BILL NUMBER: SB 1027 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY JULY 7, 1997
AMENDED IN SENATE MAY 14, 1997
INTRODUCED BY Senator Schiff
FEBRUARY 27, 1997
An act to amend Sections 23200 and 23202 of, and
to add Section 22811 to Chapter
14.2 (commencing with Section 22820) to Part 13 of, and to repeal
Section 22707 of , the Education Code, relating to school
employees.
LEGISLATIVE COUNSEL'S DIGEST
SB 1027, as amended, Schiff. School employees retirement.
The State Teachers' Retirement System authorizes members to
redeposit refunded contributions.
The bill would authorize members to redeposit contributions
withdrawn by nonmember spouses.
Existing law authorizes credit for service prior to July 1, 1944,
in other states.
This bill would authorize purchases of additional service credit
for out-of-state public school employment without any date
restriction. These provisions would become operative on January
1, 1999.
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 22811 is added to the Education Code, to read:
22811. (a) A member, other than a retired member, may elect to
purchase additional service credit for employment with a public
school system in another state or territory of the United States or
by the United States for its citizens under the following conditions:
(1) The out-of-state service shall have been in a position that in
this state would qualify for membership in this system.
(2) In no event shall the member receive credit for this service
if the member has received or is eligible to receive credit for the
same service in another retirement system.
(b) The amount of additional service credit that may be purchased
may not exceed the lesser of the number of years of service credit
the member has in the out-of-state retirement system or 10 years.
(c) Additional service credit may be purchased under this section
by either of the following:
(1) Depositing contributions for each year of service claimed up
to the limits established in subdivision (b), or amounts in
accordance with Section 22801.
(2) Depositing contributions in accordance with Section 22801 and
receiving the number of years of service credit the total amount of
contributions will purchase up to the limits established in
subdivision (b).
(d) A member who transfers contributions under subdivision (c) may
not transfer contributions qualifying under Section 403(b) of the
Internal Revenue Code.
(e) Contributions for additional service credit purchased shall
not be used in calculating highest average annual compensation when
calculating final compensation.
SEC. 2.
SECTION 1. Section 22707 of the Education Code is repealed.
22707. Except as otherwise specifically provided in this part no
member shall receive credit for service performed outside this state.
SEC. 2. Chapter 14.2 (commencing with Section 22820) is added to
Part 13 of the Education Code, to read:
CHAPTER 14.2. OUT-OF-STATE SERVICE CREDIT
22820. (a) A member, other than a retired member, may elect to
purchase out-of-state service credited in a public retirement system
for service covering public education in another state or territory
of the United States or by the United States for its citizens. In no
event shall the member receive credit for this service if the member
has credit or is eligible to receive credit for the same service in
the Cash Balance Plan under Part 14 (commencing with Section 26000)
or another public retirement system, excluding social security.
(b) The amount of out-of-state service for which a member may
purchase credit may not exceed the number of years of service
credited to the member in the out-of-state retirement system or 10
years, whichever is less.
(c) Out-of-state service credit may be purchased under this
section by means of any of the following actions:
(1) Paying an amount equal to the amount refunded from the other
public retirement system and receiving service credit in this plan
pursuant to subdivision (a) of Section 22823.
(2) Paying the contributions required under this plan pursuant to
subdivision (a) of Section 22823 for the service credited in the
other public retirement system.
(3) Paying an amount equal to the amount refunded from the other
public retirement system and an additional amount in accordance with
subdivision (a) of Section 22823 for the service credited in the
other public retirement system.
(d) Contributions made to a plan qualified under Section 403(b) of
the Internal Revenue Code may not be used to purchase credit for
out-of-state service.
(e) Compensation for out-of-state service shall not be used in
determining the highest average annual compensation earnable when
calculating final compensation.
(f) The credited service purchased under this section shall not be
used to meet the eligibility requirements for benefits provided
under Sections 23801, 23804, 23851, 23854, 24001, 24101, and 24201.
22821. A member's election to purchase out-of-state service
credit shall be submitted in writing and shall include information as
required by the board.
22822. An election pursuant to Section 22820 to purchase credit
for out-of-state service may be made by a member any time prior to
the effective date of a family, survivor, disability, or retirement
allowance.
22823. (a) A member who elects to receive credit for out-of-state
service as provided in this chapter shall contribute to the
retirement fund the actuarial cost of the service, including interest
as appropriate, as determined by the board based on the most recent
valuation of the plan.
(b) (1) Any payment that a member may make to the system to obtain
credit for out-of-state service shall be paid in full prior to the
effective date of a family, survivor, disability, or retirement
allowance.
(2) If the system is unable to inform the member of the amount
required to purchase out-of-state service prior to the effective date
of the applicable allowance, the member may make payment in full
within 30 days after the date of mailing of the statement of
contributions and interest required or the effective date of the
appropriate allowance, whichever is later.
(c) Contributions for out-of-state service credit shall be made in
a lump sum, or in not more than 120 monthly installments. No
installment, except the final installment, shall be less than
twenty-five dollars ($25).
(d) Regular interest shall be charged on the monthly unpaid
balance if the member makes installment payments.
22824. No provision of this chapter shall apply to the extent it
would require any action to be taken that would create a conflict
with Section 415 of the Internal Revenue Code of 1968 (Title 26 of
the United States Code).
22825. This chapter shall become operative on January 1, 1999.
SEC. 3. Section 23200 of the Education Code is amended to
read:
23200. (a) If a person, whose accumulated retirement
contributions have been refunded, again becomes a member of the plan,
the person may elect to redeposit those contributions with regular
interest from the date of refund to the date of payment. If the
member elects to redeposit, the member shall repay all accumulated
retirement contributions that were previously refunded.
(b) For time prior to July 1, 1944, regular interest shall be at
21/2 percent compounded annually.
(c) If a nonmember spouse, as defined in Section 22651, withdraws
accumulated contributions in accordance with Section 22661, the
member may redeposit a sum equal to those contributions pursuant to
subdivision (a), providing he or she is not receiving an allowance
under Chapter 26 (commencing with Section 24100) or Chapter 27
(commencing with Section 24201).
SEC. 3.
SEC. 4. Section 23202 of the Education Code is amended to
read:
23202. (a) An election pursuant to Section 23200 to redeposit
accumulated retirement contributions may be made by a member anytime
prior to the effective date of the member's retirement.
(b) An election to redeposit refunded accumulated retirement
contributions shall be considered as an election to repay all
accumulated retirement contributions previously refunded under the
provision of this chapter.
(c) If any payment due because of this election is not received at
the system's office in Sacramento within 120 days of its due date,
the election shall be canceled. Upon the cancellation of election
any payments made under the election shall be refunded.
(d) If the election is cancelled, the member may at any time prior
to the effective date of retirement, again elect to redeposit
accumulated retirement contributions previously withdrawn or
refunded, in accordance with Section 23200 and all the laws, rules,
and regulations pertaining thereto.