BILL NUMBER: SB 581 ENROLLED
BILL TEXT
PASSED THE SENATE SEPTEMBER 5, 2007
PASSED THE ASSEMBLY SEPTEMBER 4, 2007
AMENDED IN ASSEMBLY AUGUST 30, 2007
AMENDED IN ASSEMBLY JUNE 11, 2007
INTRODUCED BY Senator Wiggins
(Coauthor: Senator Ducheny)
(Coauthors: Assembly Members Berg, Berryhill, Davis, Dymally,
Evans, Jeffries, and Keene)
FEBRUARY 22, 2007
An act to add Section 16641.5 to, to add Article 7 (commencing
with Section 50980) to Chapter 4.5 of Part 1 of Division 1 of Title 5
of, and to repeal and add Chapter 4.5 (commencing with Section
50950) of Part 1 of Division 1 of Title 5 of, the Government Code,
relating to firefighters.
LEGISLATIVE COUNSEL'S DIGEST
SB 581, Wiggins. Firefighters: volunteer firefighters length of
service awards.
(1) Existing law establishes the Volunteer Firefighters Length of
Service Award Act and authorizes local agencies with regularly
organized fire departments to contract with the Board of
Administration of the Public Employees' Retirement System to make the
volunteer firefighters of those local agencies members of the
service award system. Under existing law, a volunteer firefighter
subject to the service award system is entitled to an award upon
attaining 60 years of age and accruing a minimum of 10 years of
length of service award credit, and not to exceed 20 years of length
of service award credit. Under existing law, all moneys received
pursuant to these provisions are deposited in the Volunteer
Firefighters Length of Service Award Fund, a continuously
appropriated fund in the State Treasury.
This bill would repeal these provisions, effective March 1, 2008,
and instead authorize those local agencies with regularly organized
fire departments to contract with the board of the California State
Fire Employees Welfare Benefit Corporation to make the volunteer
firefighters of those local agencies members of the service award
system. The bill would require that board to maintain a plan pursuant
to specified provisions of the Internal Revenue Code and to select a
financial institution or other qualified entity to act as trustee
and establish a trust for the award system, as specified. The bill
would provide that the representatives on the board administer the
award system subject to specified fiduciary duties and for the
exclusive purpose of providing benefits to members of the award
system. The bill would also require the board to adopt rules and
regulations to administer the award system, including, but not
limited to, eligibility requirements for membership in the award
system, requirements for a member to receive an award, and the amount
of an award payable under the act.
This bill would further require a volunteer firefighter who is a
member of the award system and the members of the qualifications
review commission, as specified, to certify, under penalty of
perjury, that the volunteer firefighter has actively participated in
specified fire department activities. By creating a new crime, the
bill would create a state-mandated local program. The bill would also
require the Board of Administration of the Public Employees'
Retirement System, on or before January 31, 2008, to divulge and
transfer specified data and files regarding the award system to the
board of the California State Fire Employees Welfare Benefit
Corporation. The bill would require the Board of Administration of
the Public Employees' Retirement System to terminate the award
system, as specified, if the transfer of the award system is not
completed on or before March 1, 2008.
(2) Existing law requires the state to indemnify, from the General
Fund, and hold harmless the present, former, and future board
members, officers, and employees of, and investment managers under
contract with, the Board of Administration of the Public Employees'
Retirement System by reason of any decision to restrict, reduce, or
eliminate specified investments.
This bill would require the state to indemnify, from the General
Fund, and hold harmless the present, former, and future board
members, officers, and employees of the Board of Administration of
the Public Employees' Retirement System as a result of the transfer
of the award system to the board of the California State Fire
Employees Welfare Benefit Corporation.
(3) The California Constitution requires the state to reimburse
local agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 16641.5 is added to the Government Code, to
read:
16641.5. The Public Employees' Retirement System, as a public
entity, and the present, future, and former board members of the
Public Employees' Retirement System, jointly and individually, and
state officers and employees, shall be indemnified from the General
Fund and held harmless by the State of California from all claims,
demands, suits, actions, damages, judgments, costs, charges, and
expenses, including, but not limited to, court costs and attorney's
fees, and against all liability, losses, and damages of any nature
whatsoever that these present, future, or former board members,
officers, and employees shall or may at any time sustain as a result
of the transfer of the Volunteer Firefighters Length of Service Award
System as described in Chapter 4.5 (commencing with Section 50950).
SEC. 2. Chapter 4.5 (commencing with Section 50950) is added to
Part 1 of Division 1 of Title 5 of the Government Code, to read:
CHAPTER 4.5. VOLUNTEER FIREFIGHTERS LENGTH OF SERVICE AWARD
ACT
Article 1. General Provisions
50950. The Legislature finds and declares all of the following:
(a) The Volunteer Firefighters Length of Service Award System is
not a retirement system but an incentive program for volunteer
firefighters.
(b) The purpose of the award system can be achieved more
efficiently and at a lower cost than the current program by
transferring the award system and responsibility for administering
that system from the Board of Administration of the Public Employees'
Retirement System to the board of the California State Fire
Employees Welfare Benefit Corporation.
(c) On and after the date of the transfer or termination of the
award system, the Board of Administration of the Public Employees'
Retirement System shall have no responsibility to administer the
award system and shall take no action related to past, present, or
future obligations of administering the system. On and after the date
of the transfer or termination of the award system, the Board of
Administration of the Public Employees' Retirement System shall have
no liability related to the administration of the award system.
(d) Because trust fund moneys in the award system are to be used
for the exclusive benefit of the participants in the award system,
the Board of Administration of the Public Employees' Retirement
System shall not pay or transfer any trust fund moneys related to any
claims, demands, actions, damages, judgments, costs, charges, and
expenses, including, but not limited to, court costs and attorney's
fees, regarding claims arising out of or incurred as a result of the
transfer of the award system. However, nothing in this chapter shall
prevent the Board of Administration of the Public Employees'
Retirement System from charging and receiving administrative fees in
connection with transferring the administration of the award system
from the Board of Administration of the Public Employees' Retirement
System to the board of the California State Fire Employees Welfare
Benefit Corporation.
(e) It is the intent of the Legislature that the Board of
Administration of the Public Employees' Retirement System and the
board of the California State Fire Employees Welfare Benefit
Corporation work cooperatively with each other to transfer the
administration of the award system and establish systems and accounts
necessary to transfer participant information, assets, and
liabilities regarding the award system.
(f) The purpose of this chapter is to provide cities, counties,
cities and counties, or districts, that have fire departments with
volunteer firefighting members, the opportunity to offer these
members an award for life as an incentive. Nothing contained in this
chapter shall be deemed to supersede the provisions of existing state
law and the charters, ordinances, and rules of local public agencies
that establish and regulate the activities of these fire
departments. This chapter is intended, instead, to strengthen these
departments through the creation of an incentive for the volunteer to
respond to emergency calls and attend official department training
drills and meetings. It is the further intention of this chapter to
provide a means for local communities to bestow fitting reward and
recognition for long and faithful volunteer service.
50951. (a) This chapter establishes the Volunteer Firefighters
Length of Service Award System and may be cited as the Volunteer
Firefighters Length of Service Award Act.
(b) Notwithstanding any other contrary law, enrollment for an
award shall not be construed as a retirement, the receipt of an award
shall not be construed as the receipt of a retirement allowance or
benefit, and service credited under the Volunteer Firefighters Length
of Service Award System shall not be construed as service credited
to a retirement system for purposes of duplicating service credit or
benefits in other public retirement systems.
50952. For the purposes of this chapter, unless the context
otherwise requires, the definitions set forth below shall mean the
following:
(a) "Actuarial interest rate" means the interest rate fixed by the
board for purposes of actuarial valuation of the assets and
liabilities of the award system.
(b) "Annual interest rate" means the interest rate fixed by the
board for purposes of crediting interest.
(c) "Award" means monthly payments for life derived from
contributions by a department.
(d) "Award recipient" means a former member who satisfied all the
requirements as determined by the board to be eligible to receive an
award, and is receiving an award.
(e) "Award system" means the Volunteer Firefighters Length of
Service Award System established by this chapter.
(f) "Board" means the board of the California State Fire Employees
Welfare Benefit Corporation.
(g) "Certified prior service credit" means credit for service
performed prior to the contract operative date as certified by a
qualifications review commission. That prior service shall be
credited in the award system to the extent that prior service
qualifies as certified service credit pursuant to the rules and
regulations established by the board.
(h) "Certified service credit" means credit certified pursuant to
Section 50960 for services rendered by a member.
(i) "Contract operative date" means the first day of the month
next following the date on which the contract becomes effective.
(j) "Custodian of the fund" means a financial institution or other
entity that qualifies under the laws of this state to act as a
trustee of and establish a trust described in Internal Revenue
Service Revenue Procedure 92-64.
(k) "Department" means any of the following:
(1) A regularly organized fire department of a city, county, city
and county, or district having official recognition of the government
of the city, county, city and county, or district in which the
department is located.
(2) A regularly organized fire department of an unincorporated
town.
(l) "Fund" means an account or trust described in Internal Revenue
Service Revenue Procedure 92-64, which is maintained by the
custodian of the fund.
(m) "Member" means a volunteer of a department, the governing body
of which has contracted with the board under this chapter, and who
has been certified by a qualifications review commission as having
satisfied all the requirements for membership as set established by
the board. Membership, once established, continues indefinitely until
the award system is terminated and the funds disbursed pursuant to
50974.
(n) "Service credit" means the aggregate of certified service
credit.
(o) "Service year" means the period beginning July 1 and ending
June 30 of the following year.
(p) "Volunteer" means a person registered as a volunteer member of
a regularly organized fire department as defined in subdivision (k).
Article 2. Administration, Award System, and Membership
50953. (a) The award system shall be administered by the board
and the board shall comply with the following requirements:
(1) The board shall maintain a plan as described in Section 457(e)
(11) of Title 26 of the United States Code.
(2) The representatives on the board shall be elected.
(3) The representatives on the board shall administer the award
system with the reasonable care, skill, prudence, and diligence under
the circumstances then prevailing that a prudent person acting in a
like capacity and familiar with the award system would use in the
conduct of an enterprise of a like character and with like aims.
(4) The representatives on the board shall be subject to the
prudent investor standard with regard to the fund.
(5) The award system shall be administered for the exclusive
purpose of providing benefits to members of the award system.
(6) The board shall select a custodian of the fund, as described
in subdivision (j) of Section 50952.
(b) Notwithstanding subdivision (a), the assets of the fund
attributable to the benefit of registered volunteers of a department
are subject to the claims of creditors of the department in the case
of the insolvency of the department. The assets of the fund that are
not attributable to the benefits of registered volunteers of an
insolvent department are not subject to the claims of the creditors
of the insolvent department.
50954. (a) The board shall adopt rules and regulations to
administer the award system, including, but not limited to, all of
the following:
(1) Eligibility requirements for a member to receive an award,
including, but not limited to, minimum age and minimum years of
certified service credit.
(2) Eligibility requirements for a member to include certified
prior service credit as certified service credit in calculating the
amount of his or her award or to qualify for an award.
(3) The amount of an award payable under this chapter and any
cost-of-living adjustments or supplemental payments based upon that
award.
(4) Eligibility requirements for membership in the award system.
(5) The maximum years of certified service credit a member may
accrue under the award system.
(6) Other rules and regulations that the board determines are
appropriate to administer this chapter.
(b) In addition to those powers and duties, the board shall
determine if participation in the award system is adequate to ensure
that sufficient funds will be available for the payment of awards on
an actuarial reserve basis before any awards are paid. If the board
determines that participation in the award system is inadequate to
assure the financial success of the system, the board may terminate
the award system pursuant to Section 50974 or may amend the award
system pursuant to the rules and regulations of the board.
50955. (a) The board shall, from time to time, determine and fix
the annual interest rate and actuarial interest rate.
(b) The board shall keep in convenient form the data necessary for
the actuarial valuation of the award system. The board shall, at
least quadrennially, cause to be made an actuarial investigation into
the mortality and service experience of members and persons
receiving awards and an actuarial valuation of the assets and
liabilities of the award system.
(c) When there is insufficient data upon which to establish
mortality rates or other actuarial assumptions required to evaluate
the obligations of the award system, the board may adopt appropriate
assumptions that, upon the advice and recommendation of the actuary,
are necessary.
50956. (a) On the basis of investigation and valuation, the board
shall adopt the mortality, service, and other tables as it deems
necessary, and shall make changes in the contributions required from
contracting departments as the board considers appropriate in order
to assure the actuarial soundness of this award system.
(b) The board shall credit all contributions of departments in the
fund with interest at the annual interest rate compounded at each
June 30.
(c) Data filed by a member or department with the board is
confidential, and no individual record shall be divulged by an
official or employee having access to that data to a person other
than the member to whom the information relates or his or her
authorized representative, or the department that employs the member.
That information shall be used by the board for the sole purpose of
carrying into effect the provisions of this chapter.
(d) Each volunteer member and department shall file with the board
the information and evidence as may be required by the board in
administration of this award system.
50957. The custodian of the fund shall be subject to the
exclusive control of the board to administer and invest the assets of
the fund. The assets in the fund shall be used to pay the costs of
administration and for the payment of awards under this chapter.
Article 3. Service Credit and Contributions
50958. Only members may accumulate service credit in the award
system. A volunteer becomes a member when he or she satisfies the
minimum requirements for membership, as established by the board, and
the minimum service requirements as certified by a qualifications
review commission. Membership shall terminate on the day prior to the
effective date of an award pursuant to Section 50962.
50959. (a) The award system shall be funded by contributions paid
by contracting departments and income from the fund. The award
system is a noncontributory system, and no contributions shall be
required from members of the award system.
(b) As determined by actuarial valuation reported to the
contracting department by the award system, each contracting
department shall make contributions annually, not later than October
1 of each year, sufficient to meet the prescribed amount with respect
to volunteers of the contracting department, in accordance with the
conditions provided in its contract under the award system.
(c) Contributions of all contracting departments shall be applied
by the board during each fiscal year to meet the obligations of all
departments collectively, pursuant to the following order:
(1) In an amount equal to the liabilities accruing on account of
awards payable on account of current service.
(2) The balance of contributions on any other liability incurred
under this chapter.
50960. (a) Only those volunteers who have been certified by their
contracting department as having satisfactorily completed a service
year shall be credited with current service for that year. A member
is not required to qualify in consecutive years.
(b) Members of departments contracting on or after the effective
date of this chapter may initially be credited with a full service
year if the board authorizes credit for that service and the member
and his or her department satisfy the other requirements established
by the board, including, but not limited to, certification by the
department's qualifications review commission.
(c) A satisfactory service year credit shall be determined by a
member's active participation in all of the following fire department
activities.
(1) Training drills.
(2) Responses to emergency calls.
(3) Attendance at official department and association meetings.
(d) Contracting departments shall maintain adequate records to
show that a credited member was a participating member of the
department during the year of certification. The records may include,
but are not limited to, the following:
(1) Department run logs.
(2) Department training records.
(3) Certificates of training.
(4) Records of exposures to hazardous products.
(5) Minutes of departmental or association meetings.
50961. (a) The governing body of each contracting department
shall establish a qualifications review commission that shall include
the fire chief, one member of the governing body appointed by the
governing body, and one volunteer elected by the volunteers employed
by the contracting department.
(b) The qualifications review commission shall review the list of
department members each year, and prior to October 1 of each year
shall certify to the board those volunteers who have qualified.
(c) In no event shall a member be credited with more than the
maximum number of years of service allowed in the award system, as
established by the rules and regulations of the board.
(d) With respect to each contracting department that provides
benefits for prior service credit, the qualifications review
commission shall promulgate and publish guidelines for computing
prior service credit. The guidelines shall require the prior service
credit to be verified and certified and, in the event that there are
no records in existence, the members of the commission and the
volunteer shall sign an affidavit certifying that the prior service
met the criteria prescribed in Section 50960. The affidavit shall be
signed under penalty of perjury. Thereafter, the qualifications
review commission shall certify to the board certified prior service
credit that has been earned by each member.
50962. When the member's application for an award is received by
the board, an award shall be granted to accrue and become effective
pursuant to the terms, conditions, and eligibility requirements
established by the board.
50963. The board shall determine the terms, conditions, and
eligibility requirements for all of the following:
(a) The amount of an award payable under the award system.
(b) If a member is entitled to a cost-of-living adjustment and the
amount of that cost-of-living adjustment.
(c) If a member is entitled to receive an award and the amounts of
supplemental payments based upon that award.
(d) Any death benefits payable to a member's designated
beneficiary or the estate of the member.
(e) All other benefits authorized by the board under this chapter.
Article 4. Contract Provisions
50964. (a) Except as described in subdivision (b), a department
may participate in and make all of its volunteers members of the
award system by a contract entered into between the governing body of
the department and the board pursuant to this chapter.
(b) The board may prohibit a new contract with or may establish
terms and conditions regarding a new contract for a department that
has previously terminated a contract for participation under this
chapter.
50965. When the governing body of a department desires to
consider participation in the award system, the governing body shall
ask the board for a quotation of the approximate contribution to the
award system that would be required by the department for
participation in the award system.
50966. An employee organization, recognized under the provisions
of appropriate authority, may request the governing body of the
department to ask the board for a quotation of the approximate
contribution to the award system that would be required of the
department for participation in the award system, and if the employee
organization is willing to pay for the cost of that quotation, the
department shall make the request. The board shall furnish copies of
the quotation to both the department and the employee organization.
50967. On request of the board, the department shall furnish the
data concerning its volunteers as the board requires to make the
necessary valuations and investigations into the experience among the
volunteers.
50968. The approximate contribution quoted by the board and the
actual contribution to be made if a contract results shall be
determined by actuarial valuations of the future service liability
under the award system, on account of the volunteers involved in the
computation, and in consideration of other circumstances that may be
adopted by the board, upon recommendation of the actuary.
50969. The approximate and actual contributions payable by a
contracting department shall be similar to premiums under insurance
policies. The approximate contribution quoted by the board to the
department is subject to the contingency that the actual contribution
certified by the board after the approval of a contract may differ
from the approximate contribution because of any of the following:
(a) Time elapsed between the quotation and operative date of the
contract.
(b) Any changes in the facts or assumptions upon which the
quotation was based.
50970. (a) Approval of the contract by the governing body of the
department shall be by resolution or by any other means permitted by
law.
(b) The board shall inform the governing body of the projected
costs of the program.
50971. Errors in a contract may be corrected through amendments
approved by the adoption of suitable resolutions by the contracting
parties. All contract amendments shall be made in the same manner as
prescribed for the approval of the initial contract.
Article 5. Termination and Limitations
50972. The contract may be terminated by the governing body of a
contracting department by resolution or by any other means permitted
by law. All liability of the department with respect to its volunteer
members of the award system shall cease. All moneys deposited in the
fund shall be held for the continued payment of previously granted
awards and the costs of administration.
50973. The board may provide that an award under this chapter
shall not be payable, or begin to accrue, until the board
establishes, by appropriate resolution, that the fund contains
sufficient net assets to make the payments provided by this chapter
based upon an actuarial reserve basis.
50974. Upon termination of the award system, assets in the fund
shall be disbursed in the following order:
(a) An amount sufficient to pay awards previously granted shall be
retained by the board.
(b) An amount sufficient to pay reasonable administrative expenses
shall be retained by the board.
(c) From any balance in the fund after the above amounts have been
retained or disbursed, each department's accumulated contributions,
less a proportionate share of the amount retained for reasonable
administrative expenses, less the amount retained to pay awards of
that department's volunteers, shall be refunded to the department.
Article 6. Indemnity
50975. The Public Employees' Retirement System, as a public
entity, and the present, future, and former board members of the
Public Employees' Retirement System, jointly and individually, and
state officers and employees, shall be indemnified from the General
Fund as described in Section 16641.5 for all claims, demands, suits,
actions, damages, judgments, costs, charges, and expenses as a result
of the transfer of the award system from the Board of Administration
of the Public Employees' Retirement System to the board of the
California State Fire Employees Welfare Benefit Corporation.
50976. (a) The Board of Administration of the Public Employees'
Retirement System shall not be liable for any action or failure to
act by the board of the California State Fire Employees Welfare
Benefit Corporation. Upon transfer of the award system, the board of
the California State Fire Employees Welfare Benefit Corporation shall
assume all responsibilities and liabilities related to the award
system.
(b) As of the date of the transfer or termination of the award
system, the Board of Administration of the Public Employees'
Retirement System shall have no liability or responsibility for the
administration of the award system.
Article 7. Termination of the Award System by the Public
Employees' Retirement System
50977. If the transfer of the Volunteer Firefighters Length of
Service Award System from the Board of Administration of the Public
Employees' Retirement System to the board of the California State
Fire Employees Welfare Benefit Corporation is not completed on or
before March 1, 2008, the Board of Administration of the Public
Employees' Retirement System shall terminate the award system and
disburse the assets in the award system in the following order of
priority:
(a) An amount sufficient to pay reasonable administrative expenses
shall be retained by the Board of Administration of the Public
Employees' Retirement System.
(b) (1) Except as described in paragraph (2), an amount sufficient
to pay current award recipients or members and former members who
have satisfied, on or before March 1, 2008, all the requirements to
be eligible to receive an award, a one-time lump-sum payment in an
amount equal to the actuarial present value of the monthly benefit
paid to an award recipient. This amount to be paid shall be in lieu
of an ongoing monthly benefit previously provided by the Board of
Administration of the Public Employees' Retirement System pursuant to
Chapter 4.5 (commencing with Section 50950) of Part 1 of Division 1
of Title 5, as added by Chapter 1145 of the Statutes of 1979, and as
that chapter read on December 31, 2007.
(2) If the award system does not contain assets sufficient to pay
the amounts described in paragraph (1), the current award recipients
or members and former members shall be paid a pro rata share of the
remaining award system assets. The pro rata share for a current award
recipient, member, or former member described in paragraph (1) shall
be calculated as a ratio of the amount calculated for an individual
payment under paragraph (1) as that amount bears to the total of all
payments under paragraph (1).
(c) (1) Except as described in paragraph (2), if a member has
earned service credit necessary to receive a service award but the
member has not attained 60 years of age on or before March 1, 2008,
he or she shall be paid a one-time lump-sum payment in an amount
equal to the actuarial present value of the monthly benefit that
would have been paid to an award recipient at 60 years of age. This
amount to be paid shall be in lieu of an ongoing monthly benefit
previously provided by the Board of Administration of the Public
Employees' Retirement System pursuant to Chapter 4.5 (commencing with
Section 50950) of Part 1 of Division 1 of Title 5, as added by
Chapter 1145 of the Statutes of 1979, and as that chapter read on
December 31, 2007.
(2) If the award system does not contain assets sufficient to pay
the amounts described in paragraph (1), a member described in
paragraph (1) shall be paid a pro rata share of the remaining award
system assets. The pro rata share for that member shall be calculated
as a ratio of the amount calculated for an individual payment under
paragraph (1) as that amount bears to the total of all payments under
paragraph (1).
(d) From any
balance of the assets after the amounts described in subdivisions (a)
to (c), inclusive, each department shall receive a pro rata share of
the remaining award system assets. The pro rata share for each
department shall be calculated as a ratio of the accumulated
contributions of that department, less the distributions made to pay
the awards of that department's volunteers as described in this
section, as that amount bears to the total of all payments under this
subdivision.
50978. For purposes of this chapter, if the Board of
Administration of the Public Employees' Retirement System transfers
the data and files that are necessary to effect the transfer of and
relate to members and beneficiaries who participate in the award
system to the board of the California State Fire Employees Welfare
Benefit Corporation, the transfer of the award system shall be deemed
complete on the date that the Board of Administration of the Public
Employees' Retirement System transfers the assets of the award system
to the board of the California State Fire Employees Welfare Benefit
Corporation.
50979. This chapter shall become operative on March 1, 2008.
SEC. 3. Article 7 (commencing with Section 50980) is added to
Chapter 4.5 of Part 1 of Division 1 of Title 5 of the Government
Code, as added by Chapter 1145 of the Statutes of 1979, to read:
Article 7. Transfer of the Award System
50980. (a) On or before January 31, 2008, the Board of
Administration of the Public Employees' Retirement System shall do
both of the following:
(1) Notwithstanding Section 20230, divulge and transfer to the
board of the California State Fire Employees Welfare Benefit
Corporation the data and files of the Volunteer Firefighters Length
of Service Award System that relate to members or beneficiaries who
participate in the award system.
(2) Divulge and transfer data and files that are necessary to
effect the transfer of the administration of the Volunteer
Firefighters Length of Service Award System from the Board of
Administration of the Public Employees' Retirement System to the
board of the California State Fire Employees Welfare Benefit
Corporation.
(b) On or before March 1, 2008, the Board of Administration of the
Public Employees' Retirement System and the board of the California
State Fire Employees Welfare Benefit Corporation shall take all steps
necessary to transfer the award system including, but not limited
to, all of the following:
(1) The board of the California State Fire Employees Welfare
Benefit Corporation shall select a custodian of a fund for the
transfer of funds pursuant to Section 50981 from the Board of
Administration of the Public Employees' Retirement System and ensure
that this custodian is available to establish an account or trust
described in Internal Revenue Service Revenue Procedure 92-64 to
receive those funds.
(2) Complete the transfer of the assets and liabilities of the
award system as described in Section 50981.
(3) The Board of Administration of the Public Employees'
Retirement System or the board of the California State Fire Employees
Welfare Benefit Corporation shall provide written notice of the
transfer of the award system and when the transfer will occur to
award recipients and departments that participate in the award
system. The notice described in this paragraph shall include, but is
not limited to, the contact information for the board of the
California State Fire Employees Welfare Benefit Corporation, and
information that the Board of Administration of the Public Employees'
Retirement System will no longer have the responsibility to
administer the award system.
(4) In addition to the notice described in paragraph (3), the
board of the California State Fire Employees Welfare Benefit
Corporation shall send written notice to award recipients and
departments that participate in the award system regarding the
revised rules, regulations, and procedures for the administration of
the award system.
(5) The departments that participate in the award system shall
send written notice to their volunteers informing them of the
information described in paragraphs (3) and (4).
(6) The board of the California State Fire Employees Welfare
Benefit Corporation shall establish administrative systems and
accounts necessary to receive participant information, assets, and
liabilities that will be transferred by the Board of Administration
of the Public Employees' Retirement System.
(c) The transfer of the award system shall be deemed complete as
of the date described in Section 50985.
50981. (a) On or before March 1, 2008, the Board of
Administration of the Public Employees' Retirement System shall
transfer any assets held for the benefit of the award system,
including, but not limited to, cash and securities, to the custodian
of a fund described in Section 50980.
(b) The Board of Administration of the Public Employees'
Retirement System may only deduct from the assets described in
subdivision (a) award benefit payments and reasonable administrative
expenses to cover the period up through the date of the transfer.
(c) On or before March 1, 2008, the Board of Administration of the
Public Employees' Retirement System shall notify and send any
documents related to any liabilities of the award system, including,
but not limited to, claims, demands, actions, damages, judgments,
costs, charges, expenses, or obligations, to the board of the
California State Fire Employees Welfare Benefit Corporation.
50982. (a) In order to expedite the transfer of the award system
from the Board of Administration of the Public Employees' Retirement
System to the board of the California State Fire Employees Welfare
Benefit Corporation, the board of the California State Fire Employees
Welfare Benefit Corporation shall, to the extent necessary to
transfer the award system, and prior to March 1, 2008, comply with
the following requirements:
(1) The board of the California State Fire Employees Welfare
Benefit Corporation shall maintain a plan as described in Section 457
(e)(11) of Title 26 of the United States Code.
(2) The representatives on the board of the California State Fire
Employees Welfare Benefit Corporation shall be elected.
(3) The representatives on the board of the California State Fire
Employees Welfare Benefit Corporation shall administer any funds with
the reasonable care, skill, prudence, and diligence under the
circumstances then prevailing that a prudent person acting in a like
capacity would use in the conduct of an enterprise of a like
character and with like aims.
(4) The representatives on the board of the California State Fire
Employees Welfare Benefit Corporation shall be subject to the prudent
investor standard with regard to any funds.
(5) Any funds shall be administered for the exclusive benefit of
members of the award system.
(6) The board of the California State Fire Employees Welfare
Benefit Corporation shall select a financial institution or other
entity that qualifies under the laws of this state to act as a
trustee of and establish a trust described in Internal Revenue
Service Revenue Procedure 92-64.
(b) The board of the California State Fire Employees Welfare
Benefit Corporation shall adopt rules and regulations regarding all
of the following:
(1) Eligibility requirements for a member to receive an award
under the new system, including, but not limited to, minimum age and
minimum years of certified service credit.
(2) Eligibility requirements for a member to include certified
prior service credit as certified service credit in calculating the
amount of his or her award or to qualify for an award under the new
system.
(3) The amount of an award under the new system and any
cost-of-living adjustments or supplemental payments based upon that
award.
(4) Eligibility requirements for membership in the award system.
(5) The maximum years of certified service credit a member may
accrue under the award system.
(6) Other rules and regulations that the board of the California
State Fire Employees Welfare Benefit Corporation determines are
appropriate.
(c) Notwithstanding subdivision (a), the assets received from the
Board of Administration of the Public Employees' Retirement System by
the board of the California State Fire Employees Welfare Benefit
Corporation attributable to the benefit of registered volunteers of a
department are subject to the claims of creditors of the department
in the case of the insolvency of the department. Any assets that are
not attributable to the benefits of registered volunteers of an
insolvent department are not subject to the claims of the creditors
of the insolvent department.
(d) Data filed by a member or department with the board of the
California State Fire Employees Welfare Benefit Corporation is
confidential, and no individual record shall be divulged by an
official or employee having access to that data to a person other
than the member to whom the information relates or his or her
authorized representative, or the department that employs the member.
(e) The custodian of a fund described in Section 50980, subject to
the exclusive control of the board of the California State Fire
Employees Welfare Benefit Corporation to administer and invest the
assets of the new system fund, shall be a financial institution
eligible to establish and administer a trust described in Internal
Revenue Service Revenue Procedure 92-64. The assets in a fund for the
new system shall be used to pay the costs of administration and for
the payment of awards under the new system.
50983. Present, future, and former board members of the Public
Employees' Retirement System, jointly and individually, and state
officers and employees, shall be indemnified from the General Fund as
described in Section 16641.5 as a result of the transfer of the
award system from the Board of Administration of the Public Employees'
Retirement System to the board of the California State Fire
Employees Welfare Benefit Corporation.
50984. The Board of Administration of the Public Employees'
Retirement System shall not be liable for any action or failure to
act by the board of the California State Fire Employees Welfare
Benefit Corporation. Upon transfer of the award system, the board of
the California State Fire Employees Welfare Benefit Corporation shall
assume all responsibilities and liabilities related to the award
system.
50985. For purposes of this chapter, if the Board of
Administration of the Public Employees' Retirement System transfers
the data and files to the board of the California State Fire
Employees Welfare Benefit Corporation as described in Section 50980,
the transfer of the award system shall be deemed complete on the date
that the Board of Administration of the Public Employees' Retirement
System transfers the assets of the system as described in Section
50981, regardless of whether the notices described in paragraphs (3)
to (5), inclusive, of subdivision (b) of Section 50980 are sent.
50986. This chapter shall become inoperative on March 1, 2008,
and, as of January 1, 2009, is repealed, unless a later enacted
statute, that becomes operative on or before January 1, 2009, deletes
or extends the dates on which it becomes inoperative and is
repealed.
SEC. 4. No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.