BILL NUMBER: SB 1352 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MAY 27, 2016
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, 22115.2, 22120,
22134, 22134.5, 22508, 22508.5, 22509, 22515, 22664,
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, 26604, 26808, 26810,
28000, 28001, and 28002 of, and to amend,
repeal, and add Sections 22905 and 26603 of, to add Section 22168.5
to, to repeal Sections 22109.5 and 22136 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 amended, 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 5 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 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 defines a break in service for the purpose of
defining a member's final compensation and defines final compensation
with respect to a member whose salary while an active member was
reduced because of a reduction in school funds, as specified.
Existing law provides that, for these purposes, periods in which a
member's salary was reduced may be aggregated, as specified.
This bill would repeal these provisions and revise definitions of
final compensation to address breaks in service, including with
reference to periods during which a member's salary was reduced
because of a reduction in school funds. The bill would define school
term for these purposes. The bill would define final compensation for
purposes of calculating a benefit that does not include service
credit, which would include disability and family allowances. The
bill, among other things, would also revise and clarify provisions
relating to determining final compensation in connection with
concurrent retirement when a member has concurrent membership in
another retirement system. The bill would make various conforming
changes in connection with these changes.
(2)
(3) 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. 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 within 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)
(4) Federal law, the Uniformed Services Employment and
Reemployment Rights Act, Act of 1994,
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.
(5) Existing law requires that specified member contributions and
employer contributions be credited to a member's individual account
in the Defined Benefit Program or the Defined Benefit Supplement
Program pursuant to the applicable provisions in the Teachers'
Retirement Law. Existing law requires the system to make a
determination regarding the timing of the crediting of contributions
relating compensation for creditable service in excess of one year.
Existing law prescribes how these provisions become operative based
on a computation to be made by the Superintendent of Public
Instruction for the 2001-02 fiscal year.
This bill would repeal and reenact these provisions, as of July 1,
2018, eliminating obsolete language regarding their operation and
establishing when contributions are credited without regard to a
determination by the system.
(4)
(6) 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)
(7) 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)
(8) 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)
(9) 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.
(10) Existing law requires that employee contributions and
employer contributions for the Cash Balance Benefit Program be
credited to their respective accounts as of the first working day
following the date all contributions to fully satisfy the
contribution report, as specified, are received by the system.
This bill, on and after July 1, 2018, would require that employee
contributions and employer contributions be credited to their
respective accounts as of the day contributions are required to be
transmitted to the plan. The bill would also make a conforming
change.
(8)
(1 1) 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.
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 the amount of 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, except as provided under
Section 24410, "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 22109.5 of the
Education Code is repealed.
22109.5. "Break in service," for purposes of determining a member'
s final compensation, means:
(a) With respect to service of a member employed as a full-time
employee and service performed by a member employed as a part-time
employee, any period of time covering a pay period during which a
member is on an unpaid leave of absence or a pay period in which a
member has not performed any creditable service.
(b) For a member who has been employed in a substitute position:
(1) And has a change in assignment during a school year to a
full-time or part-time position, a break in service is determined on
the same basis as for the full-time or part-time employment during
the same school year.
(2) For less than 50 percent of their teaching career for which
service is credited, a break in service is determined on the same
basis as full-time employment.
(3) For more than 50 percent of their teaching career for which
service is credited, a break in service is any period of time within
a school year for which compensation is not paid and service is not
credited.
(c) If a member commenced performing service at the beginning of a
school term, the months not recognized as part of the school term
are not a break in service; however, if the member commenced
performing service after the school term began, or did not complete
the school term, the months not recognized as part of the school term
are a break in service. The school term shall be no less than the
days or hours specified as full time in Section 22138.5.
(d) Earnable salaries for a full pay period, but not beyond the
effective date of retirement, shall be used in determining final
compensation when the member performed service within that pay
period.
SEC. 5. Section 22115.2 of the
Education Code is amended to read:
22115.2. "Concurrent membership" means membership in the Defined
Benefit Program by an individual who is credited with service that is
not used as a basis for benefits under any other public retirement
system and is also a member of the California Public Employees'
Retirement System, the Legislators' Retirement System, the University
of California Retirement System, county retirement systems
established under Chapter 3 (commencing with Section 31450) of Part 3
of Division 4 of Title 3 of the Government Code, or the San
Francisco Employees' Retirement System. A member with concurrent
membership shall have the right to the following:
(a) Have final compensation determined pursuant to subdivision
(c) (d) of Section 22134 or subdivision
(c) (d) of Section 22134.5.
(b) Redeposit accumulated retirement contributions pursuant to
Section 23201.
(c) Apply for retirement pursuant to paragraph (2) of subdivision
(a) of Section 24201.
SEC. 4. SEC. 6. Section 22120 of the
Education Code is amended to read:
22120. "Credited interest" means interest that is credited to
active members' and inactive members' accumulated retirement
contributions 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. 7. Section 22134 of the Education
Code is amended to read:
22134. (a) "Final compensation" means the highest average annual
compensation earnable, as defined by Section 22115, by a member
during any period of 36 consecutive months of service while
an active member of the Defined Benefit Program or time during which
he or she was not a member but for which the member has received
credit under the Defined Benefit Program, except time that was so
credited for service performed outside this state prior to July 1,
1944.
(b) For purposes of this section, periods of service separated by
breaks in service or by periods in which a member's salary
was reduced because of a reduction in school funds as certified
by the employer may be aggregated, if the periods of service
are consecutive except for the breaks. breaks
or periods of salary reduction.
(c) The following shall be considered periods of service for the
purpose of determining final compensation:
(1) The full pay period if the member earns creditable
compensation within that pay period, but not beyond the benefit
effective date except as provided in paragraph (3).
(2) The months of the school year preceding the school term if the
member earns creditable compensation during the first pay period of
that school term.
(3) The months of the school year following the school term if the
member earns creditable compensation during the last pay period of
that school term.
(4) Any period that is excluded from the school term if a member
earns creditable compensation during the pay periods immediately
preceding and immediately following the excluded period.
(c)
(d) The determination of final compensation of a member
who is eligible for concurrent retirement as defined in Section
22115.5 shall take into consideration the compensation
earnable a person could earn for services rendered on
a full-time basis while a member of any other system,
a retirement system with which the member
has concurrent membership, as defined in Section 22115.2,
provided that both of the following exist:
(1) Service under any other system was not performed during the
same pay period with service under the Defined Benefit Program.
(2) Retirement for service under the Defined Benefit
Program is concurrent with the member's retirement for service
under any other system pursuant to Section 22115.5.
(d)
(e) The creditable compensation
earnable for the first position in which
California service was credited school
year in which a member earned creditable compensation
shall be used when additional months of creditable
compensation earnable is are required
for the purpose of determining final compensation under
Section 23805. compensation.
(e)
(f) If a member has received service credit for
part-time service performed prior to July 1, 1956, the member's final
compensation shall be adjusted for that service in excess of one
year by the ratio that part-time service bears to full-time service.
(f) The board may specify a different final compensation with
respect to disability allowances, disability retirement allowances,
family allowances, and children's portions of survivor benefit
allowances payable on and after January 1, 1978. The compensation
earnable for periods of part-time service shall be adjusted by the
ratio that part-time service bears to full-time service.
(g) For purposes of calculating a benefit that does not include
service credit, final compensation shall be the highest average
annual creditable compensation earned by a member during any period
of 36 consecutive months of service, excluding compensation for which
contributions are credited to the Defined Benefit Supplement
Program. Final compensation determined pursuant to this subdivision
shall not exceed the amount determined pursuant to subdivision (a).
(g)
(h) The amendment of former Section 22127 made by
Chapter 782 of the Statutes of 1982 does not constitute a change in,
but is declaratory of, the existing law.
SEC. 8. Section 22134.5 of the
Education Code is amended to read:
22134.5. (a) Notwithstanding Section 22134, "final compensation"
means the highest average annual compensation earnable, as defined in
Section 22115, by a member during any period of 12 consecutive
months of service while an active member of the Defined
Benefit Program or time during which he or she was not a member but
for which the member has received credit under the Defined Benefit
Program, except time that was so credited for service performed
outside this state prior to July 1, 1944.
(b) For purposes of this section, periods of service separated by
breaks in service may be aggregated, if the periods of service are
consecutive except for the breaks.
(c) The following shall be considered periods of service for the
purpose of determining final compensation:
(1) The full pay period if the member earns creditable
compensation within that pay period, but not beyond the benefit
effective date except as provided in paragraph (3).
(2) The months of the school year preceding the school term if the
member earns creditable compensation during the first pay period of
that school term.
(3) The months of the school year following the school term if the
member earns creditable compensation during the last pay period of
that school term.
(4) Any period that is excluded from the school term if a member
earns creditable compensation during the pay periods immediately
preceding and immediately following the excluded period.
(c)
(d) The determination of final compensation of a member
who is eligible for concurrent retirement as defined in Section
22115.5 shall take into consideration the compensation
earnable a person could earn for services rendered on
a full-time basis while a member of any other system,
a retirement system with which the member
has concurrent membership, as defined in Section 22115.2,
provided that both of the following exist:
(1) Service under any other system was not performed during the
same pay period with service under the Defined Benefit Program.
(2) Retirement for service under the Defined Benefit
Program is concurrent with the member's retirement for service
under any other system pursuant to Section 22115.5.
(d)
(e) If a member has received service credit for
part-time service performed prior to July 1, 1956, the member's final
compensation shall be adjusted for that service in excess of one
year by the ratio that part-time service bears to full-time service.
(e) The board may specify a different final compensation with
respect to disability allowances, disability retirement allowances,
family allowances, and children's portions of survivor benefit
allowances payable on and after January 1, 1978. The compensation
earnable for periods of part-time service shall be adjusted by the
ratio that part-time service bears to full-time service.
(f) For purposes of calculating a benefit that does not include
service credit, final compensation shall be the highest average
annual creditable compensation earned by a member during any period
of 12 consecutive months of service, excluding compensation for which
contributions are credited to the Defined Benefit Supplement
Program. Final compensation determined pursuant to this subdivision
shall not exceed the amount determined pursuant to subdivision (a).
(f)
(g ) This section shall apply to the
following:
(1) A member who has 25 or more years of credited service,
excluding service credited pursuant to the following:
(A) Section 22714.
(B) Section 22715.
(C) Section 22717, except as provided in subdivision (c) of
Section 22121.
(D) Section 22826.
(2) A nonmember spouse, if the member had 25 or more years of
credited service, as calculated in paragraph (1), on the date the
parties separated, as established in the judgment or court order
pursuant to Section 22652.
(3) This section shall not apply to a member subject to the
California Public Employees' Pension Reform Act of 2013.
SEC. 9. Section 22136 of the Education
Code is repealed.
22136. (a) "Final compensation" with respect to a member whose
salary while an active member was reduced because of a reduction in
school funds as certified by the employer means the highest average
annual compensation earnable, as defined by Section 22115, by the
member during any 36 months while employed to perform creditable
service subject to coverage by the Defined Benefit Program.
(b) For the purposes of this section, periods of service separated
by breaks in service or periods in which a member's salary was
reduced may be aggregated, if the periods of service are consecutive
except for the breaks or periods of the salary reduction.
SEC. 10. Section 22 168.5 is added to
the Education Code , to read:
22168.5. "School term" means a minimum period of 35 weeks
beginning the first day and ending the last day creditable service is
required to be performed by a member employed on a full-time basis,
excluding any period that has been excluded pursuant to a publicly
available written contractual agreement. The school term shall also
be the same for a member who is not employed on a full-time basis who
is performing the same duties as a member employed on a full-time
basis.
SEC. 5. SEC. 11. 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. 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. SEC. 12. 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
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. 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. SEC. 13. 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 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 of the
member's signature. A copy of the election shall be filed with the
other public retirement system.
(c) Any 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.
(d) 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. SEC. 14. Section 22515 of
the Education Code is amended to read:
22515. (a) 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.
(b) The election shall be in writing on a form prescribed by this
system and shall be received at the system's headquarters office
within 30 days after the date of the member's signature and prior to
submission of contributions. Membership in the Defined Benefit
Program shall become effective as of the first day of the pay period
following the election. The election is irrevocable and shall remain
in effect until the member terminates employment and receives a
refund of accumulated retirement contributions.
(c) The amendments to this section enacted during the 1995-96
Regular Session shall be deemed to have become operative on July 1,
1996.
SEC. 15. Se ction 22664 of the
Education Code is amended to read:
22664. The nonmember spouse who is awarded a separate account
shall have the right to a service retirement allowance and, if
applicable, a retirement benefit under this part.
(a) The nonmember spouse shall be eligible to retire for service
under this part if the following conditions are satisfied:
(1) The member had at least five years of credited service during
the period of marriage, at least one year of which had been performed
subsequent to the most recent refund to the member of accumulated
retirement contributions. The credited service may include service
credited to the account of the member as of the date of the
dissolution or legal separation, previously refunded service,
out-of-state service, and permissive service credit that the member
is eligible to purchase at the time of the dissolution or legal
separation.
(2) The nonmember spouse has at least two and one-half years of
credited service in his or her separate account.
(3) The nonmember spouse has attained 55 years of age or more.
(b) A service retirement allowance of a nonmember spouse under
this part shall become effective upon a date designated by the
nonmember spouse, provided:
(1) The requirements of subdivision (a) are satisfied.
(2) The nonmember spouse has filed an application for service
retirement on a properly executed form provided by the system, that
is executed no earlier than six months before the effective date of
the retirement allowance.
(3) The effective date is no earlier than the first day of the
month that the application is received at the system's headquarters
office and the effective date is after the date the judgment or court
order pursuant to Section 22652 was entered.
(c) (1) Upon service retirement at normal retirement age under
this part, the nonmember spouse shall receive a retirement allowance
that shall consist of an annual allowance payable in monthly
installments equal to 2 percent of final compensation for each year
of credited service.
(2) If the nonmember spouse's retirement is effective at less than
normal retirement age and between early retirement age under this
part and normal retirement age, the retirement allowance shall be
reduced by one-half of 1 percent for each full month, or fraction of
a month, that will elapse until the nonmember spouse would have
reached normal retirement age.
(3) If the nonmember spouse's service retirement is effective at
an age greater than normal retirement age and is effective on or
after January 1, 1999, the percentage of final compensation for each
year of credited service shall be determined pursuant to the
following table:
Age at Retirement Percentage
60 1/4 ..................... 2.033
60 1/2 ..................... 2.067
60 3/4 ..................... 2.10
61 ......................... 2.133
61 1/4 ..................... 2.167
61 1/2 ..................... 2.20
61 3/4 ..................... 2.233
62 ......................... 2.267
62 1/4 ..................... 2.30
62 1/2 ..................... 2.333
62 3/4 ..................... 2.367
63 and over ................ 2.40
(4) In computing the retirement allowance of the nonmember spouse,
the age of the nonmember spouse on the last day of the month that
the retirement allowance begins to accrue shall be used.
(5) Final compensation, for purposes of calculating the service
retirement allowance of the nonmember spouse under this subdivision,
shall be calculated according to the definition of final compensation
in Section 22134, 22134.5, 22135, or 22136,
or 22135, whichever is applicable, and shall be based on the
member's compensation earnable up to the date the parties separated,
as established in the judgment or court order pursuant to Section
22652. The nonmember spouse shall not be entitled to use any other
calculation of final compensation.
(d) Upon service retirement under this part, the nonmember spouse
shall receive a retirement benefit based on an amount equal to the
balance of credits in the nonmember spouse's Defined Benefit
Supplement account on the date the retirement benefit becomes
payable.
(1) A retirement benefit shall be a lump-sum payment, or an
annuity payable in monthly installments, or a combination of both a
lump-sum payment and an annuity, as elected by the nonmember spouse
on the application for a retirement benefit. A retirement benefit
paid as an annuity under this chapter shall be subject to Sections
22660, 25011, and 25011.1.
(2) Upon distribution of the entire retirement benefit in a
lump-sum payment, no other benefit shall be payable to the nonmember
spouse or the nonmember spouse's beneficiary under the Defined
Benefit Supplement Program.
(e) If the member is or was receiving a disability allowance under
this part with an effective date before or on the date the parties
separated as established in the judgment or court order pursuant to
Section 22652, or at any time applies for and receives a disability
allowance with an effective date that is before or coincides with the
date the parties separated as established in the judgment or court
order pursuant to Section 22652, the nonmember spouse shall not be
eligible to retire until after the disability allowance of the member
terminates. If the member who is or was receiving a disability
allowance returns to employment to perform creditable service subject
to coverage under the Defined Benefit Program or has his or her
allowance terminated under Section 24015, the nonmember spouse may
not be paid a retirement allowance until at least six months after
termination of the disability allowance and the return of the member
to employment to perform creditable service subject to coverage under
the Defined Benefit Program, or the termination of the
disability allowance and the
employment or self-employment of the member in any capacity,
notwithstanding Section 22132. If at the end of the six-month period,
the member has not had a recurrence of the original disability or
has not had his or her earnings fall below the amounts described in
Section 24015, the nonmember spouse may be paid a retirement
allowance if all other eligibility requirements are met.
(1) The retirement allowance of the nonmember spouse under this
subdivision shall be calculated as follows: the disability allowance
the member was receiving, exclusive of the portion for dependent
children, shall be divided between the share of the member and the
share of the nonmember spouse. The share of the nonmember spouse
shall be the amount obtained by multiplying the disability allowance,
exclusive of the portion for dependent children, by the years of
service credited to the separate account of the nonmember spouse,
including service projected to the date of separation, and dividing
by the projected service of the member. The nonmember spouse's
retirement allowance shall be the lesser of the share of the
nonmember spouse under this subdivision or the retirement allowance
under subdivision (c).
(2) The share of the member shall be the total disability
allowance reduced by the share of the nonmember spouse. The share of
the member shall be considered the disability allowance of the member
for purposes of Section 24213.
(f) The nonmember spouse who receives a retirement allowance is
not a retired member under this part. However, the allowance of the
nonmember spouse shall be increased by application of the improvement
factor and shall be eligible for the application of supplemental
increases and other benefit maintenance provisions under this part,
including, but not limited to, Sections 24412 and 24415 based on the
same criteria used for the application of these benefit maintenance
increases to the service retirement allowances of members.
(g) Paragraphs (1) to (3), inclusive, of subdivision (c) shall not
apply to a nonmember spouse of a member subject to the California
Public Employees' Pension Reform Act of 2013. For a person who is a
nonmember spouse of a member subject to the California Public
Employees' Pension Reform Act of 2013 and is awarded a separate
account, the retirement allowance shall equal the percentage of final
compensation for each year of credited service that is equal to the
percentage specified in Section 24202.6 based on the age of the
nonmember spouse on the effective date of the allowance.
SEC. 9. SEC. 16. 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 Sections 22901.7,
22950.5, and 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. SEC. 17. 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.
(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.
(d) 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.
(e) This section shall be applicable to any person who retires on
or after January 1, 1999.
SEC. 11. SEC. 18. 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 services," for purposes of
determining plan vesting, eligibility for membership, and accrual of
benefits, 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, 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
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.
(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
United States 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. SEC. 19. 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. Service that is deemed to the member pursuant to this
subparagraph shall not be used for benefit calculations.
(B) In cases of death during qualified military 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, service shall be used exclusively for plan
vesting and eligibility for membership purposes. Service that is
deemed to the member pursuant to this subparagraph shall not be used
for benefit calculations.
(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.
(B) 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 accruing benefits in the Defined Benefit
Program and Defined Benefit Supplement Program, 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 credit, compensation earnable,
contributions, interest, and additional earnings credits 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 22901, 22901 and Section
22901.7, if applicable, 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
22901, 22901 and Section 22901.7 if applicable,
in respect of the eligible period of service in the uniformed
services no benefits 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 or the Defined Benefit Supplement Program 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 of 1994 (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 service credit for 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 (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 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. 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.
SEC. 13. SEC. 20. 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
22950, 22950.5, and 22951 had the member remained continuously
employed during that period of eligible service in the uniformed
services.
(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.
(e) 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.
(f) 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.
(g) Employers shall remit to the plan with respect to the Defined
Benefit Program and the Defined Benefit Supplement Program, the
employer contributions required under subdivisions (c) and (d) 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.
(h) 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. SEC. 21. Section 22853 of
the Education Code is amended to read:
22853. For purposes of this chapter, creditable compensation
during the period of service in the uniformed services shall be
computed as follows:
(a) The creditable compensation the member would have received for
the eligible period of service had the member remained continuously
employed.
(b) In the event the creditable compensation is not reasonably
certain, creditable compensation shall be based on the member's
average creditable compensation 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. SEC. 22. Section 22853.5 of
the Education Code is amended to read:
22853.5. For purposes of this chapter, compensation earnable
during the period of service in the uniformed services shall be
computed as follows:
(a) The compensation earnable that would have been applicable for
the eligible period of service had the member remained continuously
employed.
(b) In the event the compensation earnable that would have been
applicable is not reasonably certain, compensation earnable shall be
based on the member's compensation earnable 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 service prorated over the period
of service in the uniformed services.
SEC. 16. SEC. 23. 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
benefits or credit for plan vesting or eligibility for membership
purposes under this chapter for an amount exceeding five years,
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. 24. Section 22905 of the Education
Code is amended to read:
22905. (a) Member contributions pursuant to Sections 22901,
22901.3, and 22901.7, employer contributions pursuant to Section
22903 or 22904, and member contributions made by an employer pursuant
to Section 22909 shall be credited to the member's individual
account under the Defined Benefit Program or the Defined Benefit
Supplement Program, whichever is applicable pursuant to the
provisions of this part.
(b) Except as provided in subdivision (g), member and employer
contributions, exclusive of contributions pursuant to Sections
22901.7, 22950.5, and 22951, on a member's compensation under the
following circumstances shall be credited to the member's Defined
Benefit Supplement account:
(1) Compensation for creditable service that exceeds one year in a
school year.
(2) Compensation that is determined by the system to have been
paid to enhance a member's benefits pursuant to subdivision (b) of
Section 22119.2 or to not reflect sound principles that support the
integrity of the retirement fund pursuant to subdivision (f) of
Section 22119.2.
(3) Compensation that is paid for a limited number of times as
specified by law, a collective bargaining agreement, or an employment
agreement.
(c) A member may not make voluntary pretax or posttax
contributions under the Defined Benefit Supplement Program, except as
provided in subdivision (d), nor may a member redeposit amounts
previously distributed based on the balance in the member's Defined
Benefit Supplement account.
(d) Member and employer contributions pursuant to paragraph (1) of
subdivision (b) under the Defined Benefit Supplement Program shall
be credited to the accounts of members as of July 1 each year
following a determination by the system under the provisions of this
part that those contributions should be credited to the Defined
Benefit Supplement Program. Any other contributions under the Defined
Benefit Supplement Program pursuant to paragraph (2) or (3) of
subdivision (b), shall be credited to the individual account of the
member upon receipt by the system. Contributions to a member's
Defined Benefit Supplement account shall be identified separately
from the member's contributions credited under the Defined Benefit
Program.
(e) Any contributions on compensation that is creditable to the
Defined Benefit Supplement account shall be limited to the
contributions made pursuant to Sections 22901, 22901.3, 22950, and
22951. Any excess member contributions, as determined by the system,
shall be returned to the member through the employer and any excess
employer contributions shall be returned to the employer.
(f) The provisions of this section 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 this section shall
become operative on July 1, 2003.
(g) Paragraphs (2) and (3) of subdivision (b) shall not apply to a
member subject to the California Public Employees' Pension Reform
Act of 2013.
(h) This section shall become inoperative on July 1, 2018, and, as
of January 1, 2019, is repealed.
SEC. 25. Section 22905 is added to the
Education Code , to read:
22905. (a) Member contributions pursuant to Sections 22901,
22901.3, and 22901.7, employer contributions pursuant to Section
22903 or 22904, and member contributions made by an employer pursuant
to Section 22909 shall be credited to the member's individual
account under the Defined Benefit Program or the Defined Benefit
Supplement Program, whichever is applicable pursuant to the
provisions of this part.
(b) Except as provided in subdivision (e), member and employer
contributions, exclusive of contributions pursuant to Sections
22901.7, 22950.5, and 22951, on a member's compensation under the
following circumstances shall be credited to the member's Defined
Benefit Supplement account:
(1) Compensation for creditable service that exceeds one year in a
school year shall be credited effective on the July 1 immediately
following the period for which the compensation is earned.
(2) Compensation that is determined by the system to have been
paid to enhance a member's benefits pursuant to subdivision (b) of
Section 22119.2 or to not reflect sound principles that support the
integrity of the retirement fund pursuant to subdivision (f) of
Section 22119.2 shall be credited effective as of the earliest day
contributions are due in the office pursuant to Section 23002.
(3) Compensation that is paid for a limited number of times as
specified by law, a collective bargaining agreement, or an employment
agreement shall be credited effective as of the earliest day
contributions are due in the office pursuant to Section 23002.
(c) A member shall not make voluntary pretax or posttax
contributions under the Defined Benefit Supplement Program nor may a
member redeposit amounts previously distributed based on the balance
in the member's Defined Benefit Supplement account.
(d) Any contributions on compensation that is creditable to the
Defined Benefit Supplement account shall be limited to the
contributions made pursuant
to Sections 22901, 22901.3, 22950, and 22951. Any excess member
contributions, as determined by the system, shall be returned to the
member through the employer and any excess employer contributions
shall be returned to the employer.
(e) Paragraphs (2) and (3) of subdivision (b) shall not apply to a
member subject to the California Public Employees' Pension Reform
Act of 2013.
(f) This section shall become operative on July 1, 2018.
SEC. 17. SEC. 26. 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 the member
earned creditable compensation pursuant to Section 22119.2 or
22119.3.
(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. SEC. 27. 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 the member
earned creditable compensation pursuant to Section 22119.2 or
22119.3.
(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. SEC. 28. 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 the member
earned creditable compensation pursuant to Section 22119.2 or
22119.3.
(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.
(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.
(7) (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.
(8) 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. SEC. 29. 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 the member
earned creditable compensation pursuant to Section 22119.2 or
22119.3.
(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. SEC. 30. 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, except as provided in subdivision (c) of Section 22121, 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, except as provided in subdivision (c) of Section 22121, 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) (f) of Section 22115.
SEC. 22. SEC. 31. 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, except as provided in
subdivision (c) of Section 22121, 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) (f) of Section 22115.
SEC. 23. SEC. 32. 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, except as provided
in subdivision (c) of Section 22121, 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) (f) 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. SEC. 33. 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, except as provided in subdivision
(c) of Section 22121, 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. SEC. 34. 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, except as provided in
subdivision (c) of Section 22121, 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. SEC. 35. 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 board, in writing on a
properly executed form provided by the system
system, 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. SEC. 36. 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 for purposes of determining supplemental
benefits pursuant to Sections 24412 and 24415, the base allowance
shall be determined as follows:
(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.
(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. based.
(3) The base allowance determined pursuant to this subdivision
shall be modified for an option, if applicable.
(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. SEC. 37. Section 24606 of
the Education Code is amended to read:
24606. (a) If any payment of contributions or accumulated
contributions or benefits under this plan remains unclaimed and,
after a good faith effort, the legal claimant cannot be found, the
board shall redeposit the proceeds 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 and payments rejected via electronic funds transfer. Upon
notice of cancellation or rejection, 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. SEC. 38. 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 based on 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. SEC. 39. 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 based
on 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. SEC. 40. 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 based on the actuarial valuation
undertaken following the plan year pursuant to Section 26211 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. 41. Section 26603 of the Education
Code is amended to read:
26603. (a) All employee contributions shall
be credited to employee accounts and all employer contributions
shall be credited to employer accounts as of the first working day
following the date all contributions to fully satisfy the
contribution report as submitted by the employer are received by the
system.
(b) This section shall become inoperative on July 1, 2018, and, as
of January 1, 2019, is repealed.
SEC. 42. Section 26603 is added to the
Education Code , to read:
26603. (a) All employee contributions shall be credited to
employee accounts and all employer contributions shall be credited to
employer accounts effective as of the day contributions are required
to be transmitted to the plan pursuant to subdivision (a) of Section
26303.
(b) This section shall become operative on July 1, 2018.
SEC. 43. Section 26604 of the Education
Code is amended to read:
26604. (a) Beginning June 1, 1996, prior to the Cash Balance Plan
becoming effective, and prior to the beginning of each plan year
thereafter, the board, by plan amendment with respect to the Cash
Balance Benefit Program, shall declare the minimum interest rate for
crediting employee accounts and employer accounts with respect to the
Cash Balance Benefit Program during the following plan year.
(b) All interest shall be computed at the minimum interest rate on
the balance of the employee account and the employer account and
shall be compounded daily.
(c) Interest for contributions credited during that month to the
respective account shall accrue at the minimum interest rate from the
first working day following the date contributions are received in
full by the system pursuant to Section 26603.
(d)
(c) Interest shall not be credited to employee accounts
and employer accounts that have been transferred to the Annuitant
Reserve for payment of an annuity.
SEC. 32. SEC. 44. 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 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. SEC. 45. 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 terminate the annuity
upon written request to the system and make contributions to the
program based on salary paid by the employer for the employment,
subject to the following conditions:
(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.
(2) Termination of the participant's annuity shall become
effective on the first day of the month designated by the
participant.
(b) Upon 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.
(c) 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 option, the age of the beneficiary on the current
retirement date.
(d) 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. SEC. 46. 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 services," for purposes of
determining plan vesting, eligibility for membership, and accrual of
benefits, 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, 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 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.
(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 United States 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. SEC. 47. 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. 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.
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. SEC. 48. 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. The
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. 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. The employer
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. 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 that were remitted for that
period shall be adjusted pursuant to Section 26302.