BILL NUMBER: AB 2375 INTRODUCED
BILL TEXT
INTRODUCED BY Committee on Public Employees, Retirement, and Social
Security (Assembly Members Cooper (Chair), Bonta, Cooley, Gonzalez,
and O'Donnell)
FEBRUARY 18, 2016
An act to amend Sections 20034, 20035, 20035.5, 20037, 20037.6,
20037.7, 20037.8, 20037.9, 20037.10, 20037.11, 20037.12, 20037.13,
20037.15, 20537, 20572, 20577.5, 20578, 20638, 20963, 20963.1, 20965,
21499, and 21626.5 of, and to repeal and amend Sections 20037.5 and
20037.14 of, the Government Code, relating to the Public Employees'
Retirement System.
LEGISLATIVE COUNSEL'S DIGEST
AB 2375, as introduced, Committee on Public Employees, Retirement,
and Social Security. Public Employees' Retirement System: omnibus
bill.
Existing law, the Public Employees' Retirement Law, creates the
Public Employees' Retirement System (PERS) for the purpose of
providing pension benefits to state employees and employees of
contracting agencies and prescribes the rights and duties of members
of the system and their beneficiaries. Existing law vests management
and control of PERS in its board of administration. PERS provides a
defined benefit to members of the program, based on final
compensation, credited service, and age at retirement, subject to
certain variations.
(1) Existing law prescribes various definitions of final
compensation based on employment classification, bargaining unit,
date of hire, and date of retirement, among other things.
This bill would revise these definitions to remove redundant
language and make technical and style changes.
(2) Existing law authorizes the board to charge interest, at the
actuarial interest rate, on the amount of any payment due and unpaid
by a contracting agency until payment is received.
This bill would instead permit the board to change interest on
payments due and unpaid at the greater of the annual return on the
system's investments for the year prior to the year in which payments
are not timely made or a simple annual rate of 10%.
(3) In addition to the above, existing law authorizes the board to
assess a contracting agency that fails to make contributions when
due interest at an annual rate of 10% and the costs of collection,
including reasonable legal fees. In the case of repeated
delinquencies, the board may assess the contracting agency a penalty
of 10% of the delinquent amount.
This bill would recast these provision to authorize the board, if
a contracting agency fails to fully pay any installment of
contributions when due, to assess a penalty of 10% of the total
amount due and unpaid, including accrued and unpaid interest. The
bill would permit the penalty to be assessed once during each 30-day
period that the outstanding amount remains unpaid. The bill would
also specify that the contracting agency may be assessed the costs of
collection, including reasonable legal fees and litigation costs,
including, without limitation, legal fees and legal costs incurred in
bankruptcy, when necessary to collect any amounts due.
(4) Existing law authorizes the board to terminate a local agency
contract if the contracting agency fails for 30 days after demand by
the board to pay any installment of required contributions or fails
for three months after demand to file any information required for
administration of the agency's employees. Existing law permits the
board to reduce benefits in certain instances when contributions are
inadequate to fund them. Existing law authorizes the board to merge a
plan that has been terminated into the terminated agency pool
without benefit reduction or with a lesser reduction if certain
conditions are met.
This bill would delete references to merging a plan and instead
specify that the board may elect to not impose a reduction on a plan,
or to impose a lesser reduction on a plan, that has been terminated
if those acts will not impact the actuarial soundness of the
terminated agency pool. The bill would make related changes by
deleting administrative provisions relating to the sequence for
transferring assets in relation to the reduction of benefits.
(5) Existing law grants members in specified member
classifications whose retirements are within 4 months of separation
from employment specified percentages of service credit for each
unused day of sick leave or educational leave.
This bill would specify that a day of unused sick leave or unused
educational leave is the equivalent of an 8-hour day.
(6) Existing law requires payment of interest on a preretirement
or postretirement death allowance or a preretirement or
postretirement lump-sum benefit if not paid within a specified time
after the date of death of an annuitant. Existing law prescribes the
method of calculating interest for this purpose.
This bill would instead require that interest by calculated at 7%,
pursuant to the California Constitution.
(7) Existing law requires a surviving domestic partner be treated
in the same manner as a surviving spouse for purposes of
postretirement survivor's allowances if certain conditions are met.
This bill would require that an individual who is the same gender
as a member be treated in the same manner as a surviving spouse for
purposes of postretirement survivor's allowances if certain
conditions are met.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 20034 of the Government Code is amended to
read:
20034. The average monthly salary highest
annual average compensation during any consecutive 12- or
36-month period of service employment
as a member of any retirement system maintained by the
university shall be considered compensation earnable by a member of
this system for purposes of computing final compensation for the
member providing he or she retires concurrently under both systems.
SEC. 2. Section 20035 of the Government Code is amended to read:
20035. (a) Notwithstanding Section 20037, "final compensation"
for the purposes of determining any pension or benefit with respect
to a state member who retires or dies on or after July 1, 1991, and
with respect to benefits based on service with the state, means the
highest annual compensation which was earnable by the state member
during the any consecutive 12-month
period of employment immediately preceding the
effective date of his or her retirement or the date of his or her
last separation from state service if earlier or during any
other period of 12 consecutive months during his or her membership in
this system that the member designates on the application for
retirement. earlier.
(b) With respect to a state member who retires or dies on or after
July 1, 1991, and who was a managerial employee, as defined by
subdivision (e) of Section 3513, or a supervisory employee, as
defined by subdivision (g) of Section 3513, whose monthly salary
range was administratively reduced by 5 percent because of the salary
range reductions administratively imposed upon managers and
supervisors during the 1991-92 fiscal year, "final compensation"
means the highest annual compensation the state member would have
earned had his or her salary range not been reduced by the 5-percent
reduction. This subdivision shall only apply if the period during
which the state member's salary was reduced would have otherwise been
included in determining his or her final compensation. The costs, if
any, that may result from the use of the higher final compensation
shall be paid for by the employer in the same manner as other
retirement benefits are funded.
SEC. 3. Section 20035.5 of the Government Code is amended to read:
20035.5. Notwithstanding Section 20037, "final compensation" for
the purposes of determining any pension or benefit with respect to a
school member who retires or dies on or after January 1, 2000, and
with respect to benefits based on service with a school employer,
means the highest annual compensation that was earnable by the school
member during the any consecutive
12-month period of employment immediately
preceding the effective date of his or her retirement or the date of
his or her last separation from service if earlier or during
any other period of 12 consecutive months during his or her
membership in this system that the member designates on the
application for retirement. earlier.
SEC. 4. Section 20037 of the Government Code is amended to read:
20037. For a state member, or for a local member who is an
employee of a contracting agency that is subject to this section,
"final compensation" means the highest average
annual average compensation earnable by a member during
the three consecutive years any consecutive
36-month period of employment immediately
preceding the effective date of his or her retirement or the date of
his or her last separation from state service if earlier or
during any other period of three consecutive years during his or her
membership in this system which he or she designates in his or her
application for retirement, earlier, including
any or all of the period or periods of (a) service required for
qualification for membership, or (b) prior service which qualifies
for credit under this system, if any, immediately preceding
membership, or (c) time prior to entering state service at the
compensation earnable by him or her in the position first held by him
or her in that service, as may be necessary to complete three
consecutive years. For the purposes of this section, periods of
service separated by a period of retirement or breaks in service may
be aggregated to constitute a period of three consecutive years, if
the periods of service are consecutive except for such a period of
retirement or breaks. If a break in service did not exceed six months
in duration, time included in the break and compensation earnable
during that time shall be included in computation of final
compensation. If a break in service exceeded six months in duration,
the first six months thereof and the compensation earnable during
those six months shall be included in computation of final
compensation, but time included in the break which is in excess of
six months and the compensation earnable during that excess time
shall be excluded in computation of final compensation. On and after
November 13, 1968, this section shall apply to all contracting
agencies and to the employees of those agencies whether or not those
agencies have previously elected to be subject to this section,
except that this section shall not apply to an employee of a
contracting agency which has not elected to be subject to this
section whose death occurred or whose retirement was effective prior
to November 13, 1968.
SEC. 5. Section 20037.5 of the Government Code, as added by
Section 56 of Chapter 88 of the Statutes of 1998, is repealed.
20037.5. Notwithstanding Section 20035, "final compensation" for
a state member who has elected to be subject to Section 21353.5, for
the purposes of determining any pension or benefit based on service
credited under that section, means the highest average annual
compensation earnable by the member during the consecutive 36-month
period immediately preceding the effective date of his or her
retirement, or the date of his or her last separation from state
service if earlier, or during any other period of 36 consecutive
months during his or her state membership that the member designates
on the application for retirement.
SEC. 6. Section 20037.5 of the Government Code, as added by
Section 56 of Chapter 91 of the Statutes of 1998, is amended to read:
20037.5. Notwithstanding Section 20035, "final compensation" for
a state member who has elected to be subject to Section 21353.5, for
the purposes of determining any pension or benefit based on service
credited under that section, means the highest average annual
compensation earnable by the member during the
any consecutive 36-month period immediately
preceding the effective date of his or her
retirement, retirement or the date of his or her
last separation from state service if earlier, or during
any other period of 36 consecutive months during his or her state
membership that the member designates on the application for
retirement. earlier.
SEC. 7. Section 20037.6 of the Government Code is amended to read:
20037.6. (a) Notwithstanding Sections 20035 and 20037, final
compensation for a person who is employed by the state for the first
time and becomes a state member of the system on or after July 1,
2006, and is represented by State Bargaining Unit 2, means the
highest average annual compensation earnable by the member during
the any consecutive 36-month period
immediately preceding the effective date of his or
her retirement, retirement or the date
of his or her last separation from state service if
earlier, or during any other period of 36 consecutive months during
his or her state membership that the member designates on the
application for retirement. earlier.
(b) This section applies to service credit accrued while a member
of State Bargaining Unit 2.
(c) This section does not apply to:
(1) Former state employees who return to state employment on or
after July 1, 2006.
(2) State employees hired prior to July 1, 2006, who were subject
to Section 20281.5 during the first 24 months of state employment.
(3) State employees hired prior to July 1, 2006, who become
subject to representation by State Bargaining Unit 2 on or after July
1, 2006.
(4) State employees on an approved leave of absence who return to
active employment on or after July 1, 2006.
SEC. 8. Section 20037.7 of the Government Code is amended to read:
20037.7. (a) Notwithstanding Sections 20035 and 20037, final
compensation for a person who is employed by the state for the first
time and becomes a state member of the system on or after January 1,
2007, and is represented by State Bargaining Unit 1, 3, 4, 11, 14,
15, 17, 20, or 21, means the highest average annual compensation
earnable by the member during the any
consecutive 36-month period immediately preceding
the effective date of his or her retirement,
retirement or the date of his or her last separation from state
service if earlier, or during any other period of 36
consecutive months during his or her state membership that the member
designates on the application for retirement.
earlier.
(b) This section applies to service credit accrued while a member
of State Bargaining Unit 1, 3, 4, 11, 14, 15, 17, 20, or 21.
(c) This section does not apply to:
(1) Former state employees previously employed before January 1,
2007, who return to state employment on or after January 1, 2007.
(2) State employees hired prior to January 1, 2007, who were
subject to Section 20281.5 during the first 24 months of state
employment.
(3) State employees hired prior to January 1, 2007, who become
subject to representation by State Bargaining Unit 1, 3, 4, 11, 14,
15, 17, 20, or 21 on or after January 1, 2007.
(4) State employees on an approved leave of absence employed
before January 1, 2007, who return to active employment on or after
January 1, 2007.
SEC. 9. Section 20037.8 of the Government Code is amended to read:
20037.8. (a) Notwithstanding Sections 20035 and 20037, final
compensation for a person who is employed by the state for the first
time and becomes a state member of the system on or after January 1,
2007, and is represented by State Bargaining Unit 12 or 13, means the
highest average annual compensation earnable by the member during
the any consecutive 36-month period
immediately preceding the effective date of his or
her retirement, retirement or the date
of his or her last separation from state service if
earlier, or during any other period of 36 consecutive months during
his or her state membership that the member designates on the
application for retirement. earlier.
(b) This section applies to service credit accrued while a member
of State Bargaining Unit 12 or 13.
(c) This section does not apply to:
(1) Former state employees previously employed before January 1,
2007, who return to state employment on or after January 1, 2007.
(2) State employees hired prior to January 1, 2007, who were
subject to Section 20281.5 during the first 24 months of state
employment.
(3) State employees hired prior to January 1, 2007, who become
subject to representation by State Bargaining Unit 12 or 13 on or
after January 1, 2007.
(4) State employees on an approved leave of absence employed
before January 1, 2007, who return to active employment on or after
January 1, 2007.
SEC. 10. Section 20037.9 of the Government Code is amended to
read:
20037.9. (a) Notwithstanding Sections 20035 and 20037, final
compensation for a person who is employed by the state for the first
time and becomes a state member of the system on or after January 1,
2007, and is represented by State Bargaining Unit 16 or 19, means the
highest average annual compensation earnable by the member during
the any consecutive 36-month period
immediately preceding the effective date of his or
her retirement, retirement or the date
of his or her last separation from state service if
earlier, or during any other period of 36 consecutive months during
his or her state membership that the member designates on the
application for retirement. earlier.
(b) This section applies to service credit accrued while a member
of State Bargaining Unit 16 or 19.
(c) This section does not apply to:
(1) Former state employees previously employed before January 1,
2007, who return to state employment on or after January 1, 2007.
(2) State employees hired prior to January 1, 2007, who were
subject to Section 20281.5 during the first 24 months of state
employment.
(3) State employees hired prior to January 1, 2007, who become
subject to representation by State Bargaining Unit 16 or 19 on or
after January 1, 2007.
(4) State employees on an approved leave of absence employed
before January 1, 2007, who return to active employment on or after
January 1, 2007.
SEC. 11. Section 20037.10 of the Government Code is amended to
read:
20037.10. (a) Notwithstanding Sections 20035 and 20037, final
compensation for a person who is employed by the state for the first
time and becomes a state member of the system on or after January 1,
2007, and is represented by State Bargaining Unit 7, means the
highest average annual compensation earnable by the member during
the any consecutive 36-month period
immediately preceding the effective date of his or her
retirement, retirement or the date of his or her
last separation from state service if earlier, or during
any other period of 36 consecutive months during his or her state
membership that the member designates on the application for
retirement. earlier.
(b) This section applies to service credit accrued while a member
of State Bargaining Unit 7.
(c) This section does not apply to:
(1) Service credit accrued while classified as a state peace
officer/firefighter while a member of Bargaining Unit 7.
(2) Former state employees previously employed before January 1,
2007, who return to state employment on or after January 1, 2007.
(3) State employees hired prior to January 1, 2007, who were
subject to Section 20281.5 during the first 24 months of state
employment.
(4) State employees hired prior to January 1, 2007, who become
subject to representation by State Bargaining Unit 7 on or after
January 1, 2007.
(5) State employees on an approved leave of absence employed
before January 1, 2007, who return to active employment on or after
January 1, 2007.
SEC. 12. Section 20037.11 of the Government Code is amended to
read:
20037.11. (a) Notwithstanding Sections 20035 and 20037, final
compensation for a person who is employed by the state for the first
time and becomes a state member of the system on or after January 1,
2007, and is represented by State Bargaining Unit 10, means the
highest average annual compensation earnable by the member during
the any consecutive 36-month period
immediately preceding the effective date of his or
her retirement, retirement or the date
of his or her last separation from state service if
earlier, or during any other period of 36 consecutive months during
his or her state membership that the member designates on the
application for retirement. earlier.
(b) This section applies to service credit accrued while a member
of State Bargaining Unit 10.
(c) This section does not apply to:
(1) Former state employees previously employed before January 1,
2007, who return to state employment on or after January 1, 2007.
(2) State employees hired prior to January 1, 2007, who were
subject to Section 20281.5 during the first 24 months of state
employment.
(3) State employees hired prior to January 1, 2007, who become
subject to representation by State Bargaining Unit 10 on or after
January 1, 2007.
(4) State employees on an approved leave of absence employed
before January 1, 2007, who return to active employment on or after
January 1, 2007.
SEC. 13. Section 20037.12 of the Government Code is amended to
read:
20037.12. (a) Notwithstanding Sections 20035 and 20037, final
compensation for a person who is employed by the state for the first
time and becomes a state member of the system on or after January 1,
2007, and is represented by State Bargaining Unit 18, means the
highest average annual compensation earnable by the member during
the any consecutive 36-month period
immediately preceding the effective date of his or
her retirement, retirement or the date
of his or her last separation from state service if
earlier, or during any other period of 36 consecutive months during
his or her state membership that the member designates on the
application for retirement. earlier.
(b) This section applies to service credit accrued while a member
of State Bargaining Unit 18.
(c) This section does not apply to:
(1) Former state employees previously employed before January 1,
2007, who return to state employment on or after January 1, 2007.
(2) State employees hired prior to January 1, 2007, who were
subject to Section 20281.5 during the first 24 months of state
employment.
(3) State employees hired prior to January 1, 2007, who become
subject to representation by State Bargaining Unit 18 on or after
January 1, 2007.
(4) State employees on an approved leave of absence employed
before January 1, 2007, who return to active employment on or after
January 1, 2007.
SEC. 14. Section 20037.13 of the Government Code is amended to
read:
20037.13. (a) Notwithstanding Sections 20035 and 20037, for the
purposes of determining any pension or benefit with respect to
benefits based on service with the state, "final compensation" means
the highest annual compensation that was earnable by the state member
during the any consecutive 36-month
period of employment immediately preceding the
effective date of his or her retirement or the date of his or her
last separation from state service or during any other
period of 36 consecutive months during his or her membership in this
system that the member designates on the application for retirement.
if earlier.
(b) This section shall only apply to a member appointed to a
career executive assignment, as defined in Section 18546, who at the
time of appointment meets one or more of the following criteria:
(1) He or she previously had, but does not currently have,
permanent status in the civil service.
(2) He or she is a person described in Section 18990 who was not,
within the past 12 months, employed by the Legislature for two or
more consecutive years.
(3) He or she is a person described in Sections 18992 who was not,
within the past 12 months, holding a nonelected exempt position in
the executive branch.
(c) A state entity that employs a person described in subdivision
(b) in a career executive assignment shall notify the Controller of
this person's employment status and the Controller shall forward this
information to the system.
SEC. 15. Section 20037.14 of the Government Code, as amended by
Section 127 of Chapter 296 of the Statutes of 2011, is repealed.
20037.14. (a) Notwithstanding Sections 20035 and 20037, final
compensation for a person who is employed by the state for the first
time and becomes a state member of the system on or after October 31,
2010, and is represented by State Bargaining Unit 5 or 8, means the
highest average annual compensation earnable by the member during the
consecutive 36-month period immediately preceding the effective date
of his or her retirement, or the date of his or her last separation
from state service if earlier, or during any other period of 36
consecutive months during his or her state membership that the member
designates on the application for retirement.
(b) This section applies to service credit accrued while a member
of State Bargaining Unit 5 or 8 or in a class related to State
Bargaining Unit 5 or 8 as an employee who is excepted from the
definition of "state employee" in subdivision (c) of Section 3513, or
an officer or employee of the executive branch of state government
who is not a member of the civil service.
(c) This section does not apply to:
(1) Former state employees previously employed before October 31,
2010, who return to state employment on or after October 31, 2010.
(2) State employees hired prior to October 31, 2010, who were
subject to Section 20281.5 during the first 24 months of state
employment.
(3) State employees hired prior to October 31, 2010, who become
subject to representation by State Bargaining Unit 5 or 8 on or after
October 31, 2010.
(4) State employees on an approved leave of absence employed
before October 31, 2010, who return to active employment on or after
October 31, 2010.
SEC. 16. Section 20037.14 of the Government Code, as added by
Section 11 of Chapter 163 of the Statutes of 2010, is amended to
read:
20037.14. (a) Notwithstanding Sections 20035 and 20037, final
compensation for a person who is employed by the state for the first
time and becomes a state member of the system on or after October 31,
2010, and is represented by State Bargaining Unit 5 or 8, means the
highest average annual compensation earnable by the member during
the any consecutive 36-month period
immediately preceding the effective date of his or
her retirement, retirement or the date
of his or her last separation from state service if
earlier, or during any other period of 36 consecutive months during
his or her state membership that the member designates on the
application for retirement. earlier.
(b) This section applies to service credit accrued while a member
of State Bargaining Unit 5 or 8 or in a class related to State
Bargaining Unit 5 or 8 as an employee who is excepted from the
definition of "state employee" in subdivision (c) of Section 3513, or
an officer or employee of the executive branch of state government
who is not a member of the civil service.
(c) This section does not apply to:
(1) Former state employees previously employed before October 31,
2010, who return to state employment on or after October 31, 2010.
(2) State employees hired prior to October 31, 2010, who were
subject to Section 20281.5 during the first 24 months of state
employment.
(3) State employees hired prior to October 31, 2010, who become
subject to representation by State Bargaining Unit 5 or 8 on or after
October 31, 2010.
(4) State employees on an approved leave of absence employed
before October 31, 2010, who return to active employment on or after
October 31, 2010.
SEC. 17. Section 20037.15 of the Government Code is amended to
read:
20037.15. (a) Notwithstanding Sections 3517.8, 20035, and 20037,
final compensation for a person who is employed for the first time
and becomes a member of the system on or after January 15, 2011,
means the highest average annual compensation earnable by the member
during the any consecutive 36-month
period immediately preceding the effective date of
his or her retirement, retirement or
the date of his or her last separation from state service if
earlier, or during any other period of 36 consecutive months during
his or her state membership that the member designates on the
application for retirement. earlier.
(b) This section applies to the following:
(1) Service credit accrued while a member of State Bargaining Unit
6 or 9 or in a class related to State Bargaining Unit 6 or 9 as an
employee who is excepted from the definition of "state employee" in
subdivision (c) of Section 3513, or an officer or employee of the
executive branch of state government who is not a member of the civil
service.
(2) Service credit accrued while a peace officer/firefighter
member represented by State Bargaining Unit 7 or in a class related
to peace officer/firefighter members in State Bargaining Unit 7 as an
employee who is excepted from the definition of "state employee" in
subdivision (c) of Section 3513, or an officer or employee of the
executive branch of state government who is not a member of the civil
service.
(3) Service credit accrued as an employee who is excepted from the
definition of "state employee" in subdivision (c) of Section 3513,
or an officer or employee of the executive branch of state government
who is not a member of the civil service.
(4) Service credit accrued as an employee of the Legislature, the
judicial branch, or the California State University.
(c) This section does not apply to:
(1) Former employees previously employed before January 15, 2011,
who return to employment on or after January 15, 2011, and who were
previously subject to a 12-month average.
(2) State employees hired prior to January 15, 2011, who were
subject to Section 20281.5 during the first 24 months of state
employment, and who were previously subject to a 12-month average.
(3) State employees hired prior to January 15, 2011, who become
subject to representation by State Bargaining Unit 6, 7, or 9 on or
after January 15, 2011, and who were previously subject to a 12-month
average.
(4) Employees on an approved leave of absence employed before
January 15, 2011, who return to active employment on or after January
15, 2011, and who were previously subject to a 12-month average.
(d) If this section is in conflict with a memorandum of
understanding that is current and in effect on January 15, 2011, the
memorandum of understanding shall be controlling while it remains in
effect. Upon expiration of the memorandum of understanding that is in
effect and current on January 15, 2011, this section shall be
controlling and may not be superseded by a subsequent memorandum of
understanding.
SEC. 18. Section 20537 of the Government Code is amended to read:
20537. The board may charge interest on the amount of any payment
due and unpaid by a contracting agency until payment is received.
Interest shall be charged at the actuarial interest rate.
greater of the annual return on the system's
investments for the year
prior to the year in which payments are not timely made or a simple
annual rate of 10 percent. The interest shall be deemed
interest earnings for the year in which the late payment is received.
SEC. 19. Section 20572 of the Government Code is amended to read:
20572. (a) If a contracting agency fails for 30 days after demand
by the board to pay in full any installment of
contributions required by its contract, or fails for three months
after demand therefor by the board therefor
to file any information required in the administration of
this system with respect to that contracting agency's
employees, or if the board determines that the contracting
agency is no longer in existence, the board may terminate that
contract by resolution adopted by a majority vote of its members
effective 60 days after notice of its adoption has been mailed by
registered mail to the governing body of the contracting agency.
(b) Notwithstanding In addition to the
interest obligations set forth in Section 20537, if a
contracting agency fails to remit pay in full
any installment of the contributions when due, the
agency may be assessed interest at an annual rate of 10 percent and
the costs of collection, including reasonable legal fees, when
necessary to collect the amounts due. In the case of repeated
delinquencies, due and the failure continues for a
period of three months, the contracting agency may be assessed
a penalty of 10 percent of the delinquent amount. That
total amount due and unpaid, including any accrued and
unpaid interest. The penalty may be assessed once during each
30-day period that the outstanding amount remains unpaid.
In addition, the contracting agency may be assessed the costs of
collection, including reasonable lega l fees and
litigation costs, including, without limitation, legal fees and legal
costs incurred in bankruptcy, when necessary to collect any amounts
due.
SEC. 20. Section 20577.5 of the Government Code is amended to
read:
20577.5. Notwithstanding Section 20577, the board may
merge a plan elect not to impose a reduction, or to
impose a lesser reduction, on a plan that has been terminated
pursuant to Section 20572 into the terminated agency pool
without benefit reduction, or with a lesser reduction,
20572 if (a) the board has made all reasonable efforts to
collect the amount necessary to fully fund the liabilities of the
plan, plan and (b) the board finds that
the merger of the plan into the terminated agency pool
without benefit reduction not reducing the benefits,
or imposing a lesser reduction, will not impact the actuarial
soundness of the terminated agency pool.
SEC. 21. Section 20578 of the Government Code is amended to read:
20578. (a) Except as provided in subdivision (b), on and after
January 1, 1991, the rights and benefits of a former employee of a
contracting agency which terminated on or before January 1, 1991, or
of his or her beneficiary, shall be the same as if the agency had
continued as a contracting agency. Any monthly allowance of that
individual, or of his or her beneficiary, that was reduced pursuant
to Section 20577 because the contracting agency failed to pay the
board the amount of the difference shall not be subject to continued
reduction on or after January 1, 1991. As of January 1, 1991,
benefits shall be paid at the level provided in the contract prior to
that reduction. However, if a former employee of a contracting
agency that terminated on or before January 1, 1991, becomes employed
by another covered employer after the date of termination, including
an employer subject to reciprocity, the benefits shall be calculated
by using the highest compensation earned by the individual.
In accordance with Section 20580, an individual who has withdrawn
his or her accumulated contributions from the terminated agency shall
not be permitted to redeposit any withdrawn contributions upon again
becoming a member of this system.
Except as provided in Section 20577.5, benefits shall be reduced
proportionally pursuant to Section 20577 prior to the transfer of
assets to the pool if the amount of the terminating agency's assets
are less than the actuarial equivalent described in clause (1) of
subdivision (a) of Section 20576 and if the agency fails to pay the
difference.
(b) If a contracting agency has not paid the system for any
deficit in funding for earned benefits, as determined pursuant to
Section 20577, members shall be entitled to the benefits to which
members of the plan were entitled 36 months prior to the date the
agency notified the board of its intention to terminate its contract
or 36 months prior to the date the board notified the agency of its
intent to terminate the contract, whichever is earlier. Entitlement
to earned benefits under this subdivision shall be subject to Section
20577.5.
SEC. 22. Section 20638 of the Government Code is amended to read:
20638. The average monthly salary highest
annual average compensation during any
consecutive 12- or 36-month period of service
employment as a member of a county retirement
system shall be considered compensation earnable by a member of this
system for purposes of computing final compensation for the member
provided:
(a) (1) Entry into employment in which he or she became a member
in one system occurred on or after October 1, 1957, and within 90
days of discontinuance of employment as a member of the other system.
(2) This subdivision shall not deny the benefit of this section to
any person retiring after October 1, 1963, who entered membership
prior to October 1, 1957, if he or she entered the employment in
which he or she became a member within 90 days of termination of
employment in which he or she was a member of the other system, and
he or she became a member within seven months of entry into
employment, or, if an employee of a district as defined in Section
31468, became a member at the time the district was included in a
county retirement system.
(b) He or she retires concurrently under both systems and is
credited with the period of service under the county system at the
time of retirement.
SEC. 23. Section 20963 of the Government Code is amended to read:
20963. (a) A state, school, or school safety member, whose
effective date of retirement is within four months of separation from
employment with the employer subject to this section that granted
the sick leave credit, shall be credited at his or her retirement
with 0.004 year of service credit for each unused day of sick leave
certified to the board by the employer. A day of unused sick
leave is the equivalent of an eight-hour day. The certification
shall report only those days of unused sick leave that were accrued
by the member during the normal course of his or her employment and
shall not include any additional days of sick leave reported for the
purpose of increasing the member's retirement benefit. Reports of
unused days of sick leave shall be subject to audit and retirement
benefits may be adjusted where improper reporting is found. For
purposes of this subdivision, sick leave shall not include sick leave
earned as a National Guard member as described in Section 20380.5.
(b) Until receipt of certification from an employer concerning
unused sick leave, the board may pay an estimated allowance pursuant
to this section. At the time of receipt of the certification, the
allowance shall be adjusted to reflect any necessary changes.
(c) Notwithstanding any other provisions of this part, this
section shall not apply to local members other than local
miscellaneous members employed before July 1, 1980, by a school
district that is a contracting agency or those school safety members
employed before July 1, 1980, by a contracting agency that is a
school district or community college district, as defined in
subdivision (i) of Section 20057.
(d) This section shall not apply to any of the following:
(1) A person who becomes a school member on and after July 1,
1980, and any person who becomes a local member employed, on and
after July 1, 1980, by a school district that is a contracting agency
whether or not the person was ever a school member or local member
prior to that date.
(2) A state employee, with respect to sick leave credits earned as
a state member under Section 21353.5, except that the member shall
be entitled to receive credit under this section for the sick leave
he or she has earned as a state member subject to any other
retirement formula, provided the member has a sick leave credit
balance remaining at the time of retirement.
(e) For the purposes of this section, sick leave benefits provided
to state employees pursuant to the state sick leave system shall be
construed to mean compensation paid to employees on approved leaves
of absence because of sickness.
SEC. 24. Section 20963.1 of the Government Code is amended to
read:
20963.1. (a) A state member whose effective date of retirement is
within four months of separation from employment of the state, shall
be credited at his or her retirement with 0.004 year of service for
each unused day of educational leave credit, as certified to the
board by the employer. A day of unused educational leave is the
equivalent of an eight-hour day. The provisions of this section
shall be effective for eligible state members who retire directly
from state employment on and after January 1, 2000.
(b) This section shall apply to eligible state members in state
bargaining units that have agreed to this section in a memorandum of
understanding, or as authorized by the Director of Human Resources
for classifications of state employees that are excluded from the
definition of "state employee" by paragraph (c) of Section 3513 of
the Government Code.
SEC. 25. Section 20965 of the Government Code is amended to read:
20965. A local miscellaneous member and a local safety member,
whose effective date of retirement is within four months of
separation from employment with the employer which granted the sick
leave credit, shall be credited at his or her retirement with 0.004
year of service credit for each unused day of sick leave certified to
the board by his or her employer. A day of unused sick leave is
the equivalent of an eight-hour day. The certification shall
report only those days of unused sick leave that were accrued by the
member during the normal course of his or her employment and shall
not include any additional days of sick leave reported for the
purpose of increasing the member's retirement benefit. Reports of
unused days of sick leave shall be subject to audit and retirement
benefits may be adjusted where improper reporting is found.
This section shall not apply to any contracting agency nor to the
employees of a contracting agency until the agency elects to be
subject to this section by contract or by amendment to its contract
made in the manner prescribed for approval of contracts, except that
an election among the employees is not required, or, in the case of
contracts made after September 26, 1974, by express provision in the
contract making the contracting agency subject to this section.
This section shall only apply to members who retire after the
effective date of the contract amendments.
SEC. 26. Section 21499 of the Government Code is amended to read:
21499. (a) Notwithstanding Section 21498, when either an initial
payment of a preretirement or postretirement death allowance or a
preretirement or postretirement lump-sum benefit is payable in an
amount of ten dollars ($10) or more, it shall be authorized to the
Controller within 45 days of receipt by this system of all the
necessary information, including the return of warrants issued or any
overpayment outstanding after the date of the death of the
annuitant.
(b) If any payment is not made within that time limitation, the
payment shall also include interest at the greater of the
interest crediting rate specified in Section 20178 or the net
earnings rate (including capital gains and losses) in effect at the
time the payment is made, default interest rate
established in Section 1 of Article XV of the California Constitution
for time following the expiration of that time limitation.
SEC. 27. Section 21626.5 of the Government Code is amended to
read:
21626.5. (a) For purposes of Section 21624,
21626, 21627, 21629, or 21630, a surviving domestic partner shall be
treated in the same manner as a surviving spouse if either:
(a)
(1) The domestic partnership was registered for one
year prior to the member's service retirement date or at the
disability retirement date and continuously until the date of the
member's death.
(b)
(2) The member retired prior to January 1, 2006, and
both the member and his or her domestic partner, who currently are in
a state-registered domestic partnership, sign an affidavit stating
that, at the time prescribed by the retirement system for married
spouses to qualify for survivor continuance, the member and the
domestic partner would have qualified to be registered as domestic
partners pursuant to Section 297 of the Family Code.
(b) For purposes of Section 21624, 21626, 21627, 21629, or 21630,
an individual who is the same gender as the member shall be treated
in the same manner as a surviving spouse if the following conditions
are satisfied:
(1) The individual entered into marriage with the member on or
after the date when individuals of the same gender were legally
allowed to enter into marriage and was married continuously until the
date of the member's death.
(2) Either of the following applies:
(A) The member retired prior to the date when individuals of the
same gender were legally allowed to enter into marriage, and both the
member and his or her spouse, who are currently married, sign an
affidavit stating that, at the time prescribed by the retirement
system for spouses to qualify for a survivor continuance, the member
and the individual would have qualified to be legally married had it
been legally possible for people of the same gender to marry.
(B) The individual originally qualified to become a surviving
spouse under subdivision (a).