BILL NUMBER: AB 654 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY JUNE 1, 2009
AMENDED IN ASSEMBLY APRIL 23, 2009
AMENDED IN ASSEMBLY MARCH 24, 2009
INTRODUCED BY Assembly Member Mendoza
FEBRUARY 25, 2009
An act to amend Sections 22714, 22715, 22954, 22955,
22955.5, 23003, 23006, 23008, 26301, and 26303 of, to
amend, repeal, and add Section 22162 of, and to add Sections
23006.5, 23010, 23010 and 26303.5 to, the
Education Code, relating to state teachers' retirement.
LEGISLATIVE COUNSEL'S DIGEST
AB 654, as amended, Mendoza. State teachers' retirement.
(1) The State Teachers' Retirement Law prescribes the rights and
benefits of members of the State Teachers' Retirement System. The law
provides that retirement benefits under the Defined Benefit Program
of the State Teachers' Retirement Plan are based on the member's
final compensation and years of credited service. Generally, final
compensation is the highest average annual compensation earnable by
the member during a 3-year period. However, for a member with 25 or
more years of credited service, final compensation is the highest
average annual compensation earnable by the member during a one-year
period. That law authorizes the Governor, a school district,
community college district, or county office of education to grant
members of the Defined Benefit Program of the State Teachers'
Retirement Plan 2 additional years of service credit, if the member
retires for service within a designated period and certain conditions
are satisfied, including the transfer of a specified amount to the
Teachers' Retirement Fund.
This bill would require regular interest to be charged on the
unpaid balance if the transfer to the retirement fund is made in
installments. The bill would modify the definition of "regular
interest" for purposes of the State Teachers' Retirement Law.
(2) Under the law, a continuous appropriation is made annually
from the General Fund for transfer to the Supplemental Benefit
Maintenance Account in the Teachers' Retirement Fund to fund
supplemental purchase power protection payments to retired members,
disabled members, and beneficiaries of the Defined Benefit Program of
the State Teachers' Retirement System. The law provides that the
total amount of the appropriation for each year shall be equal to
2.5% of the total of the creditable compensation of the fiscal year
ending in the immediately preceding calendar year upon which members'
contributions are based for purposes of funding the supplemental
payments, as specified. The law also provides for annual continuous
appropriations from the General Fund for transfer to the Teachers'
Retirement Fund to fund the benefits of the Defined Benefit Program.
Those appropriations for each year are equal to 2.017% and 0.524% of
the total of the creditable compensation of the fiscal year ending in
the immediately preceding calendar year upon which members'
contributions are based, as specified.
This bill would clarify, for purposes of calculating those
appropriations, that the total of the creditable compensation
reported to the system during the fiscal year ending in the
immediately preceding calendar year, includes creditable compensation
that was earned either during that fiscal year or the immediately
preceding fiscal year.
(3)
(2) The law specifies the date by which member and
employer contributions are due in the office of the State Teachers'
Retirement System, and provides that payments thereafter shall be
delinquent and subject to interest, as specified. If a county
superintendent of schools, employing agency, school district, or
community college district that reports directly to the system fails
to pay the contributions, the Teachers' Retirement Board may assess
penalties and charge regular interest on the delinquent
contributions.
This bill, instead, would require the board, in accordance with
regulations, to assess penalties and charge regular interest for any
delinquent contributions, as specified. The bill would provide that
any penalties or interest may be appealed, as specified.
(4)
(3) The law requires the county superintendent of
schools or employing agency, and authorizes a school district or
community college district, with approval of the Teachers' Retirement
Board, to submit a report monthly to the State Teachers' Retirement
System containing information as the board may require in the
administration of the State Teachers' Retirement Plan. If those
monthly reports are submitted late or in an unacceptable form, or
include late or improper adjustments, the board is authorized to
assess penalties pursuant to a specified formula, or a fee of $500,
whichever is greater.
This bill, instead, would require the board, in accordance with
regulations, to assess those penalties, pursuant to a specified
formula, or a fee of $500, whichever is greater. The bill
would additionally require the board to assess penalties, pursuant to
a specified formula, if a county superintendent of schools, or an
employing agency, school district, or community college district that
reports directly to the system, includes in those monthly reports
creditable compensation earned during any prior fiscal year, except
for the immediately preceding fiscal year. If creditable compensation
earned during the immediately preceding fiscal year is included in
other specified monthly reports to the system, that creditable
compensation would be required to be included for purposes of
calculating the appropriations described in paragraph (2) above.
The bill would provide that any penalties or
interest may be appealed, as specified.
(5)
(4) The law permits an employer to offer benefits under
the Cash Balance Benefit Program to certain employees who are
employed less than 50% of full time, and requires employers to
transmit and report contributions paid on behalf of each participant
in each pay period, along with all other information required by the
system by specified due dates. The board is authorized to collect
interest for delinquent contributions and to assess a penalty for a
report submitted late or in an unacceptable form pursuant to a
specified formula, or a fee of $500, whichever is greater.
This bill, instead, would require the board to collect interest on
delinquent contributions, as specified, and to assess
penalties a penalty , in accordance with
regulations, against the employer for a report submitted late or in
an unacceptable form pursuant to a specified formula, or a fee of
$500, whichever is greater. The bill would provide that any
penalties penalty or interest may be appealed,
as specified.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 22162 of the Education Code is amended to read:
22162. "Regular interest" means interest that is compounded
annually based on the annual equivalent of the prior year's average
yield to maturity on the investment-grade fixed income securities
attributable to the Defined Benefit Program, but not on assets
attributable to the Defined Benefit Supplement Program. The regular
interest rate shall be adopted annually by the board as a plan
amendment with respect to the Defined Benefit Program.
This section shall become inoperative on June 30, 2010, and, as of
January 1, 2011, is repealed, unless a later enacted statute, that
becomes operative on or before January 1, 2011, deletes or extends
the dates on which it becomes inoperative and is repealed.
SEC. 2. Section 22162 is added to the Education Code, to read:
22162. "Regular interest" means interest that is equal to the
actuarially assumed rate of return on investments on assets of the
Defined Benefit Program. The regular interest rate shall be adopted
annually by the board as a plan amendment with respect to the Defined
Benefit Program.
This section shall become operative on July 1, 2010.
SEC. 3. Section 22714 of the Education Code is amended to read:
22714. (a) Whenever the governing board of a school district or a
community college district or a county office of education, by
formal action, determines pursuant to Section 44929 or 87488 that,
because of impending curtailment of, or changes in, the manner of
performing services, the best interests of the district or county
office of education would be served by encouraging certificated
employees or academic employees to retire for service and that the
retirement will result in a net savings to the district or county
office of education, an additional two years of service credit shall
be granted under this part to a member of the Defined Benefit Program
if all of the following conditions exist:
(1) The member is credited with five or more years of service
credit and retires for service under Chapter 27 (commencing with
Section 24201) during a period of not more than 120 days or less than
60 days, commencing no sooner than the effective date of the formal
action of the employer that shall specify the period.
(2) (A) 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.
(B) Regular interest shall be charged on the unpaid balance if the
employer makes the transfer to the retirement fund in installments.
(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 (c) of Section 14502.1.
(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 (c) of Section
14502.1.
(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 the school district, community college district, or
county office of education 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.
(i) 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 within one
year following the effective date of the formal action under
subdivision (a), or if the member is not otherwise eligible to retire
for service.
SEC. 4. Section 22715 of the Education Code is amended to read:
22715. (a) Notwithstanding any other provisions of this part,
whenever the Governor, by executive order, determines that because of
an impending curtailment of, or change in the manner of performing
service, the best interest of the state would be served by
encouraging the retirement of state employees, and that sufficient
economies could be realized to offset any cost to state agencies
resulting from this section, an additional two years of service shall
be credited under this part to members of the Defined Benefit
Program, who are state employees, if the following conditions exist:
(1) The member is credited with five or more years of service and
retires during a period not to exceed 120 days or less than 60 days
commencing no sooner than the date of issuance of the Governor's
executive order specifying that period.
(2) (A) The appointing power, as defined in Section 18524 of the
Government Code, transfers to the retirement fund an amount
determined by the board to equal the actuarial equivalent of the
difference between the allowance the member receives after the
receipt of service credit under this section and the amount the
member would have received without the service credit. The transfer
to the retirement fund shall be made in a manner and time period
acceptable to the employer and the board.
(B) Regular interest shall be charged on the unpaid balance if the
employer makes the transfer to the retirement fund in installments.
(3) The appointing power determines that it is electing to
exercise the provisions of this section, pursuant to the Governor's
order, and certifies to the Department of Finance and to the
Legislative Analyst, as to the specific economies that would be
realized if the additional service credit toward retirement were
granted.
(b) As used in this section, "member" means a state employee who
is employed in a job classification, department, or other
organizational unit designated by the appointing power, as defined in
Section 18524 of the Government Code.
(c) The amount of service credit shall be two years regardless of
credited service, but shall not exceed the number of years
intervening between the date of the member's retirement under this
part and the date the member would be required to be retired because
of age. The appointing power shall make the payment with respect to
all eligible employees who retire pursuant to this section.
(d) Any member who qualifies under this section, upon subsequent
reinstatement under this part, shall forfeit the service credit
granted under this section.
(e) This section shall not be applicable to any member otherwise
eligible if that 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 date of issuance of the
executive order or if the member is not eligible to retire without
the additional credit available under this section.
(f) The benefit provided by this section shall not be applicable
to the employees of any appointing power until the Director of
Finance approves the transmittal of funds by that appointing power or
the Board of Regents or the Board of Trustees to the retirement fund
pursuant to paragraph (2) of subdivision (a).
(g) The Director of Finance shall approve the transmittal of funds
by the appointing power not sooner than 30 days after notification
in writing of the necessity therefor to the chairperson of the
committee in each house of the Legislature that considers
appropriations and the Chairperson of the Joint Legislative Budget
Committee, or not sooner than any lesser time that the chairperson of
the committee, or his or her designee, may in each instance
determine. If there is any written communication between the Director
of Finance and the Legislative Analyst, a copy of the communication
shall be transmitted to the chairperson of each appropriate policy
committee.
SEC. 5. Section 22954 of the Education Code is
amended to read:
22954. (a) Notwithstanding Section 13340 of the Government Code,
a continuous appropriation is hereby annually made from the General
Fund to the Controller, pursuant to this section, for transfer to the
Supplemental Benefit Maintenance Account in the Teachers' Retirement
Fund.
(b) Except as reduced pursuant to subdivision (c), the total
amount of the appropriation for each year shall be equal to 2.5
percent of the total of the creditable compensation of the fiscal
year ending in the immediately preceding calendar year, which was
earned either during that fiscal year or the immediately preceding
fiscal year, upon which members' contributions are based for purposes
of funding the supplemental payments authorized by Section 24415, as
reported annually to the Director of Finance, the Chairperson of the
Joint Legislative Budget Committee, and the Legislative Analyst
pursuant to Section 22955.5.
(c) Beginning with the 2008-09 fiscal year, the appropriation in
subdivision (b) shall be reduced in accordance with the following
schedule:
2008-09.................$66,386,000
2009-10.................$70,000,000
2010-11.................$71,000,000
2011-12 and each fiscal year
thereafter..............$72,000,000
(d) Transfers made to the Supplemental Benefit Maintenance
Account, pursuant to subdivision (a) shall be made on November 1 and
April 1 of each fiscal year.
(e) The board may deduct from the annual appropriation made
pursuant to this section an amount necessary for the administrative
expenses of Section 24415.
(f) It is the intent of the Legislature in enacting this section
to establish the supplemental payments pursuant to Section 24415 as
vested benefits pursuant to a contractually enforceable promise to
make annual contributions from the General Fund to the Supplemental
Benefit Maintenance Account in the Teachers' Retirement Fund in order
to provide a continuous annual source of revenue for the purposes of
making the supplemental payments under Section 24415.
SEC. 6. Section 22955 of the Education Code is
amended to read:
22955. (a) Notwithstanding Section 13340 of the Government Code,
commencing July 1, 2003, a continuous appropriation is hereby
annually made from the General Fund to the Controller, pursuant to
this section, for transfer to the Teachers' Retirement Fund. The
total amount of the appropriation for each year shall be equal to
2.017 percent of the total of the creditable compensation of the
fiscal year ending in the immediately preceding calendar year, which
was earned either during that fiscal year or the immediately
preceding fiscal year, upon which members' contributions are based,
as reported annually to the Director of Finance, the Chairperson of
the Joint Legislative Budget Committee, and the Legislative Analyst
pursuant to Section 22955.5, and shall be divided into four equal
quarterly payments.
(b) Notwithstanding Section 13340 of the Government Code,
commencing October 1, 2003, a continuous appropriation, in addition
to the appropriation made by subdivision (a), is hereby annually made
from the General Fund to the Controller for transfer to the Teachers'
Retirement Fund. The total amount of the appropriation for each year
shall be equal to 0.524 percent of the total of the creditable
compensation of the fiscal year ending in the immediately preceding
calendar year, which was earned either during that fiscal year or the
immediately preceding fiscal year, upon which members' contributions
are based, as reported annually to the Director of Finance, the
Chairperson of the Joint Legislative Budget Committee, and the
Legislative Analyst pursuant to Section 22955.5, and shall be divided
into four equal quarterly payments. The percentage shall be adjusted
to reflect the contribution required to fund the normal cost deficit
or the unfunded obligation as determined by the board based upon a
recommendation from its actuary. If a rate increase is required, the
adjustment may be for no more than 0.25 percent per year and in no
case may the transfer made pursuant to this subdivision exceed 1.505
percent of the total of the creditable compensation of the fiscal
year ending in the immediately preceding calendar year upon which
members' contributions are based. At any time when there is neither
an unfunded obligation nor a normal cost deficit, the percentage
shall be reduced to zero. The funds transferred pursuant to this
subdivision shall first be applied to eliminating on or before June
30, 2027, the unfunded actuarial liability of the fund identified in
the actuarial valuation as of June 30, 1997.
(c) For the purposes of this section, the term "normal cost
deficit" means the difference between the normal cost rate as
determined in the actuarial valuation required by Section 22311 and
the total of the member contribution rate required under Section
22901 and the employer contribution rate required under Section
22950, and shall exclude (1) the portion for unused sick leave
service credit granted pursuant to Section 22717, and (2) the cost of
benefit increases that occur after July 1, 1990. The contribution
rates prescribed in Section 22901 and Section 22950 on July 1, 1990,
shall be utilized to make the calculations. The normal cost deficit
shall then be multiplied by the total of the creditable compensation
upon which member contributions under this part are based to
determine the dollar amount of the normal cost deficit for the year.
(d) Pursuant to Section 22001 and case law, members are entitled
to a financially sound retirement system. It is the intent of the
Legislature that this section shall provide the retirement fund
stable and full funding over the long term.
(e) This section continues in effect but in a somewhat different
form, fully performs, and does not in any way unreasonably impair,
the contractual obligations determined by the court in California
Teachers' Association v. Cory, 155 Cal.App.3d 494.
(f) Subdivision (b) shall not be construed to be applicable to any
unfunded liability resulting from any benefit increase or change in
contribution rate under this part that occurs after July 1, 1990.
(g) The provisions of this section shall be construed and
implemented to be in conformity with the judicial intent expressed by
the court in California Teachers' Association v. Cory, 155
Cal.App.3d 494.
(h) This section shall become operative on July 1, 2003, if the
revenue limit cost-of-living adjustment computed by the
Superintendent of Public Instruction for the 2001-02 fiscal year is
equal to or greater than 3.5 percent. Otherwise this section shall
become operative on July 1, 2004.
SEC. 7. Section 22955.5 of the Education Code
is amended to read:
22955.5. (a) For purposes of Sections 22954 and 22955,
"creditable compensation" shall include only creditable compensation
for which member contributions are credited under the Defined Benefit
Program.
(b) On or after October 1 and on or before October 25 of each
year, beginning in 2008, the board shall calculate the total amount
of creditable compensation for the fiscal year that ended on the
immediately preceding June 30, which was earned either during that
fiscal year or the immediately preceding fiscal year. For the purpose
of informing the Department of Finance and the Legislature of the
amount of the state's appropriations pursuant to Sections 22954 and
22955 in the next fiscal year, the system shall immediately submit a
report that includes this calculation to the Director of Finance, the
Chairperson of the Joint Legislative Budget Committee, and the
Legislative Analyst.
(c) After submission of the report described in subdivision (b),
on or before the April 15 after submission of the report described in
subdivision (b), the system shall notify the Director of Finance,
the Chairperson of the Joint Legislative Budget Committee, and the
Legislative Analyst of any revisions in its calculation of the total
amount of creditable compensation for the fiscal year that ended on
the immediately preceding June 30.
(d) The last revised calculation submitted pursuant to subdivision
(c) on or before April 15 of each year or, if no such revised
calculation is submitted, the calculation in the report submitted
pursuant to subdivision (b) shall be the calculation of creditable
compensation upon which the state's appropriations pursuant to
Sections 22954 and 22955 will be based in the next fiscal year. On or
after April 15 and on or before May 1 of each year, the system shall
submit to the Controller a copy of this calculation, along with a
requested schedule of transfers to be made pursuant to the
appropriations in Sections 22954 and 22955 in the next fiscal year
beginning on the next July 1. The system shall also provide a copy of
this schedule to the Director of Finance and the Legislative
Analyst.
SEC. 8. SEC. 5. Section 23003 of the
Education Code is amended to read:
23003. (a) If a county superintendent of schools or employing
agency or school district or community college district that reports
directly to the system fails to make payment of contributions as
provided in Section 23002, the board shall, in accordance with
regulations, assess penalties.
(b) The board shall, in accordance with regulations, charge
regular interest on any delinquent contributions under this part.
SEC. 9. SEC. 6. Section 23006 of the
Education Code is amended to read:
23006. (a) If a county superintendent of schools or employing
agency or school district or community college district that reports
directly to the system, submits monthly reports, as specified by
Section 23004, late, as defined in Section 23005, or in unacceptable
form, the board shall, in accordance with regulations, assess
penalties.
(b) The board shall, in accordance with regulations, assess
penalties, based on the sum of the employer and employee
contributions required under this part by the report, for late or
unacceptable submission of reports, at a rate of interest equal to
the regular interest rate or a fee of five hundred dollars ($500),
whichever is greater.
SEC. 10. Section 23006.5 is added to the
Education Code, to read:
23006.5. (a) If a county superintendent of schools, or an
employing agency, school district, or community college district that
reports directly to the system, includes creditable compensation
earned during any prior fiscal year, except for the immediately
preceding fiscal year, in the monthly reports specified in Section
23004, the board shall, in accordance with regulations, assess
penalties. The penalties shall be equal to the product of the
creditable compensation earned during relevant prior fiscal years and
the contribution rate specified in Sections 22954 and 22955, plus
the product of the creditable compensation earned during relevant
prior fiscal years and the regular interest rate for the period from
July 1 of the fiscal year following the year in which the creditable
compensation is earned and the time the penalty is received in full
by the system.
(b) If a county superintendent of schools, or an employing agency,
school district, or community college district that reports directly
to the system, includes creditable compensation earned during the
immediately preceding fiscal year in the monthly reports specified in
Section 23004, that creditable compensation shall be subject to
Sections 22954, 22955, and 22955.5.
SEC. 11. SEC. 7. Section 23008 of
the Education Code is amended to read:
23008. (a) If more or less than the required contributions
specified in this part and Section 44987 are paid to the system based
on any payment of creditable compensation to a member, proper
adjustments shall be made on a monthly report, by the county
superintendent, district superintendent, chancellor of a community
college district, or other employing agency who submitted the report,
within 60 days after discovery or notification by the system and any
refunds shall be made to the member within the same time period by
the employing agency.
(b) The board shall, in accordance with regulations, assess
penalties for late or improper adjustments, as specified in
Sections 23006 and 23006.5. adjustments pursuant to
Section 23006. These penalties shall be no more than the regular
interest as defined in Section 22162. The penalty so assessed shall
be deemed interest earned in the year in which it was received.
(c) If a required report contains erroneous information and the
system, acting in good faith, disburses funds from the Teachers'
Retirement Fund based on that information, the county superintendent,
district superintendent, chancellor of a community college district,
or other employing agency who submitted the report shall reimburse
the retirement fund in full for the amount of the erroneous
disbursement. Reimbursement shall be made immediately upon
notification by the system.
SEC. 12. SEC. 8. Section 23010 is
added to the Education Code, to read:
23010. A person or entity that reports directly to the system
that is assessed penalties or interest pursuant to Section 23003,
23006, 23006.5, or 23008 may appeal the assessed
penalties or interest subject to the appeals process established
pursuant to Section 22219.
SEC. 13. SEC. 9. Section 26301 of
the Education Code is amended to read:
26301. (a) Employers shall report contributions paid on behalf of
each participant in each pay period, along with all other
information required by the system no later than 10 working days
following the last day of the pay period in which the salary was
earned, and the report shall be delinquent immediately thereafter.
That report shall be submitted electronically in an encrypted format
provided by the system that ensures the security of the transmitted
participant data.
(b) The board shall, in accordance with regulations, assess
penalties a penalty against the
employer for a report submitted late or
in an unacceptable form. The penalties
penalty shall be based upon the sum of the
employee and employer contributions required to be reported under
this part at a rate of interest equal to the regular interest rate,
accruing on the balance for the period between the time the report
was due and the time an acceptable report is actually received by the
system, or a fee of five hundred dollars ($500), whichever is
greater.
SEC. 14. SEC. 10. Section 26303 of
the Education Code is amended to read:
26303. (a) Employers shall transmit to the plan the employee
contributions and employer contributions with respect to the Cash
Balance Benefit Program for salary paid to each participant during
the pay period no later than 10 working days following the last day
of the pay period in which the salary was earned.
(b) Payments shall be delinquent on the 11th working day
thereafter, and interest shall begin to accrue at the regular
interest rate from that day until payment for the contributions and
interest is received in full by the system. The board shall collect
interest for late payment from the employer under this subdivision.
SEC. 15. SEC. 11. Section 26303.5 is
added to the Education Code, to read:
26303.5. A person or entity that reports directly to the system
that is assessed penalties a penalty or
interest pursuant to Section 26301 or 26303 may appeal the assessed
penalties penalty or interest using the
appeals process established pursuant to Section 22219.