Amended in Assembly March 9, 2016

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,begin delete and 31526 ofend deletebegin insert 31526, and 31641.4 of, and to add Sections 31495.7 and 31520.6 to,end insert the Government Code, relating to county employees’ retirement.

LEGISLATIVE COUNSEL’S DIGEST

AB 2376, as amended, 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.

begin insert

CERL provides for the retirement system in Los Angeles County specific ages and pension allowances for normal and early retirement. Under CERL, a member of a CERL retirement system who is eligible to retire at 50 years of age pursuant to specified statute, or who is required to retire because of age while a member of the Public Employees’ Retirement System (PERS), a CERL retirement system in another county, the State Teachers’ Retirement System (STRS), or a retirement system of any other public agency of the state that has established reciprocity with PERS subject to certain conditions, but who cannot retire concurrently from PERS, a CERL retirement system in another county, STRS, or a retirement system of any other public agency of the state that has established reciprocity with PERS subject to certain conditions, is entitled to have final compensation and service determined under specific statutes as if the member had retired concurrently under that other system (concurrent retirement exception). Provisions of CERL specifically applicable to Los Angeles County, among other things, apply reciprocal benefits, including the concurrent retirement exception, to the retirement system in Los Angeles County.

end insert
begin insert

This bill would amend provisions of CERL specifically applicable to Los Angeles County to provide that the concurrent retirement exception applies to a member of the retirement system in Los Angeles County eligible to retire at 55 years of age and would state that the amendment is declaratory of existing law.

end insert
begin insert

CERL sets forth the membership composition for boards of retirement, as specified. Under that law, the retirement board in specified counties is comprised of 9 members and an alternate member, as specified. That law also authorizes specified counties to appoint an alternate retired member to the office of the 8th member of the board and authorizes the alternate retired member to vote as a member of the board only in the event the 8th member is absent from a board meeting for any cause.

end insert
begin insert

This bill would additionally authorize the alternate retired member to vote as a member of the board if the 8th member is present and both the 2nd and 3rd, both the 2nd and 7th, or both the 3rd and 7th members are absent for any cause.

end insert

Under CERL, except as specified, the management of a retirement system is vested in the board ofbegin delete retirement, with membership as prescribed.end deletebegin insert retirement.end insert 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.

begin insert

CERL requires that a safety member who receives credit for prior employment in public service, the principal duties of which consisted of active law enforcement or active fire suppression, or active service in the Armed Forces of the United States during time of war or national emergency, have his or her pension or retirement allowance for that service calculated on the same basis as the calculation of the retirement allowance the member would receive as a safety member under certain laws relating to the retirement of safety members for service.

end insert
begin insert

This bill would require instead that the allowance be calculated on the same basis as the calculation of the retirement allowance the member would receive as a safety member under the safety benefit formula in effect on the date of the member’s initial safety membership.

end insert

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

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

P3    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.

P4    1(b) Except as otherwise provided in this section, effective as of
2the transfer date, a member who has transferred to Retirement Plan
3E pursuant to this section and his or her survivors or beneficiaries
4shall receive retirement, survivors’, and other benefits that shall
5consist of: (1) the benefits to which they are entitled under the
6terms of Retirement Plan E, but based on the member’s service
7credited only under that plan, and payable at the time and in the
8manner provided under Retirement Plan E, and (2) the benefits to
9which they would have been entitled under the terms of Retirement
10Plan D had the member remained a member of Retirement Plan
11D, but based on the member’s service credited only under that
12plan, and payable at the time and in the manner provided under
13Retirement Plan D. Except as otherwise provided in this section,
14the calculation of the member’s, survivors’, or beneficiaries’
15benefits under each plan shall be subject to that plan’s respective,
16separate terms, including, but not limited to, the definitions of
17“final compensation” and provisions establishing cost-of-living
18adjustments, establishing minimum retirement age and service
19requirements, and governing integration with federal social security
20payments. Notwithstanding the foregoing, the aggregate service
21credited under both retirement plans shall be taken into account
22for the purpose of determining eligibility for and vesting of benefits
23under each plan.

24(c) Notwithstanding any other provision of Retirement Plan D
25or Retirement Plan E:

26(1) A member who has transferred to Retirement Plan E pursuant
27to this section may not retire for disability and receive disability
28retirement benefits under Retirement Plan D.

29(2) If a member who has transferred to Retirement Plan E
30pursuant to this section dies prior to retirement, that member’s
31survivor or beneficiary may not receive survivor or death benefits
32under Retirement Plan D but shall receive a refund of the member’s
33contributions to Retirement Plan D together with all interest
34credited thereto.

35(d) As used in this section:

36(1) “Period of active employment” means a period during which
37the member is actively performing the duties of a full-time or
38part-time employee position or is on any authorized paid leave of
39absence, except a leave of absence during which the member is
40totally disabled and is receiving, or is eligible to receive, disability
P5    1benefits, either during or after any elimination or qualifying period,
2under a disability plan provided by the employer.

3(2) “Retirement Plan D” means the contributory retirement plan
4otherwise available to members of the system between June 1,
51979, and December 31, 2012, inclusive.

6(3) “Retirement Plan E” means the noncontributory retirement
7plan established under this article.

8(4) “Transfer date” means the first day of the first month that
9is at least 30 days after the date that the application is filed with
10the board to change plan membership under subdivision (a).

11(e) This section shall only be applicable to Los Angeles County
12and shall not become operative until the board of supervisors of
13that county elects, by resolution adopted by a majority vote, to
14make this section operative in the county.

15

SEC. 2.  

Section 31494.5 of the Government Code is amended
16to read:

17

31494.5.  

(a) A general member whose benefits are governed
18by Retirement Plan E may, during a period of active employment,
19elect to change plan membership and become a member,
20prospectively, in Retirement Plan D. The election shall be made
21upon written application signed by the member and filed with the
22board, pursuant to enrollment procedures and during an enrollment
23period established by the board, which enrollment period shall not
24occur more frequently than once every three years for that member.
25The change in plan membership shall be effective as of the transfer
26date, as defined in subdivision (g). Except as otherwise provided
27in this section, the rights and obligations of a member who elects
28to change membership under this section shall be governed by the
29terms of Retirement Plan D on and after the transfer date. Prior to
30the transfer date, the rights to retirement, survivors’, or other
31benefits payable to a member and his or her survivors or
32beneficiaries shall continue to be governed by Retirement Plan E.

33(b) If a member has made the election to change plans under
34subdivision (a), monthly contributions by the member and the
35employer under the terms of Retirement Plan D shall commence
36as of the transfer date. For the purposes of calculating the member’s
37contribution rate under Retirement Plan D, his or her entry age
38shall be deemed to be his or her age at his or her birthday nearest
39the transfer date; however, if the member exchanges service credit
40in accordance with subdivision (c), with regard to contributions
P6    1made for periods after that exchange, his or her entry age shall be
2adjusted and deemed to be the member’s age at his or her birthday
3nearest the date on which begins the most recent period of
4unbroken service credited under Retirement Plan D, taking into
5 account service purchased under subdivision (c). In no event shall
6the exchange of service under subdivision (c) affect the entry age
7with respect to, or the cost of, employee contributions made, or
8service purchased, prior to the exchange.

9(c) (1) A general member who has elected to change plans
10under subdivision (a) also may elect to exchange, at that time or
11any time thereafter, but prior to the earlier of his or her application
12for retirement, termination from employment, or death, some
13portion designated in whole-month increments, or all of the service
14credited under Retirement Plan E for an equivalent amount of
15service credited under Retirement Plan D, provided, however, that
16the member may not exchange less than 12 months’ service or, if
17less, the total service credited under Retirement Plan E. The
18exchange shall be effective on the date when the member completes
19the purchase of that service by depositing in the retirement fund,
20by lump sum or regular monthly installments, over the period of
21time determined by a resolution adopted by a majority vote of the
22board of retirement, or both, but in any event prior to the earlier
23of his or her death or the date that is 120 days after the effective
24date of his or her retirement, the sum of: (1) the contributions the
25member would have made to the retirement fund under Retirement
26Plan D for that length of time for which the member shall receive
27credit as service under Retirement Plan D, computed in accordance
28with the rate of contribution applicable to the member under
29Retirement Plan D, based upon his or her entry age, and in the
30same manner prescribed under Retirement Plan D as if that plan
31had been in effect during the period for which the member shall
32receive service credit, and (2) the regular interest thereon.

33(2) For the purposes of this subdivision, a member’s entry age
34shall be deemed to be the member’s age at his or her birthday
35nearest the date on which begins the most recent period of
36unbroken service credited under Retirement Plan D following
37completion of the service exchange under this subdivision. A
38member may receive credit for a period of service under only one
39plan and in no event shall a member receive credit for the same
P7    1period of service under both Retirement Plan D and Retirement
2Plan E.

3(3) A member who fails to complete the purchase of service as
4required under this subdivision shall be treated as completing an
5exchange of service under Retirement Plan E for an equivalent
6amount of service under Retirement Plan D only with regard to
7the service that actually has been purchased through completed
8deposit with the retirement fund of the requisite purchase amount,
9calculated in accordance with this subdivision.

10(d) Except as otherwise provided in this section, effective as of
11the transfer date, a member who has transferred to Retirement Plan
12D pursuant to this section and his or her survivors or beneficiaries
13shall receive retirement, disability, survivors’, death, or other
14benefits that shall consist of: (1) the benefits to which they are
15entitled under the terms of Retirement Plan D, but based on the
16member’s service credited only under that plan, and payable at the
17time and in the manner provided under Retirement Plan D, and
18(2) the benefits to which they would have been entitled under the
19terms of Retirement Plan E had the member remained a member
20of Retirement Plan E, but based on the member’s service credited
21only under that plan, and payable at the time and in the manner
22provided under Retirement Plan E. Except as otherwise provided
23in this section, the calculation of the portion of a member’s or
24beneficiary’s benefit that is attributable to each plan is subject to
25that plan’s respective, separate terms, including, but not limited
26to, the definitions of “final compensation” and provisions
27establishing cost-of-living adjustments, establishing minimum age
28and service requirements, and governing integration with federal
29social security payments. Notwithstanding the foregoing, the
30aggregate service credited under both Retirement Plan D and
31Retirement Plan E shall be taken into account for the purpose of
32determining eligibility for, and vesting of, benefits under each
33plan.

34(e) Notwithstanding any other provision of Retirement Plan D
35or Retirement Plan E, a member who transfers into Retirement
36Plan D under this section may retire for service-connected or
37nonservice-connected disability and receive disability benefits
38under Retirement Plan D only if he or she has either (1) completed
39two continuous years of active service after his or her most recent
40transfer date, or (2) earned five years of retirement service credit
P8    1under Retirement Plan D after his or her most recent transfer date.
2Notwithstanding any other provision to the contrary, a member
3who becomes disabled and does not meet either of these conditions
4(1) may apply for and receive only a deferred or service retirement
5allowance, or (2) may elect to transfer prospectively back to
6Retirement Plan E, and for the purposes of calculating his or her
7retirement benefits under this section, shall in lieu of credit under
8Retirement Plan D be credited with service under Retirement Plan
9E as provided under subdivision (g) of Section 31488 during any
10period he or she is totally disabled and is receiving, or eligible to
11receive, disability benefits, either during or after any elimination
12or qualifying period, under a disability plan provided by the
13employer up to the earlier of the date he or she retires or no longer
14qualifies for disability benefits. If a member dies before he or she
15is eligible to retire and before completing either two continuous
16years of active service after the transfer date into Retirement Plan
17D or after earning five years of retirement service credit under
18Retirement Plan D after that transfer date, that member’s
19beneficiary shall not be entitled to the survivor allowance under
20Section 31781.1 or 31781.12, if operative.

21(f) Notwithstanding any other provisions of Retirement Plan D
22or Retirement Plan E, a member who has transferred to Retirement
23Plan D pursuant to this section and who retires for disability when
24eligible under this section and Retirement Plan D, may not also
25retire for service and receive service retirement benefits under
26Retirement Plan E. However, for the purpose of calculating
27disability benefits under Retirement Plan D, the “sum to which he
28or she would be entitled as service retirement” or his or her “service
29retirement allowance,” as those terms are used in Sections 31726,
3031726.5, and 31727.4, shall consist of the blended benefit to which
31the member would be entitled under subdivision (d) if he or she
32retired for service, not just the service retirement benefit to which
33he or she would be entitled under Retirement Plan D.

34(g) As used in this section:

35(1) “Active service” means time spent on active, on-the-job
36performance of the duties of a full-time or part-time position and
37on any authorized paid leaves of absence; provided, however, that
38any authorized paid leave of absence or part-time service shall not
39constitute active service if the leave of absence or part-time service
40is necessitated by a preexisting disability, injury, or disease. The
P9    1board of retirement shall determine whether or not a leave of
2absence or part-time service is necessitated by a preexisting
3disability, injury, or disease, and thus excluded from the member’s
4active service, based upon evidence presented by the employer
5and the member upon request by the board.

6(2) “Entry age” means the age used for calculating the normal
7rate of contribution to Retirement Plan D with respect to a member
8who has transferred membership to Retirement Plan D under this
9section.

10(3) “Period of active employment” means a period during which
11the member is actively performing the duties of a full-time or
12part-time employee position or is on any authorized paid leave of
13absence, except a leave of absence during which the member is
14totally disabled and is receiving, or is eligible to receive, disability
15benefits, either during or after any elimination or qualifying period,
16under a disability plan provided by the employer.

17(4) “Retirement Plan D” means the contributory retirement plan
18otherwise available to members of the system between June 1,
191979, and December 31, 2012, inclusive.

20(5) “Retirement Plan E” means the noncontributory retirement
21plan established under this article.

22(6) “Transfer date” means the first day of the first month that
23is at least 30 days after the date that the application is filed with
24the board to change plan membership under subdivision (a).

25(h) This section shall only be applicable to Los Angeles County
26and shall not become operative until the board of supervisors of
27that county elects, by resolution adopted by a majority vote, to
28make this section operative in the county.

29begin insert

begin insertSEC. 3.end insert  

end insert

begin insertSection 31495.7 is added to the end insertbegin insertGovernment Codeend insertbegin insert, to
30read:end insert

begin insert
31

begin insert31495.7.end insert  

Section 31835.1 applies to a member eligible to retire
32at 55 years of age pursuant to Section 31491. This section is
33declaratory of existing law.

end insert
34begin insert

begin insertSEC. 4.end insert  

end insert

begin insertSection 31520.6 is added to the end insertbegin insertGovernment Codeend insertbegin insert, to
35read:end insert

begin insert
36

begin insert31520.6.end insert  

Notwithstanding any provision to the contrary in
37Section 31520.3 or 31520.5, in any county in which there is an
38alternate retired member, if the eighth member is present, the
39alternate retired member may also vote as a member of the board
40in the event both the second and third, or both the second and
P10   1seventh, or both the third and seventh members are absent for any
2cause.

end insert
3

begin deleteSEC. 3.end delete
4begin insertSEC. 5.end insert  

Section 31526 of the Government Code is amended
5to read:

6

31526.  

The regulations shall include provisions:

7(a) For the election of officers, their terms, meetings, and all
8other matters relating to the administrative procedure of the board.

9(b) For one of the following:

10(1) The filing of a sworn statement by every person who is or
11becomes a member, showing date of birth, nature and duration of
12employment with the county, compensation received, and other
13information as is required by the board.

14(2) In lieu of a sworn statement, the submission by the member’s
15employer to the retirement association of the information otherwise
16required in paragraph (1), in a form determined by the retirement
17association.

18(c) For forms of annuity certificates and other forms as required.

19begin insert

begin insertSEC. 6.end insert  

end insert

begin insertSection 31641.4 of the end insertbegin insertGovernment Codeend insertbegin insert is amended
20to read:end insert

21

31641.4.  

begin insert(a)end insertbegin insertend insertA member shall receive credit for employment
22in public service only for such service as hebegin insert or sheend insert is not entitled
23to receive a pension or retirement allowance frombegin delete suchend deletebegin insert theend insert public
24agency. The service for whichbegin delete heend deletebegin insert the memberend insert elects to contribute
25and the fact that no pension or retirement allowance will accrue
26tobegin delete suchend deletebegin insert theend insert member by virtue ofbegin delete hisend deletebegin insert the member’send insert employment in
27begin delete suchend deletebegin insert thatend insert public agencybegin delete mustend deletebegin insert shallend insert be certified to by an officer of
28the public agency where hebegin insert or sheend insert renderedbegin delete suchend deletebegin insert thatend insert public service
29orbegin delete mustend deletebegin insert shallend insert be established to the satisfaction of the board.

begin delete

30 Notwithstanding

end delete

31begin insert(b)end insertbegin insertend insertbegin insertNotwithstandingend insert any otherbegin delete provision ofend delete law, a safety member
32who receives credit for prior employment in public service, the
33principal duties of which consisted of active law enforcement or
34active fire suppression, or active service in thebegin delete armed servicesend delete
35begin insert Armed Forcesend insert of the United States during time of war or national
36emergency, shall have hisbegin insert or herend insert pension or retirement allowance
37forbegin delete suchend deletebegin insert thatend insert service calculated on the same basis as the calculation
38of the retirement allowancebegin delete suchend deletebegin insert theend insert member would receive as a
39safety member underbegin delete Section 31664.end deletebegin insert the safety benefit formula in
40effect on the date of the member’s initial safety membership.end insert

begin delete

P11   1 A

end delete

2begin insert(c)end insertbegin insertend insertbegin insertAend insert safety member who entered the service as a peace officer
3prior to the establishment of the safety membership provisions in
4hisbegin insert or herend insert county shall be considered a safety member from hisbegin insert or
5herend insert
initial hiring date, for the purposes of this section,
6notwithstanding any otherbegin delete provision ofend delete law.



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