Amended in Senate June 20, 2016

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 31526, and 31641.4end deletebegin insert and 31526end insert of, and to add Sections 31495.7 and 31520.6 to, 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.

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.

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.

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.

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.

Under CERL, except as specified, the management of a retirement system is vested in the board of retirement. 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 delete

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 delete
begin delete

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 delete

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
P4    1payable to a member and his or her survivors or beneficiaries shall
2continue to be governed by Retirement Plan D.

3(b) Except as otherwise provided in this section, effective as of
4the transfer date, a member who has transferred to Retirement Plan
5E pursuant to this section and his or her survivors or beneficiaries
6shall receive retirement, survivors’, and other benefits that shall
7consist of: (1) the benefits to which they are entitled under the
8terms of Retirement Plan E, but based on the member’s service
9credited only under that plan, and payable at the time and in the
10manner provided under Retirement Plan E, and (2) the benefits to
11which they would have been entitled under the terms of Retirement
12Plan D had the member remained a member of Retirement Plan
13D, but based on the member’s service credited only under that
14plan, and payable at the time and in the manner provided under
15Retirement Plan D. Except as otherwise provided in this section,
16the calculation of the member’s, survivors’, or beneficiaries’
17benefits under each plan shall be subject to that plan’s respective,
18separate terms, including, but not limited to, the definitions of
19“final compensation” and provisions establishing cost-of-living
20adjustments, establishing minimum retirement age and service
21requirements, and governing integration with federal social security
22payments. Notwithstanding the foregoing, the aggregate service
23credited under both retirement plans shall be taken into account
24for the purpose of determining eligibility for and vesting of benefits
25under each plan.

26(c) Notwithstanding any other provision of Retirement Plan D
27or Retirement Plan E:

28(1) A member who has transferred to Retirement Plan E pursuant
29to this section may not retire for disability and receive disability
30retirement benefits under Retirement Plan D.

31(2) If a member who has transferred to Retirement Plan E
32pursuant to this section dies prior to retirement, that member’s
33survivor or beneficiary may not receive survivor or death benefits
34under Retirement Plan D but shall receive a refund of the member’s
35contributions to Retirement Plan D together with all interest
36credited thereto.

37(d) As used in this section:

38(1) “Period of active employment” means a period during which
39the member is actively performing the duties of a full-time or
40part-time employee position or is on any authorized paid leave of
P5    1absence, except a leave of absence during which the member is
2totally disabled and is receiving, or is eligible to receive, disability
3benefits, either during or after any elimination or qualifying period,
4under a disability plan provided by the employer.

5(2) “Retirement Plan D” means the contributory retirement plan
6otherwise available to members of the system between June 1,
71979, and December 31, 2012, inclusive.

8(3) “Retirement Plan E” means the noncontributory retirement
9plan established under this article.

10(4) “Transfer date” means the first day of the first month that
11is at least 30 days after the date that the application is filed with
12the board to change plan membership under subdivision (a).

13(e) This section shall only be applicable to Los Angeles County
14and shall not become operative until the board of supervisors of
15that county elects, by resolution adopted by a majority vote, to
16make this section operative in the county.

17

SEC. 2.  

Section 31494.5 of the Government Code is amended
18to read:

19

31494.5.  

(a) A general member whose benefits are governed
20by Retirement Plan E may, during a period of active employment,
21elect to change plan membership and become a member,
22prospectively, in Retirement Plan D. The election shall be made
23upon written application signed by the member and filed with the
24board, pursuant to enrollment procedures and during an enrollment
25period established by the board, which enrollment period shall not
26occur more frequently than once every three years for that member.
27The change in plan membership shall be effective as of the transfer
28date, as defined in subdivision (g). Except as otherwise provided
29in this section, the rights and obligations of a member who elects
30to change membership under this section shall be governed by the
31terms of Retirement Plan D on and after the transfer date. Prior to
32the transfer date, the rights to retirement, survivors’, or other
33benefits payable to a member and his or her survivors or
34beneficiaries shall continue to be governed by Retirement Plan E.

35(b) If a member has made the election to change plans under
36subdivision (a), monthly contributions by the member and the
37employer under the terms of Retirement Plan D shall commence
38as of the transfer date. For the purposes of calculating the member’s
39contribution rate under Retirement Plan D, his or her entry age
40shall be deemed to be his or her age at his or her birthday nearest
P6    1the transfer date; however, if the member exchanges service credit
2in accordance with subdivision (c), with regard to contributions
3made for periods after that exchange, his or her entry age shall be
4adjusted and deemed to be the member’s age at his or her birthday
5nearest the date on which begins the most recent period of
6unbroken service credited under Retirement Plan D, taking into
7 account service purchased under subdivision (c). In no event shall
8the exchange of service under subdivision (c) affect the entry age
9with respect to, or the cost of, employee contributions made, or
10service purchased, prior to the exchange.

11(c) (1) A general member who has elected to change plans
12under subdivision (a) also may elect to exchange, at that time or
13any time thereafter, but prior to the earlier of his or her application
14for retirement, termination from employment, or death, some
15portion designated in whole-month increments, or all of the service
16credited under Retirement Plan E for an equivalent amount of
17service credited under Retirement Plan D, provided, however, that
18the member may not exchange less than 12 months’ service or, if
19less, the total service credited under Retirement Plan E. The
20exchange shall be effective on the date when the member completes
21the purchase of that service by depositing in the retirement fund,
22by lump sum or regular monthly installments, over the period of
23time determined by a resolution adopted by a majority vote of the
24board of retirement, or both, but in any event prior to the earlier
25of his or her death or the date that is 120 days after the effective
26date of his or her retirement, the sum of: (1) the contributions the
27member would have made to the retirement fund under Retirement
28Plan D for that length of time for which the member shall receive
29credit as service under Retirement Plan D, computed in accordance
30with the rate of contribution applicable to the member under
31Retirement Plan D, based upon his or her entry age, and in the
32same manner prescribed under Retirement Plan D as if that plan
33had been in effect during the period for which the member shall
34receive service credit, and (2) the regular interest thereon.

35(2) For the purposes of this subdivision, a member’s entry age
36shall be deemed to be the member’s age at his or her birthday
37nearest the date on which begins the most recent period of
38unbroken service credited under Retirement Plan D following
39completion of the service exchange under this subdivision. A
40member may receive credit for a period of service under only one
P7    1plan and in no event shall a member receive credit for the same
2period of service under both Retirement Plan D and Retirement
3Plan E.

4(3) A member who fails to complete the purchase of service as
5required under this subdivision shall be treated as completing an
6exchange of service under Retirement Plan E for an equivalent
7amount of service under Retirement Plan D only with regard to
8the service that actually has been purchased through completed
9deposit with the retirement fund of the requisite purchase amount,
10calculated in accordance with this subdivision.

11(d) Except as otherwise provided in this section, effective as of
12the transfer date, a member who has transferred to Retirement Plan
13D pursuant to this section and his or her survivors or beneficiaries
14shall receive retirement, disability, survivors’, death, or other
15benefits that shall consist of: (1) the benefits to which they are
16entitled under the terms of Retirement Plan D, but based on the
17member’s service credited only under that plan, and payable at the
18time and in the manner provided under Retirement Plan D, and
19(2) the benefits to which they would have been entitled under the
20terms of Retirement Plan E had the member remained a member
21of Retirement Plan E, but based on the member’s service credited
22only under that plan, and payable at the time and in the manner
23provided under Retirement Plan E. Except as otherwise provided
24in this section, the calculation of the portion of a member’s or
25beneficiary’s benefit that is attributable to each plan is subject to
26that plan’s respective, separate terms, including, but not limited
27to, the definitions of “final compensation” and provisions
28establishing cost-of-living adjustments, establishing minimum age
29and service requirements, and governing integration with federal
30social security payments. Notwithstanding the foregoing, the
31aggregate service credited under both Retirement Plan D and
32Retirement Plan E shall be taken into account for the purpose of
33determining eligibility for, and vesting of, benefits under each
34plan.

35(e) Notwithstanding any other provision of Retirement Plan D
36or Retirement Plan E, a member who transfers into Retirement
37Plan D under this section may retire for service-connected or
38nonservice-connected disability and receive disability benefits
39under Retirement Plan D only if he or she has either (1) completed
40two continuous years of active service after his or her most recent
P8    1transfer date, or (2) earned five years of retirement service credit
2under Retirement Plan D after his or her most recent transfer date.
3Notwithstanding any other provision to the contrary, a member
4who becomes disabled and does not meet either of these conditions
5(1) may apply for and receive only a deferred or service retirement
6allowance, or (2) may elect to transfer prospectively back to
7Retirement Plan E, and for the purposes of calculating his or her
8retirement benefits under this section, shall in lieu of credit under
9Retirement Plan D be credited with service under Retirement Plan
10E as provided under subdivision (g) of Section 31488 during any
11period he or she is totally disabled and is receiving, or eligible to
12receive, disability benefits, either during or after any elimination
13or qualifying period, under a disability plan provided by the
14employer up to the earlier of the date he or she retires or no longer
15qualifies for disability benefits. If a member dies before he or she
16is eligible to retire and before completing either two continuous
17years of active service after the transfer date into Retirement Plan
18D or after earning five years of retirement service credit under
19Retirement Plan D after that transfer date, that member’s
20beneficiary shall not be entitled to the survivor allowance under
21Section 31781.1 or 31781.12, if operative.

22(f) Notwithstanding any other provisions of Retirement Plan D
23or Retirement Plan E, a member who has transferred to Retirement
24Plan D pursuant to this section and who retires for disability when
25eligible under this section and Retirement Plan D, may not also
26retire for service and receive service retirement benefits under
27Retirement Plan E. However, for the purpose of calculating
28disability benefits under Retirement Plan D, the “sum to which he
29or she would be entitled as service retirement” or his or her “service
30retirement allowance,” as those terms are used in Sections 31726,
3131726.5, and 31727.4, shall consist of the blended benefit to which
32the member would be entitled under subdivision (d) if he or she
33retired for service, not just the service retirement benefit to which
34he or she would be entitled under Retirement Plan D.

35(g) As used in this section:

36(1) “Active service” means time spent on active, on-the-job
37performance of the duties of a full-time or part-time position and
38on any authorized paid leaves of absence; provided, however, that
39any authorized paid leave of absence or part-time service shall not
40constitute active service if the leave of absence or part-time service
P9    1is necessitated by a preexisting disability, injury, or disease. The
2board of retirement shall determine whether or not a leave of
3absence or part-time service is necessitated by a preexisting
4disability, injury, or disease, and thus excluded from the member’s
5active service, based upon evidence presented by the employer
6and the member upon request by the board.

7(2) “Entry age” means the age used for calculating the normal
8rate of contribution to Retirement Plan D with respect to a member
9who has transferred membership to Retirement Plan D under this
10section.

11(3) “Period of active employment” means a period during which
12the member is actively performing the duties of a full-time or
13part-time employee position or is on any authorized paid leave of
14absence, except a leave of absence during which the member is
15totally disabled and is receiving, or is eligible to receive, disability
16benefits, either during or after any elimination or qualifying period,
17under a disability plan provided by the employer.

18(4) “Retirement Plan D” means the contributory retirement plan
19otherwise available to members of the system between June 1,
201979, and December 31, 2012, inclusive.

21(5) “Retirement Plan E” means the noncontributory retirement
22plan established under this article.

23(6) “Transfer date” means the first day of the first month that
24is at least 30 days after the date that the application is filed with
25the board to change plan membership under subdivision (a).

26(h) This section shall only be applicable to Los Angeles County
27and shall not become operative until the board of supervisors of
28that county elects, by resolution adopted by a majority vote, to
29make this section operative in the county.

30

SEC. 3.  

Section 31495.7 is added to the Government Code, to
31read:

32

31495.7.  

Section 31835.1 applies to a member eligible to retire
33at 55 years of age pursuant to Section 31491. This section is
34declaratory of existing law.

35

SEC. 4.  

Section 31520.6 is added to the Government Code, to
36read:

37

31520.6.  

Notwithstanding any provision to the contrary in
38Section 31520.3 or 31520.5, in any county in which there is an
39alternate retired member, if the eighth member is present, the
40alternate retired member may also vote as a member of the board
P10   1in the event both the second and third, or both the second and
2seventh, or both the third and seventh members are absent for any
3cause.

4

SEC. 5.  

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.

begin delete
19

SEC. 6.  

Section 31641.4 of the Government Code is amended
20to read:

21

31641.4.  

(a) A member shall receive credit for employment
22in public service only for such service as he or she is not entitled
23to receive a pension or retirement allowance from the public
24agency. The service for which the member elects to contribute and
25the fact that no pension or retirement allowance will accrue to the
26member by virtue of the member’s employment in that public
27agency shall be certified to by an officer of the public agency where
28he or she rendered that public service or shall be established to the
29satisfaction of the board.

30(b) Notwithstanding any other law, a safety member who
31receives credit for prior employment in public service, the principal
32duties of which consisted of active law enforcement or active fire
33suppression, or active service in the Armed Forces of the United
34States during time of war or national emergency, shall have his or
35her pension or retirement allowance for that service calculated on
36the same basis as the calculation of the retirement allowance the
37member would receive as a safety member under the safety benefit
38formula in effect on the date of the member’s initial safety
39membership.

P11   1(c) A safety member who entered the service as a peace officer
2prior to the establishment of the safety membership provisions in
3his or her county shall be considered a safety member from his or
4her initial hiring date, for the purposes of this section,
5notwithstanding any other law.

end delete


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