BILL NUMBER: AB 2642 ENROLLED
BILL TEXT
PASSED THE ASSEMBLY AUGUST 31, 2000
PASSED THE SENATE AUGUST 29, 2000
AMENDED IN SENATE AUGUST 14, 2000
AMENDED IN SENATE JUNE 29, 2000
AMENDED IN ASSEMBLY MAY 26, 2000
INTRODUCED BY Assembly Member Calderon
FEBRUARY 25, 2000
An act to amend Section 20677 of, and to add Sections 21354.3,
21354.4, and 31676.2 to, the Government Code, relating to public
employees' retirement, and making an appropriation therefor.
LEGISLATIVE COUNSEL'S DIGEST
AB 2642, Calderon. Public employees' retirement: benefits.
(1) Under existing law, contracting agencies of the Public
Employees' Retirement System may elect to provide service retirement
benefits for local miscellaneous members, as defined, based on either
a 2% at age 60 formula or a 2% at age 55 formula, as specified.
Under existing law, the contribution rate for those members is 7% of
compensation. Member contributions are deposited in the Public
Employees' Retirement Fund, a continuously appropriated special fund.
This bill would authorize contracting agencies that are fully
funded to elect to provide those benefits to local miscellaneous
members based on a 2.5% at age 55 formula or a 2.7% at age 55
formula, as specified, and to increase member contributions under
those benefit formulas to 8% and 9%, respectively, thereby making an
appropriation.
(2) Under the County Employees Retirement Law of 1937, service
retirement benefits for general members of county and district
retirement systems are calculated according to one of several
specified formulae adopted by the county board of supervisors.
This bill would authorize those retirement systems having excess
earnings to provide service retirement benefits for general members
based on a 2% at age 50 formula, as specified, upon approval by the
county board of supervisors.
Appropriation: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 20677 of the Government Code is amended to
read:
20677. (a) (1) The normal rate of contribution for a state
miscellaneous member whose service is not included in the federal
system shall be 6 percent of the compensation in excess of three
hundred seventeen dollars ($317) per month paid that member for
service rendered on and after July 1, 1976.
(2) The normal rate of contribution for a school member, or a
local miscellaneous member shall be 7 percent of the compensation
paid that member for service rendered on and after June 21, 1971.
(3) Notwithstanding paragraph (2), the normal rate of contribution
for a local miscellaneous member shall be 8 percent of the
compensation paid that member for service rendered on and after the
date the member's contracting agency elects to make local
miscellaneous members subject to the benefit formula provided in
Section 21354.3.
(4) Notwithstanding paragraph (2), the normal rate of contribution
for a local miscellaneous member shall be 9 percent of the
compensation paid that member for service rendered on and after the
date the member's contracting agency elects to make local
miscellaneous members subject to the benefit formula provided in
Section 21354.4.
(5) The normal rate of contribution for a state miscellaneous or
industrial member, who has elected to be subject to Section 21353.5
and whose service is not included in the federal system, shall be 6
percent of the member's compensation.
(6) The normal rate of contribution as established under this
subdivision for a member whose service is included in the federal
system, and whose service retirement allowance is reduced under
Section 21353, 21353.5, 21354, 21354.1, 21354.3, or 21354.4 because
of that inclusion, shall be reduced by one-third as applied to
compensation not exceeding four hundred dollars ($400) per month for
service after the date of execution of the agreement including
service in the federal system and prior to termination of the
agreement with respect to the coverage group to which he or she
belongs.
(b) (1) The normal rate of contribution for a state miscellaneous
member whose service has been included in the federal system shall be
5 percent of compensation in excess of five hundred thirteen dollars
($513) per month paid that member for service rendered on and after
July 1, 1976.
(2) The normal rate of contribution for a state miscellaneous or
industrial member, who has elected to be subject to Section 21353.5
and whose service has been included in the federal system, shall be 5
percent of compensation, subject to the reduction specified in
paragraph (6) of subdivision (a).
(c) The normal rate of contribution for a state miscellaneous or
state industrial member who is subject to Section 21076 or 21077
shall be 0 percent.
(d) A member who elected to become subject to Section 21353 solely
for service rendered on or after the effective date of the election,
as authorized by subdivision (c) of Section 21070 during the period
between November 1, 1988, and October 31, 1989, is not required to
make the contributions specified in Section 21073.
(e) A member who elects to become subject to Section 21353 or
21354.1, as applicable, shall contribute at the rate specified in
paragraph (1) of subdivision (a) or paragraph (1) of subdivision (b),
as determined by the member's status with the federal system, and
the rate shall be applied from the first of the month following the
date of the election. A member who makes the election shall also
contribute for service prior to the date the contribution rate was
applied, in the manner specified in Section 21073 or 21073.1, as
applicable.
SEC. 2. Section 21354.3 is added to the Government Code, to read:
21354.3. (a) The combined current and prior service pensions for
a local miscellaneous member is a pension derived from the
contributions of the employer sufficient, when added to the service
retirement annuity that is derived from the accumulated normal
contributions of the member at the date of retirement, to equal the
fraction of one-fiftieth of the member's final compensation set forth
opposite the member's age at retirement, taken to the preceding
completed quarter year, in the following table, multiplied by the
number of years of current and prior service except service in a
category of membership other than that of local miscellaneous member
with which the member is entitled to be credited at retirement:
Age at
Retirement Fraction
50 ................................... 1.0000
50 1/4 ............................... 1.0125
50 1/2 ............................... 1.0250
50 3/4 ............................... 1.0375
51 ................................... 1.0500
51 1/4 ............................... 1.0625
51 1/2 ............................... 1.0750
51 3/4 ............................... 1.0875
52 ................................... 1.1000
52 1/4 ............................... 1.1125
52 1/2 ............................... 1.1250
52 3/4 ............................... 1.1375
53 ................................... 1.1500
53 1/4 ............................... 1.1625
53 1/2 ............................... 1.1750
53 3/4 ............................... 1.1875
54 ................................... 1.2000
54 1/4 ............................... 1.2125
54 1/2 ............................... 1.2250
54 3/4 ............................... 1.2375
55 and over .......................... 1.2500
(b) The fraction specified in the above table shall be reduced by
one-third as applied to that part of final compensation that does not
exceed four hundred dollars ($400) per month for all service of a
member any of whose service has been included in the federal system.
This reduction shall not apply to a member employed by a contracting
agency that enters into a contract after July 1, 1971, and who
elects not to be subject to this paragraph or with respect to service
rendered after the termination of coverage under the federal system
with respect to the coverage group to which the member belongs.
(c) This section shall supersede Sections 21353 and 21354 with
respect to all local miscellaneous members who retire after the date
this section becomes applicable to their respective employers.
(d) This section shall not apply to a contracting agency nor its
employees until the contracting agency elects to make all local
miscellaneous members subject to it by amendment to its contract made
in the manner prescribed for approval of contracts or in the case of
a new contract, by express provision of the contract. No contract
or amendment making this section applicable to local miscellaneous
members shall be approved unless the last annual actuarial valuation
by the actuary, as defined in Section 20015, indicates that the
contracting agency's miscellaneous plan is more than 100 percent
funded. The operative date of this section with respect to a local
miscellaneous member shall be the effective date of the amendment to
his or her employer's contract electing to be subject to this
section.
SEC. 3. Section 21354.4 is added to the Government Code, to read:
21354.4. (a) The combined current and prior service pensions for
a local miscellaneous member is a pension derived from the
contributions of the employer sufficient, when added to the service
retirement annuity that is derived from the accumulated normal
contributions of the member at the date of retirement, to equal the
fraction of one-fiftieth of the member's final compensation set forth
opposite the member's age at retirement, taken to the preceding
completed quarter year, in the following table, multiplied by the
number of years of current and prior service, except service in a
category of membership other than that of a local miscellaneous
member, with which the member is entitled to be credited at
retirement:
Age of
Retirement Fraction
50 ............................................. 1.0000
50 1/4 ......................................... 1.0175
50 1/2 ......................................... 1.0350
50 3/4 ......................................... 1.0525
51 ............................................. 1.0700
51 1/4 ......................................... 1.0875
51 1/2 ......................................... 1.1050
51 3/4 ......................................... 1.1225
52 ............................................. 1.1400
52 1/4 ......................................... 1.1575
52 1/2 ......................................... 1.1750
52 3/4 ......................................... 1.1925
53 ............................................. 1.2100
53 1/4 ......................................... 1.2275
53 1/2 ......................................... 1.2450
53 3/4 ......................................... 1.2625
54 ............................................. 1.2800
54 1/4 ......................................... 1.2975
54 1/2 ......................................... 1.3150
54 3/4 ......................................... 1.3325
55 and over .................................... 1.3500
(b) The fractions specified in the above table shall be reduced by
one-third as applied to that part of final compensation that does
not exceed four hundred dollars ($400) per month for all service of a
member any of whose service has been included in the federal system.
This reduction shall not apply to a member employed by a
contracting agency that enters into a contract after July 1, 1971,
and elects not to be subject to this paragraph or with respect to
service rendered after the termination of coverage under the federal
system with respect to the coverage group to which the member
belongs.
(c) This section shall supersede Sections 21353, 21354, and
21354.3 with respect to all miscellaneous members who retired after
the date this section becomes applicable to their respective
employers.
(d) This section shall not apply to a contracting agency nor its
employees until the contracting agency elects to make all local
miscellaneous members subject to it by amendment to its contract made
in the manner prescribed for approval of contracts or in the case of
a new contract, by express provision of the contract. No contract
or amendment making this section applicable to local miscellaneous
members shall be approved unless the last annual actuarial valuation
by the actuary, as defined in Section 20015, indicates that the
contracting agency's miscellaneous plan is more than 100 percent
funded. The operative date of this section with respect to a local
miscellaneous member shall be the effective date of the amendment to
his or her employer's contract electing to be subject to this
section.
SEC. 4. Section 31676.2 is added to the Government Code, to read:
31676.2. Notwithstanding any other provisions of this chapter,
the current service pension or the current service pension combined
with the prior service pension is an additional pension for members
purchased by the contributions of the county or district sufficient,
when added to the service retirement annuity, to equal the fraction
of one-fiftieth of the member's final compensation set forth opposite
the member's age at retirement, taken to the preceding completed
quarter year, in the following table multiplied by the number of
years of current service or years of current and prior service with
which the member is entitled to be credited at retirement, but in no
event shall the total retirement allowance exceed the member's final
compensation:
Age at
Retirement Fraction
50 .............................. 1.0000
50 1/4 .............................. 1.0130
50 1/2 .............................. 1.0259
50 3/4 .............................. 1.0387
51 .............................. 1.0516
51 1/4 .............................. 1.0656
51 1/2 .............................. 1.0796
51 3/4 .............................. 1.0937
52 .............................. 1.1078
52 1/4 .............................. 1.1231
52 1/2 .............................. 1.1384
52 3/4 .............................. 1.1538
53 .............................. 1.1692
53 1/4 .............................. 1.1859
53 1/2 .............................. 1.2028
53 3/4 .............................. 1.2195
54 .............................. 1.2336
54 1/4 .............................. 1.2547
54 1/2 .............................. 1.2730
54 3/4 .............................. 1.2915
55 and over ......................... 1.3099
The fractions herein set forth shall be used until adjusted by
each board for its retirement system in accordance with the interest
and mortality tables adopted by each board.
In any county operating under this section any limitations in any
provisions of this chapter upon the amount of compensation used for
computing rates of contributions shall be disregarded.
Wherever in this chapter reference is made to survivorship
benefits and rights under Section 31676.1, the same shall apply to
this section.
This section shall not be operative in any county until adopted by
a resolution of the board of supervisors following a determination
by the board of retirement that excess earnings exist in the county
retirement fund.