Amended in Senate June 16, 2014

Amended in Senate May 23, 2014

Amended in Assembly March 27, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 2472

Introduced by Committee on Public Employees, Retirement and Social Security (Bonta (Chair), Rendon, Ridley-Thomas, and Wieckowski)

February 21, 2014

An act to amend Sections begin delete 20096, end delete 20340, 20533, 21074, 21075, 21453, 21499, 75070, 75079, 75552, and 75570 of, to add Section 75580.5 to, and to repeal Sections 20237 and 22849 of, the Government Code, relating to public employee benefits.

LEGISLATIVE COUNSEL’S DIGEST

AB 2472, as amended, Committee on Public Employees, Retirement and Social Security. Public employees: retirement and health 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. Existing law vests the management and control of the PERS in the Board of Administration of the PERS. Existing law begin delete provides that the membership of the board includes 6 members elected under the supervision of the board. Existing law requires the board to distribute ballots to each member of the retirement system in advance of each election, the results of which are required to be certified by the Secretary of State. end delete

begin delete

This bill would instead require the Executive Officer of PERS to certify the results of the election.

end delete

begin delete (2) end delete begin delete   end delete begin delete Existing law end delete requires the board, in addition to any other reports it is required to make, to annually file a separate report with the Governor and the Legislature on all matters under its jurisdiction.

This bill would repeal that requirement and make other conforming changes.

begin delete

(3) Existing law

end delete

begin insert (2) end insert begin insert   end insert begin insert PERL end insert specifies that a person ceases to be a member of PERS if the person has less than 5 years of service credit and no accumulated contributions in the retirement fund at the time of termination of service, as specified.

This bill would provide that a member who is subject to specified provisions also ceases to be a member of PERS if the person has less than 10 years of service credit and no accumulated contributions in the retirement fund at the time of termination of service, and would make related conforming changes.

begin delete

(4) Existing

end delete

begin insert (3) end insert begin insert   end insert begin insert PERL prescribes different benefit formulas referred to as First Tier and Second Tier. Existing end insert law provides that a state member who begin delete is subject to specified provisions end delete begin insert elected a calculation of a service retirement allowance based upon a specified computation of First Tier and Second Tier service end insert shall be retired for service upon written application to the board if he or she has attained 50 years of age and is credited with 5 years of state service.

This bill would begin delete provide end delete begin insert specify end insert that begin insert this provision applies to end insert a state begin delete member who is subject to other specified provisions shall be retired for service upon written application to the board if he or she has attained 52 years of age and is credited with 5 years of state service end delete begin insert member, as described above, who is subject to a certain benefit formula available to Second Tier members who became members of the system before January 1, 2013 end insert .

begin delete

(5) Existing law

end delete

begin insert (4) end insert begin insert   end insert begin insert PERL end insert provides that if a correction of the amount of compensation received by a member that is reported to the system requires additional employer contributions to be paid to the system, the contributions shall be computed using the employer rate in effect at the time of the adjustment.

This bill would instead provide that the employer contribution shall be computed using the employer contribution rate in effect at the time that the compensation requiring adjustment was earned.

begin delete

(6) Existing law

end delete

begin insert (5) end insert begin insert   end insert begin insert PERL end insert requires that an election, revocation, or change of retirement benefits be made prior to the making of the first payment on account of any retirement allowance, or any retirement allowance following a change in retirement status.

This bill would allow an election, revocation, or change of election to be made within 30 calendar days after the making of the first payment.

begin delete

(7) Existing law

end delete

begin insert (6) end insert begin insert   end insert begin insert PERL end insert requires the board to conduct a study to examine the feasibility and cost-effectiveness of creating a single statewide health care pool that would cover all public school employees.

This bill would repeal that requirement.

begin delete

(8)

end delete

begin insert (7) end insert  Existing law establishes the Judges’ Retirement System II which provides retirement benefits to elected judges. Existing law authorizes a judge to elect, revoke, or change a previous election of benefits in a writing filed with the system prior to the making of the first payment on account of the retirement allowance.

This bill would require those authorized elections, revocations, and changes to be made within 30 calendar days after the making of the first payment.

begin delete

(9)

end delete

begin insert (8) end insert  Existing law provides that if a retired judge becomes entitled to any salary for assignment to a court by the Chairperson of the Judicial Council after retirement for disability, the retirement allowance otherwise payable pursuant to the Judges’ Retirement System II Law shall, during the time he or she is entitled to receive that salary or other compensation, be reduced by the amount of that salary or compensation.

This bill would require, except as provided, a person who is retired for service or disability under the system to reinstate from retirement and again become a member of the system if he or she is appointed or elected to serve as a judge.

begin delete

(10)

end delete

begin insert (9) end insert  The bill would make other conforming, and technical, nonsubstantive changes.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

begin delete

SECTION 1.  

Section 20096 of the Government Code is
amended to read:

20096.  

The board shall cause ballots to be distributed to each
eligible active and retired member of the retirement system in
advance of each election, and shall provide for the return of the
voted ballots to the board without cost to the member, and shall
develop election procedures. The results shall be certified by the
executive officer of the retirement system. The board may require
all persons who perform election duties to certify, under penalty
of perjury, that they properly performed those duties.

end delete

begin delete SEC. 2. end delete
begin insert SECTION 1. end insert   

Section 20237 of the Government Code is
repealed.

begin delete SEC. 3. end delete
begin insert SEC. 2. end insert   

Section 20340 of the Government Code is amended
to read:

20340.  

A person ceases to be a member:

(a) Upon retirement, except while participating in reduced
worktime for partial service retirement.

(b) If he or she is paid his or her normal contributions, unless
payment of contributions is the result of an election pursuant to
paragraph (1) of subdivision (b) of Section 21070, or unless, after
reducing the member’s credited service by the service applicable
to the contributions being withdrawn, the member meets the
requirements of Section 21075 or if he or she is paid a portion of
his or her normal contributions where more than one payment is
made, or these contributions are held pursuant to Section 21500.
For the purposes of this subdivision, deposit in the United States
mail of a warrant drawn in favor of a member, addressed to the
latest address of the member on file in the office of this system,
electronic fund transfer to the person’s bank, savings and loan
association, or credit union account, constitutes payment to the
person of the amount for which the warrant is drawn or
electronically transferred.

(c) If the member has less than five years of service credit, or
less than 10 years of service credit if the member is subject to
Section 21076 or 21076.5, and no accumulated contributions in
the retirement fund at the time of termination of service, unless
the member establishes membership in 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, or establishes reciprocity
with a reciprocal retirement system.

begin delete SEC. 4. end delete
begin insert SEC. 3. end insert   

Section 20533 of the Government Code is amended
to read:

20533.  

The employer contribution rate adopted under this part,
or because of amendments to the contract or to this part, apply to
all compensation upon the basis of which member’s contributions
are deducted after those employer contribution rates became or
become effective.

If correction of the amount of compensation reported is required,
the employer contributions shall be computed using the employer
contribution rate in effect at the time that the compensation
requiring adjustment was earned.

begin delete SEC. 5. end delete
begin insert SEC. 4. end insert   

Section 21074 of the Government Code is amended
to read:

21074.  

(a) A state member who became subject to the Second
Tier shall be retired for service upon his or her written application
to the board if he or she has attained age 55 and is credited with
10 years of state service.

(b) A state member who elected coverage under Section 21077,
shall be retired for service upon his or her written application to
the board if he or she has attained 50 years of age if subject to
Section begin delete 21076, or 52 years of age if subject to Section 21076.5, end delete
begin insert 21076 end insert and is credited with five years of state service. No benefit
shall be payable for service rendered under the Second Tier
retirement formula unless the member has rendered 10 years of
state service except as provided in subdivision (c).

(c) Notwithstanding subdivision (a) or (b), a state member in
the Second Tier who is credited with five years of state service
prior to January 1, 1985, may retire with less than 10 years of state
service upon his or her written application to the board if he or she
has attained age 50.

begin delete SEC. 6. end delete
begin insert SEC. 5. end insert   

Section 21075 of the Government Code is amended
to read:

21075.  

Notwithstanding Section 20340, a person who is subject
to Section 21076, 21076.5, or Section 21077 ceases to be a member
if he or she has less than 10 years of service credit and no
accumulated contributions in the retirement fund at the time of
termination of service, except a member who had five years of
credited service prior to January 1, 1985.

begin delete SEC. 7. end delete
begin insert SEC. 6. end insert   

Section 21453 of the Government Code is amended
to read:

21453.  

An election, revocation, or change of election shall be
made within 30 calendar days after the making of the first payment
on account of any retirement allowance or, in the event of a change
of retirement status after retirement, within 30 calendar days after
the making of the first payment on account of any retirement
allowance following the change in retirement status. “Change in
retirement status” includes, but is not limited to, change from
service to disability retirement, from disability retirement to service
retirement, from nonindustrial disability retirement to industrial
disability retirement, or from industrial to nonindustrial disability
retirement.

For purposes of this section, payment shall be deemed to have
been made on the date a warrant is mailed, or the date funds are
electronically transferred to a bank, savings and loan association,
or credit union account for deposit in the member’s account.

This section shall not be construed to authorize a member to
change his or her retirement status after the election, revocation,
or change of election provided in this section.

begin delete SEC. 8. end delete
begin insert SEC. 7. end insert   

Section 21499 of the Government Code is amended
to read:

21499.  

(a) Notwithstanding Section 21498, when either an
initial payment of a preretirement or postretirement death allowance
or a preretirement or postretirement lump-sum benefit is payable
in an amount of ten dollars ($10) or more, it shall be authorized
to the Controller within 45 days of receipt by this system of all the
necessary information, including the return of warrants issued or
any overpayment outstanding after the date of the death of the
annuitant.

(b) If any payment is not made within that time limitation, the
payment shall also include interest at the greater of the interest
crediting rate specified in Section 20178 or the net earnings rate
(including capital gains and losses) in effect at the time the payment
is made, for time following the expiration of that time limitation.

begin delete SEC. 9. end delete
begin insert SEC. 8. end insert   

Section 22849 of the Government Code is repealed.

begin delete SEC. 10. end delete
begin insert SEC. 9. end insert   

Section 75070 of the Government Code is amended
to read:

75070.  

In lieu of the retirement allowance for his begin insert or her end insert life
alone, a judge may elect, or revoke or change a previous election
prior to the approval of the previous election, to have the actuarial
equivalent of his retirement allowance as of the date of retirement
applied to a lesser retirement allowance, in accordance with one
of the optional settlements specified in Section 75071.

That election, revocation, or change of election shall be made
by a writing filed with the Judges’ Retirement System within 30
calendar days after the making of the first payment on account of
any retirement allowance.

begin delete SEC. 11. end delete
begin insert SEC. 10. end insert   

Section 75079 of the Government Code is amended
to read:

75079.  

(a) When a judge elects and becomes entitled to receive
the benefits accorded by this article, he or she does not have the
right to select an optional settlement under the provisions of Article
3.5 (commencing with Section 75070) of this chapter.

(b) When a judge becomes entitled on and after January 1, 1987,
to receive the benefits accorded by this article, the judge may
instead elect an actuarially reduced retirement allowance payable
for life and if the judge dies before he or she receives the amount
of his or her accumulated contributions at retirement, the remaining
unpaid amount of his or her accumulated contributions shall be
paid to his or her designated beneficiary, if he or she has so
designated, and if none, to his or her estate.

The election shall be made in writing and filed with the Judges’
Retirement System within 30 calendar days after the making of
the first payment on account of any retirement allowance.

(c) The surviving spouse of a judge who qualifies, as prescribed
in Section 75075, to receive the benefits accorded by Section 75076
but who elected to receive the actuarially reduced retirement
allowance as provided in subdivision (b) and who dies during
retirement shall receive, until death, an allowance equal to one-half
of the retirement allowance that would have been payable to the
judge if he or she were living and had elected to receive the benefits
accorded by Section 75076.

begin delete SEC. 12. end delete
begin insert SEC. 11. end insert   

Section 75552 of the Government Code is amended
to read:

75552.  

(a) After payment of a portion of the member’s
contributions to a nonmember pursuant to subdivision (b) of
Section 75551, the member may redeposit the full amount in the
fund at any time before he or she retires or otherwise leaves judicial
office. The redeposit shall include interest at the rate of interest
then being required to be paid by members of the Public
Employees’ Retirement System under Section 20750 from the date
of payment to the date of redeposit. A partial redeposit shall not
be accepted.

(b) After payment of a portion of the member’s monetary credits
to a nonmember pursuant to subdivision (c) of Section 75551, the
member may redeposit the full amount in the fund at any time
before he or she retires or otherwise leaves judicial office. The
redeposit shall include interest at the greater of: (1) the rate of
interest then being required to be paid by members of the Public
Employees’ Retirement System under Section 20750 from the date
of payment to the date of redeposit; or (2) the compounded amounts
that would have been credited to the member’s monetary account
pursuant to subdivision (b) of Section 75520 had the payment not
been made to the nonmember. A partial redeposit shall not be
accepted.

begin delete SEC. 13. end delete
begin insert SEC. 12. end insert   

Section 75570 of the Government Code is amended
to read:

75570.  

(a) In lieu of the retirement allowance under
subdivision (d) of Section 75522 for his or her life alone, a judge
who elects to retire with a monthly allowance under subdivision
(d) of Section 75522 may elect, or revoke or change a previous
election prior to the approval of the previous election, to have the
actuarial equivalent of his or her retirement allowance as of the
date of retirement applied to a lesser retirement allowance, in
accordance with one of the optional settlements specified in Section
75571.

(b) That election, revocation, or change of election shall be
made by a writing filed with the system within 30 calendar days
after the making of the first payment on account of any retirement
allowance.

begin delete SEC. 14. end delete
begin insert SEC. 13. end insert   

Section 75580.5 is added to the Government Code,
to read:

75580.5.  

(a) Except as provided in subdivision (b), if a person
who is retired for service or disability 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 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 service.