BILL NUMBER: AB 820 AMENDED
BILL TEXT
AMENDED IN SENATE JUNE 13, 2000
AMENDED IN ASSEMBLY JANUARY 3, 2000
INTRODUCED BY Committee on Public Employees, Retirement and Social
Security (Correa (Chair), Firebaugh, Honda, Knox, and Pescetti)
FEBRUARY 24, 1999
An act to amend Section 23200 of, and
Sections 22662, 22802, 23200, 23202, 24750, and 24751 of, to
add Section 24315 to Sections 24300.5,
26144.5, 26403, 26501.5, and 26503.5 to, and to repeal Section
26401.5 of , the Education Code, relating to teachers'
retirement , and making an appropriation therefor .
LEGISLATIVE COUNSEL'S DIGEST
AB 820, as amended, Committee on Public Employees, Retirement and
Social Security. Teachers' retirement.
Existing law establishes the State Teachers' Retirement System to
provide retirement benefits to participating teachers.
(1) Under existing law, if a member whose accumulated
retirement contributions have been refunded ,
again becomes a member or another specified condition exists, or
if a nonmember spouse is awarded a separate account and accumulated
contributions have been previously refunded to the member , the
person member or nonmember spouse may
elect to redeposit those contributions with regular interest from the
date of refund to the date of payment.
This bill would authorize the member or nonmember spouse
to redeposit a portion of the refunded contribution
contributions , as specified.
(2) Existing law provides that a member , prior to
retirement, may elect an option one of
several options for a modified retirement allowance
payable for the life of the member and the member's designated
option beneficiary, as specified .
This bill would authorize the State Teachers' Retirement Board to
waive those provisions if it determines that the waiver would affect
fewer than 100 individuals and would not have a material effect on
the fund.
This bill would, effective July 1, 2001, authorize retired members
who did not elect one of the options to make such an election after
retirement, and to designate the member's spouse as the option
beneficiary, subject to specified conditions.
(3) Under the State Teachers' Retirement Law, the Cash Balance
Benefit Program provides a retirement plan for persons who perform
creditable service, as defined, on a part-time basis. If an employer
elects to provide the benefits of the program, and an eligible
employee elects to participate, the employer and employee make
contributions to the program, as specified, which are deposited in
the Teachers' Retirement Fund, a continuously appropriated special
fund. Under existing law, a part-time employee who performs
creditable service for multiple employers may elect to participate in
the program only if all of his or her employers provide benefits
under the program.
This bill would repeal that provision with respect to multiple
employers. The bill would also authorize persons who provide trustee
service, as defined, to elect to participate in the program and, upon
that election, would require those persons and their employers to
make contributions, as specified, thereby making an appropriation.
Vote: majority. Appropriation: no yes
. Fiscal committee: yes. State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 22662 of the Education Code is amended to
read:
22662. The nonmember spouse who is awarded a separate account
under this part may redeposit accumulated retirement contributions
previously refunded to the member in accordance with the
determination of the court pursuant to Section 22652.
(a) The nonmember spouse may redeposit under this part only those
accumulated retirement contributions that were previously refunded to
the member and in which the court has determined the nonmember
spouse has a community property interest.
(b) The nonmember spouse shall inform the system in writing of his
or her intent to redeposit within 180 days after the judgment or
court order addressing the redeposit rights of the nonmember spouse
is entered. The nonmember spouse shall elect to redeposit on a form
provided by the system within 30 days after the system mails an
election form and the billing.
(c) If the nonmember spouse elects to redeposit under this part,
he or she shall repay all or a portion of the accumulated
retirement contributions and shall pay regular interest from the date
of the refund to the date of payment.
(d) An election to redeposit shall be considered an
election to repay all accumulated retirement contributions previously
refunded under this part in which the nonmember spouse has a
community property interest. All payments shall be
received by the system before the effective date of retirement of the
nonmember spouse under this part. If any payment due because of the
election is not received at the system's office in Sacramento within
120 days of its due date, the election shall be canceled and any
payments made under the election shall be returned to the nonmember
spouse.
(e) The right of the nonmember spouse to redeposit shall be
subject to Section 23203.
(f) The member shall not have a right to redeposit the share of
the nonmember spouse in the previously refunded accumulated
retirement contributions under this part whether or not the nonmember
spouse elects to redeposit. However, any accumulated retirement
contributions previously refunded under this part and not explicitly
awarded to the nonmember spouse under this part by the judgment or
court order shall be deemed the exclusive property of the member.
SEC. 2. Section 22802 of the Education Code is amended to read:
22802. (a) A member who was previously excluded from membership
in the Defined Benefit Program may elect to receive credit for:
(1) Service as a substitute excluded under Section 22602.
(2) Service performed on a part-time basis excluded under Section
22601.5 or Section 22604.
(3) Adult education service excluded under Section 22603, as it
read on December 31, 1995.
(4) Service as a school nurse excluded under Section 22606, as it
read on December 31, 1995.
(5) Service performed in a position prior to the date the position
was made subject to coverage under the Defined Benefit Program.
(6) Service subject to coverage under the Defined Benefit Program
performed while a member of another California public retirement
system, provided the member has ceased to be a member of, and has
ceased to be entitled to benefits from, the other retirement system.
The member shall not receive credit for the service if the member
may redeposit withdrawn contributions and subsequently be eligible
for any benefits based upon the same service or based upon other
full-time service performed during the same period, from another
California public retirement system.
(b) A member who elects to receive credit under this part for
service performed while excluded from membership under the Defined
Benefit Program shall pay all of the required
contributions for all such or the portion of
that service for which the member elects to receive credit
.
SEC. 3. Section 23200 of the Education Code is amended to
read:
23200. (a) If a person, whose accumulated retirement
contributions have been refunded, again becomes a member of the
Defined Benefit Program or is subject to Section 23201 ,
the person may elect to redeposit all or a portion of
those contributions with regular interest from the date of refund to
the date of payment. If the member elects to redeposit, the
member shall repay all accumulated retirement contributions that
were previously refunded under this part. payment.
(b) For time prior to July 1, 1944, regular interest shall be at
21/2 percent compounded annually.
(c) If a nonmember spouse, as defined in Section 22651, withdraws
accumulated contributions in accordance with Section 22661, the
member may redeposit a sum equal to those contributions pursuant to
subdivision (a), providing he or she is not receiving an allowance
under Chapter 26 (commencing with Section 24100) or Chapter 27
(commencing with Section 24201).
(d) A member may elect If a member elects
to redeposit a portion of all accumulated retirement
contributions that were previously refunded , and,
subject to requirements imposed by the board, shall receive
pro rata credit for that contribution. imposed by the
board, the member shall receive pro rata service credit in
proportion to the amount redeposited.
SEC. 2. Section 24315 is added to the Education Code, to read:
24315. Notwithstanding any other provisions of this chapter, the
board may waive the provisions of this chapter if the board
determines that the waiver would affect fewer than 100 individuals
and would not have a material effect on the fund. For that purpose,
a material effect is a cost in excess of one thousandth of one
percent (.0001) of the State Teachers' Retirement Fund assets.
SEC. 4. Section 23202 of the Education Code is amended to read:
23202. (a) An election pursuant to Section 23200 to redeposit
accumulated retirement contributions may be made by a member anytime
prior to the effective date of the member's retirement under this
part.
(b) An election to redeposit refunded accumulated retirement
contributions shall be considered as an election to repay
all accumulated retirement contributions previously
refunded , up to but not exceeding the amount required to
restore the total service credit refunded, under the
provision provisions of this chapter.
(c) If any payment due because of this election is not received at
the system's office in Sacramento within 120 days of its due date,
the election shall be canceled. Upon the cancellation of election
any , the member shall receive credit for the
payments made under the election or, at the request of
the member, those payments shall be refunded.
(d) If the election is canceled, the member may at any time prior
to the effective date of retirement under this part, again elect to
redeposit accumulated retirement contributions previously withdrawn
or refunded, in accordance with Section 23200 and all the laws,
rules, and regulations pertaining thereto.
SEC. 5. Section 24300.5 is added to the Education Code, to read:
24300.5. (a) Notwithstanding Section 24300, any retired member
who did not elect an option pursuant to that section may, after the
effective date of the member's retirement under this part, elect an
option described in Section 24300 that would provide an actuarially
modified retirement allowance payable throughout the life of the
member and the member's spouse, subject to the provisions of this
section.
(b) The retired member shall notify the board, in writing on a
form provided by the system, of the election of the option and the
designation of the member's spouse as the option beneficiary.
(c) The election of an option under this section is subject to
approval by the board. A retired member may not elect a joint and
survivor option that would result in any additional liability to the
retirement fund. A retired member may not elect Option 8.
(d) The election shall be effective six months after the date the
notification is received by the board, provided that both the retired
member and the retired member's designated spouse are then living.
(e) The election of the option and designation of the option
beneficiary under this section shall result in an actuarial
modification of the member's retirement allowance. Modification of
the member's retirement allowance pursuant to this section shall be
based on the ages of the retired member and the retired member's
spouse as of the effective date of the election.
(f) This section shall be operative July 1, 2001.
SEC. 6. Section 24750 of the Education Code is amended to read:
24750. Those members who took a refund of their accumulated
contributions from the former Los Angeles Unified School District
Retirement System or the former Los Angeles Community College
District Retirement System or the San Francisco City and County
Employees' Retirement System, prior to July 1, 1972, and who have
former Permanent Fund contributions only on deposit related to former
local system service shall have those accumulated former Permanent
Fund contributions on deposit as of July 1, 1972, treated in the same
manner as accumulated retirement contributions of all nonlocal
members. Upon discovery and notification to those members, they
shall do either of the following:
(a) Redeposit all or a portion of the accumulated
retirement contributions required to bring the account into
full balance with regular interest prior to retirement under this
part.
(b) Leave those former Permanent Fund accumulated contributions on
deposit and receive a reduced retirement allowance under the law as
it read on June 30, 1972.
SEC. 7. Section 24751 of the Education Code is amended to read:
24751. Those members who took a refund of their accumulated
retirement contributions from the former Los Angeles Unified
School District Retirement System or the former Los Angeles Community
College District Retirement System or the San Francisco City and
County Employees' Retirement System, prior to July 1, 1972, and who
also took a refund of their Permanent Fund contributions from the
State Teachers' Retirement System with respect to the Defined Benefit
Program, and who redeposited their contributions in the local system
but did not redeposit their Permanent Fund contributions in the
State Teachers' Retirement System with respect to the Defined Benefit
Program, shall redeposit all or a portion of the
accumulated retirement contributions required to bring the
account into full balance with regular interest from the date of
refund to the date of payment. The redeposit may be made immediately
upon notification by the system and shall be made prior to
retirement under this part. The redeposit shall be made in a lump
sum or by installment payments as specified by the chief executive
officer.
SEC. 8. Section 26144.5 is added to the Education Code, to read:
26144.5. "Trustee service" means duties performed by a member of
the governing body of an employer.
SEC. 9. Section 26401.5 of the Education Code is repealed.
26401.5. (a) A member of the Defined Benefit Program who is
employed by more than one employer to perform creditable service for
less than 50 percent of the full-time equivalent for the position
with each employer shall not be eligible to make an election as
provided in Section 26401 unless and until all employers by which the
member is employed to perform creditable service provide the
benefits of this part for their employees.
(b) If a member of the Defined Benefit Program who pursuant to
subdivision (a) has made an election as provided in Section 26401 is
subsequently employed to perform creditable service for an employer
that does not provide the benefits of this part for its employees,
contributions shall no longer be made to the Cash Balance Benefit
Program on his or her behalf and creditable service performed for all
employers shall be subject to coverage under the Defined Benefit
Program, with no subsequent right of election pursuant to Section
26401 or subdivision (a).
SEC. 10. Section 26403 is added to the Education Code, to read:
26403. A person who performs trustee service for an employer who
has elected to provide benefits pursuant to this part to its
employees may elect to participate in the Cash Balance Benefit
Program for that service.
SEC. 11. Section 26501.5 is added to the Education Code, to read:
26501.5. A person who elects, pursuant to Section 26403, to
participate in the Cash Balance Benefit Program shall make
contributions, as provided in Section 26501, based on his or her
salary or other compensation earned for trustee service.
SEC. 12. Section 26503.5 is added to the Education Code, to read:
26503.5. If a person elects, pursuant to Section 26403, to
participate in the Cash Balance Benefit Program, his or her employer
shall make contributions, as provided in Section 26503, based on the
salary or other compensation paid for trustee service.