Amended in Senate June 20, 2016

Amended in Assembly May 4, 2016

California Legislature—2015–16 Regular Session

Assembly BillNo. 2375


Introduced by Committee on Public Employees, Retirement, and Social Security (Assembly Membersbegin delete Cooper (Chair), Bonta,end deletebegin insert Bonta (Chair),end insert Cooley,begin delete Gonzalez, and O'Donnellend deletebegin insert Cooper, Cristina Garcia, O'Donnell, Wagner, and Waldronend insert)

February 18, 2016


An act to amend Section 87483 of the Education Code, and to amend Sections 7502, 7504, 7507, 7507.2, 20034, 20035, 20035.5, 20037, 20037.6, 20037.7, 20037.8, 20037.9, 20037.10, 20037.11, 20037.12, 20037.13, 20037.15, 20229, 20537, 20572, 20577.5, 20578, 20638, 20900, 20963, 20963.1, 20965,begin delete 21337,end delete 21499, 21626.5, and 22820 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 amended, Committee on Public Employees, Retirement, and Social Security. Public Employees’ Retirement System: omnibus bill.

(1) Existing law requires all state and local retirement systems to secure, not less than triennially, the services of an enrolled actuary, who is required to perform a valuation of the system. Existing law requires all state and local public retirement systems to submit audited financial statements to the Controller at the earliest practicable opportunity within 6 months of the close of each fiscal year. Existing law requires the Controller to review these reports and to publish an annual report on the financial condition of all state and local public retirement systems, as specified. Existing law requires the Controller to establish an advisory committee, including enrolled actuaries, to assist state and local systems with their reporting duties. Existing law requires the Legislature and local legislative bodies, when considering changes in retirement benefits or other postemployment benefits, to secure the services of an actuary to provide a statement of the actuarial impact upon future annual costs, except as specified. Existing law establishes the California Actuarial Advisory Panel, which consists of a specified membership that includes enrolled actuaries. Existing law requires the panel to provide impartial and independent information on pensions, other postemployment benefits, and best practices to public agencies.

This bill would delete references to enrolled actuaries for purposes of the provisions described above. The bill would substitute for this designation, for purposes of establishing the advisory committee and the actuarial advisory panel, as described above, actuaries who have attained the designation of Associate or Fellow of the Society of Actuaries. The bill would substitute for the enrolled actuaries designation, for purposes of the triennial valuation and the reporting requirements described above, actuaries who satisfy the qualification standards for actuaries issuing statements of actuarial opinion in the United States with regard to pensions or other postemployment benefits.

(2) 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.

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.

(3) Existing law requires the board to provide the Legislature, the Governor, and the Chair of the California Actuarial Advisory Panel a specified report in connection with state employee retirement plans. Existing law requires the Chair of the California Actuarial Advisory Panel, within 30 days of receipt of the report, at a specified, publicly noticed hearing, to make a presentation on certain issues relating to investment returns and amortization.

This bill would require that the presentation described above to be made each legislative session and that the presentation be based on the report made by the board.

(4) 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 tobegin delete changeend deletebegin insert chargeend insert 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%.

(5) 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.

(6) 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.

(7) Existing law authorizes certain members who are either academic employees of the California State University or certificated employees of school districts employed on a part-time basis to receive full-time service credit and the benefits related to that status if both the member and employer elect to make the appropriate additional contributions and other requirements are met. Existing law limits the application of these provisions to 5 years of part-time status.

This bill would extend the authorization described above to academic employees of community college districts. The bill would also make a correctional change in this regard.

(8) 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.

begin delete

(9) Existing law requires the board to transfer funds to separate state and school accounts to fund the purchasing power protection allowance of retirees, survivors, and beneficiaries of state or school employers. Existing law prescribes a method for calculating the amount to be transferred, which is to be the lesser of two amounts, one of which is calculated at one and 1/10th percent of the net earnings on state or school member contributions, as specified.

end delete
begin delete

This bill would revise the calculation described above to be one and 1/10th percent of state or school member contributions.

end delete
begin delete

(10)

end delete

begin insert(9)end insert 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 be calculated at 7%, pursuant to the California Constitution.

begin delete

(11)

end delete

begin insert(10)end insert 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.

begin delete

(12)

end delete

begin insert(11)end insert Existing law, the Public Employees’ Medical and Hospital Care Act (PEMHCA), which is administered by the Board of Administration of the Public Employees’ Retirement System, authorizes the board to contract for health benefit plans for employees and annuitants, as defined, which may include employees and annuitants of contracting agencies. Existing law grants eligible, uninsured family members of specified firefighters or peace officers whose deaths are the result of injury or disease arising out of their duties the status of annuitants for purposes of receiving benefits under PEMHCA. Existing law requires employers to notify the board within 10 business days of the death of the employee in this context if a spouse of family member may be eligible for enrollment in a health benefit plan in this regard.

This bill would revise the duty of employers to notify the board to also require that they provide updated contact information of the surviving spouse or family member if that person may be eligible for enrollment.

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

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

P5    1

SECTION 1.  

Section 87483 of the Education Code is amended
2to read:

3

87483.  

Notwithstanding any other provision, the governing
4board of a community college district may establish regulations
5that allow academic employees to reduce their workload from
6full-time to part-time duties. The regulations shall include, but
7shall not be limited to, the following if the employees wish to
8reduce their workload and maintain retirement benefits pursuant
9to Section 22713 of this code or Section 20900 of the Government
10Code:

P6    1(a) The employee shall have reached the age of 55 prior to
2reduction in workload.

3(b) The employee shall have been employed full time in an
4academic position or a position requiring certification
5qualifications, or both, for at least 10 years of which the
6immediately preceding five years were full-time employment.

7(c) During the period immediately preceding a request for a
8reduction in workload, the employee shall have been employed
9full time in an academic position or a position requiring
10certification qualifications, or both, for a total of at least five years
11without a break in service. For purposes of this subdivision,
12sabbaticals and other approved leaves of absence shall not
13constitute a break in service. Time spent on a sabbatical or other
14approved leave of absence shall not be used in computing the
15five-year full-time service requirement prescribed by this
16subdivision.

17(d) The option of part-time employment shall be exercised at
18the request of the employee and can be revoked only with the
19mutual consent of the employer and the employee.

20(e) The employee shall be paid a salary which is the pro rata
21share of the salary he or she would be earning had he or she not
22elected to exercise the option of part-time employment but shall
23retain all other rights and benefits for which he or she makes the
24payments that would be required if he or she remained in full-time
25employment.

26The employee shall receive health benefits as provided in Section
2753201 of the Government Code in the same manner as a full-time
28employee.

29(f) The minimum part-time employment shall be the equivalent
30of one-half of the number of days of service required by the
31employee’s contract of employment during his or her final year
32of service in a full-time position.

33(g) The period of this part-time employment shall not exceed
34five years for employees subject to Section 20900 of the
35Government Code or 10 years for employees subject to Section
3622713 of this code.

37(h) The period of part-time employment of employees subject
38to Section 20815 of the Government Code shall not extend beyond
39the end of the college year during which the employee reaches his
P7    1or her 70th birthday. This subdivision shall not apply to any
2employee subject to Section 22713 of this code.

3

SEC. 2.  

Section 7502 of the Government Code is amended to
4read:

5

7502.  

The State Controller shall review the annual financial
6report of each state and local public retirement system submitted
7pursuant to Section 7504 giving particular consideration to the
8adequacy of funding of each system. The State Controller shall
9also review the triennial valuation of each public retirement system
10submitted pursuant to Section 7504 and shall give particular
11consideration to the assumption concerning the inflation element
12in salary and wage increases, mortality, service retirement rates,
13withdrawal rates, disability retirement rates, and rate of return on
14total assets.

15The State Controller shall establish an advisory committee that
16shall include actuaries who have attained the designation of
17Associate or Fellow of the Society of Actuaries and state and local
18public retirement system administrators to assist in carrying out
19the duties imposed by this section.

20

SEC. 3.  

Section 7504 of the Government Code is amended to
21read:

22

7504.  

(a) All state and local public retirement systems shall,
23not less than triennially, secure the services of an actuary. For the
24purposes of this section, “actuary” means an actuary who satisfies
25the qualification standards for actuaries issuing statements of
26actuarial opinion in the United States with regard to pensions or
27other postemployment benefits and who has demonstrated
28experience in public retirement systems. The actuary shall perform
29a valuation of the system utilizing actuarial assumptions and
30techniques established by the agency that are, in the aggregate,
31reasonably related to the experience and the actuary’s best estimate
32of anticipated experience under the system. Any differences
33between the actuarial assumptions and techniques used by the
34actuary that differ significantly from those established by the
35agency shall be disclosed in the actuary’s report and the effect of
36the differences on the actuary’s statement of costs and obligations
37shall be shown.

38(b) All state and local public retirement systems shall secure
39the services of a qualified person to perform an attest audit of the
P8    1system’s financial statements. A qualified person means any of
2the following:

3(1) A person who is licensed to practice as a certified public
4accountant in this state by the California Board of Accountancy.

5(2) A person who is registered and entitled to practice as a public
6accountant in this state by the California Board of Accountancy.

7(3) A county auditor in any county subject to the County
8Employees Retirement Law of 1937 (Chapter 3 (commencing with
9Section 31450) of Part 3 of Division 4 of Title 3).

10(4) A county auditor in any county having a pension trust and
11retirement plan established pursuant to Section 53216.

12(c) All state and local public retirement systems shall submit
13audited financial statements to the State Controller at the earliest
14practicable opportunity within six months of the close of each
15fiscal year. However, the State Controller may delay the filing date
16for reports due in the first year until the time as report forms have
17been developed that, in his or her judgment, will satisfy the
18requirements of this section. The financial statements shall be
19prepared in accordance with generally accepted accounting
20principles in the form and manner prescribed by the State
21Controller. The penalty prescribed in Section 53895 shall be
22invoked for failure to comply with this section. Upon a satisfactory
23showing of good cause, the State Controller may waive the penalty
24for late filing provided by this subdivision.

25(d) The State Controller shall compile and publish a report
26annually on the financial condition of all state and local public
27retirement systems containing, but not limited to, the data required
28in Section 7502. The report shall be published within 12 months
29of the receipt of the information, and in no case later than 18
30months after the end of the fiscal year upon which the information
31in the report is based.

32

SEC. 4.  

Section 7507 of the Government Code is amended to
33read:

34

7507.  

(a) For the purpose of this section:

35(1)  “Actuary” means an actuary as defined in Section 7504.

36(2) “Future annual costs” includes, but is not limited to, annual
37dollar changes, or the total dollar changes involved when available,
38as well as normal cost and any change in accrued liability.

39(b) (1) Except as provided in paragraph (2), the Legislature and
40local legislative bodies, including community college district
P9    1governing boards, when considering changes in retirement benefits
2or other postemployment benefits, shall secure the services of an
3actuary to provide a statement of the actuarial impact upon future
4annual costs, including normal cost and any additional accrued
5liability, before authorizing changes in public retirement plan
6benefits or other postemployment benefits.

7(2) The requirements of this subdivision do not apply to:

8(A)  An annual increase in a premium that does not exceed 3
9percent under a contract of insurance.

10(B) A change in postemployment benefits, other than pension
11benefits, mandated by the state or federal government or made by
12an insurance carrier in connection with the renewal of a contract
13of insurance.

14(c) (1) (A) With regard to local legislative bodies, including
15community college district governing boards, the future costs of
16changes in retirement benefits or other postemployment benefits,
17as determined by the actuary, shall be made public at a public
18meeting at least two weeks prior to the adoption of any changes
19in public retirement plan benefits or other postemployment benefits.
20If the future costs of the changes exceed one-half of 1 percent of
21the future annual costs, as defined in paragraph (2) of subdivision
22(a), of the existing benefits for the legislative body, an actuary
23shall be present to provide information as needed at the public
24meeting at which the adoption of a benefit change shall be
25considered. The adoption of any benefit to which this section
26applies shall not be placed on a consent calendar.

27(B) The requirements of this paragraph do not apply to:

28(i) An annual increase in a premium that does not exceed 3
29percent under a contract of insurance.

30(ii) A change in postemployment benefits, other than pension
31benefits, mandated by the state or federal government or made by
32an insurance carrier in connection with the renewal of a contract
33of insurance.

34(2) With regard to the Legislature, the future costs as determined
35by the actuary shall be made public at the policy and fiscal
36committee hearings to consider the adoption of any changes in
37public retirement plan benefits or other postemployment benefits.
38The adoption of any benefit to which this section applies shall not
39be placed on a consent calendar.

P10   1(d) Upon the adoption of any benefit change to which this
2section applies, the person with the responsibilities of a chief
3executive officer in an entity providing the benefit, however that
4person is denominated, shall acknowledge in writing that he or
5she understands the current and future cost of the benefit as
6determined by the actuary. For the adoption of benefit changes by
7the state, this person shall be the Director of Human Resources.

8(e) The requirements of this section do not apply to a school
9district or a county office of education, which shall instead comply
10with requirements regarding public notice of, and future cost
11determination for, benefit changes that have been enacted to
12regulate these entities. These requirements include, but are not
13limited to, those enacted by Chapter 1213 of the Statutes of 1991
14and by Chapter 52 of the Statutes of 2004.

15

SEC. 5.  

Section 7507.2 of the Government Code is amended
16to read:

17

7507.2.  

(a) There is hereby enacted the California Actuarial
18Advisory Panel. The panel shall provide impartial and independent
19information on pensions, other postemployment benefits, and best
20practices to public agencies and shall meet quarterly.

21(b) The responsibilities of the California Actuarial Advisory
22Panel shall include, but are not limited to:

23(1) Defining the range of actuarial model policies and best
24practices for public retirement plan benefits, including pensions
25and other postemployment benefits.

26(2) Developing pricing and disclosure standards for California
27public sector benefit improvements.

28(3) Developing quality control standards for California public
29sector actuaries.

30(4) Gathering model funding policies and practices.

31(5) Replying to policy questions from public retirement systems
32in California.

33(6) Providing comment upon request by public agencies.

34(c) The California Actuarial Advisory Panel shall consist of
35eight members. Each member shall be an actuary who has attained
36the designation of Associate or Fellow of the Society of Actuaries
37and who has demonstrated experience with public sector clients.
38Members shall be appointed by the entities listed below, and each
39member shall serve a three-year term, provided that, in the initial
40appointments only, the panelists named by the University of
P11   1California, the Senate, and one of the panelists named by the
2Governor shall serve two-year terms. The Governor shall appoint
3two panelists, and one panelist shall be appointed by each of the
4following:

5(1) The Teachers’ Retirement Board.

6(2) The Board of Administration of the Public Employees’
7Retirement System.

8(3) The State Association of County Retirement Systems.

9(4) The Board of Regents of the University of California.

10(5) The Speaker of the Assembly.

11(6) The Senate Committee on Rules.

12(d) The California Actuarial Advisory Panel shall be located in
13the Controller’s office, which shall provide support staff to the
14panel.

15(e) The opinions of the California Actuarial Advisory Panel are
16nonbinding and advisory only. The opinions of the panel shall not,
17in any case, be used as the basis for litigation.

18(f) A member of the California Actuarial Advisory Panel shall
19receive reimbursement for expenses that shall be paid by the
20authority that appointed the member.

21(g) The California Actuarial Advisory Panel shall report to the
22Legislature on or before February 1 of each year.

23

SEC. 6.  

Section 20034 of the Government Code is amended
24to read:

25

20034.  

The highest annual average compensation during any
26consecutive 12- or 36-month period of employment as a member
27of any retirement system maintained by the university shall be
28considered compensation earnable by a member of this system for
29purposes of computing final compensation for the member
30providing he or she retires concurrently under both systems.

31

SEC. 7.  

Section 20035 of the Government Code is amended
32to read:

33

20035.  

(a) Notwithstanding Section 20037, “final
34compensation” for the purposes of determining any pension or
35benefit with respect to a state member who retires or dies on or
36after July 1, 1991, and with respect to benefits based on service
37with the state, means the highest annual compensation which was
38earnable by the state member during any consecutive 12-month
39period of employment preceding the effective date of his or her
P12   1retirement or the date of his or her last separation from state service
2if earlier.

3(b) With respect to a state member who retires or dies on or
4after July 1, 1991, and who was a managerial employee, as defined
5by subdivision (e) of Section 3513, or a supervisory employee, as
6defined by subdivision (g) of Section 3513, whose monthly salary
7range was administratively reduced by 5 percent because of the
8salary range reductions administratively imposed upon managers
9and supervisors during the 1991-92 fiscal year, “final
10compensation” means the highest annual compensation the state
11member would have earned had his or her salary range not been
12reduced by the 5-percent reduction. This subdivision shall only
13apply if the period during which the state member’s salary was
14reduced would have otherwise been included in determining his
15or her final compensation. The costs, if any, that may result from
16the use of the higher final compensation shall be paid for by the
17employer in the same manner as other retirement benefits are
18funded.

19

SEC. 8.  

Section 20035.5 of the Government Code is amended
20to read:

21

20035.5.  

Notwithstanding Section 20037, “final compensation”
22for the purposes of determining any pension or benefit with respect
23to a school member who retires or dies on or after January 1, 2000,
24and with respect to benefits based on service with a school
25employer, means the highest annual compensation that was
26earnable by the school member during any consecutive 12-month
27period of employment preceding the effective date of his or her
28retirement or the date of his or her last separation from service if
29earlier.

30

SEC. 9.  

Section 20037 of the Government Code is amended
31to read:

32

20037.  

For a state member, or for a local member who is an
33employee of a contracting agency that is subject to this section,
34“final compensation” means the highest annual average
35compensation earnable by a member during any consecutive
3636-month period of employment preceding the effective date of
37his or her retirement or the date of his or her last separation from
38state service if earlier, including any or all of the period or periods
39of (a) service required for qualification for membership, or (b)
40prior service which qualifies for credit under this system, if any,
P13   1immediately preceding membership, or (c) time prior to entering
2state service at the compensation earnable by him or her in the
3position first held by him or her in that service, as may be necessary
4to complete three consecutive years. For the purposes of this
5section, periods of service separated by a period of retirement or
6breaks in service may be aggregated to constitute a period of three
7consecutive years, if the periods of service are consecutive except
8for such a period of retirement or breaks. If a break in service did
9not exceed six months in duration, time included in the break and
10compensation earnable during that time shall be included in
11computation of final compensation. If a break in service exceeded
12six months in duration, the first six months thereof and the
13compensation earnable during those six months shall be included
14in computation of final compensation, but time included in the
15break which is in excess of six months and the compensation
16earnable during that excess time shall be excluded in computation
17of final compensation. On and after November 13, 1968, this
18section shall apply to all contracting agencies and to the employees
19of those agencies whether or not those agencies have previously
20elected to be subject to this section, except that this section shall
21not apply to an employee of a contracting agency which has not
22elected to be subject to this section whose death occurred or whose
23retirement was effective prior to November 13, 1968.

24

SEC. 10.  

Section 20037.5 of the Government Code, as added
25by Section 56 of Chapter 88 of the Statutes of 1998, is repealed.

26

SEC. 11.  

Section 20037.5 of the Government Code, as added
27by Section 56 of Chapter 91 of the Statutes of 1998, is amended
28to read:

29

20037.5.  

Notwithstanding Section 20035, “final compensation”
30for a state member who has elected to be subject to Section
3121353.5, for the purposes of determining any pension or benefit
32based on service credited under that section, means the highest
33average annual compensation earnable by the member during any
34consecutive 36-month period preceding the effective date of his
35or her retirement or the date of his or her last separation from state
36service if earlier.

37

SEC. 12.  

Section 20037.6 of the Government Code is amended
38to read:

39

20037.6.  

(a) Notwithstanding Sections 20035 and 20037, final
40compensation for a person who is employed by the state for the
P14   1first time and becomes a state member of the system on or after
2July 1, 2006, and is represented by State Bargaining Unit 2, means
3the highest average annual compensation earnable by the member
4during any consecutive 36-month period preceding the effective
5date of his or her retirement or the date of his or her last separation
6from state service if earlier.

7(b) This section applies to service credit accrued while a member
8of State Bargaining Unit 2.

9(c) This section does not apply to:

10(1)  Former state employees who return to state employment
11on or after July 1, 2006.

12(2) State employees hired prior to July 1, 2006, who were subject
13to Section 20281.5 during the first 24 months of state employment.

14(3) State employees hired prior to July 1, 2006, who become
15subject to representation by State Bargaining Unit 2 on or after
16July 1, 2006.

17(4)  State employees on an approved leave of absence who return
18to active employment on or after July 1, 2006.

19

SEC. 13.  

Section 20037.7 of the Government Code is amended
20to read:

21

20037.7.  

(a) Notwithstanding Sections 20035 and 20037, final
22compensation for a person who is employed by the state for the
23first time and becomes a state member of the system on or after
24January 1, 2007, and is represented by State Bargaining Unit 1, 3,
254, 11, 14, 15, 17, 20, or 21, means the highest average annual
26compensation earnable by the member during any consecutive
2736-month period preceding the effective date of his or her
28retirement or the date of his or her last separation from state service
29if earlier.

30(b) This section applies to service credit accrued while a member
31of State Bargaining Unit 1, 3, 4, 11, 14, 15, 17, 20, or 21.

32(c) This section does not apply to:

33(1) Former state employees previously employed before January
341, 2007, who return to state employment on or after January 1,
352007.

36(2) State employees hired prior to January 1, 2007, who were
37subject to Section 20281.5 during the first 24 months of state
38employment.

P15   1(3) State employees hired prior to January 1, 2007, who become
2subject to representation by State Bargaining Unit 1, 3, 4, 11, 14,
315, 17, 20, or 21 on or after January 1, 2007.

4(4) State employees on an approved leave of absence employed
5before January 1, 2007, who return to active employment on or
6after January 1, 2007.

7

SEC. 14.  

Section 20037.8 of the Government Code is amended
8to read:

9

20037.8.  

(a) Notwithstanding Sections 20035 and 20037, final
10compensation for a person who is employed by the state for the
11first time and becomes a state member of the system on or after
12January 1, 2007, and is represented by State Bargaining Unit 12
13or 13, means the highest average annual compensation earnable
14by the member during any consecutive 36-month period preceding
15the effective date of his or her retirement or the date of his or her
16last separation from state service if earlier.

17(b) This section applies to service credit accrued while a member
18of State Bargaining Unit 12 or 13.

19(c) This section does not apply to:

20(1) Former state employees previously employed before January
211, 2007, who return to state employment on or after January 1,
222007.

23(2) State employees hired prior to January 1, 2007, who were
24subject to Section 20281.5 during the first 24 months of state
25employment.

26(3) State employees hired prior to January 1, 2007, who become
27subject to representation by State Bargaining Unit 12 or 13 on or
28after January 1, 2007.

29(4) State employees on an approved leave of absence employed
30before January 1, 2007, who return to active employment on or
31after January 1, 2007.

32

SEC. 15.  

Section 20037.9 of the Government Code is amended
33to read:

34

20037.9.  

(a) Notwithstanding Sections 20035 and 20037, final
35compensation for a person who is employed by the state for the
36first time and becomes a state member of the system on or after
37January 1, 2007, and is represented by State Bargaining Unit 16
38or 19, means the highest average annual compensation earnable
39by the member during any consecutive 36-month period preceding
P16   1the effective date of his or her retirement or the date of his or her
2last separation from state service if earlier.

3(b) This section applies to service credit accrued while a member
4of State Bargaining Unit 16 or 19.

5(c) This section does not apply to:

6(1) Former state employees previously employed before January
71, 2007, who return to state employment on or after January 1,
82007.

9(2) State employees hired prior to January 1, 2007, who were
10subject to Section 20281.5 during the first 24 months of state
11employment.

12(3) State employees hired prior to January 1, 2007, who become
13subject to representation by State Bargaining Unit 16 or 19 on or
14after January 1, 2007.

15(4) State employees on an approved leave of absence employed
16before January 1, 2007, who return to active employment on or
17after January 1, 2007.

18

SEC. 16.  

Section 20037.10 of the Government Code is amended
19to read:

20

20037.10.  

(a) Notwithstanding Sections 20035 and 20037,
21final compensation for a person who is employed by the state for
22the first time and becomes a state member of the system on or after
23January 1, 2007, and is represented by State Bargaining Unit 7,
24means the highest average annual compensation earnable by the
25member during any consecutive 36-month period immediately
26preceding the effective date of his or her retirement or the date of
27his or her last separation from state service if earlier.

28(b) This section applies to service credit accrued while a member
29of State Bargaining Unit 7.

30(c) This section does not apply to:

31(1) Service credit accrued while classified as a state peace
32officer/firefighter while a member of State Bargaining Unit 7.

33(2) Former state employees previously employed before January
341, 2007, who return to state employment on or after January 1,
352007.

36(3) State employees hired prior to January 1, 2007, who were
37subject to Section 20281.5 during the first 24 months of state
38employment.

P17   1(4) State employees hired prior to January 1, 2007, who become
2subject to representation by State Bargaining Unit 7 on or after
3January 1, 2007.

4(5) State employees on an approved leave of absence employed
5before January 1, 2007, who return to active employment on or
6after January 1, 2007.

7

SEC. 17.  

Section 20037.11 of the Government Code is amended
8to read:

9

20037.11.  

(a) Notwithstanding Sections 20035 and 20037,
10final compensation for a person who is employed by the state for
11the first time and becomes a state member of the system on or after
12January 1, 2007, and is represented by State Bargaining Unit 10,
13means the highest average annual compensation earnable by the
14member during any consecutive 36-month period preceding the
15effective date of his or her retirement or the date of his or her last
16separation from state service if earlier.

17(b) This section applies to service credit accrued while a member
18of State Bargaining Unit 10.

19(c) This section does not apply to:

20(1) Former state employees previously employed before January
211, 2007, who return to state employment on or after January 1,
222007.

23(2) State employees hired prior to January 1, 2007, who were
24subject to Section 20281.5 during the first 24 months of state
25employment.

26(3) State employees hired prior to January 1, 2007, who become
27subject to representation by State Bargaining Unit 10 on or after
28January 1, 2007.

29(4) State employees on an approved leave of absence employed
30before January 1, 2007, who return to active employment on or
31 after January 1, 2007.

32

SEC. 18.  

Section 20037.12 of the Government Code is amended
33to read:

34

20037.12.  

(a) Notwithstanding Sections 20035 and 20037,
35final compensation for a person who is employed by the state for
36the first time and becomes a state member of the system on or after
37January 1, 2007, and is represented by State Bargaining Unit 18,
38means the highest average annual compensation earnable by the
39member during any consecutive 36-month period preceding the
P18   1effective date of his or her retirement or the date of his or her last
2separation from state service if earlier.

3(b) This section applies to service credit accrued while a member
4of State Bargaining Unit 18.

5(c) This section does not apply to:

6(1) Former state employees previously employed before January
71, 2007, who return to state employment on or after January 1,
82007.

9(2) State employees hired prior to January 1, 2007, who were
10subject to Section 20281.5 during the first 24 months of state
11employment.

12(3) State employees hired prior to January 1, 2007, who become
13subject to representation by State Bargaining Unit 18 on or after
14January 1, 2007.

15(4) State employees on an approved leave of absence employed
16before January 1, 2007, who return to active employment on or
17after January 1, 2007.

18

SEC. 19.  

Section 20037.13 of the Government Code is amended
19to read:

20

20037.13.  

(a) Notwithstanding Sections 20035 and 20037, for
21the purposes of determining any pension or benefit with respect
22to benefits based on service with the state, “final compensation”
23means the highest annual compensation that was earnable by the
24state member during any consecutive 36-month period of
25employment preceding the effective date of his or her retirement
26or the date of his or her last separation from state service if earlier.

27(b) This section shall only apply to a member appointed to a
28career executive assignment, as defined in Section 18546, who at
29the time of appointment meets one or more of the following
30criteria:

31(1) He or she previously had, but does not currently have,
32permanent status in the civil service.

33(2) He or she is a person described in Section 18990 who was
34not, within the past 12 months, employed by the Legislature for
35two or more consecutive years.

36(3) He or she is a person described in Section 18992 who was
37not, within the past 12 months, holding a nonelected exempt
38position in the executive branch.

39(c) A state entity that employs a person described in subdivision
40(b) in a career executive assignment shall notify the Controller of
P19   1this person’s employment status and the Controller shall forward
2this information to the system.

3

SEC. 20.  

Section 20037.14 of the Government Code, as
4amended by Section 127 of Chapter 296 of the Statutes of 2011,
5is repealed.

6

SEC. 21.  

Section 20037.14 of the Government Code, as added
7by Section 11 of Chapter 163 of the Statutes of 2010, is amended
8to read:

9

20037.14.  

(a) Notwithstanding Sections 20035 and 20037,
10final compensation for a person who is employed by the state for
11the first time and becomes a state member of the system on or after
12October 31, 2010, and is represented by State Bargaining Unit 5
13or 8, means the highest average annual compensation earnable by
14the member during any consecutive 36-month period preceding
15the effective date of his or her retirement or the date of his or her
16last separation from state service if earlier.

17(b) This section applies to service credit accrued while a member
18of State Bargaining Unit 5 or 8 or in a class related to State
19Bargaining Unit 5 or 8 as an employee who is excepted from the
20definition of “state employee” in subdivision (c) of Section 3513,
21or an officer or employee of the executive branch of state
22government who is not a member of the civil service.

23(c) This section does not apply to:

24(1) Former state employees previously employed before October
2531, 2010, who return to state employment on or after October 31,
262010.

27(2) State employees hired prior to October 31, 2010, who were
28subject to Section 20281.5 during the first 24 months of state
29employment.

30(3) State employees hired prior to October 31, 2010, who
31become subject to representation by State Bargaining Unit 5 or 8
32on or after October 31, 2010.

33(4) State employees on an approved leave of absence employed
34before October 31, 2010, who return to active employment on or
35after October 31, 2010.

36

SEC. 22.  

Section 20037.15 of the Government Code is amended
37to read:

38

20037.15.  

(a)  Notwithstanding Sections 3517.8, 20035, and
3920037, final compensation for a person who is employed for the
40first time and becomes a member of the system on or after January
P20   115, 2011, means the highest average annual compensation earnable
2by the member during any consecutive 36-month period preceding
3the effective date of his or her retirement or the date of his or her
4last separation from state service if earlier.

5(b) This section applies to the following:

6(1) Service credit accrued while a member of State Bargaining
7Unit 6 or 9 or in a class related to State Bargaining Unit 6 or 9 as
8an employee who is excepted from the definition of “state
9employee” in subdivision (c) of Section 3513, or an officer or
10employee of the executive branch of state government who is not
11a member of the civil service.

12(2) Service credit accrued while a peace officer/firefighter
13member represented by State Bargaining Unit 7 or in a class related
14to peace officer/firefighter members in State Bargaining Unit 7 as
15an employee who is excepted from the definition of “state
16employee” in subdivision (c) of Section 3513, or an officer or
17employee of the executive branch of state government who is not
18a member of the civil service.

19(3) Service credit accrued as an employee who is excepted from
20the definition of “state employee” in subdivision (c) of Section
213513, or an officer or employee of the executive branch of state
22government who is not a member of the civil service.

23(4) Service credit accrued as an employee of the Legislature,
24the judicial branch, or the California State University.

25(c) This section does not apply to:

26(1) Former employees previously employed before January 15,
272011, who return to employment on or after January 15, 2011, and
28who were previously subject to a 12-month average.

29(2) State employees hired prior to January 15, 2011, who were
30subject to Section 20281.5 during the first 24 months of state
31employment, and who were previously subject to a 12-month
32average.

33(3) State employees hired prior to January 15, 2011, who become
34subject to representation by State Bargaining Unit 6, 7, or 9 on or
35after January 15, 2011, and who were previously subject to a
3612-month average.

37(4) Employees on an approved leave of absence employed before
38January 15, 2011, who return to active employment on or after
39January 15, 2011, and who were previously subject to a 12-month
40average.

P21   1(d) If this section is in conflict with a memorandum of
2understanding that is current and in effect on January 15, 2011,
3the memorandum of understanding shall be controlling while it
4remains in effect. Upon expiration of the memorandum of
5understanding that is in effect and current on January 15, 2011,
6this section shall be controlling and may not be superseded by a
7subsequent memorandum of understanding.

8

SEC. 23.  

Section 20229 of the Government Code is amended
9to read:

10

20229.  

(a) The board, notwithstanding Section 10231.5, shall
11provide the Legislature, the Governor, and the Chair of the
12California Actuarial Advisory Panel, established pursuant to
13Section 7507.2 of the Government Code, with an annual report
14that includes all of the following, as these items apply to state
15employee retirement plans:

16(1) (A) A description of the investment return assumption
17utilized by the board when determining the contribution rates.

18(B) A calculation of the contribution rates utilizing an
19investment return assumption 2 percentage points above and 2
20percentage points below the investment return assumption utilized
21by the board.

22(2) (A) A description of the amortization period for any
23unfunded liabilities utilized by the board when determining the
24contribution rates.

25(B) A calculation of the contribution rates based on an
26amortization period equal to the estimated average remaining
27service periods of employees covered by the contributions.

28(3) (A) A description of the discount rate utilized by the board
29for reporting liabilities.

30(B) A calculation of those liabilities based upon a discount rate
31that is 2 percent below the long-term rate of return actually
32assumed by the board.

33(4) The market value of the assets controlled by the board and
34an explanation of how the actuarial value assigned to those assets
35differs from the market value of those assets.

36(b) Each legislative session, the Chair of the California Actuarial
37Advisory Panel, or his or her designee, shall, during a publicly
38noticed joint hearing of the Senate Committee on Public
39Employment and Retirement and the Assembly Committee on
40Public Employees, Retirement and Social Security, do all of the
P22   1following based on information received in the report required by
2subdivision (a):

3(1) Explain the role played by the investment return assumption
4and amortization period in the calculation of the contribution rates.

5(2) Describe the consequences for future state budgets should
6the investment return assumption not be realized.

7(3) Report whether the board’s amortization period exceeds the
8estimated average remaining service periods of employees covered
9by the contributions.

10(c) The report required by subdivision (a) shall be submitted in
11compliance with Section 9795.

12

SEC. 24.  

Section 20537 of the Government Code is amended
13to read:

14

20537.  

The board may charge interest on the amount of any
15payment due and unpaid by a contracting agency until payment is
16received. Interest shall be charged at the greater of the annual
17return on the system’s investments for the year prior to the year
18in which payments are not timely made or a simple annual rate of
1910 percent. The interest shall be deemed interest earnings for the
20year in which the late payment is received.

21

SEC. 25.  

Section 20572 of the Government Code is amended
22to read:

23

20572.  

(a) If a contracting agency fails for 30 days after
24demand by the board to pay in full any installment of contributions
25required by its contract, or fails for three months after demand
26therefor by the board to file any information required in the
27administration of this system with respect to that contracting
28agency’s employees, or if the board determines that the contracting
29agency is no longer in existence, the board may terminate that
30contract by resolution adopted by a majority vote of its members
31effective 60 days after notice of its adoption has been mailed by
32registered mail to the governing body of the contracting agency.

33(b) In addition to the interest obligations set forth in Section
3420537, if a contracting agency fails to pay in full any installment
35of the contributions when due and the failure continues for a period
36of three months, the contracting agency may be assessed a penalty
37of 10 percent of the total amount due and unpaid, including any
38accrued and unpaid interest. The penalty may be assessed once
39during each 30-day period that the outstanding amount remains
40unpaid. In addition, the contracting agency may be assessed the
P23   1costs of collection, including reasonable legal fees and litigation
2costs, including, without limitation, legal fees and legal costs
3incurred in bankruptcy, when necessary to collect any amounts
4due.

5

SEC. 26.  

Section 20577.5 of the Government Code is amended
6to read:

7

20577.5.  

Notwithstanding Section 20577, the board may elect
8not to impose a reduction, or to impose a lesser reduction, on a
9plan that has been terminated pursuant to Section 20572 if (a) the
10board has made all reasonable efforts to collect the amount
11necessary to fully fund the liabilities of the plan and (b) the board
12finds that not reducing the benefits, or imposing a lesser reduction,
13will not impact the actuarial soundness of the terminated agency
14pool.

15

SEC. 27.  

Section 20578 of the Government Code is amended
16to read:

17

20578.  

(a) Except as provided in subdivision (b), on and after
18January 1, 1991, the rights and benefits of a former employee of
19a contracting agency which terminated on or before January 1,
201991, or of his or her beneficiary, shall be the same as if the agency
21had continued as a contracting agency. Any monthly allowance
22of that individual, or of his or her beneficiary, that was reduced
23pursuant to Section 20577 because the contracting agency failed
24to pay the board the amount of the difference shall not be subject
25to continued reduction on or after January 1, 1991. As of January
261, 1991, benefits shall be paid at the level provided in the contract
27prior to that reduction. However, if a former employee of a
28contracting agency that terminated on or before January 1, 1991,
29becomes employed by another covered employer after the date of
30termination, including an employer subject to reciprocity, the
31benefits shall be calculated by using the highest compensation
32earned by the individual.

33In accordance with Section 20580, an individual who has
34withdrawn his or her accumulated contributions from the
35terminated agency shall not be permitted to redeposit any
36withdrawn contributions upon again becoming a member of this
37system.

38(b) If a contracting agency has not paid the system for any deficit
39in funding for earned benefits, as determined pursuant to Section
4020577, members shall be entitled to the benefits to which members
P24   1of the plan were entitled 36 months prior to the date the agency
2notified the board of its intention to terminate its contract or 36
3months prior to the date the board notified the agency of its intent
4to terminate the contract, whichever is earlier. Entitlement to earned
5benefits under this subdivision shall be subject to Section 20577.5.

6

SEC. 28.  

Section 20638 of the Government Code is amended
7to read:

8

20638.  

The highest annual average compensation during any
9consecutive 12- or 36-month period of employment as a member
10of a county retirement system shall be considered compensation
11earnable by a member of this system for purposes of computing
12final compensation for the member provided:

13(a) (1) Entry into employment in which he or she became a
14member in one system occurred on or after October 1, 1957, and
15within 90 days of discontinuance of employment as a member of
16the other system.

17(2) This subdivision shall not deny the benefit of this section to
18any person retiring after October 1, 1963, who entered membership
19prior to October 1, 1957, if he or she entered the employment in
20which he or she became a member within 90 days of termination
21of employment in which he or she was a member of the other
22system, and he or she became a member within seven months of
23entry into employment, or, if an employee of a district as defined
24in Section 31468, became a member at the time the district was
25included in a county retirement system.

26(b) He or she retires concurrently under both systems and is
27credited with the period of service under the county system at the
28time of retirement.

29

SEC. 29.  

Section 20900 of the Government Code is amended
30to read:

31

20900.  

(a) Notwithstanding any other provision of this part,
32a member employed on a part-time basis on and after January 1,
331976, shall, for the period of part-time employment, receive the
34credit the member would receive if he or she was employed on a
35full-time basis and have his or her retirement allowance, as well
36as any other benefits the member is entitled to under this part,
37based upon the salary that he or she would have received if
38employed on a full-time basis, if the member and his or her
39employer both elect to contribute to the retirement fund the amount
40that would have been contributed if the member was employed on
P25   1a full-time basis. Prior to the reduction of an employee’s workload
2under this section, the district personnel responsible for the
3administration of this program, in conjunction with the
4administrative staff of the State Teachers’ Retirement System and
5this system, shall verify the eligibility of the applicant for the
6reduced workload program. This section shall be applicable only
7to a member who meets the following criteria:

8(1) The member is one of the following:

9(A) An academic employee of the California State University.

10(B) A certificated employee of a school district.

11(C) An academic employee of a community college district.

12 (2) The member meets the criteria provided in Sections 44922
13and 87483 of the Education Code or Section 89516 of the
14Education Code.

15(3) The member is not older than 70 years of age and is limited
16to a period of five years of part-time status.

17(b) The employer shall maintain the necessary records to
18separately identify each employee receiving credit pursuant to this
19section.

20

SEC. 30.  

Section 20963 of the Government Code is amended
21to read:

22

20963.  

(a) A state, school, or school safety member, whose
23effective date of retirement is within four months of separation
24from employment with the employer subject to this section that
25granted the sick leave credit, shall be credited at his or her
26retirement with 0.004 year of service credit for each unused day
27of sick leave certified to the board by the employer. A day of
28unused sick leave is the equivalent of an eight-hour day. The
29certification shall report only those days of unused sick leave that
30were accrued by the member during the normal course of his or
31her employment and shall not include any additional days of sick
32leave reported for the purpose of increasing the member’s
33 retirement benefit. Reports of unused days of sick leave shall be
34subject to audit and retirement benefits may be adjusted where
35improper reporting is found. For purposes of this subdivision, sick
36leave shall not include sick leave earned as a National Guard
37member as described in Section 20380.5.

38(b) Until receipt of certification from an employer concerning
39unused sick leave, the board may pay an estimated allowance
P26   1pursuant to this section. At the time of receipt of the certification,
2the allowance shall be adjusted to reflect any necessary changes.

3(c) Notwithstanding any other provisions of this part, this section
4shall not apply to local members other than local miscellaneous
5members employed before July 1, 1980, by a school district that
6is a contracting agency or those school safety members employed
7before July 1, 1980, by a contracting agency that is a school district
8or community college district, as defined in subdivision (i) of
9Section 20057.

10(d) This section shall not apply to any of the following:

11(1) A person who becomes a school member on and after July
121, 1980, and any person who becomes a local member employed,
13on and after July 1, 1980, by a school district that is a contracting
14agency whether or not the person was ever a school member or
15local member prior to that date.

16(2) A state employee, with respect to sick leave credits earned
17as a state member under Section 21353.5, except that the member
18shall be entitled to receive credit under this section for the sick
19leave he or she has earned as a state member subject to any other
20retirement formula, provided the member has a sick leave credit
21balance remaining at the time of retirement.

22(e) For the purposes of this section, sick leave benefits provided
23to state employees pursuant to the state sick leave system shall be
24construed to mean compensation paid to employees on approved
25leaves of absence because of sickness.

26

SEC. 31.  

Section 20963.1 of the Government Code is amended
27to read:

28

20963.1.  

(a) A state member whose effective date of retirement
29is within four months of separation from employment of the state,
30shall be credited at his or her retirement with 0.004 year of service
31for each unused day of educational leave credit, as certified to the
32board by the employer. A day of unused educational leave is the
33equivalent of an eight-hour day. The provisions of this section
34shall be effective for eligible state members who retire directly
35from state employment on and after January 1, 2000.

36(b) This section shall apply to eligible state members in state
37bargaining units that have agreed to this section in a memorandum
38of understanding or as authorized by the Director of Human
39Resources for classifications of state employees that are excluded
P27   1from the definition of “state employee” by subdivision (c) of
2Section 3513 of the Government Code.

3

SEC. 32.  

Section 20965 of the Government Code is amended
4to read:

5

20965.  

A local miscellaneous member and a local safety
6member, whose effective date of retirement is within four months
7of separation from employment with the employer which granted
8the sick leave credit, shall be credited at his or her retirement with
90.004 year of service credit for each unused day of sick leave
10certified to the board by his or her employer. A day of unused sick
11leave is the equivalent of an eight-hour day. The certification shall
12report only those days of unused sick leave that were accrued by
13the member during the normal course of his or her employment
14and shall not include any additional days of sick leave reported
15for the purpose of increasing the member’s retirement benefit.
16Reports of unused days of sick leave shall be subject to audit and
17retirement benefits may be adjusted where improper reporting is
18found.

19This section shall not apply to any contracting agency nor to the
20employees of a contracting agency until the agency elects to be
21subject to this section by contract or by amendment to its contract
22made in the manner prescribed for approval of contracts, except
23that an election among the employees is not required, or, in the
24case of contracts made after September 26, 1974, by express
25provision in the contract making the contracting agency subject
26to this section.

27This section shall only apply to members who retire after the
28effective date of the contract amendments.

begin delete
29

SEC. 33.  

Section 21337 of the Government Code is amended
30to read:

31

21337.  

(a) On an annual basis, the board shall transfer funds
32to separate supplemental state and school accounts, to fund the
33purchasing power protection allowance of retirees, survivors, and
34beneficiaries of state or school employers, respectively. The
35amounts transferred shall be the lesser of the following:

36(1) The amount necessary to increase all monthly allowances
37paid by this system to retirees, survivors, and beneficiaries of state
38or school employers to 75 percent of the purchasing power of the
39initial monthly allowances.

P28   1(2) One and one-tenth percent of state or school member
2 contributions.

3(b) The funds transferred to the two separate supplemental
4accounts shall be utilized to increase all monthly allowances paid
5by this system to retirees, survivors, and beneficiaries of state and
6school employers, up to a maximum of 75 percent of the purchasing
7power, as determined by the board, of the initial monthly
8allowances, notwithstanding the benefit provided by Section 21328,
9that were received by every retired state or school member or
10survivor or beneficiary of a state or school member or retiree who
11was eligible to receive any allowance at the end of each fiscal year.
12Funds remaining in the state or school account after the payment
13of benefits under this section shall be transferred to the respective
14state or school employer accounts.

15(c) Annual adjustments in the purchasing power protection
16allowance shall be effective with the monthly allowance regularly
17payable on the first day of May, provided that in the first year after
18enactment of the act adding this subdivision, the purchasing power
19protection allowance adjustment to the monthly allowance payable
20on the first day of May shall also reflect an adjustment for the
21period from January 1 through April 30. The board shall implement
22the provisions of this subdivision on or before January 1, 2012,
23unless the board determines that the implementation tasks cannot
24be completed until a later date, in which case, the board shall be
25prepared to implement the provisions of this section no later than
26July 1, 2013.

end delete
27

begin deleteSEC. 34.end delete
28
begin insertSEC. 33.end insert  

Section 21499 of the Government Code is amended
29to read:

30

21499.  

(a) Notwithstanding Section 21498, when either an
31initial payment of a preretirement or postretirement death allowance
32or a preretirement or postretirement lump-sum benefit is payable
33in an amount of ten dollars ($10) or more, it shall be authorized
34to the Controller within 45 days of receipt by this system of all the
35necessary information, including the return of warrants issued or
36any overpayment outstanding after the date of the death of the
37annuitant.

38(b) If any payment is not made within that time limitation, the
39payment shall also include interest at the default interest rate
40established in Section 1 of Article XV of the California
P29   1Constitution for time following the expiration of that time
2limitation.

3

begin deleteSEC. 35.end delete
4
begin insertSEC. 34.end insert  

Section 21626.5 of the Government Code is amended
5to read:

6

21626.5.  

(a) For purposes of Section 21624, 21626, 21627,
721629, or 21630, a surviving domestic partner shall be treated in
8the same manner as a surviving spouse if either:

9(1) The domestic partnership was registered for one year prior
10to the member’s service retirement date or at the disability
11retirement date and continuously until the date of the member’s
12death.

13(2) The member retired prior to January 1, 2006, and both the
14member and his or her domestic partner, who currently are in a
15state-registered domestic partnership, sign an affidavit stating that,
16at the time prescribed by the retirement system for married spouses
17to qualify for survivor continuance, the member and the domestic
18partner would have qualified to be registered as domestic partners
19pursuant to Section 297 of the Family Code.

20(b) For purposes of Section 21624, 21626, 21627, 21629, or
2121630, an individual who is the same gender as the member shall
22be treated in the same manner as a surviving spouse if the following
23conditions are satisfied:

24(1) The individual entered into marriage with the member on
25or after the date when individuals of the same gender were legally
26allowed to enter into marriage and was married continuously until
27the date of the member’s death.

28(2) Either of the following applies:

29(A) The member retired prior to the date when individuals of
30the same gender were legally allowed to enter into marriage, and
31both the member and his or her spouse, who are currently married,
32sign an affidavit stating that, at the time prescribed by the
33retirement system for spouses to qualify for a survivor continuance,
34the member and the individual would have qualified to be legally
35married had it been legally possible for people of the same gender
36to marry.

37(B) The individual originally qualified to become a surviving
38spouse under subdivision (a).

P30   1

begin deleteSEC. 36.end delete
2
begin insertSEC. 35.end insert  

Section 22820 of the Government Code is amended
3to read:

4

22820.  

(a) Upon the death, on or after January 1, 2002, of a
5firefighter employed by a county, city, city and county, district,
6or other political subdivision of the state, a firefighter employed
7by the Department of Forestry and Fire Protection, a firefighter
8employed by the federal government who was a resident of this
9state and whose regular duty assignment was to perform
10firefighting services within this state, or a peace officer as defined
11in Section 830.1, 830.2, 830.3, 830.31, 830.32, 830.33, 830.34,
12830.35, 830.36, 830.37, 830.38, 830.39, 830.4, 830.5, 830.55, or
13830.6 of the Penal Code, if the death occurred as a result of injury
14or disease arising out of and in the course of his or her official
15duties, the surviving spouse or other eligible family member of
16the deceased firefighter or peace officer, if uninsured, is deemed
17to be an annuitant under Section 22760 for purposes of enrollment.
18All eligible family members of the deceased firefighter or peace
19officer who are uninsured may enroll in a health benefit plan of
20the surviving spouse’s choice. However, an unmarried child of the
21surviving spouse is not eligible to enroll in a health benefit plan
22under this section if the child was not a family member under
23Section 22775 and regulations pertinent thereto prior to the
24firefighter’s or peace officer’s date of death. The employer of the
25deceased firefighter or peace officer shall notify the board within
2610 business days of the death of the employee and any updated
27contact information of the surviving spouse or family member if
28that spouse or family member may be eligible for enrollment in a
29 health benefit plan under this section.

30(b) Upon notification, the board shall promptly determine
31eligibility and shall forward to the eligible spouse or family
32member the materials necessary for enrollment. In the event of a
33dispute regarding whether a firefighter’s or peace officer’s death
34occurred as a result of injury or disease arising out of and in the
35course of his or her official duties as required under subdivision
36(a), that dispute shall be determined by the Workers’ Compensation
37Appeals Board, subject to the same procedures and standards
38applicable to hearings relating to claims for workers’ compensation
39benefits. The jurisdiction of the Workers’ Compensation Appeals
40Board under this section is limited to the sole issue of industrial
P31   1causation and this section does not authorize the Workers’
2Compensation Appeals Board to award costs against the system.

3(c) (1) Notwithstanding any other provision of law, and except
4as otherwise provided in subdivision (d), the state shall pay the
5employer contribution required for enrollment under this part for
6the uninsured surviving spouse of a deceased firefighter or peace
7officer for life, and the other uninsured eligible family members
8of a deceased firefighter or peace officer, provided the family
9member meets the eligibility requirements of Section 22775 and
10regulations pertinent thereto.

11(2) The contribution payable by the state for each uninsured
12surviving spouse and other uninsured eligible family members
13shall be adjusted annually and be equal to the amount specified in
14Section 22871.

15(3) The state’s contribution under this section shall commence
16on the effective date of enrollment of the uninsured surviving
17spouse or other uninsured eligible family members. The
18contribution of each surviving spouse and eligible family member
19shall be the total cost per month of the benefit coverage afforded
20him or her under the plan less the portion contributed by the state
21pursuant to this section.

22(d) The cancellation of coverage by an annuitant, as defined in
23this section, shall be final without option to reenroll, unless
24coverage is canceled because of enrollment in an insurance plan
25from another source.

26(e) For purposes of this section, “surviving spouse” means a
27spouse who was married to the deceased firefighter or peace officer
28on the deceased’s date of death and either was married for a
29continuous period of at least one year prior to the date of death or
30was married to the deceased prior to the date the deceased
31firefighter or peace officer sustained the injury or disease resulting
32in death.

33(f) For purposes of this section, “uninsured” means that the
34surviving spouse is not enrolled in an employer-sponsored health
35plan under which the employer contribution covers 100 percent
36of the cost of health care premiums.

P32   1(g) The board has no duty to identify, locate, or notify any
2surviving spouse or eligible family member who may be or may
3become eligible for benefits under this section.



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