 days after the date of the member’s signature
and, if applicable, the spouse’s or registered domestic partner’s
signature.

(b) A member who makes a preretirement election of an Option
2, Option 3, Option 4, Option 5, Option 6, or Option 7 pursuant
to Section 24300, or an election as described in paragraph (1), (2),
or (3) of Section 24300.1 may subsequently make a preretirement
election of the compound option described in paragraph (4) of
subdivision (a) of Section 24300.1. The member may retain the
same option and the same option beneficiary as named in the prior
preretirement election for a designated percentage within the
compound option.

(c) Upon the member’s death prior to the benefit effective date,
the beneficiary who was designated under the option elected and
who survives shall receive an allowance calculated under the
option, under the assumption that the member retired for service
pursuant to Chapter 27 (commencing with Section 24201) on the
date of death. The payment of the allowance to the option
beneficiary shall be in lieu of the family allowance provided in
Section 23804, the payment provided in paragraph (1) of
subdivision (a) of Section 23802, the survivor benefit allowance
provided in Section 23854, and the payment provided in
subdivisions (a) and (b) of Section 23852, except that if the
beneficiary dies before all of the member’s accumulated retirement
contributions are paid, the balance, if any, shall be paid to the estate
of the person last receiving or entitled to receive the allowance.
The accumulated annuity deposit contributions and the death
payment provided in Sections 23801 and 23851 shall be paid to
the beneficiary in a lump sum.

(d) If the member subsequently retires for service, and the
elected option has not been canceled pursuant to Section 24309,
a modified service retirement allowance computed under Section
24300 or 24300.1 and the option elected shall be paid.

(e) The amount of the service retirement allowance prior to
applying the option factor shall be calculated as of the earlier of
the member’s age at death before retirement or age on the last day
of the month in which the member requested service retirement
be effective. The modification of the service retirement allowance
by the option elected shall be based on the ages of the member
and the beneficiary designated under the option, as of the date the
election was signed.

(f) A member who terminates the service retirement allowance
pursuant to Section 24208 shall not be eligible to file a
preretirement election of an option until one calendar year elapses
from the date the allowance is terminated. If the member retires
again within one calendar year of the termination of their benefit
pursuant to Section 24208, the retired member shall keep, upon
subsequent retirement, the option and beneficiary or the unmodified
election in place upon the date the termination of the benefits
became effective.

(1) If the member’s option beneficiary or beneficiaries
predecease the member within one calendar year of the termination
of benefits and before the member has retired again, upon
notification to the system, the system shall begin delete remove end delete begin insert cancel end insert the
option and beneficiary from that portion of the benefit with
begin delete modification end delete begin insert reduction end insert pursuant to Section begin delete 24307.5 end delete begin insert 24309 end insert . The
member shall not elect a new option or beneficiary begin insert pursuant to
Section 24310 end insert until one calendar year from the termination
effective date has elapsed.

(2) If a final decree of dissolution of marriage or a judgment of
nullity has been entered or an order of separate maintenance has
been made within one calendar year of the termination of benefits
and the member has not retired again, upon notification to the
system, the system shall begin delete remove end delete begin insert cancel end insert or change the option
election in accordance with the court order with begin delete modification end delete
begin insert reduction end insert pursuant to Section begin delete 24307.5 end delete begin insert 24309 end insert . Any additional
changes shall not be made until one calendar year from the
termination effective date has elapsed.

(g) The system shall inform members who are qualified to make
a preretirement election of an option, through the annual statements
of account, that the election of an option can be made.

begin delete SEC. 55. end delete
begin insert SEC. 57. end insert   

Section 24308 of the Education Code is amended and
renumbered to read:

24330.  

(a) The election of an option as provided in Section
24307 shall preclude the payment of a family allowance to any
beneficiary under this part.

(b) The preretirement election of an option made by the member
pursuant to Section 24307 shall be voided by the board as of the
effective date of an approved disability retirement under this part.
Members receiving a disability retirement allowance pursuant to
Chapter 26 (commencing with Section 24100) may not file an
election of option as provided in Section 24307.

(c) The election of an option as provided in Section 24307 shall
preclude the payment of a survivor benefit allowance pursuant to
Chapter 23 (commencing with Section 23850) and shall preclude
the payment of the remaining balance of the member’s accumulated
retirement contributions prior to the death of the option beneficiary.

begin delete SEC. 56. end delete
begin insert SEC. 58. end insert   

Section 24309 of the Education Code is amended to
read:

24309.  

(a) A member may change or cancel the election of an
option made pursuant to Section 24307. The change or cancellation
shall be on a properly executed form provided by the system and
received at the system’s headquarters office within 30 days after
the date of the member’s signature and, if applicable, the spouse’s
signature, and no later than 30 days from the date the member’s
initial benefit payment for the member’s most recent retirement
under the Defined Benefit Program is paid by the system. The
change or cancellation shall become effective as of the date of the
member’s signature or the day prior to the member’s benefit
effective date, whichever is earlier.

(1) Any change to an election of an option shall be made
according to Section 24307 and shall be considered a new
preretirement election of an option.

(2) Regardless of how the member elects to receive his or her
retirement allowance, a change made to an election of an option
or a cancellation of an option shall result in the reduction of that
allowance by an amount determined by the board to be the actuarial
equivalent of the coverage the member received as a result of the
preretirement election and that does not result in any adverse
funding to the plan.

(b) If the option beneficiary designated in the preretirement
election of an option pursuant to Section 24307 dies prior to the
member’s retirement, the preretirement election shall be canceled
as of the day following the date of death and the member’s
subsequent retirement allowance under this part shall be subject
to the allowance reduction prescribed in this section.

(c) If the option elected pursuant to Section 24307 is “Option
8” as described in paragraph (7) of subdivision (a) of Section 24300
or the compound option as described in paragraph (4) of
subdivision (a) of Section 24300.1, a member may cancel the
designation of an option beneficiary. If the member cancels the
designation of the option beneficiary or the option beneficiary
predeceases the member prior to the member’s retirement, the
member may elect to receive that portion of the retirement
allowance without modification for the option or elect one or
multiple new or existing option beneficiaries as described in
Section 24307. Any change or cancellation of the designation of
the option beneficiary under this subdivision shall result in the
allowance reduction prescribed in this section.

begin insert

begin insert SEC. 59. end insert   

end insert

begin insert Section 24310 of the end insert begin insert Education Code end insert begin insert is amended to
read: end insert

24310.  

If begin delete a member cancels end delete an election begin insert of an option is canceled end insert
under Section 24309, the member may again elect an option under
Section 24307. If begin delete the member elects to change end delete begin insert an election of end insert an
option begin insert is changed or canceled end insert during any year, the reduction for
that year shall be that for the option to which the greater reduction
under Section 24309 as it read on December 31, 1995, is applicable.

begin delete SEC. 57. end delete
begin insert SEC. 60. end insert   

Section 24311 of the Education Code is amended and
renumbered to read:

24340.  

(a) A member who has a preretirement election of an
option in effect on December 31, 1990, may change his or her
preretirement election of Option 2, Option 3, Option 4, or Option
5 to either Option 6 or Option 7 without the allowance reduction
prescribed in Sections 24309 and 24310, provided the change is
made on or after January 1, 1991, and prior to the earlier of January
1, 1992, or the member’s retirement under this part.

(b) If the member elects to change his or her option under this
section, then the member shall retain the same option beneficiary
as named in the prior preretirement election. The election to change
the preretirement election under this section shall be void if not
received in the system’s headquarters office at least 30 days prior
to the death of the option beneficiary.

begin delete SEC. 58. end delete
begin insert SEC. 61. end insert   

Section 24312 of the Education Code is amended and
renumbered to read:

24344.  

(a) A member who has a preretirement election of an
option in effect on December 31, 1999, may change his or her
preretirement election of Option 2, Option 3, Option 4, Option 5,
Option 6, or Option 7 to Option 8 without the allowance reduction
prescribed in Sections 24309 and 24310, provided the change is
made on or after January 1, 2000, and prior to the earlier of July
1, 2000, or the member’s benefit effective date.

(b) If the member elects to change his or her option under this
section then the member shall retain the same option and the same
option beneficiary as named in the prior preretirement election of
an option as one of the options under Option 8. The election to
change the preretirement election under this section shall be void
if not received in the system’s headquarters office at least 30 days
prior to the death of the option beneficiary.

(c) This section shall become operative on January 1, 2000.

begin delete SEC. 59. end delete
begin insert SEC. 62. end insert   

Section 24312.1 of the Education Code is amended
and renumbered to read:

24346.  

(a) A member who has a preretirement election of an
option in effect on December 31, 2006, pursuant to paragraphs (1)
to (6), inclusive, of subdivision (a) of Section 24300 may change
his or her preretirement election to an option described in paragraph
(1), (2), or (3) of subdivision (a) of Section 24300.1 without the
allowance reduction described in Sections 24309 and 24310,
provided the change is made on or after January 1, 2007, and prior
to July 1, 2007.

(b) A member who has a preretirement election of Option 8 as
described in Section 24300 in effect on December 31, 2006, and
in that Option 8 election has an option pursuant to paragraphs (1)
to (6), inclusive, of subdivision (a) of Section 24300, may change
any of the options under paragraphs (1) to (6), inclusive, of
subdivision (a) of Section 24300 to an option described in
paragraph (1), (2), or (3) of subdivision (a) of Section 24300.1
without the allowance reduction described in Sections 24309 and
24310, if change is made on or after January 1, 2007, and prior to
July 1, 2007. A member may not change the portion of the
unmodified benefit that would be modified pursuant to that prior
option.

(c) The election to change the option by a member as described
in this section shall be subject to all of the following:

(1) The member may not change the option beneficiary that was
designated in the prior preretirement option election.

(2) The change in options under this section shall be effective
on the date the election is signed, provided that the election is on
a properly executed form provided by the system and received at
the system’s headquarters office within 30 days of the date of the
signature.

(d) If the member elects to change options as described in this
section, the age of the member and the option beneficiary on the
effective date of the prior preretirement option election shall be
the age used to calculate the member’s benefit at the time of
retirement.

begin delete SEC. 60. end delete
begin insert SEC. 63. end insert   

Section 24313 of the Education Code is amended and
renumbered to read:

24343.  

(a) Any member who retired for service under Option
2 or Option 3 with an effective date prior to January 1, 1991, whose
option beneficiary had died prior to January 1, 1995, shall receive,
effective January 1, 1999, the retirement allowance without
modification for the option if all of the following conditions are
met:

(1) The retired member is living as of January 1, 1999.

(2) The retired member has not elected a new option beneficiary
under Section 24323.

(3) The retirement allowance without modification for the option
payable as of January 1, 1999, is greater than the amount payable
under the option, plus the amounts from annual benefit
improvements, ad hoc benefit begin delete increases end delete begin insert increases, end insert and payments
from the Supplemental Benefit Maintenance Account.

(4) The retired member does not inform the system in writing,
on a form provided by the system, within 30 days of receipt of the
notification of the change to the retirement allowance without
modification for the option, of his or her election to continue to
receive the option allowance.

(b) Any member who retired for service under Option 4 or
Option 5 with an effective date prior to January 1, 1991, whose
option beneficiary had died prior to January 1, 1999, shall receive
effective January 1, 1999, the retirement allowance without
modification for the option if all the following conditions are met:

(1) The retired member is living as of January 1, 1999.

(2) The retired member has not elected a new option beneficiary
under Section 24323.

(3) The retirement allowance without modification for the option
payable as of January 1, 1999, is greater than the amount payable
under the option, plus the amount from annual benefit
improvements, ad hoc benefit begin delete increases end delete begin insert increases, end insert and payments
from the Supplemental Benefit Maintenance Account.

(4) The retired member does not inform the system in writing,
on a form provided by the system, within 30 days of receipt of the
notification of the change to the retirement allowance without
modification for the option, of his or her election to continue to
receive the option allowance.

(c) The change to the retirement allowance without modification
for the option begin delete , end delete shall be consistent with Section 22453.

(d) A member retired for service who receives the retirement
allowance without modification for the option provided under this
section begin delete , end delete shall not elect a new option beneficiary under Section
24323.

(e) The cost of this section shall be paid by the transfer for that
purpose of the one-time gain accrued to the State Teachers’
Retirement System from the difference between the contributions
received pursuant to Sections 22901 and 22950 in the 1997-98
fiscal year minus the normal cost as displayed in the June 30, 1997,
actuarial valuation.

begin insert

begin insert SEC. 64. end insert   

end insert

begin insert Section 24347 is added to the end insert begin insert Education Code end insert begin insert , to
read: end insert

begin insert

begin insert 24347. end insert   

(a) A member who retired and elected an option
pursuant to Section 24300.1 and designated his or her same-sex
spouse as option beneficiary may elect to change his or her option
subject to the following:

(1) A member who elected the 100 percent beneficiary option
or the 50 percent beneficiary option may elect to change his or
her option to the 75 percent beneficiary option described in
paragraph (7) of subdivision (a) of Section 24300.1, provided the
member’s same-sex spouse is more than exactly 19 year younger
than the member.

(2) (A) A member who elected the compound option may elect
to change the option designated for his or her same-sex spouse
within the compound option to the 100 percent beneficiary option
described in paragraph (1) of subdivision (a) of Section 24300.1,
provided the member’s same-sex spouse is more than exactly 10
years younger than the member, or the 75 percent beneficiary
option described in paragraph (2) of subdivision (a) of Section
24300.1, provided the member’s same-sex spouse is more than
exactly 19 years younger than the member.

(B) If a member elects to change the option designated for his
or her same-sex spouse within the compound option, the member
may also elect to change the option designated to any other option
beneficiary or beneficiaries within the compound option to the 100
percent beneficiary option, the 75 percent beneficiary option, or
the 50 percent beneficiary option described in paragraph (1), (2),
or (3) of subdivision (a) of Section 24300.1.

(C) If a member elects to change the option designated for his
or her same-sex spouse within the compound option, the member
may also elect to change the percentage of his or her unmodified
allowance designated to the option beneficiary or beneficiaries.
The percent of the allowance that is not modified by an option, if
any, shall be payable to the member. The sum of all percentage
specified for the option beneficiary or beneficiaries and the
member’s remaining unmodified allowance, if any, shall equal
100 percent.

(D) Any change made pursuant to this paragraph shall be
subject to the requirements and restrictions of the compound option
described in paragraph (4) of subdivision (a) of Section 24300.1
and shall not be construed to allow a member to cancel his or her
compound option.

(3) The option change made by the member pursuant to this
section is made on or after January 1, 2015, and prior to July 1,
2015.

(4) The member is in a same-sex marriage recognized by the
United State government, any state government, or any foreign
government and elected his or her same-sex spouse as his or her
option beneficiary prior to June 26, 2013.

(5) The member designates the same option beneficiary or
beneficiaries that were designated for the prior option elected by
the member.

(6) The option beneficiary or beneficiaries have not predeceased
the member as of the effective date of the option change made by
the member pursuant to this section.

(b) The option change made by a member pursuant to
subdivision (a) shall become effective as of the member’s signature
date on a properly executed form provided by the system subject
to the following requirements:

(1) The form includes the signature of the member’s same-sex
spouse and the signature is dated.

(2) The date the form is received at the system’s headquarters
office is within 30 calendar days after the date of the member’s
signature and within 30 calendar days after the date of the
same-sex spouse’s signature.

(3) The date of the member’s signature and the date of the
same-sex spouse’s signature are on or after January 1, 2015 and
prior to July 1, 2015.

(c) After receipt of the member’s election, the system shall mail
an acknowledgment notice to the member that set forth the new
option elected by the member.

(d) A member may cancel an option change made pursuant to
subdivision (a) and elect to receive his or her benefit according
to his or her prior option election provided the requirements of
paragraphs (5) and (6) of subdivision (a) are still met. The
cancellation shall become effective as of the member’s signature
date on the initial option change made by the member pursuant
to subdivision (a) subject to the following requirements:

(1) The cancellation is made on a properly executed form
provided by the system.

(2) The form includes the signature of the member and his or
her same-sex spouse and the signatures are dated.

(3) The form is received at the system’s headquarters office
within 30 calendar days after the date of the acknowledgment
notice described in subdivision (c).

(e) A member may cancel an initial option change made
pursuant to subdivision (a) and elect to make one subsequent
change from his or her option election to any other option provided
by and subject to the restrictions of subdivision (a). The subsequent
change shall become effective as of the member’s signature date
on the initial option change made by the member pursuant to
subdivision (a) and subject to the following requirements:

(1) The cancellation and subsequent change are made on a
properly executed form provided by the system.

(2) The form includes the signature of the member and his or
her same-sex spouse and the signatures are dated.

(3) The form is received at the system’s headquarters office
within 30 calendar days after the date of the acknowledgment
notice described in subdivision (c).

(f) If a member elects to change his or her option as described
in subdivision (a) or (e), the retirement allowance of the member
shall be modified in a manner determined by the board to prevent
any additional liability to the plan.

(g) A member shall not change options in derogation of a
spouse’s or former spouse’s community property rights as specified
in a court order.

end insert

begin delete SEC. 61. end delete
begin insert SEC. 65. end insert   

Section 24348 is added to the Education Code, to
read:

24348.  

(a) A member who has a preretirement option pursuant
to Section 24307 in effect on June 26, 2013, and designated his or
her same-sex spouse as option beneficiary may elect to change his
or her option subject to the following:

(1) A member who elected the 100 percent beneficiary option
or the 50 percent beneficiary option may elect to change his or her
option to the 75 percent beneficiary option described in paragraph
(2) of subdivision (a) of Section 24300.1 provided the member’s
same-sex spouse is more than exactly 19 years younger than the
member.

(2) (A) A member who elected the compound option may elect
to change the option designated for his or her same-sex spouse
within the compound option to the 100 percent beneficiary option
described in paragraph (1) of subdivision (a) of Section 24300.1
provided the member’s same-sex spouse is more than exactly 10
years younger than the member, or the 75 percent beneficiary
option described in paragraph (2) of subdivision (a) of Section
24300.1 provided the member’s same-sex spouse is more than
exactly 19 years younger than the member.

(B) If a member elects to change the option designated for his
or her same-sex spouse within the compound option, the member
may also elect to change the option designated to any other option
beneficiary or beneficiaries within the compound option to the 100
percent beneficiary option, the 75 percent beneficiary option, or
the 50 percent beneficiary option described in paragraph (1), (2),
or (3) of subdivision (a) of Section 24300.1.

(C) If a member elects to change the option designated for his
or her same-sex spouse within the compound option, the member
may also elect to change the percentage of his or her unmodified
allowance designated to the option beneficiary or beneficiaries.
The percent of the allowance that is not modified by an option, if
any, shall be payable to the member. The sum of all percentages
specified for the option beneficiary or beneficiaries and the
member’s remaining unmodified allowance, if any, shall equal
100 percent.

(D) Any change made pursuant to this paragraph shall be subject
to the requirements and restrictions of the compound option
described in paragraph (4) of subdivision (a) of Section 24300.1
and shall not be construed to allow a member to cancel his or her
compound option.

(3) The option change made by the member pursuant to this
section is made on or after January 1, 2015, and prior to begin delete June 30, end delete
begin insert July 1, end insert 2015.

(4) The member is in a same-sex marriage recognized by the
United States government, any state government, or any foreign
government and elected his or her same-sex spouse as his or her
option beneficiary prior to June 26, 2013.

(5) The member designates the same option beneficiary or
beneficiaries that were designated for the prior option elected by
the member.

(6) The option beneficiary or beneficiaries have not predeceased
the member as of the effective date of the option change made by
the member pursuant to this section.

(b) The option change made by a member pursuant to
subdivision (a) shall become effective as of the member’s signature
date on a properly executed form provided by the system subject
to the following requirements:

(1) The form includes the signature of the member’s same-sex
spouse and the signature is dated.

(2) The date the form is received at the system’s headquarters
office is within 30 calendar days after the date of the member’s
signature and within 30 calendar days after the date of the same-sex
spouse’s signature.

(3) The date of the member’s signature and the date of the
same-sex spouse’s signature are on or after January 1, 2015, and
prior to begin delete June 30, end delete begin insert July 1, end insert 2015.

(c) A preretirement option change made pursuant to this section
will not result in the allowance reduction described in Sections
24309 and 24310.

(d) If a member elects to change options pursuant to this section,
the age of the member and the option beneficiary or beneficiaries
on the effective date of the prior preretirement option election shall
be the age used to calculate the member’s benefit at the time of
retirement.

begin delete SEC. 62. end delete
begin insert SEC. 66. end insert   

Section 24402 of the Education Code is amended to
read:

24402.  

(a) Service retirement allowances, disability
allowances, disability retirement allowances, family allowances,
and survivor benefit allowances payable pursuant to this part shall
be increased by application of the benefit improvement factor.

(b) Allowances payable to beneficiaries on account of options
elected under Section 24300, 24300.1, 24307, or 24332 shall be
increased by application of the improvement factor. This factor
shall be applicable on the same date when it would have been
applied to the allowance of the deceased person.

(c) The benefit improvement factor shall not be applied to an
annuity that is the actuarial equivalent of the accumulated annuity
deposit contributions standing to the credit of the member’s account
on the effective date of a service or disability retirement.

begin delete SEC. 63. end delete
begin insert SEC. 67. end insert   

Section 24412 of the Education Code is amended to
read:

24412.  

(a) The annual revenues deposited to the Teachers’
Retirement Fund pursuant to Section 6217.5 of the Public
Resources Code are continuously appropriated without regard to
fiscal year for the purposes of this section and shall be distributed
annually in quarterly supplemental payments commencing on
September 1 of each year to retired members, disabled members,
and beneficiaries under the Defined Benefit Program. The amount
available for distribution in any year shall be the income for that
year from the sale or use of school lands and lieu lands, as
estimated by the State Lands Commission prior to the beginning
of the fiscal year, adjusted by the difference between the estimated
and actual income for the preceding fiscal year. The board shall
deduct from the revenues an amount necessary for administrative
expenses to implement this section.

(b) The net revenues to be distributed shall be allocated among
those retired members, disabled members, and beneficiaries, as
defined in subdivision (a) of Section 22107, whose allowances
under the Defined Benefit Program, after applying the annual
improvement factor as defined in Section 22140, if any, are below
80 percent of the purchasing power of the base allowance. The
purchasing power calculation for each individual allowance shall
be based on the change in the All Urban California Consumer Price
Index between June of the calendar year of retirement and June of
the fiscal year preceding the fiscal year of the distribution. The
allocation shall provide a pro rata share of the amount needed to
restore the allowance payable, after application of the current year
annual improvement factor to 80 percent of the purchasing power
of the base allowance.

(c) The allowance increase shall not be applicable to annuities
payable from the accumulated annuity deposit contributions or the
accumulated tax-sheltered annuity contributions.

(d) In any year that the net revenues from school lands and lieu
lands is greater than that needed to adjust the allowances of all
retired members, disabled members, and beneficiaries, as defined
in subdivision (a) of Section 22107, under the Defined Benefit
Program to 80 percent of the purchasing power of the base
allowance, the net revenues in excess of that needed for distribution
shall be used by the board to reduce the unfunded actuarial
obligation of the fund, if any.

(e) The board shall inform each recipient of supplemental
payments under this section that the increases are not cumulative
and are not part of the base allowance.

begin delete SEC. 64. end delete
begin insert SEC. 68. end insert   

Section 24415 of the Education Code is amended to
read:

24415.  

(a) The proceeds of the Supplemental Benefit
Maintenance Account shall be distributed annually in quarterly
supplemental payments commencing on September 1, 1990, to
retired members, disabled members, and beneficiaries, as defined
in subdivision (a) of Section 22107. The amount available for
distribution in any fiscal year shall not exceed the amount necessary
to restore purchasing power up to 85 percent of the purchasing
power of the base allowance, after the application of all allowance
increases authorized by this part, including those specified in
Section 24412, and excluding those provided pursuant to Sections
24410.5, 24410.6, and 24410.7.

(b) The net revenues to be distributed shall be allocated among
those retired members, disabled members, and beneficiaries, as
defined in subdivision (a) of Section 22107, whose allowances,
after sequentially applying the annual improvement factor as
defined in Sections 22140 and 22141, and the annual supplemental
payment as specified in Section 24412, have the lowest purchasing
power percentage. The purchasing power calculation for each
individual shall be based on the change in the All Urban California
Consumer Price Index between June of the calendar year of
retirement and June of the fiscal year preceding the fiscal year of
distribution. In any year in which the purchasing power of the
allowances of all retired members, disabled members, and
beneficiaries, as defined in subdivision (a) of Section 22107, equals
not less than 85 percent and additional funds remain from the
allocation authorized by this section, those funds shall remain in
the Supplemental Benefit Maintenance Account for allocation in
future years.

(c) The allowance increase shall not be applicable to annuities
payable from the accumulated annuity deposit contributions or the
accumulated tax-sheltered annuity contributions.

(d) The increases provided by subdivision (b) are not cumulative,
not part of the base allowance, and will be payable only to the
extent that funds are available from the Supplemental Benefit
Maintenance Account. The board shall inform each recipient of
the contents of this subdivision.

(e) The adjustments authorized by this section are vested only
up to the amount payable as a result of the annual appropriation
made pursuant to Section 22954 and the adjustments made by the
board pursuant to Section 24415.5. The adjustments authorized
by this section shall not be included in the base allowance for
purposes of calculating the annual improvement defined by
Sections 22140 and 22141.

(f) Notwithstanding subdivision (b), for purposes of restoring
the purchasing power of benefits provided pursuant to Section
24410.5 for members and beneficiaries receiving benefits pursuant
to subdivision (b), the purchasing power calculation shall be based
on 85 percent of the change in the All Urban California Consumer
Price Index between January 2000 and June of the fiscal year
preceding the fiscal year of distribution, after the application of
increases authorized by Section 24412 that are made to the
allowances provided pursuant to Section 24410.5.

(g) Notwithstanding subdivision (b), for purposes of restoring
the purchasing power of benefits provided pursuant to Sections
24410.6 and 24410.7 for members and beneficiaries receiving
benefits pursuant to subdivision (b), the purchasing power
calculation shall be based on 85 percent of the change in the All
Urban California Consumer Price Index between January 2001
and June of the fiscal year preceding the fiscal year of distribution,
after the application of increases authorized by Section 24412 that
are made to the allowances provided pursuant to Sections 24410.6
and 24410.7.

begin delete SEC. 65. end delete
begin insert SEC. 69. end insert   

Section 24600 of the Education Code is amended to
read:

24600.  

(a) A retirement allowance under this part begins to
accrue on the effective date of the member’s retirement and ceases
on the earlier of the day of the member’s death or the day on which
the retirement allowance is terminated for a reason other than the
member’s death.

(b) A retirement allowance payable to an option beneficiary
under this part begins to accrue on the day following the day of
the retired member’s death and ceases on the day of the option
beneficiary’s death.

(c) A disability allowance under this part begins to accrue on
the effective date of the member’s disability allowance and ceases
on the earlier of the day of the member’s death or the day on which
the disability allowance is terminated for a reason other than the
member’s death.

(d) A family allowance under this part begins to accrue on the
day following the day of the member’s death and ceases on the
day of the event that terminates eligibility for the allowance.

(e) A survivor benefit allowance payable to a surviving spouse
under this part pursuant to Chapter 23 (commencing with Section
23850) begins to accrue on the day the member would have
attained normal retirement age or on the day following the day of
the member’s death, as elected by the surviving spouse, and ceases
on the day of the surviving spouse’s death.

(f) (1) Except as provided in paragraph (2), a child’s portion
of an allowance under this part begins to accrue on the effective
date of that allowance and ceases on the earlier of either the
termination of the child’s eligibility or the termination of the
allowance.

(2) A child’s portion of a disability retirement allowance under
Chapter 26 (commencing with Section 24100) ceases on the earlier
of either:

(A) The termination date of the child’s eligibility.

(B) The termination of the allowance for reasons other than
death.

(g) Supplemental payments issued under this part pursuant to
Sections 24412 and 24415 to retired members, disabled members,
and beneficiaries shall begin to accrue pursuant to Sections 24412
and 24415 and shall cease to accrue as of the termination dates
specified in subdivisions (a) to (f), inclusive, of this section.

(h) Notwithstanding any other provision of this part or other
law, distributions payable under the plan with respect to the
Defined Benefit Program and the Defined Benefit Supplement
Program shall be made in accordance with applicable provisions
of the Internal Revenue Code of 1986 and related regulations. The
required beginning date of benefit payments that represent the
entire interest of the member in the plan with respect to the Defined
Benefit Program and the Defined Benefit Supplement Program
shall be either:

(1) In the case of a refund of contributions, as described in
Chapter 18 (commencing with Section 23100) of this part and
distribution of an amount equal to the balance of credits in a
member’s Defined Benefit Supplement account, as described in
Chapter 38 (commencing with Section 25000) of this part, not
later than April 1 of the calendar year following the later of (A)
the calendar year in which the member attains the age at which
the Internal Revenue Code of 1986 requires a distribution of
benefits or (B) the calendar year in which the member terminates
employment within the meaning of subdivision (i).

(2) In the case of a retirement allowance, as defined in Section
22166, not later than April 1 of the calendar year following the
later of (A) the calendar year in which the member attains the age
at which the Internal Revenue Code of 1986 requires a distribution
of benefits or (B) the calendar year in which the member terminates
employment within the meaning of subdivision (i), to continue
over the life of the member or the lives of the member and the
member’s option beneficiary, or over the life expectancy of the
member or the life expectancy of the member and the member’s
option beneficiary.

(i) For purposes of subdivision (h), the phrase “terminates
employment” means the later of:

(1) The date the member ceases to perform creditable service
subject to coverage under this plan.

(2) The date the member ceases employment in a position
subject to coverage under another public retirement system in this
state if the compensation earnable while a member of the other
system may be considered in the determination of final
compensation pursuant to Section 22134 or 22134.5.

begin delete SEC. 66. end delete
begin insert SEC. 70. end insert   

Section 25015 of the Education Code is amended to
read:

25015.  

(a) If a member elects to receive a benefit payable
under the Defined Benefit Supplement Program as a joint and
survivor annuity, the designation of the beneficiary made pursuant
to Section 24300 or 24300.1 shall apply to the benefit payable
under this chapter. The annuity beneficiary designation shall not
be changed after the date the benefit becomes payable to the
member, except as provided in Section 24324, 25011, 25011.1,
25018, or 25018.1, or Chapter 12 (commencing with Section
22650).

(b) If the member designates one or multiple option beneficiaries
within Option 8 pursuant to Section 24300 or the compound option begin delete described in paragraph (4) of subdivision (a) of end delete begin insert pursuant to end insert Section
24300.1, the percentage of the unmodified allowance attributable
to each option beneficiary specified in that designation shall apply
to the joint and survivor annuity payable under this chapter. The
member shall elect one joint and survivor annuity type and this
annuity type shall be applied the same for each beneficiary and
each designated percentage of the member only annuity. If any
percentage of the allowance was designated to remain unmodified,
the member only annuity shall apply for the corresponding
percentage of the annuity provided under this chapter. The annuity
amount payable to the member during his or her lifetime shall be
modified to be payable over the combined lives of the member
and the annuity beneficiary or beneficiaries.

begin insert

(1) Pursuant to Section 401(a)(9) of the Internal Revenue Code,
the member shall not designate the 100 percent beneficiary annuity
type under this subdivision if any annuity beneficiary is more than
exactly 10 years younger than the member, unless that annuity
beneficiary is the member’s spouse or former spouse who has been
awarded a community property interest in the member’s benefits
under this part.

end insert begin insert

(2) Pursuant to Section 401(a)(9) of the Internal Revenue Code,
the member shall not designate the 75 percent beneficiary annuity
type under this subdivision if any annuity beneficiary is more than
exactly 19 years younger than the member, unless that annuity
beneficiary is the member’s spouse or former spouse who has been
awarded a community property interest in the member’s benefits
under this part.

end insert

(c) If the member predeceases an annuity beneficiary, the
annuity beneficiary may designate, on a properly executed form
provided by the system, a payee to receive an amount that may be
payable in a lump sum pursuant to Section 25023 upon the death
of the annuity beneficiary.

begin insert

begin insert SEC. 71. end insert   

end insert

begin insert Section 25100 of the end insert begin insert Education Code end insert begin insert is amended to
read: end insert

25100.  

(a) The board shall establish a vendor registration
process through which information about tax-deferred retirement
investment products as described in Section 403(b) of the Internal
Revenue Code of 1986 shall be made available for consideration
by public employees of all local school districts, community college
districts, county offices of education, and state employees of a
state employer under the uniform state payroll system, excluding
the California State University System, eligible to participate in
an annuity contract and custodial account as described in Section
403(b) of the Internal Revenue Code of 1986.

(b) For the purposes of this chapter, “403(b) product or 403(b)
products” means tax-deferred retirement investment products as
described in Section 403(b) of the Internal Revenue Code of 1986,
and its subsequent amendments, and complying with applicable
California insurance laws, and federal and California securities
laws and rules as applied by appropriate regulatory entities.

(c) For the purposes of this chapter:

(1) “Employer” means any local school district, community
college district, or county office of education, or any state employer
under the uniform state payroll system, excluding the California
State University System, with employees eligible to participate in
an annuity contract and custodial account as described in Section
403(b) of the Internal Revenue Code of 1986, with the Controller
acting on the state employer’s behalf.

(2) “Vendor” means begin delete a public retirement system, broker-dealer,
registered investment company, nonbank custodian, or life
insurance company qualified to do business in California that
provides 403(b) products end delete begin insert any organization qualified to do business
in California that offers a 403(b) product end insert . “Vendor” does not
include individual registered representatives, brokers, financial
planners, or agents.

begin delete

(3) “Nonbank custodian” means a fund custodian, other than a
bank, that meets the criteria of a trustee specified in Section
408(a)(2) of the Internal Revenue Code.

end delete begin delete

(4) “Broker-dealer” means only those broker-dealers who offer
a proprietary 403(b) product or who charge fees that are otherwise
not disclosed.

end delete

begin delete SEC. 67. end delete
begin insert SEC. 72. end insert   

Section 26113 of the Education Code is amended to
read:

26113.  

(a) “Creditable service” means any of the following
activities performed for an employer in a position requiring a
credential, certificate, or permit pursuant to this code begin insert , end insert or under the
appropriate minimum standards adopted by the Board of Governors
of the California Community Colleges begin insert , end insert or under the provisions of
an approved charter for the operation of a charter school for which
the charter school is eligible to receive state apportionment begin insert , end insert or
pursuant to a contract between a community college district and
the United States Department of Defense to provide vocational
training:

(1) The work of teachers, instructors, district begin delete interns end delete begin insert interns, end insert
and academic employees employed in the instructional program
for pupils, including special programs such as adult education,
regional occupational programs, child care centers, and
prekindergarten programs pursuant to Section 22161.

(2) Education or vocational counseling, guidance, and placement
services.

(3) The work of directors, coordinators, and assistant
administrators who plan courses of study to be used in California
public schools, or research connected with the evaluation or
efficiency of the instructional program.

(4) The selection, collection, preparation, classification,
demonstration, or evaluation of instructional materials of any
course of study for use in the development of the instructional
program in California public schools, or other services related to
school curriculum.

(5) The examination, selection, in-service training, or assignment
of teachers, begin delete principals end delete begin insert principals, end insert or other similar personnel
involved in the instructional program.

(6) School activities related to, and an outgrowth of, the
instructional and guidance program of the school when performed
in addition to other activities described in this section.

(7) The work of nurses, physicians, speech therapists,
psychologists, audiometrists, audiologists, and other school health
professionals.

(8) Services as a school librarian.

(9) The work of county and district superintendents and other
employees who are responsible for the supervision of persons or
administration of the duties described in this section.

(10) Trustee service as described in Section 26403.

(b) “Creditable service” also means the work of superintendents
of California public schools.

(c) The board shall have final authority for determining
creditable service to cover activities not already specified.

begin delete SEC. 68. end delete
begin insert SEC. 73. end insert   

Section 26803 of the Education Code is amended to
read:

26803.  

(a) All creditable service subject to coverage by the
Cash Balance Benefit Program and all service with the participant’s
last employer or employers that is creditable under the Defined
Benefit Program shall be terminated prior to the retirement date.

(b) All employers with which the participant is employed to
perform creditable service subject to coverage by the plan shall
certify on a form prescribed by the system that the participant’s
employment has been terminated unless the employment was
terminated 12 months or more prior to the member’s retirement
date.

begin delete SEC. 69. end delete
begin insert SEC. 74. end insert   

Section 27201 of the Education Code is amended to
read:

27201.  

(a) All creditable service subject to coverage by the
Cash Balance Benefit Program and all service with the begin delete participants’ end delete
begin insert participant’s end insert last employer or employers that is creditable service
under the Defined Benefit Program shall terminate prior to
application for a termination benefit under this part.

(b) All employers with which the participant is employed to
perform creditable service subject to coverage by the plan shall
certify on a form prescribed by the system that the participant’s
employment has been terminated unless the employment was
terminated 12 months or more prior to the date the member signed
the termination application.

begin delete SEC. 70. end delete
begin insert SEC. 75. end insert   

Section 33050 of the Education Code is amended to
read:

33050.  

(a) The governing board of a school district or a county
board of education, on a districtwide or countywide basis or on
behalf of one or more of its schools or programs, after a public
hearing on the matter, may request the State Board of Education
to waive all or part of any section of this code or any regulation
adopted by the State Board of Education that implements a
provision of this code that may be waived, except:

(1) Article 1 (commencing with Section 15700) and Article 2
(commencing with Section 15780) of Chapter 4 of Part 10.

(2) Chapter 6 (commencing with Section 16000) of Part 10.

(3) Chapter 12 (commencing with Section 17000), Chapter 12.5
(commencing with Section 17070.10), and Chapter 14
(commencing with Section 17085) of Part 10.

(4) Part 13 (commencing with Section 22000), Part 13.5
(commencing with Section 25900), and Part 14 (commencing with
Section 26000).

(5) Section 35735.1.

(6) Paragraph (8) of subdivision (a) of Section 37220.

(7) The following provisions of Part 10.5 (commencing with
Section 17211):

(A) Chapter 1 (commencing with Section 17211).

(B) Article 1 (commencing with Section 17251) to Article 6
(commencing with Section 17365), inclusive, of Chapter 3.

(C) Sections 17416 to 17429, inclusive; Sections 17459 and
17462 and subdivision (a) of Section 17464; and Sections 17582
to 17592, inclusive.

(8) The following provisions of Part 24 (commencing with
Section 41000):

(A) Sections 41000 to 41360, inclusive.

(B) Sections 41420 to 41423, inclusive.

(C) Sections 41600 to 41866, inclusive.

(D) Sections 41920 to 42911, inclusive.

(9) Sections 44504 and 44505.

(10) Article 3 (commencing with Section 44930) of Chapter 4
of Part 25 and regulations in Title 5 of the California Code of
Regulations adopted pursuant to Article 3 (commencing with
Section 44930) of Chapter 4 of Part 25.

(11) Part 26 (commencing with Section 46000).

(12) Chapter 6 (commencing with Section 48900) and Chapter
6.5 (commencing with Section 49060) of Part 27.

(13) Section 51513.

(14) Chapter 6.10 (commencing with Section 52120) of Part
28, relating to class size reduction.

(15) Section 52163.

(16) The identification and assessment criteria relating to any
categorical aid program, including Sections 52164.1 and 52164.6.

(17) Sections 52165, 52166, and 52178.

(18) Article 3 (commencing with Section 52850) of Chapter 12
of Part 28.

(19) Section 56364.1, except that this restriction shall not
prohibit the State Board of Education from approving any waiver
of Section 56364 or begin delete Section end delete 56364.2, as applicable, relating to full
inclusion.

(20) Article 4 (commencing with Section 60640) of Chapter 5
of Part 33, relating to the STAR Program, and any other provisions
of Chapter 5 (commencing with Section 60600) of Part 33 that
establish requirements for the STAR Program.

(b) Any waiver of provisions related to the programs identified
in Section 52851 shall be granted only pursuant to Article 3
(commencing with Section 52850) of Chapter 12 of Part 28.

(c) The waiver of an advisory committee required by law shall
be granted only pursuant to Article 4 (commencing with Section
52870) of Chapter 12 of Part 28.

(d) Any request for a waiver submitted by the governing board
of a school district or a county board of education pursuant to
subdivision (a) shall include a written statement as to both of the
following:

(1) Whether the exclusive representative of employees, if any,
as provided in Chapter 10.7 (commencing with Section 3540) of
Division 4 of Title 1 of the Government Code, participated in the
development of the waiver.

(2) The exclusive representative’s position regarding the waiver.

(e) Any request for a waiver submitted pursuant to subdivision
(a) relating to a regional occupational center or program established
pursuant to Article 1 (commencing with Section 52300) of Chapter
9 of Part 28, that is operated by a joint powers entity established
pursuant to Chapter 5 (commencing with Section 6500) of Division
7 of Title 1 of the Government Code, shall be submitted as a joint
waiver request for each participating school district and shall meet
both of the following conditions:

(1) Each joint waiver request shall comply with all of the
requirements of this article.

(2) The submission of a joint waiver request shall be approved
by a unanimous vote of the governing board of the joint powers
agency.

(f) The governing board of any school district requesting a
waiver under this section of any provision of Article 5
(commencing with Section 39390) of Chapter 3 of Part 23 shall
provide written notice of any public hearing it conducted pursuant
to subdivision (a), at least 30 days prior to the hearing, to each
public agency identified under Section 39394.

begin delete SEC. 71. end delete
begin insert SEC. 76. end insert   

Section 1 of Chapter 559 of the Statutes of 2013 is
amended to read:

Section 1.  

The Legislature finds and declares that this act, as
it applies to the State Teachers’ Retirement Plan, clarifies the
California Public Employees’ Pension Reform Act of 2013, is
declaratory of existing law, and is intended to apply concurrently
with the initial operation of that act. The amendments made by
this act, excluding those amendments made in Sections 4, 12, 28,
29, 30, and 36, shall be deemed to be operative January 1, 2013,
unless otherwise stated.

begin delete SEC. 72. end delete
begin insert SEC. 77. end insert   

Any section of any other act enacted by the
Legislature during the 2014 calendar year that takes effect on or
before January 1, 2015, and that amends, amends and renumbers,
adds, repeals and adds, or repeals a section that is amended,
amended and renumbered, added, repealed and added, or repealed
by this act, shall prevail over this act, whether that act is enacted
prior to or subsequent to the enactment of this act. The repeal, or
repeal and addition, of any article, chapter, part, title, or division
of any code by this act shall not become operative if any section
of any other act that is enacted by the Legislature during the 2014
calendar year and takes effect on or before January 1, 2015,
amends, amends and renumbers, adds, repeals and adds, or repeals
any section contained in that article, chapter, part, title, or division.