BILL NUMBER: AB 2233 CHAPTERED
BILL TEXT
CHAPTER 912
FILED WITH SECRETARY OF STATE SEPTEMBER 30, 2004
APPROVED BY GOVERNOR SEPTEMBER 29, 2004
PASSED THE ASSEMBLY AUGUST 25, 2004
PASSED THE SENATE AUGUST 24, 2004
AMENDED IN SENATE AUGUST 23, 2004
AMENDED IN SENATE AUGUST 17, 2004
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 22134, 22134.5, 22135, 22171, 22650,
22651, 22661, 22663, 22705.5, 22714, 23203, 23300, 23812, 24114,
24203.6, 24204, 24209.3, 24211, 24212, 24213, 24214, 25000.9, 25100,
25107, 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, 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 specifies the conditions that are required to be
met for a service retirement allowance to become effective under the
Defined Benefit Program of the State Teachers' Retirement Plan.
This bill would permit a member who files a retirement application
to change or cancel that application as long as the form is received
by the system no later than a specified date.
(5) Existing law establishes the service retirement allowance for
a member of the Defined Benefit Program of the State Teachers'
Retirement Plan who retires and reinstates or receives a disability
allowance, as specified. A service retirement calculated under those
provisions excludes certain types of service credit.
This bill would additionally exclude the purchase of redeposits of
contributions pursuant to specified provisions.
(6) Existing law governing the State Teachers' Retirement System
requires the Teachers' Retirement Board to establish a vendor
registration process by which information about tax deferred
investment products is made available to employees.
This bill would revise those provisions to specify, among other
things, that the term "broker-dealer" as used in those provisions
means broker-dealers who offer a proprietary 403(b) product, as
defined, or who charge fees that are otherwise not disclosed.
(7) 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.
(8) This bill would declare that any act that amends or repeals
any of the sections amended by this act shall prevail over this act.
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 22134 of the Education Code is amended to read:
22134. (a) "Final compensation" means the highest average annual
compensation earnable by a member during any period of three
consecutive school years while an active member of the Defined
Benefit Program or time during which he or she was not a member but
for which the member has received credit under the Defined Benefit
Program, except time that was so credited for service performed
outside this state prior to July 1, 1944. The last three consecutive
years of employment shall be used by the system in determining final
compensation unless designated to the contrary in writing by the
member.
(b) For purposes of this section, periods of service separated by
breaks in service may be aggregated to constitute a period of three
consecutive years, if the periods of service are consecutive except
for the breaks.
(c) The determination of final compensation of a member who has
concurrent membership in another retirement system pursuant to
Section 22115.2 shall take into consideration the compensation
earnable while a member of the other system, provided that all of the
following exist:
(1) The member was in state service or in the employment of a
local school district or a county superintendent of schools.
(2) Service under the other system was not performed during the
same pay period with service under the Defined Benefit Program.
(3) Retirement under the Defined Benefit Program is concurrent
with the member's retirement under the other system.
(d) The compensation earnable for the first position in which
California service was credited shall be used when additional
compensation earnable is required to accumulate three consecutive
years for the purpose of determining final compensation under Section
23805.
(e) If a member has received service credit for part-time service
performed prior to July 1, 1956, the member's final compensation
shall be adjusted for that service in excess of one year by the ratio
that part-time service bears to full-time service.
(f) The board may specify a different final compensation with
respect to disability allowances, disability retirement allowances,
family allowances, and children's portions of survivor benefit
allowances payable on and after January 1, 1978. The compensation
earnable for periods of part-time service shall be adjusted by the
ratio that part-time service bears to full-time service.
(g) The amendment of former Section 22127 made by Chapter 782 of
the Statutes of 1982 does not constitute a change in, but is
declaratory of, the existing law.
SEC. 3. Section 22134.5 of the Education Code is amended to read:
22134.5. (a) Notwithstanding Section 22134, "final compensation"
means the highest average annual compensation earnable by a member
during any period of 12 consecutive months while an active member of
the Defined Benefit Program or time during which he or she was not a
member but for which the member has received credit under the Defined
Benefit Program, except time that was so credited for service
performed outside this state prior to July 1, 1944. The last
consecutive 12-month period of employment shall be used by the system
in determining final compensation unless designated to the contrary
in writing by the member.
(b) For purposes of this section, periods of service separated by
breaks in service may be aggregated to constitute a period of 12
consecutive months, if the periods of service are consecutive except
for the breaks.
(c) The determination of final compensation of a member who has
concurrent membership in another retirement system pursuant to
Section 22115.2 shall take into consideration the compensation
earnable while a member of the other system, provided that all of the
following exist:
(1) The member was in state service or in the employment of a
local school district or a county superintendent of schools.
(2) Service under the other system was not performed during the
same pay period with service under the Defined Benefit Program.
(3) Retirement under the Defined Benefit Program is concurrent
with the member's retirement under the other system.
(d) If a member has received service credit for part-time service
performed prior to July 1, 1956, the member's final compensation
shall be adjusted for that service in excess of one year by the ratio
that part-time service bears to full-time service.
(e) The board may specify a different final compensation with
respect to disability allowances, disability retirement allowances,
family allowances, and children's portions of survivor benefit
allowances payable on and after January 1, 1978. The compensation
earnable for periods of part-time service shall be adjusted by the
ratio that part-time service bears to full-time service.
(f) This section shall only apply to a member who has 25 or more
years of credited service, excluding service credited pursuant to
Section 22714, 22714.5, 22715, 22717, or 22826, but including any
credited service that a court has ordered be awarded to a nonmember
spouse pursuant to Section 22652. This section also shall apply to a
nonmember spouse, if the member had at least 25 years of credited
service, excluding service credited pursuant to Section 22714,
22714.5, 22715, 22717, or 22826, on the date the parties separated,
as established in the judgment or court order pursuant to Section
22652.
SEC. 4. Section 22135 of the Education Code is amended to read:
22135. (a) Notwithstanding subdivisions (a) and (b) of Section
22134, "final compensation" means the highest average annual
compensation earnable by an active member who is a classroom teacher
who retires, becomes disabled, or dies, after June 30, 1990, during
any period of 12 consecutive months during his or her membership in
the plan's Defined Benefit Program. The last 12 consecutive months
of employment shall be used by the system in determining final
compensation unless designated to the contrary in writing by the
member.
(b) Section 22134, except subdivision (a) of that section, shall
apply to classroom teachers who retire after June 30, 1990, and any
statutory reference to Section 22134 or "final compensation" with
respect to a classroom teacher who retires, becomes disabled, or
dies, after June 30, 1990, shall be deemed to be a reference to this
section.
(c) As used in this section, "classroom teacher" means any of the
following:
(1) All teachers and substitute teachers in positions requiring
certification qualifications who spend, during the last 10 years of
their employment with the same employer which immediately precedes
their retirement, 60 percent or more of their contract time each year
providing direct instruction. For the purpose of determining
continuity of employment within the meaning of this subdivision, an
authorized leave of absence for sabbatical or illness or other
collectively bargained or employer-approved leaves shall not
constitute a break in service.
(2) Other certificated personnel who spend, during the last 10
years of their employment with the same employer that immediately
precedes their retirement, 60 percent or more of their contract time
each year providing direct services to pupils, including, but not
limited to, librarians, counselors, nurses, speech therapists,
resource specialists, audiologists, audiometrists, hygienists,
optometrists, psychologists, driver safety instructors, and personnel
on special assignment to perform school attendance and adjustment
services.
(d) As used in this section, "classroom teacher" does not include
any of the following:
(1) Certificated employees whose job descriptions require an
administrative credential.
(2) Certificated employees whose job descriptions include
responsibility for supervision of certificated staff.
(3) Certificated employees who serve as advisers, coordinators,
consultants, or developers or planners of curricula, instructional
materials, or programs, who spend, during the last 10 years of their
employment with the same employer that immediately precedes their
retirement, less than 60 percent of their contract time in direct
instruction.
(4) Certificated employees whose job descriptions require
provision of direct instruction or services, but who are functioning
in nonteaching assignments.
(5) Classified employees.
(e) This section shall apply only to teachers employed by an
employer that has, pursuant to Chapter 10.7 (commencing with Section
3540) of Division 4 of Title 1 of the Government Code, entered into a
written agreement with an exclusive representative, that makes this
section applicable to all of its classroom teachers, as defined in
subdivision (c).
(f) The written agreement shall include a mechanism to pay for all
increases in allowances provided for by this section through
employer contributions or employee contributions or both, which shall
be collected and retained by the employer in a trust fund to be used
solely and exclusively to pay the system for all increases in
allowances provided by this section and related administrative costs;
and a mechanism for disposition of the employee's contributions if
employment is terminated before retirement, and for the establishment
of a trust fund board. The trust fund board shall administer the
trust fund and shall be composed of an equal number of members
representing classroom teachers chosen by the bargaining agent and
the employer. If the employer agrees to pay the total cost of
increases in allowances, the establishment of a trust fund and a
trust fund board shall be optional to the employer. The employer,
within 30 days of receiving an invoice from the system, shall
reimburse the retirement fund the amount determined by the Teachers'
Retirement Board to be the actuarial equivalent of the difference
between the allowance the member or beneficiary receives pursuant to
this section and the allowance the member or beneficiary would have
received if the member's final compensation had been computed under
Section 22134 and the proportionate share of the cost to the plan's
Defined Benefit Program, as determined by the Teachers' Retirement
Board, of administering this section. The payment shall include the
cost of all increases in allowances provided for by this section for
all years of service credited to the member as of the benefit
effective date. Interest shall be charged at the regular interest
rate for any payment not received within 30 days of receipt of the
invoice. Payments not received within 30 days after receipt of the
invoice may be collected pursuant to Section 23007.
(g) Upon the execution of the agreement, the employer shall notify
all certificated employees of the agreement and any certificated
employee of the employer, who is a member of the Public Employees'
Retirement System pursuant to Section 22508, that he or she may,
within 60 days following the date of notification, elect to terminate
his or her membership in the Public Employees' Retirement System and
become a member of this plan's Defined Benefit Program. However,
only service credited under the Defined Benefit Program subsequent to
the date of that election shall be subject to this section.
(h) An employer that agrees to become subject to this section,
shall, on a form and within the timeframes prescribed by the system,
certify the applicability of this section to a member pursuant to the
criteria set forth in this section when a retirement, disability, or
family allowance becomes payable.
(i) For a nonmember spouse, final compensation shall be determined
pursuant to paragraph (2) of subdivision (c) of Section 22664. The
employer, within 30 days of receiving an invoice from the system,
shall reimburse the retirement fund pursuant to subdivision (f).
Interest shall be charged at the regular interest rate for payments
not received within the prescribed timeframe. Payments not received
within 30 days of invoicing may be collected pursuant to Section
23007.
SEC. 5. 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 either accidental,
or due to an illness, and the marriage took place 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.
(c) Except as excluded by Sections 22661 and 23812, "spouse"
shall also include 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. 6. 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. 7. 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.
(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. 8. 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.
(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.
(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.
(f) The nonmember spouse may not cancel a refund or lump-sum
payment under this part after it is effective.
(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.
(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. 9. 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. 10. 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. 11. 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. 12. 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. 13. 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.
(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 is not 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. 14. 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. 15. Section 24114 of the Education Code is amended to read:
24114. (a) A member receiving a disability retirement benefit
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 receiving a disability retirement benefit 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
receiving a disability retirement benefit 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 receiving a disability retirement benefit 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 receiving a disability retirement benefit under
this part who is participating in an approved rehabilitation program
pursuant to Section 24111.
(f) This section does not apply to a member receiving a disability
retirement benefit under this part who began receiving a disability
retirement allowance prior to October 16, 1992.
SEC. 16. Section 24203.6 of the Education Code is amended to read:
24203.6. (a) In addition to the amount otherwise payable pursuant
to Sections 24202.5, 24203, 24203.5, 24205, 24209, 24209.3, 24210,
24211, and 24212, a member who (1) retires for service on or after
January 1, 2001, (2) has, prior to January 1, 2011, 30 or more years
of credited service, excluding service credited pursuant to Sections
22714, 22714.5, 22715, 22717, 22717.5, and 22826 but including any
credited service that a court has ordered be awarded to a nonmember
spouse pursuant to Section 22652, and (3) is receiving an allowance
subject to Section 24203.5, shall receive a monthly increase in the
allowance, prior to any modification pursuant to Sections 24300 and
24309, in the amount identified in the following schedule for the
number of years of the member's credited service at the time of
retirement, excluding service credited pursuant to Sections 22714,
22714.5, 22715, 22717, 22717.5, and 22826 but including any credited
service that a court has ordered be awarded to a nonmember spouse
pursuant to Section 22652:
30 years of credited service .............. $200
31 years of credited service .............. $300
32 or more years of credited service ...... $400
(b) This section also shall apply to a nonmember spouse, if the
member is eligible for the allowance increase pursuant to subdivision
(a) upon his or her retirement for service and had at least 30 years
of credited service, excluding service credited pursuant to Sections
22714, 22714.5, 22715, 22717, 22717.5, and 22826, on the date the
parties separated, as established in the judgment or court order
pursuant to Section 22652 and the service credit of the member was
divided into separate accounts in the name of the member and the
nonmember spouse by a court pursuant to Section 22652. The amount
identified in the schedule in subdivision (a) and payable pursuant to
this section, that is based on the service credited during the
marriage, shall be divided and paid to the member and the nonmember
spouse proportionately according to the respective percentages of the
member's service credit that were allocated to the member and the
nonmember spouse in the court's order.
(c) The allowance increase provided under this section shall not
be subject to Sections 24415 and 24417, but shall be subject to
Section 22140.
SEC. 17. Section 24204 of the Education Code is amended to read:
24204. A service retirement allowance under this part shall
become effective upon any date designated by the member, provided all
of the following conditions are met:
(a) An application for service retirement allowance is filed on a
form provided by the system, that is executed no earlier than six
months before the effective date of retirement allowance.
(b) The effective date is later than the last day of creditable
service for which compensation is payable to the member.
(c) The effective date is no earlier than the first day of the
month in which the application is received at the system's office in
Sacramento.
(d) Either of the following conditions exists:
(1) The effective date is no earlier than one year following the
date on which the retirement allowance was terminated under Section
24208, or subdivision (a) of Section 24117.
(2) The effective date is no earlier than the date upon and
continuously after which the member is determined to the satisfaction
of the board to have been mentally incompetent.
(e) A member who files an application prior to the effective date
of retirement may change or cancel his or her retirement application,
as long as the form provided by the system is received in the system'
s office in Sacramento no later than the last day of the month in
which the retirement date is effective.
SEC. 18. Section 24209.3 of the Education Code is amended to read:
24209.3. (a) Notwithstanding subdivision (a) of Section 24209 and
subdivision (d) of Section 24204, and exclusive of any amounts
payable during the prior retirement for service pursuant to Section
22714, 22714.5, or 22715:
(1) A member who retired, other than pursuant to Section 24210,
24211, 24212, or 24213, and who reinstates and performs creditable
service, as defined in Section 22119.5, after the most recent
reinstatement, in an amount equal to two or more years of credited
service, shall, upon retirement for service on or after the effective
date of this section, receive a service retirement allowance equal
to the sum of the following:
(A) An amount calculated pursuant to this chapter based on
credited service performed prior to the most recent reinstatement,
using the member's age at the subsequent service retirement, from
which age shall be deducted the total time during which the member
was retired for service, and final compensation.
(B) An amount calculated pursuant to this chapter based on
credited service performed subsequent to the most recent
reinstatement, using the member's age at the subsequent service
retirement, and final compensation.
(2) A member who retired pursuant to Section 24210 and who
reinstates and performs creditable service, as defined in Section
22119.5, after the most recent reinstatement, in an amount equal to
two or more years of credited service, shall, upon retirement for
service on or after the effective date of this section, receive a
service retirement allowance equal to the sum of the following:
(A) An amount calculated pursuant to this chapter based on service
credit accrued prior to the effective date of the disability
retirement, using the member's age at the subsequent service
retirement, from which age shall be deducted the total time during
which the member was retired for service, and indexed final
compensation to the effective date of the initial service retirement.
(B) An amount calculated pursuant to this chapter based on the
service credit accrued after termination of the disability
retirement, using the member's age at the subsequent service
retirement, from which age shall be deducted the total time during
which the member was retired for service, and final compensation.
(C) An amount calculated pursuant to this chapter based on
credited service performed subsequent to the most recent
reinstatement, using the member's age at the subsequent service
retirement, and final compensation.
(3) A member who retired pursuant to Section 24211 and who
reinstates and performs creditable service, as defined in Section
22119.5, after the most recent reinstatement, in an amount equal to
two or more years of credited service, shall, upon retirement for
service on or after the effective date of this section, receive a
service retirement allowance equal to the sum of the following:
(A) The greater of (i) the disability allowance the member was
receiving immediately prior to termination of that allowance,
excluding the children's portion, or (ii) an amount calculated
pursuant to this chapter based on service credit accrued prior to the
effective date of the disability allowance, using the member's age
at the subsequent service retirement, from which age shall be
deducted the total time during which the member was retired for
service, and final compensation using compensation earnable or
projected final compensation or a combination of both.
(B) An amount equal to either of the following:
(i) For a member who was receiving a benefit pursuant to
subdivision (a) of Section 24211, the member's credited service at
the time of the retirement pursuant to Section 24211, excluding
service credited pursuant to Section 22717 or 22717.5 or Chapter 14
(commencing with Section 22800) or Chapter 14.2 (commencing with
Section 22820) or Chapter 19 (commencing with Section 23200).
(ii) For a member who was receiving a benefit pursuant to
subdivision (b) of Section 24211, the member's projected service,
excluding service credited pursuant to Section 22717 or 22717.5 or
Chapter 14 (commencing with Section 22800) or Chapter 14.2
(commencing with Section 22820) or Chapter 19 (commencing with
Section 23200).
(C) An amount calculated pursuant to this chapter based on
credited service performed subsequent to the most recent
reinstatement, using the member's age at the subsequent service
retirement, and final compensation using compensation earnable or
projected final compensation or a combination of both.
(D) An amount based on any service credited pursuant to Chapter 14
(commencing with Section 22800) or Chapter 14.2 (commencing with
Section 22820) or Chapter 19 (commencing with Section 23200) or, for
credited service performed during the most recent reinstatement,
Section 22714, 22714.5, 22715, 22717, or 22717.5, using the member's
age at the subsequent service retirement, from which age shall be
deducted the total time during which the member was retired for
service, and final compensation using compensation earnable, or
projected final compensation, or a combination of both.
(4) A member who retired pursuant to Section 24212 or 24213 and
who reinstates and performs creditable service, as defined in Section
22119.5, after the most recent reinstatement, in an amount equal to
two or more years of credited service, shall, upon retirement for
service on or after the effective date of this section, receive a
service retirement allowance equal to the sum of the following:
(A) An amount calculated pursuant to this chapter based on the
member's projected service credit, excluding service credited
pursuant to Section 22717, 22717.5, or Chapter 14 (commencing with
Section 22800) or Chapter 14.2 (commencing with Section 22820) or
Chapter 19 (commencing with Section 23200), using the member's age at
the subsequent service retirement, from which age shall be deducted
the total time during which the member was retired for service, and
final compensation using compensation earnable or projected final
compensation or a combination of both.
(B) An amount calculated pursuant to this chapter based on
credited service performed subsequent to the most recent
reinstatement, using the member's age at the subsequent service
retirement, and final compensation, using compensation earnable or
projected final compensation or a combination of both.
(C) An amount based on any service credited pursuant to Chapter 14
(commencing with Section 22800) or Chapter 14.2 (commencing with
Section 22820) or Chapter 19 (commencing with Section 23200) or, for
credited service performed during the most recent reinstatement,
Section 22714, 22714.5, 22715, 22717, or 22717.5, using the member's
age at the subsequent service retirement, from which age shall be
deducted the total time during which the member was retired for
service, and final compensation using compensation earnable, or
projected final compensation, or a combination of both.
(b) If the total amount of credited service, other than that
accrued pursuant to Sections 22714, 22714.5, 22715, 22717, 22717.5,
and 22826, is equal to or greater than the number of years required
to be eligible for an increased allowance pursuant to this chapter or
Section 22134.5, the amounts identified in this section shall be
calculated pursuant to the section authorizing the increased benefit.
(c) For members receiving an allowance pursuant to Section 24410.5
or 24410.6, the amount payable pursuant to this section shall not be
less than the amount payable to the member as of the effective date
of reinstatement.
(d) The amount payable pursuant to this section shall not be less
than the amount that would be payable to the member pursuant to
Section 24209.
(e) For purposes of determining an allowance increase pursuant to
Sections 24415 and 24417, the calendar year of retirement shall be
the year of the subsequent retirement if the final compensation used
to calculate the allowance pursuant to this section is higher than
the final compensation used to calculate the allowance for the prior
retirement.
(f) The allowance paid pursuant to this section to a member
receiving a lump-sum payment pursuant to Section 24221 shall be
actuarially reduced to reflect that lump-sum payment.
SEC. 19. Section 24211 of the Education Code is amended to read:
24211. When a member who has been granted a disability allowance
under this part after June 30, 1972, returns to employment subject to
coverage under the Defined Benefit Program and performs:
(a) Less than three years of creditable service after termination
of the disability allowance, the member shall receive a retirement
allowance which is the sum of the allowance calculated on service
credit accrued after the termination date of the disability
allowance, the age of the member on the last day of the month in
which the retirement allowance begins to accrue, and final
compensation using compensation earnable and projected final
compensation, plus the greater of either of the following:
(1) A service retirement allowance calculated on service credit
accrued as of the effective date of the disability allowance, the age
of the member on the last day of the month in which the retirement
allowance begins to accrue, and projected final compensation
excluding service credited pursuant to Sections 22717 and 22717.5 or
Chapter 14 (commencing with Section 22800) or Chapter 14.2
(commencing with Section 22820) or Chapter 19 (commencing with
Section 23200), to the termination date of the disability allowance.
(2) The disability allowance the member was receiving immediately
prior to termination of that allowance, excluding children's
portions.
(b) Three or more years of creditable service after termination of
the disability allowance, the member shall receive a retirement
allowance that is the greater of the following:
(1) A service retirement allowance calculated on all actual and
projected service excluding service credited pursuant to Sections
22717 and 22717.5 or Chapter 14 (commencing with Section 22800) or
Chapter 14.2 (commencing with Section 22820) or Chapter 19
(commencing with Section 23200), the age of the member on the last
day of the month in which the retirement allowance begins to accrue,
and final compensation using compensation earnable, or projected
final compensation, or a combination of both.
(2) The disability allowance the member was receiving immediately
prior to termination of that allowance, excluding children's
portions.
(c) The allowance shall be increased by an amount based on any
service credited pursuant to Sections 22714, 22714.5, 22715, 22717,
and 22717.5 or Chapter 14 (commencing with Section 22800) or Chapter
14.2 (commencing with Section 22820) or Chapter 19 (commencing with
Section 23200), and final compensation using compensation earnable,
or projected final compensation, or a combination of both.
(d) If the total amount of credited service, other than projected
service or service that accrued pursuant to Sections 22714, 22714.5,
22715, 22717, 22717.5, and 22826, is equal to or greater than 30
years, the amounts identified in subdivisions (a) and (b) shall be
calculated pursuant to Sections 24203.5 and 24203.6.
SEC. 20. Section 24212 of the Education Code is amended to read:
24212. (a) If a disability allowance granted under this part
after June 30, 1972, is terminated for reasons other than those
specified in Section 24213 and the member does not return to
employment subject to coverage under the Defined Benefit Program, the
member's service retirement allowance, when payable, shall be based
on projected service, excluding service credited pursuant to Sections
22717 and 22717.5 or Chapter 14 (commencing with Section 22800) or
Chapter 14.2 (commencing with Section 22820), projected final
compensation, and the age of the member on the last day of the month
in which the retirement allowance begins to accrue. The allowance
payable under this section, excluding annuities payable from
accumulated annuity deposit contributions, shall not be greater than
the terminated disability allowance excluding children's portions.
(b) The allowance shall be increased by an amount based on any
service credited pursuant to Sections 22714, 22714.5, 22715, 22717,
and 22717.5 or Chapter 14 (commencing with Section 22800) or Chapter
14.2 (commencing with Section 22820) or Chapter 19 (commencing with
Section 23200) and final compensation using compensation earnable, or
projected final compensation, or a combination of both.
SEC. 21. Section 24213 of the Education Code is amended to read:
24213. (a) When a member who has been granted a disability
allowance under this part after June 30, 1972, attains normal
retirement age, or at a later date when there is no dependent child,
the disability allowance shall be terminated and the member shall be
eligible for service retirement. The retirement allowance shall be
calculated on the projected final compensation and projected service
to normal retirement age, excluding service credited pursuant to
Section 22717 or Chapter 14 (commencing with Section 22800) or
Chapter 14.2 (commencing with Section 22820). The allowance payable
under this section, excluding annuities payable from accumulated
annuity deposit contributions, shall not be greater than the
terminated disability allowance. The allowance shall be increased by
an amount based on any service credited pursuant to Section 22714,
22714.5, 22715, or 22717 or Chapter 14 (commencing with Section
22800) or Chapter 14.2 (commencing with Section 22820) or Chapter 19
(commencing with Section 23200) and projected final compensation to
normal retirement age.
(b) Upon retirement, the member may elect to modify the service
retirement allowance payable in accordance with any option provided
under this part.
SEC. 22. 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) adjusted by the percentage 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, 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. 23. 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) adjusted by the percentage 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. 24. 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, 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. 25. Section 25100 of the Education Code is amended to read:
25100. (a) The board shall establish a vendor registration
process through which information about tax-deferred retirement
investment products as described in Section 403(b) of the Internal
Revenue Code of 1986 shall be made available for consideration by
public employees of all local school districts, community college
districts, and county offices of education.
(b) For the purposes of this chapter, "403(b) product or 403(b)
products" means tax-deferred retirement investment products as
described in Section 403(b) of the Internal Revenue Code of 1986, and
its subsequent amendments, and complying with applicable California
insurance laws, and federal and California securities laws and rules
as applied by appropriate regulatory entities.
(c) For the purposes of this chapter, "vendor" means a public
retirement system, broker-dealer, registered investment company,
nonbank custodian, or life insurance company qualified to do business
in California that provides 403(b) products. "Vendor" does not
include individual registered representatives, brokers, financial
planners, or agents. "Nonbank custodian" means a fund custodian,
other than a bank, that meets the criteria of a trustee specified in
Section 408(a)(2) of the Internal Revenue Code. "Broker-dealer"
means only those broker-dealers who offer a proprietary 403(b)
product or who charge fees that are otherwise not disclosed.
SEC. 26. Section 25107 of the Education Code is amended to read:
25107. A vendor may not charge a fee associated with a registered
403(b) product that is not disclosed, pursuant to Section 25101.
SEC. 27. 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. 28. 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 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. 29. 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. 30. 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. 31. Section 27401 of the Education Code is amended to read:
27401. For purposes of this chapter, "nonparticipant spouse"
means 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. 32. 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.
(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.
(d) The nonparticipant spouse is deemed to have permanently waived
all rights to an annuity when the distribution becomes effective.
(e) The nonparticipant spouse may not cancel a distribution after
the distribution is effective.
(f) The nonparticipant spouse shall have no right to elect to
redeposit the distribution after the distribution is effective.
SEC. 33. 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. 34. 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.