BILL NUMBER: AB 820 AMENDED
BILL TEXT
AMENDED IN SENATE AUGUST 21, 2000
AMENDED IN SENATE AUGUST 7, 2000
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, and Pescetti)
FEBRUARY 24, 1999
An act to amend Sections 22662, 22652,
22662, 22705, 22802, 23200, 23201, 23202, 24750, and 24751 of,
to add Sections 24300.6, 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 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 ,
effective July 1, 2001, to redeposit a portion of the refunded
contributions, as specified , and make additional changes with
respect to the division of accounts between a member and a nonmember
spouse .
(2) Existing law provides that a member, prior to retirement, may
elect 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, effective July 1, 2001, authorize a retired
member, who was unmarried at the time of retirement and who did not
elect one of the options, to make such an election if he or she
marries after retirement, and to designate the member's new 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.
(4) Existing law prohibits a member from receiving credit under
the Defined Benefit Program for service for which the member is
entitled to receive a retirement benefit from another retirement
system, as specified.
This bill would provide that that prohibition would not apply to
any retirement benefit received from a qualified defined contribution
plan.
Vote: majority. Appropriation: yes. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 22652 of the Education Code is amended to
read:
22652. (a) Upon the legal separation or dissolution of marriage
of a member, other than a retired member, the court shall
include in the judgment or a court order the date on which the
parties separated.
(b) The court may order in the judgment or court order that the
member's accumulated retirement contributions and service
credit under the Defined Benefit Program, or an amount equal to
the member's Defined Benefit Supplement account balance, or both,
under this part that are attributable to periods of service
during the marriage be divided into two separate and distinct
accounts in the name of the member and the nonmember spouse,
respectively. Any service credit or and
accumulated retirement contributions under the Defined Benefit
Program and any accumulated Defined Benefit Supplement account
balance under this part that are not explicitly awarded by the
judgment or court order shall be deemed the exclusive property of the
member in the Defined Benefit Program or the Defined Benefit
Supplement Program, as applicable .
(c) The determination of the court of community property rights
pursuant to this section shall be consistent with this chapter and
shall address the rights of the nonmember spouse, including, but not
limited to, the following:
(1) The right to a retirement allowance under this part
the Defined Benefit Program and, if applicable, a
retirement benefit under the Defined Benefit Supplement Program
.
(2) The right to a refund of accumulated retirement contributions
under this part the Defined Benefit Program
and the return of the accumulated Defined Benefit Supplement account
balance that were awarded to the nonmember spouse .
(3) The right to redeposit all or a portion of
accumulated retirement contributions previously refunded to the
member which are the member is
eligible for to redeposit
under this part by the member under pursuant to
Sections 23200 to 23203, inclusive, and shall specify the
shares of the redeposit amount awarded to the member and
the nonmember spouse of the eligible redeposit amount
.
(4) The right to purchase additional service credit under
this part which that the member is eligible
for purchase by the member under to purchase
pursuant to Sections 22800 to 22810, inclusive, and shall
specify the shares of the additional service credit
awarded to the member and the nonmember spouse of the
service credit eligible for purchase .
SEC. 2. Section 22662 of the Education Code is amended to
read:
22662. The nonmember spouse who is awarded a separate account
under this part the Defined Benefit Program
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 that specifies
the redeposit rights of the nonmember spouse is entered. The
nonmember spouse's election to redeposit shall be made 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 the Defined Benefit Program , he or
she shall repay all or a portion of the member's refunded accumulated
retirement contributions that were awarded to the nonmember spouse
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 or a part of accumulated retirement contributions
previously refunded under the Defined Benefit Program in which the
nonmember spouse has a community property interest. All
payments shall be received by the system before the effective date of
the nonmember spouse's retirement under this part
the Defined Benefit Program . 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.
SEC. 3. Section 22705 of the Education Code is amended to read:
22705. No service shall be included under this part for which a
member of the Defined Benefit Program is entitled to receive a
retirement benefit in a lump sum or installment payments, for other
than military service, from any public retirement system other than
this system, or under the American Gratuity Act No. 4151 relating to
service in the Philippine Islands under which 15 or more years of
creditable service has accrued, or the San Francisco City and County
Employees Retirement System. If a retired member under this part
becomes entitled to such a retirement benefit, his or her retirement
allowance shall be reduced thereafter to exclude the service upon
which the retirement benefit is based, without other change in his or
her retirement status. This section shall not apply to any
retirement benefit received from a defined contribution plan that is
qualified under Section 401(a), Section 403(b), or Section 457 of the
Internal Revenue Code.
SEC. 4. 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
or the portion of that service for which the member elects to receive
credit.
SEC. 3.
SEC. 5. 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.
(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 all or a
portion of 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) If a member elects to redeposit a portion of all accumulated
retirement contributions that were previously refunded subject to
requirements imposed by the board, the member shall receive pro rata
service credit in proportion to the amount redeposited.
SEC. 4.
SEC. 6. Section 23201 of the Education Code is amended to
read:
23201. Any person whose accumulated retirement contributions were
refunded, who wishes to establish concurrent membership, and who has
received, or will qualify to receive, a retirement allowance from
one or more of the retirement systems defined in Section 22115.2, may
elect to redeposit all or a portion of the accumulated retirement
contributions that were refunded, with regular interest from the date
of refund to the date of payment, without being employed to perform
creditable service subject to coverage under the Defined Benefit
Program.
SEC. 5.
SEC. 7. 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 accumulated
retirement contributions previously refunded, up to but not
exceeding the amount required to restore the total service credit
refunded, under the 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 , election, 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. 6.
SEC. 8. Section 24300.6 is added to the Education Code, to
read:
24300.6. (a) Any retired member who was unmarried on the
effective date of retirement who did not elect an option pursuant to
Section 24300, and who thereafter marries, may, after the effective
date of the member's retirement under this part, elect an option
described in paragraphs (1) to (6), inclusive, of subdivision (a) of
Section 24300, naming his or her new spouse as the option
beneficiary, subject to all of the following:
(1) The retired member shall have been married for at least one
year prior to making the election of the option.
(2) 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 new spouse as the option beneficiary.
(3) 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.
(4) 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.
(b) 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 that shall be
payable through the life of the member and the member's new spouse.
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 new spouse as of the effective date of the election.
(c) This section shall be operative July 1, 2001.
SEC. 7.
SEC. 9. 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. 8.
SEC. 10. 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. 9.
SEC. 11. 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. 10.
SEC. 12. Section 26401.5 of the Education Code is repealed.
SEC. 11.
SEC. 13. 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. 12.
SEC. 14. 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. 13.
SEC. 15. 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.
SEC. 16. Sections 1, 2, 5, 6, 7, 8, 9, and 10 of this act shall
become operative July 1, 2001.