California Legislature—2015–16 Regular Session

Assembly BillNo. 2376


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 31494.2, 31494.5, and 31526 of the Government Code, relating to county employees’ retirement.

LEGISLATIVE COUNSEL’S DIGEST

AB 2376, as introduced, Committee on Public Employees, Retirement, and Social Security. County employees’ retirement: Los Angeles County.

The County Employees Retirement Law of 1937 (CERL) establishes retirement plans, known as Retirement Plan D and Retirement Plan E, that are applicable in the retirement system in Los Angeles County and prescribes procedures for members to transfer between those plans. CERL defines “Retirement Plan E” to mean the noncontributory retirement plan established by specific provisions, and defines “Retirement Plan D” to mean the contributory retirement plan otherwise available to new members of the retirement system on the transfer date.

This bill would revise the definition of Retirement Plan D to, instead, refer to the contributory retirement plan otherwise available to members of the system between June 1, 1979, and December 31, 2012, inclusive.

Under CERL, except as specified, the management of a retirement system is vested in the board of retirement, with membership as prescribed. CERL authorizes such a board to make regulations not inconsistent with that law, and requires that the regulations include specific provisions, including provisions for the filing of a sworn statement by every person who is or becomes a member, showing date of birth, nature and duration of employment with the county, compensation received, and other information as is required by the board.

This bill would authorize those regulations, in lieu of a sworn statement, to provide for the submission by a member’s employer to the retirement association of the information otherwise required in a sworn statement, in a form determined by the retirement association.

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

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

P2    1

SECTION 1.  

Section 31494.2 of the Government Code is
2amended to read:

3

31494.2.  

(a) A general member whose benefits are governed
4by Retirement Plan D may, during a period of active employment,
5elect to change plan membership and become a member,
6prospectively, in Retirement Plan E. The election shall be made
7upon written application signed by the member and filed with the
8board, pursuant to enrollment procedures and during an enrollment
9period established by the board, which enrollment period shall not
10occur more frequently than once every three years for that member.
11The change in plan membership shall be effective as of the transfer
12date, as defined in subdivision (d). Except as otherwise provided
13in this section, the rights and obligations of a member who elects
14to change membership under this section shall be governed by the
15terms of this article on and after the transfer date. Prior to the
16transfer date, the rights to retirement, survivors’, or other benefits
17payable to a member and his or her survivors or beneficiaries shall
18continue to be governed by Retirement Plan D.

19(b) Except as otherwise provided in this section, effective as of
20the transfer date, a member who has transferred to Retirement Plan
21E pursuant to this section and his or her survivors or beneficiaries
22shall receive retirement, survivors’, and other benefits that shall
23consist of: (1) the benefits to which they are entitled under the
24terms of Retirement Plan E, but based on the member’s service
25credited only under that plan, and payable at the time and in the
26manner provided under Retirement Plan E, and (2) the benefits to
27which they would have been entitled under the terms of Retirement
P3    1Plan D had the member remained a member of Retirement Plan
2D, but based on the member’s service credited only under that
3plan, and payable at the time and in the manner provided under
4Retirement Plan D. Except as otherwise provided in this section,
5the calculation of the member’s, survivors’, or beneficiaries’
6benefits under each plan shall be subject to that plan’s respective,
7separate terms, including, but not limited to, the definitions of
8“final compensation” and provisions establishing cost-of-living
9adjustments, establishing minimum retirement age and service
10requirements, and governing integration with federal social security
11payments. Notwithstanding the foregoing, the aggregate service
12credited under both retirement plans shall be taken into account
13for the purpose of determining eligibility for and vesting of benefits
14under each plan.

15(c) Notwithstanding any other provision of Retirement Plan D
16or Retirement Plan E:

17(1) A member who has transferred to Retirement Plan E pursuant
18to this section may not retire for disability and receive disability
19retirement benefits under Retirement Plan D.

20(2) If a member who has transferred to Retirement Plan E
21pursuant to this section dies prior to retirement, that member’s
22survivor or beneficiary may not receive survivor or death benefits
23under Retirement Plan D but shall receive a refund of the member’s
24contributions to Retirement Plan D together with all interest
25credited thereto.

26(d) As used in this section:

27(1) “Period of active employment” means a period during which
28the member is actively performing the duties of a full-time or
29part-time employee position or is on any authorized paid leave of
30absence, except a leave of absence during which the member is
31totally disabled and is receiving, or is eligible to receive, disability
32benefits, either during or after any elimination or qualifying period,
33under a disability plan provided by the employer.

34(2) “Retirement Plan D” means the contributory retirement plan
35otherwise available tobegin delete new members of the system on the transfer
36date.end delete
begin insert members of the system between June 1, 1979, and December
3731, 2012, inclusive.end insert

38(3) “Retirement Plan E” means the noncontributory retirement
39plan established under this article.

P4    1(4) “Transfer date” means the first day of the first month that
2is at least 30 days after the date that the application is filed with
3the board to change plan membership under subdivision (a).

4(e) This section shall only be applicable to Los Angeles County
5and shall not become operative until the board of supervisors of
6that county elects, by resolution adopted by a majority vote, to
7make this section operative in the county.

8

SEC. 2.  

Section 31494.5 of the Government Code is amended
9to read:

10

31494.5.  

(a) A general member whose benefits are governed
11by Retirement Plan E may, during a period of active employment,
12elect to change plan membership and become a member,
13prospectively, in Retirement Plan D. The election shall be made
14upon written application signed by the member and filed with the
15board, pursuant to enrollment procedures and during an enrollment
16period established by the board, which enrollment period shall not
17occur more frequently than once every three years for that member.
18The change in plan membership shall be effective as of the transfer
19date, as defined in subdivision (g). Except as otherwise provided
20in this section, the rights and obligations of a member who elects
21to change membership under this section shall be governed by the
22terms of Retirement Plan D on and after the transfer date. Prior to
23the transfer date, the rights to retirement, survivors’, or other
24benefits payable to a member and his or her survivors or
25beneficiaries shall continue to be governed by Retirement Plan E.

26(b) If a member has made the election to change plans under
27subdivision (a), monthly contributions by the member and the
28employer under the terms of Retirement Plan D shall commence
29as of the transfer date. For the purposes of calculating the member’s
30contribution rate under Retirement Plan D, his or her entry age
31shall be deemed to be his or her age at his or her birthday nearest
32the transfer date; however, if the member exchanges service credit
33in accordance with subdivision (c), with regard to contributions
34made for periods after that exchange, his or her entry age shall be
35adjusted and deemed to be the member’s age at his or her birthday
36nearest the date on which begins the most recent period of
37unbroken service credited under Retirement Plan D, taking into
38 account service purchased under subdivision (c). In no event shall
39the exchange of service under subdivision (c) affect the entry age
P5    1with respect to, or the cost of, employee contributions made, or
2service purchased, prior to the exchange.

3(c) begin insert(1)end insertbegin insertend insertA general member who has elected to change plans
4under subdivision (a) also may elect to exchange, at that time or
5any time thereafter, but prior to the earlier of his or her application
6for retirement, termination from employment, or death, some
7portion designated in whole-month increments, or all of the service
8credited under Retirement Plan E for an equivalent amount of
9service credited under Retirement Plan D, provided, however, that
10the member may not exchange less than 12 months’ service or, if
11less, the total service credited under Retirement Plan E. The
12exchange shall be effective on the date when the member completes
13the purchase of that service by depositing in the retirement fund,
14by lump sum or regular monthly installments, over the period of
15time determined by a resolution adopted by a majority vote of the
16board of retirement, or both, but in any event prior to the earlier
17of his or her death or the date that is 120 days after the effective
18date of his or her retirement, the sum of: (1) the contributions the
19member would have made to the retirement fund under Retirement
20Plan D for that length of time for which the member shall receive
21credit as service under Retirement Plan D, computed in accordance
22with the rate of contribution applicable to the member under
23Retirement Plan D, based upon his or her entry age, and in the
24same manner prescribed under Retirement Plan D as if that plan
25had been in effect during the period for which the member shall
26receive service credit, and (2) the regular interest thereon.

begin delete

27 For

end delete

28begin insert(2)end insertbegin insertend insertbegin insertForend insert the purposes of this subdivision, a member’s entry age
29shall be deemed to be the member’s age at his or her birthday
30nearest the date on which begins the most recent period of
31unbroken service credited under Retirement Plan D following
32completion of the service exchange under this subdivision. A
33member may receive credit for a period of service under only one
34plan and in no event shall a member receive credit for the same
35period of service under both Retirement Plan D and Retirement
36Plan E.

begin delete

37 A

end delete

38begin insert(3)end insertbegin insertend insertbegin insertAend insert member who fails to complete the purchase of service as
39required under this subdivision shall be treated as completing an
40exchange of service under Retirement Plan E for an equivalent
P6    1amount of service under Retirement Plan D only with regard to
2the service that actually has been purchased through completed
3deposit with the retirement fund of the requisite purchase amount,
4calculated in accordance with this subdivision.

5(d) Except as otherwise provided in this section, effective as of
6the transfer date, a member who has transferred to Retirement Plan
7D pursuant to this section and his or her survivors or beneficiaries
8shall receive retirement, disability, survivors’, death, or other
9benefits that shall consist of: (1) the benefits to which they are
10entitled under the terms of Retirement Plan D, but based on the
11member’s service credited only under that plan, and payable at the
12time and in the manner provided under Retirement Plan D, and
13(2) the benefits to which they would have been entitled under the
14terms of Retirement Plan E had the member remained a member
15of Retirement Plan E, but based on the member’s service credited
16only under that plan, and payable at the time and in the manner
17provided under Retirement Plan E. Except as otherwise provided
18in this section, the calculation of the portion of a member’s or
19beneficiary’s benefit that is attributable to each plan is subject to
20that plan’s respective, separate terms, including, but not limited
21to, the definitions of “final compensation” and provisions
22establishing cost-of-living adjustments, establishing minimum age
23and service requirements, and governing integration with federal
24social security payments. Notwithstanding the foregoing, the
25aggregate service credited under both Retirement Plan D and
26Retirement Plan E shall be taken into account for the purpose of
27determining eligibility for, and vesting of, benefits under each
28plan.

29(e) Notwithstanding any other provision of Retirement Plan D
30or Retirement Plan E, a member who transfers into Retirement
31Plan D under this section may retire for service-connected or
32nonservice-connected disability and receive disability benefits
33under Retirement Plan D only if he or she has either (1) completed
34two continuous years of active service after his or her most recent
35transfer date, or (2) earned five years of retirement service credit
36under Retirement Plan D after his or her most recent transfer date.
37Notwithstanding any other provision to the contrary, a member
38who becomes disabled and does not meet either of these conditions
39(1) may apply for and receive only a deferred or service retirement
40allowance, or (2) may elect to transfer prospectively back to
P7    1Retirement Plan E, and for the purposes of calculating his or her
2retirement benefits under this section, shall in lieu of credit under
3Retirement Plan D be credited with service under Retirement Plan
4E as provided under subdivision (g) of Section 31488 during any
5period he or she is totally disabled and is receiving, or eligible to
6receive, disability benefits, either during or after any elimination
7or qualifying period, under a disability plan provided by the
8employer up to the earlier of the date he or she retires or no longer
9qualifies for disability benefits. If a member dies before he or she
10is eligible to retire and before completing either two continuous
11years of active service after the transfer date into Retirement Plan
12D or after earning five years of retirement service credit under
13Retirement Plan D after that transfer date, that member’s
14beneficiary shall not be entitled to the survivor allowance under
15Section 31781.1 or 31781.12, if operative.

16(f) Notwithstanding any other provisions of Retirement Plan D
17or Retirement Plan E, a member who has transferred to Retirement
18Plan D pursuant to this section and who retires for disability when
19eligible under this section and Retirement Plan D, may not also
20retire for service and receive service retirement benefits under
21Retirement Plan E. However, for the purpose of calculating
22disability benefits under Retirement Plan D, the “sum to which he
23or she would be entitled as service retirement” or his or her “service
24retirement allowance,” as those terms are used in Sections 31726,
2531726.5, and 31727.4, shall consist of the blended benefit to which
26the member would be entitled under subdivision (d) if he or she
27retired for service, not just the service retirement benefit to which
28he or she would be entitled under Retirement Plan D.

29(g) As used in this section:

30(1) “Active service” means time spent on active, on-the-job
31performance of the duties of a full-time or part-time position and
32on any authorized paid leaves of absence; provided, however, that
33any authorized paid leave of absence or part-time service shall not
34constitute active service if the leave of absence or part-time service
35is necessitated by a preexisting disability, injury, or disease. The
36board of retirement shall determine whether or not a leave of
37absence or part-time service is necessitated by a preexisting
38disability, injury, or disease, and thus excluded from the member’s
39active service, based upon evidence presented by the employer
40and the member upon request by the board.

P8    1(2) “Entry age” means the age used for calculating the normal
2rate of contribution to Retirement Plan D with respect to a member
3who has transferred membership to Retirement Plan D under this
4section.

5(3) “Period of active employment” means a period during which
6the member is actively performing the duties of a full-time or
7part-time employee position or is on any authorized paid leave of
8absence, except a leave of absence during which the member is
9totally disabled and is receiving, or is eligible to receive, disability
10benefits, either during or after any elimination or qualifying period,
11under a disability plan provided by the employer.

12(4) “Retirement Plan D” means the contributory retirement plan
13otherwise available tobegin delete new members of the retirement system on
14the transfer date.end delete
begin insert members of the system between June 1, 1979,
15and December 31, 2012, inclusive.end insert

16(5) “Retirement Plan E” means the noncontributory retirement
17plan established under this article.

18(6) “Transfer date” means the first day of the first month that
19is at least 30 days after the date that the application is filed with
20the board to change plan membership under subdivision (a).

21(h) This section shall only be applicable to Los Angeles County
22and shall not become operative until the board of supervisors of
23that county elects, by resolution adopted by a majority vote, to
24make this section operative in the county.

25

SEC. 3.  

Section 31526 of the Government Code is amended
26to read:

27

31526.  

The regulations shall include provisions:

28(a) For the election of officers, their terms, meetings, and all
29other matters relating to the administrative procedure of the board.

30(b) Forbegin delete theend deletebegin insert one of the following:end insert

31begin insert(1)end insertbegin insertend insertbegin insertTheend insert filing of a sworn statement by every person who is or
32becomes a member, showing date of birth, nature and duration of
33employment with the county, compensation received, andbegin delete suchend delete
34 other information as is required by the board.

begin insert

35(2) In lieu of a sworn statement, the submission by the member’s
36employer to the retirement association of the information otherwise
37required in paragraph (1), in a form determined by the retirement
38association.

end insert

P9    1(c) For forms of annuity certificates andbegin delete for suchend delete other forms
2asbegin delete areend delete required.



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