BILL NUMBER: AB 2472 CHAPTERED
BILL TEXT
CHAPTER 820
FILED WITH SECRETARY OF STATE SEPTEMBER 25, 1998
APPROVED BY GOVERNOR SEPTEMBER 24, 1998
PASSED THE ASSEMBLY AUGUST 29, 1998
PASSED THE SENATE AUGUST 28, 1998
AMENDED IN SENATE AUGUST 26, 1998
AMENDED IN SENATE AUGUST 25, 1998
AMENDED IN ASSEMBLY JULY 2, 1998
AMENDED IN ASSEMBLY JUNE 18, 1998
INTRODUCED BY Assembly Member Leonard
FEBRUARY 20, 1998
An act to amend Section 22822 of, to add Part 7 (commencing with
Section 22960) to Division 5 of Title 2 of, to add Sections 3517.61,
19173.4, 19175.7, 21363.5, and 21465 to, and to repeal Article 2.1
(commencing with Section 21078) of Chapter 12 of Part 3 of Division 5
of Title 2 of, the Government Code, relating to state employees,
making an appropriation therefor, and declaring the urgency thereof,
to take effect immediately.
LEGISLATIVE COUNSEL'S DIGEST
AB 2472, Leonard. State employees: memoranda of understanding.
(1) Existing law provides that if any provision of a memorandum of
understanding reached between the state employer and a recognized
employee organization representing state civil service employees
requires the expenditure of funds, those provisions of the memorandum
of understanding shall not become effective unless approved by the
Legislature in the annual Budget Act.
This bill would approve provisions of a specified memorandum of
understanding entered into between the state employer and a specified
employee organization, and would provide that the provisions of any
memorandum of understanding that require the expenditure of funds
shall become effective even if the provisions of the memorandum of
understanding are approved by the Legislature in legislation other
than the annual Budget Act. The bill would exempt the memorandum of
understanding with State Bargaining Unit 6 from certain conflicting
statutory provisions and would prescribe alternative probationer
rejection procedures for state employees in that bargaining unit.
This bill would require the Department of Personnel Administration
to endeavor to maintain appropriate compensation, benefits, and
personnel policies under its statutory jurisdiction for supervisory
peace officers by considering specified factors.
(2) The Public Employees' Retirement Law, contains the State Peace
Officers' and Firefighters' Defined Contribution Plan for state
peace officer or firefighter members in State Bargaining Unit 6 to
supplement the benefits provided under the Public Employees'
Retirement System.
This bill would delete the provisions of the existing plan, would
instead establish the State Peace Officers' and Firefighters' Defined
Contribution Plan as a separate supplemental retirement program, and
would establish the State Peace Officers' and Firefighters' Defined
Contribution Plan Fund in the State Treasury for the plan and provide
that all moneys in the fund are continuously appropriated for
payments of the plan. The bill would increase the service allowance
limitation from 80% to 85% for members of State Bargaining Unit 6 who
retire on and after January 1, 1999, and would establish a new
retirement option consisting of a partial distribution of the present
value of the actuarial amount of retirement allowances for those
members.
(3) The Public Employees' Medical and Hospital Care Act provides
health benefits plans for eligible public employees.
This bill would authorize permanent intermittent employees who are
represented by State Bargaining Unit 6 to enroll for health benefits
within specified periods.
(4) This bill would declare that it is to take effect immediately
as an urgency statute.
Appropriation: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares that the purpose of
this act is to adopt an agreement pursuant to Section 3517.5 of the
Government Code entered into by the state employer and a recognized
employee organization to make necessary statutory changes in health,
retirement, salary, and other benefits.
SEC. 2. The provisions of the memoranda of understanding prepared
pursuant to Section 3517.5 of the Government Code entered into by the
state employer and Unit 6 - California Correctional Peace Officers
Association -dated August 22, 1998, and that requires the expenditure
of funds, is hereby approved for the purposes of Section 3517.6 of
the Government Code.
SEC. 3. Notwithstanding Section 3517.6 of the Government Code, the
provisions of any memorandum of understanding that require the
expenditure of funds shall become effective even if the provisions of
the memorandum of understanding are approved by the Legislature in
legislation other than the annual Budget Act.
SEC. 4. The Department of Personnel Administration shall endeavor
to maintain appropriate compensation, benefits, and personnel
policies under its statutory jurisdiction for supervisory peace
officers by considering factors that shall include, but are not
limited to, the compensation, benefits, and personnel practices
provided to correctional peace officers in state government.
SEC. 5. Section 3517.61 is added to the Government Code, to read:
3517.61. Notwithstanding Section 3517.6, for state employees in
State Bargaining Unit 6, in any case where the provisions of Section
70031 of the Education Code, subdivision (i) of Section 3513, or
Section 14876, 18714, 19080.5, 19100, 19143, 19173.4, 19175.7, 19261,
19818.16, 19819.1, 19820, 19822, 19824, 19826, 19827, 19828, 19829,
19830, 19831, 19832, 19833, 19834, 19835, 19836, 19837, 19838, 19839,
19840, 19841, 19842, 19843, 19844, 19845, 19846, 19847, 19848,
19849, 19849.1, 19849.4, 19850.1, 19850.2, 19850.3, 19850.4, 19850.5,
19850.6, 19851, 19853, 19854, 19856, 19856.1, 19858.1, 19858.2,
19859, 19860, 19861, 19862, 19862.1, 19863, 19863.1, 19864, 19866,
19869, 19870, 19871, 19871.1, 19872, 19873, 19874, 19875, 19876,
19877, 19877.1, 19878, 19879, 19880, 19880.1, 19881, 19882, 19883,
19884, 19885, 19887, 19887.1, 19887.2, 19888, 19990, 19991, 19991.1,
19991.2, 19991.3, 19991.4, 19991.5, 19991.6, 19991.7, 19992, 19992.1,
19992.2, 19992.3, 19992.4, 19993, 19994.1, 19994.2, 19994.3, 19994.4
19995, 19995.1, 19995.2, 19995.3, 19996.1, 19996.2, 19998, 19998.1,
20796, 21600, 21602, 21604, 21605, 22825, or 22825.1 are in conflict
with the provisions of a memorandum of understanding, the memorandum
of understanding shall be controlling without further legislative
action. In any case where the provisions of Section 19997.2,
19997.3, 19997.8, 19997.9, 19997.10, 19997.11, 19997.12, 19997.13, or
19997.14 are in conflict with the provisions of a memorandum of
understanding, the terms of the memorandum of understanding shall be
controlling unless the State Personnel Board finds those terms to the
inconsistent with merit employment principles as provided for by
Article VII of the California Constitution. Where this finding is
made, the provisions of the Government Code shall prevail until those
affected sections of the memorandum of understanding are
renegotiated to resolve the inconsistency. If any provision of the
memorandum of understanding requires the expenditure of funds, those
provisions of the memorandum of understanding shall not become
effective unless approved by the Legislature in the annual Budget
Act. If any provision of the memorandum of understanding requires
legislative action to permit its implementation by amendment of any
section not cited above, those provisions of the memorandum of
understanding shall not become effective unless approved by the
Legislature.
SEC. 6. Section 19173.4 is added to the Government Code, to read:
19173.4. (a) Notwithstanding Section 19173, effective January 1,
1999, this section shall only apply to state employees in State
Bargaining Unit 6.
(b) Any probationer may be rejected by the appointing power during
the probationary period for reasons relating to the probationer's
qualifications, the good of the service, or failure to demonstrate
merit, efficiency, and fitness.
(c) A rejection during the probationary period is effected by the
service upon the probationer of a written notice of rejection which
shall include both of the following:
(1) An effective date for the rejection which shall not be later
than the last day of the probationary period.
(2) A statement of the reasons for the rejection.
(d) Service of the notice shall be made prior to the effective
date of the rejection. Notice of rejection shall be served prior to
the conclusion of the prescribed probationary period. The
probationary period may be extended when necessary to provide the
full notice period required by board rule. Within 15 days after the
effective date of the rejection, a copy thereof shall be filed with
the board.
SEC. 7. Section 19175.7 is added to the Government Code, to read:
19175.7. (a) Notwithstanding Section 19175, this section shall
only apply to state employees in State Bargaining Unit 6.
(b) The board, at the written request of a rejected probationer
filed within 15 calendar days of the effective date of rejection,
shall only review allegations that the rejection was made for reasons
of discrimination as defined for the purposes of subdivision (a) of
Section 19702, fraud, political patronage, or for failure to comply
with Department of Personnel Administration Rule 599.795. If the
board determines that the rejected probationer has stated a prima
facie case of discrimination, fraud, political patronage, or failure
to comply with Department of Personnel Administration Rule 599.795,
the board may investigate the case with or without a hearing and do
any one of the following:
(1) Affirm the action of the appointing power.
(2) Modify the action of the appointing power.
(3) Restore the name of the rejected probationer to the employment
list for certification to any position within the class, provided
that his or her name shall not be certified to the agency by which he
or she was rejected, except with the concurrence of the appointing
power thereof.
(4) Restore the rejected probationer to the position from which he
or she was rejected, but this shall be done only if the board
determines that there is substantial evidence to support that the
rejection was made for reasons of discrimination as defined for the
purposes of subdivision (a) of Section 19702, fraud, political
patronage, or failure to comply with Department of Personnel
Administration Rule 599.795. At any such investigation or hearing
the rejected probationer shall have the burden of proof, subject to
rebuttal by him or her, and it shall be presumed that the rejection
was free from discrimination, fraud, political patronage, or failure
to comply with Department of Personnel Administration Rule 599.795
and that the statement of reasons therefor in the notice of rejection
is true.
SEC. 8. Article 2.1 (commencing with Section 21078) of Chapter 12
of Part 3 of Division 5 of Title 2 of the Government Code is
repealed.
SEC. 9. Section 21363.5 is added to the Government Code, to read:
21363.5. Notwithstanding Section 21363, the limitation on the
service retirement benefit shall be 85 percent for state peace
officer/firefighter members in State Bargaining Unit 6 who retire on
and after January 1, 1999. This provision may also be applied to
state peace officer/firefighter members in related supervisory or
confidential positions, provided the Department of Personnel
Administration has approved this inclusion in writing to the board.
SEC. 10. Section 21465 is added to the Government Code, to read:
21465. Optional settlement 5 consists of a partial distribution
of the actuarial present value of the member's unmodified monthly
allowance, as prescribed in Section 21363 or 21418. The actuarial
present value shall be based upon the investment return and
postretirement mortality assumptions adopted by the board for that
purpose. The member may elect to receive the actuarial present value
of no more than 50 percent of his or her unmodified allowance. The
member shall elect to receive the remaining portion of the unmodified
allowance not distributed as a lump sum for the remainder of his or
her lifetime under one of the settlements specified in this article
for the remainder of his or her lifetime and thereafter to his or her
designated beneficiary. Under no circumstances shall the benefits
provided under this section exceed the benefits that would have
otherwise been provided under any other section in this article.
This section shall only apply to state peace officer/firefighter
members in State Bargaining Unit 6 who retire on and after January 1,
1999, as well as to state peace officer/firefighter members in
related supervisory and confidential positions, provided the
Department of Personnel Administration has approved their inclusion.
SEC. 11. Part 7 (commencing with Section 22960) is added to
Division 5 of Title 2 of the Government Code, to read:
PART 7. STATE PEACE OFFICERS' AND FIREFIGHTERS' DEFINED
CONTRIBUTION PLAN
CHAPTER 1. GENERAL PROVISIONS
22960. (a) The State Peace Officers' and Firefighters' Defined
Contribution Plan is hereby established for state peace officer and
firefighter members in Bargaining Unit 6 who have become subject to
this part by memorandum of understanding, as provided by Section
3517.5.
(b) The plan may also be provided to state peace officers or
firefighters who are either excluded from the definition of state
employee in subdivision (c) of Section 3513, or are nonelected
officers or employees of the executive branch of government and are
not members of the civil service, and who supervise employees in a
bargaining unit that is subject to this part, provided that the
Department of Personnel Administration has approved their inclusion
for coverage under this part.
22960.1. The State Peace Officers' and Firefighters' Defined
Contribution Plan shall supplement the benefits provided under Part 3
(commencing with Section 20000).
22960.2. (a) The State Peace Officers' and Firefighters' Defined
Contribution Plan is a qualified money purchase pension plan under
Section 401(a) of Title 26 of the United States Code.
(b) The design and administration of the State Peace Officers' and
Firefighters' Defined Contribution Plan shall conform with the
applicable provisions of Title 26 of the United States Code and the
Revenue and Taxation Code.
22960.3. If any provision of this part or application thereof to
any person or circumstance is held invalid, that invalidity shall not
affect other provisions or applications of this part that can be
given effect without the invalid provision or application, and to
this end the provisions of this part are severable.
CHAPTER 2. DEFINITIONS
22960.10. "Account" means the account maintained with respect to
the participant which reflects that aggregate value of the following
amounts credited to the participant:
(a) Employee contributions to the plan.
(b) Employer contributions to the plan on behalf of the
participant.
(c) Net earnings of the State Peace Officers' and Firefighters'
Defined Contribution Plan Fund allocable to the participant.
(d) Any amount credited to the participant's account by reason of
a transfer from another qualified plan in accordance with applicable
federal tax laws.
22960.11. "Beneficiary" means any person or persons designated by
the participant pursuant to this part, or otherwise entitled by
statute, to receive distributions from the participant's account upon
the death of the participant.
22960.12. "Board" means the Board of Administration of the
California Public Employees' Retirement System.
22960.13. "Compensation" means the total amount paid to an
employee for a plan year as required to be reported on the employee's
Internal Revenue Service form W-2 for income tax withholding
purposes. This amount shall include employee contributions picked up
by the employer under Section 414(h)(2) of Title 26 of the United
States Code; and any amounts deducted by the employer from the
participant's salary, including deductions for tax-deferred
retirement plans or insurance programs; deductions for participation
in an eligible deferred compensation plan within the meaning of
Section 457 of Title 26 of the United States Code; and deductions for
participation in a plan that meets the requirements of Section 125
or 401(k) of Title 26 of the United States Code.
22960.14. "Disability" means a disability as determined by the
board pursuant to Section 21156.
22960.15. "Eligible employee" means any person employed by the
state, whose compensation is paid out of funds directly controlled by
the state, and who is subject to coverage by the plan pursuant to
the provisions of Section 23000.
22960.16. "Employee contribution" means the amount withheld from
the participant's compensation by the employer as a contribution to
the participant's account in the plan.
22960.17. "Employee contribution rate" means the percentage of
the participant's compensation to be withheld by the employer as an
employee contribution to the plan.
22960.18. "Employer" means the State of California.
22960.19. "Employer contribution" means the amount contributed by
the employer to the participant's account in the plan.
22960.20. "Employer contribution rate" means the percentage of
the participant's compensation to be contributed by the employer to
the participant's account in the plan.
22960.21. "Fund" means the State Peace Officers' and Firefighters'
defined Contribution Plan Fund.
22960.22. "Net earnings" means the income earned, or losses
incurred, on the State Peace Officers' and Firefighters' Defined
Contribution Plan Fund, less the costs of administering the plan.
22960.23. "Normal retirement age" means the age at which the
participant is eligible for a retirement benefit without special
qualifications and is the age of 50 years under this plan.
22960.24. "Participant" means an employee who is subject to
coverage by the plan, and who has contributions credited under the
plan.
22960.25. "Plan" means the State Peace Officers' and Firefighters'
Defined Contribution Plan.
22960.26. "Plan year" means the 12-month period commencing on any
January 1 and ending on the following December 31.
22960.27. "Retirement" means termination of all employment for
the employer and completion of all conditions precedent to receiving
a distribution for retirement.
22960.28. "Spouse" means the person married to the participant on
the date the participant files a beneficiary designation, or an
application for a distribution from the plan, or on the date of the
participant's death.
22960.29. "State peace officers and firefighters" means those
persons included in the definition of "state peace
officer/firefighter member" pursuant to Article 3 (commencing with
Section 20390) of Chapter 4 of Part 3.
22960.30. "System" means the Public Employees' Retirement System.
22960.31. "Termination" means termination of employment by reason
of separation from all service for the employer.
22960.32. "Valuation date" means the date as of which the assets
of the fund are valued.
CHAPTER 3. ADMINISTRATION OF THE PLAN
22960.35. (a) Except as provided in this part, the plan shall be
administered by the board in conformity with its powers and duties
for administration of the system as set forth in Part 3 (commencing
with Section 20000). The board shall, to the extent that it
determines feasible, follow the procedures set forth in Article 7
(commencing with Section 20220) of Chapter 2 of Part 3.
(b) The board may retain a third-party administrator to perform
recordkeeping, customer service or other plan administration
services.
(c) The board shall notify the Department of Personnel
Administration when it is prepared to implement the plan.
22960.36. (a) The board shall adopt a trust instrument embodying
the material terms and conditions of the plan consistent with this
part and the applicable provisions of Title 26 of the United States
Code.
(b) The board may, as it deems necessary, amend the plan
consistent with this part and the applicable provisions of Title 26
of the United States Code.
(c) The board shall provide reasonable notice to each plan
participant of any plan amendment.
22960.37. In administering the plan, the officers and employees
of the system shall discharge their duties with respect to the plan
solely in the interest of the participants and beneficiaries:
(a) In accordance with the documents and instruments governing the
plan insofar as those documents and instruments are consistent with
this part.
(b) For the exclusive purpose of both of the following:
(1) Providing benefits to participants and their beneficiaries.
(2) Defraying reasonable expenses of administering the plan.
(c) By investing with the care, skill, prudence, and diligency
under the circumstances then prevailing that a prudent person acting
in a like capacity and familiar with those matters would use in the
conduct of an enterprise of a like character and with like aims.
22960.38. With regard to the plan, the board shall not engage in
any transaction prohibited by Section 503(b) of Title 26 of the
United States Code.
22960.39. The board may require a third-party administrator,
recordkeeper, custodian, or investment manager that is contracted
with, or appointed by the system, to be subject to the duties set
forth in Section 22960.37.
22960.40. Data filed by any participant or beneficiary with the
board is confidential, and no individual record shall be divulged by
any official or employee having access to that data to any person
other than the participant to whom the information relates or his or
her authorized representative, employer, or any state department or
agency. The information shall be used by the board for the sole
purpose of carrying into effect the provisions of this part. Any
information that is requested for retirement purposes by any public
agency shall be treated as confidential by the agency.
(a) The board may seek reimbursement for reasonable administrative
expenses incurred when providing that information. Except as
provided by this section, no participant's or beneficiary's address,
home telephone number, or other personal information shall be
released.
(b) For purposes of this section, "authorized representative"
includes the spouse or beneficiary of a participant when no contrary
appointment has been made and when, in the opinion of the board, the
participant is prevented from appointing an authorized representative
because of mental or physical incapacity or death.
CHAPTER 4. THE FUND
22960.45. The State Peace Officers' and Firefighters' Defined
Contribution Plan Fund is hereby established as a special trust fund
in the State Treasury to accept participant and employer
contributions to the plan.
22960.46. The board shall have exclusive control of the
investment of the fund.
22960.47. Notwithstanding any other provision of law, the board
may retain a bank or trust company to serve as a custodian for
safekeeping, recordkeeping, delivery, securities valuation,
investment performance reporting, or other services in connection
with investment and administration of the fund.
22960.48. Notwithstanding Section 13340, all moneys in the fund
are continuously appropriated, without regard to fiscal years or plan
years, to the board to carry out the purposes of this part.
22960.49. All costs of the plan shall be charged against the plan
participants accounts.
22960.50. The assets of the fund shall be valued annually, and
may be valued more frequently as prescribed by the board.
22960.51. No part of the assets of the fund may revert to the
employer until all liabilities of the plan have been fully satisfied.
CHAPTER 5. ELIGIBILITY
22960.55. (a) Any person who is an eligible employee on the
effective date of the plan, as set forth in the memorandum of
understanding, shall become a participant on the effective date of
the plan.
(b) Any person who becomes an eligible employee after the
effective date of the plan shall become a participant on the first
day of covered employment.
CHAPTER 6. CONTRIBUTIONS
22960.60. (a) Employer and employee contribution rates may be
determined by the terms of the memorandum of understanding applicable
to each plan participant and the employer in accordance with the
requirements of this section.
(b) Through the Department of Personnel Administration, the
employer shall provide the board with a true and correct copy of each
memorandum of understanding applicable to plan participants. The
board may prescribe procedures for the orderly transmittal and
receipt of these documents.
(c) Except as provided in subdivision (e), after receipt of an
applicable memorandum of understanding that sets forth an employer
contribution rate and any employee contribution rate, the board
shall, in accordance with Section 22960.36, amend the plan to provide
for the employer contribution rate and any employee contribution
rate set forth in the memorandum of understanding.
(d) The employer contribution rate and any employee contribution
rate for state peace officers and firefighters who have become
subject to this part pursuant to the provisions of subdivision (b) of
Section 22960 shall be the contribution rate or rates set forth in
the memorandum of understanding for state peace officers and
firefighter members in Bargaining Unit 6.
(e) The board may refuse to amend the plan under this section if,
in the board's considered judgment, the proposed amendment would
violate any applicable provision of Title 26 of the United States
Code.
(f) The initial employer contribution rate shall be prescribed in
the memorandum of understanding. In the event an MOU expires and no
new memorandums of understanding takes effect, the last memorandums
of understanding in place shall control.
22960.61. The employer shall pick up, for the sole purpose of and
in accordance with the requirements of Section 414(h)(2) of Title 26
of the United States Code and Section 17501 of the Revenue and
Taxation Code, all of the amounts otherwise due as employee
contributions, which shall be paid by the employer in lieu of
employee contributions and which shall be deducted from the employee'
s compensation.
22960.62. Pursuant to terms and conditions established by the
board, a participant may be permitted to transfer funds from an
eligible retirement plan into the plan to the extent that the
transfers are allowable under applicable federal and state laws.
22960.63. (a) Notwithstanding any other provision of law or
contract to the contrary, contributions to the plan shall be subject
to the applicable limitations imposed by Section 415 of Title 26 of
the United States Code, as that section may be amended from time to
time and as these limits may be adjusted by the Commissioner of
Internal Revenue.
(b) Notwithstanding any other provision of law or contract to the
contrary, the amount of compensation that is taken into account in
determining the benefits payable under the plan shall not exceed the
applicable annual compensation limitations prescribed by Section 401
(a)(17) of Title 26 of the United State Code, as that section may be
amended from time to time and as that limit may be adjusted by the
Commissioner of Internal Revenue.
CHAPTER 7. PARTICIPANT ACCOUNTS
22960.65. (a) Any contributions made by the participant to the
plan shall be credited to the participant's account.
(b) Contributions made by the employer on behalf of the
participant shall be credited to the participant's account.
22960.66. In the case of a contribution that is made under a
mistake of fact, nothing in this part shall prohibit the return of
that contribution within one year after discovery of the mistake.
22960.67. The net earnings of the fund shall be allocated to the
participant's account as of each valuation date in the ratio that the
participant's account balance bears to the aggregate of all
participants' account balances.
22960.68. The value of each participant's account shall be
determined at least once annually in a manner prescribed by the
board.
22960.69. A participant shall receive a statement that displays
the value, or balance, of the participant's account and summarizes
any credits to the account or other transactions that occurred after
the immediately preceding valuation date. The statement of account
shall be provided at least once annually to each participant.
CHAPTER 8. RIGHTS TO BENEFITS
22960.70. A participant has a vested right to 100 percent of the
value of the participant's account. The right accrues when the
person becomes a participant.
22960.71. The right of a participant to a benefit is not subject
to execution or any other process whatsoever, except to the extent
permitted by Section 704.110 of the Code of Civil Procedure, and is
unassignable except as specifically provided under this part.
Notwithstanding any provision of this part to the contrary,
contributions, benefits and service credit with respect to qualified
military service shall be provided in accordance with Section 414(u)
of Title 26 of the United States Code.
CHAPTER 9. COMMUNITY PROPERTY
22960.75. (a) Upon the legal separation or dissolution of
marriage of a participant, the court shall include in the judgment or
a court order the date on which the parties separated.
(b) If the community property is divided in accordance with
subdivision (c) of Section 2610 of the Family Code, the court shall
order that the contributions and earnings attributable to periods of
service during the marriage be divided into two separate and distinct
accounts in the name of the participant and the name of the
nonparticipant spouse, respectively. Any contributions or earnings
that are not explicitly awarded by the judgment or court order shall
be deemed the exclusive property of the participant.
(c) The court shall address the rights of the nonparticipant
spouse to the following:
(1) The right to a retirement benefit, and the consequent right to
elect an annuity.
(2) The right to lump-sum distribution of the balance
of the nonparticipant spouse's account.
(3) The right to designate a beneficiary to receive a distribution
of the balance remaining in the nonparticipant spouse's account upon
the death of the nonparticipant spouse.
(d) In the capacity of nonparticipant spouse, he or she is
entitled only to the rights and benefits explicitly established by
this chapter. The nonparticipant spouse shall not be entitled to a
disability benefit.
(e) Nothing in this chapter shall be construed to authorize any
amount to be distributed under the plan at a time or in a form that
is not permitted under this part or Title 26 of the United States
Code.
22960.76. For purposes of this chapter, "nonparticipant spouse"
means the spouse or the former spouse of the participant, who as a
result of petitioning the court for the division of community
property, has been awarded a distinct and separate account. A
nonparticipant spouse who is awarded a separate account is not a
participant in the plan.
22960.77. (a) The nonparticipant spouse shall have the right to a
lump-sum distribution of the amounts credited to his or her account.
(b) The nonparticipant spouse shall file an application for the
distribution on a form prescribed by the board.
(c) No partial distribution shall be made from the nonparticipant
spouse's account.
(d) The nonparticipant spouse may not cancel the distribution once
it has become effective.
(e) The nonparticipant spouse is deemed to have permanently waived
all rights to a retirement benefit when the distribution becomes
effective.
22960.78. (a) A nonparticipant spouse may apply for a retirement
benefit, provided the participant or the nonparticipant spouse has
attained the normal retirement age. The retirement benefit is a
distribution of the balance of the nonparticipant spouse's account.
(b) Application for a retirement benefit shall be made on an
application form prescribed by the board.
(c) The retirement date shall be the date designated in the
nonparticipant spouse's application, or the day following the date of
the court order dividing the community property of the participant
and nonparticipant spouse, if later.
22960.79. A nonparticipant spouse who is entitled to a
distribution for retirement that equals or exceeds five thousand
dollars ($5,000), may elect to receive the distribution in one of the
following forms:
(a) A single lump-sum payment.
(b) Substantially level installment payments for a period of years
that extends no longer than the life expectancy of the participant.
(c) A single life annuity.
CHAPTER 10. BENEFICIARY DESIGNATION
22960.80. The participant may designate any person or persons as
beneficiaries to receive any amount that may be payable upon the
death of the participant pursuant to the provisions of Section
22960.88. The beneficiary or beneficiaries shall be designated on a
form prescribed by the board, signed by the participant, and
delivered to a plan representative prior to the participant's death.
22960.81. Notwithstanding Section 22960.80, the participant's
beneficiary designation shall not be given effect and shall be
overridden to the extent that such a designation would impair the
rights of any surviving spouse under applicable federal or state law.
22960.82. Unless otherwise provided in the beneficiary
designation form, each designated beneficiary shall be entitled to
equal shares of the lump-sum distribution that may be payable from
the participant's account upon the death of the participant.
22960.83. In the event the participant dies without a valid
beneficiary designation on file, or if no designated beneficiary
survives the participant, any balance remaining in the participant's
account shall be payable to the participant's estate.
CHAPTER 11. BENEFITS
22960.85. (a) Upon separation from all service for the employer
for any reason other than death, disability, or retirement, a
participant is entitled to a lump-sum distribution of the balance of
his or her account as of the first valuation date immediately
following the date of the application.
(b) Application for a distribution for termination of employment
shall be made on an application form prescribed by the board. Any
participant who is entitled to a distribution that equals or exceeds
five thousand dollars ($5,000), may elect on the application form to
receive the distribution in one of the following forms:
(1) A single lump-sum payment.
(2) Substantially level installment payments for a period of years
that extends no longer than the life expectancy of the participant.
(c) The employer shall certify on a form prescribed by the board
that the participant's employment has terminated.
(d) No partial distribution shall be made from the participant's
account.
(e) The participant is deemed to have permanently waived all
rights to a retirement benefit when the distribution becomes
effective.
22960.86. (a) Upon separation from all service for the employer,
a participant may apply for a retirement benefit, provided the
retirement date is no earlier than the date on which the participant
attains the normal retirement age. The retirement benefit is a
distribution of the balance of the participant's account as of the
first valuation date immediately following the date of the
application.
(b) Application for a retirement benefit shall be made on an
application form prescribed by the board.
(c) The employer shall certify on a form prescribed by the board
that the participant's employment has terminated.
22960.87. (a) A disability benefit shall become payable to a
participant only upon the participant's separation from all service
for the employer and upon a determination by the board that the
participant has a disability pursuant to Section 21156. The
disability benefit is a distribution of the balance of the
participant's account as of the first valuation date immediately
following the date of the application.
(b) Application for a disability benefit shall be made on an
application form and in the manner prescribed by the board.
(c) The employer shall certify on a form prescribed by the board
that the participant's employment has terminated.
22960.88. (a) Upon receipt of proof of a participant's death, the
beneficiary or beneficiaries shall be entitled to a death benefit
that is a lump-sum distribution of the balance remaining in the
participant's account.
(1) If the participant died prior to termination of employment or
distribution of all of the contributions and earnings credited to the
participant's account, the lump-sum distribution shall be an amount
that is equal to the balance remaining in the participant's account.
(2) If the participant died while receiving a periodic payment,
any remaining payments shall be paid to the beneficiary under the
same schedule until there is no balance remaining in the participant'
s account.
(b) Application for the distribution shall be made on an
application form prescribed by the board.
22960.89. Any participant who is entitled to a distribution for
retirement or disability that equals or exceeds five thousand dollars
($5,000), may elect to receive the distribution in one of the
following forms:
(a) A single lump-sum payment.
(b) Substantially level installment payments for a period of years
that extends no longer than the life expectancy of the participant.
(c) A single life annuity.
(d) A joint and survivor annuity for the lifetimes of the
participant and the participant's option beneficiary.
22960.90. A beneficiary who is the spouse of the participant and
who is entitled to a distribution that equals or exceeds five
thousand dollars ($5,000), may elect to receive the distribution in
one of the following forms:
(a) A single lump-sum payment.
(b) Substantially level installment payments for a period of years
that extends no longer than the life expectancy of the beneficiary.
(c) A single life annuity.
22960.91. A beneficiary who is not the spouse of the participant,
and who is entitled to a distribution that equals or exceeds five
thousand dollars ($5,000), may elect to receive the distribution in
one of the following forms:
(a) A single lump-sum payment.
(b) Substantially level installment payments for a period not to
exceed five years.
22960.92. The board may contract with an insurance, annuity,
mutual fund, or any other qualified company to provide annuities to
participants pursuant to Section 22960.89, to beneficiaries pursuant
to Section 22960.90, and to nonparticipant spouses pursuant to
Section 22960.79.
CHAPTER 12. DISTRIBUTIONS
22960.95. Notwithstanding any other provision of this part, a
participant, nonparticipant spouse, or beneficiary shall not be
permitted to elect a distribution under this part that does not
satisfy the requirements of Section 401(a)(9) of Title 26 of the
United States Code, including the incidental death benefit
requirements of Section 401(a)(9)G and the regulations thereunder.
The required beginning date of distributions that reflect the entire
interest of the participant shall be as follows:
(a) In the case of a lump-sum distribution to the participant, the
lump-sum payment shall be made not later than April 1 of the
calendar year following the later of the calendar year in which the
participant attains the age of 70 and a half years or the calendar
year in which the participant terminates all employment for the
employer.
(b) In the case of a distribution to the participant in the form
of installment payments or an annuity, payment shall begin not later
than April 1 of the calendar year following the later of the calendar
year in which the participant attains the age of 70 and a half years
or the calendar year in which the participant terminates all
employment subject to coverage by the plan.
(c) In the case of a benefit payable on account of the participant'
s death, distributions shall be paid no later than December 31 of the
calendar year in which the fifth anniversary of the participant's
date of death occurs unless the beneficiary is the participant's
spouse in which case distributions must commence on or before the
later of either:
(1) December 31 of the calendar year immediately following the
calendar year in which the participant dies.
(2) December 31 of the calendar year in which the participant
would have attained the age of 70 and a half years.
22960.96. (a) Distributions from the plan shall be made as soon
as practicable after the first valuation date immediately following
the date of the application.
(b) Notwithstanding Chapter 3 (commencing with Section 13100) of
Part 1 of Division 8 of the Probate Code or any other law to the
contrary, the death benefit payable under the plan may be requested
by the beneficiary and paid as soon as practicable following receipt
of proof of the participant's death.
22960.97. If a person becomes entitled to a distribution from the
plan that constitutes an eligible rollover distribution within the
meaning of Section 401(a)(31) of Title 26 of the United States Code,
the person may elect under terms and conditions established by the
board to have the distribution or a portion thereof paid directly to
a plan that constitutes an eligible retirement plan within the
meaning of Section 401(a)(31), as specified by that person. Upon the
exercise of the election by a person with respect to a distribution
or a portion thereof, the distribution by the plan of the amount so
designated, once distributable under the terms of the plan, shall be
made in the form of a direct rollover to the eligible retirement plan
so specified.
22960.98. Except as otherwise provided in this part, all
distributions shall be made directly from the fund to the participant
or beneficiary. To the extent required by federal and state law,
income and other taxes shall be withheld from each benefit payment,
and the payment shall be reported to the appropriate governmental
agency or agencies.
22960.99. (a) The plan's obligations to a participant,
beneficiary, or nonparticipant spouse who has applied for a lump-sum
benefit cease upon distribution of the lump-sum benefit.
(1) Deposit in the United States mail of a warrant drawn in favor
of the participant, beneficiary, or nonparticipant spouse and
addressed to the latest address on file for that person constitutes
distribution of the benefit.
(2) Deposit in the United States mail of a notice that the
requested electronic funds transfer has been made as directed by the
participant, beneficiary, or nonparticipant spouse constitutes
distribution of the benefit.
(3) If the participant, beneficiary, or nonparticipant spouse has
elected on a form prescribed by the board to transfer all or a
specific portion of the account that is eligible for a direct
trustee-to-trustee transfer under Section 401(a)(31) of Title 26 of
the United States Code, deposit in the United States mail of a notice
that the requested transfer has been made constitutes distribution
of the benefit.
(b) The plan's obligations to a participant, beneficiary, or
nonparticipant spouse who elected to receive a benefit in the form of
installment payments or an annuity cease upon distribution of the
final payment.
(1) Deposit in the United States mail of a warrant drawn in favor
of the participant, beneficiary, or nonparticipant spouse and
addressed to the latest address on file for that person constitutes
distribution of the benefit.
(2) Deposit in the United States mail of a notice that the
requested electronic funds transfer has been made as directed by the
participant, beneficiary, or nonparticipant spouse constitutes
distribution of the benefit.
(c) Distribution under paragraph (1), (2), or (3) of subdivision
(a) or paragraph (1) or (2) of subdivision (b) pursuant to the board'
s determination in good faith of the existence, identity, or other
facts relating to entitlement of persons constitutes a complete
discharge and release of the board, system, and plan from liability
for payments.
SEC. 12. Section 22822 of the Government Code is amended to read:
22822. (a) Notwithstanding any other provision of this chapter,
with respect to state officers and employees, a permanent
intermittent employee, who has an appointment of more than six months
and works at least half time, shall be eligible to enroll or
register not to enroll for health benefits within 60 calendar days
after having been credited with a minimum of 480 paid hours within
one of two designated 6-month periods in a calendar year. To
continue benefits, a permanent intermittent employee must be credited
with a minimum of 480 paid hours in a designated 6-month period or
960 paid hours in two consecutive designated 6-month periods. For
the purposes of this section, the designated 6-month periods are
January 1 through June 30 and July 1 through December 31 of each
calendar year.
(b) Permanent intermittent employees who are represented by State
Bargaining Unit 6 may enroll or register not to enroll for health
benefits within 60 calendar days following graduation from the
academies of the Department of Corrections and the Department of the
Youth Authority. To continue benefits, a permanent intermittent
employee must be credited with a minimum number of hours during the
designated periods described in subdivision (a).
SEC. 13. This act is an urgency statute necessary for the
immediate preservation of the public peace, health, or safety within
the meaning of Article IV of the Constitution and shall go into
immediate effect. The facts constituting the necessity are:
In order for the provisions of this act to be applicable as soon
as possible in the 1997-98 fiscal year, and so facilitate the orderly
administration of state government at the earliest possible time, it
is necessary that this act take effect immediately.