Amended in Senate June 1, 2015

California Legislature—2015–16 Regular Session

Assembly BillNo. 991


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,begin insert 22119.2, 22119.3,end insert 22121, 22141, 22404, 22509,begin insert 22515, 22711,end insert 22714,begin insert 22717,end insert 22900, 22903, 22950, 23001, 24114,begin insert 24209, 24209.3, 24210, 24211, 24212, 24213,end insert 24214, 24214.5, 26000, 26002.5, 26132,begin insert 26139.5,end insert 26400,begin insert 26401,end insert 26506, 26806, 26807.6, 26812, 26906.6,begin delete and 27100end deletebegin insert 27100, 44987, and 87768.5end insert of, and to addbegin delete Sectionend deletebegin insert Sections 22144.3 andend insert 26142.5 to, the Education Code, relating to state teachers’ retirement.

LEGISLATIVE COUNSEL’S DIGEST

AB 991, as amended, 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.begin insert Existing law prescribes different retirement allowance formulations for members who retire after reinstating from retirement depending on the circumstances of their service after reinstatement, and whether they return to employment subject to the Defined Benefit Program, among other factors.end insert

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.begin insert The bill would define leave of absence as a period of leave to which a member is entitled that is expressly authorized or required pursuant to specified provisions.end insert 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,begin delete to require as a condition of that grantend delete that necessary documentation be provided to the retirement system within a specified time.begin delete Theend delete

begin insertThisend insert bill wouldbegin insert alsoend insert 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.begin insert The bill would provide that the election of membership in the Defined Benefit Program by certain people, including substitute teachers, is not terminated until the person receives a refund of contributions. The bill would make various technical, conforming, and correctional changes to provisions relating to retirement allowance formulations for members who reinstate after retiring, and who retire after receiving a disability allowance, including changing the member’s age at retirement to refer to the member’s age on the last day of the month the allowance will begin.end insert 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 servicebegin insert mayend insert 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. Thebegin insert bill would authorize a member of the Defined Benefit Program employed to perform creditable service as a substitute to elect to have that service covered under the Cash Balance Benefit Program, subject to certain conditions.end insert

begin insertThisend insert bill wouldbegin insert alsoend insert 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:

P4    1

SECTION 1.  

Section 22001.5 of the Education Code is
2amended to read:

3

22001.5.  

The Legislature hereby finds and declares that on
4July 1, 1996, the State Teachers’ Retirement System Cash Balance
5Plan was created and established to provide a retirement plan for
6persons employed by an employer offering the Cash Balance Plan,
7excluding community college districts, to perform creditable
8service for less than 50 percent of the full-time equivalent for the
9position or employed by a community college district offering the
10Cash Balance Plan to perform creditable service on a temporary
11basis pursuant to Section 87474, 87478, 87480, 87481, 87482, or
1287482.5, or employed by an employer offering the Cash Balance
13Plan to perform creditable service as a substitute employee. The
14persons eligible for the Cash Balance Plan were excluded from
15mandatory membership in the State Teachers’ Retirement System
16 Defined Benefit Plan. Both plans are administered by the Teachers’
17Retirement Board. Prior to the creation and establishment of the
18Cash Balance Plan, the State Teachers’ Retirement System Defined
19Benefit Plan had been identified simply as the State Teachers’
20Retirement System. As a result, the system was identified as both
21the administrative body and the retirement plan. The State
22Teachers’ Retirement Law was amended to identify the retirement
23plan as the State Teachers’ Retirement System Defined Benefit
24Plan in order to distinguish that plan from the Cash Balance Plan.
25Because both plans were intended to provide for the retirement of
26teachers and other persons employed in connection with public
27schools of this state and schools supported by this state, a merger
28of these two plans is now hereby made for the purpose of
29establishing a single retirement plan that shall be known and may
30be cited as the State Teachers’ Retirement Plan consisting of the
31different benefit programs set forth in this part and Part 14
P5    1(commencing with Section 26000). This plan shall be administered
2by the Teachers’ Retirement Board as set forth in this part and Part
314 (commencing with Section 26000). This part, together with
4Part 14 (commencing with Section 26000) shall be known and
5may be cited as the Teachers’ Retirement Law.

6begin insert

begin insertSEC. 2.end insert  

end insert

begin insertSection 22119.2 of the end insertbegin insertEducation Codeend insertbegin insert is amended to
7read:end insert

8

22119.2.  

(a) “Creditable compensation” means remuneration
9that is paid in cash by an employer to all persons in the same class
10of employees for performing creditable service in that position.
11Creditable compensation shall include:

12(1) Salary or wages paid in accordance with a publicly available
13written contractual agreement, including, but not limited to, a
14salary schedule or employment agreement.

15(2) Remuneration that is paid in addition to salary or wages,
16provided it is paid to all persons who are in the same class of
17employees in the same dollar amount, the same percentage of
18salary or wages, or the same percentage of the amount being
19distributed.

20(3) Remuneration that is paid for the use of sick leave,begin delete vacation,
21and otherend delete
begin insert vacation leave, or anend insert employer-approvedbegin delete leave,end delete
22begin insert compensated leave of absence,end insert except as provided in paragraph
23(4) of subdivision (c).

24(4) Member contributions that are picked up by an employer
25pursuant to Section 22903 or 22904.

26(5) Amounts that are deducted from a member’s remuneration,
27including, but not limited to, deductions for participation in a
28deferred compensation plan; deductions to purchase an annuity
29 contract, tax-deferred retirement plan, or insurance program; and
30contributions to a plan that meets the requirements of Section 125,
31401(a), 401(k), 403(b), 457(b), or 457(f) of Title 26 of the United
32States Code.

33(6) Any other payments the board determines to be “creditable
34compensation.”

35(b) Any creditable compensation determined by the system to
36have been paid to enhance a member’s benefits shall not be credited
37under the Defined Benefit Program. Contributions on that
38compensation shall be credited to the Defined Benefit Supplement
39Program. A presumption by the system that creditable
40compensation was paid to enhance a member’s benefits may be
P6    1rebutted by the member or by the employer on behalf of the
2member. Upon receipt of sufficient evidence to the contrary, a
3presumption by the system that creditable compensation was paid
4to enhance the member’s benefits may be reversed.

5(c) “Creditable compensation” does not mean and shall not
6include:

7(1) Remuneration that is not paid in cash or is not paid to all
8persons who are in the same class of employees.

9(2) Remuneration that is paid for service that is not creditable
10service pursuant to Section 22119.5.

11(3) Remuneration that is paid in addition to salary or wages if
12it is not paid to all persons in the same class of employees in the
13same dollar amount, the same percentage of salary or wages, or
14the same percentage of the amount being distributed pursuant to
15paragraph (2) of subdivision (a).

16(4) Remuneration that is paid in exchange for the relinquishment
17of unused accumulated leave.

18(5) Payments, including, but not limited to, those for
19participation in a deferred compensation plan; to purchase an
20annuity contract, tax-deferred retirement plan, or insurance
21program; and for contributions to a plan that meets the requirements
22of Section 125, 401(a), 401(k), 403(b), 457(b), or 457(f) of Title
2326 of the United States Code when the cost is covered by an
24employer and is not deducted from the member’s salary.

25(6) Fringe benefits provided by an employer.

26(7) Expenses paid or reimbursed by an employer.

27(8) Severance pay, including lump-sum and installment
28payments, or money paid in excess of salary or wages to a member
29as compensatory damages or as a compromise settlement.

30(9) Any other payments the board determines not to be
31“creditable compensation.”

32(d) An employer or individual who knowingly or willfully
33reports compensation in a manner inconsistent with subdivision
34(a) or (c) may be subject to prosecution for fraud, theft, or
35embezzlement in accordance with the Penal Code. The system
36may establish procedures to ensure that compensation reported by
37an employer is in compliance with this section.

38(e) For purposes of this section, remuneration shall be considered
39paid if distributed to any person in the same class of employees
40who meets the qualifications or requirements specified in a publicly
P7    1available written contractual agreement, including, but not limited
2to, a collective bargaining agreement or an employment agreement,
3as a condition of receiving the remuneration.

4(f) This definition of “creditable compensation” reflects sound
5principles that support the integrity of the retirement fund. Those
6principles include, but are not limited to, consistent treatment of
7compensation throughout a member’s career, consistent treatment
8of compensation among an entire class of employees, consistent
9treatment of compensation for the position, preventing adverse
10selection, and excluding from compensation earnable remuneration
11that is paid to enhance a member’s benefits. The system shall
12determine the appropriate crediting of contributions between the
13Defined Benefit Program and the Defined Benefit Supplement
14Program according to these principles, to the extent not otherwise
15specified pursuant to this part.

16(g) The section shall become operative on July 1, 2002.

17(h) This section shall not apply to a member subject to the
18California Public Employees’ Pension Reform Act of 2013.

19begin insert

begin insertSEC. 3.end insert  

end insert

begin insertSection 22119.3 of the end insertbegin insertEducation Codeend insertbegin insert is amended to
20read:end insert

21

22119.3.  

(a) “Creditable compensation” for members who are
22subject to the California Public Employees’ Pension Reform Act
23of 2013 means remuneration that is paid each pay period in which
24creditable service is performed for that position. Creditable
25compensation shall be paid in cash by an employer to all persons
26in the same class of employees in accordance with a publicly
27available written contractual agreement, including, but not limited
28to, a salary schedule or employment agreement. Creditable
29compensation shall include:

30(1) Remuneration that is paid for the use of sick leave,begin delete vacation,
31and otherend delete
begin insert vacation leave, or anend insert employer-approvedbegin delete leave,end delete
32begin insert compensated leave of absence,end insert except as provided in paragraph
33(4) of subdivision (b).

34(2) Member contributions that are picked up by an employer
35pursuant to Section 22903 or 22904.

36(3) Amounts that are deducted from a member’s remuneration,
37including, but not limited to, deductions for participation in a
38deferred compensation plan; deductions to purchase an annuity
39contract, tax-deferred retirement plan, or insurance program; and
40contributions to a plan that meets the requirements of Section 125,
P8    1401(a), 401(k), 403(b), 457(b), or 457(f) of Title 26 of the United
2States Code.

3(4) Notwithstanding paragraphs (6) and (8) of subdivision (c)
4of Section 7522.34 of the Government Code, remuneration that is
5paid for creditable service that exceeds one year in a school year.

6(b) “Creditable compensation” does not mean and shall not
7include:

8(1) Remuneration that is not paid in cash or is not paid to all
9persons who are in the same class of employees.

10(2) Remuneration that is paid for service that is not creditable
11service pursuant to Section 22119.5.

12(3) Remuneration that is not paid each pay period in which
13creditable service is performed for that position.

14(4) Remuneration that is paid in exchange for the relinquishment
15of unused accumulated leave.

16(5) Payments, including, but not limited to, those for
17participation in a deferred compensation plan; to purchase an
18annuity contract, tax-deferred retirement plan, or insurance
19program; and for contributions to a plan that meets the requirements
20of Section 125, 401(a), 401(k), 403(b), 457(b), or 457(f) of Title
2126 of the United States Code when the cost is covered by an
22employer.

23(6) Fringe benefits provided by an employer.

24(7) Expenses paid or reimbursed by an employer.

25(8) Severance pay, including lump sum and installment
26payments, or money paid in excess of salary or wages to a member
27as compensatory damages or as a compromise settlement.

28(9) Creditable compensation determined by the system to have
29been paid to enhance a member’s benefit.

30(10) Compensation paid to the member in lieu of benefits
31provided to the member by the employer or paid directly by the
32employer to a third party other than the system for the benefit of
33the member.

34(11) Any one-time or ad hoc payments made to a member.

35(12) Any employer-provided allowance, reimbursement, or
36payment, including, but not limited to, one made for housing,
37vehicle, or uniform.

38(13) Any bonus paid in addition to compensation described in
39subdivision (a).

P9    1(14) Any other payments the board determines not to be
2“creditable compensation.”

3(c) (1) Except for purposes of calculating credited service in
4the Defined Benefit Program and for reporting compensation
5earnable on or after January 1, 2013, creditable compensation in
6any fiscal year shall not exceed:

7(A) One hundred twenty percent of the “contribution and benefit
8base,” as determined under Section 430(b) of the Social Security
9Act (42 U.S.C. Sec. 430(b)), on January 1, 2013, for a member
10whose service is not included in the federal system.

11(B) One hundred percent of the “contribution and benefit base,”
12as determined under Section 430(b) of the Social Security Act (42
13U.S.C. Sec. 430(b)), on January 1, 2013, for a member whose
14service is included in the federal system pursuant to any changes
15in state or federal law enacted on or after January 1, 2013.

16(2) The system shall adjust the limit based on the annual changes
17to the Consumer Price Index for All Urban Consumers: U.S. City
18Average, calculated by dividing the Consumer Price Index for All
19Urban Consumers: U.S. City Average for the month of February
20 in the fiscal year preceding the adjustment by the Consumer Price
21Index for All Urban Consumers: U.S. City Average for the month
22of February of the previous year rounded to the nearest thousandth.
23Notwithstanding paragraph (1) of subdivision (d) of Section
247522.10 of the Government Code, the adjustment shall be effective
25annually on July 1, beginning July 1, 2014.

26(3) The Legislature reserves the right to modify the requirements
27of this subdivision with regard to all members subject to this
28subdivision, except that the Legislature may not modify these
29provisions in a manner that would result in a decrease in benefits
30accrued prior to the effective date of the modification.

31(4) This subdivision shall apply to compensation paid during
32the 2013-14 fiscal year and each fiscal year thereafter.

33(d) An employer or individual who knowingly or willfully
34reports compensation in a manner inconsistent with subdivision
35(a) or (b) may be subject to prosecution for fraud, theft, or
36embezzlement in accordance with the Penal Code. The system
37may establish procedures to ensure that compensation reported by
38an employer is in compliance with this section.

39(e) For purposes of this section, remuneration shall be considered
40paid if distributed to any person in the same class of employees
P10   1who meets the qualifications or requirements specified in a publicly
2available written contractual agreement, including, but not limited
3to, a collective bargaining agreement or an employment agreement,
4as a condition of receiving the remuneration.

5(f) This definition of “creditable compensation” reflects sound
6principles that support the integrity of the retirement fund. Those
7principles include, but are not limited to, consistent treatment of
8compensation throughout a member’s career, consistent treatment
9of compensation among an entire class of employees, consistent
10treatment of compensation for the position, preventing adverse
11selection, and excluding from creditable compensation
12remuneration that is paid to enhance a member’s benefits. The
13system shall determine the appropriate crediting of contributions
14according to these principles, to the extent not otherwise specified
15pursuant to this part. A presumption by the system that creditable
16compensation was paid to enhance the member’s benefits may be
17rebutted by the member or by the employer on behalf of the
18member. Upon receipt of sufficient evidence to the contrary, a
19presumption by the system that creditable compensation was paid
20to enhance the member’s benefits may be reversed.

21

begin deleteSEC. 2.end delete
22begin insertSEC. 4.end insert  

Section 22121 of the Education Code is amended to
23read:

24

22121.  

(a) “Credited service” means service for which the
25required contributions have been paid and service for which
26required contributions would have been paid in absence of the
27limit prescribed by Section 401(a)(17) of Title 26 of the United
28States Code as described in Section 22317.5.

29(b) “Credited service” for members who are subject to the
30California Public Employees’ Pension Reform Act of 2013 means
31service for which required contributions have been paid and service
32for which required contributions would have been paid in absence
33of the limit established by subdivision (c) of Section 22119.3.

34(c) “Credited service” for the limited purpose of determining
35eligibility for benefits pursuant to Section 22134.5, 24203.5, or
3624203.6 also includes up to two-tenths of one year of service
37granted pursuant to Section 22717.

38

begin deleteSEC. 3.end delete
39begin insertSEC. 5.end insert  

Section 22141 of the Education Code is amended to
40read:

P11   1

22141.  

(a)  Notwithstanding Section 22140, “improvement
2factor” means an increase of 2 percent in benefits provided under
3Sections 24408 and 24409 for each year commencingbegin delete onend delete September
41, 1981, and under Section 24410.5 for each year commencing
5September 1, 2001, and under Sections 24410.6 and 24410.7 for
6each year commencing September 1, 2002. The improvement
7factor shall not be compounded nor shall it be applicable to
8annuities payable from the accumulated annuity deposit
9contributions or the accumulated tax-sheltered annuity
10contributions. The Legislature reserves the right to adjust the
11amount of the improvement factor up or down as the economic
12conditions dictate. No adjustments of the improvement factor shall
13reduce the monthly retirement allowance or benefit below that
14which would be payable to the recipient under this part had this
15section not been enacted.

16(b) Beginning July 1, 2014, the improvement factor shall vest
17for an active member in any calendar year in which active members
18paid increased member contributions pursuant to Section 22901.7.

19(c) If, for any reason, the increased employee contribution
20referenced in subdivision (b), and as required by subdivisions (a)
21and (b) of Section 22901.7, ceases to be legally required to be
22made pursuant to the act that added this subdivision, then the
23Legislature reserves the right to adjust the amount of the
24improvement factor up or down as the economic conditions dictate
25for all members who retire on or after January 1, 2014. No
26adjustments of the improvement factor shall reduce the monthly
27retirement allowance or benefit below that which would be payable
28to the recipient under this part had this section not been enacted.

29(d) For members who retired before the calendar year in which
30Section 22901.7 was added, the Legislature reserves the right to
31adjust the amount of the improvement factor up or down as the
32economic conditions dictate. No adjustments of the improvement
33factor shall reduce the monthly retirement allowance or benefit
34below that which would be payable to the recipient under this part
35had this section not been enacted.

36begin insert

begin insertSEC. 6.end insert  

end insert

begin insertSection 22144.3 is added to the end insertbegin insertEducation Codeend insertbegin insert, to
37read:end insert

begin insert
38

begin insert22144.3.end insert  

“Leave of absence” means a period of leave to which
39a member is entitled that is expressly authorized or required by
40Chapter 4 (commencing with Section 44800) of Part 25 of Division
P12   13 of Title 2, or Chapter 1 (commencing with Section 87000) or
2Chapter 3 (commencing with Section 87400) of Part 51 of Division
37 of Title 3.

end insert
4

begin deleteSEC. 4.end delete
5begin insertSEC. 7.end insert  

Section 22404 of the Education Code is amended to
6read:

7

22404.  

(a) Notwithstanding any other provision of this part
8or Part 14 (commencing with Section 26000) to the contrary, the
9board may establish by plan amendment a specified amount or
10amounts, not to exceed ten dollars ($10), below which the system
11may dispense with:

12 (1) The processing of a benefit payment, an annuity payment,
13or any other payment, including adjustments to those payments,
14payable to a member, participant, or beneficiary.

15(2) The collection of a benefit overpayment, annuity
16overpayment, or any other overpayments paid to a member,
17participant, or beneficiary.

18(b) When the cumulative dollar amount associated with one or
19more benefit payments or overpayments, annuity payments or
20overpayments, or other payments or overpayments equals or
21exceeds the amount described in subdivision (a), that amount shall
22be paid to, or collected from, the member, participant, or
23beneficiary. That cumulative amount paid or collected shall not
24be credited with interest.

25

begin deleteSEC. 5.end delete
26begin insertSEC. 8.end insert  

Section 22509 of the Education Code is amended to
27read:

28

22509.  

(a) Within 10 working days of the date of hire of an
29employee who has the right to make an election pursuant to Section
3022508 or 22508.5, the employer shall inform the employee of the
31right to make an election and shall make available to the employee
32written information provided by each retirement system concerning
33the benefits provided under that retirement system to assist the
34employee in making an election.

35(b) Any election made pursuant to subdivision (a) of Section
3622508 or subdivision (a) of Section 22508.5 shall be filed with the
37office of the State Teachers’ Retirement System and a copy of the
38election shall be filed with the other public retirement system. Any
39election made pursuant to subdivision (c) of Section 22508 or
40subdivision (b) of Section 22508.5 shall be filed with the office
P13   1of the Public Employees’ Retirement System and a copy of the
2election shall be filed with the office of this system.

3(c) Any election made pursuant to Section 22508 or Section
422508.5 shall become effective as of the first day of employment
5in the position that qualified the employee to make an election.

6begin insert

begin insertSEC. 9.end insert  

end insert

begin insertSection 22515 of the end insertbegin insertEducation Codeend insertbegin insert is amended to
7read:end insert

8

22515.  

Persons excluded from membership pursuant to Sections
922601.5, 22602, and 22604 may elect membership in the Defined
10Benefit Program at any time while employed to perform creditable
11service subject to coverage under that program. The election shall
12be in writing on a form prescribed by this system and shall be filed
13in the office of this system prior to submission of contributions.
14The election is irrevocable and shall remain in effect until the
15member terminatesbegin delete employment.end deletebegin insert employment and receives a refund
16of accumulated retirement contributions.end insert
The amendments to this
17section enacted during the 1995-96 Regular Session shall be
18deemed to have become operative on July 1, 1996.

19begin insert

begin insertSEC. 10.end insert  

end insert

begin insertSection 22711 of the end insertbegin insertEducation Codeend insertbegin insert is amended to
20read:end insert

21

22711.  

(a) A member under this part shall be granted service
22credit for time during which the member serves as an elected officer
23of an employee organization while on a compensated leave of
24absence pursuant to Section 44987 or 87768.5, if all of the
25following conditions are met:

26(1) The member was employed and performed creditable service
27subject to coverage under this Defined Benefit Program in the
28month prior to commencement of the leave of absence.

29(2) The member makes contributions to the Teachers’
30Retirement Fund in the amount that the member would have
31contributed had the member performed creditable service on a
32full-time basis during the period the member served as an elected
33officer of the employee organization.

34(3) The member’s employer contributes to the Teachers’
35Retirement Fund at a rate adopted by the board as a plan
36amendment with respect to the Defined Benefit Program an amount
37based upon the creditable compensation that would have been paid
38to the member had the member performed creditable service on a
39full-time basis during the period the member served as an elected
40officer of the employee organization.

P14   1(b) The maximumbegin delete period of time during which a member may
2serve as an elected officer and receiveend delete
service creditbegin insert a member
3may receiveend insert
pursuant to this section shall not exceed 12begin delete calendarend delete
4 years.

5

begin deleteSEC. 6.end delete
6begin insertSEC. 11.end insert  

Section 22714 of the Education Code is amended to
7read:

8

22714.  

(a) Whenever the governing board of a school district
9or a community college district or a county office of education,
10by formal action, determines pursuant to Section 44929 or 87488
11that, because of impending curtailment of, or changes in, the
12manner of performing services, the best interests of the district or
13county office of education would be served by encouraging
14certificated employees or academic employees to retire for service
15and that the retirement will result in a net savings to the district or
16county office of education, an additional two years of service credit
17shall be granted under this part to a member of the Defined Benefit
18Program if all of the following conditions exist:

19(1) The member is credited with five or more years of service
20credit and retires for service under Chapter 27 (commencing with
21Section 24201) during a period of not more than 120 days or less
22than 60 days, commencing no sooner than the effective date of the
23formal action of the employer that shall specify the period.

24(2) The documentation required by this section is received by
25the system no later than 30 calendar days after the last day of the
26window period established in paragraph (1).

27(3) (A) The employer transfers to the retirement fund an amount
28determined by the Teachers’ Retirement Board to equal the
29actuarial equivalent of the difference between the allowance the
30member receives after receipt of service credit pursuant to this
31section and the amount the member would have received without
32the service credit and an amount determined by the Teachers’
33Retirement Board to equal the actuarial equivalent of the difference
34between the purchasing power protection supplemental payment
35the member receives after receipt of service credit pursuant to this
36section and the amount the member would have received without
37the service credit. The payment for purchasing power shall be
38deposited in the Supplemental Benefit Maintenance Account
39established by Section 22400 and shall be subject to Section 24415.
40The transfer to the retirement fund shall be made in a manner and
P15   1a time period, not to exceed eight years, that is acceptable to the
2Teachers’ Retirement Board. The employer shall transfer the
3required amount for all eligible employees who retire pursuant to
4this section.

5(B) Regular interest shall be charged on the unpaid balance if
6the employer makes the transfer to the retirement fund in
7installments.

8(4) The employer transmits to the retirement fund the
9administrative costs incurred by the system in implementing this
10section, as determined by the Teachers’ Retirement Board.

11(5) The employer has considered the availability of teachers or
12academic employees to fill the positions that would be vacated
13pursuant to this section.

14(b) (1) The school district shall demonstrate and certify to the
15county superintendent that the formal action taken would result in
16a net savings to the district.

17(2) The county superintendent shall certify to the Teachers’
18Retirement Board that the result specified in paragraph (1) can be
19demonstrated. The certification shall include, but not be limited
20to, the information specified in subdivision (c) of Section 14502.1.

21(3) The school district shall reimburse the county superintendent
22for all costs to the county superintendent that result from the
23certification.

24(c) (1) The county office of education shall demonstrate and
25certify to the Superintendent of Public Instruction that the formal
26action taken would result in a net savings to the county office of
27education.

28(2) The Superintendent of Public Instruction shall certify to the
29Teachers’ Retirement Board that the result specified in paragraph
30(1) can be demonstrated. The certification shall include, but not
31be limited to, the information specified in subdivision (c) of Section
3214502.1.

33(3) The Superintendent of Public Instruction may request
34reimbursement from the county office of education for all
35administrative costs that result from the certification.

36(d) (1) The community college district shall demonstrate and
37certify to the chancellor’s office that the formal action taken would
38result in a net savings to the district.

39(2) The chancellor shall certify to the Teachers’ Retirement
40Board that the result specified in paragraph (1) can be
P16   1demonstrated. The certification shall include, but not be limited
2to, the information specified in subdivision (c) of Section 84040.5.

3(3) The chancellor may request reimbursement from the
4community college district for all administrative costs that result
5from the certification.

6(e) The opportunity to be granted service credit pursuant to this
7section shall be available to all members employed by the school
8district, community college district, or county office of education
9who meet the conditions set forth in this section.

10(f) The amount of service credit shall be two years.

11(g) Any member of the Defined Benefit Program who retires
12under this part for service under Chapter 27 (commencing with
13Section 24201) with service credit granted under this section and
14who subsequently reinstates shall forfeit the service credit granted
15under this section.

16(h) Any member of the Defined Benefit Program who retires
17under this part for service under Chapter 27 (commencing with
18Section 24201) with service credit granted under this section and
19who takes any job with the school district, community college
20district, or county office of education that granted the member the
21service credit less than five years after receiving the credit shall
22forfeit the ongoing benefit he or she receives from the additional
23service credit granted under this section.

24(i) This section does not apply to any member otherwise eligible
25if the member receives any unemployment insurance payments
26arising out of employment with an employer subject to this part
27within one year following the effective date of the formal action
28under subdivision (a), or if the member is not otherwise eligible
29to retire for service.

30begin insert

begin insertSEC. 12.end insert  

end insert

begin insertSection 22717 of the end insertbegin insertEducation Codeend insertbegin insert is amended to
31read:end insert

32

22717.  

(a) A member shall be granted credit at service
33retirement for each day of accumulated and unused sick leave days
34for which full salary is allowed to which the member was entitled
35on the member’s final day of employment with the employer or
36employers subject to coverage by the Defined Benefit Program
37during the last school year in which he or shebegin delete performed creditable
38service.end delete
begin insert earned creditable compensation pursuant to Section
3922119.2 or 22119.3.end insert
The system shall accept certification from
40each employer with which the member has accumulated sick leave
P17   1days for that period, provided this leave has not been transferred
2to another employer.

3(b) The amount of service credit to be granted shall be
4determined by dividing the number of days of accumulated and
5unused sick leave days by the number of days of service the
6employer requires the member’s class of employees to perform in
7a school year during the member’s final year of creditable service
8subject to coverage by the Defined Benefit Program, which shall
9not be less than the minimum standard specified in Section
1022138.5. The number of days shall not include school and legal
11holidays. In no event shall the divisor be less than 175. For
12members employed less than full time, the standards identified in
13Section 22138.5 shall be considered as the minimum full-time
14equivalent. For those standards identified in Section 22138.5 that
15are applicable to teachers or instructors and that are expressed only
16in terms of hours or instructional hours, the number of hours or
17instructional hours shall be divided by six to determine the number
18of days.

19(c) When the member has made application for service
20retirement under this part, the employer shall certify to the board,
21within 30 days following the effective date of the member’s service
22retirement or the date the application for retirement is received by
23the system’s headquarters office, whichever is later, the number
24of days of accumulated and unused sick leave days that the member
25was entitled to on the final day of employment. The board may
26assess a penalty on delinquent reports.

27(d) This section shall be applicable to any person who retires
28on or after January 1, 1999.

29

begin deleteSEC. 7.end delete
30begin insertSEC. 13.end insert  

Section 22900 of the Education Code is amended to
31read:

32

22900.  

By accepting employment to perform creditable service,
33a person consents to make contributions pursuant to Sections 22901
34and 22901.7 for service and compensation credited under this part.

35

begin deleteSEC. 8.end delete
36begin insertSEC. 14.end insert  

Section 22903 of the Education Code is amended to
37read:

38

22903.  

Notwithstanding Sections 22901, 22901.3, 22901.7,
3922956, and 23000, the state and each school district, community
40college district, county board of education, and county
P18   1superintendent of schools, may pick up, for the sole purpose of
2deferring taxes, as authorized by Section 414(h)(2) of the Internal
3Revenue Code of 1986 (26begin delete U.S.C.A.end deletebegin insert U.S.C.end insert Sec. 414(h)(2)) and
4Section 17501 of the Revenue and Taxation Code, all of the
5contributions required to be paid under this part by a member of
6the Defined Benefit Program, provided that the contributions are
7deducted from the creditable compensation of the member.

8

begin deleteSEC. 9.end delete
9begin insertSEC. 15.end insert  

Section 22950 of the Education Code is amended to
10read:

11

22950.  

(a) Employers shall contribute monthly to the system
128 percent of the creditable compensation upon which members’
13contributions under this part are based.

14(b) From the contributions required under subdivision (a), there
15shall be deposited in the Teachers’ Retirement Fund an amount,
16determined by the board, that is not less than the amount,
17determined in an actuarial valuation of the Defined Benefit
18Program pursuant to Section 22311.5, necessary to finance the
19liabilities associated with the benefits of the Defined Benefit
20Program over the funding period adopted by the board, after taking
21into account the contributions made pursuant to Sections 22901,
2222901.7, 22950.5, 22951, 22955, and 22955.1.

23(c) The amount of contributions required under subdivision (a)
24that is not deposited in the Teachers’ Retirement Fund pursuant
25to subdivision (b) shall be deposited directly into the Teachers’
26Health Benefits Fund, as established in Section 25930, and shall
27not be deposited into or transferred from the Teachers’ Retirement
28Fund.

29(d) (1) Notwithstanding subdivisions (b) and (c), there may be
30deposited into the Teachers’ Retirement Program Development
31Fund, as established in Section 22307.5, from the contributions
32required under subdivision (a), an amount determined by the board,
33not to exceed the limit specified in paragraph (2).

34(2) The balance of deposits into the Teachers’ Retirement
35Program Development Fund, minus the subsequent transfer of
36funds, with interest, into the Teachers’ Retirement Fund pursuant
37to subdivision (e) of Section 22307.5, shall not exceed 0.01 percent
38of the total of the creditable compensation of the fiscal year ending
39in the immediately preceding calendar year upon which member’s
40contributions to the Defined Benefit Program are based.

P19   1(3) The deposits described in this subdivision shall not be
2deposited into, or transferred from, the Teachers’ Retirement Fund.

3

begin deleteSEC. 10.end delete
4begin insertSEC. 16.end insert  

Section 23001 of the Education Code is amended to
5read:

6

23001.  

Each county superintendent, district superintendent,
7chancellor of a community college district, or other employing
8agency that reports directly to the system shall draw requisitions
9for contributions required by Sections 22901, 22901.7, 22950, and
1022950.5 in favor of the State Teachers’ Retirement System, and
11the requisitions, when allowed and signed by the county auditor,
12shall constitute a warrant against the county treasury. The county
13superintendent, district superintendent, chancellor of a community
14college district, or other employing agency thereupon shall forward
15the warrants to the board in the system’s headquarters office. The
16amounts received shall be deposited immediately in the State
17Treasury to the Teachers’ Retirement Fund.

18

begin deleteSEC. 11.end delete
19begin insertSEC. 17.end insert  

Section 24114 of the Education Code is amended to
20read:

21

24114.  

(a) A member receiving a disability retirement benefit
22under this part may be employed or self-employed in any capacity,
23notwithstanding Section 22132, but may not make contributions
24to the retirement fund with respect to the Defined Benefit Program
25or accrue service credit under this part based on earnings from any
26employment.

27(b) A member receiving a disability retirement benefit under
28this part may earn in any one calendar year up to the limitation
29specified in subdivision (c) without a reduction in his or her
30disability retirement allowance.

31(c) The limitation that shall apply to the earnings of a member
32receiving a disability retirement benefit under this part shall be
33fifteen thousand dollars ($15,000), in any one calendar year,
34adjusted annually by the board effective each January 1 by the
35amount of increase in the All Urban California Consumer Price
36Index using December 1989 as the base.

37(d) If a member receiving a disability retirement benefit under
38this part earns in excess of the limitation specified in subdivision
39(c) from all employment in any calendar year, notwithstanding
40Section 22132, his or her retirement allowance shall be reduced
P20   1by the amount of the excess earnings. The amount of the reduction
2in an individual month shall be no more than the monthly
3allowance payable in that month, and the total amount of the
4reduction shall not exceed the amount of the annual allowance
5payable under this part for the calendar year in which the excess
6compensation was earned.

7(e) The earnings limitation specified in this section does not
8apply to a member receiving a disability retirement benefit under
9this part who is participating in an approved rehabilitation program
10pursuant to Section 24111.

11(f) This section does not apply to a member receiving a disability
12retirement benefit under this part who began receiving a disability
13retirement allowance prior to October 16, 1992.

14begin insert

begin insertSEC. 18.end insert  

end insert

begin insertSection 24209 of the end insertbegin insertEducation Codeend insertbegin insert is amended to
15read:end insert

16

24209.  

(a) Upon retirement for service following reinstatement,
17the member shall receive a service retirement allowance equal to
18the sum of both of the following:

19(1) An amount equal to the monthly allowance the member was
20eligible to receive immediately precedingbegin insert the most recentend insert
21 reinstatement, exclusive of any amounts payable pursuant to
22Section 22714 or 22715, increased by the improvement factor that
23would have been applied to the allowance if the member had not
24reinstated.

25(2) An amount calculated pursuant to Section 24202, 24202.5,
2624202.6, 24203, 24203.5, or 24206begin delete on service creditedend deletebegin insert based on
27credited service accrued, including any service granted pursuant
28to Section 22717 or 22717.5,end insert
subsequent to the most recent
29reinstatement, the member’s agebegin delete at retirement,end deletebegin insert on the last day of
30the month in which the retirement allowance begins to accrue,end insert
and
31final compensation.

32(b) If the total amount of creditedbegin delete service,end deletebegin insert service accrued,end insert other
33than that accrued pursuant to Sections 22714, 22715, 22717,
3422717.5, and 22826, is equal to or greater than 30 years, the
35amounts identified in paragraphs (1), for members who initially
36retired on or after January 1, 1999, and (2) of subdivision (a) shall
37be calculated pursuant to Section 24203.5.

38(c) If the total amount of creditedbegin delete service,end deletebegin insert service accrued,end insert other
39than that accrued pursuant to Sections 22714, 22715, 22717,
4022717.5, and 22826, is equal to or greater than 30 years, upon
P21   1retirement for service following reinstatement, a member who
2retired pursuant to Section 24213, and received the terminated
3disability allowance for the prior retirement, shall receive a service
4retirement allowance equal to the sum of the following:

5(1) An amount based on thebegin delete service credit accruedend deletebegin insert credited
6service accrued, including any service granted pursuant to Section
722717 or 22717.5,end insert
prior to the effective date of the disability
8allowance, the member’s age at the prior retirement increased by
9the factor provided in Section 24203.5, and projected final
10compensation.

11(2) An amount calculated pursuant to Section 24202, 24202.5,
1224202.6, 24203.5, or 24206begin delete on service creditedend deletebegin insert based on credited
13service accrued, including any service granted pursuant to Section
1422717 or 22717.5,end insert
subsequent to the reinstatement, the member’s
15agebegin delete at retirement,end deletebegin insert on the last day of the month in which the
16retirement allowance begins to accrue,end insert
and finalbegin delete compensation.end delete
17begin insert compensation using compensation earnable, or projected final
18compensation, or a combination of both.end insert

19(d) For purposes of this section, final compensation shall not
20be based on a determination of compensation earnable as described
21in subdivision (e) of Section 22115.

22begin insert

begin insertSEC. 19.end insert  

end insert

begin insertSection 24209.3 of the end insertbegin insertEducation Codeend insertbegin insert is amended
23to read:end insert

24

24209.3.  

(a) Notwithstanding subdivision (a) of Section 24209,
25and exclusive of any amounts payable during the prior retirement
26for service pursuant to Section 22714, or 22715:

27(1) A member who retired, other than pursuant to Section 24210,
2824211, 24212, or 24213, and who reinstates and performs creditable
29service, as defined in Section 22119.5, after the most recent
30reinstatement, in an amount equal to two or more years of credited
31service, shall, upon retirement for service on or after the effective
32date of this section, receive a service retirement allowance equal
33to the sum of the following:

34(A) An amount calculated pursuant to this chapter based on
35credited servicebegin delete performedend deletebegin insert accrued, including any service granted
36pursuant to Section 22717 or 22717.5,end insert
prior to the most recent
37reinstatement, using the member’s age at the subsequent service
38retirement, from which age shall be deducted the total time during
39which the member was retired for service, and final compensation.

P22   1(B) An amount calculated pursuant to this chapter based on
2credited servicebegin delete performedend deletebegin insert accrued, including any service granted
3pursuant to Section 22717 or 22717.5,end insert
subsequent to the most
4recent reinstatement, using the member’s agebegin delete at the subsequent
5service retirement,end delete
begin insert on the last day of the month in which the
6retirement allowance begins to accrue,end insert
and final compensation.

7(2) A member who retired pursuant to Section 24210 and who
8reinstates and performs creditable service, as defined in Section
922119.5, after the most recent reinstatement, in an amount equal
10to two or more years of credited service, shall, upon retirement for
11service on or after the effective date of this section, receive a
12service retirement allowance equal to the sum of the following:

13(A) An amount calculated pursuant to this chapter based on
14begin delete service credit accruedend deletebegin insert credited service accrued, including any
15service granted pursuant to Section 22717 or 22717.5,end insert
prior to the
16effective date of the disability retirement, using the member’s age
17at the subsequent service retirement, from which age shall be
18deducted the total time during which the member was retired for
19service, and indexed final compensation to the effective date of
20the initial service retirement.

21(B) An amount calculated pursuant to this chapter based on the
22begin delete service credit accruedend deletebegin insert credited service accrued, including any
23service granted pursuant to Section 22717 or 22717.5,end insert
after
24termination of the disability retirement,begin insert excluding credited service
25accrued or granted subsequent to the most recent reinstatement,end insert

26 using the member’s age at the subsequent service retirement, from
27which age shall be deducted the total time during which the
28member was retired for service, and final compensation.

29(C) An amount calculated pursuant to this chapter based on
30credited servicebegin delete performedend deletebegin insert accrued, including any service granted
31pursuant to Section 22717 or 22717.5,end insert
subsequent to the most
32recent reinstatement, using the member’s agebegin delete at the subsequent
33service retirement,end delete
begin insert on the last day of the month in which the
34retirement allowance begins to accrue,end insert
and final compensation.

35(3) A member who retired pursuant to Section 24211 and who
36reinstates and performs creditable service, as defined in Section
3722119.5, after the most recent reinstatement, in an amount equal
38to two or more years of credited service, shall, upon retirement for
39service on or after the effective date of this section, receive a
40service retirement allowance equal to the sum of the following:

P23   1(A) The greater of (i) the disability allowance the member was
2begin delete receivingend deletebegin insert eligible to receiveend insert immediately prior to termination of
3that allowance, excluding the children’s portion, or (ii) an amount
4calculated pursuant to this chapter based onbegin insert creditedend insert servicebegin delete creditend delete
5 accrued prior to the effective date of the disability allowance,
6begin insert excluding credited service accrued or granted pursuant to Section
722717 or 22717.5 or Chapter 14 (commencing with Section 22800)
8or Chapter 14.2 (commencing with Section 22820) or Chapter 19
9(commencing with Section 23200),end insert
using the member’s age at the
10subsequent service retirement, from which age shall be deducted
11the total time during which the member was retired for service,
12and final compensation using compensationbegin delete earnableend deletebegin insert earnable,end insert or
13projected final compensationbegin insert earnable,end insert or a combination of both.

14(B) An amount equal to either of the following:

15(i) For a member who was receiving a benefit pursuant to
16subdivision (a) of Section 24211,begin delete the member’s credited serviceend delete
17begin insert an amount calculated pursuant to this chapter based on credited
18service accruedend insert
at the time of the retirement pursuant to Section
1924211, excludingbegin delete serviceend delete creditedbegin insert service accrued or granted prior
20to the effective date of the disability allowance orend insert
pursuant to
21Section 22717 or 22717.5 or Chapter 14 (commencing with Section
2222800) or Chapter 14.2 (commencing with Section 22820) or
23Chapter 19 (commencing with Sectionbegin delete 23200).end deletebegin insert 23200), the
24member’s age at the subsequent service retirement, from which
25age shall be deducted the total time during which the member was
26retired for service, and final compensation using compensation
27earnable, or projected final compensation, or a combination of
28both.end insert

29(ii) For a member who was receiving a benefit pursuant to
30subdivision (b) of Section 24211,begin delete the member’s projected service,
31excluding service creditedend delete
begin insert an amount calculated pursuant to this
32chapter based on projected service at the time of the retirement
33pursuant to Section 24211, excluding credited serviceend insert
begin insert accrued or
34granted prior to the effective date of the disability allowance orend insert

35 pursuant to Section 22717 or 22717.5 or Chapter 14 (commencing
36with Section 22800) or Chapter 14.2 (commencing with Section
3722820) or Chapter 19 (commencing with Sectionbegin delete 23200).end deletebegin insert 23200),
38the member’s age at the subsequent service retirement, from which
39age shall be deducted the total time during which the member was
40retired for service, and final compensation using compensation
P24   1earnable, or projected final compensation, or a combination of
2both.end insert

begin delete

3(C) An amount calculated pursuant to this chapter based on
4credited service performed subsequent to the most recent
5reinstatement, using the member’s age at the subsequent service
6retirement, and final compensation using compensation earnable
7or projected final compensation or a combination of both.

8(D) An amount based on any service credited pursuant to
9Chapter 14 (commencing with Section 22800) or Chapter 14.2
10(commencing with Section 22820) or Chapter 19 (commencing
11with Section 23200) or, for credited service performed during the
12most recent reinstatement, Section 22714, 22715, 22717, or
1322717.5, using the member’s age at the subsequent service
14retirement, from which age shall be deducted the total time during
15which the member was retired for service, and final compensation
16 using compensation earnable, or projected final compensation, or
17a combination of both.

end delete
begin insert

18(C) An amount based on any credited service accrued or granted
19pursuant to Section 22717 or 22717.5 or Chapter 14 (commencing
20with Section 22800) or Chapter 14.2 (commencing with Section
2122820) or Chapter 19 (commencing with Section 23200), at the
22time of the retirement pursuant to Section 24211, using the
23member’s age at the subsequent service retirement, from which
24age shall be deducted the total time during which the member was
25retired for service, and final compensation using compensation
26earnable, or projected final compensation, or a combination of
27both.

end insert
begin insert

28(D) An amount calculated pursuant to this chapter based on
29credited service accrued subsequent to the most recent
30reinstatement, including credited service accrued or granted
31pursuant to Section 22714, 22715, 22717, or 22717.5 or Chapter
3214 (commencing with Section 22800) or Chapter 14.2 (commencing
33with Section 22820) or Chapter 19 (commencing with Section
3423200), using the member’s age on the last day of the month in
35which the retirement allowance begins to accrue, and final
36compensation using compensation earnable, or projected final
37compensation, or a combination of both.

end insert

38(4) A member who retired pursuant to Section 24212 or 24213
39and who reinstates and performs creditable service, as defined in
40Section 22119.5, after the most recent reinstatement, in an amount
P25   1equal to two or more years of credited service, shall, upon
2retirement for service on or after the effective date of this section,
3receive a service retirement allowance equal to the sum of the
4following:

5(A) An amount calculated pursuant to this chapter based on the
6member’s projected servicebegin delete credit, excluding service credited
7pursuant to Section 22717, 22717.5,end delete
begin insert at the time of the retirement
8pursuant to Section 24212 or 24213, including credited service
9accrued or granted pursuant to Section 22717 or 22717.5end insert
or
10Chapter 14 (commencing with Section 22800) or Chapter 14.2
11(commencing with Section 22820) or Chapter 19 (commencing
12with Section 23200), using the member’s age at the subsequent
13service retirement, from which age shall be deducted the total time
14during which the member was retired for service, and final
15compensation using compensationbegin delete earnableend deletebegin insert earnable,end insert or projected
16finalbegin delete compensationend deletebegin insert compensation,end insert or a combination of both.

17(B) An amount calculated pursuant to this chapter based on
18credited servicebegin delete performed subsequent to the most recent
19reinstatement, using the member’s age at the subsequent service
20retirement, and final compensation, using compensation earnable
21or projected final compensation or a combination of both.end delete
begin insert accrued
22subsequent to the most recent reinstatement, including credited
23service accrued or granted pursuant to Section 22714, 22715,
2422717, or 22717.5 or Chapter 14 (commencing with Section 22800)
25or Chapter 14.2 (commencing with Section 22820) or Chapter 19
26(commencing with Section 23200), using the member’s age on the
27last day of the month in which the retirement allowance begins to
28accrue, and final compensation using compensation earnable, or
29projected final compensation, or a combination of both.end insert

begin delete

30(C) An amount based on any service credited pursuant to
31Chapter 14 (commencing with Section 22800) or Chapter 14.2
32(commencing with Section 22820) or Chapter 19 (commencing
33with Section 23200) or, for credited service performed during the
34most recent reinstatement, Section 22714, 22715, 22717, or
3522717.5, using the member’s age at the subsequent service
36retirement, from which age shall be deducted the total time during
37which the member was retired for service, and final compensation
38using compensation earnable, or projected final compensation, or
39a combination of both.

end delete

P26   1(b) If the total amount of credited service, other thanbegin insert projected
2service, or serviceend insert
that accruedbegin insert or was grantedend insert pursuant to Sections
322714, 22715, 22717, 22717.5, and 22826, is equal to or greater
4than the number of years required to be eligible for an increased
5allowance pursuant to this chapter or Section 22134.5, the amounts
6identified in this section shall be calculated pursuant to the section
7authorizing the increased benefit.

8(c) For members receiving an allowance pursuant to Section
924410.5 or 24410.6, the amount payable pursuant to this section
10shall not be less than the amount payable to the member as of the
11effective date of reinstatement.

12(d) The amount payable pursuant to this section shall not be
13less than the amount that would be payable to the member pursuant
14to Section 24209.

15(e) For purposes of determining an allowance increase pursuant
16to Sections 24415 and 24417, the calendar year of retirement shall
17be the year of the subsequent retirement if the final compensation
18used to calculate the allowance pursuant to this section is higher
19than the final compensation used to calculate the allowance for
20the prior retirement.

21(f) The allowance paid pursuant to this section to a member
22receiving a lump-sum payment pursuant to Section 24221 shall be
23actuarially reduced to reflect that lump-sum payment.

24(g) For purposes of this section, final compensation shall not
25be based on a determination of compensation earnable as described
26in subdivision (e) of Section 22115.

27begin insert

begin insertSEC. 20.end insert  

end insert

begin insertSection 24210 of the end insertbegin insertEducation Codeend insertbegin insert is amended to
28read:end insert

29

24210.  

Upon retirement for service following a prior disability
30retirement granted pursuant to Chapter 26 (commencing with
31Section 24100) that was terminated, the member shall receive a
32service retirement allowance calculated pursuant to Section 24202,
3324202.5, 24202.6, 24203, 24203.5, 24203.6, or 24206 and equal
34to the sum of both of the following:

35(a) An amount based onbegin delete service credit accruedend deletebegin insert credited service
36accrued, including any service granted pursuant to Section 22717
37or 22717.5,end insert
prior to the effective date of the disability retirement,
38the member’s agebegin delete as of the effective date of the service retirement,end delete
39begin insert on the last day of the month in which the retirement allowance
P27   1begins to accrue,end insert
and indexed final compensation to the effective
2date of the service retirement.

3(b) An amount based on thebegin delete service credit accruedend deletebegin insert credited
4service accrued, including any service granted pursuant to Section
522717 or 22717.5,end insert
after termination of the disability retirement,
6the member’s agebegin delete as of the effective date of service retirement,end deletebegin insert on
7the last day of the month in which the retirement allowance begins
8to accrue,end insert
and final compensation.

9begin insert

begin insertSEC. 21.end insert  

end insert

begin insertSection 24211 of the end insertbegin insertEducation Codeend insertbegin insert is amended to
10read:end insert

11

24211.  

When a member who has been granted a disability
12allowance under this part after June 30, 1972, returns to
13employment subject to coverage under the Defined Benefit
14Program and performs:

15(a) Less than three years of creditable service after termination
16of thebegin insert most recentend insert disability allowance, the member shall receive
17a retirement allowance which is the sum of the allowance calculated
18onbegin insert creditedend insert servicebegin delete creditend delete accrued after the termination date of the
19disability allowance, excludingbegin insert creditedend insert servicebegin delete creditedend deletebegin insert accrued
20or grantedend insert
pursuant tobegin delete Sectionsend deletebegin insert Sectionend insert 22717begin delete andend deletebegin insert orend insert 22717.5 or
21Chapter 14 (commencing with Section 22800) or Chapter 14.2
22(commencing with Section 22820) or Chapter 19 (commencing
23with Section 23200), the age of the member on the last day of the
24month in which the retirement allowance begins to accrue, and
25final compensation using compensation earnable or projected final
26 compensation, or a combination of both, plus the greater of either
27of the following:

28(1) A service retirement allowance calculated onbegin insert creditedend insert service
29begin delete creditend delete accrued as of the effective date of the disability allowance,
30excludingbegin insert creditedend insert servicebegin delete creditedend deletebegin insert accrued or grantedend insert pursuant
31tobegin delete Sectionsend deletebegin insert Sectionend insert 22717begin delete andend deletebegin insert orend insert 22717.5 or Chapter 14
32(commencing with Section 22800) or Chapter 14.2 (commencing
33with Section 22820) or Chapter 19 (commencing with Section
3423200), thebegin delete age of the memberend deletebegin insert member’s ageend insert on the last day of
35the month in which the retirement allowance begins to accrue, and
36projected final compensation to the termination date of the
37disability allowance.

38(2) The disability allowance the member was eligible to receive
39immediately prior to termination ofbegin delete thatend deletebegin insert the most recent disabilityend insert
40 allowance, excluding children’s portions.

P28   1(b) Three or more years of creditable service after termination
2of thebegin insert most recentend insert disability allowance, the member shall receive
3a retirement allowance that is the greater of the following:

4(1) A service retirement allowance calculated on all actual and
5projectedbegin delete serviceend deletebegin insert service,end insert excludingbegin insert creditedend insert servicebegin delete creditedend delete
6begin insert accrued or grantedend insert pursuant tobegin delete Sectionsend deletebegin insert Section end insert 22717begin delete andend deletebegin insert orend insert
7 22717.5 or Chapter 14 (commencing with Section 22800) or
8Chapter 14.2 (commencing with Section 22820) or Chapter 19
9(commencing with Section 23200), thebegin delete age of the memberend delete
10begin insert member’s ageend insert on the last day of the month in which the retirement
11allowance begins to accrue, and final compensation using
12compensation earnable, or projected final compensation, or a
13combination of both.

14(2) The disability allowance the member wasbegin delete receivingend deletebegin insert eligible
15to receiveend insert
immediately prior to termination ofbegin delete thatend deletebegin insert the most recent
16disabilityend insert
allowance, excluding children’s portions.

17(c) The allowance shall be increased by an amount based on
18anybegin insert creditedend insert servicebegin delete creditedend deletebegin insert accrued or grantedend insert pursuant to
19begin delete Sectionsend deletebegin insert Sectionend insert 22714, 22715, 22717,begin delete andend deletebegin insert orend insert 22717.5 or Chapter
2014 (commencing with Section 22800) or Chapter 14.2
21(commencing with Section 22820) or Chapter 19 (commencing
22with Section 23200),begin insert the member’s age on the last day of the month
23in which the retirement allowance begins to accrue,end insert
and final
24compensation using compensation earnable, or projected final
25compensation, or a combination of both.

26(d) If the total amount of credited service, other than projected
27service orbegin insert creditedend insert service that accruedbegin insert or was grantedend insert pursuant
28to Sections 22714, 22715, 22717, 22717.5, and 22826, is equal to
29or greater than 30 years, the amounts identified in subdivisionsbegin delete (a)
30and (b)end delete
begin insert (a) to (c), inclusive,end insert shall be calculated pursuant to Sections
3124203.5 and 24203.6.

32(e) For purposes of this section, final compensation shall not
33be based on a determination of compensation earnable as described
34in subdivision (e) of Section 22115.

35(f) Upon retirement, the member may elect to modify the service
36retirement allowance payable in accordance with any option
37provided under this part.

38begin insert

begin insertSEC. 22.end insert  

end insert

begin insertSection 24212 of the end insertbegin insertEducation Codeend insertbegin insert is amended to
39read:end insert

P29   1

24212.  

(a) If a disability allowance granted under this part
2after June 30, 1972, is terminated for reasons other than those
3specified in Section 24213 and the member does not return to
4employment subject to coverage under the Defined Benefit
5Program, the member’s service retirement allowance, when
6payable, shall be based on projected service, excludingbegin insert creditedend insert
7 servicebegin delete creditedend deletebegin insert accrued or grantedend insert pursuant tobegin delete Sectionsend deletebegin insert Sectionend insert
8 22717begin delete andend deletebegin insert orend insert 22717.5 or Chapter 14 (commencing with Section
922800) or Chapter 14.2 (commencing with Section 22820), or
10Chapter 19 (commencing with Section 23200), projected final
11compensation, and thebegin delete age of the memberend deletebegin insert member’s ageend insert on the
12last day of the month in which the retirement allowance begins to
13accrue. The allowance payable under this section, excluding
14annuities payable from accumulated annuity deposit contributions,
15shall not be greater than thebegin delete terminatedend delete disability allowancebegin insert the
16member was eligible to receive immediately prior to the earlier of
17the termination of that allowance or at normal retirement age,end insert

18 excluding children’s portions.

19(b) The allowance shall be increased by an amount based on
20anybegin insert creditedend insert servicebegin delete creditedend deletebegin insert accrued or grantedend insert pursuant to
21begin delete Sections 22714, 22715, 22717, andend deletebegin insert Section 22717 orend insert 22717.5 or
22Chapter 14 (commencing with Section 22800) or Chapter 14.2
23(commencing with Section 22820) or Chapter 19 (commencing
24with Sectionbegin delete 23200)end deletebegin insert 23200), the member’s age on the last day of
25the month in which the retirement allowance begins to accrue,end insert
and
26final compensation using compensation earnable, or projected final
27compensation, or a combination of both.

28(c) If the total amount of credited service, other than projected
29service orbegin insert creditedend insert service that accruedbegin insert or was grantedend insert pursuant
30to Sectionsbegin delete 22714, 22715,end delete 22717, 22717.5, and 22826, is equal to
31or greater than 30 years, the amounts identified in subdivisions (a)
32and (b) shall be calculated pursuant to Sections 24203.5 and
3324203.6.

34(d) Upon retirement, the member may elect to modify the service
35retirement allowance payable in accordance with any option
36provided under this part.

37begin insert

begin insertSEC. 23.end insert  

end insert

begin insertSection 24213 of the end insertbegin insertEducation Codeend insertbegin insert is amended to
38read:end insert

39

24213.  

(a) When a member who has been granted a disability
40allowance under this part after June 30, 1972, attains normal
P30   1retirement age, or at a later date when there is no dependent child,
2the disability allowance shall be terminated and the member shall
3be eligible for service retirement. The retirement allowance shall
4be calculated on the projected final compensation and projected
5service to normal retirement age, excludingbegin insert creditedend insert service
6begin delete creditedend deletebegin insert accrued or grantedend insert pursuant tobegin delete Sectionsend deletebegin insert Sectionend insert 22717
7begin delete and 22717.5,end deletebegin insert or 22717.5end insert or Chapter 14 (commencing with Section
822800) or Chapter 14.2 (commencing with Sectionbegin delete 22820),end deletebegin insert 22820)end insert
9 or Chapter 19 (commencing with Section 23200), and thebegin delete age of
10the memberend delete
begin insert member’s ageend insert on the last day of the month in which
11the retirement allowance begins to accrue. The allowance payable
12under this section, excluding annuities payable from accumulated
13annuity deposit contributions, shall not be greater than the
14begin delete terminatedend delete disabilitybegin delete allowance,end deletebegin insert allowance the member was eligible
15to receive immediately prior toend insert
begin insert normal retirement age,end insert excluding
16children’s portions.

17(b) The allowance shall be increased by an amount based on
18anybegin insert creditedend insert servicebegin delete creditedend deletebegin insert accrued or grantedend insert pursuant to
19Sectionbegin delete 22714, 22715, 22717, or 22717.5,end deletebegin insert 22717 or 22717.5end insert or
20Chapter 14 (commencing with Sectionbegin delete 22800),end deletebegin insert 22800) orend insert Chapter
2114.2 (commencing with Sectionbegin delete 22820),end deletebegin insert 22820)end insert or Chapter 19
22(commencing with Sectionbegin delete 23200)end deletebegin insert 23200), the member’s age on
23the last day of the month in which the retirement allowance begins
24to accrue,end insert
and projected final compensation to normal retirement
25age.

26(c) If the total amount of creditedbegin delete service,end deletebegin insert service accrued,end insert other
27than projected service orbegin insert creditedend insert service that accruedbegin insert or was
28grantedend insert
pursuant to Sectionsbegin delete 22714, 22715,end delete 22717, 22717.5, and
2922826, is equal to or greater than 30 years, the amounts identified
30in subdivisions (a) and (b) shall be calculated pursuant to Sections
3124203.5 and 24203.6.

32(d) Upon retirement, the member may elect to modify the service
33retirement allowance payable in accordance with any option
34provided under this part.

35

begin deleteSEC. 12.end delete
36begin insertSEC. 24.end insert  

Section 24214 of the Education Code, as amended
37by Section 21 of Chapter 32 of the Statutes of 2014, is amended
38to read:

39

24214.  

(a) A member retired for service under this part may
40perform retired member activities, but the member shall not make
P31   1contributions to the retirement fund or accrue service credit based
2on compensation earned from that service. The employer shall
3maintain accurate records of the earnings of the retired member
4and report those earnings monthly to the system and retired member
5as described in Section 22461.

6(b) If a member is retired for service under this part, the
7annualized rate of pay for retired member activities, performed by
8that member shall not be less than the minimum, nor exceed the
9maximum, paid by the employer to other employees performing
10comparable duties.

11(c) A member retired for service under this part shall not be
12required to reinstate for performing retired member activities.

13(d) A member retired for service under this part may earn
14compensation for performing retired member activities in any one
15school year up to the limitation specified in subdivision (f) without
16a reduction in his or her retirement allowance.

17(e) The postretirement compensation limitation provisions set
18forth in this section are not applicable to compensation earned for
19the performance of retired member activities that are not wholly
20or in part supported by state, local, or federal funds.

21(f) (1) The limitation that shall apply to the compensation paid
22in cash to the retired member for performance of retired member
23activities, excluding reimbursements paid by an employer for
24expenses incurred by the member in which payment of the expenses
25by the member is substantiated, shall, in any one school year, be
26an amount calculated by the system each July 1 equal to one-half
27of the median final compensation of all members who retired for
28service during the fiscal year ending in the previous calendar year.

29(2) For written agreements pertaining to the performance of
30retired member activities entered into, extended, renewed, or
31amended on or after January 1, 2014, the limitation in paragraph
32(1) shall also apply to payments made for the performance of retired
33member activities, including, but not limited to, those for
34participation in a deferred compensation plan; to purchase an
35annuity contract, tax-deferred retirement plan, or insurance
36program; and for contributions to a plan that meets the requirements
37of Section 125, 401(a), 401(k), 403(b), 457(b), or 457(f) of Title
3826 of the United States Code when the cost is covered by an
39employer.

P32   1(g) If a member retired for service under this part earns
2compensation for performing retired member activities, in excess
3of the limitation specified in subdivision (f), and if that
4compensation is not exempt from that limitation under subdivision
5(e) or (h) or any other law, the member’s retirement allowance
6shall be reduced by the amount of the excess compensation. The
7amount of the reduction in an individual month shall be no more
8than the monthly allowance payable in that month, and the total
9amount of the reduction shall not exceed the amount of the annual
10allowance payable under this part for the fiscal year in which the
11excess compensation was earned after any reduction made in
12accordance with subdivision (h) of Section 24214.5.

13(h) The limitation specified in this section is not applicable to
14compensation paid to a member retired for service under this part
15who has returned to work after the date of retirement:

16(1) As a trustee appointed by the Superintendent pursuant to
17Section 41320.1.

18(2) As a fiscal adviser or fiscal expert appointed by a county
19superintendent of schools pursuant to Article 2 (commencing with
20Section 42122) of Chapter 6 of Part 24 of Division 3 of Title 2.

21(3) As a receiver or trustee appointed by the state board pursuant
22to Article 3.1 (commencing with Section 52055.57) of Chapter
236.1 of Part 28 of Division 4 of Title 2.

24(4) As a special trustee appointed by the Board of Governors
25of the California Community Colleges pursuant to Section 84040.

26(i) The Superintendent, the Executive Director of the State Board
27of Education, the Chancellor of the California Community
28Colleges, or the county superintendent of schools exercising the
29exemption pursuant to subdivision (h) shall submit all
30documentation required by the system to substantiate the eligibility
31of the retired member for the exemption, including compliance
32with subdivisions (j) and (k). The documentation shall be received
33by the system prior to the retired member’s performance of retired
34member activities.

35(j) Subdivision (h) shall not apply to a retired member who has
36not attained normal retirement age at the time the compensation
37is earned by the member, received additional service credit pursuant
38to Section 22714 or 22715, or received from any public employer
39any financial inducement to retire in the previous six months. For
40purposes of this section and Section 24214.5, “financial inducement
P33   1to retire” includes, but is not limited to, any form of compensation
2or other payment that is paid directly or indirectly by a public
3employer to the member, even if not in cash, either before or after
4retirement, if the member retires for service on or before a specific
5date or specific range of dates established by the public employer
6on or before the date the inducement is offered. The system shall
7liberally interpret this subdivision to further the Legislature’s intent
8to make subdivision (h) inapplicable to members if the member
9received a financial incentive from any public employer to retire
10or otherwise terminate employment with the public employer.

11(k) The documentation required for subdivision (i) shall include
12certification of the following:

13(1) The position was first advertised for appointment to current
14active or inactive members of the program with the necessary
15qualifications to perform the requirements of the position and no
16qualified current active or inactive member was available to be
17 appointed.

18(2) The appointing authority made a good faith effort to hire a
19retired member who reinstated to active membership for the
20position at the same salary that was offered as first advertised
21pursuant to paragraph (1).

22(3) The appointing authority, having tried and failed to hire a
23current active or inactive member or a reinstated retired member,
24hired a retired member and the salary offered to the retired member
25subject to this paragraph does not exceed the salary that was offered
26as first advertised pursuant to paragraph (1).

27(4) The salary paid shall be no greater than the salary offered
28to current active members for the appointed position.

29(l) The amendments to this section enacted during the 1995-96
30Regular Session shall be deemed to have become operative on July
311, 1996.

32(m) The amendments to this section enacted during the second
33year of the 2011-12 Regular Session shall apply to compensation
34paid during the 2012-13 and 2013-14 fiscal years.

35(n) The amendments to this section enacted during the first year
36of the 2013-14 Regular Session shall apply to compensation paid
37on or after January 1, 2014.

38(o) This section shall become inoperative on July 1, 2017, and,
39as of January 1, 2018, is repealed, unless a later enacted statute,
P34   1that becomes operative on or before January 1, 2018, deletes or
2extends the dates on which it becomes inoperative and is repealed.

3

begin deleteSEC. 13.end delete
4begin insertSEC. 25.end insert  

Section 24214 of the Education Code, as amended
5by Section 22 of Chapter 32 of the Statutes of 2014, is amended
6to read:

7

24214.  

(a) A member retired for service under this part may
8perform retired member activities, but the member shall not make
9contributions to the retirement fund or accrue service credit based
10on compensation earned from that service. The employer shall
11maintain accurate records of the earnings of the retired member
12and report those earnings monthly to the system and retired member
13as described in Section 22461.

14(b) If a member is retired for service under this part, the
15annualized rate of pay for retired member activities performed by
16that member shall not be less than the minimum, nor exceed the
17maximum, paid by the employer to other employees performing
18comparable duties.

19(c) A member retired for service under this part shall not be
20required to reinstate for performing retired member activities.

21(d) A member retired for service under this part may earn
22compensation for performing retired member activities in any one
23school year up to the limitation specified in subdivision (f) without
24a reduction in his or her retirement allowance.

25(e) The postretirement compensation limitation provisions set
26forth in this section are not applicable to compensation earned for
27the performance of retired member activities that are not wholly
28or in part supported by state, local, or federal funds.

29(f) (1) The limitation that shall apply to the compensation paid
30in cash to the retired member for performance of retired member
31activities, excluding reimbursements paid by an employer for
32expenses incurred by the member in which payment of the expenses
33by the member is substantiated, shall, in any one school year, be
34an amount calculated by the system each July 1 equal to one-half
35of the median final compensation of all members who retired for
36service during the fiscal year ending in the previous calendar year.

37(2) For written agreements pertaining to the performance of
38retired member activities entered into, extended, renewed, or
39amended on or after January 1, 2014, the limitation in paragraph
40(1) shall also apply to payments made for the performance of retired
P35   1member activities, including, but not limited to, those for
2participation in a deferred compensation plan; to purchase an
3annuity contract, tax-deferred retirement plan, or insurance
4program; and for contributions to a plan that meets the requirements
5of Section 125, 401(a), 401(k), 403(b), 457(b), or 457(f) of Title
626 of the United States Code when the cost is covered by an
7employer.

8(g) If a member retired for service under this part earns
9compensation for performing retired member activities, in excess
10of the limitation specified in subdivision (f), the member’s
11retirement allowance shall be reduced by the amount of the excess
12compensation. The amount of the reduction in an individual month
13shall be no more than the monthly allowance payable in that month,
14and the total amount of the reduction shall not exceed the amount
15of the annual allowance payable under this part for the fiscal year
16in which the excess compensation was earned after any reduction
17made in accordance with subdivision (h) of Section 24214.5.

18(h) The language of this section derived from the amendments
19to the section of this number added by Chapter 394 of the Statutes
20of 1995, enacted during the 1995-96 Regular Session, is deemed
21to have become operative on July 1, 1996.

22(i) This section shall become operative on July 1, 2017.

23

begin deleteSEC. 14.end delete
24begin insertSEC. 26.end insert  

Section 24214.5 of the Education Code is amended
25to read:

26

24214.5.  

(a) (1) Notwithstanding subdivision (f) of Section
2724214, the postretirement compensation limitation that shall apply
28to the compensation paid in cash to the retired member for
29performance of retired member activities, excluding
30reimbursements paid by an employer for expenses incurred by the
31member in which payment of the expenses by the member is
32substantiated, shall be zero dollars ($0) during the first 180 calendar
33days after the most recent retirement of a member retired for service
34under this part.

35(2) For written agreements pertaining to the performance of
36retired member activities entered into, extended, renewed, or
37amended on or after January 1, 2014, the limitation in paragraph
38(1) shall also apply to payments made for the performance of retired
39member activities, including, but not limited to, those for
40participation in a deferred compensation plan; to purchase an
P36   1annuity contract, tax-deferred retirement plan, or insurance
2program; and for contributions to a plan that meets the requirements
3of Section 125, 401(a), 401(k), 403(b), 457(b), or 457(f) of Title
426 of the United States Code when the cost is covered by an
5employer.

6(b) If the retired member has attained normal retirement age at
7the time the compensation is earned, subdivision (a) shall not apply
8and Section 24214 shall apply if the appointment has been
9approved by the governing body of the employer in a public
10meeting, as reflected in a resolution adopted by the governing body
11of the employer prior to the performance of retired member
12activities, expressing its intent to seek an exemption from the
13limitation specified in subdivision (a). Approval of the appointment
14may not be placed on a consent calendar. Notwithstanding any
15other provision of Article 3.5 (commencing with Section 6250) of
16Division 7 of Title 1 of the Government Code or any state or
17federal law incorporated by subdivision (k) of Section 6254 of the
18Government Code, the resolution shall be subject to disclosure by
19the entity adopting the resolution and the system. The resolution
20shall include the following specific information and findings:

21(1) The nature of the employment.

22(2) A finding that the appointment is necessary to fill a critically
23needed position before 180 calendar days have passed.

24(3) A finding that the member is not ineligible for application
25of this subdivision pursuant to subdivision (d).

26(4) A finding that the termination of employment of the retired
27member with the employer is not the basis for the need to acquire
28the services of the member.

29(c) Subdivision (b) shall not apply to a retired member whose
30termination of employment with the employer is the basis for the
31need to acquire the services of the member.

32(d) Subdivision (b) shall not apply if the retired member received
33additional service credit pursuant to Section 22714 or 22715 or
34received from any public employer any financial inducement to
35retire. For purposes of this section, “financial inducement to retire”
36includes, but is not limited to, any form of compensation or other
37payment that is paid directly or indirectly by a public employer to
38the member, even if not in cash, either before or after retirement,
39if the participant retires for service on or before a specific date or
40specific range of dates established by a public employer on or
P37   1before the date the inducement is offered. The system shall liberally
2interpret this subdivision to further the Legislature’s intent to make
3subdivision (b) inapplicable to members if the member received
4a financial incentive from any public employer to retire or
5otherwise terminate employment with a public employer.

6(e) The Superintendent, the county superintendent of schools,
7or the chief executive officer of a community college shall submit
8all documentation required by the system to substantiate the
9eligibility of the retired member for application of subdivision (b),
10including, but not limited to, the resolution adopted pursuant to
11that subdivision.

12(f) The documentation required by this section shall be received
13by the system prior to the retired member’s performance of retired
14member activities.

15(g) Within 30 calendar days after the receipt of all
16documentation required by the system pursuant to this section, the
17system shall inform the entity seeking application of the exemption
18specified in subdivision (b), and the retired member whether the
19compensation paid to the member will be subject to the limitation
20specified in subdivision (a).

21(h) If a member retired for service under this part earns
22compensation for performing retired member activities in excess
23of the limitation specified in subdivision (a), the member’s
24retirement allowance shall be reduced by the amount of the excess
25compensation. The amount of the reduction in an individual month
26shall be no more than the monthly allowance payable in thatbegin delete monthend delete
27begin insert month,end insert and the total amount of the reduction shall not exceed the
28amount of the allowance payable during the first 180 calendar
29days, after a member retired for service under this part.

30(i) The amendments to this section enacted during the first year
31of the 2013-14 Regular Session shall apply to compensation paid
32on or after January 1, 2014.

33

begin deleteSEC. 15.end delete
34begin insertSEC. 27.end insert  

Section 26000 of the Education Code is amended to
35read:

36

26000.  

The Legislature hereby finds and declares that the State
37Teachers’ Retirement System Cash Balance Plan was created and
38established on July 1, 1996, to provide a retirement plan for persons
39employed by an employer offering the Cash Balance Plan,
40excluding a community college district, to perform creditable
P38   1service for less than 50 percent of the full-time equivalent for the
2position, or employed by a community college district offering the
3Cash Balance Plan to perform creditable service on a temporary
4basis pursuant to Section 87474, 87478, 87480, 87481, 87482, or
587482.5, or employed by an employer offering the Cash Balance
6Plan to perform creditable service as a substitute employee. The
7persons eligible for the Cash Balance Plan were excluded from
8mandatory membership in the State Teachers’ Retirement System
9 Defined Benefit Plan. Both plans are administered by the Teachers’
10Retirement Board. Because both plans were intended to provide
11for the retirement of teachers and other persons employed in
12connection with the public schools of this state and schools
13supported by this state, a merger of these two plans is now hereby
14made for the purpose of establishing a single retirement plan that
15shall be known and may be cited as the State Teachers’ Retirement
16Plan consisting of the different benefit programs set forth in this
17part and Part 13 (commencing with Section 22000). The plan shall
18be administered by the Teachers’ Retirement Board as set forth in
19this part and Part 13 (commencing with Section 22000). As a result
20of this merger, a Cash Balance Benefit Program will be provided
21under the State Teachers’ Retirement Plan and that program is set
22forth in this part.

23The governing board of a school district, community college
24district, or county office of education may, by formal action, elect
25to provide the benefits of the Cash Balance Benefit Program under
26this part for their employees.

27

begin deleteSEC. 16.end delete
28begin insertSEC. 28.end insert  

Section 26002.5 of the Education Code is amended
29to read:

30

26002.5.  

Except as excluded in subdivision (d) of Section
3126807.5 or subdivision (c) of Section 26906.5, a person who is the
32registered domestic partner of a member, as established pursuant
33to Section 297 or 299.2 of the Family Code, shall be treated in the
34same manner as a “spouse,” as defined in Section 26140.

35

begin deleteSEC. 17.end delete
36begin insertSEC. 29.end insert  

Section 26132 of the Education Code is amended to
37read:

38

26132.  

“Participant” means a person who has performed
39creditable service subject to coverage by the Cash Balance Benefit
40Program and who has contributions credited under the Cash
P39   1Balance Benefit Program or is receiving an annuity under the Cash
2Balance Benefit Program by reason of creditable service or has
3not yet met the conditions of subdivision (b) of Section 26806.

4begin insert

begin insertSEC. 30.end insert  

end insert

begin insertSection 26139.5 of the end insertbegin insertEducation Codeend insertbegin insert is amended
5to read:end insert

6

26139.5.  

(a) “Salary,” for participants subject to the California
7Public Employees’ Pension Reform Act of 2013, means
8remuneration paid each pay period in cash by an employer to a
9participant for creditable service performed in that position subject
10to coverage under the Cash Balance Benefit Program in accordance
11with a publicly available written contractual agreement, including,
12but not limited to, a salary schedule or employment agreement,
13based on years of training and years of experience as specified in
14Section 45028. Salary shall include:

15(1) Money paid for the participant’s absence from performance
16of creditable service as approved by an employer, except as
17provided in paragraph (5) of subdivision (b).

18(2) Employee contributions picked up by an employer pursuant
19to Section 26502.

20(3) Amounts deducted by an employer from the participant’s
21salary, including, but not limited to, deductions for participation
22in a deferred compensation plan; deductions for the purchase of
23an annuity contract, tax-deferred retirement plan, or other insurance
24program; and deductions for participation in a plan that meets the
25requirements of Section 125, 401(a), 401(k), 403(b), 457(b), or
26457(f) of Title 26 of the United States Code.

27(4) Any other payments the board determines by plan
28amendment to be “salary.”

29(b) “Salary” does not mean and shall not include:

30(1) Money paid for service that is not creditable service.

31(2) Money not paid each pay period in which creditable service
32is performed for that position.

33(3) Fringe benefits provided by an employer.

34(4) Expenses paid or reimbursed by an employer.

35(5) Money paid in exchange for the relinquishment of unused
36accumulated leave.

37(6) Severance pay, including lump-sum and installment
38payments, or money paid in excess of salary to a participant as
39compensatory damages or as a compromise settlement.

P40   1(7) Payments, including, but not limited to, those for
2participation in a deferred compensation plan; to purchase an
3annuity contract, tax-deferred retirement program, or other
4insurance program; and for participation in a plan that meets the
5requirements of Section 125, 401(a), 401(k), 403(b), 457(b), or
6457(f) of Title 26 of the United States Code that are purchased by
7an employer for a participant.

8(8) Any payments determined by the system to have been made
9by an employer to enhance a participant’s benefits under the plan.

10(9) Money paid to the participant in lieu of benefits provided
11to the participant by the employer or paid directly by the employer
12to a third party other than the system for the benefit of the
13participant.

14(10) Any one-time or ad hoc payments made to a participant.

15(11) Any employer-provided allowance, reimbursement, or
16payment, including, but not limited to, one made for housing,
17vehicle, or uniform.

18(12) Any bonus paid in addition to compensation described in
19subdivision (a).

20(13) Any other payments the board determines by plan
21amendment not to be “salary.”

22(c) (1) Salary in any fiscal year shall not exceed:

23(A)  One hundred twenty percent of the “contribution and benefit
24base,” as determined under Section 430(b) of the Social Security
25Act (42 U.S.C. Sec. 430(b)), on January 1, 2013, for a participant
26whose service is not included in the federal system.

27(B) One hundred percent of the “contribution and benefit base,”
28as determined under Section 430(b) of the Social Security Act (42
29U.S.C. Sec. 430(b)), on January 1, 2013, for a participant whose
30service is included in the federal system pursuant to any changes
31in state or federal law enacted on or after January 1, 2013.

32(2) The system shall adjust the limitbegin delete in paragraph (1)end delete based on
33the annual changes to the Consumer Price Index for All Urban
34Consumers: U.S. City Average, calculated by dividing the
35Consumer Price Index for All Urban Consumers: U.S. City
36Average for the month of February in the fiscal year preceding the
37adjustment by the Consumer Price Index for All Urban Consumers:
38U.S. City Average for the month of February of the previous year
39rounded to the nearest thousandth. Notwithstanding paragraph (1)
40of subdivision (d) of Section 7522.10 of the Government Code,
P41   1the adjustment shall be effective annually on July 1, beginning
2July 1, 2014.

3(3) The Legislature reserves the right to modify the requirements
4of this subdivision with regard to all participants subject to this
5subdivision, except that the Legislature may not modify these
6provisions in a manner that would result in a decrease in benefits
7accrued prior to the effective date of the modification.

8(d) Any employer or person who knowingly or willfully reports
9salary in a manner inconsistent with the provisions of subdivisions
10(a) or (b) may be subject to prosecution for fraud, theft, or
11embezzlement in accordance with provisions of the Penal Code.
12The system may establish procedures to ensure that salary reported
13by an employer is in compliance with this section.

14(e) For purposes of this section, remuneration shall be considered
15paid if distributed to any person in the same class of employees
16who meets the qualifications or requirements specified in a publicly
17available written contractual agreement, including, but not limited
18to, a collective bargaining agreement or an employment agreement,
19as a condition of receiving the remuneration.

20

begin deleteSEC. 18.end delete
21begin insertSEC. 31.end insert  

Section 26142.5 is added to the Education Code, to
22read:

23

26142.5.  

“System’s headquarters office” means the office
24building established as the permanent headquarters facility for the
25system, pursuant to Section 22375.

26

begin deleteSEC. 19.end delete
27begin insertSEC. 32.end insert  

Section 26400 of the Education Code is amended to
28read:

29

26400.  

(a) (1) A person employed on a part-time basis by an
30employer, excluding community college districts, to perform
31creditable service for less than 50 percent of each full-time position
32shall become a participant on the later of the first day that creditable
33service is performed for an employer that provides the Cash
34Balance Benefit Program or the effective date of the employer’s
35governing board’s action to provide the Cash Balance Benefit
36Program, provided that creditable service is not performed for the
37same employer with whom the person is subject to mandatory
38membership in the Defined Benefit Program, and that the person
39has not made an election pursuant to subdivision (d).

P42   1(2) If the participant’s basis of employment with an employer,
2excluding community college districts, that provides the Cash
3Balance Benefit Program changes to employment to perform
4creditable service for 50 percent or more of the full-time position
5during one school year with the same employer, creditable service
6performed for that employer shall no longer be covered under the
7Cash Balance Benefit Program as of the last day of the pay period
8in which the change in the participant’s basis of employment
9occurred. Creditable service performed for that employer shall be
10subject to coverage by the Defined Benefit Program as of the first
11day of the pay period following the change in the participant’s
12basis of employment.

13(b) (1) A person employed on a temporary basis pursuant to
14Section 87474, 87478, 87480, 87481, 87482, or 87482.5 by a
15community college district, who is not subject to mandatory
16membership in the Defined Benefit Program pursuant to Section
1722501,begin delete 22502end deletebegin insert 22502, 22503,end insert or 22504 for each position with the
18same employer, shall become a participant on the later of the first
19day that creditable service is performed for an employer that
20provides the Cash Balance Benefit Program or the effective date
21of the employer’s governing board’s action to provide the Cash
22Balance Benefit Program, provided that the person has not made
23an election pursuant to subdivision (d).

24(2) If the participant’s basis of employment with a community
25college district changes to employment that is subject to mandatory
26membership in the Defined Benefit Program pursuant to Section
2722501, 22502,begin insert 22503,end insert or 22504 during one school year with the
28same employer, creditable service performed for that employer
29shall no longer be covered under the Cash Balance Benefit Program
30as of the last day of the pay period in which the change in the
31participant’s basis of employment occurred. Creditable service
32performed for that employer shall be subject to coverage by the
33Defined Benefit Program as of the first day of the pay period
34following the change in the participant’s basis of employment.

35(c) (1) Any person employed to perform creditable service as
36a substitute employee for an employer shall become a participant
37on the later of the first day that creditable service is performed for
38an employer that provides the Cash Balance Benefit Program or
39the effective date of the employer’s governing board’s action to
40provide the Cash Balance Benefit Program, provided that creditable
P43   1service is not performed for the same employer with whom the
2person is subject to mandatory membership in the Defined Benefit
3Program, and that the person has not made an election pursuant to
4subdivision (d).

5(2) If the participant’s basis of employment as a substitute
6employee for an employer changes to employment that is subject
7to mandatory membership in the Defined Benefit Program pursuant
8to Section 22501, 22502,begin insert 22503,end insert or 22504 during one school year
9with the same employer, creditable service performed for that
10employer shall no longer be covered under the Cash Balance
11Benefit Program as of the last day of the pay period in which the
12change in the participant’s basis of employment occurred.
13Creditable service performed for that employer shall be subject to
14coverage under the Defined Benefit Program as of the first day of
15the pay period following the change in the participant’s basis of
16 employment.

17(d) If the employer’s governing board’s action to provide the
18Cash Balance Benefit Program gives employees the right to elect
19coverage under the federal Social Security Act or an alternative
20retirement plan offered by the employer in addition to the Cash
21Balance Benefit Program, the employee may elect within 60
22calendar days of the latest of the first day that creditable service
23is performed, the date of the employer’s governing board’s action
24to provide the Cash Balance Benefit Program, or the effective date
25of the employer’s governing board’s action to provide the Cash
26Balance Benefit Program to be covered by the federal Social
27Security Act or to participate in the alternative retirement plan in
28lieu of participating in the Cash Balance Benefit Program. An
29electionbegin delete mayend deletebegin insert shallend insert not preclude an employee from participating
30in the Cash Balance Benefit Program at a later date so long as the
31Cash Balance Benefit Program is provided by the employer and
32the employee is eligible to participate in the Cash Balance Benefit
33Program.

34(e) If subdivision (d) is applicable, the employer shall inform
35employees pursuant to subdivision (c) of Section 26300 of their
36right to make an election and the election shall be made on a
37properly executed form provided by the system and filed with the
38employer. The employer shall retain a copy of the employee’s
39signed election form and mail the original election form to the
40system’s headquarters office. The election shall become effective
P44   1on the later of the first day that creditable service is performed or
2the effective date of the employer’s governing board’s action to
3provide the Cash Balance Benefit Program.

4(f) If the governing board of an employer subsequently provides,
5in addition to the Cash Balance Benefit Program, federal Social
6Security Act coverage, a participant covered by the Cash Balance
7Benefit Program who is performing creditable service for that
8employer may elect to be covered by the federal Social Security
9Act in lieu of the Cash Balance Benefit Program. That participant’s
10election shall be made within 60 calendar days of the date the
11governing board acted to provide coverage under the federal Social
12Security Act or the effective date of the governing board’s action
13to provide federal Social Security Act coverage, whichever is later.
14An election under this subdivision may not preclude an employee
15from participating in the Cash Balance Benefit Program at a later
16date if the employee is eligible to participate in the Cash Balance
17Benefit Program and the employer provides the Cash Balance
18Benefit Program.

19(g) If the governing board of an employer provided federal
20Social Security Act coverage with an effective date prior to January
211, 2007, and the employer offered the Cash Balance Benefit
22Program as of the effective date of the governing board’s action
23to provide federal Social Security Act coverage, a participant who
24was performing creditable service for that employer may elect to
25be covered by the federal Social Security Act in lieu of the Cash
26Balance Benefit Program. The participant’s election shall be made
27on or after March 1, 2008, and on or before May 1, 2008. The
28election to participate in the federal Social Security Act shall be
29effective on July 1, 2008. An election under this subdivision may
30not preclude an employee from participating in the Cash Balance
31Benefit Program at a later date if the employee is eligible to
32participate in the Cash Balance Benefit Program and the employer
33provides the Cash Balance Benefit Program.

34(h) An election by an employee to terminate his or her
35participation in the Cash Balance Benefit Program as described in
36subdivision (f) or (g) shall be made on a properly executed form
37provided by the system and filed with the employer. The employer
38shall retain a copy of the employee’s signed election form and
39mail the original election form to thebegin insert system’send insert headquarters begin delete office
40of the system.end delete
begin insert office.end insert

P45   1begin insert

begin insertSEC. 33.end insert  

end insert

begin insertSection 26401 of the end insertbegin insertEducation Codeend insertbegin insert is amended to
2read:end insert

3

26401.  

(a) A member of the Defined Benefit Program who is
4employed to perform creditable service on a part-time basis for
5less than 50 percent of each full-time position bybegin delete a school district
6or county office of educationend delete
begin insert an employer, excluding a community
7college district,end insert
that provides the Cash Balance Benefit Program
8may elect to become a participant for creditable service subject to
9coverage under the Cash Balance Benefit Program for that
10employer, provided that the creditable service is not performed
11for the same employer with whom the member is also subject to
12mandatory membership in the Defined Benefit Program.

13(b) A member of the Defined Benefit Program who is employed
14pursuant to Section 87474,begin insert 87478,end insert 87480, 87481, 87482, or
1587482.5 by a community college district that provides the Cash
16Balance Benefit Program may elect to become a participant for
17creditable service subject to coverage under the Cash Balance
18Benefit Program for that employer, provided that the creditable
19service is not performed for the same employer with whom the
20member is also subject to mandatory membership in the Defined
21Benefit Program.

begin insert

22(c) A member of the Defined Benefit Program who is employed
23to perform creditable service as a substitute employee by an
24employer that provides the Cash Balance Benefit Program may
25 elect to become a participant for creditable service subject to
26coverage under the Cash Balance Benefit Program for that
27employer, provided that the creditable service is not performed
28for the same employer with whom the member is also subject to
29mandatory membership in the Defined Benefit Program.

end insert
begin delete

30(c)

end delete

31begin insert(d)end insert The election shall be made on a properly executed form
32provided by the system and shall be filed with the employer within
3360 calendar days of the later of the first day of employment with
34an employer that provides the Cash Balance Benefit Program, the
35date of the employer’s governing board’s action to provide the
36Cash Balance Benefit Program, or the effective date of the
37employer’s governing board’s action to provide the Cash Balance
38Benefit Program.

begin delete

39(d)

end delete

P46   1begin insert(e)end insert Employers shall make available to employees specified in
2subdivisions (a) and (b) information and forms provided by the
3system for making an election regarding participation. The
4employer shall retain a copy of the employee’s signed election
5form and mail the original signed election form to thebegin delete headquarters
6office of the system as described in Section 22375.end delete
begin insert system’s
7headquarters office.end insert
The election shall become effective on the
8first day of the pay period following the pay period in which the
9election is made.

begin delete

10(e)

end delete

11begin insert(f)end insert If an election is made pursuant to subdivision (a) and the
12participant’s basis of employment with that employer changes to
13employment to perform creditable service for 50 percent or more
14of the full-time position during one school year with the same
15employer, creditable service performed for that employer shall no
16longer be covered under the Cash Balance Benefitbegin delete Program.end delete
17begin insert Program as of the last day of the pay period in which the change
18in the participant’s basis of employment occurred.end insert
Creditable
19service performed for that employer shall be subject to coverage
20under the Defined Benefit Program as of the first day of the pay
21period following the change in the participant’s basis of
22employment.

begin delete

23(f)

end delete

24begin insert(g)end insert If an election is made pursuant to subdivision (b) and the
25participant’s basis of employment with the community college
26district changes to employment that is subject to mandatory
27membership in the Defined Benefit Program pursuant to Section
2822501, 22502,begin insert 22503,end insert or 22504 during one school year with the
29same employer, creditable service performed for that employer
30shall no longer be covered under the Cash Balance Benefit
31begin delete Program.end deletebegin insert Program as of the last day of the pay period in which
32the change in the participant’s basis of employment occurred.end insert

33 Creditable service performed for that employer shall be subject to
34coverage under the Defined Benefit Program as of the first day of
35the pay period following the change in the participant’s basis of
36employment.

begin insert

37(h) If an election is made pursuant to subdivision (c) and the
38participant’s basis of employment with that employer changes to
39employment that is subject to mandatory membership in the
40Defined Benefit Program pursuant to Section 22501, 22502, 22503,
P47   1or 22504 during one school year with the same employer,
2creditable service performed for that employer shall no longer be
3covered under the Cash Balance Benefit Program as of the last
4day of the pay period in which the change in the participant’s basis
5of employment occurred. Creditable service performed for that
6employer shall be subject to coverage under the Defined Benefit
7Program as of the first day of the pay period following the change
8in the participant’s basis of employment.

end insert
begin delete

9(g)

end delete

10begin insert(i)end insert (1) If an employee was excluded from participation in the
11Cash Balance Benefit Program pursuant to Section 26401.5, as
12that section read on December 31, 2000, for the same service, the
13employee may elect to become a participant for creditable service
14subject to coverage under the Cash Balance Benefit Program for
15that employer, provided all of the following conditions are met:

16(A) The employment is pursuant to Section 87474,begin insert 87478,end insert
17 87480, 87481, 87482, or 87482.5.

18(B) The employer offers the Cash Balance Benefit Program.

19(C) The creditable service is not also subject to mandatory
20membership in the Defined Benefit Program.

21(2) Employers shall, on or before May 1, 2007, make available
22to employees described in this subdivision, information and forms
23provided by the system for making an election regarding
24participation. The employee shall submit the form to the employer
25within a 60-day election period designated by the employer. The
26employer shall retain a copy of the employee’s signed election
27form and mail the original signed election form to thebegin delete headquarters
28office of the system as described in Section 22375.end delete
begin insert system’s
29headquarters office.end insert
The election shall become effective on the
30first day of the pay period following the pay period in which the
31election is made.

32

begin deleteSEC. 20.end delete
33begin insertSEC. 34.end insert  

Section 26506 of the Education Code is amended to
34read:

35

26506.  

(a) Except as provided in subdivision (b), participants
36shall not make voluntary pretax or post-tax contributions into the
37Cash Balance Benefit Program, nor shall participants redeposit
38amounts previously distributed from employee accounts or
39employer accounts.

P48   1(b) Pursuant to terms and conditions established by the board,
2participants may be permitted to transfer funds from eligible
3retirement plans into the Cash Balance Benefit Program to the
4extent that the transfers are allowable under and are completed in
5a manner prescribed by applicable federal and state laws, and any
6related regulations.

7(c) Funds deposited with the Cash Balance Benefit Program by
8a participant pursuant to subdivision (b) shall be credited to the
9participant and identified separately from credits in the participant’s
10employee and employer accounts. Funds so deposited shall be
11treated as credits to the participant’s employee account for all other
12purposes under this part.

13

begin deleteSEC. 21.end delete
14begin insertSEC. 35.end insert  

Section 26806 of the Education Code is amended to
15read:

16

26806.  

(a) The normal form of retirement benefit under this
17part is a lump-sum payment. Upon distribution of the lump-sum
18payment to the participant, no further benefits shall be payable
19from the plan with respect to the Cash Balance Benefit Program.

20(b) The lump-sum payment in subdivision (a) shall not be
21payable before 180 calendar days have elapsed following the date
22of termination of employment.

23(c) Except as provided in subdivision (d) or subdivision (e) of
24Section 26812, the application for the retirement benefit in the
25form of a lump-sum payment shall be automatically canceled if
26the participant performs creditable service within 180 calendar
27days following the date of termination of employment.

28(d) Subdivision (c) does not apply if the participant has reached
29that age at which the Internal Revenue Code of 1986 requires a
30distribution of benefits. A participant who has reached this age
31shall receive a distribution commencing on the earlier of the date
32that the participant has met the conditions of subdivision (b) or
33the conditions of subdivision (c) of Section 26004.

34

begin deleteSEC. 22.end delete
35begin insertSEC. 36.end insert  

Section 26807.6 of the Education Code is amended
36to read:

37

26807.6.  

(a) A participant who retired and elected an annuity
38pursuant to Section 26807 may elect to change annuities, subject
39to all of the following:

P49   1(1) A participant who elected a single life annuity with or
2without a cash refund feature or a period certain annuity may not
3change his or her annuity.

4(2) A participant who elected an annuity under paragraph (3)
5or (4) of subdivision (b) of Section 26807 may elect an annuity
6under paragraph (3) of subdivision (a) of Section 26807.5.

7(3) The election of the participant under this section is made on
8or after January 1, 2007, and prior to July 1, 2007.

9(4) The participant designates the same annuity beneficiary that
10was designated under the prior annuity elected by the participant,
11if the annuity and annuity designation were effective on December
1231, 2006.

13(5) The annuity beneficiary is not afflicted with a known
14terminal illness and the participant declares, under penalty of
15perjury under the laws of this state, that to the best of his or her
16knowledge, the annuity beneficiary is not afflicted with a known
17terminal illness.

18(6) The annuity beneficiary has not predeceased the participant
19as of the effective date of the change in the annuity by the
20participant.

21(b) The change in the annuity by the participant shall be effective
22on the date the election is signed, provided that the election is on
23a properly executed form provided by the system and that election
24is received at the system’s headquarters office within 30 days after
25the date the election is signed.

26(c) After receipt of a participant’s election document, the system
27shall mail an acknowledgment notice to the participant that sets
28forth the new annuity elected by the participant.

29(d) If the participant and the annuity beneficiary are alive and
30not afflicted with a known terminal illness, a participant may cancel
31the election to change annuities and elect to receive the benefit
32according to the preexisting annuity election. After cancellation,
33the participant may elect to make a one-time change from the
34preexisting annuity to any other annuity provided by and subject
35to the restrictions of paragraph (1), (2), (3), or (4) of subdivision
36(a). The cancellation or the cancellation and one-time change shall
37be made on a properly executed form provided by the system and
38shall be received at the system’s headquarters office no later than
3930 calendar days following the date of mailing of the
40acknowledgment notice. If the participant elects to make the
P50   1one-time change provided by this subdivision, the change shall be
2effective as of the participant’s signature date on the initial election
3to change.

4(e) If the system is unable to mail an acknowledgment notice
5to the participant on or before June 1, 2007, or prior to the end of
6the election period, provided that the participant and the annuity
7beneficiary are alive and not afflicted with a known terminal
8illness, the system shall allow a participant to cancel the election
9to change annuities and elect to receive the benefit according to
10the preexisting annuity election. After cancellation, the participant
11may elect to make a one-time change from the preexisting annuity
12to any other annuity provided by and subject to the restrictions of
13paragraph (1), (2), (3), or (4) of subdivision (a). The cancellation
14or the cancellation and one-time change may be made after the
15end of the election period if it is made on a properly executed form
16provided by the system and is received at the system’s headquarters
17office no later than 30 calendar days following the date of mailing
18of the acknowledgment notice. If the participant elects to make
19the one-time change provided by this subdivision, the change shall
20be effective as of the participant’s signature date on the initial
21election to change.

22(f) If the participant elects to change his or her annuity as
23described in subdivision (a) or (d), the participant’s annuity shall
24be modified in a manner determined by the board to prevent any
25additional liability to the plan.

26(g) References to a “participant” in paragraph (1) of subdivision
27(a) shall apply to the nonmember spouse.

28(h) The participant shall not change annuities in derogation of
29a spouse’s or former spouse’s community property rights as
30specified in a court order.

31

begin deleteSEC. 23.end delete
32begin insertSEC. 37.end insert  

Section 26812 of the Education Code is amended to
33read:

34

26812.  

(a) A participant retired for service under this part may
35perform retired participant activities, but the participant shall not
36make contributions to the plan or accrue service credit under the
37Defined Benefit Program based on compensation earned from that
38service. The employer shall maintain accurate records of the
39earnings of the retired participant and report those earnings monthly
40to the system and retired participant.

P51   1(b) If a participant is retired for service under this part, the
2annualized rate of pay for retired participant activities performed
3by that participant shall not be less than the minimum, nor exceed
4the maximum, paid by the employer to other employees performing
5comparable duties.

6(c) A participant retired for service under this part shall not be
7required to reinstate for performing retired participant activities.

8(d) (1) If all of the following apply to a participant retired for
9service under this part, the participant’s annuity shall be reduced
10by the amount of the compensation:

11(A) The participant is receiving an annuity under the Cash
12Balance Benefit Program.

13(B) The participant is below normal retirement age or retired
14on or after January 1, 2014.

15(C) The participant earns compensation paid in cash for
16performing retired participant activities, excluding reimbursements
17paid by an employer for expenses incurred by the participant in
18which payment of the expenses by the participant is substantiated.

19(2) The reduction in paragraph (1) shall only be made for
20compensation paid in cash during the first 180 calendar days after
21a participant retired for service under this part. The amount of the
22reduction in an individual month shall be no more than the monthly
23annuity payable in thatbegin delete monthend deletebegin insert month,end insert and the total amount of the
24reduction shall not exceed the amount of the annuity payable during
25the first 180 calendar days after a participant retired for service
26under this part. For written agreements pertaining to the
27performance of retired participant activities entered into, extended,
28renewed, or amended on or after January 1, 2014, the reduction in
29paragraph (1) shall also be made for payments made for the
30performance of retired participant activities, including, but not
31limited to, those for participation in a deferred compensation plan;
32to purchase an annuity contract, tax-deferred retirement plan, or
33insurance program; and for contributions to a plan that meets the
34requirements of Section 125, 401(a), 401(k), 403(b), 457(b), or
35457(f) of Title 26 of the United States Code when the cost is
36covered by an employer.

37(3) Subject to the limitation described in paragraph (4), if all of
38the following apply to a participant retired for service under this
39part, the participant’s application for the retirement benefit shall
40automatically be canceled:

P52   1(A) The participant is anticipated to receive the retirement
2benefit in the form of a lump-sum payment.

3(B) The participant earns compensation for performing
4creditable service within 180 calendar days following the date of
5termination of employment.

6(4) Paragraph (3) does not apply if the participant has reached
7that age at which the Internal Revenue Code of 1986 requires a
8distribution of benefits. A participant who has reached that age
9shall receive a distribution commencing on the earlier of the date
10that the participant has met the conditions of subdivision (b) of
11Section 26806 or the conditions of subdivision (c) of Section
1226004.

13(e) If the participant has attained normal retirement age at the
14time the compensation is earned, subdivision (d) shall not apply
15if the appointment has been approved by the governing body of
16the employer in a public meeting, as reflected in a resolution
17adopted by the governing body of the employer prior to the
18performance of retired participant activities, expressing its intent
19to seek an exemption from the limitation specified in subdivision
20(d). Approval of the appointment shall not be placed on a consent
21calendar. Notwithstanding any other provision of Article 3.5
22(commencing with Section 6250) of Division 7 of Title 1 of the
23Government Code or any state or federal law incorporated by
24subdivision (k) of Section 6254 of the Government Code, the
25resolution shall be subject to disclosure by the entity adopting the
26resolution and the system. The resolution shall include the
27following specific information and findings:

28(1) The nature of the employment.

29(2) A finding that the appointment is necessary to fill a critically
30needed position before 180 calendar daysbegin delete hasend deletebegin insert haveend insert passed.

31(3) A finding that the participant is not ineligible for application
32of this subdivision pursuant to subdivision (g).

33(4) A finding that the termination of employment of the retired
34participant with the employer is not the basis for the need to acquire
35the services of the participant.

36(f) Subdivision (e) shall not apply to a retired participant whose
37termination of employment with the employer is the basis for the
38need to acquire the services of the participant.

39(g) Subdivision (e) shall not apply if the participant received
40additional service credit pursuant tobegin delete Sectionsend deletebegin insert Sectionend insert 22714 or
P53   122715 or received from any public employer any financial
2inducement to retire. For purposes of this section, “financial
3inducement to retire” includes, but is not limited to, any form of
4compensation or other payment that is paid directly or indirectly
5by a public employer to the participant, even if not in cash, either
6before or after retirement, if the participant retires for service on
7or before a specific date or specific range of dates established by
8a public employer on or before the date the inducement is offered.
9The system shall liberally interpret this subdivision to further the
10Legislature’s intent to make subdivision (e) inapplicable to
11participants if the participant received a financial incentive from
12any public employer to retire or otherwise terminate employment
13with a public employer.

14(h) The superintendent, the county superintendent of schools,
15or the chief executive officer of a community college shall submit
16all documentation required by the system to substantiate the
17eligibility of the retired participant for application of subdivision
18(e), including, but not limited to, the resolution adopted pursuant
19to that subdivision.

20(i) The documentation required by this section shall be received
21by the system prior to the retired participant’s performance of
22retired participant activities.

23(j) Within 30 calendar days of the receipt of all documentation
24required by the system pursuant to this section, the system shall
25inform the entity seeking application of the exemption specified
26in subdivision (e) and the retired participant whether the
27compensation paid to the participant will be subject to the limitation
28specified in subdivision (d).

29

begin deleteSEC. 24.end delete
30begin insertSEC. 38.end insert  

Section 26906.6 of the Education Code is amended
31to read:

32

26906.6.  

(a) A participant who is disabled and elected an
33annuity pursuant to Section 26906 may elect to change annuities,
34subject to all of the following:

35(1) A participant who elected a single life annuity with or
36without a cash refund feature or a period certain annuity may not
37change his or her annuity.

38(2) A participant who elected an annuity under paragraph (3)
39or (4) of subdivision (b) of Section 26906 may elect an annuity
40under paragraph (3) of subdivision (a) of Section 26906.5.

P54   1(3) The election by the participant under this section is made
2on or after January 1, 2007, and prior to July 1, 2007.

3(4) The participant designates the same annuity beneficiary that
4was designated under the prior annuity elected by the participant,
5if the annuity and the annuity beneficiary designation were effective
6on December 31, 2006.

7(5) The annuity beneficiary is not afflicted with a known
8terminal illness and the participant declares, under penalty of
9perjury under the laws of this state, that to the best of his or her
10knowledge, the annuity beneficiary is not afflicted with a known
11terminal illness.

12(6) The annuity beneficiary has not predeceased the participant
13as of the effective date of the change in the annuity by the
14participant.

15(b) The change in the annuity by the participant shall be effective
16on the date the election is signed, provided that the election is on
17a properly executed form provided by the system and that election
18is received at the system’s headquarters office within 30 days after
19the date the election is signed.

20(c) After receipt of a participant’s election document, the system
21shall mail an acknowledgment notice to the participant that sets
22forth the new annuity elected by the participant.

23(d) If the participant and the annuity beneficiary are alive and
24not afflicted with a known terminal illness, a participant may cancel
25the election to change annuities and elect to receive the benefit
26according to the preexisting annuity election. After cancellation,
27the participant may elect to make a one-time change from the
28preexisting annuity to any other annuity provided by and subject
29to the restrictions of paragraph (1), (2), (3), or (4) of subdivision
30(a). The cancellation or the cancellation and one-time change shall
31be made on a properly executed form provided by the system and
32shall be received at the system’s headquarters office no later than
3330 calendar days following the date of mailing of the
34acknowledgment notice. If the participant elects to make the
35one-time change provided by this subdivision, the change shall be
36effective as of the participant’s signature date on the initial election
37to change.

38(e) If the system is unable to mail an acknowledgment notice
39to the participant on or before June 1, 2007, or prior to the end of
40the election period, provided that the participant and the annuity
P55   1beneficiary are alive and not afflicted with a known terminal
2illness, the system shall allow a participant to cancel the election
3to change annuities and elect to receive the benefit according to
4the preexisting annuity election. After cancellation, the participant
5may elect to make a one-time change from the preexisting annuity
6to any other annuity provided by and subject to the restrictions of
7paragraph (1), (2), (3), or (4) of subdivision (a). The cancellation
8or the cancellation and one-time change may be made after the
9end of the election period if it is made on a properly executed form
10provided by the system and is received at the system’s headquarters
11office no later than 30 calendar days following the date of mailing
12of the acknowledgment notice. If the participant elects to make
13the one-time change provided by this subdivision, the change shall
14be effective as of the participant’s signature date on the initial
15election to change.

16(f) If the participant elects to change his or her annuity as
17described in subdivision (a) or (d), the participant’s annuity shall
18be modified in a manner determined by the board to prevent any
19additional liability to the plan.

20(g) The participant shall not change annuities in derogation of
21 a spouse’s or former spouse’s community property rights as
22specified in a court order.

23

begin deleteSEC. 25.end delete
24begin insertSEC. 39.end insert  

Section 27100 of the Education Code is amended to
25read:

26

27100.  

A participant may at any time designate or change the
27designation of one or more primary beneficiaries and one or more
28contingent beneficiaries to receive any lump-sum death benefit
29that may be payable under the plan. The beneficiary for the
30lump-sum death benefit under this part may be a person, trust, or
31the estate of the participant. The beneficiary shall be designated
32on a form prescribed by the system that is received in the system’s
33headquarters office before the participant’s death.

34begin insert

begin insertSEC. 40.end insert  

end insert

begin insertSection 44987 of the end insertbegin insertEducation Codeend insertbegin insert is amended to
35read:end insert

36

44987.  

(a) The governing board of a school district shall grant
37to any employee, upon request, a leave of absence without loss of
38compensation for the purpose of enabling the employee to serve
39as an elected officer of any local school district public employee
P56   1organization, or any statewide or national public employee
2organization with which the local organization is affiliated.

3The leave shall include, but is not limited to, absence for
4purposes of attendance by the employee at periodic, stated, special,
5or regular meetings of the body of the organization on which the
6employee serves as an officer. Compensation during the leave shall
7include retirement fund contributions required of the school district
8as employer. The required employer contribution rate shall be the
9rate adopted by the Teachers’ Retirement Board as a plan
10amendment with respect to the Defined Benefit Program as
11provided in Section 22711. The employee shall earn full service
12credit during the leave of absence and shall pay member
13contributions as prescribed by Section 22711. The maximum
14amount of the service credit earned may not exceed twelvebegin delete calendarend delete
15 years. Any employee who serves as a full-time officer of a public
16employee organization is not eligible for disability benefits under
17the State Teachers’ Retirement Plan while on the leave of absence.

18Following the school district’s payment of the employee for the
19leave of absence, the school district shall be reimbursed by the
20employee organization of which the employee is an elected officer
21for all compensation paid the employee on account of the leave.
22Reimbursement by the employee organization shall be made within
23 10 days after its receipt of the school district’s certification of
24payment of compensation to the employee.

25The leave of absence without loss of compensation provided for
26by this section is in addition to the released time without loss of
27compensation granted to representatives of an exclusive
28representative by subdivision (c) of Section 3543.1 of the
29Government Code.

30For purposes of this section, “school district” also means “county
31superintendent of schools.”

32(b) An employee who after August 31, 1978, was absent on
33account of elected-officer service, shall receive full service credit
34in the State Teachers’ Retirement Plan; provided that, not later
35than April 30, 1981: (1) the employee makes a written request to
36the employer for a leave of absence for the period of the
37elected-officer service, and (2) the employee organization of which
38the employee is an elected officer pays to the employee’s school
39district an amount equal to the required State Teachers’ Retirement
P57   1Plan member and employer retirement contributions, as prescribed
2by this section.

3The school district, following this written request and payment,
4shall transmit the amount received to the State Teachers’
5Retirement System, informing it of the period of the employee’s
6leave of absence. The State Teachers’ Retirement System shall
7credit the employee with all service credit earned for the period
8of the elected-officer leave of absence.

9If the employee has been compensated by the school district for
10the period of the service, then, as a condition to the employee’s
11entitlement to service credit for this period, the school district shall
12be reimbursed by the employee organization for the amount of the
13compensation.

14The provisions of this subdivision shall apply retroactively to
15all service as an elective officer in a public employee organization
16occurring after August 31, 1978.

17begin insert

begin insertSEC. 41.end insert  

end insert

begin insertSection 87768.5 of the end insertbegin insertEducation Codeend insertbegin insert is amended
18to read:end insert

19

87768.5.  

The governing board of a community college district
20shall grant to any employee, upon request, a leave of absence
21without loss of compensation for the purpose of enabling the
22employee to serve as an elected officer of any local community
23college district public employee organization, or of any statewide
24or national public employee organization with which the local
25organization is affiliated.

26The leave shall include, but is not limited to, absence for
27purposes of attendance by the employee at periodic, stated, special,
28or regular meetings of the body of the organization on which the
29employee serves as an officer. Compensation during the leave shall
30include retirement fund contributions required of the community
31college district as employer. Required retirement contributions
32shall include the amount necessary to pay any unfunded liability
33cost for the retirement plan. The employee shall earn full service
34credit during the leave of absence and shall pay member
35contributions as prescribed by Section 22901. The maximum
36amount of the service credit earned shall not exceed 12begin delete calendarend delete
37 years. Any employee who serves as a full-time officer of a public
38employee organization shall not be eligible for disability benefits
39under the State Teachers’ Retirement System while on the leave
40of absence.

P58   1Following the community college district’s payment of the
2employee for the leave of absence, the community college district
3shall be reimbursed by the employee organization of which the
4employee is an elected officer for all compensation paid the
5employee on account of the leave. Reimbursement by the employee
6organization shall be made within 10 days after its receipt of the
7community college district’s certification of payment of
8compensation to the employee.

9The leave of absence without loss of compensation provided for
10by this section is in addition to the released time without loss of
11compensation granted to representatives of an exclusive
12representative by subdivision (c) of Section 3543.1 of the
13Government Code.

14begin insert

begin insertSEC. 42.end insert  

end insert

begin insertAny section of any other act enacted by the
15Legislature during the 2015 calendar year that takes effect on or
16before January 1, 2016, and that amends, amends and renumbers,
17adds, repeals and adds, or repeals a section that is amended,
18amended and renumbered, added, repealed and added, or repealed
19by this act, shall prevail over this act, whether that act is enacted
20prior to or subsequent to the enactment of this act. The repeal, or
21repeal and addition, of any article, chapter, part, title, or division
22of any code by this act shall not become operative if any section
23of any other act that is enacted by the Legislature during the 2015
24calendar year and takes effect on or before January 1, 2016,
25amends, amends and renumbers, adds, repeals and adds, or repeals
26any section contained in that article, chapter, part, title, or division.end insert



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