Senate Bill No. 1352

Introduced by Committee on Public Employment and Retirement (Senators Pan (Chair), Beall, Hall, Moorlach, and Morrell)

February 19, 2016

An act to amend Sections 22106.1, 22120, 22508, 22508.5, 22509, 22515, 22703, 22717, 22850, 22851, 22852, 22853, 22853.5, 22854, 24005, 24105, 24201.5, 24204, 24209, 24209.3, 24211, 24212, 24213, 24322, 24410, 24606, 25001, 25006, 26202, 26808, 26810, 28000, 28001, and 28002 of, and to repeal and amend Section 22101.5 of, the Education Code, relating to state teachers’ retirement.

LEGISLATIVE COUNSEL’S DIGEST

SB 1352, as introduced, Committee on Public Employment and Retirement. State teachers’ retirement.

Existing law, the Teachers’ Retirement Law, establishes the State Teachers’ Retirement System (STRS) and creates the Defined Benefit Program of the State Teachers’ Retirement Plan, which provides a defined benefit to members of the program, based on final compensation, credited service, and age at retirement, subject to certain variations. STRS is administrated by the Teachers’ Retirement Board. The Defined Benefit Program is funded by employer and employee contributions, as well as investment returns and state appropriations, which are deposited or credited to the Teachers’ Retirement Fund.

(1) Existing law authorizes a disabled member to apply for a disability allowance or a disability retirement if he or she has five or more years of service and specified requirements are met. STRS provides retired and disabled members certain supplemental benefits, including those that maintain purchasing power up to a specified percent. Existing law prescribes base dates for purposes of applying postretirement benefit increases based on whether final compensation is used to calculate a service retirement upon termination of a disability allowance or if the disability allowance is continued, as specified. Existing law defines base allowance for these purposes

This bill would provide that definition of base allowance does not apply to provisions relating to base dates, as described above. The bill would, instead, revise the base date provisions to prescribe a method for their determination when applied to supplemental benefits and a disability allowance effective date is used.

(2) Existing law authorizes members who become employed in specified capacities in positions that are covered by other retirement systems, or who perform service that may be excluded from coverage in certain respects, to elect coverage under the defined benefit program. These provisions prescribe requirements for making this election effective, generally providing that they be made on a form prescribed by the system with 60 days of hire.

This bill would revise these requirements to require that the election forms be received by STRS, as specified, within 30 days of signature.

(3) Federal law, the Uniformed Services Employment and Reemployment Rights Act, requires pension plans to treat members who return from military service as if they did not have a break in service for purposes of certain provisions, which requirements are reflected in various provisions of the Teachers’ Retirement Law. Existing law establishes the Defined Benefit Supplement Program for the purpose of providing supplemental benefits to members whose earnings are in excess of specified amounts. Existing law establishes the Cash Balance Benefit Program, administered by the Teachers’ Retirement Board, as a separate benefit program within the State Teachers’ Retirement Plan in order to provide a retirement plan for persons employed to perform creditable service for less than 50% of full-time service.

This bill would make clarifying, conforming, and technical changes to reflect the requirements of federal law and specifically to account for its application to the Defined Benefit Supplement Program.

(4) Existing law requires that disability allowances and disability retirement allowances become effective on a date designated by the member, subject to certain requirements, including that the date is later than the last day of creditable service for which compensation is payable.

This bill would revise the reference to creditable service to instead refer to the last day the member earned creditable compensation, as defined.

(5) Existing law prescribes different methods of calculating a STRS service retirement, which depend on whether a member had previously received a disability allowance, disability retirement, or service retirement subsequent to which he or she reinstated in the system. Existing law identifies different methods of calculating service credit in this context, which may be applied to certain benefit enhancements such as that related to longevity. Existing law generally permits unused sick leave to be used for the purpose of calculating service credit, subject to a specified calculation.

This bill would provide, for purposes of the service retirements described above, that a certain amount of credited service that results from application of unused sick leave is to be applied to specified benefit enhancements. The bill would prohibit a member who elects a lump-sum retirement benefit from being eligible for specified disability benefits. The bill would prescribe a method for calculating service credit from unused sick leave for specified members.

(6) Existing law requires amounts of benefits that cannot be paid because a member or beneficiary cannot be located be returned to the retirement fund. Existing law prohibits interest from accruing on returned warrants in payment of benefits and contributions that are drawn and canceled by the Controller.

This bill would prohibit the accruing of interest on payments rejected pursuant to electronic fund transfers.

(7) Existing law permits a participant in the Cash Balance Benefit Program, who is employed while receiving an annuity under the program, to terminate the annuity and again make contributions to the program, subject to certain conditions, including that the participant has reached normal retirement age and has been receiving an annuity for at least a year.

This bill would revise the conditions pursuant to which an annuity may be terminated to eliminate the requirements that the participant has reached normal retirement age and has been receiving an annuity for at least a year, and prescribe administrative provisions.

(8) This bill would also make other technical, clarifying, and conforming changes.

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

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

SECTION 1.  

Section 22101.5 of the Education Code, as added
by Section 3 of Chapter 74 of the Statutes of 2000, is repealed.

begin delete

22101.5.  

“Accumulated Defined Benefit Supplement account
balance” means an amount equal to the sum of member
contributions, the member contributions picked up by an employer,
employer contributions, and interest credited on those contributions
pursuant to Section 25005, that are credited by the system to the
member’s Defined Benefit Supplement account.

end delete

SEC. 2.  

Section 22101.5 of the Education Code, as added by
Section 1 of Chapter 1021 of the Statutes of 2000, is amended to
read:

22101.5.  

“Accumulated Defined Benefit Supplement account
balance” means begin insert the amount of end insert credits equal to the sum of member
contributions, the member contributions picked up by an employer,
employer contributions, interest credited pursuant to Section 25005
and additional earnings credited pursuant to Section 25006.

SEC. 3.  

Section 22106.1 of the Education Code is amended to
read:

22106.1.  

For the purposes of determining supplemental benefits
pursuant to Sections 24412 and 24415, begin insert except as provided under
Section 24410, end insert “base allowance” means a monthly allowance under
the Defined Benefit Program prior to all allowance increases by
this part and after modification for an option, if applicable.

SEC. 4.  

Section 22120 of the Education Code is amended to
read:

22120.  

“Credited interest” means interest that is credited to
active members’ and inactive begin delete members’, end delete begin insert members’ end insert accumulated
retirement begin delete contributions, end delete begin insert contributions end insert and accumulated annuity
deposit contributions at a rate set annually by the board as a plan
amendment with respect to the Defined Benefit Program.

SEC. 5.  

Section 22508 of the Education Code is amended to
read:

22508.  

(a) A member who becomes employed by the same or
a different school district or community college district, or a county
superintendent, or who becomes employed by the state in a position
described in subdivision (b), to perform service that requires
membership in a different public retirement system, and who is
not excluded from membership in that public retirement system,
may elect to have that service subject to coverage by the Defined
Benefit Program of this plan and excluded from coverage by the
other public retirement system. begin delete The election shall be made in
writing on a form prescribed by this system within 60 days from
the date of hire in the position requiring membership in the other
public retirement system. end delete If that election is made, the service
performed for the employer after the date of hire shall be
considered creditable service for purposes of this part.

(b) Subdivision (a) shall apply to a member who becomes
employed by the state only if the member is also one of the
following:

(1) Represented by a state bargaining unit that represents
educational consultants, professional educators, or librarians
employed by the state.

(2) Excluded from the definition of “state employee” in
subdivision (c) of Section 3513 of the Government Code, but
performing, supervising, or managing work similar to work
performed by employees described in paragraph (1).

(3) In a position not covered by civil service and in the executive
branch of government, but performing, supervising, or managing
work similar to work performed by employees described in
paragraph (1).

(c) (1) A member of the Public Employees’ Retirement System
described in paragraph (2) who is subsequently employed to
perform creditable service requiring coverage by the Defined
Benefit Program of this plan may elect to have that subsequent
service subject to coverage by the Public Employees’ Retirement
System and excluded from coverage by the Defined Benefit
Program pursuant to Section 20309 of the Government Code. If
the election is made, creditable service performed for the employer
after the date of hire shall be subject to coverage by the Public
Employees’ Retirement System.

(2) This subdivision shall apply to a member of the Public
Employees’ Retirement System who either (A) is employed by a
school district, community college district, a county superintendent,
or the State Department of Education or (B) has at least five years
of credited service under the system.

(d) An election made by a member pursuant to this section shall
be irrevocable.

SEC. 6.  

Section 22508.5 of the Education Code is amended to
read:

22508.5.  

(a) Any person who is a member of the Defined
Benefit Program of the State Teachers’ Retirement Plan employed
by a community college district who subsequently is employed by
the Board of Governors of the California Community Colleges to
perform duties that are subject to membership in a different public
retirement begin delete system, shall be excluded from membership in that
different system if he or she elects, in writing, and files that election
in the office of the State Teachers’ Retirement System within 60
days after the person’s entry into the new position, to continue as
a member of the Defined Benefit Program. end delete begin insert system may elect to
have that service subject to coverage by the Defined Benefit
Program of this plan and excluded from coverage by the other
public retirement system. end insert Only a person who has achieved plan
vesting is eligible to elect to continue as a member of the program.

(b) A member of the Public Employees’ Retirement System
who is employed by the Board of Governors of the California
Community Colleges who subsequently is employed by a
community college district to perform creditable service subject
to coverage under the Defined Benefit Program, may elect to have
that service subject to coverage by the Public Employees’
Retirement System and excluded from coverage under the Defined
Benefit Program pursuant to Section 20309 of the Government
Code.

(c) This section shall apply to changes in employment effective
on or after January 1, 1998.

SEC. 7.  

Section 22509 of the Education Code is amended to
read:

22509.  

(a) Within 10 working days of the date of hire of an
employee who has the right to make an election pursuant to Section
22508 or 22508.5, the employer shall inform the employee of the
right to make an election and shall make available to the employee
written information provided by each retirement system concerning
the benefits provided under that retirement system to assist the
employee in making an election.

(b) Any election made pursuant to subdivision (a) of Section
22508 or subdivision (a) of Section 22508.5 shall be begin delete filed with the
office of the State Teachers’ Retirement System and a end delete begin insert made in
writing on a form prescribed by the system within 60 days from
the date of hire in the position requiring membership in the other
public retirement system and shall be received at the system’s
headquarters office within 30 days after the date or the member’s
signature. A end insert copy of the election shall be filed with the other public
retirement system. begin delete Any end delete

begin insert (c) end insert begin insert   end insert begin insert Any end insert election made pursuant to subdivision (c) of Section
22508 or subdivision (b) of Section 22508.5 shall be filed with the
office of the Public Employees’ Retirement System and a copy of
the election shall be filed with the office of this system.

begin delete

(c)

end delete

begin insert (d) end insert  Any election made pursuant to Section 22508 or Section
22508.5 shall become effective as of the first day of employment
in the position that qualified the employee to make an election.

SEC. 8.  

Section 22515 of the Education Code is amended to
read:

22515.  

begin insert (a) end insert begin insert   end insert Persons excluded from membership pursuant to
Sections 22601.5, 22602, and 22604 may elect membership in the
Defined Benefit Program at any time while employed to perform
creditable service subject to coverage under that program. begin delete The end delete

begin insert (b) end insert begin insert   end insert begin insert The end insert election shall be in writing on a form prescribed by this
system and shall be begin delete filed in the office of this system end delete begin insert received at
the system’s headquarters office within 30 days after the date of
the member’s signature and end insert prior to submission of contributions.
begin insert Membership in the Defined Benefit Program shall become effective
as of the first day of the pay period following the election. end insert The
election is irrevocable and shall remain in effect until the member
terminates employment and receives a refund of accumulated
retirement contributions. begin delete The end delete

begin insert (c) end insert begin insert   end insert begin insert The end insert amendments to this section enacted during the 1995-96
Regular Session shall be deemed to have become operative on July
1, 1996.

SEC. 9.  

Section 22703 of the Education Code is amended to
read:

22703.  

(a) Service shall be credited to the Defined Benefit
Program, except as provided in subdivision (b).

(b) A member’s creditable service that exceeds 1.000 in a school
year shall not be credited to the Defined Benefit Program.
Commencing July 1, 2002, contributions by the employer and the
member that are deposited in the Teachers’ Retirement Fund for
creditable compensation paid to the member for service that
exceeds 1.000 in a school year, exclusive of contributions pursuant
to begin delete Section end delete begin insert Sections 22901.7, 22950.5, and end insert 22951, shall be credited
to the Defined Benefit Supplement Program.

(c) In lieu of any other benefits provided by this part, any
member who performed service prior to July 1, 1956, shall receive
retirement benefits for that service at least equal to the benefits
that the member would have received for that service under the
provisions of this part as they existed on June 30, 1956. This
subdivision shall not apply to service that is credited in the San
Francisco Employees’ Retirement System.

(d) The amendments to this section made during the second
year of the 1999-2000 Regular Session shall become operative on
July 1, 2002, if the revenue limit cost-of-living adjustment
computed by the Superintendent of Public Instruction for the
2001-02 fiscal year is equal to or greater than 3.5 percent.
Otherwise the amendments to this section made during the second
year of the 1999-2000 Regular Session shall become operative on
July 1, 2003.

SEC. 10.  

Section 22717 of the Education Code is amended to
read:

22717.  

(a) A member shall be granted credit at service
retirement for each day of accumulated and unused sick leave days
for which full salary is allowed to which the member was entitled
on the member’s final day of employment with the employer or
employers subject to coverage by the Defined Benefit Program
during the last school year in which he or she earned creditable
compensation pursuant to Section 22119.2 or 22119.3. The system
shall accept certification from each employer with which the
member has accumulated sick leave days for that period, provided
this leave has not been transferred to another employer.

(b) The amount of service credit to be granted shall be
determined by dividing the number of days of accumulated and
unused sick leave days by the number of days of service the
employer requires the member’s class of employees to perform in
a school year during the member’s final year of creditable service
subject to coverage by the Defined Benefit Program, which shall
not be less than the minimum standard specified in Section
22138.5. The number of days shall not include school and legal
holidays. In no event shall the divisor be less than 175. For
members employed less than full time, the standards identified in
Section 22138.5 shall be considered as the minimum full-time
equivalent. For those standards identified in Section 22138.5 that
are applicable to teachers or instructors and that are expressed only
in terms of hours or instructional hours, the number of hours or
instructional hours shall be divided by six to determine the number
of days.

begin insert

(c) For members who are last employed with the state in a
position in which there are no contracted base service days, the
amount of service credit to be granted shall be 0.004 years of
service for each day of unused sick leave certified to the board by
the employer. The certification shall report only those days of
unused sick leave that were accrued by the member during the
normal course of his or her employment subject to coverage by
the Defined Benefit Program.

end insert begin delete

(c)

end delete

begin insert (d) end insert  When the member has made application for service
retirement under this part, the employer shall certify to the board,
within 30 days following the effective date of the member’s service
retirement or the date the application for retirement is received by
the system’s headquarters office, whichever is later, the number
of days of accumulated and unused sick leave days that the member
was entitled to on the final day of employment. The board may
assess a penalty on delinquent reports.

begin delete

(d)

end delete

begin insert (e) end insert  This section shall be applicable to any person who retires
on or after January 1, 1999.

SEC. 11.  

Section 22850 of the Education Code is amended to
read:

22850.  

(a) The Legislature hereby declares its intent to provide
benefits under this part to reemployed members who have been
absent from a position of employment subject to coverage under
the Defined Benefit Program to perform service in the uniformed
services of the United States in accordance with the Uniformed
Services Employment and Reemployment Rights Act of 1994
(Chapter 43 (commencing with Section 4301) of Title 38 of the
United States Code).

(b) The system shall comply with Chapter 43 (commencing
with Section 4301) of Title 38 of the United States Code, as that
chapter may be amended from time to time.

(c) “Service in the uniformed begin delete services” end delete begin insert services,” for purposes
of determining plan vesting, eligibility for membership, and accrual
of benefits, end insert means the performance of duty on a voluntary or
involuntary basis in a uniformed service under competent authority
and includes active duty, active duty for training, initial active duty
for training, inactive duty training, begin delete and end delete a period for which a
member is absent from a position of employment for the purpose
of an examination to determine the fitness of the member to
perform any begin delete duty. end delete begin insert duty, and the period of time following the actual
service in the uniformed service through the last day a member is
eligible to report back to work or to apply for reemployment as
specified under Section 1002.259 of Title 20 of the Code of Federal
Regulations. end insert

(d) “Uniformed services” means the Armed Forces of the United
States of America, the Army National Guard and the Air National
Guard when engaged in active duty for training, inactive duty
training, or full-time National Guard duty, the commissioned corps
of the Public Health Service, and any other category of persons
designated by the President in time of war or emergency.

(e) Except as provided in Section 22851, no benefit shall accrue
during the period of service in the uniformed services if the
member does not return to employment, with the same employer
which had employed the member immediately prior to the eligible
period of service in the uniformed services, as prescribed in Chapter
43 (commencing with Section 4301) of Title 38 of the United
States Code.

SEC. 12.  

Section 22851 of the Education Code is amended to
read:

22851.  

The right to pension benefits under this part of a
member who dies or who returns to employment with the same
employer which had employed the member immediately prior to
the eligible period of service in the uniformed services, and is
subject to Chapter 43 (commencing with Section 4301) of Title
38 of the United States Code shall be determined under this section.

(a) (1) A reemployed or deceased member shall be treated as
not having incurred a break in service by reason of that member’s
eligible period or periods of service in the uniformed services.

(2) (A) Each eligible period of service served by a member in
the uniformed services shall, upon return to employment, with the
same employer which had employed the member immediately
prior to the eligible period of service in the uniformed services, or
upon death, be deemed to constitute service with the employer or
employers toward plan vesting and eligibility for membership in
the Defined Benefit Program. begin insert Service that is deemed to the member
pursuant to this subparagraph shall not be used for benefit
calculations. end insert

(B) In cases of death during qualified military begin delete service, end delete begin insert service
or if a member fails to remit the member contributions that would
have been required in respect of the eligible period of service in
the uniformed services, end insert service shall begin delete be calculated under Section
22853.5 and shall end delete be used exclusively for plan vesting and
eligibility for membership purposes. Service that is deemed to the
member begin delete in this way end delete begin insert pursuant to this subparagraph end insert shall not be
used for benefit begin delete calculations based on service credit balances. end delete
begin insert calculations. end insert

begin insert

(3) (A) Each eligible period of service served by a member in
the uniformed services shall, upon his or her payment of the
member contributions required under this part, be deemed to
constitute service for the purposes of accruing benefits in the
Defined Benefit Program and the Defined Benefit Supplement
Program.

end insert begin delete

(3)

end delete

begin insert (B) end insert  A member who returns to employment, with the same
employer which had employed the member immediately prior to
the eligible period of service in the uniformed services shall not
be entitled to any benefits under this part in respect of service in
the uniformed services to which the member would not otherwise
have been entitled had the member remained continuously
employed and not undertaken such service in the uniformed
services.

(b) For purposes of begin delete calculating benefits, end delete begin insert accruing benefits in
the Defined Benefit Program and Defined Benefit Supplement
Program, end insert a member who returns to employment with the same
employer which had employed the member immediately prior to
the eligible period of service in the uniformed services shall be
entitled to service begin delete credit end delete begin insert credit, compensation earnable,
contributions, interest, and additional earnings credits end insert under this
part for the eligible period of service in the uniformed services
upon his or her payment of the member contributions required
under Section begin delete 22901 end delete begin insert 22901, and Section 22901.7, if applicable, end insert
that otherwise would have been due for such period of service had
the member remained continuously employed and not undertaken
such service in the uniformed services. No such payment of
member contributions may exceed the amount the member would
have been required to contribute under this part had the member
not served in the uniformed services and had remained
continuously employed by the employer throughout the eligible
period of service in the uniformed services. If a member fails to
remit the member contributions that would have been required
under Section begin delete 22901 end delete begin insert 22901, and Section 22901.7 if applicable, end insert in
respect of the eligible period of service in the uniformed services
no begin delete service credit end delete begin insert benefits end insert shall be provided under this part for the
period to which the omitted contributions relate.

(c) Any payment of member contributions to the Defined Benefit
Program begin insert or the Defined Benefit Supplement Program end insert in this section
shall be made by the member during the period beginning with
the date of return to employment and may continue for three times
the period of the member’s eligible service in the uniformed
services, not to exceed five years. Any payment of member
contributions to the Defined Benefit Program in this section by a
member who returned to employment prior to January 1, 1997,
and qualifies for benefits in accordance with the federal Uniformed
Services Employment and Reemployment Rights Act (38 U.S.C.
Secs. 4301 to 4335, incl.) shall be made by the member during the
period beginning with the date of notification of eligibility by the
employer to the system and may continue for three times the period
of the member’s eligible service in the uniformed services, not to
exceed five years. Any subsequent request to purchase begin insert service
credit for end insert this service shall be subject to the provisions of Chapter
14 (commencing with Section 22800). If all contributions due
under this part are not paid to the plan with respect to the Defined
Benefit Program within the specified repayment period and in
accordance with subdivision begin delete (b) of Section 22851 the contributions
shall be returned to the member at the end of the repayment period.
Interest end delete begin insert (b), the member shall be entitled to the benefits attributable
to the contributions received or may request a return of his or her
payments. Credited interest end insert on member contributions made for
the eligible period of service in the uniformed services shall not
be credited under this part until after the contributions due are paid
and then only prospectively to the member’s account in accordance
with Section 22216. begin insert For the Defined Benefit Supplement Program,
contributions, interest, and additional earnings credits the member
would have earned had the member remained continuously
employed during the period of eligible service in the uniformed
services shall be credited retroactively after all contributions due
are paid. end insert

SEC. 13.  

Section 22852 of the Education Code is amended to
read:

22852.  

(a) An employer reemploying a member of the Defined
Benefit Program with service subject to the requirements of
Chapter 43 (commencing with Section 4301) of Title 38 of the
United States Code shall be liable to the plan for the employer
contributions under this part, provided that employer was the last
employer employing the member immediately prior to the period
served by the member in the uniformed services.

(b) For purposes of determining the amount of that liability
under this part and any obligation to the plan with respect to the
Defined Benefit Program, interest shall not be included in the
liability to the plan.

(c) Subject to subdivision (e), the employer shall pay the
employer contributions for the eligible period of service in the
uniformed services that would have been required under Sections
begin delete 22950 end delete begin insert 22950, 22950.5, end insert and 22951 had the member remained
continuously employed during that period of eligible service in
the uniformed services.

begin insert

(d) In addition to any amount required pursuant to subdivision
(c), the employer shall pay the full cost of any interest and
additional earnings credits credited to the member’s Defined
Benefit Supplement account pursuant to subdivision (b) of Section
22851.

end insert begin delete

(d)

end delete

begin insert (e) end insert  The employer shall not be liable for employer contributions
under this part for the eligible period of service in the uniformed
services to the extent that the member fails to remit the member
contributions for that period.

begin delete

(e)

end delete

begin insert (f) end insert  The employer shall provide information regarding the
reemployment of a member who is subject to Chapter 43
(commencing with Section 4301) of Title 38 of the United States
Code on a form prescribed by the system within 30 days of the
date of reemployment.

begin delete

(f)

end delete

begin insert (g) end insert  Employers shall remit to the plan with respect to the Defined
Benefit Program begin insert and the Defined Benefit Supplement Program, end insert
the employer contributions required under begin delete subdivision (c) end delete
begin insert subdivisions (c) and (d) end insert within 60 working days of the date the
system notifies the employer of the amount of contributions due
with respect to the member who elects to remit the member
contributions for the eligible period of service in the uniformed
services.

begin delete

(g)

end delete

begin insert (h) end insert  If the employee does not comply with subdivision (b) of
Section 22851 within the time period specified, the employer
contributions that were remitted for that period shall be adjusted
pursuant to Section 23008.

SEC. 14.  

Section 22853 of the Education Code is amended to
read:

22853.  

For purposes begin delete of computing an employer’s contributions
for the eligible period of service or the member’s contributions
under this part, the employee’s compensation earnable during the
period end delete begin insert of this chapter, creditable compensation during the period
of service in the uniformed services end insert shall be computed as follows:

(a) The begin insert creditable end insert compensation begin delete earnable end delete the member would
have received for the eligible period of begin delete service. end delete begin insert service had the
member remained continuously employed. end insert

(b) In the event the begin insert creditable end insert compensation begin delete earnable end delete is not
reasonably certain, begin delete the employer’s contributions and member’s
contributions end delete begin insert creditable compensation end insert shall be based on the
member’s average begin insert creditable end insert compensation begin delete earnable end delete during the
12-month period immediately preceding the eligible period of
service in the uniformed services or, if shorter, the period of
employment immediately preceding that period of service.

SEC. 15.  

Section 22853.5 of the Education Code is amended
to read:

22853.5.  

For purposes of begin delete computing service to award to
members who die during qualified military service, service end delete begin insert this
chapter, compensation earnable during the period of service in
the uniformed services end insert shall be computed as follows:

(a)  begin delete The service credit the member would have received for the
eligible period of service through the beginning of the period of
qualified military leave through the date of death. end delete begin insert The
compensation earnable that would have been applicable for the
eligible period of service had the member remained continuously
employed. end insert

(b) In the event the begin delete service credit end delete begin insert compensation end insert earnable begin insert that
would have been applicable end insert is not reasonably certain, begin delete vesting credit end delete
begin insert compensation earnable end insert shall be based on the member’s begin delete average
service credit end delete begin insert compensation earnable end insert earned during the 12-month
period immediately preceding the eligible period of service in the
uniformed services or, if shorter, the period of employment
immediately preceding that period of begin delete service. end delete begin insert service prorated
over the period of service in the uniformed services. end insert

SEC. 16.  

Section 22854 of the Education Code is amended to
read:

22854.  

A reemployed member who has been absent from a
position of employment subject to coverage under the Defined
Benefit Program to perform service in the uniformed services,
pursuant to Section 22850, for a period in excess of five years shall
not be entitled to begin delete service credit end delete begin insert benefits end insert or credit for plan vesting
begin insert or eligibility for membership end insert purposes under this begin delete part, end delete begin insert chapter for
an amount exceeding five years, end insert except where the service in the
uniformed services has exceeded five years for the following
reasons:

(a) The member is required to serve beyond five years to
complete an initial period of obligated service.

(b) The member was unable to obtain orders releasing the
member from a period of service in the uniformed services before
the expiration of the five-year period and that inability was through
no fault of the member.

(c) The member served in the uniformed services as required
pursuant to Section 270 of Title 10 of the United States Code,
Section 502(a) or 503 of Title 32 of the United States Code, or to
fulfill additional training requirements determined and certified
in writing by the Secretary of Defense, to be necessary for
professional development, or for completion of skill training or
retraining.

(d) The member is ordered to do any of the following:

(1) Ordered to or retained on active duty under Section 672(a),
672(g), 673, 673(b), 673(c), or 688 of Title 10 of the United States
Code or under Section 331, 332, 359, 360, 367, or 712 of Title 14
of the United States Code.

(2) Ordered to or retained on active duty, other than for training,
under any provision of law during a war or during a national
emergency declared by the President or the Congress.

(3) Ordered to active duty, other than for training, in support,
as determined by the secretary concerned, of an operational mission
for which personnel have been ordered to active duty under Section
673(b) of Title 10 of the United States Code.

(4) Ordered to active duty in support, as determined by the
secretary concerned, of a critical mission or requirement of the
uniformed services.

(5) Called into federal service as a member of the National
Guard under Chapter 15 (commencing with Section 331) of Title
10 of the United States Code or under Section 3500 or 8500 of
Title 10 of the United States Code.

SEC. 17.  

Section 24005 of the Education Code is amended to
read:

24005.  

(a) A disability allowance under this part shall become
effective upon any date designated by the member, provided all
of the following conditions are met:

(1) An application for disability allowance is filed on a properly
executed form prescribed by the system.

(2) The effective date is later than the last day begin delete of creditable
service for which compensation is payable to the member. end delete begin insert the
member earned creditable compensation pursuant to Section
22119.2 or 22119.3. end insert

(3) The effective date is no earlier than either the first day of
the month in which the application is received by the system’s
headquarters office or the date upon and continuously after which
the member is determined to the satisfaction of the board to have
been mentally incompetent.

(b) If the member is employed to perform creditable service
subject to coverage under the Defined Benefit Program at the time
the disability allowance is approved under this part, the member
shall notify the system in writing, within 90 days, of the last day
on which the member will perform service. If the member does
not respond within 90 days, or if the last day on which service will
be performed is more than 90 days after the date the system notifies
the member of approval of the disability allowance, the member’s
application for a disability allowance shall be rejected and a
disability allowance shall not be payable to the member.

SEC. 18.  

Section 24105 of the Education Code is amended to
read:

24105.  

(a) A disability retirement allowance under this part
shall become effective upon any date designated by the member,
provided that all of the following conditions are met:

(1) An application for disability retirement is filed on a properly
executed form prescribed by the system.

(2) The effective date is later than the last day begin delete of creditable
service for which compensation is payable to the member. end delete begin insert the
member earned creditable compensation pursuant to Section
22119.2 or 22119.3. end insert

(3) The effective date is no earlier than either the first day of
the month in which the application is received at the system’s
headquarters office or the date upon and continuously after which
the member is determined to the satisfaction of the board to have
been mentally incompetent.

(4) The application for disability retirement contains an election
of either an unmodified allowance or an allowance modified under
an option as provided in Section 24332.

(b) If the member is employed to perform creditable service
subject to coverage under the Defined Benefit Program at the time
the disability retirement is approved, the member shall notify the
system in writing, within 90 days, of the last day on which the
member will perform service. If the member does not respond
within 90 days, or if the last day on which service will be
performed is more than 90 days after the date the system notifies
the member of the approval of disability retirement, the member’s
application for disability retirement shall be rejected and a
disability retirement allowance shall not be payable to the member.

SEC. 19.  

Section 24201.5 of the Education Code is amended
to read:

24201.5.  

(a) A member who is eligible and applies for a
disability allowance or retirement pursuant to Section 24001 or
24101 may apply to receive a service retirement allowance pending
the determination of his or her application for disability, subject
to all of the following:

(1) The member is eligible to retire for service under Section
24201 or 24203.

(2) The member submits the application on a form provided by
the system, subject to all of the following:

(A) The application is executed no earlier than the date the
application for disability benefits is executed and no earlier than
six months before the effective date of the retirement allowance.

(B) The effective date is no earlier than the first day of the month
in which the application for disability benefits is received at the
system’s headquarters office, unless the application for disability
benefits is denied or canceled and the member has indicated an
earlier service retirement date on the application to use if denied
or canceled. If the application for disability benefits is denied or
canceled, the service retirement date of a member who submits an
application for retirement pursuant to this section on or after
January 1, 2014, shall be no earlier than January 1, 2014.

(C) The effective date is later than the last day begin delete of creditable
service for which compensation is payable to the member. end delete begin insert the
member earned creditable compensation pursuant to Section
22119.2 or 22119.3. end insert

(D) The effective date is no earlier than one year following the
date on which a retirement allowance was terminated pursuant to
Section 24208, unless the application for disability benefits is
denied or canceled and the member has indicated an earlier service
retirement date on the application to use if denied or canceled. If
the application for disability benefits is denied or canceled, the
service retirement date is no earlier than one day after the date on
which a retirement allowance was terminated pursuant to Section
24208, provided that the retirement allowance is terminated on or
after January 1, 2014.

(E) The effective date is no earlier than one year following the
date on which a retirement allowance was terminated pursuant to
subdivision (a) of Section 24117.

(3) The effective date of the service retirement allowance can
be no earlier than the date upon and continuously after which the
member is determined to the satisfaction of the board to have been
mentally incompetent.

(4) A member who applies for service retirement under this
section is not eligible to receive a lump-sum payment and an
actuarially reduced monthly allowance pursuant to Section 24221.

(5) A member who applies for service retirement under this
section is not eligible to receive an allowance calculated pursuant
to Section 24205.

begin insert

(6) A member who applies for service retirement under this
section and elects to receive his or her retirement benefit pursuant
to Section 25009 as a lump-sum payment is not eligible to elect a
disability benefit pursuant to Section 25016 or 25018.1.

end insert begin delete

(6)

end delete

begin insert (7) end insert  (A) Except as described in subparagraph (B), a member
who applies for service retirement under this section shall not
receive service credit for each day of accumulated and unused
leave of absence for illness or injury or for education pursuant to
Section 22717 or 22717.5.

(B) If the application for disability is denied or canceled, the
member’s service retirement allowance shall be adjusted to the
effective date of the service retirement to include service credited
pursuant to Section 22717 or 22717.5.

begin delete

(7)

end delete

begin insert (8) end insert  If the application for disability is denied or canceled, a
member who applies for a service retirement allowance under this
section is subject to all of the following:

(A) Unless otherwise provided in this part, a member who, on
his or her application for service retirement, elects an option
pursuant to Section 24300.1 or 24307 may not change or revoke
that option.

(B) If the member receives a modified service retirement
allowance based on the election of an option pursuant to Section
24300.1 or 24307, that modified service retirement allowance shall
continue in effect and unchanged.

(C) If the member did not elect an option pursuant to Section
24300.1 or 24307 and receives an unmodified service retirement
allowance, that unmodified service retirement allowance shall
continue in effect and unchanged.

(b) A member who applies for service retirement under this
section may change or cancel his or her service retirement
application pursuant to Section 24204, or may terminate his or her
service retirement allowance pursuant to Section 24208.

(c) A member may not cancel his or her application for disability
prior to a determination of that application unless he or she submits
a written request to the system’s headquarters office. If a member
elects to cancel his or her service retirement application or elects
to terminate his or her service retirement allowance as described
in subdivision (b), that election shall not cancel the application for
disability.

(d) (1) Subparagraph (C) of paragraph (1) of subdivision (a)
of Section 24001 and paragraph (3) of subdivision (a) of Section
24101 shall not apply to a member who cancels an application for
service retirement pursuant to Section 24204 or who terminates a
service retirement allowance pursuant to Section 24208, if all of
the following apply:

(A) The member earned at least one year of credited service
subsequent to the most recent terminated service retirement
allowance.

(B) The member’s application for disability under this section
is pending determination by the board.

(2) If the member’s application for disability under this section
is denied or canceled, subparagraph (C) of paragraph (1) of
subdivision (a) of Section 24001 and paragraph (3) of subdivision
(a) of Section 24101 shall apply if the member submits a new
application for disability.

(e) (1) If the board approves the application for disability, and
notwithstanding subdivision (f) of Section 24204, the board shall
cancel the member’s application for service retirement and shall
authorize payment of a disability allowance or disability retirement.

(2) If the board approves the application for disability and the
member has received service retirement allowance payments under
this part, the effective date for the disability allowance or disability
retirement shall be the same as the effective date of the service
retirement allowance.

(f) If a member who applies for service retirement under this
section dies prior to a determination by the board on the application
for disability, the member shall be considered retired for service
at the time of death, and any subsequent benefits shall be paid
accordingly.

(g) If a member who applies for service retirement under this
section dies after the board has approved the member’s application
for disability, the member shall be considered a disabled member,
or retired for disability, at the time of death, and any subsequent
benefits shall be paid accordingly, even if the member died prior
to receiving notification of the approval of his or her application
for disability.

(h) If the member changes or cancels his or her service
retirement application or terminates his or her service retirement
allowance as described in subdivision (b), the system shall make
appropriate adjustments to the applicable service retirement
allowance, disability allowance, or disability retirement allowance,
retroactive to the effective date of the disability allowance or
disability retirement allowance. Subdivision (a) of Section 24617
shall not apply.

(i) The system may recover a service retirement allowance
overpayment made to a member by deducting that overpayment
from any subsequent disability benefit payable to the member.

(j) Nothing in this section shall be construed to allow a member
or beneficiary to receive more than one type of retirement or
disability allowance for the same period of time.

SEC. 20.  

Section 24204 of the Education Code is amended to
read:

24204.  

(a) A service retirement allowance under this part shall
become effective upon any date designated by the member,
provided all of the following conditions are met:

(1) An application for service retirement allowance is filed on
a form provided by the system, which is executed no earlier than
six months before the effective date of retirement allowance.

(2) The effective date is later than the last day begin delete of creditable
service for which compensation is payable to the member. end delete begin insert the
member earned creditable compensation pursuant to Section
22119.2 or 22119.3. end insert

(3) The effective date is no earlier than one day after the date
on which the retirement allowance was terminated under Section
24208.

(4) The effective date is no earlier than one year following the
date on which the retirement allowance was terminated under
subdivision (a) of Section 24117.

(5) The effective date is no earlier than the date upon and
continuously after which the member is determined to the
satisfaction of the board to have been mentally incompetent.

(6) The effective date is no earlier than the date upon which the
member completes payment of a service credit purchase pursuant
to Section 22801, 22820, or 22826, or payment of a redeposit of
contributions pursuant to Section 23200, except as provided in
Section 22801 or 22829.

(b) A member who files an application for service retirement
may change or cancel his or her retirement application, as long as
the form provided by the system is received in the system’s
headquarters office no later than 30 days from the date the
member’s initial benefit payment for the member’s most recent
retirement under the Defined Benefit Program is paid by the
system. If a member cancels his or her retirement application, the
member shall return the total gross distribution amount of all
payments for the canceled retirement benefit to the system’s
headquarters office no later than 45 days from the date of the
member’s initial benefit payment and shall be liable for any adverse
tax consequences that may result from these actions.

(c) The retirement date of a member who files an application
for retirement pursuant to Section 24201 on or after January 1,
2012, shall be no earlier than January 1, 2012.

(d) Nothing in this section shall be construed to allow a member
to receive more than one type of retirement or disability allowance
for the same period of time by virtue of his or her own membership.

SEC. 21.  

Section 24209 of the Education Code is amended to
read:

24209.  

(a) Upon retirement for service following reinstatement,
the member shall receive a service retirement allowance equal to
the sum of both of the following:

(1) An amount equal to the monthly allowance the member was
eligible to receive immediately preceding the most recent
reinstatement, exclusive of any amounts payable pursuant to
Section 22714 or 22715, increased by the improvement factor that
would have been applied to the allowance if the member had not
reinstated.

(2) An amount calculated pursuant to Section 24202, 24202.5,
24202.6, 24203, 24203.5, or 24206 based on credited service
accrued, including any service granted pursuant to Section 22717
or 22717.5, subsequent to the most recent reinstatement, the
member’s age on the last day of the month in which the retirement
allowance begins to accrue, and final compensation.

(b) If the total amount of credited service accrued, other than
that accrued pursuant to Sections 22714, 22715, 22717, 22717.5,
and 22826, begin insert except as provided in subdivision (c) of Section 22121, end insert
is equal to or greater than 30 years, the amounts identified in
paragraphs (1), for members who initially retired on or after
January 1, 1999, and (2) of subdivision (a) shall be calculated
pursuant to Section 24203.5.

(c) If the total amount of credited service accrued, other than
that accrued pursuant to Sections 22714, 22715, 22717, 22717.5,
and 22826, begin insert except as provided in subdivision (c) of Section 22121, end insert
is equal to or greater than 30 years, upon retirement for service
following reinstatement, a member who retired pursuant to Section
24213, and received the terminated disability allowance for the
prior retirement, shall receive a service retirement allowance equal
to the sum of the following:

(1) An amount based on the credited service accrued, including
any service granted pursuant to Section 22717 or 22717.5, prior
to the effective date of the disability allowance, the member’s age
at the prior retirement increased by the factor provided in Section
24203.5, and projected final compensation.

(2) An amount calculated pursuant to Section 24202, 24202.5,
24202.6, 24203.5, or 24206 based on credited service accrued,
including any service granted pursuant to Section 22717 or
22717.5, subsequent to the reinstatement, the member’s age on
the last day of the month in which the retirement allowance begins
to accrue, and final compensation using compensation earnable,
or projected final compensation, or a combination of both.

(d) For purposes of this section, final compensation shall not
be based on a determination of compensation earnable as described
in subdivision (e) of Section 22115.

SEC. 22.  

Section 24209.3 of the Education Code is amended
to read:

24209.3.  

(a) Notwithstanding subdivision (a) of Section 24209,
and exclusive of any amounts payable during the prior retirement
for service pursuant to Section 22714, or 22715:

(1) A member who retired, other than pursuant to Section 24210,
24211, 24212, or 24213, and who reinstates and performs creditable
service, as defined in Section 22119.5, after the most recent
reinstatement, in an amount equal to two or more years of credited
service, shall, upon retirement for service on or after the effective
date of this section, receive a service retirement allowance equal
to the sum of the following:

(A) An amount calculated pursuant to this chapter based on
credited service accrued, including any service granted pursuant
to Section 22717 or 22717.5, prior to the most recent reinstatement,
using the member’s age at the subsequent service retirement, from
which age shall be deducted the total time during which the
member was retired for service, and final compensation.

(B) An amount calculated pursuant to this chapter based on
credited service accrued, including any service granted pursuant
to Section 22717 or 22717.5, subsequent to the most recent
reinstatement, using the member’s age on the last day of the month
in which the retirement allowance begins to accrue, and final
compensation.

(2) A member who retired pursuant to Section 24210 and who
reinstates and performs creditable service, as defined in Section
22119.5, after the most recent reinstatement, in an amount equal
to two or more years of credited service, shall, upon retirement for
service on or after the effective date of this section, receive a
service retirement allowance equal to the sum of the following:

(A) An amount calculated pursuant to this chapter based on
credited service accrued, including any service granted pursuant
to Section 22717 or 22717.5, prior to the effective date of the
disability retirement, using the member’s age at the subsequent
service retirement, from which age shall be deducted the total time
during which the member was retired for service, and indexed final
compensation to the effective date of the initial service retirement.

(B) An amount calculated pursuant to this chapter based on the
credited service accrued, including any service granted pursuant
to Section 22717 or 22717.5, after termination of the disability
retirement, excluding credited service accrued or granted
subsequent to the most recent reinstatement, using the member’s
age at the subsequent service retirement, from which age shall be
deducted the total time during which the member was retired for
service, and final compensation.

(C) An amount calculated pursuant to this chapter based on
credited service accrued, including any service granted pursuant
to Section 22717 or 22717.5, subsequent to the most recent
reinstatement, using the member’s age on the last day of the month
in which the retirement allowance begins to accrue, and final
compensation.

(3) A member who retired pursuant to Section 24211 and who
reinstates and performs creditable service, as defined in Section
22119.5, after the most recent reinstatement, in an amount equal
to two or more years of credited service, shall, upon retirement for
service on or after the effective date of this section, receive a
service retirement allowance equal to the sum of the following:

(A) The greater of (i) the disability allowance the member was
eligible to receive immediately prior to termination of that
allowance, excluding the children’s portion, or (ii) an amount
calculated pursuant to this chapter based on credited service
accrued prior to the effective date of the disability allowance,
excluding credited service accrued or granted pursuant to Section
22717 or 22717.5 or Chapter 14 (commencing with Section 22800)
or Chapter 14.2 (commencing with Section 22820) or Chapter 19
(commencing with Section 23200), using the member’s age at the
subsequent service retirement, from which age shall be deducted
the total time during which the member was retired for service,
and final compensation using compensation earnable, or projected
final compensation earnable, or a combination of both.

(B) An amount equal to either of the following:

(i) For a member who was receiving a benefit pursuant to
subdivision (a) of Section 24211, an amount calculated pursuant
to this chapter based on credited service accrued at the time of the
retirement pursuant to Section 24211, excluding credited service
accrued or granted prior to the effective date of the disability
allowance or pursuant to Section 22717 or 22717.5 or Chapter 14
(commencing with Section 22800) or Chapter 14.2 (commencing
with Section 22820) or Chapter 19 (commencing with Section
23200), the member’s age at the subsequent service retirement,
from which age shall be deducted the total time during which the
member was retired for service, and final compensation using
compensation earnable, or projected final compensation, or a
combination of both.

(ii) For a member who was receiving a benefit pursuant to
subdivision (b) of Section 24211, an amount calculated pursuant
to this chapter based on projected service at the time of the
retirement pursuant to Section 24211, excluding credited service
accrued or granted prior to the effective date of the disability
allowance or pursuant to Section 22717 or 22717.5 or Chapter 14
(commencing with Section 22800) or Chapter 14.2 (commencing
with Section 22820) or Chapter 19 (commencing with Section
23200), the member’s age at the subsequent service retirement,
from which age shall be deducted the total time during which the
member was retired for service, and final compensation using
compensation earnable, or projected final compensation, or a
combination of both.

(C) An amount based on any credited service accrued or granted
pursuant to Section 22717 or 22717.5 or Chapter 14 (commencing
with Section 22800) or Chapter 14.2 (commencing with Section
22820) or Chapter 19 (commencing with Section 23200), at the
time of the retirement pursuant to Section 24211, using the
member’s age at the subsequent service retirement, from which
age shall be deducted the total time during which the member was
retired for service, and final compensation using compensation
earnable, or projected final compensation, or a combination of
both.

(D) An amount calculated pursuant to this chapter based on
credited service accrued subsequent to the most recent
reinstatement, including credited service accrued or granted
pursuant to Section 22714, 22715, 22717, or 22717.5 or Chapter
14 (commencing with Section 22800) or Chapter 14.2
(commencing with Section 22820) or Chapter 19 (commencing
with Section 23200), using the member’s age on the last day of
the month in which the retirement allowance begins to accrue, and
final compensation using compensation earnable, or projected final
compensation, or a combination of both.

(4) A member who retired pursuant to Section 24212 or 24213
and who reinstates and performs creditable service, as defined in
Section 22119.5, after the most recent reinstatement, in an amount
equal to two or more years of credited service, shall, upon
retirement for service on or after the effective date of this section,
receive a service retirement allowance equal to the sum of the
following:

(A) An amount calculated pursuant to this chapter based on the
member’s projected service at the time of the retirement pursuant
to Section 24212 or 24213, including credited service accrued or
granted pursuant to Section 22717 or 22717.5 or Chapter 14
(commencing with Section 22800) or Chapter 14.2 (commencing
with Section 22820) or Chapter 19 (commencing with Section
23200), using the member’s age at the subsequent service
retirement, from which age shall be deducted the total time during
which the member was retired for service, and final compensation
using compensation earnable, or projected final compensation, or
a combination of both.

(B) An amount calculated pursuant to this chapter based on
credited service accrued subsequent to the most recent
reinstatement, including credited service accrued or granted
pursuant to Section 22714, 22715, 22717, or 22717.5 or Chapter
14 (commencing with Section 22800) or Chapter 14.2
(commencing with Section 22820) or Chapter 19 (commencing
with Section 23200), using the member’s age on the last day of
the month in which the retirement allowance begins to accrue, and
final compensation using compensation earnable, or projected final
compensation, or a combination of both.

(b) If the total amount of credited service, other than projected
service, or service that accrued or was granted pursuant to Sections
22714, 22715, 22717, 22717.5, and 22826, begin insert except as provided in
subdivision (c) of Section 22121, end insert is equal to or greater than the
number of years required to be eligible for an increased allowance
pursuant to this chapter or Section 22134.5, the amounts identified
in this section shall be calculated pursuant to the section authorizing
the increased benefit.

(c) For members receiving an allowance pursuant to Section
24410.5 or 24410.6, the amount payable pursuant to this section
shall not be less than the amount payable to the member as of the
effective date of reinstatement.

(d) The amount payable pursuant to this section shall not be
less than the amount that would be payable to the member pursuant
to Section 24209.

(e) For purposes of determining an allowance increase pursuant
to Sections 24415 and 24417, the calendar year of retirement shall
be the year of the subsequent retirement if the final compensation
used to calculate the allowance pursuant to this section is higher
than the final compensation used to calculate the allowance for
the prior retirement.

(f) The allowance paid pursuant to this section to a member
receiving a lump-sum payment pursuant to Section 24221 shall be
actuarially reduced to reflect that lump-sum payment.

(g) For purposes of this section, final compensation shall not
be based on a determination of compensation earnable as described
in subdivision (e) of Section 22115.

SEC. 23.  

Section 24211 of the Education Code is amended to
read:

24211.  

When a member who has been granted a disability
allowance under this part after June 30, 1972, returns to
employment subject to coverage under the Defined Benefit
Program and performs:

(a) Less than three years of creditable service after termination
of the most recent disability allowance, the member shall receive
a retirement allowance which is the sum of the allowance calculated
on credited service accrued after the termination date of the
disability allowance, excluding credited service accrued or granted
pursuant to Section 22717 or 22717.5 or Chapter 14 (commencing
with Section 22800) or Chapter 14.2 (commencing with Section
22820) or Chapter 19 (commencing with Section 23200), the age
of the member on the last day of the month in which the retirement
allowance begins to accrue, and final compensation using
compensation earnable or projected final compensation, or a
combination of both, plus the greater of either of the following:

(1) A service retirement allowance calculated on credited service
accrued as of the effective date of the disability allowance,
excluding credited service accrued or granted pursuant to Section
22717 or 22717.5 or Chapter 14 (commencing with Section 22800)
or Chapter 14.2 (commencing with Section 22820) or Chapter 19
(commencing with Section 23200), the member’s age on the last
day of the month in which the retirement allowance begins to
accrue, and projected final compensation to the termination date
of the disability allowance.

(2) The disability allowance the member was eligible to receive
immediately prior to termination of the most recent disability
allowance, excluding children’s portions.

(b) Three or more years of creditable service after termination
of the most recent disability allowance, the member shall receive
a retirement allowance that is the greater of the following:

(1) A service retirement allowance calculated on all actual and
projected service, excluding credited service accrued or granted
pursuant to Section 22717 or 22717.5 or Chapter 14 (commencing
with Section 22800) or Chapter 14.2 (commencing with Section
22820) or Chapter 19 (commencing with Section 23200), the
member’s age on the last day of the month in which the retirement
allowance begins to accrue, and final compensation using
compensation earnable, or projected final compensation, or a
combination of both.

(2) The disability allowance the member was eligible to receive
immediately prior to termination of the most recent disability
allowance, excluding children’s portions.

(c) The allowance shall be increased by an amount based on
any credited service accrued or granted pursuant to Section 22714,
22715, 22717, or 22717.5 or Chapter 14 (commencing with Section
22800) or Chapter 14.2 (commencing with Section 22820) or
Chapter 19 (commencing with Section 23200), the member’s age
on the last day of the month in which the retirement allowance
begins to accrue, and final compensation using compensation
earnable, or projected final compensation, or a combination of
both.

(d) If the total amount of credited service, other than projected
service or credited service that accrued or was granted pursuant
to Sections 22714, 22715, 22717, 22717.5, and 22826, begin insert except as
provided in subdivision (c) of Section 22121, end insert is equal to or greater
than 30 years, the amounts identified in subdivisions (a) to (c),
inclusive, shall be calculated pursuant to Sections 24203.5 and
24203.6.

(e) For purposes of this section, final compensation shall not
be based on a determination of compensation earnable as described
in subdivision (e) of Section 22115.

(f) Upon retirement, the member may elect to modify the service
retirement allowance payable in accordance with any option
provided under this part.

SEC. 24.  

Section 24212 of the Education Code is amended to
read:

24212.  

(a) If a disability allowance granted under this part
after June 30, 1972, is terminated for reasons other than those
specified in Section 24213 and the member does not return to
employment subject to coverage under the Defined Benefit
Program, the member’s service retirement allowance, when
payable, shall be based on projected service, excluding credited
service accrued or granted pursuant to Section 22717 or 22717.5
or Chapter 14 (commencing with Section 22800) or Chapter 14.2
(commencing with Section 22820), or Chapter 19 (commencing
with Section 23200), projected final compensation, and the
member’s age on the last day of the month in which the retirement
allowance begins to accrue. The allowance payable under this
section, excluding annuities payable from accumulated annuity
deposit contributions, shall not be greater than the disability
allowance the member was eligible to receive immediately prior
to the earlier of the termination of that allowance or at normal
retirement age, excluding children’s portions.

(b) The allowance shall be increased by an amount based on
any credited service accrued or granted pursuant to Section 22717
or 22717.5 or Chapter 14 (commencing with Section 22800) or
Chapter 14.2 (commencing with Section 22820) or Chapter 19
(commencing with Section 23200), the member’s age on the last
day of the month in which the retirement allowance begins to
accrue, and final compensation using compensation earnable, or
projected final compensation, or a combination of both.

(c) If the total amount of credited service, other than projected
service or credited service that accrued or was granted pursuant
to Sections 22717, 22717.5, and 22826, begin insert except as provided in
subdivision (c) of Section 22121, end insert is equal to or greater than 30
years, the amounts identified in subdivisions (a) and (b) shall be
calculated pursuant to Sections 24203.5 and 24203.6.

(d) Upon retirement, the member may elect to modify the service
retirement allowance payable in accordance with any option
provided under this part.

SEC. 25.  

Section 24213 of the Education Code is amended to
read:

24213.  

(a) When a member who has been granted a disability
allowance under this part after June 30, 1972, attains normal
retirement age, or at a later date when there is no dependent child,
the disability allowance shall be terminated and the member shall
be eligible for service retirement. The retirement allowance shall
be calculated on the projected final compensation and projected
service to normal retirement age, excluding credited service accrued
or granted pursuant to Section 22717 or 22717.5 or Chapter 14
(commencing with Section 22800) or Chapter 14.2 (commencing
with Section 22820) or Chapter 19 (commencing with Section
23200), and the member’s age on the last day of the month in
which the retirement allowance begins to accrue. The allowance
payable under this section, excluding annuities payable from
accumulated annuity deposit contributions, shall not be greater
than the disability allowance the member was eligible to receive
immediately prior to normal retirement age, excluding children’s
portions.

(b) The allowance shall be increased by an amount based on
any credited service accrued or granted pursuant to Section 22717
or 22717.5 or Chapter 14 (commencing with Section 22800) or
Chapter 14.2 (commencing with Section 22820) or Chapter 19
(commencing with Section 23200), the member’s age on the last
day of the month in which the retirement allowance begins to
accrue, and projected final compensation to normal retirement age.

(c) If the total amount of credited service accrued, other than
projected service or credited service that accrued or was granted
pursuant to Sections 22717, 22717.5, and 22826, begin insert except as
provided in subdivision (c) of Section 22121, end insert is equal to or greater
than 30 years, the amounts identified in subdivisions (a) and (b)
shall be calculated pursuant to Sections 24203.5 and 24203.6.

(d) Upon retirement, the member may elect to modify the service
retirement allowance payable in accordance with any option
provided under this part.

SEC. 26.  

Section 24322 of the Education Code is amended to
read:

24322.  

(a) An option elected under Section 24300, 24300.1,
or 24307 may be canceled by a retired member if the option
beneficiary is the retired member’s spouse or former spouse and
a final decree of dissolution of marriage or a judgment of nullity
has been entered or an order of separate maintenance has been
made on or after January 1, 1978, by a court of competent
jurisdiction. A retired member may cancel the option before or
after issuance of the first retirement allowance payment.

(b) The retired member shall notify the begin delete board end delete begin insert board, end insert in writing
begin insert on a properly executed form provided by the system end insert of cancellation
of the option. Notification shall not be earlier than the effective
date of the decree, judgment, or order and shall include a certified
copy of the final decree of dissolution, or judgment of nullity, or
an order of separate maintenance, and any property settlement
agreement.

(c) Upon notification to the board, the retired member may elect:
(1) to receive the unmodified retirement allowance from the date
of receipt of the notification; or (2) a new joint and survivor option
under Section 24300.1 and may designate one or multiple new
option beneficiaries. Modification of the retirement allowance
because of the newly elected option or newly designated
beneficiary or beneficiaries shall be based on the ages of the retired
member and the new option beneficiary or beneficiaries as of the
effective date of the new option. The election of a new joint and
survivor option or the designation of a new option beneficiary or
beneficiaries shall be consistent with the final decree of dissolution,
judgment of nullity, order of separate maintenance, or property
settlement agreement, and shall not result in any additional liability
to the Teachers’ Retirement Fund. The effective date of the change
shall be the date notification is received by the board.

SEC. 27.  

Section 24410 of the Education Code is amended to
read:

24410.  

(a) If projected final compensation is used to calculate
the service retirement allowance following the termination of the
disability allowance or if the disability allowance is continued as
the lesser of the two allowance calculations under Section 24212
or 24213, then the original disability allowance effective date shall
be retained as the base date for purposes of determining
postretirement benefit increases.

(b) If the disability allowance effective date is used pursuant to
subdivision (a), then begin delete the original disability allowance the member
was eligible to receive on that date shall be used for the purpose
of determining postretirement benefit increases. This subdivision
shall not apply to an action filed in superior court before January
1, 2014. end delete begin insert for purposes of determining supplemental benefits
pursuant to Sections 24412 and 24415, the base allowance shall
be determined as follows: end insert

begin insert

(1) If the disability allowance is continued pursuant to Section
24212 or 24213, the base allowance shall be equal to the disability
allowance prior to all allowance increases made pursuant to this
part.

end insert begin insert

(2) If the disability allowance is not continued pursuant to
Section 24212 or 24213, the base allowance shall be based on the
factors used to calculate the service retirement allowance, except
that projected final compensation shall be replaced with the final
compensation upon which the disability allowance was based using
compensation earnable without the adjustment pursuant to
subdivision (f) of Section 22134 and subdivision (e) of Section
22134.5.

end insert begin insert

(3) The base allowance determined pursuant to this subdivision
shall be modified for an option, if applicable.

end insert

(c) This section shall be applicable for determining the base
date for applicable postretirement increases made on or after
January 1, 1982.

(d) This section shall only apply to service retirements effective
the day after the termination date of the disability allowance.

SEC. 28.  

Section 24606 of the Education Code is amended to
read:

24606.  

(a) If any begin delete warrant drawn in end delete payment of contributions
or accumulated contributions or benefits under this plan remains
unclaimed begin delete or end delete begin insert and, after a good faith effort, end insert the legal claimant
cannot be found, the board shall redeposit the proceeds begin delete of the
warrant end delete in the retirement fund, and shall hold the proceeds for the
legal claimant without further accumulation of interest. The
redeposit does not operate to establish the membership of the
claimant in this plan.

(b) Subdivision (a) applies to warrants drawn and canceled by
the Controller begin delete pursuant to Section 17070 of the Government Code,
except that, upon end delete begin insert and payments rejected via electronic funds
transfer. Upon end insert notice of begin delete cancellation, end delete begin insert cancellation or rejection, end insert
the proceeds revert to and become a part of the retirement fund,
and shall be applied to meet the liabilities of the retirement fund.

(c) The board may at any time after reversion of proceeds, as
provided above to the retirement fund, and upon receipt of proper
information satisfactory to it, return from the retirement fund an
amount equal to those proceeds to the credit of the legal claimant.

SEC. 29.  

Section 25001 of the Education Code is amended to
read:

25001.  

(a) The board shall establish a segregated account
within the retirement fund to be known as the Gain and Loss
Reserve, and the board shall have sole authority over the reserve.
The Gain and Loss Reserve shall be maintained for the Defined
Benefit Supplement Program and may be used to credit interest at
the minimum interest rate for plan years in which the board
determines that the obligation cannot be met from investment
earnings. The Gain and Loss Reserve may also be used to provide
additions to the Annuitant Reserve for monthly annuities payable
under the Defined Benefit Supplement Program.

(b) The board shall establish a goal for the balance of the Gain
and Loss Reserve and periodically shall review the sufficiency of
the reserve based on the recommendations of the actuary.

(c) The board may allocate excess earnings of the plan with
respect to assets attributable to the Defined Benefit Supplement
Program to the Gain and Loss Reserve. In addition, the board may
allocate any liability gains and losses attributable to the Defined
Benefit Supplement Program to the Gain and Loss Reserve. Upon
the recommendation of the actuary, the board shall determine
annually the amount, if any, that is to be allocated to the Gain and
Loss Reserve for that plan year. That determination shall be made
upon recommendation of the actuary begin delete after adoption of end delete begin insert based on end insert
the actuarial valuation undertaken following the plan year pursuant
to Section 22311.5, but no later than June 30 following the end of
the plan year. In determining whether to allocate excess earnings
to the Gain and Loss Reserve, the board shall consider all of the
following:

(1) Whether or not the plan has excess earnings attributable to
the Defined Benefit Supplement Program.

(2) The sufficiency of the Gain and Loss Reserve in light of the
goal established pursuant to subdivision (b).

(3) The amount required for the plan’s administrative costs with
respect to the Defined Benefit Supplement Program.

(4) The amount required for crediting members’ accounts at the
minimum interest rate.

(d) In determining whether to allocate liability gains and losses
to the Gain and Loss Reserve, the board shall consider the matters
described in paragraphs (2), (3), and (4) of subdivision (c).

SEC. 30.  

Section 25006 of the Education Code is amended to
read:

25006.  

(a) The board may declare an additional earnings credit
to be applied to Defined Benefit Supplement accounts for a plan
year. Prior to declaring an additional earnings credit, the board
shall consider all of the following:

(1) Whether the plan’s investment earnings with respect to the
Defined Benefit Supplement Program for the plan year exceed the
amount required to meet the liabilities identified in paragraphs (2),
(3), and (4).

(2) The amount required for the plan year to credit interest on
members’ nominal accounts at the minimum interest rate.

(3) The amount of the plan’s administrative expenses with
respect to the Defined Benefit Supplement Program for the plan
year.

(4) The sufficiency of the Gain and Loss Reserve and whether
any additions must be made to that reserve.

(b) For any plan year that the board declares an additional
earnings credit, the board shall specify the amount to be added to
members’ accounts as a percentage increase. The additional
earnings credit shall be applied to the balance of credits in each
member’s nominal account as of the last day of the plan year and
shall be applied as of the date specified by the board. The additional
earnings credit shall not be added to the balance of credits
transferred from a member’s Defined Benefit Supplement account
to the Annuitant Reserve.

(c) The declaration of an additional earnings credit shall be
made as a plan amendment adopted by the board with respect to
the Defined Benefit Supplement Program upon recommendation
of the actuary begin delete after adoption of end delete begin insert based on end insert the actuarial valuation
undertaken following the plan year pursuant to Section 22311.5,
but no later than June 30 following the end of the plan year.

SEC. 31.  

Section 26202 of the Education Code is amended to
read:

26202.  

(a) The board shall establish a Gain and Loss Reserve
within the Teachers’ Retirement Fund for the Cash Balance Benefit
Program. The board has sole authority to administer the Gain and
Loss Reserve to be drawn upon to the extent necessary to credit
interest to employee accounts and employer accounts at the
minimum interest rate during years in which the investment
earnings of the plan with respect to the Cash Balance Benefit
Program are not sufficient for that purpose, and, where necessary,
to provide additions to the Annuitant Reserve for monthly annuity
payments.

(b) The board shall establish and periodically review goals
regarding the sufficiency of the Gain and Loss Reserve based on
the recommendation of the actuary.

(c) In the event that the total amount of investment earnings of
the plan with respect to the Cash Balance Benefit Program for any
plan year exceeds the sum of the total amount required to credit
all employee and employer accounts at the minimum interest rate
for the plan year plus the administrative costs of the plan with
respect to the Cash Balance Benefit Program for the plan year, the
board shall determine the amount, if any, that is to be credited to
the Gain and Loss Reserve for the plan year. That determination
shall be made upon recommendation of the actuary begin delete following the
adoption by the board of end delete begin insert based on end insert the actuarial valuation
undertaken following the plan year pursuant to Section begin delete 26202, end delete
begin insert 26211 end insert but no later than June 30 following the end of the plan year.
In determining whether an amount is to be credited to the Gain
and Loss Reserve, the board shall consider the sufficiency of the
reserve in light of the goal established for the sufficiency and the
recommendations of the actuary.

SEC. 32.  

Section 26808 of the Education Code is amended to
read:

26808.  

(a) The annuity elected under this chapter shall be
determined as a value actuarially equivalent to the sum of the
employee account and the employer account as of the retirement
date. The annuity shall be calculated using the age of the participant
and, if the participant elected a joint and survivor option, the age
of the beneficiary on the retirement date.

(b) In the case of a participant who previously received an
annuity that was terminated pursuant to Section begin delete 26505 or end delete 26810,
the portion of the annuity derived from the amounts credited to
the employee account and employer account as of the date of
reemployment shall be calculated using the actuarial assumptions
in effect on the previous retirement date using the age of the
participant and, if the participant elected a joint and survivor option,
the age of the beneficiary on the current retirement date.

SEC. 33.  

Section 26810 of the Education Code is amended to
read:

26810.  

(a) A participant who is employed to perform creditable
service subject to coverage by the Cash Balance Benefit Program
while receiving an annuity under the program may begin delete voluntarily end delete
terminate the annuity upon begin delete employment end delete begin insert written request to the
system end insert and make contributions to the program based on salary paid
by the employer for the employment, begin delete provided the participant has
attained normal retirement age and has been receiving a retirement
annuity for at least one year. The participant shall continue to be
subject to Section 26808. end delete begin insert subject to the following conditions: end insert

begin insert

(1) The request for termination of the annuity is filed on a form
prescribed by the system, and the form is executed no earlier than
six months before the effective date of the termination.

end insert begin insert

(2) Termination of the participant’s annuity shall become
effective on the first day of the month designated by the participant.

end insert begin delete

(b) The participant shall request in writing within 60 days of
employment that the annuity be terminated. Termination of the
participant’s annuity shall become effective on the first day of the
month following the month in which verification of the
participant’s employment is received by the system from the
participant’s employer.

(c)

end delete

begin insert (b) end insert  Upon begin delete voluntary end delete termination of the annuity, the employee
and employer account of the participant shall be credited with
respective balances that reflect the actuarial equivalent of the
participant’s retirement benefit as of the date the participant
terminates the annuity and the Annuitant Reserve shall be reduced
by the amount of the credits.

begin delete

(d)

end delete

begin insert (c) end insert  The portion of the annuity derived from the amounts credited
to the employee account and employer account, as of the date the
participant terminates the annuity, shall be calculated using the
actuarial assumptions in effect on the initial retirement date using
the age of the participant and, if the participant elected a joint and
survivor begin delete option end delete begin insert option, end insert the age of the beneficiary on the current
retirement date.

begin delete

(e)

end delete

begin insert (d) end insert  Upon election of a subsequent annuity, the credits in the
participant’s employee account and employer account shall be
transferred to the Annuitant Reserve.

SEC. 34.  

Section 28000 of the Education Code is amended to
read:

28000.  

(a) The Legislature hereby finds and declares its intent
to preserve and protect the rights of reemployed participants who
have been absent from a position of employment covered by the
Cash Balance Benefit Program to serve in the uniformed services
of the United States of America in accordance with the Uniformed
Services Employment and Reemployment Rights Act of 1994
(Chapter 43 (commencing with Section 4301) of Title 38 of the
United States Code).

(b) The plan shall comply with Chapter 43 (commencing with
Section 4301) of Title 38 of the United States Code, as that chapter
may be amended from time to time.

(c) The term “service in the uniformed begin delete services” end delete begin insert services,” for
purposes of determining plan vesting, eligibility for membership,
and accrual of benefits, end insert means the performance of duty on a
voluntary or involuntary basis in a uniformed service under
competent authority and includes active duty, active duty for
training, initial active duty for training, inactive duty training, begin delete and end delete
a period for which a participant is absent from a position of
employment for the purpose of an examination to determine the
fitness of the participant to perform any such begin delete duty. end delete begin insert duty, and the
period of time following the actual service in the uniformed service
through the last day a member is eligible to report back to work
or to apply for reemployment as specified under Section 1002.259
of Title 20 of the Code of Federal Regulations. end insert

(d) The term “uniformed services” means the Armed Forces of
the United States of America, the Army National Guard and the
Air National Guard when engaged in active duty for training,
inactive duty training, or full-time National Guard duty, the
commissioned corps of the Public Health Service, and any other
category of persons designated by the President in time of war or
emergency.

(e) No entitlement of the right to contribute toward credits under
the Cash Balance Benefit Program pursuant to this chapter by the
participant as a result of service in the uniformed services shall
accrue if the participant does not return to employment with the
same employer or employers which employed the participant
immediately prior to the eligible period of service in the uniformed
services as prescribed in Chapter 43 (commencing with Section
4301) of Title 38 of the United States Code.

SEC. 35.  

Section 28001 of the Education Code is amended to
read:

28001.  

(a) The participant who returns to employment with
the same employer which had employed the participant
immediately prior to the eligible period of service in the uniformed
services, in accordance with the requirements of Chapter 43
(commencing with Section 4301) of Title 38 of the United States
Code, shall be treated as not having incurred a break in the
performance of creditable service by reason of that participant’s
period or periods of service in the uniformed services. The length
of each period of service in the uniformed services shall not exceed
five years unless otherwise permitted pursuant to Section 28004.
Each period of service in the uniformed services by the participant
shall, upon that participant’s return to employment with the same
employer or employers which had employed the participant
immediately prior to the eligible period of service in the uniformed
services, constitute employment toward the performance of
creditable service provided that participant elects to remit the
employee contributions that would have been made during the
period of service in the uniformed services. The remittance of
employee contributions shall be calculated pursuant to Sections
26501 and 28003. In no event shall that remittance exceed the
amount the participant would have been required to contribute
during that period of performance of creditable service had the
participant remained continuously employed by the last employer
and not served in the uniformed services throughout that period.

(b) Notwithstanding Section 26506, remittance of employee
contributions in accordance with subdivision (a) shall be made by
the employer pursuant to Section 26502 upon the employer’s
receipt of written consent of the participant specifying a schedule
of repayments. That remittance shall commence during the period
beginning with the date of return to employment and may continue
for three times the period of the participant’s eligible period of
service in the uniformed services, not to exceed five years. The
plan’s receipt of the remittance payments to the plan with respect
to the Cash Balance Benefit Program shall be credited pursuant to
Chapter 7 of this part. begin delete Interest on the payments of remitted
employee contributions made for the period of service in the
uniformed services shall not be credited in the participant’s account
until after such payments are received and only prospectively to
the participant’s account in accordance with Section 26604. end delete
begin insert Contributions, interest, and additional earnings credits the
participant would have earned had the participant remained
continuously employed during the period of eligible service in the
uniformed services shall be credited to employee and employer
accounts retroactively upon receipt of the employee contributions. end insert
Upon receipt of the remittance payments to the plan, the payments
shall be subject to the same terms and conditions under the program
as if the payments had been employee contributions made by the
participant had the participant not served for a period in the
uniformed services. In no event shall the current year contributions
and contributions made for purposes of purchasing service exceed
the maximum exclusion allowance as set forth in the Internal
Revenue Code.

SEC. 36.  

Section 28002 of the Education Code is amended to
read:

28002.  

(a) Except as provided in subdivision (b), an employer
reemploying a participant with service subject to the requirements
of Chapter 43 (commencing with Section 4301) of Title 38 of the
United States Code, shall be liable to remit the employer
contributions provided that employer employed the participant
immediately prior to the eligible period of service in the uniformed
services. begin delete That remittance shall exclude interest and the end delete begin insert The end insert
contribution rate by the employer shall be to the same extent as
that for contributions to the Cash Balance Benefit Program for
other employees during the same period. begin insert In addition to
contributions due pursuant to this subdivision, the employer shall
remit an amount that is the equivalent of the full cost of any interest
and additional earnings credits credited pursuant to Section 28001. end insert
The employer begin delete shall, within 30 days of the date of reemployment,
provide information as required by the board, on a form provided
by the system, notifying the system of reemployment. end delete begin insert shall provide
information regarding the reemployment of a participant who is
subject to Chapter 43 (commencing with Section 4301) of Title 38
of the United States Code on a form prescribed by the system within
30 days of the date of reemployment. end insert Following receipt of that
notice, the system shall calculate in accordance with Section 28003
the total amount of employer contributions due for the participant
for the full period of service in the uniformed services. Within 60
working days of notification by the plan of amount due, the
employer shall remit to the plan all employer contributions.

(b) The employer shall not be liable for employer contributions
for the period of service in the uniformed services if the participant
elects not to remit the employee contributions for that period
through the employer as required under Section 28001. In the event
the participant does not remit all of the employee contributions
within the prescribed repayment period, the total amount of the
employer contributions begin delete shall remain with the plan and credited to
the participant’s employer account with respect to the Cash Balance
Benefit Program. end delete begin insert that were remitted for that period shall be
adjusted pursuant to Section 26302. end insert