BILL NUMBER: AB 991 INTRODUCED
BILL TEXT
INTRODUCED BY Committee on Public Employees, Retirement, and Social
Security (Assembly Members Bonta (Chair), Cooley, Jones-Sawyer, O'
Donnell, and Rendon)
FEBRUARY 26, 2015
An act to amend Sections 22001.5, 22121, 22141, 22404, 22509,
22714, 22900, 22903, 22950, 23001, 24114, 24214, 24214.5, 26000,
26002.5, 26132, 26400, 26506, 26806, 26807.6, 26812, 26906.6, and
27100 of, and to add Section 26142.5 to, the Education Code, relating
to state teachers' retirement.
LEGISLATIVE COUNSEL'S DIGEST
AB 991, as introduced, Committee on Public Employees, Retirement,
and Social Security. 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 governed by the Teachers' Retirement
Board. Existing law defines credited service for these purposes as
service from which required contributions have been paid. Existing
law permits the board to amend the plan to dispense with payment for
amounts less than $10. Existing law permits specified employers
participating in STRS, if it is in the best interests of the school
district or office of education, to grant an additional 2 years of
service credit in order to encourage retirement, if specified
conditions are met. Existing law authorizes specified payments made
pursuant to the Teachers' Retirement Law, including disability
retirement benefits and compensation for postretirement activities,
to be reduced if they are in excess of specified limits. Existing law
permits members retired for disability or service from STRS to
perform member activities without reinstatement into the system if
certain conditions are met.
This bill would revise the definition of credited service for
purposes of STRS to include service for which required contributions
would have been made in absence of specified federal limits. The bill
would revise the provisions authorizing the board to dispense with
the payment for amounts less than $10 to be more specific in regard
to the types of payments and to include adjustments to those
payments. The bill would require, in regard to the grant of
additional service credit to encourage retirement, to require as a
condition of that grant that necessary documentation be provided to
the retirement system within a specified time. The bill would make
various technical changes to accurately cross-reference current law
regarding contributions to fund the system. The bill would specify
how reductions in payments are to be made in connection with the
amount received in a particular month. The bill would make other
technical, conforming changes, and corrections.
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 states
legislative findings and declarations regarding the purpose of the
Cash Balance Plan offered pursuant to the program. Existing law
defines a participant for these purposes and prescribes the
circumstances pursuant to which a person is permitted to participate
in the program and how participation may be terminated and service be
subject to the Defined Benefit Program offered by STRS. Existing law
provides that the normal form of retirement benefit under the Cash
Balance Benefit Program is a lump-sum payment.
This bill would revise the statement of legislative findings
regarding the Cash Balance Benefit Program to specify that it applies
to a person working for an employer, except a community college
district, that offers the plan, a person who is employed on temporary
basis, as specified, by a community college district offering the
plan, or a person employed as a substitute employee. The bill would
revise the definition of a participant in the plan to require that he
or she has not received a lump-sum retirement benefit, as specified.
The bill would define the system's headquarters office for purposes
of the program. The bill would revise the circumstances pursuant to
which a person providing creditable service would be eligible to
participate in the plan with reference to whether a person has
elected an alternative retirement program, whether a participant's
employment with a community college district precludes continued
participation in the plan, and how a substitute employee may become
and remain a member of the plan. The bill would prohibit payment of a
lump-sum retirement benefit before 180 days have elapsed following
termination of employment and would require automatic termination of
an application for the retirement benefit based on the participant
performing creditable service with 180 days of terminating
employment, except as specified. The bill would specify how
reductions in payments under the Cash Balance Benefit Program are to
be made in connection with the amount received in a particular month.
The bill would require, with regard to a participant retired for
service, that the retired participant application for the retirement
benefit be canceled automatically if he or she is anticipated to
receive the retirement in a lump-sum payment and earns compensation
for performing creditable service with 180 days after termination of
employment. The bill would make other technical, conforming changes,
and corrections in the Cash Balance 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 22001.5 of the Education Code is amended to
read:
22001.5. The Legislature hereby finds and declares that on July
1, 1996, the State Teachers' Retirement System Cash Balance Plan was
created and established to provide a retirement plan for persons
employed by an employer offering the Cash Balance Plan,
excluding community college districts, to perform creditable
service for less than 50 percent of the full-time equivalent for the
position or employed by a community college district offering
the Cash Balance Plan to perform creditable service on a temporary
basis pursuant to Section 87474, 87478, 87480, 87481, 87482, or
87482.5, or employed by an employer offering the Cash Balance
Plan to perform creditable service as a substitute employee
. The persons eligible for the Cash Balance Plan were excluded
from mandatory membership in the State Teachers' Retirement System
Defined Benefit Plan. Both plans are administered by the Teachers'
Retirement Board. Prior to the creation and establishment of the Cash
Balance Plan, the State Teachers' Retirement System Defined Benefit
Plan had been identified simply as the State Teachers' Retirement
System. As a result, the system was identified as both the
administrative body and the retirement plan. The State Teachers'
Retirement Law was amended to identify the retirement plan as the
State Teachers' Retirement System Defined Benefit Plan in order to
distinguish that plan from the Cash Balance Plan. Because both plans
were intended to provide for the retirement of teachers and other
persons employed in connection with public schools of this state and
schools supported by this state, a merger of these two plans is now
hereby made for the purpose of establishing a single retirement plan
that shall be known and may be cited as the State Teachers'
Retirement Plan consisting of the different benefit programs set
forth in this part and Part 14 (commencing with Section 26000). This
plan shall be administered by the Teachers' Retirement Board as set
forth in this part and Part 14 (commencing with Section 26000). This
part, together with Part 14 (commencing with Section 26000) shall be
known and may be cited as the Teachers' Retirement Law.
SEC. 2. Section 22121 of the Education Code is amended to read:
22121. (a) "Credited service" means service for which the
required contributions have been paid and service for which
required contributions would have been paid in absence of the limit
prescribed by Section 401(a)(17) of Title 26 of the United States
Code as described in Section 22317.5 .
(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. 3. Section 22141 of the Education Code is amended to read:
22141. (a) Notwithstanding Section 22140, "improvement factor"
means an increase of 2 percent in benefits provided under Sections
24408 and 24409 for each year commencing on September 1, 1981, and
under Section 24410.5 for each year commencing September 1, 2001, and
under Sections 24410.6 and 24110.7 24410.7
for each year commencing September 1, 2002. The
improvement factor shall not be compounded nor shall it be
applicable to annuities payable from the accumulated annuity deposit
contributions or the accumulated tax-sheltered annuity contributions.
The Legislature reserves the right to adjust the amount of the
improvement factor up or down as the economic conditions dictate. No
adjustments of the improvement factor shall reduce the monthly
retirement allowance or benefit below that which would be payable to
the recipient under this part had this section not been enacted.
(b) Beginning July 1, 2014, the improvement factor shall vest for
an active member in any calendar year in which active members paid
increased member contributions pursuant to Section 22901.7.
(c) If, for any reason, the increased employee contribution
referenced in subdivision (b), and as required by subdivisions (a)
and (b) of Section 22901.7, ceases to be legally required to be made
pursuant to the act that added this subdivision, then the Legislature
reserves the right to adjust the amount of the improvement factor up
or down as the economic conditions dictate for all members who
retire on or after January 1, 2014. No adjustments of the improvement
factor shall reduce the monthly retirement allowance or benefit
below that which would be payable to the recipient under this part
had this section not been enacted.
(d) For members who retired before the calendar year in which
Section 22901.7 was added, the Legislature reserves the right to
adjust the amount of the improvement factor up or down as the
economic conditions dictate. No adjustments of the improvement factor
shall reduce the monthly retirement allowance or benefit below that
which would be payable to the recipient under this part had this
section not been enacted.
SEC. 4. Section 22404 of the Education Code is amended to read:
22404. (a) Notwithstanding any other provision of this part or
Part 14 (commencing with Section 26000) to the contrary, the board
may establish by plan amendment a specified amount or amounts, not to
exceed ten dollars ($10), below which the system may dispense
with the with:
(1) The processing of
benefit or other payments or a benefit payment, an
annuity payment, or any other payment, including adjustments to those
payments, payable to a member, participant, or beneficiary.
(2) The collection of
benefit or other overpayments that result from adjustments made to
the benefit or other amount a benefit overpayment,
annuity overpayment, or any other overpayments paid to a
member, participant, or beneficiary.
(b) When the cumulative dollar amount associated with one or more
benefit or other adjustments benefit payments
or overpayments, annuity payments or overpayments, or other payments
or overpayments equals or exceeds the amount described in
subdivision (a), that amount shall be paid to, or collected from, the
member, participant, or beneficiary. That cumulative amount paid or
collected shall not be credited with interest.
SEC. 5. Section 22509 of the Education Code is amended to read:
22509. (a) Within 10 working days of the date of hire of an
employee who has the right to make an election pursuant to Section
22508 or 22508.5, the employer shall inform the employee of the right
to make an election and shall make available to the employee written
information provided by each retirement system concerning the
benefits provided under that retirement system to assist the employee
in making an election.
(b) Any election made pursuant to subdivision (a) of Section 22508
or subdivision (a) of Section 22508.5 shall be filed with the office
of the State Teachers' Retirement System and a copy of the election
shall be filed with the other public retirement system. Any election
made pursuant to subdivision (b) (c) of
Section 22508 or subdivision (b) of Section 22508.5 shall be filed
with the office of the Public Employees' Retirement System and a copy
of the election shall be filed with the office of this system.
(c) Any election made pursuant to Section 22508 or Section 22508.5
shall become effective as of the first day of employment in the
position that qualified the employee to make an election.
SEC. 6. Section 22714 of the Education Code is amended to read:
22714. (a) Whenever the governing board of a school district or a
community college district or a county office of education, by
formal action, determines pursuant to Section 44929 or 87488 that,
because of impending curtailment of, or changes in, the manner of
performing services, the best interests of the district or county
office of education would be served by encouraging certificated
employees or academic employees to retire for service and that the
retirement will result in a net savings to the district or county
office of education, an additional two years of service credit shall
be granted under this part to a member of the Defined Benefit Program
if all of the following conditions exist:
(1) The member is credited with five or more years of service
credit and retires for service under Chapter 27 (commencing with
Section 24201) during a period of not more than 120 days or less than
60 days, commencing no sooner than the effective date of the formal
action of the employer that shall specify the period.
(2) The documentation required by this section is received by the
system no later than 30 calendar days after the last day of the
window period established in paragraph (1).
(2)
(3 ) (A) The employer transfers to the
retirement fund an amount determined by the Teachers' Retirement
Board to equal the actuarial equivalent of the difference between the
allowance the member receives after receipt of service credit
pursuant to this section and the amount the member would have
received without the service credit and an amount determined by the
Teachers' Retirement Board to equal the actuarial equivalent of the
difference between the purchasing power protection supplemental
payment the member receives after receipt of service credit pursuant
to this section and the amount the member would have received without
the service credit. The payment for purchasing power shall be
deposited in the Supplemental Benefit Maintenance Account established
by Section 22400 and shall be subject to Section 24415. The transfer
to the retirement fund shall be made in a manner and a time period,
not to exceed eight years, that is acceptable to the Teachers'
Retirement Board. The employer shall transfer the required amount for
all eligible employees who retire pursuant to this section.
(B) Regular interest shall be charged on the unpaid balance if the
employer makes the transfer to the retirement fund in installments.
(3)
(4) The employer transmits to the retirement fund the
administrative costs incurred by the system in implementing this
section, as determined by the Teachers' Retirement Board.
(4)
(5) The employer has considered the availability of
teachers or academic employees to fill the positions that would be
vacated pursuant to this section.
(b) (1) The school district shall demonstrate and certify to the
county superintendent that the formal action taken would result in a
net savings to the district.
(2) The county superintendent shall certify to the Teachers'
Retirement Board that the result specified in paragraph (1) can be
demonstrated. The certification shall include, but not be limited to,
the information specified in subdivision (c) of Section 14502.1.
(3) The school district shall reimburse the county superintendent
for all costs to the county superintendent that result from the
certification.
(c) (1) The county office of education shall demonstrate and
certify to the Superintendent of Public Instruction that the formal
action taken would result in a net savings to the county office of
education.
(2) The Superintendent of Public Instruction shall certify to the
Teachers' Retirement Board that the result specified in paragraph (1)
can be demonstrated. The certification shall include, but not be
limited to, the information specified in subdivision (c) of Section
14502.1.
(3) The Superintendent of Public Instruction may request
reimbursement from the county office of education for all
administrative costs that result from the certification.
(d) (1) The community college district shall demonstrate and
certify to the chancellor's office that the formal action taken would
result in a net savings to the district.
(2) The chancellor shall certify to the Teachers' Retirement Board
that the result specified in paragraph (1) can be demonstrated. The
certification shall include, but not be limited to, the information
specified in subdivision (c) of Section 84040.5.
(3) The chancellor may request reimbursement from the community
college district for all administrative costs that result from the
certification.
(e) The opportunity to be granted service credit pursuant to this
section shall be available to all members employed by the school
district, community college district, or county office of education
who meet the conditions set forth in this section.
(f) The amount of service credit shall be two years.
(g) Any member of the Defined Benefit Program who retires under
this part for service under Chapter 27 (commencing with Section
24201) with service credit granted under this section and who
subsequently reinstates shall forfeit the service credit granted
under this section.
(h) Any member of the Defined Benefit Program who retires under
this part for service under Chapter 27 (commencing with Section
24201) with service credit granted under this section and who takes
any job with the school district, community college district, or
county office of education that granted the member the service credit
less than five years after receiving the credit shall forfeit the
ongoing benefit he or she receives from the additional service credit
granted under this section.
(i) This section does not apply to any member otherwise eligible
if the member receives any unemployment insurance payments arising
out of employment with an employer subject to this part within one
year following the effective date of the formal action under
subdivision (a), or if the member is not otherwise eligible to retire
for service.
SEC. 7. Section 22900 of the Education Code is amended to read:
22900. By accepting employment to perform creditable service, a
person consents to make contributions pursuant to Section
22901 Sections 22901 and 22901.7 for service and
compensation credited under this part.
SEC. 8. Section 22903 of the Education Code is amended to read:
22903. Notwithstanding Sections 22901, 22901.3, 22901.7,
22956, and 23000, the state and each school
district, community college district, county board of education, and
county superintendent of schools, may pick up, for the sole purpose
of deferring taxes, as authorized by Section 414(h)(2) of the
Internal Revenue Code of 1986 (26 U.S.C.A. Sec. 414(h)(2)) and
Section 17501 of the Revenue and Taxation Code, all of the
contributions required to be paid under this part by a member of the
Defined Benefit Program, provided that the contributions are deducted
from the creditable compensation of the member.
SEC. 9. Section 22950 of the Education Code is amended to read:
22950. (a) Employers shall contribute monthly to the system 8
percent of the creditable compensation upon which members'
contributions under this part are based.
(b) From the contributions required under subdivision (a), there
shall be deposited in the Teachers' Retirement Fund an amount,
determined by the board, that is not less than the amount, determined
in an actuarial valuation of the Defined Benefit Program pursuant to
Section 22311.5, necessary to finance the liabilities associated
with the benefits of the Defined Benefit Program over the funding
period adopted by the board, after taking into account the
contributions made pursuant to Sections 22901, 22951, and
22955. 22901.7, 22950.5, 22951, 22955, and 22955.1.
(c) The amount of contributions required under subdivision (a)
that is not deposited in the Teachers' Retirement Fund pursuant to
subdivision (b) shall be deposited directly into the Teachers' Health
Benefits Fund, as established in Section 25930, and shall not be
deposited into or transferred from the Teachers' Retirement Fund.
(d) (1) Notwithstanding subdivisions (b) and (c), there may be
deposited into the Teachers' Retirement Program Development Fund, as
established in Section 22307.5, from the contributions required under
subdivision (a), an amount determined by the board, not to exceed
the limit specified in paragraph (2).
(2) The balance of deposits into the Teachers' Retirement Program
Development Fund, minus the subsequent transfer of funds, with
interest, into the Teachers' Retirement Fund pursuant to subdivision
(e) of Section 22307.5, shall not exceed 0.01 percent of the total of
the creditable compensation of the fiscal year ending in the
immediately preceding calendar year upon which member's contributions
to the Defined Benefit Program are based.
(3) The deposits described in this subdivision shall not be
deposited into, or transferred from, the Teachers' Retirement Fund.
SEC. 10. Section 23001 of the Education Code is amended to read:
23001. Each county superintendent, district superintendent,
chancellor of a community college district, or other employing agency
that reports directly to the system shall draw requisitions for
contributions required by Sections 22901 and 22950
22901, 22901.7, 22950, and 22950.5 in favor of the State
Teachers' Retirement System, and the requisitions, when allowed and
signed by the county auditor, shall constitute a warrant against the
county treasury. The county superintendent, district superintendent,
chancellor of a community college district, or other employing agency
thereupon shall forward the warrants to the board in the system's
headquarters office. The amounts received shall be deposited
immediately in the State Treasury to the Teachers' Retirement Fund.
SEC. 11. Section 24114 of the Education Code is amended to read:
24114. (a) A member receiving a disability retirement benefit
under this part may be employed or self-employed in any capacity,
notwithstanding Section 22132, but may not make contributions to the
retirement fund with respect to the Defined Benefit Program or accrue
service credit under this part based on earnings from any
employment.
(b) A member receiving a disability retirement benefit under this
part may earn in any one calendar year up to the limitation specified
in subdivision (c) without a reduction in his or her disability
retirement allowance.
(c) The limitation that shall apply to the earnings of a member
receiving a disability retirement benefit under this part shall be
fifteen thousand dollars ($15,000), in any one calendar year,
adjusted annually by the board effective each January 1 by the amount
of increase in the All Urban California Consumer Price Index using
December 1989 as the base.
(d) If a member receiving a disability retirement benefit under
this part earns in excess of the limitation specified in subdivision
(c) from all employment in any calendar year, notwithstanding Section
22132, his or her retirement allowance shall be reduced by the
amount of the excess earnings. The amount of the reduction
may be equal to in an individual month shall be no more
than the monthly allowance payable but may
in that month, and the total amount of the reduction shall
not exceed the amount of the annual allowance payable under this
part for the calendar year in which the excess compensation was
earned.
(e) The earnings limitation specified in this section does not
apply to a member receiving a disability retirement benefit under
this part who is participating in an approved rehabilitation program
pursuant to Section 24111.
(f) This section does not apply to a member receiving a disability
retirement benefit under this part who began receiving a disability
retirement allowance prior to October 16, 1992.
SEC. 12. Section 24214 of the Education Code, as amended by
Section 21 of Chapter 32 of the Statutes of 2014, is amended to read:
24214. (a) A member retired for service under this part may
perform retired member activities, but the member shall not make
contributions to the retirement fund or accrue service credit based
on compensation earned from that service. The employer shall maintain
accurate records of the earnings of the retired member and report
those earnings monthly to the system and retired member as described
in Section 22461.
(b) If a member is retired for service under this part, the
annualized rate of pay for retired member activities, performed by
that member shall not be less than the minimum, nor exceed the
maximum, paid by the employer to other employees performing
comparable duties.
(c) A member retired for service under this part shall not be
required to reinstate for performing retired member activities.
(d) A member retired for service under this part may earn
compensation for performing retired member activities in any one
school year up to the limitation specified in subdivision (f) without
a reduction in his or her retirement allowance.
(e) The postretirement compensation limitation provisions set
forth in this section are not applicable to compensation earned for
the performance of retired member activities that are not wholly or
in part supported by state, local, or federal funds.
(f) (1) The 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, in any one school year, be an amount
calculated by the system each July 1 equal to one-half of the median
final compensation of all members who retired for service during the
fiscal year ending in the previous calendar year.
(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 made for the performance of retired
member activities , 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.
(g) If a member retired for service under this part earns
compensation for performing retired member activities, in excess of
the limitation specified in subdivision (f), and if that compensation
is not exempt from that limitation under subdivision (e) or (h) or
any other law, the member's retirement allowance shall be reduced by
the amount of the excess compensation. The amount of the reduction
may be equal to in an individual month shall
be no more than the monthly allowance payable but
payable in that month, and the total amount of the
reduction shall not exceed the amount of the annual allowance
payable under this part for the fiscal year in which the excess
compensation was earned after any reduction made in accordance with
subdivision (h) of Section 24214.5.
(h) The limitation specified in this section is not applicable to
compensation paid to a member retired for service under this part who
has returned to work after the date of retirement:
(1) As a trustee appointed by the Superintendent pursuant to
Section 41320.1.
(2) As a fiscal adviser or fiscal expert appointed by a county
superintendent of schools pursuant to Article 2 (commencing with
Section 42122) of Chapter 6 of Part 24 of Division 3 of Title 2.
(3) As a receiver or trustee appointed by the state board pursuant
to Article 3.1 (commencing with Section 52055.57) of Chapter 6.1 of
Part 28 of Division 4 of Title 2.
(4) As a special trustee appointed by the Board of Governors of
the California Community Colleges pursuant to Section 84040.
(i) The Superintendent, the Executive Director of the State Board
of Education, the Chancellor of the California Community Colleges, or
the county superintendent of schools exercising the exemption
pursuant to subdivision (h) shall submit all documentation required
by the system to substantiate the eligibility of the retired member
for the exemption, including compliance with subdivisions (j) and
(k). The documentation shall be received by the system prior to the
retired member's performance of retired member activities.
(j) Subdivision (h) shall not apply to a retired member who has
not attained normal retirement age at the time the compensation is
earned by the member, received additional service credit pursuant to
Section 22714 or 22715, or received from any public employer any
financial inducement to retire in the previous six months. For
purposes of this section and Section 24214.5, "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 member retires for service on or before a specific
date or specific range of dates established by the 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 (h) inapplicable to members if the member
received a financial incentive from any public employer to retire or
otherwise terminate employment with the public employer.
(k) The documentation required for subdivision (i) shall include
certification of the following:
(1) The position was first advertised for appointment to current
active or inactive members of the program with the necessary
qualifications to perform the requirements of the position and no
qualified current active or inactive member was available to be
appointed.
(2) The appointing authority made a good faith effort to hire a
retired member who reinstated to active membership for the position
at the same salary that was offered as first advertised pursuant to
paragraph (1).
(3) The appointing authority, having tried and failed to hire a
current active or inactive member or a reinstated retired member,
hired a retired member and the salary offered to the retired member
subject to this paragraph does not exceed the salary that was offered
as first advertised pursuant to paragraph (1).
(4)
The salary paid shall be no greater than the salary offered to
current active members for the appointed position.
( l ) The amendments to this section enacted during the
1995-96 Regular Session shall be deemed to have become operative on
July 1, 1996.
(m) The amendments to this section enacted during the second year
of the 2011-12 Regular Session shall apply to compensation paid
during the 2012-13 and 2013-14 fiscal years.
(n) 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.
(o) This section shall become inoperative on July 1, 2017, and, as
of January 1, 2018, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2018, deletes or
extends the dates on which it becomes inoperative and is repealed.
SEC. 13. Section 24214 of the Education Code, as amended by
Section 22 of Chapter 32 of the Statutes of 2014, is amended to read:
24214. (a) A member retired for service under this part may
perform retired member activities, but the member shall not make
contributions to the retirement fund or accrue service credit based
on compensation earned from that service. The employer shall maintain
accurate records of the earnings of the retired member and report
those earnings monthly to the system and retired member as described
in Section 22461.
(b) If a member is retired for service under this part, the
annualized rate of pay for retired member activities performed by
that member shall not be less than the minimum, nor exceed the
maximum, paid by the employer to other employees performing
comparable duties.
(c) A member retired for service under this part shall not be
required to reinstate for performing retired member activities.
(d) A member retired for service under this part may earn
compensation for performing retired member activities in any one
school year up to the limitation specified in subdivision (f) without
a reduction in his or her retirement allowance.
(e) The postretirement compensation limitation provisions set
forth in this section are not applicable to compensation earned for
the performance of retired member activities that are not wholly or
in part supported by state, local, or federal funds.
(f) (1) The 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, in any one school year, be an amount
calculated by the system each July 1 equal to one-half of the median
final compensation of all members who retired for service during the
fiscal year ending in the previous calendar year.
(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 made for the performance of retired
member activities , 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.
(g) If a member retired for service under this part earns
compensation for performing retired member activities, in excess of
the limitation specified in subdivision (f), the member's retirement
allowance shall be reduced by the amount of the excess compensation.
The amount of the reduction may be equal to
in an individual month shall be no more than the monthly
allowance payable but may in that month, and
the total amount of the reduction shall not exceed the amount
of the annual allowance payable under this part for the fiscal year
in which the excess compensation was earned after any reduction made
in accordance with subdivision (h) of Section 24214.5.
(h) The language of this section derived from the amendments to
the section of this number added by Chapter 394 of the Statutes of
1995, enacted during the 1995-96 Regular Session, is deemed to have
become operative on July 1, 1996.
(i) This section shall become operative on July 1, 2017.
SEC. 14. 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 made for the performance of retired
member activities , 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 in
an individual month shall be no more than the monthly
allowance payable but may payable in that
month and the total amount of the reduction shall 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.
SEC. 15. Section 26000 of the Education Code is amended to read:
26000. The Legislature hereby finds and declares that the State
Teachers' Retirement System Cash Balance Plan was created and
established on July 1, 1996, to provide a retirement plan for persons
employed by an employer offering the Cash Balance Plan,
excluding a community college district, to perform creditable
service for less than 50 percent of the full-time equivalent for the
position , or employed by a community college district offering
the Cash Balance Plan to perform creditable service on a temporary
basis pursuant to Section 87474, 87478, 87480, 87481, 87482, or
87482.5, or employed by an employer offering the Cash Balance
Plan to perform creditable service as a substitute employee
. The persons eligible for the Cash Balance Plan were excluded
from mandatory membership in the State Teachers' Retirement System
Defined Benefit Plan. Both plans are administered by the Teachers'
Retirement Board. Because both plans were intended to provide for the
retirement of teachers and other persons employed in connection with
the public schools of this state and schools supported by this
state, a merger of these two plans is now hereby made for the purpose
of establishing a single retirement plan that shall be known and may
be cited as the State Teachers' Retirement Plan consisting of the
different benefit programs set forth in this part and Part 13
(commencing with Section 22000). The plan shall be administered by
the Teachers' Retirement Board as set forth in this part and Part 13
(commencing with Section 22000). As a result of this merger, a Cash
Balance Benefit Program will be provided under the State Teachers'
Retirement Plan and that program is set forth in this part.
The governing board of a school district, community college
district, or county office of education may, by formal action, elect
to provide the benefits of the Cash Balance Benefit Program under
this part for their employees.
SEC. 16. Section 26002.5 of the Education Code is amended to read:
26002.5. Except as excluded in subdivision (d) of Section 26807.5
or subdivision (d) (c) of Section
26906.5, a person who is the registered domestic partner of a member,
as established pursuant to Section 297 or 299.2 of the Family Code,
shall be treated in the same manner as a "spouse," as defined in
Section 26140.
SEC. 17. Section 26132 of the Education Code is amended to read:
26132. "Participant" means a person who has performed creditable
service subject to coverage by the Cash Balance Benefit
Program, Program and who has contributions
credited under the Cash Balance Benefit Program or is receiving an
annuity under the Cash Balance Benefit Program by reason of
creditable service or has not yet met the conditions of
subdivision (b) of Section 26806 .
SEC. 18. Section 26142.5 is added to the Education Code, to read:
26142.5. "System's headquarters office" means the office building
established as the permanent headquarters facility for the system,
pursuant to Section 22375.
SEC. 19. Section 26400 of the Education Code is amended to read:
26400. (a) (1) A person employed on a
part-time basis by a school district or county office of
education an employer, excluding community college
districts, to perform creditable service for less than 50
percent of each full-time position shall become a participant on the
later of the first day that creditable service is performed for an
employer that provides the Cash Balance Benefit Program or the
effective date of the employer's governing board's action to provide
the Cash Balance Benefit Program, provided that creditable service is
not performed for the same employer with whom the person is subject
to mandatory membership in the Defined Benefit Program.
Program, and that the person has not made an election
pursuant to subdivision (d).
(2) If the participant's basis of employment with an employer,
excluding community college districts, that provides the Cash Balance
Benefit Program changes to employment to perform creditable service
for 50 percent or more of the full-time position during one school
year with the same employer, creditable service performed for that
employer shall no longer be covered under the Cash Balance Benefit
Program as of the last day of the pay period in which the change in
the participant's basis of employment occurred. Creditable service
performed for that employer shall be subject to coverage by the
Defined Benefit Program as of the first day of the pay period
following the change in the participant's basis of employment.
(b) (1) A person employed on a temporary
basis pursuant to Section 87474, 87478, 87480, 87481, 87482, or
87482.5 by a community college district, who is not subject to
mandatory membership in the Defined Benefit Program pursuant to
Section 22501, 22502 or 22504 for each position with the
same employer, shall become a participant on the later of the first
day that creditable service is performed for an employer that
provides the Cash Balance Benefit Program or the effective date of
the employer's governing board's action to provide the Cash Balance
Benefit Program , provided that the person has not made an
election pursuant to subdivision (d) .
(2) If the participant's basis of employment with a community
college district changes to employment that is subject to mandatory
membership in the Defined Benefit Program pursuant to Section 22501,
22502, or 22504 during one school year with the same employer,
creditable service performed for that employer shall no longer be
covered under the Cash Balance Benefit Program as of the last day of
the pay period in which the change in the participant's basis of
employment occurred. Creditable service performed for that employer
shall be subject to coverage by the Defined Benefit Program as of the
first day of the pay period following the change in the participant'
s basis of employment.
(c) (1) Any person employed to perform creditable service as a
substitute employee for an employer shall become a participant on the
later of the first day that creditable service is performed for an
employer that provides the Cash Balance Benefit Program or the
effective date of the employer's governing board's action to provide
the Cash Balance Benefit Program, provided that creditable service is
not performed for the same employer with whom the person is subject
to mandatory membership in the Defined Benefit Program, and that the
person has not made an election pursuant to subdivision (d).
(2) If the participant's basis of employment as a substitute
employee for an employer changes to employment that is subject to
mandatory membership in the Defined Benefit Program pursuant to
Section 22501, 22502, or 22504 during one school year with the same
employer, creditable service performed for that employer shall no
longer be covered under the Cash Balance Benefit Program as of the
last day of the pay period in which the change in the participant's
basis of employment occurred. Creditable service performed for that
employer shall be subject to coverage under the Defined Benefit
Program as of the first day of the pay period following the change in
the participant's basis of employment.
(c)
(d) If the employer's governing board's action to
provide the Cash Balance Benefit Program gives employees the right to
elect coverage under social security the
federal Social Security Act or an alternative
retirement plan offered by the employer in addition to the Cash
Balance Benefit Program, the employee may elect within 60 calendar
days of the latest of the first day that creditable service is
performed, the date of the employer's governing board's action to
provide the Cash Balance Benefit Program, or the effective date of
the employer's governing board's action to provide the Cash Balance
Benefit Program to be covered by social security
the federal Social Security Act or to participate in the
alternative retirement plan in lieu of participating in the Cash
Balance Benefit Program. An election may not preclude an employee
from participating in the Cash Balance Benefit Program at a later
date so long as the Cash Balance Benefit Program is provided by the
employer and the employee is eligible to participate in the Cash
Balance Benefit Program.
(d)
(e) If subdivision (c) (d)
is applicable, the employer shall inform employees pursuant to
subdivision (c) of Section 26300 of their right to make an election
and the election shall be made on a properly executed form provided
by the system and filed with the employer. The employer shall retain
a copy of the employee's signed election form and mail the original
election form to the system's headquarters office
of the system as described in Section 22375. office.
The election shall become effective on the later of the first
day that creditable service is performed or the effective date of the
employer's governing board's action to provide the Cash Balance
Benefit Program.
(e) If the participant's basis of employment with a school
district or county office of education that provides the Cash Balance
Benefit Program changes to employment to perform creditable service
for 50 percent or more of the full-time position during one school
year with the same employer, creditable service performed for that
employer shall no longer be covered under the Cash Balance Benefit
Program. Creditable service performed for that employer shall be
subject to coverage by the Defined Benefit Program as of the first
day of the pay period following the change in the participant's basis
of employment.
(f) If the participant's basis of employment with a community
college district changes to employment that is subject to mandatory
membership in the Defined Benefit Program pursuant to Section 22501,
22502, or 22504 during one school year with the same employer,
creditable service performed for that employer shall no longer be
covered under the Cash Balance Benefit Program. Creditable service
performed for that employer shall be subject to coverage by the
Defined Benefit Program as of the first day of the pay period
following the change in the participant's basis of employment.
(g)
(f) If the governing board of an employer subsequently
provides, in addition to the Cash Balance Benefit Program,
social security federal Social Security Act
coverage, a participant covered by the Cash Balance Benefit Program
who is performing creditable service for that employer may elect to
be covered by social security the federal
Social Security Act in lieu of the Cash Balance Benefit
Program. That participant's election shall be made within 60 calendar
days of the date the governing board acted to provide coverage under
social security the federal Social Security
Act or the effective date of the governing board's action to
provide federal Social Security Act coverage, whichever is
later. An election under this subdivision may not preclude an
employee from participating in the Cash Balance Benefit Program at a
later date if the employee is eligible to participate in the Cash
Balance Benefit Program and the employer provides the Cash Balance
Benefit Program.
(h)
(g) If the governing board of an employer provided
social security federal Social Security Act
coverage with an effective date prior to January 1, 2007, and
the employer offered the Cash Balance Benefit Program as of the
effective date of the governing board's action to provide
social security federal Social Security Act
coverage, a participant who was performing creditable service for
that employer may elect to be covered by social security
the federal Social Security Act in lieu of the
Cash Balance Benefit Program. The participant's election shall be
made on or after March 1, 2008, and on or before May 1, 2008. The
election to participate in social security
the federal Social Security Act shall be effective on July 1,
2008. An election under this subdivision may not preclude an employee
from participating in the Cash Balance Benefit Program at a later
date if the employee is eligible to participate in the Cash Balance
Benefit Program and the employer provides the Cash Balance Benefit
Program.
(i)
(h) An election by an employee to terminate his or her
participation in the Cash Balance Benefit Program as described in
subdivision (g) or (h) (f) or (g) shall
be made on a properly executed form provided by the system and filed
with the employer. The employer shall retain a copy of the employee'
s signed election form and mail the original election form to the
headquarters office of the system, as described in Section
22375. system.
SEC. 20. Section 26506 of the Education Code is amended to read:
26506. (a) Except as provided in subdivision (b), participants
shall not make voluntary pretax or post-tax contributions into the
Cash Balance Benefit Program, nor shall participants redeposit
amounts previously distributed from employee accounts or employer
accounts.
(b) Pursuant to terms and conditions established by the board,
participants may be permitted to transfer funds from eligible
retirement plans into the Cash Balance Benefit Program to the extent
that the transfers are allowable under and are completed in a manner
prescribed by applicable federal and state laws, and any related
regulations.
(c) Funds deposited with the Cash Balance Benefit Program by a
participant pursuant to subdivision (b) shall be credited to the
participant and identified separately from credits in the participant'
s employee and employer accounts. Funds so deposited shall be
credited with interest pursuant to Section 26604.
treated as credits to the participant's employee account for all
other purposes under this part.
SEC. 21. Section 26806 of the Education Code is amended to read:
26806. (a) The normal form of retirement
benefit under this part is a lump-sum payment. Upon distribution of
the lump-sum payment to the participant, no further benefits shall be
payable from the plan with respect to the Cash Balance Benefit
Program.
(b) The lump-sum payment in subdivision (a) shall not be payable
before 180 calendar days have elapsed following the date of
termination of employment.
(c) Except as provided in subdivision (d) or subdivision (e) of
Section 26812, the application for the retirement benefit in the form
of a lump-sum payment shall be automatically canceled if the
participant performs creditable service within 180 calendar days
following the date of termination of employment.
(d) Subdivision (c) does not apply if the participant has reached
that age at which the Internal Revenue Code of 1986 requires a
distribution of benefits. A participant who has reached this age
shall receive a distribution commencing on the earlier of the date
that the participant has met the conditions of subdivision (b) or the
conditions of subdivision (c) of Section 26004.
SEC. 22. Section 26807.6 of the Education Code is amended to read:
26807.6. (a) A participant who retired and elected an annuity
pursuant to Section 26807 may elect to change annuities, subject to
all of the following:
(1) A participant who elected a single life annuity with or
without a cash refund feature or a period certain annuity may not
change his or her annuity.
(2) A participant who elected an annuity under paragraph (3) or
(4) of subdivision (b) of Section 26807 may elect an annuity under
paragraph (3) of subdivision (a) of Section 26807.5.
(3) The election of the participant under this section is made on
or after January 1, 2007, and prior to July 1, 2007.
(4) The participant designates the same annuity beneficiary that
was designated under the prior annuity elected by the participant, if
the annuity and annuity designation were effective on December 31,
2006.
(5) The
annuity beneficiary is not afflicted with a known terminal illness
and the participant declares, under penalty of perjury under the laws
of this state, that to the best of his or her knowledge, the annuity
beneficiary is not afflicted with a known terminal illness.
(6) The annuity beneficiary has not predeceased the participant as
of the effective date of the change in the annuity by the
participant.
(b) The change in the annuity by the participant 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
as described in Section 22375 within 30 days after
the date the election is signed.
(c) After receipt of a participant's election document, the system
shall mail an acknowledgment notice to the participant that sets
forth the new annuity elected by the participant.
(d) If the participant and the annuity beneficiary are alive and
not afflicted with a known terminal illness, a participant may cancel
the election to change annuities and elect to receive the benefit
according to the preexisting annuity election. After cancellation,
the participant may elect to make a one-time change from the
preexisting annuity to any other annuity 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 as described
in Section 22375 no later than 30 calendar days following
the date of mailing of the acknowledgment notice. If the participant
elects to make the one-time change provided by this subdivision, the
change shall be effective as of the participant's signature date on
the initial election to change.
(e) If the system is unable to mail an acknowledgment notice to
the participant on or before June 1, 2007, or prior to the end of the
election period, provided that the participant and the annuity
beneficiary are alive and not afflicted with a known terminal
illness, the system shall allow a participant to cancel the election
to change annuities and elect to receive the benefit according to the
preexisting annuity election. After cancellation, the participant
may elect to make a one-time change from the preexisting annuity to
any other annuity 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 as described in Section 22375 no later than
30 calendar days following the date of mailing of the acknowledgment
notice. If the participant elects to make the one-time change
provided by this subdivision, the change shall be effective as of the
participant's signature date on the initial election to change.
(f) If the participant elects to change his or her annuity as
described in subdivision (a) or (d), the participant's annuity shall
be modified in a manner determined by the board to prevent any
additional liability to the plan.
(g) References to a "participant" in paragraph (1) of subdivision
(a) shall apply to the nonmember spouse.
(h) The participant shall not change annuities in derogation of a
spouse's or former spouse's community property rights as specified in
a court order.
SEC. 23. Section 26812 of the Education Code is amended to read:
26812. (a) A participant retired for service under this part may
perform retired participant activities, but the participant shall not
make contributions to the plan or accrue service credit under the
Defined Benefit Program based on compensation earned from that
service. The employer shall maintain accurate records of the earnings
of the retired participant and report those earnings monthly to the
system and retired participant.
(b) If a participant is retired for service under this part, the
annualized rate of pay for retired participant activities performed
by that participant shall not be less than the minimum, nor exceed
the maximum, paid by the employer to other employees performing
comparable duties.
(c) A participant retired for service under this part shall not be
required to reinstate for performing retired participant activities.
(d) (1) If all of the following apply to a participant retired for
service under this part, the participant's annuity shall be reduced
by the amount of the compensation:
(A) The participant is receiving an annuity under the Cash Balance
Benefit Program.
(B) The participant is below normal retirement age or retired on
or after January 1, 2014.
(C) The participant earns compensation paid in cash for performing
retired participant activities, excluding reimbursements paid by an
employer for expenses incurred by the participant in which payment of
the expenses by the participant is substantiated.
(2) The reduction in paragraph (1) shall only be made for
compensation paid in cash during the first 180 calendar days after a
participant retired for service under this part. The amount of the
reduction may be equal to in an individual
month shall be no more than the monthly annuity payable
but in that month and the total amount of the
reduction shall not exceed the amount of the annuity payable
during the first 180 calendar days after a participant retired for
service under this part. For written agreements pertaining to the
performance of retired participant activities entered into, extended,
renewed, or amended on or after January 1, 2014, the reduction in
paragraph (1) shall also be made for payments made for the
performance of retired participant activities , 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.
(3) Subject to the limitation described in paragraph (4), if all
of the following apply to a participant retired for service under
this part, the participant's application for the retirement benefit
shall automatically be canceled:
(A) The participant is anticipated to receive the retirement
benefit in the form of a lump-sum payment.
(B) The participant earns compensation for performing creditable
service within 180 calendar days following the date of termination of
employment.
(4) Paragraph (3) does not apply if the participant has reached
that age at which the Internal Revenue Code of 1986 requires a
distribution of benefits. A participant who has reached that age
shall receive a distribution commencing on the earlier of the date
that the participant has met the conditions of subdivision (b) of
Section 26806 or the conditions of subdivision (c) of Section 26004.
(e) If the participant has attained normal retirement age at the
time the compensation is earned, subdivision (d) shall not 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 participant activities, expressing its intent to seek an
exemption from the limitation specified in subdivision (d). Approval
of the appointment shall 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 has passed.
(3) A finding that the participant is not ineligible for
application of this subdivision pursuant to subdivision (g).
(4) A finding that the termination of employment of the retired
participant with the employer is not the basis for the need to
acquire the services of the participant.
(f) Subdivision (e) shall not apply to a retired participant whose
termination of employment with the employer is the basis for the
need to acquire the services of the participant.
(g) Subdivision (e) shall not apply if the participant received
additional service credit pursuant to Sections 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 participant, 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 (e) inapplicable to participants if the
participant received a financial incentive from any public employer
to retire or otherwise terminate employment with a public employer.
(h) 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 participant for application of subdivision (e),
including, but not limited to, the resolution adopted pursuant to
that subdivision.
(i) The documentation required by this section shall be received
by the system prior to the retired participant's performance of
retired participant activities.
(j) Within 30 calendar days of 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 (e) and the retired participant whether the compensation
paid to the participant will be subject to the limitation specified
in subdivision (d).
SEC. 24. Section 26906.6 of the Education Code is amended to read:
26906.6. (a) A participant who is disabled and elected an annuity
pursuant to Section 26906 may elect to change annuities, subject to
all of the following:
(1) A participant who elected a single life annuity with or
without a cash refund feature or a period certain annuity may not
change his or her annuity.
(2) A participant who elected an annuity under paragraph (3) or
(4) of subdivision (b) of Section 26906 may elect an annuity under
paragraph (3) of subdivision (a) of Section 26906.5.
(3) The election by the participant under this section is made on
or after January 1, 2007, and prior to July 1, 2007.
(4) The participant designates the same annuity beneficiary that
was designated under the prior annuity elected by the participant, if
the annuity and the annuity beneficiary designation were effective
on December 31, 2006.
(5) The annuity beneficiary is not afflicted with a known terminal
illness and the participant declares, under penalty of perjury under
the laws of this state, that to the best of his or her knowledge,
the annuity beneficiary is not afflicted with a known terminal
illness.
(6) The annuity beneficiary has not predeceased the participant as
of the effective date of the change in the annuity by the
participant.
(b) The change in the annuity by the participant 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
as described in Section 22375 within 30 days after
the date the election is signed.
(c) After receipt of a participant's election document, the system
shall mail an acknowledgment notice to the participant that sets
forth the new annuity elected by the participant.
(d) If the participant and the annuity beneficiary are alive and
not afflicted with a known terminal illness, a participant may cancel
the election to change annuities and elect to receive the benefit
according to the preexisting annuity election. After cancellation,
the participant may elect to make a one-time change from the
preexisting annuity to any other annuity 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 as described
in Section 22375 no later than 30 calendar days following
the date of mailing of the acknowledgment notice. If the participant
elects to make the one-time change provided by this subdivision, the
change shall be effective as of the participant's signature date on
the initial election to change.
(e) If the system is unable to mail an acknowledgment notice to
the participant on or before June 1, 2007, or prior to the end of the
election period, provided that the participant and the annuity
beneficiary are alive and not afflicted with a known terminal
illness, the system shall allow a participant to cancel the election
to change annuities and elect to receive the benefit according to the
preexisting annuity election. After cancellation, the participant
may elect to make a one-time change from the preexisting annuity to
any other annuity 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 as described in Section 22375 no later than
30 calendar days following the date of mailing of the acknowledgment
notice. If the participant elects to make the one-time change
provided by this subdivision, the change shall be effective as of the
participant's signature date on the initial election to change.
(f) If the participant elects to change his or her annuity as
described in subdivision (a) or (d), the participant's annuity shall
be modified in a manner determined by the board to prevent any
additional liability to the plan.
(g) The participant shall not change annuities in derogation of a
spouse's or former spouse's community property rights as specified in
a court order.
SEC. 25. Section 27100 of the Education Code is amended to read:
27100. A participant may at any time designate or change the
designation of one or more primary beneficiaries and one or more
contingent beneficiaries to receive any lump-sum death benefit that
may be payable under the plan. The beneficiary for the lump-sum death
benefit under this part may be a person, trust, or the estate of the
participant. The beneficiary shall be designated on a form
prescribed by the system that is received in the system's
headquarters office, as established pursuant to Section
22375, office before the participant's death.