BILL NUMBER: AB 2233 INTRODUCED
BILL TEXT
INTRODUCED BY Committee on Public Employees, Retirement and Social
Security (Negrete McLeod (Chair), Levine (Vice Chair), Chan, Correa,
and Kehoe)
FEBRUARY 18, 2004
An act to amend Sections 22663, 22705.5, 22714, 23203, 24114,
24221, and 44987 of the Education Code, relating to state teachers'
retirement.
LEGISLATIVE COUNSEL'S DIGEST
AB 2233, as introduced, Committee on Public Employees, Retirement
and Social Security. State teachers' retirement.
(1) The Teachers' Retirement Law establishes the Defined Benefit
Program of the State Teachers' Retirement Plan.
This bill would make technical changes to various provisions of
that law.
(2) Existing law requires the governing board of a school district
to grant an employee a leave of absence to enable the employee to
serve as an elected officer of an employee organization.
This bill would make technical changes to that provision.
(3) This bill would declare that any act that amends or repeals
any of the sections amended by this act shall prevail over this act.
Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 22663 of the Education Code is amended to read:
22663. The nonmember spouse who is awarded a separate account
under this part has the right to purchase additional service credit
in accordance with the determination of the court pursuant to Section
22652.
(a) The nonmember spouse may purchase only the service credit that
the court, pursuant to Section 22652, has determined to be the
community property interest of the nonmember spouse.
(b) The nonmember spouse shall inform the system in writing of his
or her intent to purchase additional service credit within 180 days
after the date the judgment or court order addressing the right of
the nonmember spouse to purchase additional service credit is
entered. The nonmember spouse shall elect to purchase additional
service credit on a form provided by the system within 30 days after
the system mails an election form and billing.
(c) If the nonmember spouse elects to purchase additional service
credit, he or she shall pay, prior to retirement under this part, all
contributions with respect to the additional service at the
contribution rate for additional service credit in effect at the time
of election and regular interest from July 1 of the year following
the year upon which contributions are based.
(1) (A) The nonmember spouse shall purchase additional service
credit by paying the required contributions and interest in one lump
sum, or in not more than 120 monthly installments, provided that no
installment, except the final installment, is less than twenty-five
dollars ($25). Regular interest shall be charged on the monthly,
unpaid balance if the nonmember spouse pays in installments.
(B) If any payment due, because of the election, is not received
at the system's office in Sacramento within 120 days of its due date,
the election shall be canceled and any payments made under the
election shall be returned to the nonmember spouse.
(2) The contributions shall be based on the member's compensation
earnable in the most recent school year during which the member was
employed, preceding the date of separation established by the court
pursuant to Section 22652.
(3) All payments of contributions and interest shall be received
by the system before the effective date of the retirement of the
nonmember spouse .
(d) The nonmember spouse does not have a right to purchase
additional service credit under this part after the effective date of
a refund of the accumulated retirement contributions in the separate
account of the nonmember spouse.
(e) The member does not have a right to purchase the community
property interest of the nonmember spouse of additional service
credit under this part whether or not the nonmember spouse elects to
purchase the additional service credit. However, any additional
service credit eligible for purchase that is not explicitly awarded
to the nonmember spouse by the judgment or court order shall be
deemed the exclusive property of the member.
SEC. 2. Section 22705.5 of the Education Code is amended to read:
22705.5. Service subject to coverage by the San Francisco City
and County Employees' Retirement System pursuant to
Section 24701 is excluded from coverage in the Defined Benefit
Program. The member shall retain the right to receive a retirement
allowance for creditable service that is subject to coverage under
the Defined Benefit Program unless he or she withdraws his or her
accumulated retirement contributions for that service.
SEC. 3. Section 22714 of the Education Code is amended to read:
22714. (a) Whenever the governing board of a school district or a
community college district or a county office of education, by
formal action, determines pursuant to Section 44929 or 87488 that
because of impending curtailment of or changes in the manner of
performing services, the best interests of the district or county
office of education would be served by encouraging certificated
employees or academic employees to retire for service and that the
retirement will result in a net savings to the district or county
office of education, an additional two years of service credit shall
be granted under this part to a member of the Defined Benefit Program
if all of the following conditions exist:
(1) The member is credited with five or more years of service
credit and retires for service under Chapter 27 (commencing with
Section 24201) during a period of not more than 120 days or less than
60 days, commencing no sooner than the effective date of the formal
action of the employer that shall specify the period.
(2) The employer transfers to the retirement fund an amount
determined by the Teachers' Retirement Board to equal the actuarial
equivalent of the difference between the allowance the member
receives after receipt of service credit pursuant to this section and
the amount the member would have received without the service credit
and an amount determined by the Teachers' Retirement Board to equal
the actuarial equivalent of the difference between the purchasing
power protection supplemental payment the member receives after
receipt of service credit pursuant to this section and the amount the
member would have received without the service credit. The payment
for purchasing power shall be deposited in the Supplemental Benefit
Maintenance Account established by Section 22400 and shall be subject
to Section 24415. The transfer to the retirement fund shall be made
in a manner and a time period, not to exceed eight years, that is
acceptable to the Teachers' Retirement Board. The employer shall
transfer the required amount for all eligible employees who retire
pursuant to this section.
(3) The employer transmits to the retirement fund the
administrative costs incurred by the system in implementing this
section, as determined by the Teachers' Retirement Board.
(4) The employer has considered the availability of teachers or
academic employees to fill the positions that would be vacated
pursuant to this section.
(b) (1) The school district shall demonstrate and certify to the
county superintendent that the formal action taken would result in a
net savings to the district.
(2) The county superintendent shall certify to the Teachers'
Retirement Board that the result specified in paragraph (1) can be
demonstrated. The certification shall include, but not be limited
to, the information specified in subdivision (b) of Section 14502.
(3) The school district shall reimburse the county superintendent
for all costs to the county superintendent that result from the
certification.
(c) (1) The county office of education shall demonstrate and
certify to the Superintendent of Public Instruction that the formal
action taken would result in a net savings to the county office of
education.
(2) The Superintendent of Public Instruction shall certify to the
Teachers' Retirement Board that the result specified in paragraph (1)
can be demonstrated. The certification shall include, but not be
limited to, the information specified in subdivision (b) of Section
14502.
(3) The Superintendent of Public Instruction may request
reimbursement from the county office of education for all
administrative costs that result from the certification.
(d) (1) The community college district shall demonstrate and
certify to the chancellor's office that the formal action taken would
result in a net savings to the district.
(2) The chancellor shall certify to the Teachers' Retirement Board
that the result specified in paragraph (1) can be demonstrated. The
certification shall include, but not be limited to, the information
specified in subdivision (c) of Section 84040.5.
(3) The chancellor may request reimbursement from the community
college district for all administrative costs that result from the
certification.
(e) The opportunity to be granted service credit pursuant to this
section shall be available to all members employed by the school
district, community college district, or county office of education
who meet the conditions set forth in this section.
(f) The amount of service credit shall be two years.
(g) Any member of the Defined Benefit Program who retires under
this part for service under Chapter 27 (commencing with Section
24201) with service credit granted under this section and who
subsequently reinstates shall forfeit the service credit granted
under this section.
(h) Any member of the Defined Benefit Program who retires under
this part for service under Chapter 27 (commencing with Section
24201) with service credit granted under this section and who takes
any job with any school district in the state less than one year
after receiving the credit shall forfeit the ongoing benefit he or
she receives from the additional service credit granted under this
section.
(i) Any member of the Defined Benefit Program who retires under
this part for service under Chapter 27 (commencing with Section
24201) with service credit granted under this section and who takes
any job with the school district that granted the member the service
credit less than five years after receiving the credit shall forfeit
the ongoing benefit he or she receives from the additional
age and service credit granted under this section.
(j) This section does not apply to any member otherwise eligible
if the member receives any unemployment insurance payments arising
out of employment with an employer subject to this part during a
period extending one year beyond the effective date of the formal
action, or if the member is not otherwise eligible to retire for
service.
SEC. 4. Section 23203 of the Education Code is amended to read:
23203. (a) A member who elects to redeposit refunded accumulated
retirement contributions shall pay, prior to retirement, all
contributions and interest as determined under Section 23200.
(b) If the system is unable to inform the member or beneficiary of
the amount required to purchase additional service credit
redeposit the refunded accumulated retirement
contributions prior to the effective date of the applicable
allowance, the member or beneficiary may make the required payment
within 30 working 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. The payment shall be paid
in full before a member or beneficiary receives any adjustment in
the appropriate allowance due because of that payment.
(c) Redeposit of refunded accumulated retirement contributions
shall be made in one sum, or in not more than 120 monthly
installments, not to exceed ten years, provided that no installment,
except the final installment, is less than twenty-five dollars ($25).
SEC. 5. Section 24114 of the Education Code is amended to read:
24114. (a) A member retired for disability under this part may be
employed or self-employed in any capacity, notwithstanding Section
22132, but may not make contributions to the retirement fund with
respect to the Defined Benefit Program or accrue service credit under
this part based on earnings from any employment.
(b) A member retired for disability under this part may earn in
any one calendar year up to the limitation specified in subdivision
(c) without a reduction in his or her disability retirement
allowance.
(c) The limitation that shall apply to the earnings of a member
retired for disability under this part shall be fifteen thousand
dollars ($15,000), in any one calendar year, adjusted annually by the
board effective each January 1 by the annual
amount of increase in the All Urban California Consumer Price Index
using December 1989 as the base.
(d) If a member retired for disability under this part earns in
excess of the limitation specified in subdivision (c) from all
employment in any calendar year, notwithstanding Section 22132, his
or her retirement allowance shall be reduced by the amount of the
excess earnings. The amount of the reduction may be equal to the
monthly allowance payable but may not exceed the amount of the annual
allowance payable under this part for the calendar year in which the
excess compensation was earned.
(e) The earnings limitation specified in this section
shall does not be applicable
apply to a member retired for disability under this part
who is participating in an approved rehabilitation program pursuant
to Section 24111.
(f) This section does not apply to a member retired for disability
under this part who began receiving a disability retirement
allowance prior to October 16, 1992.
SEC. 6. Section 24221 of the Education Code is amended to read:
24221. (a) A member who retires for service on or after January
1, 2004, and prior to January 1, 2011, and who has reached either the
age of 60 years and three months within the month he or she retires
or the age of 60 years if he or she has at least 30 years of credited
service may elect, on a form prescribed by the system, to receive a
lump-sum payment and an actuarially reduced monthly
allowance benefit pursuant to this section in
lieu of the monthly allowance that would otherwise be payable to the
member pursuant to this chapter. The election under this section
shall be made at the time the member files his or her application for
service retirement allowance as provided in Section 24204.
(b) A member who makes the election described in subdivision (a)
shall receive a one-time, lump-sum payment in an amount that equals
or does not exceed the lesser of the following amounts:
(1) The actuarial present value of the difference between (A) the
monthly allowance benefit payable to
the member pursuant to this chapter, and (B) an amount equal to 2
percent of the member's final compensation multiplied by the number
of years of credited service and divided by 12.
(2) Fifteen percent of the actuarial present value of the monthly
allowance benefit payable to the member
under this chapter.
(c) Notwithstanding any other provision of this part, a member who
makes the election described in subdivision (a) shall receive a
monthly allowance, pursuant to this chapter, that shall be
actuarially reduced to reflect the lump-sum amount paid under
subdivision (b).
(d) A member may not apply a lump-sum payment made pursuant to
this section for the purposes of redepositing previously refunded
retirement contributions pursuant to Chapter 19 (commencing with
Section 23200) or purchasing service credit pursuant to Chapter 14
(commencing with Section 22800), Chapter 14.2 (commencing with
Section 22820) or Chapter 14.5 (commencing with Section 22850). The
Legislature hereby finds and declares that if a member who elects to
receive a partial lump-sum payment also elects to redeposit
previously refunded contributions or purchase service credit as a
result of the receipt of the lump-sum payment, the Defined Benefit
Program may experience a net actuarial impact.
(e) The Legislature reserves the right to modify the provisions of
this section to further the objective of permitting eligible members
to receive a lump-sum distribution of a portion of their benefits,
with a corresponding actuarial reduction in their monthly allowance,
so that there is no net actuarial impact to the Defined Benefit
Program.
SEC. 7. Section 44987 of the Education Code is amended to read:
44987. (a) The governing board of a school district shall grant
to any employee, upon request, a leave of absence without loss of
compensation for the purpose of enabling the employee to serve as an
elected officer of any local school district public employee
organization, or any statewide or national public employee
organization with which the local organization is affiliated.
The leave shall include, but is not limited to, absence for
purposes of attendance by the employee at periodic, stated, special,
or regular meetings of the body of the organization on which the
employee serves as an officer. Compensation during the leave shall
include retirement fund contributions required of the school district
as employer. The required employer contribution rate shall
be the contribution rate for additional service credit less the
member contribution rate prescribed by Section 22804
rate adopted by the Teachers' Retirement Board as a plan amendment
with respect to the Defined Benefit Program as provided in Section
22711 . The employee shall earn full service credit during the
leave of absence and shall pay member contributions as prescribed by
Section 22804 22711 . The maximum
amount of the service credit earned shall may
not exceed twelve calendar years. Any employee who serves as
a full-time officer of a public employee organization shall
is not be eligible for
disability benefits under the State Teachers' Retirement
System Plan while on the leave of absence.
Following the school district's payment of the employee for the
leave of absence, the school district shall be reimbursed by the
employee organization of which the employee is an elected officer for
all compensation paid the employee on account of the leave.
Reimbursement by the employee organization shall be made within 10
days after its receipt of the school district's certification of
payment of compensation to the employee.
The leave of absence without loss of compensation provided for by
this section is in addition to the released time without loss of
compensation granted to representatives of an exclusive
representative by subdivision (c) of Section 3543.1 of the Government
Code.
For purposes of this section, "school district" also means "county
superintendent of schools."
(b) An employee who after August 31, 1978, was absent on account
of elected-officer service, shall receive full service credit in the
State Teachers' Retirement System Plan
; provided that, not later than April 30, 1981: (1) the employee
makes a written request to the employer for a leave of absence for
the period of the elected-officer service, and (2) the employee
organization of which the employee is an elected officer pays to the
employee's school district an amount equal to the required State
Teachers' Retirement System Plan member
and employer retirement contributions, as prescribed by this
section.
The school district, following this written request and payment,
shall transmit the amount received to the State Teachers' Retirement
System, informing it of the period of the employee's leave of
absence. The State Teachers' Retirement System shall credit the
employee with all service credit earned for the period of the
elected-officer leave of absence.
In the event that
If the employee has been compensated by the school district
for the period of the service, then, as a condition to the employee's
entitlement to service credit for this period, the school district
shall be reimbursed by the employee organization for the amount of
the compensation.
The provisions of this subdivision shall apply retroactively to
all service as an elective officer in a public employee organization
occurring after August 31, 1978.
SEC. 8. Any section of any act enacted by the Legislature during
the second year of the 2003-04 Regular Session that amends, amends
and renumbers, adds, repeals and adds, or repeals a statute that is
amended by this act shall prevail over this act, whether that act is
enacted prior or subsequent to the enactment of this act.