BILL NUMBER: AB 178 AMENDED
BILL TEXT
AMENDED IN SENATE JUNE 19, 2012
AMENDED IN SENATE MAY 31, 2012
AMENDED IN ASSEMBLY MARCH 22, 2011
INTRODUCED BY Assembly Members Gorell and Ma
JANUARY 24, 2011
An act to amend Section Sections
24204, 24208, and 24214 of the Education Code, relating to
state teachers' retirement , and declaring the urgency thereof,
to take effect immediately .
LEGISLATIVE COUNSEL'S DIGEST
AB 178, as amended, Gorell. State teachers' retirement.
The Teachers' Retirement Law limits the amount of postretirement
compensation that may be earned in specified types of employment by a
retired member of the Defined Benefit Program without a reduction in
the retirement benefits of the member. That law provides exemptions
from this limit and until June 30, 2012, specifies that the
limitation provisions do not apply to compensation earned by a member
retired for service who has returned to work after retirement and,
for at least 12 consecutive months, has not performed specified
activities.
This bill would extend the operation of that exemption until June
30, 2013. The bill also would exempt from the earnings limitation,
until June 30, 2013, compensation paid to a retired member who has
returned to work after the date of retirement as a trustee,
administrator, or fiscal adviser appointed
approved pursuant to specified provisions by the Superintendent
of Public Instruction, the Board of Governors of the California
Community Colleges, or a county superintendent of schools to
address academic or financial weaknesses in a school district.
The bill would specify the documentation required for any of those
persons exercising that compensation exemption. The bill would
additionally exempt from the earnings limitation an employee of a 3rd
party which does not participate in a California public pension
system if the activities performed by the person are not normally
performed by employees of a public employer and it is for a
limited-term assignment.
The Teachers' Retirement Law limits the amount of compensation for
certain creditable service activities by a retired member in one
school year to be $22,000 adjusted by the percentage change in the
average compensation earnable by active members of the Defined
Benefit Program, from the 1998-99 fiscal year to the fiscal year
ending in the previous calendar year.
The bill would change that limit to be 1/2 of the median final
compensation of all members who retired for service during the fiscal
year ending in the previous calendar year.
Existing law authorizes a retired member of the State Teachers'
Retirement System (STRS) to terminate his or her retirement
allowance, reinstate as an active member, and later cancel the
termination upon subsequently retiring, as specified. Existing law
prescribes the conditions under which a STRS service retirement
allowance becomes effective and requires, in this regard, that the
effective date be at least one year following the date on which it is
terminated pursuant to the above-described provision.
This bill would eliminate the one-year waiting period after the
termination. The bill would also prohibit a member who terminates his
or her retirement allowance pursuant to that provision and retires
within one year of reinstatement from electing a different option or
different set of beneficiaries than were in effect at the time of the
termination.
This bill would declare that it is to take effect immediately as
an urgency statute.
Vote: majority 2/3 . Appropriation:
no. Fiscal committee: yes. State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 24204 of the
Education Code is amended to read:
24204. (a) A service retirement allowance under this part shall
become effective upon any date designated by the member, provided all
of the following conditions are met:
(1) An application for service retirement allowance is filed on a
form provided by the system, which is executed no earlier than six
months before the effective date of retirement allowance.
(2) The effective date is later than the last day of creditable
service for which compensation is payable to the member.
(3) The effective date is no earlier than one year
following the date on which the retirement allowance was
terminated under Section 24208 , or subdivision (a) of
Section 24117 .
(4) The effective date is no earlier than one year following the
date on which the retirement allowance was terminated under
subdivision (a) of Section 24117.
(4)
(5) The effective date is no earlier than the date upon
and continuously after which the member is determined to the
satisfaction of the board to have been mentally incompetent.
(5)
(6) The effective date is no earlier than the date upon
which the member completes payment of a service credit purchase
pursuant to Section 22801, 22820, or 22826, or payment of a redeposit
of contributions pursuant to Section 23200, except as provided in
Section 22801 or 22829.
(6)
(7) The effective date is no earlier than the first day
of the month in which the application for disability benefits is
received at the system's headquarters office, as established pursuant
to Section 22375, if the application is made pursuant to Section
24201.5.
(b) A member who files an application for service retirement may
change or cancel his or her retirement application, as long as the
form provided by the system is received in the system's headquarters
office, established pursuant to Section 22375, no later than 30 days
from the date the member's initial benefit payment for the member's
most recent retirement under the Defined Benefit Program is paid by
the system.
(c) The retirement date of a member retiring on and after January
1, 2012, shall be no earlier than January 1, 2012.
SEC. 2. Section 24208 of the Education
Code is amended to read:
24208. (a) A member retired for service under this part may
terminate the retirement allowance payable under this part and
applicable to his or her credited service upon written request
to the system effective upon a date designated by the member, subject
to the following conditions:
(1) The request for termination of the retirement allowance is
filed on a form provided by the system, and the form is executed no
earlier than six months before the effective date of the termination.
(2) The effective date of the termination of the retirement
allowance is no earlier than the first day of the month in which the
request for termination is received in the system's headquarters
office, as established pursuant to Section 22375.
(b) A member who files a request for termination of the retirement
allowance may cancel the termination upon written request to the
system, provided that the cancellation request is received in the
system's headquarters office, as established pursuant to Section
22375, no later than the last day of the month in which the
termination is effective.
(c) A member whose retirement allowance is terminated pursuant to
this section may apply for retirement pursuant to Section 24209, in
accordance with Section 24204.
(d) A member whose retirement allowance is terminated pursuant to
this section may not file a preretirement election of an option
pursuant to Section 24307 within one year of reinstatement that
elects either a different option or a different beneficiary or set of
beneficiaries, or both, than were in effect at the time the
retirement allowance was terminated.
(e) A member whose retirement allowance is terminated pursuant to
this section and retires pursuant to Section 24209 within one year of
reinstatement shall elect the same option and beneficiary or
beneficiaries that were in effect at the time the retirement
allowance was terminated.
SECTION 1. SEC. 3. Section 24214 of
the Education Code, as amended by Section 25 of Chapter 703 of the
Statutes of 2011, is amended to read:
24214. (a) A member retired for service under this part may
perform the activities identified in subdivision (a) or (b) of
Section 22119.5, or subdivision (a) or (b) of Section 26113, as an
employee of an employer, as an employee of a third party, or as an
independent contractor within the California public school system,
but the member shall not make contributions to the retirement fund or
accrue service credit based on compensation earned from that
service. The employer shall maintain accurate records of the earnings
of the retired member and report those earnings monthly to the
system and retired member as described in Section 22461.
(b) If a member is retired for service under this part, the rate
of pay for service performed by that member as an employee of the
employer, as an employee of a third party, or as an independent
contractor shall not be less than the minimum, nor exceed that paid
by the employer to other employees performing comparable duties.
(c) A member retired for service under this part shall not be
required to reinstate for performing the activities identified in
subdivision (a) or (b) of Section 22119.5 as an employee of an
employer, as an employee of a third party, or as an independent
contractor within the California public school system.
(d) A member retired for service under this part may earn
compensation for performing activities identified in subdivision (a)
or (b) of Section 22119.5 in any one school year up to the limitation
specified in subdivision (f) as an employee of an employer, as an
employee of a third party, or as an independent
contractor, within the California public school system, without a
reduction in his or her retirement allowance.
(e) (1) The postretirement compensation limitation provisions set
forth in this section are not applicable to compensation earned by a
member retired for service under this part who has returned to work
after the date of retirement and, for a period of at least 12
consecutive months, has not performed the activities identified in
subdivision (a) or (b) of Section 22119.5 as an employee of an
employer, as an employee of a third party, or as an independent
contractor within the California public school system. For the
purpose of this paragraph, the period of 12 consecutive months shall
begin no earlier than the effective date of the member's most recent
retirement.
(2)
(e) The postretirement compensation limitation
provisions set forth in this section are not applicable to
compensation earned for the performance of the activities described
in subdivision (a) for which the employer is not eligible to receive
state apportionment or to compensation that is not creditable
pursuant to Section 22119.2.
(f) The limitation that shall apply to the compensation for
performance of the activities identified in subdivision (a) or (b) of
Section 22119.5 by a member retired for service under this part
either as an employee of an employer, an employee of a third party,
or as an independent contractor shall, in any one school year, be an
amount calculated by the board each July 1 equal to
twenty-two thousand dollars ($22,000) adjusted by the percentage
change in the average compensation earnable of active members of the
Defined Benefit Program, as determined by the system, from the
1998-99 one-half of the median final compensation of
all members who retired for service during the fiscal year to
the fiscal year ending in the previous calendar year.
(g) If a member retired for service under this part earns
compensation for performing activities identified in subdivision (a)
or (b) of Section 22119.5 in excess of the limitation specified in
subdivision (f), as an employee of an employer, as an employee of a
third party, or as an independent contractor, within the California
public school system, and if that compensation is not exempt from
that limitation under subdivision (e) or any other provisions of law,
the member's retirement allowance shall be reduced by the amount of
the excess compensation. The amount of the reduction may be equal to
the monthly allowance payable but shall not exceed the amount of the
annual allowance payable under this part for the fiscal year in which
the excess compensation was earned after any reduction made in
accordance with subdivision (b) of Section 24214.5 .
(h) The limitation specified in this section is not applicable to
compensation paid to a member retired for service under this part who
has returned to work after the date of retirement as a trustee,
administrator, or fiscal adviser appointed
approved by the Superintendent of Public Instruction, the Board
of Governors of the California Community Colleges, or a
county superintendent of schools to address academic or financial
weaknesses in a school district pursuant to any of the following
provisions:
(1) Section 41320.1.
(2) Article 2 (commencing with Section 42122) of Chapter 6 of Part
24 of Division 3 of Title 2.
(3) Article 3.1 (commencing with Section 52055.57) of Chapter 6.1
of Part 28 of Division 4 of Title 2.
(4) Section 84040.
(i) The Superintendent of Public Instruction, the Chancellor of
the California Community Colleges, or the county
superintendent of schools exercising the exemption pursuant to
subdivision (h) shall submit all documentation required by the system
to substantiate the eligibility of the retired member for the
exemption, including compliance with subdivision (h). The
documentation shall be received by the system prior to the retired
member's performance of any activity specified in subdivision (a) or
(b) of Section 22119.5 or subdivision (a) or (b) of Section 26113.
(j) The documentation required for subdivision (i) shall include
certification of the following:
(1) The position was first advertised for appointment to current
active or inactive members of the program with the necessary
qualifications to perform the requirements of the position and no
qualified current active or inactive member was available to be
appointed.
(2) The appointing authority made a good faith effort to hire a
retired member who reinstated to active membership for the position
at the same salary that was offered as first advertised pursuant to
paragraph (1).
(3) The appointing authority, having tried and failed to hire a
current active or inactive member or a reinstated retired member,
hired a retired member and the salary offered to the retired member
subject to this paragraph does not exceed the salary that was offered
as first advertised pursuant to paragraph (1).
(4) The appointment shall be terminated no later than June 30,
2013.
(5) The salary paid shall be no greater than the salary offered to
current active members for the appointed position.
(k) An employee of a third party shall not be subject to this
section if he or she meets all of the following conditions:
(1) He or she performs a limited-term assignment.
(2) The third-party employer does not participate in a California
public pension system.
(3) The activities performed by the individual are not normally
performed by employees of the employer, as defined in Section 22131.
(j)
( l ) The amendments to this
section enacted during the 1995-96 Regular Session shall be deemed to
have become operative on July 1, 1996.
(k)
(m) This section shall apply to compensation paid during the
2012-13 fiscal year.
(n) This section shall become inoperative on June 30,
2013, and, as of January 1, 2014, is repealed, unless a later enacted
statute, that becomes operative on or before January 1, 2014,
deletes or extends the dates on which it becomes inoperative and is
repealed.
SEC. 2. SEC. 4. Section 24214 of the
Education Code, as amended by Section 26 of Chapter 703 of the
Statutes of 2011, is amended to read:
24214. (a) A member retired for service under this part may
perform the activities identified in subdivision (a) or (b) of
Section 22119.5, or subdivision (a) or (b) of Section 26113, as an
employee of an employer, as an employee of a third party, or as an
independent contractor within the California public school system,
but the member shall not make contributions to the retirement fund or
accrue service credit based on compensation earned from that
service. The employer shall maintain accurate records of the earnings
of the retired member and report those earnings monthly to the
system and retired member as described in Section 22461.
(b) If a member is retired for service under this part, the rate
of pay for service performed by that member as an employee of the
employer, as an employee of a third party, or as an independent
contractor within the California public school system shall not be
less than the minimum, nor exceed that paid by the employer to other
employees performing comparable duties.
(c) A member retired for service under this part shall not be
required to reinstate for performing the activities identified in
subdivision (a) or (b) of Section 22119.5 as an employee of an
employer, as an employee of a third party, or as an independent
contractor within the California public school system.
(d) A member retired for service under this part may earn
compensation for performing activities identified in subdivision (a)
or (b) of Section 22119.5 in any one school year up to the limitation
specified in subdivision (f) as an employee of an employer, as an
employee of a third party, or as an independent
contractor, within the California public school system, without a
reduction in his or her retirement allowance.
(e) The postretirement compensation limitation provisions set
forth in this section are not applicable to compensation earned for
the performance of the activities described in subdivision (a) for
which the employer is not eligible to receive state apportionment or
to compensation that is not creditable pursuant to Section 22119.2.
(f) The limitation that shall apply to the compensation for
performance of the activities identified in subdivision (a) or (b) of
Section 22119.5 by a member retired for service under this part
either as an employee of an employer, an employee of a third party,
or as an independent contractor shall, in any one school year, be an
amount calculated by the board each July 1 equal to
twenty-two thousand dollars ($22,000) adjusted by the percentage
change in the average compensation earnable of active members of the
Defined Benefit Program, as determined by the system, from the
1998-99 fiscal year to one-half of the
median final compensation of all members who retired for service
during the fiscal year ending in the previous calendar year.
(g) If a member retired for service under this part earns
compensation for performing activities identified in subdivision (a)
or (b) of Section 22119.5 in excess of the limitation specified in
subdivision (f), as an employee of an employer, as an employee of a
third party, or as an independent contractor, within the California
public school system, the member's retirement allowance shall be
reduced by the amount of the excess compensation. The amount of the
reduction may be equal to the monthly allowance payable but may not
exceed the amount of the annual allowance payable under this part for
the fiscal year in which the excess compensation was earned
after any reduction made in accordance with
subdivision (b) of Section 24214.5.
(h) An employee of a third party shall not be subject to this
section if he or she meets all of the following conditions:
(1) He or she performs a limited-term assignment.
(2) The third-party employer does not participate in a
California public pension system.
(3) The activities performed by the individual are not
normally performed by employees of the employer, as defined in
Section 22131. .
(h)
(i) The language of this section derived from the
amendments to the section of this number added by Chapter 394 of the
Statutes of 1995, enacted during the 1995-96 Regular Session, is
deemed to have become operative on July 1, 1996.
(i)
(j) This section shall become operative on July 1,
2013.
SEC. 5. This act is an urgency statute necessary
for the immediate preservation of the public peace, health, or safety
within the meaning of Article IV of the Constitution and shall go
into immediate effect. The facts constituting the necessity are:
In order to ensure that school districts and community colleges
across the state are not left unable to retain their interim
educators, who are often in important educational and administrative
roles, due to the June 30, 2012, expiration of certain exemptions
from the limitations on postretirement employment by members of the
Defined Benefit Program, it is necessary that this act take effect
immediately.