BILL NUMBER: AB 966 INTRODUCED
BILL TEXT
INTRODUCED BY Committee on Public Employees, Retirement and Social
Security (Hernandez (Chair), Fong (Vice Chair), Beall, and Torrico)
FEBRUARY 26, 2009
An act to amend Section 2610 of the Family Code, and to amend
Sections 20037.6, 20037.7, 20037.8, 20037.9, 20037.10, 20037.11,
20037.12, 20039.5, 20069, 20164, 20195, 20221, 20228, 20281.5, 20305,
20475, 20479, 20636.1, 20962, 20967, 21117, 21118, 21252, 21264,
21296, 21753, 22839, 22864, 22960.15, 75006, 75028.5, and 75507 of,
to add Sections 21310.5 and 75080.5 to, and to repeal Sections 20041
and 20043 of, the Government Code, relating to public employee
benefits.
LEGISLATIVE COUNSEL'S DIGEST
AB 966, as introduced, Committee on Public Employees, Retirement
and Social Security. Public employee benefits.
(1) The Public Employees' Retirement Law (PERL) creates the Public
Employees' Retirement System (PERS), which provides a defined
benefit to its members based on age at retirement, service, credit,
and final compensation. PERL defines final compensation in this
regard for members of certain state bargaining units who became a
state member of the system on or after January 1, 2006, or January 1,
2007, with specified exceptions.
This bill would specify that the provisions described above apply
to members in state bargaining units 1, 2, 3, 4, 7, 10, 11, 12, 13,
14, 15, 16, 17, 18, 19, 20, and 21 who were employed by the state for
the first time on or after January 1, 2006, or January 1, 2007.
(2) PERL requires that the entire compensation of a local member
of PERS be used for the calculation of service rendered as an
employee of the contracting agency for specified contracts, including
contracts entered prior to July 1, 1952, that contained an election
in this regard. PERL provides a definition of final compensation for
a local member of the Public Employees' Retirement System in
connection with this requirement.
This bill would delete these provisions.
(3) PERL permits officers, warrant officers, and enlisted
personnel of the California National Guard to become members of PERS
upon filing a written election and making the necessary contributions
to the retirement fund. Existing law defines final compensation and
state service in this regard. Existing law prohibits a National Guard
member from receiving health care benefits under the Public
Employees' Medical and Hospital Care Act based on his or her service
with the California National Guard.
This bill would revise the definition of final compensation for a
National Guard member to specify that it is the highest annual
compensation that was earned during a consecutive 12-month period
while rendering service with the California National Guard. The bill
would also make technical changes, including revising the definition
of state service with regard to a National Guard member to specify
that it does not apply to qualification for health and dental
benefits.
(4) PERL prescribes the period of limitation within which an
action for adjustment of errors and omissions regarding payments into
or out of the retirement fund must be filed, and generally sets that
period at 3 years. The law provides that the period of limitation
commences with the discovery of the erroneous payment in cases in
which payment is erroneous because of death or remarriage, as
specified.
This bill would provide in cases in which payment is erroneous
because of death or remarriage, as described above, that the period
of limitation is 10 years.
(5) PERL permits the Board of Directors of PERS to select,
purchase, or acquire in the name of the system real property,
improved or unimproved, and to construct or remodel, and equip, an
office building, including appropriate satellite structures, as
specified.
This bill would permit the Board of Directors of PERS to select,
purchase, or acquire real property and to construct or remodel, and
equip, business recovery centers in California for use by the system
as an alternate facility, emergency operations center, or data center
that the board determines is appropriate for disaster preparedness.
(6) PERL requires every state agency, school employer, and the
chief administrative officer of a contracting agency to provide
immediate written notice to the Board of Directors of PERS of the
change in status of any member resulting from transfer, promotion,
leave of absence, resignation, reinstatement, dismissal, or death.
This bill would revise these provisions to provide that the notice
be filed in the manner prescribed by PERS.
(7) PERL requires the Board of Directors of PERS to annually
employ a certified public accountant, who is not in public
employment, to audit the financial statements of this system.
This bill would specify that these provisions do not affect the
ability of the State Auditor or the Department of Finance to conduct
other types of audits of the system as otherwise authorized.
(8) PERL prohibits an employee who serves on a less than full-time
basis from membership the Public Employees' Retirement System unless
that person comes within specified exceptions. PERL provides an
exception for a person whose employment is on a seasonal,
limited-term, on-call, or other irregular basis, and the person works
more than 125 days, or 1,000 hours within the fiscal year, as
specified.
This bill would instead provide that an employee whose appointment
or employment contract does not fix a term of full-time, continuous
employment in excess of 6 months is excluded from PERS membership
unless specified exceptions apply. Among those exceptions, the bill
would provide that a position is not excluded if it requires service
equivalent to an average of 20 hours a week for one year or longer.
The bill would also revise the exception described above, regarding
seasonal, limited-term, or on-call employment, to have it apply if
the person completes 125 days or 1,000 hours, as specified.
(9) PERL permits a contracting agency to amend its contract with
PERS without election among its employees, as specified, if the
contracting agency has fully discharged obligations imposed on it
with respect to the amendments, and if the amendment meets certain
requirements, including that the amendments apply uniformly to a
member in specified member classes.
This bill would include local safety officers and school safety
members within the member classes to which the amendments must apply
uniformly.
(10) PERL prohibits making a contract or contract amendment to
provide retirement benefits for some, but not all members of
specified membership classifications.
This bill would include local safety officers and school safety
members within these classifications.
(11) PERL defines compensation earnable with respect to a school
member of PERS, and in this regard, particularly defines payrate for
noncertificated members for whom the normal work schedule is less
than 40 hours a week. For the purpose of calculating retirement
benefits based on part-time service, PERL requires that compensation
earnable be taken as the compensation that would have been earnable
if the employment had been on a full-time basis and the member had
worked full time, except as specified.
This bill would redefine noncertificated members as classified
members for these purposes and make clarifying changes in the
definition of payrate in this context. The bill would specify that
compensation earnable must also conform to other specified standards
for members and school members.
(12) PERL requires that a state miscellaneous member or industrial
member, other than a university member, or a local member of PERS be
retired for service if he or she has elected to participate in
partial service retirement, as specified, has been credited with 20
years of state service, and has attained normal retirement age.
This bill would eliminate the requirement of 20 years service
credit for the purpose of these provisions.
(13) PERL requires that the effective date of a written
application for retirement submitted to the board more than 9 months
after the member's discontinuance of state service be determined by
the Board of Administration of PERS consistent with criteria
established for the correction of errors and omissions.
This bill would require that the effective date of a written
application for retirement submitted to the board more than 9 months
after the member's discontinuance of state service be the first day
of the month in which the member's application is received at an
office of the board or by an employee of PERS designated by the
board.
(14) PERL provides for the preservation of the purchasing power of
benefits through a system of adjustments in benefits based on
changes in living costs. The law also establishes provisions to
ensure the federal tax-exempt status of the system and to preserve
the deferred treatment of federal income tax on public employer
contributions to public employee pensions. Existing federal law
limits the amount a defined benefit plan may pay a participant
annually, and requires that this limitation be adjusted annually by
regulation to account for increases in the cost of living.
This bill would specify that the amount payable to a member,
including any cost-of-living adjustments, is prohibited from
exceeding the limit on annual benefit payments prescribed by federal
law, and would incorporate specified provisions of federal law by
reference. The bill would also make related changes.
(15) The Public Employees Medical and Hospital Care Act requires
that 30 days prior to, or 30 days after, retirement and during the
open enrollment period, a state employee enrolled in a flexible
benefit plan administered by the state be given the option to enroll
in a health benefit plan, as specified.
This bill would change the period described above to provide that
a state employee may be given the option to enroll 30 days prior to,
or 60 days following, retirement and during the open enrollment
period.
(16) The Public Employees' Medical and Hospital Care Act requires
that premiums charged for enrollment in a health benefit program
reasonably reflect the cost of the benefits, provided that this does
not limit the Board of Administration of PERS from adjusting premiums
charged under any health benefit plan or contract to reflect
regional variations in providing services, which adjustments are at
the sole discretion of the board.
This bill would authorize the board to use reserves generated by
one or more self-funded health benefit plans to reduce the premiums
charged for enrollment in one or more separate self-funded health
benefit plans offered by the board, as specified.
(17) The Judges' Retirement Law establishes the Judges' Retirement
System to provide retirement benefits for retired judges. Existing
law also establishes the Judges' Retirement System II Law for judges
elected or appointed on or after November 9, 1994. Both of these laws
provide for the payment of accrued allowances that remain unpaid at
the time of the death of a judge pursuant to a specified order.
This bill would require that a person who is retired under the
Judges' Retirement System who is again appointed or elected to serve
as a judge reinstate from retirement and become a member of the
system, as specified. The bill would also revise provisions governing
the payment of accrued, unpaid allowances in both judges' retirement
systems to provide for their payment to either the estate of the
deceased or the duly authorized representative of the estate when the
court receives a court order appointing an executor, administrator,
or personal representative. If the estate does not require probate,
the bill would also authorize the payment to be made to a successor
trustee, or to a beneficiary of the deceased named in a valid will,
as applicable.
(18) The bill would also make technical changes.
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 2610 of the Family Code is amended to read:
2610. (a) Except as provided in subdivision (b), the court shall
make whatever orders are necessary or appropriate to ensure that each
party receives the party's full community property share in any
retirement plan, whether public or private, including all survivor
and death benefits, including, but not limited to, any of the
following:
(1) Order the disposition of any retirement benefits payable upon
or after the death of either party in a manner consistent with
Section 2550.
(2) Order a party to elect a survivor benefit annuity or other
similar election for the benefit of the other party, as specified by
the court, in any case in which a retirement plan provides for such
an election, provided that no court shall order a retirement plan to
provide increased benefits determined on the basis of actuarial
value.
(3) Upon the agreement of the nonemployee spouse, order the
division of accumulated community property contributions and service
credit as provided in the following or similar enactments:
(A) Article 1.2 2 (commencing with
Section 21215) 21290) of Chapter 9 of
Part 3 of Division 5 of Title 2 of the Government Code.
(B) Chapter 12 (commencing with Section 22650) of Part 13 of the
Education Code.
(C) Article 8.4 (commencing with Section 31685) of Chapter 3 of
Part 3 of Division 4 of Title 3 of the Government Code.
(D) Article 2.5 (commencing with Section 75050) of Chapter 11 of
Title 8 of the Government Code.
(E) Chapter 15 (commencing with Section 27400) of Part 14 of the
Education Code.
(4) Order a retirement plan to make payments directly to a
nonmember party of his or her community property interest in
retirement benefits.
(b) A court shall not make any order that requires a retirement
plan to do either of the following:
(1) Make payments in any manner that will result in an increase in
the amount of benefits provided by the plan.
(2) Make the payment of benefits to any party at any time before
the member retires, except as provided in paragraph (3) of
subdivision (a), unless the plan so provides.
(c) This section shall not be applied retroactively to payments
made by a retirement plan to any person who retired or died prior to
January 1, 1987, or to payments made to any person who retired or
died prior to June 1, 1988, for plans subject to paragraph (3) of
subdivision (a).
SEC. 2. Section 20037.6 of the Government Code is amended to read:
20037.6. (a) Notwithstanding Sections 20035 and 20037, final
compensation for a person who is employed by the state for the
first time and becomes a state member of the system on or after
July 1, 2006, and is represented by State Bargaining Unit 2, means
the highest average annual compensation earnable by the member during
the consecutive 36-month period immediately preceding the effective
date of his or her retirement, or the date of his or her last
separation from state service if earlier, or during any other period
of 36 consecutive months during his or her state membership that the
member designates on the application for retirement.
(b) This section applies to service credit accrued while a member
of State Bargaining Unit 2.
(c) This section does not apply to:
(1) Former state employees who return to state employment on or
after July 1, 2006.
(2) State employees hired prior to July 1, 2006, who were subject
to Section 20281.5 during the first 24 months of state employment.
(3) State employees hired prior to July 1, 2006, who become
subject to representation by State Bargaining Unit 2 on or after July
1, 2006.
(4) State employees on an approved leave of absence who return to
active employment on or after July 1, 2006.
SEC. 3. Section 20037.7 of the Government Code is amended to read:
20037.7. (a) Notwithstanding Sections 20035 and 20037, final
compensation for a person who is employed by the state for the
first time and becomes a state member of the system on or after
January 1, 2007, and is represented by State Bargaining Unit 1, 3,
4, 11, 14, 15, 17, 20, or 21, means the highest average annual
compensation earnable by the member during the consecutive 36-month
period immediately preceding the effective date of his or her
retirement, or the date of his or her last separation from state
service if earlier, or during any other period of 36 consecutive
months during his or her state membership that the member designates
on the application for retirement.
(b) This section applies to service credit accrued while a member
of State Bargaining Unit 1, 3, 4, 11, 14, 15, 17, 20, or 21.
(c) This section does not apply to:
(1) Former state employees previously employed before January 1,
2007, who return to state employment on or after January 1, 2007.
(2) State employees hired prior to January 1, 2007, who were
subject to Section 20281.5 during the first 24 months of state
employment.
(3) State employees hired prior to January 1, 2007, who become
subject to representation by State Bargaining Unit 1, 3, 4, 11, 14,
15, 17, 20, or 21 on or after January 1, 2007.
(4) State employees on an approved leave of absence employed
before January 1, 2007, who return to active employment on or after
January 1, 2007.
SEC. 4. Section 20037.8 of the Government Code is amended to read:
20037.8. (a) Notwithstanding Sections 20035 and 20037, final
compensation for a person who is employed by the state for the
first time and becomes a state member of the system on or after
January 1, 2007, and is represented by State Bargaining Unit 12 or
13, means the highest average annual compensation earnable by the
member during the consecutive 36-month period immediately preceding
the effective date of his or her retirement, or the date of his or
her last separation from state service if earlier, or during any
other period of 36 consecutive months during his or her state
membership that the member designates on the application for
retirement.
(b) This section applies to service credit accrued while a member
of State Bargaining Unit 12 or 13.
(c) This section does not apply to:
(1) Former state employees previously employed before January 1,
2007, who return to state employment on or after January 1, 2007.
(2) State employees hired prior to January 1, 2007, who were
subject to Section 20281.5 during the first 24 months of state
employment.
(3) State employees hired prior to January 1, 2007, who become
subject to representation by State Bargaining Unit 12 or 13 on or
after January 1, 2007.
(4) State employees on an approved leave of absence employed
before January 1, 2007, who return to active employment on or after
January 1, 2007.
SEC. 5. Section 20037.9 of the Government Code is amended to read:
20037.9. (a) Notwithstanding Sections 20035 and 20037, final
compensation for a person who is employed by the state for the
first time and becomes a state member of the system on or after
January 1, 2007, and is represented by State Bargaining Unit 16 or
19, means the highest average annual compensation earnable by the
member during the consecutive 36-month period immediately preceding
the effective date of his or her retirement, or the date of his or
her last separation from state service if earlier, or during any
other period of 36 consecutive months during his or her state
membership that the member designates on the application for
retirement.
(b) This section applies to service credit accrued while a member
of State Bargaining Unit 16 or 19.
(c) This section does not apply to:
(1) Former state employees previously employed before January 1,
2007, who return to state employment on or after January 1, 2007.
(2) State employees hired prior to January 1, 2007, who were
subject to Section 20281.5 during the first 24 months of state
employment.
(3) State employees hired prior to January 1, 2007, who become
subject to representation by State Bargaining Unit 16 or 19 on or
after January 1, 2007.
(4) State employees on an approved leave of absence employed
before January 1, 2007, who return to active employment on or after
January 1, 2007.
SEC. 6. Section 20037.10 of the Government Code is amended to
read:
20037.10. (a) Notwithstanding Sections 20035 and 20037, final
compensation for a person who is employed by the state for the
first time and becomes a state member of the system on or after
January 1, 2007, and is represented by State Bargaining Unit 7,
means the highest average annual compensation earnable by the member
during the consecutive 36-month period immediately preceding the
effective date of his or her retirement, or the date of his or her
last separation from state service if earlier, or during any other
period of 36 consecutive months during his or her state membership
that the member designates on the application for retirement.
(b) This section applies to service credit accrued while a member
of State Bargaining Unit 7.
(c) This section does not apply to:
(1) Service credit accrued while classified as a state peace
officer/firefighter while a member of Bargaining Unit 7.
(2) Former state employees previously employed before January 1,
2007, who return to state employment on or after January 1, 2007.
(3) State employees hired prior to January 1, 2007, who were
subject to Section 20281.5 during the first 24 months of state
employment.
(4) State employees hired prior to January 1, 2007, who become
subject to representation by State Bargaining Unit 7 on or after
January 1, 2007.
(5) State employees on an approved leave of absence employed
before January 1, 2007, who return to active employment on or after
January 1, 2007.
SEC. 7. Section 20037.11 of the Government Code is amended to
read:
20037.11. (a) Notwithstanding Sections 20035 and 20037, final
compensation for a person who is employed by the state for the
first time and becomes a state member of the system on or after
January 1, 2007, and is represented by State Bargaining Unit 10,
means the highest average annual compensation earnable by the member
during the consecutive 36-month period immediately preceding the
effective date of his or her retirement, or the date of his or her
last separation from state service if earlier, or during any other
period of 36 consecutive months during his or her state membership
that the member designates on the application for retirement.
(b) This section applies to service credit accrued while a member
of State Bargaining Unit 10.
(c) This section does not apply to:
(1) Former state employees previously employed before January 1,
2007, who return to state employment on or after January 1, 2007.
(2) State employees hired prior to January 1, 2007, who were
subject to Section 20281.5 during the first 24 months of state
employment.
(3) State employees hired prior to January 1, 2007, who become
subject to representation by State Bargaining Unit 10 on or after
January 1, 2007.
(4) State employees on an approved leave of absence employed
before January 1, 2007, who return to active employment on or after
January 1, 2007.
SEC. 8. Section 20037.12 of the Government Code is amended to
read:
20037.12. (a) Notwithstanding Sections 20035 and 20037, final
compensation for a person who is employed by the state for the
first time and becomes a state member of the system on or after
January 1, 2007, and is represented by State Bargaining Unit 18,
means the highest average annual compensation earnable by the member
during the consecutive 36-month period immediately preceding the
effective date of his or her retirement, or the date of his or her
last separation from state service if earlier, or during any other
period of 36 consecutive months during his or her state membership
that the member designates on the application for retirement.
(b) This section applies to service credit accrued while a member
of State Bargaining Unit 18.
(c) This section does not apply to:
(1) Former state employees previously employed before January 1,
2007, who return to state employment on or after January 1, 2007.
(2) State employees hired prior to January 1, 2007, who were
subject to Section 20281.5 during the first 24 months of state
employment.
(3) State employees hired prior to January 1, 2007, who become
subject to representation by State Bargaining Unit 18 on or after
January 1, 2007.
(4) State employees on an approved leave of absence employed
before January 1, 2007, who return to active employment on or after
January 1, 2007.
SEC. 9. Section 20039.5 of the Government Code is amended to read:
20039.5. Notwithstanding Article 5 (commencing with Section
20350) of Chapter 3, or any other provision of this part, "final
compensation" for the purposes of determining any pension or benefit
for service with the California National Guard with respect to a
National Guard member means the highest average annual compensation
that was earned during a consecutive 12-month period while
rendering service with the California National Guard. The final
compensation of a National Guard member under another retirement or
pension system shall not apply to the calculation of his or her
retirement allowance with respect to service with the California
National Guard.
SEC. 10. Section 20041 of the Government Code is repealed.
20041. For a local member who is an employee of a contracting
agency that, by the provisions of its contract with the board, is
subject to Section 20043, and for no other member, "final
compensation," shall be subject to Section 20043, under which a
member, who is afforded an election thereunder, but does not make the
election, may have more than one final compensation.
SEC. 11. Section 20043 of the Government Code is repealed.
20043. The entire compensation of a local member shall be
included in any computation to be made under this part for service
rendered as an employee of a contracting agency, the effective date
of whose contract is on or after July 1, 1952, or whose contract on
its effective date prior to July 1, 1952, contained an election to be
subject to this section.
SEC. 12. Section 20069 of the Government Code is amended to read:
20069. (a) "State service" means service rendered as an employee
or officer (employed, appointed, or elected) of the state, the
California Institute for Regenerative Medicine and the officers and
employees of its governing body, the university, a school employer,
or a contracting agency, for compensation, and only while he or she
is receiving compensation from that employer therefor, except as
provided in Article 4 (commencing with Section 20990) of Chapter 11.
(b) "State service," solely for purposes of qualification for
benefits and retirement allowances under this system, shall also
include service rendered as an officer or employee of a county if the
salary for the service constitutes compensation earnable by a member
of this system under Section 20638.
(c) "State service" service,"
except for purposes of qualification for health or dental benefits,
shall also include compensated service rendered by an officer,
warrant officer, or a person of the enlisted ranks of the California
National Guard who has elected to become a member pursuant to Section
20326 and who has not canceled his or her membership pursuant to
Section 20327.
SEC. 13. Section 20164 of the Government Code is amended to read:
20164. (a) The obligations of this system to its members continue
throughout their respective memberships, and the obligations of this
system to and in respect to retired members continue throughout the
lives of the respective retired members, and thereafter until all
obligations to their respective beneficiaries under optional
settlements have been discharged. The obligations of the state and
contracting agencies to this system in respect to members employed by
them, respectively, continue throughout the memberships of the
respective members, and the obligations of the state and contracting
agencies to this system in respect to retired members formerly
employed by them, respectively, continue until all of the obligations
of this system in respect to those retired members, respectively,
have been discharged. The obligations of any member to this system
continue throughout his or her membership, and thereafter until all
of the obligations of this system to or in respect to him or her have
been discharged.
(b) For the purposes of payments into or out of the retirement
fund for adjustment of errors or omissions, whether pursuant to
Section 20160, 20163, or 20532, or otherwise, the period of
limitation of actions shall be three years, and shall be applied as
follows:
(1) In cases where this system makes an erroneous payment to a
member or beneficiary, this system's right to collect shall expire
three years from the date of payment.
(2) In cases where this system owes money to a member or
beneficiary, the period of limitations shall not apply.
(3) In
(c) Notwithstanding subdivision (b), in
cases where payment is erroneous because of the death of the
retired member or beneficiary or because of the remarriage of the
beneficiary, the period of limitation shall be 10 years and
shall commence with the discovery of the erroneous payment.
(c)
(d) Notwithstanding subdivision (b), where any payment
has been made as a result of fraudulent reports for compensation
made, or caused to be made, by a member for his or her own benefit,
the period of limitation shall be 10 years and that period shall
commence either from the date of payment or upon discovery of the
fraudulent reporting, whichever date is later.
(d)
(e) The board shall determine the applicability of the
period of limitations in any case, and its determination with respect
to the running of any period of limitation shall be conclusive and
binding for purposes of correcting the error or omission.
SEC. 14. Section 20195 of the Government Code is amended to read:
20195. (a) The board may select, purchase, or acquire in the name
of the system, the fee or any lesser interest in real property,
improved or unimproved, and may construct or remodel, and equip, an
office building, including appropriate satellite structures, in the
County of Sacramento, California, for its use and for the use of
other state retirement systems excepting the State Teachers'
Retirement System, other departments, boards, and agencies of the
state, or appropriate private commercial entities as space may be
available from time to time. The office building and satellite
structures shall conform to the Capital Master Plan if located within
an area subject to the plan.
(b) The board may select, purchase, or acquire in the name of the
system, the fee or any lesser interest in real property, improved or
unimproved, and may construct or remodel, and equip, business
recovery centers in California for use by the system as an alternate
facility, emergency operations center, or data center that the board
determines is appropriate for disaster preparedness.
(b)
(c) If the board acquires bare land, improvements shall
be constructed according to plans approved by the State Public Works
Board and Department of General Services.
(c)
(d) If the board acquires land with improvements
thereon, the improvements shall be remodeled or completed in
accordance with plans approved by the State Public Works Board and
Department of General Services.
(d)
(e) If condemnation of the property selected is
necessary, the board may elect to deposit the funds deemed necessary
with the Treasurer. The funds are appropriated for purchase of the
selected property subject to the Property Acquisition Law.
(e)
(f) Work on all projects shall be done under contract
awarded to the lowest responsible bidder pursuant to bidding
procedures set forth in Part 2 (commencing with Section 10100) of
Division 2 of the Public Contract Code.
SEC. 15. Section 20221 of the Government Code is amended to read:
20221. Each state agency, school employer, and the chief
administrative officer of a contracting agency or any other person
who its governing body may designate shall furnish all of the
following:
(a) Immediate written notice to the
board board, in the manner prescribed by the system,
of the change in status of any member resulting from transfer,
promotion, leave of absence, resignation, reinstatement, dismissal,
or death.
(b) Any additional information concerning any member that the
board may require in the administration of this system.
(c) The services of its officer and departments that the board may
request in connection with claims by members against this system.
SEC. 16. Section 20228 of the Government Code is amended to read:
20228. The board shall annually employ a certified public
accountant, who is not in public employment, to audit the financial
statements of this system. The term for which the board may contract
to employ a certified public accountant shall not exceed five years.
The board shall not contract to employ the same certified public
accountant for two consecutive five-year terms. The costs of the
audit shall be paid from the income of the retirement fund. The audit
shall be made annually. The board shall file a copy of the audit
report with the Governor, the Secretary of the Senate, and the Chief
Clerk of the Assembly.
The board, for purposes of Section 7504, may file internally
prepared financial statements with the Controller within six months
of the end of the fiscal year, and shall file independently audited
financial statements as soon as they are available.
The annual audits of the financial statements of
the system shall not be duplicated by the Department of Finance
or the State Auditor. This
This section does not affect the ability of the State Auditor
or the Department of Finance to conduct other types of audits of the
system as otherwise authorized by statute. Thi s
system shall be exempt from a pro rata general administrative charge
for auditing.
SEC. 17. Section 20281.5 of the Government Code is amended to
read:
20281.5. (a) Notwithstanding Section 20281, a person who becomes
a state miscellaneous member other than a National Guard
member or state industrial member of the system on or after
the effective date of this section because the person is first
employed by the state and qualifies for membership shall be subject
to the provisions of this section.
(b) Members subject to this section shall not accrue credit for
service in the system and shall not make employee contributions to
the system, including the contributions set forth in Section 20677.4,
for employment with the state until the first day of the first pay
period commencing 24 months after becoming a member of the system.
(c) Notwithstanding subdivision (a), this section shall not apply
to any of the following:
(1) Persons who are already members or annuitants of the system at
the time they are first employed by the state.
(2) Employees of the California State University, or the
legislative or judicial branch of state government.
(3) Members of the Judges' Retirement System, the Judges'
Retirement System II, the Legislators' Retirement System, the State
Teachers' Retirement System, or the University of California
Retirement Plan.
(4) Persons who are members of a reciprocal retirement system and
whose employment was subject to a reciprocal retirement system within
the six months prior to membership in this system.
(5) Persons whose service is not included in the federal system.
(6) Persons who are employed by the Department of the California
Highway Patrol as students at the department's training school
established pursuant to Section 2262 of the Vehicle Code.
(7) Persons who had ceased to be members pursuant to Section 20340
or 21075.
(8) Persons who are National Guard members pursuant to Section
20380.5.
(d) A separation of employment does not alter the 24-month period
described by subdivision (b). A member who separates from state
employment shall remain subject to this section if he or she returns
to state employment as a state miscellaneous or state industrial
member within that 24-month period.
(e) Any regulations adopted by the board to implement the
requirements of this section shall not be subject to the review and
approval of the Office of Administrative Law, pursuant to Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3. The
regulations shall become effective immediately upon filing with the
Secretary of State.
SEC. 18. Section 20305 of the Government Code is amended to read:
20305. (a) An employee serving on a less than full-time
basis whose appointment or employment contract does
not fix a term of full-time, continuous employment in excess of six
months is excluded from this system unless:
(1) He or she is a member at the time he or she renders
less than full-time that service and is not
otherwise excluded pursuant to this article or by a provision of a
contract.
(2) His or her position requires regular, part-time service for
one year or longer for at least an average of 20 hours a week, or
requires service that is equivalent to at least an average of 20
hours a week for one year or longer , unless he or she
elects membership pursuant to Section 20325.
(3) His or her employment is, in the opinion of the board, on a
seasonal, limited-term, on-call, emergency, intermittent, substitute,
or other irregular basis, and is compensated and meets one of the
following conditions:
(A) The appointment or employment contract fixes
does not fix a term of full-time, continuous
employment in excess of six months or, if a term is not
fixed, months, but full-time employment
continues for longer than six months, in which case membership shall
be effective not later than the first day of the first pay period of
the seventh month of employment.
(B) The person works more than completes
125 days, if employed on a per diem basis or, if employed on
other than a per diem basis, completes 1,000 hours within
the fiscal year, in which case, membership shall be effective not
later than the first day
of the first pay period of the month following the month in which 125
days or 1,000 hours of service were completed. For purposes of this
subdivision, "day" means each eight-hour period of employment worked
by an employee paid on a per diem basis so that membership is
effective after he or she has completed 1,000 hours of compensated
service in a fiscal year.
(C) The person is employed by the Department of Forestry and Fire
Protection in one of the positions that provide state safety
membership pursuant to Section 20400 or state peace
officer/firefighter membership pursuant to Section 20392.
(4) He or she is a temporary faculty member of the California
State University and meets one of the following conditions:
(A) He or she works two consecutive semesters or three consecutive
quarters at half-time or more, and is not otherwise excluded
pursuant to this article, in which case, membership shall be
effective with the start of the next consecutive semester or quarter
if the appointment requires service of half-time or more.
(B) He or she works two consecutive semesters or three consecutive
quarters at a minimum teaching load of six weighted units, and is
not otherwise excluded pursuant to this article, in which case
membership shall be effective at the start of the next consecutive
semester or quarter, but not earlier than July 1, 2004, if the
appointment requires service of six weighted units or more. This
subparagraph does not apply to faculty members unless provided for in
a memorandum of understanding agreed upon, on or after January 1,
2003, pursuant to Chapter 12 (commencing with Section 3560) of
Division 4 of Title 1, or authorized by the Trustees of the
California State University for employees excluded from collective
bargaining.
(5) He or she is a member of the Board of Prison Terms, the State
Personnel Board, or the State Air Resources Board and elects to
become a member pursuant to Section 20320.
(6) He or she is participating in partial service retirement,
pursuant to Article 1.7 (commencing with Section 19996.30) of Chapter
7 of Part 2.6.
(7) He or she is included by specific provision of the board
relating to the exclusion of less than full-time employees.
(b) This section shall supersede any contract provision excluding
persons in any temporary or seasonal employment basis and shall apply
only to persons entering employment on and after January 1, 1975.
Except as provided in Section 20502, no contract or contract
amendment entered into after January 1, 1981, shall contain any
provision excluding persons on an irregular employment basis.
SEC. 19. Section 20475 of the Government Code is amended to read:
20475. Notwithstanding Section 20474, a contracting agency may
amend its contract or previous amendments to its contract, without
election among its employees, to reduce benefits, to terminate
provisions that are available only by election of the agency to
become subject thereto, to provide different benefits or provisions
or to provide a combination of those changes with respect to service
performed after the effective date of the contract amendment made
pursuant to this section, if the contracting agency has fully
discharged all of the obligations imposed by Chapter 10 (commencing
with Section 3500) of Division 4 of Title 1 with respect to the
contract amendments, and if the amendment provides that:
(a) The contract amendments apply uniformly with respect to all
members within each of the following classifications: local
miscellaneous members, local police officers, local firefighters,
county peace officers, local sheriffs, local safety members,
school safety members, or all local safety members other than
local police officers, local firefighters, county peace officers,
or local sheriffs , local safety members, or
school safety members .
(b) A member shall be subject to the contract as amended only if,
after the effective date of the contract amendment, the member either
(1) receives service credit for the first time within a
classification, or (2) the member returns to service within a
classification following termination of membership as provided for in
subdivision (b) of Section 20340 unless the member has redeposited
or elects prior to 90 days after returning to service to redeposit
contributions pursuant to Section 20750, in which case the member
shall not be subject to the contract amendment.
Amendments to the contract and amendments of previous amendments
to the contract may be effected pursuant to this section only once
during any three-year period with respect to each of the
classifications.
SEC. 20. Section 20479 of the Government Code is amended to read:
20479. Notwithstanding any other provision of law, including, but
not limited to, Chapter 10 (commencing with Section 3500) of
Division 4 of Title 1, no contract or contract amendment shall be
made to provide retirement benefits for some, but not all members of
the following membership classifications: local miscellaneous
members, local police officers, local firefighters, county peace
officers, local sheriffs, or local safety officers
, or school safety members .
No contract or contract amendments shall provide different
retirement benefits for a subgroup, including, but not limited to,
bargaining units or unrepresented groups, within those membership
classifications.
This section does not preclude changing membership classification
from one membership classification to another membership
classification or exclusion of groups of members by contract.
For purposes of this section, "benefit" shall not be limited to
the benefits set forth in Section 20020.
SEC. 21. Section 20636.1 of the Government Code is amended to
read:
20636.1. (a) Notwithstanding Section 20636, and Section 45102 of
the Education Code, "compensation earnable" by a school member means
the payrate and special compensation of the member, as defined by
subdivisions (b) and (c), and as limited by Section 21752.5.
(b) (1) "Payrate" means the normal monthly rate of pay or base pay
of the member paid in cash to similarly situated members of the same
group or class of employment for services rendered on a full-time
basis during normal working hours. For noncertificated
members, where the normal work schedule is less than
purposes of this part, for classified members, full-time employment
is 40 hours per week, and payments for
additional services rendered, not to exceed 40 hours per
week, shall be reported as compensation earnable for all months of
the year in which work is performed. "Payrate," for a member who is
not in a group or class, means the monthly rate of pay or base pay of
the member, paid in cash and pursuant to publicly available pay
schedules, for services rendered on a full-time basis during normal
working hours, subject to the limitations of paragraph (2) of
subdivision (e).
(A) For the purposes of this section, "noncertificated
members" "classified members" shall mean members
who retain membership under this system while employed with a school
employer in positions not subject to coverage under the Defined
Benefit Program under the State Teacher's Retirement System.
(B) For the purposes of this section, and Sections 20962 and
20966, "certificated members" shall mean members who retain
membership under this system while employed in positions subject to
coverage under the Defined Benefit Program under the State Teacher's
Retirement System.
(2) The computation for any leave without pay of a member shall be
based on the compensation earnable by him or her at the beginning of
the absence.
(3) The computation for time prior to entering state service shall
be based on the compensation earnable by him or her in the position
first held by him or her in state service.
(c) (1) Special compensation of a school member includes any
payment received for special skills, knowledge, abilities, work
assignment, workdays or hours, or other work conditions.
(2) Special compensation shall be limited to that which is
received by a member pursuant to a labor policy or agreement or as
otherwise required by state or federal law, to similarly situated
members of a group or class of employment that is in addition to
payrate. If an individual is not part of a group or class, special
compensation shall be limited to that which the board determines is
received by similarly situated members in the closest related group
or class that is in addition to payrate, subject to the limitations
of paragraph (2) of subdivision (e).
(3) Special compensation shall be for services rendered during
normal working hours and, when reported to the board, the employer
shall identify the pay period in which the special compensation was
earned.
(4) Special compensation may include the full monetary value of
normal contributions paid to the board by the employer, on behalf of
the member and pursuant to Section 20691, provided that the employer'
s labor policy or agreement specifically provides for the inclusion
of the normal contribution payment in compensation earnable.
(5) The monetary value of any service or noncash advantage
furnished by the employer to the member, except as expressly and
specifically provided in this part, shall not be special compensation
unless regulations promulgated by the board specifically determine
that value to be "special compensation."
(6) The board shall promulgate regulations that delineate more
specifically and exclusively what constitutes "special compensation"
as used in this section. A uniform allowance, the monetary value of
employer-provided uniforms, holiday pay, and premium pay for hours
worked within the normally scheduled or regular working hours that
are in excess of the statutory maximum workweek or work period
applicable to the employee under Section 201 et seq. of Title 29 of
the United States Code shall be included as special compensation and
appropriately defined in those regulations.
(7) Special compensation does not include any of the following:
(A) Final settlement pay.
(B) Payments made for additional services rendered outside of
normal working hours, whether paid in lump sum or otherwise.
(C) Any other payments the board has not affirmatively determined
to be special compensation.
(d) Notwithstanding any other provision of law, payrate and
special compensation schedules, ordinances, or similar documents
shall be public records available for public scrutiny.
(e) (1) As used in this part, "group or class of employment" means
a number of employees considered together because they share
similarities in job duties, work location, collective bargaining
unit, or other logical work related grouping. Under no circumstances
shall one employee be considered a group or class.
(2) Increases in compensation earnable granted to any employee who
is not in a group or class shall be limited during the final
compensation period applicable to the employees, as well as the two
years immediately preceding the final compensation period, to the
average increase in compensation earnable during the same period
reported by the employer for all employees who are in the same
membership classification, except as may otherwise be determined
pursuant to regulations adopted by the board that establish
reasonable standards for granting exceptions.
(f) As used in this part, "final settlement pay" means any pay or
cash conversions of employee benefits that are in excess of
compensation earnable, that are granted or awarded to a member in
connection with or in anticipation of a separation from employment.
The board shall promulgate regulations that delineate more
specifically what constitutes final settlement pay.
SEC. 22. Section 20962 of the Government Code is amended to read:
20962. (a) One year of service credit shall
be granted for service rendered and compensated in a fiscal year in
full-time employment for any of the following:
(a)
(1) One academic year of service for persons employed
on an academic year basis by the University of California, the
California State University system, or school employees who are
certificated members, under terms and conditions prescribed by the
board.
(b)
(2) Ten months of service for persons employed on a
monthly basis.
(c)
(3) Two hundred fifteen days of service after June 30,
1951, and 250 days prior to July 1, 1951, for persons employed on a
daily basis.
(d)
(4) One thousand seven hundred twenty hours of service
after June 30, 1951, and 2,000 hours prior to July 1, 1951, for
persons employed on an hourly basis.
(e)
(5) Nine months of service for state employees
represented by State Bargaining Unit 3 and subject to the 9-12 pay
plan or leave plan, provided a memorandum of understanding has been
agreed to by the state employer and the recognized employee
organization to become subject to this subdivision. A
(b) A fractional year of credit
shall be given for service rendered in a fiscal year in full-time
employment for less than the time prescribed in this section.
SEC. 23. Section 20967 of the Government Code is amended to read:
20967. For the purpose of calculating retirement benefits based
on part-time service, except under Section 21381, compensation
earnable shall be taken as the compensation that would have been
earnable if the employment had been on a full-time basis and the
member had worked full time , and shall conform to the
definitions given in Section 20636.1 for school members and Section
20636 for all other members .
SEC. 24. Section 21117 of the Government Code is amended to read:
21117. A state miscellaneous member or industrial member, other
than a university member, shall be partially retired for service upon
his or her written application to the board if he or she has elected
to participate in partial service retirement pursuant to Article 1.7
(commencing with Section 19996.30) of Chapter 7 of Part 2.6,
provided he or she is credited with 20 years of state
service and has attained the applicable normal retirement
age as prescribed by regulations of the board.
SEC. 25. Section 21118 of the Government Code is amended to read:
21118. (a) A local member shall be partially retired for service
upon his or her written application to the board if he or she has
elected to participate in partial service retirement pursuant to
Sections 21110 through 21115, provided, he or she is
credited with 20 years of state service and provided
he or she has attained the applicable normal retirement age as
prescribed by regulations of the board.
(b) This section shall not apply to a contracting agency or its
employees until the contracting agency elects to be subject to it by
amendment to its contract made in a manner prescribed for approval of
contracts or in the case of a new contract, by express provision of
the contract. The operative date of this section with respect to a
local member shall be the effective date of the amendment to his or
her employer's contract electing to be subject to this section.
SEC. 26. Section 21252 of the Government Code is amended to read:
21252. (a) A member's written application for retirement, if
submitted to the board within nine months after the date the member
discontinued his or her state service, and, in the case of retirement
for disability, if the member was physically or mentally
incapacitated to perform his or her duties from the date the member
discontinued state service to the time the written application for
retirement was submitted to the board, shall be deemed to have been
submitted on the last day for which salary was payable. The effective
date of a written application for retirement submitted to the board
more than nine months after the member's discontinuance of state
service shall be determined in accordance with Section 20160
the first day of the month in which the member's
application is received at an office of the board or by an employee
of this system designated by the board .
(b) An application for retirement may only be submitted by or for
a member who is living on the date the application is actually
received by the system. If the member has been deemed incompetent to
act on his or her own behalf continuously from the last day for which
salary was payable, the effective date of retirement may not be
earlier than one year prior to the month in which an application
submitted by the guardian of the member's estate is received by the
system.
(c) Notwithstanding any other provision of law, a member who
separates from a retirement system that has established reciprocity
with this system with the intention of retiring concurrently under
both systems and who submits his or her application for retirement
for service to the board within nine months after that separation,
may have his or her application received and acted upon by this
system as if the application were submitted pursuant to this section.
SEC. 27. Section 21264 of the Government Code is amended to read:
21264. Retired members of this system, and beneficiaries who are
entitled to receive allowances or benefits under this part, may
authorize deductions to be made from their retirement allowance
payments or from the allowances and benefits, respectively, or from
either or both where if both are being
received, in accordance with regulations or procedures
established by the board for the payment of group insurance premiums
and other premiums for benefits or protection provided for under
Section 1151, including employer-sponsored voluntary insurance
programs, for credit union payments or shares, or for the payment,
with respect to any retired state members
member of this system, of dues provided
for under Section 1152 or for any other services
pursuant to Article 6 (commencing with Section 1150) of Chapter 1 of
Division 4 of Title 4 . The board shall determine the
additional cost involved in making deductions under this section and
the state agency, the public agency, the association, or the unit
thereof, or the credit union shall pay the amount of the additional
cost to the board for deposit in the retirement fund.
SEC. 28. Section 21296 of the Government Code is amended to read:
21296. Retirement shall be effective and the retirement allowance
shall begin to accrue as of the date designated in the nonmember's
application as the effective date of retirement, or the day following
the date of court order dividing the community property of the
member and nonmember, if later. In If the
retirement application is not received within nine months of the
requested effective date, in no event shall the retirement
become effective or the retirement allowance begin to accrue earlier
than the first day of the month in which the nonmember's application
is received at an office of the board or by an employee of this
system designated by the board, or, if the nonmember has been
incompetent to act on his or her own behalf continuously from the
date of dissolution or legal separation, one year prior to the month
in which an application by the guardian of his or her estate is so
received. An application for retirement may only be filed by or for a
nonmember who is living on the date the application is actually
received by this system. The effective date of a nonmember
application for retirement received more than nine months after the
requested effective date shall be determined in accordance with
Section 20160.
SEC. 29. Section 21310.5 is added to the Government Code, to read:
21310.5. The cost-of-living adjustments under Section 415(d) of
the Internal Revenue Code to the limits described in Section 415(b)
of the Internal Revenue Code, as prescribed by the regulations of the
Department of the Treasury of the United States, are hereby
incorporated by reference and shall continue to apply after a member'
s severance from employment or annuity starting date. The amount
payable to a member in any limitation year, including any
cost-of-living adjustments provided under this article, shall not be
greater than the limit applicable under Section 415(b) of the
Internal Revenue Code at the annuity starting date, as increased in
subsequent years pursuant to Section 415(d) of the Internal Revenue
Code and the associated regulations.
SEC. 30. Section 21753 of the Government Code is amended to read:
21753. Notwithstanding any other provision of law, and
except as provided in Section 21310.5, the retirement allowance
of a member shall be increased to reflect cost-of-living adjustments
to the limits contained in Section 415 of Title 26 of the United
States Code as provided in Section 415(d) of that code, provided that
the member's allowance determined without regard to Section 415
equals or exceeds the applicable limit as indexed. Nothing in this
section is intended to, nor shall be construed to, entitle a retired
member to a cost-of-living adjustment to his or her allowance in
excess of that provided pursuant to Part 3 (commencing with Section
20000).
SEC. 31. Section 22839 of the Government Code is amended to read:
22839. Thirty days prior to, or 30 60
days following, retirement and during the open enrollment
period, a state employee enrolled in a flexible benefit plan
administered by the state shall be given the option to enroll in a
health benefit plan approved or maintained by the board and receive
the applicable employer contribution, if the state employee would
otherwise qualify as an annuitant.
SEC. 32. Section 22864 of the Government Code is amended to read:
22864. (a) Premiums charged for enrollment in a health benefit
plan shall reasonably reflect the cost of the benefits provided.
(b) This part does not limit the board's authority to do any of
the following:
(1) Enter into contracts with carriers providing compensation
based on carrier performance.
(2) Credit premiums to an employer for expenditures that the board
determines are likely to improve the health status of employees and
annuitants or otherwise reduce health care costs.
(3) Adjust the premiums charged under any health benefit plan or
contract to reflect regional variations in the cost of health care
services and other relevant factors. Any adjustment of these premiums
shall be at the sole discretion of the board and shall only apply to
the premiums charged to employees and annuitants of contracting
agencies. The board may require a contracting agency and its
employees and annuitants to pay the premium rate established pursuant
to this paragraph, which may be different than the health benefit
plan or contract premium rate that would otherwise be applicable to
that agency.
(4) Use reserves generated by one or more self-funded health
benefit plans to reduce the premiums charged for enrollment in one or
more separate self-funded health benefit plans offered by the board.
The board, in its sole discretion, shall determine whether a
self-funded health benefit plan maintains reserves and the amount of
reserves to be used pursuant to this part.
SEC. 33. Section 22960.15 of the Government Code is amended to
read:
22960.15. "Eligible employee" means any person employed by the
state, whose compensation is paid out of funds directly controlled by
the state, and who is subject to coverage by the plan pursuant to
the provisions of Section 23000 22960 .
SEC. 34. Section 75006 of the Government Code is amended to read:
75006. (a) Any allowance payable to a
retired judge or to a surviving spouse or to an eligible surviving
child which has accrued and remained unpaid at the time of the judge'
s or the surviving spouse's or surviving child's death, or any
unclaimed warrant issued prior to the date of death and returned to
the system, shall be paid pursuant to the following
order :
(a)
(1) The survivor entitled to an allowance payable by
this system.
(b)
(2) The beneficiary designated by the surviving spouse,
eligible surviving child, or retired judge if there is no eligible
survivor.
(c)
(3) The estate of the deceased, if there is no one
entitled under subdivision (a) or (b) to
payment under paragraph (1) or (2). The payment to the estate shall
be paid to either the estate of the deceased or the duly authorized
representative or representatives of the estate when this system
receives a court order appointing an executor, administrator, or
personal representative .
(4) If the estate does not require probate and the deceased has a
trust, the payment may, in the judgment of the board, be paid to the
successor trustee named in the trust.
(5) If the estate does not require probate and the deceased does
not have a trust, the payment may, in the judgment of the board, be
paid to the beneficiary or beneficiaries of the deceased named in a
valid will.
(b) If there is no qualifying beneficiary pursuant to paragraphs
(1) to (5), inclusive, of subdivision (a), the payment shall be paid
to the surviving next of kin of the deceased pursuant to the order of
distribution specified in Section 21493.
SEC. 35. Section 75028.5 of the Government Code is amended to
read:
75028.5. After a judge has withdrawn his or her accumulated
contributions upon discontinuance of his or her service, that service
shall not count in the event he or she later becomes a judge again,
until he or she pays into the Judges' Retirement Fund the amount of
accumulated contributions withdrawn by him or her, plus interest
thereon at the rate of interest then being required to be paid by
members of the Public Employees' Retirement System under Section
20654 20750 from the date of withdrawal
to the date of his or her payment.
SEC. 36. Section 75080.5 is added to the Government Code, to read:
75080.5. (a) Except as described in subdivision (b), if a person
who is retired under this system is appointed or elected to serve as
a judge, he or she shall reinstate from retirement and again become a
member of the Judges' Retirement System pursuant to this chapter.
(b) This section shall not apply to a retired judge who is
assigned to serve in a court pursuant to Section 68543.5, and he or
she shall not earn service credit or be entitled
to retirement benefits under this part for
that assignment.
SEC. 37. Section 75507 of the Government Code is amended to read:
75507. (a) Any allowance payable to a
retired judge or to a surviving spouse or to an eligible surviving
child that has accrued and remained unpaid at the time of the death
of the judge or the death of a surviving spouse or surviving child,
or any unclaimed warrant issued prior to the date of death and
returned to the board, shall be paid pursuant to
one of the following order :
(a)
(1) The survivor entitled to an allowance payable by
the board.
(b)
(2) The beneficiary designated by the surviving spouse,
eligible surviving child, or retired judge if there is no eligible
survivor.
(c)
(3) The estate of the deceased, if there is no one
entitled to payment under subdivision (a) or (b).
paragraph (1) or (2). The payment to the estate shall be paid to
either the estate of the deceased or the duly authorized
representative or representatives of the estate when this system
receives a court order appointing an executor, administrator, or
personal representative.
(4) If the estate does not require probate and the deceased has a
trust, the payment may, in the judgment of the board, be paid to the
successor trustee named in the trust.
(5) If the estate does not require probate and the deceased does
not have a trust, the payment may, in the judgment of the board, be
paid to the beneficiary or beneficiaries of the deceased named in a
valid will.
(b) If there is no qualifying beneficiary pursuant to paragraphs
(1) to (5), inclusive, of subdivision (a), the payment shall be paid
to the surviving next of kin of the deceased pursuant to the order of
distribution specified in Section 21493.