BILL NUMBER: AB 821 AMENDED
BILL TEXT
AMENDED IN SENATE JANUARY 10, 2000
AMENDED IN SENATE JUNE 14, 1999
AMENDED IN ASSEMBLY APRIL 13, 1999
INTRODUCED BY Committee on Public Employees, Retirement and Social
Security (Correa (Chair), Firebaugh, Honda, Knox, and Pescetti)
FEBRUARY 24, 1999
An act to amend Sections 22134 and 22136 of the Education Code,
and to add Section 20035.5 to the Government Code,
relating to retirement.
LEGISLATIVE COUNSEL'S DIGEST
AB 821, as amended, Committee on Public Employees, Retirement and
Social Security. Retirement.
Existing law provides for the payment of retirement benefits to
various school employees under the State Teachers' Retirement System
and the Public Employees' Retirement System. Under existing law, the
retirement benefits are computed based upon various factors,
including the employee's final compensation. Under existing law, for
those school employees, "final compensation" means the highest
average annual compensation earnable by a member during any period of
3 consecutive school years.
This bill would change that definition of "final compensation" to,
instead, mean the highest average annual compensation earnable by a
member during a consecutive 12-month period of employment, as
specified.
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 22134 of the Education Code is amended
to read:
22134. (a) "Final compensation" means the highest average annual
compensation earnable by a member during the consecutive 12-month
period of employment immediately preceding the effective date of his
or her retirement or the date of his or her last separation from
service if earlier or during any other period of 12 consecutive
months while an active member of the Defined Benefit Program or
during which he or she was not a member but for which the member has
received credit under the Defined Benefit Program, except time that
was so credited for service performed outside this state prior to
July 1, 1944. The last consecutive 12-month period of employment
shall be used by the system in determining final compensation unless
designated to the contrary in writing by the member.
(b) For purposes of this section, periods of service separated by
breaks in service may be aggregated to constitute a period of 12
consecutive months, if the periods of service are consecutive except
for the breaks.
(c) The determination of final compensation of a member who is
also a member of the Public Employees' Retirement System, the
Legislators' Retirement System, the University of California
Retirement System, county retirement systems established under
Chapter 3 (commencing with Section 31450) of Part 3 of Division 4 of
Title 3 of the Government Code, or the San Francisco City and County
Employees' Retirement System shall take into consideration the
compensation earnable while a member of the other system, provided
that all of the following exist:
(1) The member was in state service or in the employment of a
local school district or of a county superintendent of schools.
(2) Service under the other system was not performed concurrently
with service under this plan.
(3) Retirement under this plan is concurrent with the member's
retirement under the other system.
(d) The compensation earnable for the first position in which
California service is credited shall be used when additional
compensation earnable is required to accumulate three consecutive
years for the purpose of determining final compensation under Section
23804.
(e) The board may specify a different final compensation with
respect to allowances based on part-time service performed prior to
July 1, 1956, for which credit was given under this plan under board
rules in effect prior to that date.
(f) The board may specify a different final compensation with
respect to disability allowances, disability retirement allowances,
family allowances, and children's portions of survivor benefit
allowances payable on and after January 1, 1978. The compensation
earnable for periods of part-time service shall be adjusted by the
ratio that part-time service has to full-time service.
(g) The amendment of former Section 22127 made by Chapter 782 of
the Statutes of 1982 does not constitute a change in, but is
declaratory of, the existing law.
SEC. 2. Section 22136 of the Education Code is amended to read:
22136. "Final compensation" with respect to a member whose salary
while an active member was reduced because of a reduction in school
funds means the highest average annual compensation earnable by the
member during any 12 months while employed to perform creditable
service subject to coverage by the plan if the member elects to be
subject to this section.
SEC. 3. Section 20035.5 is added to the Government Code, to read:
20035.5. Notwithstanding Section 20037, "final compensation" for
the purposes of determining any pension or benefit with respect to a
school member who retires or dies on or after January 1, 2000, and
with respect to benefits based on service with a school employer,
means the highest annual compensation which was earnable by the
school member during the consecutive 12-month period of employment
immediately preceding the effective date of his or her retirement or
the date of his or her last separation from service if earlier or
during any other period of 12 consecutive months during his or her
membership in this system that the member designates on the
application for retirement.
SEC. 4. amended to read:
22134. (a) "Final compensation" means the highest average annual
compensation earnable by a member during any period of three
the consecutive school years
12-month period of employment immediately preceding the
effective date of his or her retirement or the date of his or her
last separation from service if earlier or during any other period of
12 consecutive months while an active member of the Defined
Benefit Program or time during which he or she was not a member but
for which the member has received credit under the Defined Benefit
Program, except time that was so credited for service performed
outside this state prior to July 1, 1944. The last three
consecutive years 12-month period
of employment shall be used by the system in determining final
compensation unless designated to the contrary in writing by the
member.
(b) For purposes of this section, periods of service separated by
breaks in service may be aggregated to constitute a period of
three 12 consecutive years
months , if the periods of service are
consecutive except for the breaks.
(c) The determination of final compensation of a member who has
concurrent membership in another retirement system pursuant to
Section 22115.2 shall take into consideration the compensation
earnable while a member of the other system, provided that all of the
following exist:
(1) The member was in state service or in the employment of a
local school district or a county superintendent of schools.
(2) Service under the other system was not performed concurrently
with service under the Defined Benefit Program.
(3) Retirement under the Defined Benefit Program is concurrent
with the member's retirement under the other system.
(d) The compensation earnable for the first position in which
California service was credited shall be used when additional
compensation earnable is required to accumulate three consecutive
years for the purpose of determining final compensation under Section
23805.
(e) If a member has received service credit for part-time service
performed prior to July 1, 1956, the member's final compensation
shall be adjusted for that service in excess of one year by the ratio
that part-time service bears to full-time service.
(f) The board may specify a different final compensation with
respect to disability allowances, disability retirement allowances,
family allowances, and children's portions of survivor benefit
allowances payable on and after January 1, 1978. The compensation
earnable for periods of part-time service shall be adjusted by the
ratio that part-time service bears to full-time service.
(g) The amendment of former Section 22127 made by Chapter 782 of
the Statutes of 1982 does not constitute a change in, but is
declaratory of, the existing law.
SEC. 2. Section 22136 of the Education Code is amended to read:
22136. (a) "Final compensation" with respect
to a member whose salary while an active member was reduced because
of a reduction in school funds means the highest average annual
compensation earnable by the member during any three years
12 months while employed to perform creditable
service subject to coverage by the Defined Benefit Program if the
member elects to be subject to this section.
(b) For the purposes of this section, a year shall be considered
to be a period of 12 consecutive months.
SEC. 3. The increased costs imposed upon the State Teachers'
Retirement System by this act shall be paid from funds in the
Teachers' Retirement Fund under existing provisions of law.