BILL NUMBER: AB 2233 AMENDED
BILL TEXT
AMENDED IN SENATE JUNE 8, 2004
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 22171, 22650, 22651, 22661,
22663, 22705.5, 22714, 23203, 24114, 24221, and 44987 of
23300, 23812, 24114, 24214, 24221, 25000.9, 26004,
26140, 27400, 27401, 27406, and 44987 of, and to add Sections 22007.5
and 26002.5 to, the Education Code, relating to state teachers'
retirement.
LEGISLATIVE COUNSEL'S DIGEST
AB 2233, as amended, 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 prescribes the rights and benefits of the
spouse, surviving spouse, or former spouse of a member of the Defined
Benefit Program, or a participant of the Cash Balance Benefit
Program, of the State Teachers' Retirement Plan. Existing law, as of
January 1, 2005, grants registered domestic partners the same
rights, benefits, and protections and subjects them to the same
responsibilities, duties, and obligations as are granted to or
imposed upon spouses.
This bill would specify that the provisions of the Teachers'
Retirement Law applicable to a spouse, surviving spouse, or former
spouse also apply to a registered domestic partner, surviving
domestic partner, or former domestic partner, except as specified.
(3) The Teachers' Retirement Law requires a beneficiary
designation by a member of the Defined Benefit Program to be
witnessed by 2 witnesses.
This bill would eliminate that requirement.
(4) Existing law authorizes members of the Defined Benefit Program
of the State Teachers' Retirement Plan who retire prior to January
1, 2011, at a specified age or at a specified age with 30 years of
service, to elect to receive a specified lump-sum payment upon
retirement and an actuarially reduced monthly allowance.
This bill would authorize any member who retires prior to that
date to make that election. The bill would also specify the method
to be used by the Teachers' Retirement Board to calculate the member'
s actuarially reduced monthly allowance, that results in no net
actuarial impact to the program.
(5) 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)
(6) 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 22007.5 is added to the Education Code, to
read:
22007.5. Except as excluded by Sections 22661 and 23812, any
reference to a "spouse" in this part includes a person who is the
registered domestic partner of a member, as established pursuant to
Section 297 or 299.2 of the Family Code.
SEC. 2. Section 22171 of the Education Code is amended to read:
22171. (a) "Spouse" means a person who was continuously married
to the member for the period beginning at least 12 months prior to
the death of the member, unless a child is born to the member and his
or her spouse within the 12-month period or unless the spouse is
carrying the member's unborn child.
(b) "Spouse" also means a person who was married to the member for
less than 12 months, if the member's death was accidental, or for
the period beginning prior to the occurrence of the injury or
diagnosis of the illness that resulted in death.
(1) A member's death is defined as accidental only if he or she
received bodily injuries through violent, external, or accidental
means and died as a direct result of the bodily injuries and
independent of all other causes.
(2) This subdivision does not apply if, at the time of the
marriage, the member could not have reasonably been expected to live
for 12 months, due to a known illness.
(c) Except as excluded by Sections 22661 and 23812, "spouse" also
means a person who is the registered domestic partner of a member, as
established pursuant to Section 297 or 299.2 of the Family Code.
SEC. 3. Section 22650 of the Education Code is amended to read:
22650. (a) This chapter establishes the power of a
court in a dissolution of marriage or legal separation action with
respect to community property rights in accounts with the plan under
this part and establishes and defines the rights of nonmember spouses
and nonmember registered domestic partners in the plan
under this part.
(b) For purposes of this chapter, any reference to "dissolution of
marriage or legal separation" includes the termination or
dissolution of a domestic partnership, nullity of a domestic
partnership, or the legal separation of partners in a domestic
partnership, as provided in Section 299 of the Family Code.
SEC. 4. Section 22651 of the Education Code is amended to read:
22651. (a) For purposes of this chapter and Section
23300, "nonmember spouse" means a member's spouse or former spouse
, and also includes a member's registered domestic partner or
former registered domestic partner, who is being or has been
awarded a community property interest in the service credit,
accumulated retirement contributions, accumulated Defined Benefit
Supplement account balance, or benefits of the member under this
part. A
(b) A nonmember spouse shall not be considered a member
based upon his or her receipt of any of the following being awarded
to the nonmember spouse as a result of legal separation or
dissolution of marriage: a separate account of service credit and
accumulated retirement contributions, a retirement allowance, or an
interest in the member's retirement allowance under the Defined
Benefit Program; or a separate account based on the member's Defined
Benefit Supplement account balance, a retirement benefit, or an
interest in the member's retirement benefit under the Defined Benefit
Supplement Program.
SEC. 5. Section 22661 of the Education Code is amended to read:
22661. (a) The nonmember spouse who is awarded a separate account
under this part shall have the right to a refund of the accumulated
retirement contributions in the account under the Defined Benefit
Program, and a return of the Defined Benefit Supplement account
balance, of the nonmember spouse under this part.
(b) The nonmember spouse shall file an application on a form
provided by the system to obtain a refund or lump-sum payment.
(c) The refund of accumulated retirement contributions and the
return of the accumulated Defined Benefit Supplement account balance
under this part are effective when the system deposits in the United
States mail an initial warrant drawn in favor of the nonmember spouse
and addressed to the latest address for the nonmember spouse on file
with the system. If
(d) If the nonmember spouse has elected on a form provided
by the system to transfer all or a specified portion of the
accumulated retirement contributions or accumulated Defined Benefit
Supplement account balance that are eligible for direct
trustee-to-trustee transfer to the trustee of a qualified plan under
Section 402 of the Internal Revenue Code of 1986 (26 U.S.C.A. Sec.
402), deposit in the United States mail of a notice that the
requested transfer has been made constitutes a refund of the
nonmember spouse's accumulated retirement contributions or
accumulated Defined Benefit Supplement account balance. This
subdivision shall not apply to a nonmember domestic partner,
consistent with Section 402 of the Internal Revenue Code.
(d)
(e) The nonmember spouse is deemed to have permanently
waived all rights and benefits pertaining to the service credit,
accumulated retirement contributions, and accumulated Defined Benefit
Supplement account balance under this part when the refund and
lump-sum payment become effective.
(e)
(f) The nonmember spouse may not cancel a refund or lump-sum
payment under this part after it is effective.
(f)
(g) The nonmember spouse shall not have a right to elect to
redeposit the refunded accumulated retirement contributions under
this part after the refund is effective, to redeposit under Section
22662 or purchase additional service credit under Section 22663 after
the refund becomes effective, or to redeposit the accumulated
Defined Benefit Supplement account balance after the lump-sum payment
becomes effective.
(g)
(h) If the total service credit in the separate account of
the nonmember spouse under the Defined Benefit Program, including
service credit purchased under Sections 22662 and 22663, is less than
two and one-half years, the board shall refund the accumulated
retirement contributions in the account.
SEC. 6. 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.
SEC. 7. 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.
SEC. 8. 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 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.
SEC. 9. 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 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.
SEC. 10. Section 23300 of the Education Code is amended to read:
23300. (a) A member of the Defined Benefit Program may designate
a beneficiary to receive benefits payable under this part upon the
member's death. A beneficiary designation may not be made in
derogation of a community property interest of a nonmember spouse, as
defined by Section 25000.9, with respect to service or contributions
credited under this part, unless the nonmember spouse has previously
obtained an alternative order pursuant to Section 2610 of the Family
Code.
(b) A member's beneficiary designation for benefits payable under
the Defined Benefit Program, including a designation made pursuant to
Section 24300, shall also apply to benefits payable under the
Defined Benefit Supplement Program. A beneficiary designation shall
be in writing on a form prescribed by the system ,
and executed by the member , and witnessed by
two witnesses who are not designated as a beneficiary for benefits
payable under either the Defined Benefit Program or the Defined
Benefit Supplement Program .
(c) A beneficiary designation may not be valid unless it is
received in the office of the system in Sacramento prior to the
member's death.
(d) A member may change or revoke a beneficiary designation at any
time by making a new designation pursuant to this section.
(e) This section may is not
be applicable to the designation of an option beneficiary
or an annuity beneficiary under this part.
(f) An option beneficiary may designate a death beneficiary who
would, upon the death of the option beneficiary, be entitled to
receive the option beneficiary's accrued monthly allowance.
SEC. 11. Section 23812 of the Education Code is amended to read:
23812. (a) The surviving spouse of a deceased member who
previously lost entitlement to benefits prescribed by this part due
to remarriage shall be entitled to resume payment of the benefits
effective either on January 1, 2000, or the first day of the month
following receipt by the board of a written application for
resumption of benefits, whichever date is later. The amount of the
benefits payable shall be calculated as though the benefits had been
paid without interruption from the date of remarriage through the
benefits resumption effective date.
(b) The board shall be under no requirement to identify, locate,
or notify a remarried spouse of a deceased member who previously lost
entitlement as a result of remarriage about the resumption of
benefits provided in this section. The board shall be under no
requirement to provide the name or address or any other information
concerning any remarried spouse of a deceased member to any person,
agency, or entity for the purpose of notifying those who may be
eligible for the resumption of benefits under this section.
(c) Nothing in this section shall be construed to imply or
interpreted to mean that the benefits addressed shall be required to
be paid retroactively.
(d) This section does not apply to the surviving domestic partner
of a member.
SEC. 12. 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 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 does not
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.
SEC. 13. Section 24214 of the Education Code, as amended by
Section 2 of Chapter 903 of the Statutes of 2002, is amended to read:
24214. (a) A member retired for service under this part may
perform the activities identified in paragraphs (1) to (9),
inclusive, of subdivision (a), or subdivision (b), of Section 22119.5
as an employee of an employer, as an employee of a third party, or
as an independent contractor within the California public school
system, but the member may not make contributions to the retirement
fund or accrue service credit based on compensation earned from that
service.
(b) The rate of pay for service performed by a member retired for
service under this part as an employee of the employer may not be
less than the minimum, nor exceed that paid by the employer to other
employees performing comparable duties.
(c) A member retired for service under this part may not be
required to reinstate for performing the activities identified in
paragraphs (1) to (9), inclusive, of subdivision (a), or subdivision
(b), of Section 22119.5, as an employee of an employer, as an
employee of a third party, or as an independent contractor within the
California public school system.
(d) A member retired for service under this part may earn
compensation for performing activities identified in paragraphs (1)
to (9), inclusive, of subdivision (a), or subdivision (b), of Section
22119.5 in any one school year up to the limitation specified in
subdivision (f) as an employee of an employer, as an employee of a
third party, or an independent contractor, within the California
public school system, without a reduction in his or her retirement
allowance.
(e) (1) The postretirement compensation limitation provisions set
forth in this section are not applicable to compensation earned by a
member retired for service under this part who has returned to work
after the date of retirement and, for a period of at least 12
consecutive months, has not performed the activities identified in
paragraphs (1) to (9), inclusive, of subdivision (a), or subdivision
(b), of Section 22119.5 as an employee of an employer, as an employee
of a third party, or as an independent contractor within the
California public school system.
(2) The postretirement compensation limitation provisions set
forth in this section are not applicable to compensation earned for
the performance of the activities described in subdivision (a) for
which the employer is not eligible to receive state apportionment or
to compensation that is not creditable pursuant to Section 22119.2.
(f) The limitation that shall apply to the compensation for
performance of the activities identified in paragraphs (1) to (9),
inclusive, of subdivision (a), or subdivision (b), of Section 22119.5
by a member retired for service under this part either as an
employee of an employer, an employee of a third party, or as an
independent contractor, shall, in any one school year, be an amount
calculated by the board each July 1 equal to twenty-two thousand
dollars ($22,000) multiplied adjusted
by the percentage increase change in
the average compensation earnable salary
of active members of the Defined Benefit Program, as
determined by the system, from the 1998-99 fiscal year to the fiscal
year ending in the previous calendar year.
(g) If a member retired for service under this part earns
compensation for performing activities identified in paragraphs (1)
to (9), inclusive, of subdivision (a), or subdivision (b), of Section
22119.5 in excess of the limitation specified in subdivision (f), as
an employee of an employer, as an employee of a third party, or as
an independent contractor, within the California public school
system, and if that compensation is not exempt from that limitation
under subdivision (e) or any other provisions of law, the member's
retirement allowance shall be reduced by the amount of the excess
compensation. The amount of the reduction may be equal to the
monthly allowance payable but shall not exceed the amount of the
annual allowance payable under this part for the fiscal year in which
the excess compensation was earned.
(h) The amendments to this section enacted during the 1995-96
Regular Session shall be deemed to have become operative on July 1,
1996.
(i) This section shall be repealed on January 1, 2008, unless
later enacted legislation extends or deletes that date.
SEC. 14. Section 24214 of the Education Code, as amended by Section
21 of Chapter 859 of the Statutes of 2003, is amended to read:
24214. (a) A member retired for service under this part may
perform the activities identified in paragraphs (1) to (9),
inclusive, of subdivision (a), or subdivision (b), of Section 22119.5
as an employee of an employer, as an employee of a third party, or
as an independent contractor within the California public school
system, but the member may not make contributions `to the retirement
fund or accrue service credit based on compensation earned from that
service.
(b) The rate of pay for service performed by a member retired for
service under this part as an employee of the employer may not be
less than the minimum, nor exceed that paid by the employer to other
employees performing comparable duties.
(c) A member retired for service under this part may not be
required to reinstate for performing the activities identified in
paragraphs (1) to (9), inclusive, of subdivision (a), or subdivision
(b), of Section 22119.5, as an employee of an employer, as an
employee of a third party, or as an independent contractor within the
California public school system.
(d) A member retired for service under this part may earn
compensation for performing activities identified in paragraphs (1)
to (9), inclusive, of subdivision (a), or subdivision (b), of Section
22119.5 in any one school year up to the limitation specified in
subdivision (f) as an employee of an employer, as an employee of a
third party, or an independent contractor, within the California
public school system, without a reduction in his or her retirement
allowance.
(e) The postretirement compensation limitation provisions set
forth in this section are not applicable to compensation earned for
the performance of the activities described in subdivision (a) for
which the employer is not eligible to receive state apportionment or
to compensation that is not creditable pursuant to Section 22119.2.
(f) The limitation that shall apply to the compensation for
performance of the activities identified in paragraphs (1) to (9),
inclusive, of subdivision (a), or subdivision (b), of Section 22119.5
by a member retired for service under this part either as an
employee of an employer, an employee of a third party, or as an
independent contractor, shall, in any one school year, be an amount
calculated by the board each July 1 equal to twenty-two thousand
dollars ($22,000) multiplied adjusted
by the percentage increase change in
the average compensation earnable of active members of the Defined
Benefit Program, as determined by the system, from the 1998-99 fiscal
year to the fiscal year ending in the previous calendar year.
(g) If a member retired for service under this part earns
compensation for performing activities identified in paragraphs (1)
to (9), inclusive, of subdivision (a), or subdivision (b), of Section
22119.5 in excess of the limitation specified in subdivision (f), as
an employee of an employer, as an employee of a third party, or as
an independent contractor, within the California public school
system, the member's retirement allowance shall be reduced by the
amount of the excess compensation. 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 fiscal
year in which the excess compensation was earned.
(h) The language of this section derived from the amendments to
the section of this number added by Chapter 394 of the Statutes of
1995, enacted during the 1995-96 Regular Session, is deemed to have
become operative on July 1, 1996.
(i) This section shall become operative on January 1, 2008.
SEC. 15. 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 prior to January 1, 2011,
may elect, on a form prescribed by the system, to receive a lump-sum
payment and an actuarially reduced monthly benefit
allowance 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
amount by which (A) the monthly benefit
unmodified allowance payable to the member
pursuant to this chapter, and exceeds
(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
benefit unmodified allowance 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 unmodified allowance, pursuant to this chapter,
that shall be actuarially reduced to reflect the lump-sum amount paid
under subdivision (b). The actuarially reduced unmodified
allowance may be modified pursuant to Section 24300.
(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) An election pursuant to subdivision (a) may have no net
actuarial impact to the Defined Benefit Program. The board shall
adopt present value factors to establish a corresponding actuarially
reduced monthly allowance that result in no net actuarial impact to
the Defined Benefit Program. 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.
SEC. 16. Section 25000.9 of the Education Code is amended to read:
25000.9. For purposes of this chapter and Section 23300,
"nonmember spouse" means a member's spouse or former spouse ,
and also includes a member's registered domestic partner or former
registered domestic partner, who is being or has been awarded a
community property interest in the service credit, accumulated
retirement contributions, accumulated Defined Benefit Supplement
account balance, or benefits of the member under this part. A
nonmember spouse may not be considered a member based upon his or her
receipt of any of the following being awarded to the nonmember
spouse as a result of legal separation or ,
dissolution of marriage , or dissolution of domestic
partnership :
(a) A separate account of service credit and accumulated
retirement contributions, a retirement allowance, or an interest in
the member's retirement allowance under the Defined Benefit Program.
(b) A separate account based on the member's Defined Benefit
Supplement account balance, a retirement benefit, or an interest in
the member's retirement benefit under the Defined Benefit Supplement
Program.
SEC. 17. Section 26002.5 is added to the Education Code, to read:
26002.5. Except as excluded in Sections 26004 and 27406, any
reference to a "spouse" in this part includes a person who is the
registered domestic partner of a member, as established pursuant to
Section 297 or 299.2 of the Family Code.
SEC. 18. Section 26004 of the Education Code is amended to read:
26004. Notwithstanding any other provision of law:
(a) The benefits payable to any participant or beneficiary under
this part shall be subject to the limitations imposed by Section 415
of Title 26 of the United States Code.
(b) The amount of compensation that is taken into account in
computing benefits under this part for a plan year shall not exceed
the annual compensation limit applicable to that plan year in
accordance with Section 401(a)(17) of Title 26 of the United States
Code as that section read on the effective date of this section and
as that section may be amended after that date. The determination of
compensation for a 12-month period shall be subject to the annual
compensation limit in effect for the calendar year in which the
12-month period begins. In a determination of average compensation
over more than one 12-month period, the amount of compensation taken
into account for each 12-month period shall be subject to the
respective annual compensation limit applicable to that period.
(c) Distributions from the plan under this part shall be made in
accordance with 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 benefit payments that represent the entire interest of the
participant shall be as follows:
(1) In the case of a lump-sum distribution of a retirement
benefit, disability benefit, or termination benefit, 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 701/2 years or the calendar year in which the
participant terminates all employment subject to coverage by the
plan.
(2) In the case of a retirement benefit or disability benefit that
is to be paid in the form of an annuity, payment of the annuity
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 701/2 years or the calendar year in which the participant
terminates employment in all positions subject to coverage by the
plan, with the annuity to continue over the life of the participant
or the life of the participant and the participant's option
beneficiary, or over a period not to exceed the life expectancy of
the participant or the life expectancy of the participant and the
participant's option beneficiary.
(3) In the case of a death benefit, distributions shall commence
no later than the date provided in Section 27001.
(d) If a person becomes entitled to a distribution from the plan
under this part 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 from 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.
This subdivision does not apply to the surviving domestic
partner of a member, consistent with Section 402 of the Internal
Revenue Code.
(e) The amount of any benefit from the plan under this part
which that is determined on the basis
of actuarial assumptions shall be based on actuarial assumptions
adopted by the board pursuant to Section 26213 as a plan amendment
with respect to the Cash Balance Benefit Program and those
assumptions shall preclude employer discretion and comply with
Section 401(a)(25) of Title 26 of the United States Code.
SEC. 19. Section 26140 of the Education Code is amended to read:
26140. (a) "Spouse" means the person married to the
participant on the date the participant files a beneficiary
designation, or an application for a benefit, or on the date of the
participant's death.
(b) Except as excluded in Sections 26004 and 27406, "spouse" also
includes the person who is the registered domestic partner of the
participant, as established pursuant to Section 297 or 299.2 of the
Family Code, on the date the participant files a beneficiary
designation or an application for a benefit, or on the date of the
participant's death.
SEC. 20. Section 27400 of the Education Code is amended to read:
27400. (a) This chapter establishes the power of a
court in a dissolution of marriage or legal separation action with
respect to community property rights in benefits under this part and
defines the rights of nonparticipant spouses in the Cash Balance
Benefit Program.
(b) For purposes of this chapter, any reference to "dissolution of
marriage or legal separation" also includes the termination or
dissolution of a domestic partnership, nullity of a domestic
partnership, or the legal separation of the partners in a domestic
partnership, as provided in Section 299 of the Family Code.
SEC. 21. Section 27401 of the Education Code is amended to read:
27401. For purposes of this chapter, "nonparticipant spouse"
means the a participant's spouse or
former spouse , and also includes a participant's registered
domestic partner or former registered domestic partner, who is
being or has been awarded a community property interest in the
benefits determined by reference to the amounts credited to a
participant's employee and employer accounts or the participant's
annuity. A nonparticipant spouse who is awarded separate nominal
accounts is not a participant in the Cash Balance Benefit Program. A
nonparticipant spouse who receives or is awarded an interest in a
participant's annuity is not a participant in the Cash Balance
Benefit Program.
SEC. 22. Section 27406 of the Education Code is amended to read:
27406. The nonparticipant spouse who is awarded separate nominal
accounts with respect to the Cash Balance Benefit Program shall have
the right to a lump-sum distribution of amounts credited to the
account.
(a) The nonparticipant spouse shall file an application on a form
provided by the system to obtain the distribution.
(b) The distribution is effective when the system deposits in the
United States mail a warrant drawn in favor of the nonparticipant
spouse and addressed to the latest address for the nonparticipant
spouse on file with the system. If
(c) If the nonparticipant spouse has elected on a form
provided by the system to transfer all or a specified portion of the
accounts that are eligible for direct trustee-to-trustee transfer
under Section 401(a)(31) of Title 26 of the United States Code to the
trustee of a qualified plan under Section 402 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 a distribution
of the nonparticipant spouse's credit balance from the separate
nominal accounts. This subdivision shall not apply to a
nonparticipant domestic partner, consistent with Section 402 of the
Internal Revenue Code.
(c)
(d) The nonparticipant spouse is deemed to have permanently
waived all rights to an annuity when the distribution becomes
effective.
(d)
(e) The nonparticipant spouse may not cancel a distribution
after the distribution is effective.
(e)
(f) The nonparticipant spouse shall have no right to elect
to redeposit the distribution after the distribution is effective.
SEC. 23. 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 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 22711. The maximum amount of the service credit earned
may not exceed twelve calendar years. Any employee who serves as a
full-time officer of a public employee organization is not eligible
for disability benefits under the State Teachers' Retirement 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 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 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.
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.
SEC. 24. 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.