SB 375, as introduced, Berryhill. Public employees’ retirement.
The Public Employees’ Retirement Law governs the rate of employer contributions to the Public Employees’ Retirement System. The law requires, among other things, that all assets of an employer be used in the determination of the employer contribution rate for the membership comprising the basis of the computation and that those assets held be recognized over the same funding period used to amortize unfunded accrued actuarial obligations, as specified.
This bill would make nonsubstantive changes to that provision.
Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.
The people of the State of California do enact as follows:
Section 20816 of the Government Code is
2amended to read:
(a) Notwithstanding any other provision of this part,
4all assets of an employer shall be used in the determination of the
5employer contribution rate for the membership comprising the
6basis of the computation. Assets held shall be recognized over the
7same funding period used to amortize unfunded accrued actuarial
8obligations, whether in excess of
P2 1the accrued actuarial
begin delete obligation or not,end delete using the entry
2age normal funding method.
3(b) On and after January 1, 1999, contracting agencies for which
4the actuarial value of assets exceeds the present value of benefits
5as of the most recently completed valuation, as determined by the
6chief actuary, may request that the board transfer employer assets
7to member-accumulated contribution accounts to satisfy all or a
8portion of the member contributions required by this part. That
9transfer shall be over a 12-month period provided the actuarial
10value of assets exceeds the present value of benefits. In determining
11the present value of benefits and the actuarial value of assets for
12purposes of this part, liabilities and assets attributed to the 1959
13survivor allowance may not be included. On and after January 1,
142003, a transfer of assets may not be made pursuant to this
15subdivision unless all or the same portion of the member
16contributions of each member in a membership classification are
17satisfied through the transfer. An employer electing a transfer of
18assets pursuant to this subdivision shall satisfy the members’
19contributions for a period of not less than one month and not more
20than one year.
21(c) On and after January 1, 2002, any contracting agency for
22which the actuarial value of assets exceeds the present value of
23benefits as of the most recently completed valuation, as determined
24by the chief actuary, may request that the board transfer from the
25contracting agency’s employer account excess assets, as determined
26by the board subject to the requirements and limitations of Section
27420 of the Internal Revenue Code (26 U.S.C. Sec. 420), to a retiree
28health account established by the board, in its discretion, in the
29contracting agency’s employer account pursuant to Section 401(h)
30of the Internal Revenue Code (26 U.S.C. 401(h)) for the purpose
31of providing health benefits to the contracting agency’s retirees
32and their covered dependents. The board may, in its discretion,
33transfer excess assets from the contracting agency’s employer
34account to that contracting agency’s retiree health account within
35that agency’s employer account, if the transfer meets the conditions
36of a qualified transfer pursuant to Section 420 of the Internal
37Revenue Code (26 U.S.C. Sec. 420). The transferred assets shall
38be used solely for the payment of current retiree health liabilities.
39That qualified transfer shall be made only once each year. The
40board may adopt regulations necessary to implement this
P3 1subdivision. Notwithstanding any other provision of law, the
2regulations may provide for the nonforfeiture of accrued pension
3benefits of participants and beneficiaries of a plan from which
4excess assets are transferred to the extent necessary for the transfer
5to meet the conditions of a qualified transfer pursuant to Section
6420 of the Internal Revenue Code (26 U.S.C. Sec. 420), and may
7include any other provision necessary under Section 420 of the
8Internal Revenue Code (26 U.S.C. Sec. 420) or Section 401(h) of
9the Internal Revenue Code (26 U.S.C. Sec. 401(h)) to accomplish
10the purposes of this subdivision.
11(d) For the purpose of this section, “employer” means any
12contracting agency, the state, or a school employer.
13(e) The actuarial report in the annual financial report shall also
14express the effect upon employer contribution rates of this section
15and of the recognition of net unrealized gains and losses.