BILL NUMBER: AB 2118 INTRODUCED
BILL TEXT
INTRODUCED BY Assembly Member Bock
FEBRUARY 22, 2000
An act to amend Sections 22001.5, 22109, 22115.2, 22115.5, 22167,
22200, 22201, 22207, 22212, 22375, 22400, 22508, 22508.5, 22509,
22513, 22514, 22801, 22803, 22950, 22951, 22954, 22955, 23001, 23007,
23008, 23201, 24201, 24255, 24260, 24412, 24702, 24975, 25000,
26000, 26000.5, 26000.6, 26001, 26002, 26105, 26109, 26142, 26200,
26201, 26202, 26204, 26206, 26209, and 26210 of, to amend the heading
of Chapter 7 (commencing with Section 22375) of Part 13 of Division
1 of Title 1 of, to add Sections 22500.5 and 26138.5 to, to add
Chapter 6 (commencing with Section 22360) to Part 13 of Division 1 of
Title 1 of, to repeal and add Section 22002 of, to repeal Sections
22001, 22143, 22144, 22168, 22201.2, 22201.3, 22202, 22203, 22203.5,
22204, 22205, 22206, 22208, 22209, 22210, 22217, 22218, 22218.5,
22221, 22223, 22224, 22225, 22300, 22301, 22307, 22311, 22322, 22323,
22324, 22330, 22401, 22403, 22510, 22512, and 22954.5 of, and to
repeal Chapter 4 (commencing with Section 22250) and Chapter 6
(commencing with Section 22350) of Part 13 of Division 1 of Title 1
of, the Education Code, and to amend Sections 20057, 20170, 20175,
20176, 20177, 20178, 20195, 20300, 20309, 20370, 20501, 20610, 20611,
20752, 20900, 21220, 21661, 22009.03, 22009.1, 22018, 22156, 22202,
22203, 22204, 22208, 22302, 22502, 22754, 22754.2, 31565, and 31840.8
of, to add Sections 20090.5, 20281.5, and 20281.6 to, the Government
Code, and to amend Section 6217.5 of the Public Resources Code,
relating to the State Teachers' Retirement System, and making an
appropriation therefor.
LEGISLATIVE COUNSEL'S DIGEST
AB 2118, as introduced, Bock. State Teachers' Retirement System:
merger of system.
The State Teachers' Retirement Law establishes the State Teachers'
Retirement Plan which is administered by the State Teachers'
Retirement System under the direction of the Teachers' Retirement
Board. Assets of the plan are deposited and held in the Teachers'
Retirement Fund. The Public Employees' Retirement Law establishes
the Public Employees' Retirement System which is governed by the
Board of Administration of the Public Employees' Retirement System.
Assets of that system are deposited and held in the Public Employees'
Retirement Fund, a continuously appropriated special fund.
This bill would abolish the State Teachers' Retirement System, the
Teachers' Retirement Board, and the Teachers' Retirement Fund. The
State Teachers' Retirement Plan would instead be administered by the
Public Employees' Retirement System, under the direction of the Board
of Administration of that system and all assets of the plan would be
deposited and held in the Public Employees' Retirement Fund, thereby
making an appropriation. The bill would provide that the merger of
the 2 systems shall not affect the vested rights or benefits of
members or retirees of the State Teachers' Retirement 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 22001 of the Education Code is repealed.
22001. In order to provide a financially sound plan for the
retirement, with adequate retirement allowances, of teachers in the
public schools of this state, teachers in schools supported by this
state, and other persons employed in connection with the schools, the
State Teachers' Retirement System is established. The system is a
unit of the State and Consumer Services Agency.
SEC. 2. Section 22001.5 of the Education Code is amended to read:
22001.5. (a) The Legislature hereby finds and declares
that on July 1, 1996, the State Teachers' Retirement System Cash
Balance Plan was created and established to provide a retirement plan
for persons employed to perform creditable service for less than 50
percent of the full-time equivalent for the position. The persons
eligible for the Cash Balance Plan were excluded from mandatory
membership in the State Teachers' Retirement System Defined Benefit
Plan. Both plans are were administered
by the Teachers' Retirement Board. Prior to the creation and
establishment of the Cash Balance Plan, the State Teachers'
Retirement System Defined Benefit Plan had been identified simply as
the State Teachers' Retirement System. As a result, the system was
identified as both the administrative body and the retirement plan.
The State Teachers' Retirement Law was amended to identify the
retirement plan as the State Teachers' Retirement System Defined
Benefit Plan in order to distinguish that plan from the Cash Balance
Plan. Because both plans were intended to provide for the retirement
of teachers and other persons employed in connection with public
schools of this state and schools supported by this state, a merger
of these two plans is now hereby was
made for the purpose of establishing a single retirement plan that
shall be known and may be cited as the State Teachers' Retirement
Plan consisting of the different benefit programs set forth in this
part and Part 14 (commencing with Section 26000). This plan
shall be administered by the Teachers' Retirement Board as set forth
in this part and Part 14 (commencing with Section 26000). This
(b) The Legislature hereby further finds and declares that on
January 1, 2001, the State Teachers' Retirement System was merged
into the Public Employees' Retirement System and, as a result, the
State Teachers' Retirement Plan shall be administered by the Board of
Administration of the Public Employees' Retirement System as set
forth in Chapter 2 (commencing with Section 20090) of Part 3 of
Division 5 of Title 2 of the Government Code.
(c) This part, together with Part 14 (commencing with
Section 26000) shall be known and may be cited as the Teachers'
Retirement Law.
SEC. 3. Section 22002 of the Education Code is repealed.
22002. The Legislature recognizes that the assets of the State
Teachers' Retirement Plan with respect to the Defined Benefit Program
are insufficient to meet the obligations of that program already
accrued or to accrue in the future with respect to service credited
to members of that program prior to July 1, 1972. Therefore, the
Legislature declares the following policies with respect to the
financing of the Defined Benefit Program of the State Teachers'
Retirement Plan:
(a) Members shall contribute a percentage of creditable
compensation, unless otherwise specified in this part.
(b) Employers shall contribute a percentage of the total
creditable compensation on which member contributions are based.
(c) The state shall contribute a sum certain for a given number of
years for the purpose of payment of benefits under this part.
SEC. 4. Section 22002 is added to the Education Code, to read:
22002. The merger of the State Teachers' Retirement System into
the Public Employees' Retirement System, effective January 1, 2001,
shall not be construed to affect the vested rights or benefits of
current members of the State Teachers' Retirement Plan or persons
retired prior to January 1, 2001, or their beneficiaries.
SEC. 5. Section 22109 of the Education Code is amended to read:
22109. "Board" means the Teachers' Retirement
Board of Administration of the Public Employees' Retirement
System .
SEC. 6. Section 22115.2 of the Education Code is amended to read:
22115.2. "Concurrent membership" means membership in the Defined
Benefit Program by an individual who is credited with service that is
not used as a basis for benefits under any other public retirement
system or any other membership classification of this system
and is also a member of the California Public
Employees' Retirement System, any other membership
classification of this system, or a member of 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. A member with concurrent membership shall have
the right to the following:
(a) Have final compensation determined pursuant to subdivision (c)
of Section 22134.
(b) Redeposit accumulated retirement contributions pursuant to
Section 23201.
(c) Apply for retirement pursuant to paragraph (2) of subdivision
(a) of Section 24201.
SEC. 7. Section 22115.5 of the Education Code is amended to read:
22115.5. (a) "Concurrent retirement" entitles a member of the
Defined Benefit Program to retire for service from the State Teachers'
Retirement System Plan and from at
least one of the retirement systems or other membership
classifications of this system with which the member has
concurrent membership, as defined in Section 22115.2, on the same
date or on different dates provided that the member does not perform
creditable service subject to coverage under the other system or
classification or the Defined Benefit Program between the two
retirement dates.
(b) A retired member who is subsequently employed in a position
subject to membership in a public retirement system or another
membership classification of this system , specified in Section
22115.2, shall not be eligible for concurrent retirement.
SEC. 8. Section 22143 of the Education Code is repealed.
22143. "Investment manager" and "investment adviser" mean any
person, firm, or custodian referred to in Section 22359, either
appointed by or under contract with the board to engage in investment
transactions or to manage or advise in the management of the assets
of the Teachers' Retirement Fund with respect to the Defined Benefit
Program under this part and the Cash Balance Benefit Program under
Part 14 (commencing with Section 26000).
SEC. 9. Section 22144 of the Education Code is repealed.
22144. "Investment transactions" means investment services of an
asset management or investment advisory nature and may include
advisory services, research material, trading assistance, trading
expenses, discretionary management of funds of the plan upon approval
by the board, acquisition of equipment to be used as part of the
investment function, services that provide a recommended course of
action or personal expertise, investment-related legal expenses,
investment-related contracting expenses, or custodian services
referred to in Section 22359.
SEC. 10. Section 22167 of the Education Code is amended to read:
22167. "Retirement fund" means the Teachers'
Public Employees' Retirement Fund as provided in
Article 5 (commencing with Section 20170) of Part 3 of Division 5 of
Title 2 of the Government Code .
SEC. 11. Section 22168 of the Education Code is repealed.
22168. "Return on investments" means income received or
receivable from the system's investments.
SEC. 12. Section 22200 of the Education Code is amended to read:
22200. (a) The plan and the system
are is administered by the Teachers'
Retirement Board of Administration of the Public
Employees' Retirement System pursuant to Chapter 2 (commencing with
Section 20090) of Part 3 of Division 5 of Title 2 of the Government
Code . The members of the board are as follows:
(1) The Superintendent of Public Instruction.
(2) The Controller.
(3) The Treasurer.
(4) The Director of Finance.
(5) One person who, at the time of appointment, is a member of the
governing board of a school district or a community college
district.
(6) Three persons who are either members of the Defined Benefit
Program or participants in the Cash Balance Benefit Program, as
follows:
(A) Two persons who, at the time of appointment, are classroom
teachers in kindergarten or grades 1 through 12.
(B) One person who, at the time of appointment, is a community
college instructor with expertise in the areas of business or
economics or both business and economics and who shall be appointed
by the Governor for a term of four years from a list submitted by the
Board of Governors of the California Community Colleges.
(7) One person who is either a retired member under this part or a
retired participant under Part 14 (commencing with Section 26000).
(8) One officer of a life insurance company appointed by the
Governor for a term of four years, subject to confirmation by the
Senate.
(9) One officer of a bank or a savings and loan institution who
has had at least five years of broad professional investment
experience handling various asset classes such as stocks, bonds, and
mortgage investments and who shall be appointed by the Governor for a
term of four years, subject to confirmation by the Senate.
(10) One person representing the public, appointed by the Governor
for a term of four years, subject to confirmation by the Senate.
(b) The members of the board described in paragraphs (5) and (7)
and subparagraph (A) of paragraph (6) of subdivision (a) shall be
appointed by the Governor for four-year terms from a list submitted
by the Superintendent of Public Instruction.
(c) The members of the board shall annually elect a chairperson
and vice chairperson.
SEC. 13. Section 22201 of the Education Code is amended to read:
22201. (a) The board shall set policy and
shall have the sole power and authority to hear and determine all
facts pertaining to application for benefits under the plan or any
matters pertaining to administration of the plan and the
system .
(b) The board shall meet at least once every calendar quarter at
such times as it may determine. The meetings shall be presided over
by the chairperson. In the event of the chairperson's absence from a
meeting the vice chairperson shall act as presiding officer and
perform all other duties of the chairperson.
SEC. 14. Section 22201.2 of the Education Code is repealed.
22201.2. A quorum of the board shall consist of the majority of
the board members. In determining whether or not a quorum is
present, vacant positions on the board shall not be considered. The
concurrence of the majority of the board members present shall be
necessary to the validity of any action taken by the board.
SEC. 15. Section 22201.3 of the Education Code is repealed.
22201.3. The chief executive officer of the system shall act as
secretary of the board and shall have charge of all board
correspondence and shall keep a record of board proceedings.
SEC. 16. Section 22202 of the Education Code is repealed.
22202. The board has exclusive control of the administration of
the funds. No transfers or disbursements of any amount from the
funds shall be made except upon the authorization of the board for
the purpose of carrying into effect the provisions of this part and
Part 14 (commencing with Section 26000).
SEC. 17. Section 22203 of the Education Code is repealed.
22203. The board has exclusive control of the investment of the
Teachers' Retirement Fund. Except as otherwise restricted by the
California Constitution and by law, the board may in its discretion
invest the assets of the fund through the purchase, holding, or sale
thereof of any investment, financial instrument, or financial
transaction when the investment, financial instrument, or financial
transaction is prudent in the informed opinion of the board.
SEC. 18. Section 22203.5 of the Education Code is repealed.
22203.5. (a) All investment transaction decisions made during a
closed session pursuant to paragraph (16) of subdivision (c) of
Section 11126 of the Government Code shall be by rollcall vote
entered into the minutes of that meeting.
(b) The board, within 12 months of the close of an investment
transaction or the transfer of system assets for an investment
transaction, whichever occurs first, shall disclose and report the
investment at a public meeting.
SEC. 19. Section 22204 of the Education Code is repealed.
22204. Each member of the board may administer oaths and
affirmations to witnesses and others transacting the business of the
system.
SEC. 20. Section 22205 of the Education Code is repealed.
22205. The board has the authority to negotiate, and enter into
agreements with other states of the United States on the subject of
the transfer of members' contributions and regular interest between
the retirement systems of California and other states.
SEC. 21. Section 22206 of the Education Code is repealed.
22206. As often as the board determines necessary, it may audit
or cause to be audited the records of any public agency.
SEC. 22. Section 22207 of the Education Code is amended to read:
22207. The board shall perform any other acts necessary for the
administration of the system and the plan in
carrying into effect the provisions of this part and Part 14
(commencing with Section 26000).
SEC. 23. Section 22208 of the Education Code is repealed.
22208. The board may appoint a committee of two or more of its
members to perform any act within the power of the board itself to
perform. The board may also delegate authority to the chief
executive officer to perform any such act. Except where the board,
in delegating that authority, provides that the committee or the
chief executive officer may act finally, all acts of the committee or
the chief executive officer shall be reported to the board at its
next regular meeting and shall be subject to review, ratification, or
reversal by the board.
SEC. 24. Section 22209 of the Education Code is repealed.
22209. The office of chief executive officer shall be filled by
appointment by the board and the appointee shall serve at the
pleasure of the board.
SEC. 25. Section 22210 of the Education Code is repealed.
22210. (a) Reversal by the board of any act of the committee or
the chief executive officer shall be effective on the date fixed by
the board.
(b) Payment of benefits prior to the board's action of reversal
may not be affected by such an action, except for the recovery of the
amounts paid, from the beneficiary receiving the amounts, as the
board may direct.
SEC. 26. Section 22212 of the Education Code is amended to read:
22212. The board shall appoint such those
employees as are necessary to administer the plan and
the system .
SEC. 27. Section 22217 of the Education Code is repealed.
22217. (a) The board shall employ a certified public accountant
or public accountant, who is not in public employment, to audit the
financial statements of the system. The costs of the audit shall be
paid from the income of the retirement fund. The audit shall be made
annually commencing with the fiscal year ending June 30, 1974. The
board shall file a copy of the audit report with the Governor, the
Secretary of the Senate, and the Chief Clerk of the Assembly.
(b) These audits shall not be duplicated by the Department of
Finance or the Auditor General. The system shall be exempt from a
pro rata general administrative charge for auditing.
SEC. 28. Section 22218 of the Education Code is repealed.
22218. The board shall establish and maintain records and
accounts following recognized accounting principles and controls.
SEC. 29. Section 22218.5 of the Education Code is repealed.
22218.5. The board, on March 1, 1995, and annually thereafter,
shall report to the fiscal committees of the Legislature and to the
Director of Finance the return on investments and actual payroll
subject to the system for the prior fiscal year.
SEC. 30. Section 22221 of the Education Code is repealed.
22221. The board shall adopt, upon the recommendation of the
actuary of the system, any mortality and other tables and interest
rates necessary to do the following:
(a) Permit valuation of the assets and liabilities of the system.
(b) Make any determination or calculation necessary to carry out
this part.
SEC. 31. Section 22223 of the Education Code is repealed.
22223. The members of the board who are not members of the
Defined Benefit Program or participants of the Cash Balance Benefit
Program and who are appointed by the Governor pursuant to Section
22200 shall receive one hundred dollars ($100) for every day of
actual attendance at meetings of the board or any meeting of any
committee of the board of which the person is a member, and that is
conducted for the purpose of carrying out the powers and duties of
the board, together with their necessary traveling expenses incurred
in connection with performance of their official duties.
SEC. 32. Section 22224 of the Education Code is repealed.
22224. Members of the Defined Benefit Program and participants of
the Cash Balance Benefit Program, who are either appointed to the
board by the Governor pursuant to Section 22200, or who are appointed
by the board to serve on a committee or subcommittee of the board or
a panel of the system, shall be granted, by his or her employer,
sufficient time away from regular duties, without loss of
compensation or other benefits to which the person is entitled by
reason of employment, to attend meetings of the board or any of its
committees or subcommittees of which the person is a member, or to
serve as a member of a panel of the system, and to attend to the
duties expected to be performed by the person.
SEC. 33. Section 22225 of the Education Code is repealed.
22225. (a) The compensation of the members of the Defined Benefit
Program and participants of the Cash Balance Benefit Program who are
appointed to the board, or by the board to a committee or
subcommittee, or to a panel of the system, shall not be reduced by
his or her employer for any absence from service occasioned by
attendance upon the business of the board, pursuant to Section 22224.
(b) Each employer that employs either a member of the Defined
Benefit Program or a participant of the Cash Balance Benefit Program
appointed pursuant to Section 22224 and that employs a person to
replace the member or participant during attendance at meetings of
the board, its committees or subcommittees, or when serving as a
member of a panel of the system, or when carrying out other duties
approved by the board, shall be reimbursed from the retirement fund
for the cost incurred by employing a replacement.
SEC. 34. Chapter 4 (commencing with Section 22250) of Part 13 of
Division 1 of Title 1 of the Education Code is repealed.
SEC. 35. Section 22300 of the Education Code is repealed.
22300. The chief executive officer is the chief administrative
officer of the system. The chief executive officer may administer
oaths.
SEC. 36. Section 22301 of the Education Code is repealed.
22301. The chief executive officer has the authority and
responsibility for the administration of the system and the plan
pursuant to the policies and rules adopted by the board. The chief
executive officer may delegate to his or her subordinates any act or
duty unless the board by motion or resolution recorded in its minutes
has required the chief executive officer to act personally.
SEC. 37. Section 22307 of the Education Code is repealed.
22307. (a) The board may authorize the transfer and disbursement
of funds from the retirement fund for the purpose of carrying into
effect this part and Part 14 (commencing with Section 26000) upon the
signature of either or both of its chairperson and vice chairperson
or the chief executive officer or any employee of the system
designated by the chief executive officer.
(b) Notwithstanding Section 13340 of the Government Code, the
board may disburse funds for the payment of benefits to members and
beneficiaries of the Defined Benefit Program as well as to
participants and beneficiaries of the Cash Balance Benefit Program,
for the payment of refunds and for investment transactions and these
funds shall not be required to be appropriated through the annual
Budget Act. Funds for the payment of administrative expenses are not
continuously appropriated, and shall be appropriated by the annual
Budget Act.
SEC. 38. Section 22311 of the Education Code is repealed.
22311. (a) The board shall keep in convenient form any data
necessary for the actuarial valuation of the plan.
(b) The board shall make an actuarial investigation into the
mortality, service, and other experience of members and beneficiaries
of the Defined Benefit Program as well as an actuarial review of the
goals regarding the sufficiency of the Gain and Loss Reserve with
respect to the Cash Balance Benefit Program. This investigation and
review shall include an actuarial valuation of the assets and
liabilities of the plan, and shall be performed at least once every
six years. The actuary shall perform the actuarial valuation using
actuarial assumptions adopted by the board and that are, in the
aggregate, reasonably related to the past experience of the plan and
the best estimate by the actuary of the future experience of the
plan. The report of the actuary of the results of the actuarial
valuation shall identify and include the components of normal cost
and adequate information to determine the effects of changes in
actuarial assumptions. Copies of the report on the actuarial
valuation shall be transmitted to the Governor and to the
Legislature. Upon the basis of any or all of the actuarial
investigation and valuation, the board shall adopt for the plan any
rates of return on investments, rates of contribution to the
retirement fund, mortality, service, and other tables it deems
necessary.
SEC. 39. Section 22322 of the Education Code is repealed.
22322. The system shall report monthly to the board on all late
payments.
SEC. 40. Section 22323 of the Education Code is repealed.
22323. The system shall report monthly to the board concerning
outstanding death benefits payable that have not been paid within six
months of the notification of the death of the member.
SEC. 41. Section 22324 of the Education Code is repealed.
22324. The board shall file an annual report with the Governor
and the Legislature by March 1 of each year on all phases of its work
that could affect the need for public contributions for costs of
administration of the system, including the subjects of benefits,
programs, practices, procedures, comments on trends and developments
in the field of retirement, and the following information on the
assets of the plan:
(a) A copy of the annual audit performed pursuant to Section
22217.
(b) A certification letter from the system's consulting actuary
concerning the findings of the most recent actuarial valuation,
accompanied by summaries of the actuarial cost method, assumptions,
and demographic data and analysis of funding progress.
(c) A review of the system's asset mix strategy, a market review
or the economic and financial environment in which investments were
made, and a summary of the system's general investment strategy.
(d) A description of
the investments of the system at cost and market value, and a
summary of major changes that occurred since the previous year.
(e) The following information regarding the rate of return of the
system by asset type:
(1) Time-weighted market value rate of return on a five-year,
three-year, and one-year basis.
(2) Time-weighted book value rate of return on a five-year,
three-year, and one-year basis.
(3) Portfolio return comparisons that compare investment returns
with universes and indexes.
(f) A report on the use of outside investment advisers and
managers.
(g) A report on shareholder voting.
SEC. 42. Section 22330 of the Education Code is repealed.
22330. (a) The board shall provide the Legislature with an
analysis of the asset and liability implications of each bill that
would affect the investment strategy of the system, the funding of
the plan, or the benefit structure of the plan. The analysis shall
include an explanation of the methodology employed and the
assumptions used in its preparation. Neither fiscal committee of the
Legislature shall hear any such bill until the analysis has been
provided to the committee.
(b) There is hereby continuously appropriated, without regard to
fiscal years, from the retirement fund, an amount sufficient to pay
all costs arising from subdivision (a), but not to exceed fifty
thousand dollars ($50,000) in any one fiscal year.
SEC. 43. Chapter 6 (commencing with Section 22350) of Part 13 of
Division 1 of Title 1 of the Education Code is repealed.
SEC. 44. Chapter 6 (commencing with Section 22360) is added to
Part 13 of Division 1 of Title 1 of the Education Code, to read:
CHAPTER 6. HOME LOAN PROGRAM
22360. (a) Notwithstanding any other provision of law, the board
may enter into correspondent agreements with private lending
institutions in this state to utilize the retirement fund to invest
in residential mortgages, including assisting borrowers, through
financing, to obtain homes in this state.
(b) The program shall, among other things, provide:
(1) That home loans be made available to borrowers for the
purchase of single-family dwellings, two-family dwellings,
three-family dwellings, four-family dwellings, single-family
cooperative apartments, and single-family condominiums.
(2) That the recipients of the loans occupy the homes as their
principal residences in accordance with policies established by the
board.
(3) That the home loans shall be available only for the purchase
or refinance of homes in this state.
(4) That the amount and length of the loans shall be pursuant to a
schedule periodically established by the board that shall provide a
loan of up to 100 percent of the appraised value. In no event shall
the loan amount exceed three hundred fifty thousand dollars
($350,000). The portion of any loan exceeding 80 percent of value
shall be insured by an admitted mortgage guaranty insurer conforming
to Chapter 2A (commencing with Section 12640.01) of Part 6 of
Division 2 of the Insurance Code, in an amount so that the
unguaranteed portion of the loan does not exceed 75 percent of the
market value of the property together with improvements thereon.
(5) That there may be prepayment penalties assessed on the loans
in accordance with policies established by the board.
(6) That the criteria and terms for its loans shall be consistent
with the financial integrity of the program and the sound investment
of the retirement fund.
(7) Any other terms and conditions as the board shall deem
appropriate.
(c) It is the intent of the Legislature that the provisions of
this section be used to establish an investment program for
residential mortgages, including assisting borrowers in purchasing
homes in this state, or refinancing a mortgage loan. The Legislature
intends that home loans made pursuant to this section shall be
secured primarily by the property purchased or refinanced and shall
not exceed the appraised value of that property.
(d) Appropriate administrative costs of implementing this section
and Section 22360.5 shall be paid by the participating borrowers.
Those costs may be included in the loan amount.
(e) Appropriate interest rates shall be periodically reviewed and
adjusted to provide loans to borrowers consistent with the financial
integrity of the home loan program and the sound and prudent
investment of the retirement fund. Under no circumstances, however,
shall the interest rates offered to borrowers be below current market
rate.
(f) The board shall administer this section and Section 22360.5
under other terms and conditions it deems appropriate and in keeping
with the investment standard. The board may adopt policies as
necessary for its administration of this section and Section 22360.5
and to assure compliance with applicable state and federal laws.
(g) This section and Section 22360.5 shall be known as, and may be
cited as, the Dave Elder State Teachers' Retirement Plan Home Loan
Program Act.
22360.5. (a) The board may include in any investment program
established pursuant to Section 22360 a procedure whereby a member
may obtain 100 percent financing for the purchase for a single-family
dwelling unit in accordance with the following criteria:
(1) The member shall obtain one loan secured by the purchased
home, pursuant to Section 22360, and a second personal loan secured
by a portion of the accumulated retirement contributions in the
member's individual account. The personal loan shall only be used
for the purchase of the member's principal residence and not for a
loan to refinance the member's existing mortgage.
(2) The loan secured by the purchased home shall be consistent
with the requirements imposed by Section 22360.
(3) In no event may the personal loan secured by the accumulated
retirement contributions in the member's individual account exceed
the lesser of 50 percent of the current value amount of the
accumulated retirement contributions or fifty thousand dollars
($50,000).
(4) If two members are married, the personal loan secured by the
sum total of accumulated retirement contributions in both members'
accounts shall not exceed 5 percent of the loan.
(5) The pledge of security under this section shall remain in
effect until the personal loan is paid in full.
(b) The pledge of security under this section shall take binding
effect. In the event of a default on the personal loan secured by the
member's retirement contributions as authorized by this section, the
board shall deduct an amount from the member's accumulated
retirement contributions on deposit and adjust the member's
accumulated retirement contributions as necessary to recover any
outstanding loan balance prior to making any disbursement of a refund
or a lump-sum distribution.
(c) In the event of a default on the personal loan by a member,
the board shall deduct the monthly principal plus appropriate
interest from the member's benefit, when the member begins receiving
a benefit, until the loan is paid in full.
(d) In the event of a default on the personal loan by a member
receiving a benefit, the board shall deduct the monthly principal and
interest from the member's benefit until the personal loan is paid
in full.
(e) The secured personal loan permitted under this section shall
be made available only to members who meet eligibility criteria as
determined by the board.
(f) In the event of a refund or lump-sum distribution of the
accumulated retirement contributions, the member's account shall be
adjusted as necessary to recover any outstanding loan balance.
(g) If the member is married at the time the home is purchased
with a personal loan secured by the member's accumulated retirement
contributions as authorized by this section, then the member's spouse
shall agree in writing to the pledge of security, as to his or her
community interest in the amount pledged, regardless of whether title
to the home is held in joint tenancy.
(h) For purposes of the section only, "member" means any person
who is entitled to receive an allowance funded by the system pursuant
to this part or Part 14 (commencing with Section 26000),
notwithstanding any vesting requirement and without regard to present
eligibility to retire, and who is not retired or disabled.
22361. (a) The board may, subject to and consistent with its
fiduciary duty, establish a program utilizing the retirement fund to
assist currently employed members and retired members who are victims
of a natural disaster to obtain loans from the retirement fund for
the sole purpose of repairing or rebuilding their homes that have
been damaged by a natural disaster. In order to qualify for such a
loan, the home of the currently employed member or retired member
shall have been damaged by a natural disaster and the home shall have
been in an area that has been declared a disaster area in a
proclamation of the Governor of a state of emergency affecting the
area in which the currently employed member or retired member
resides.
(b) The board may loan any amount of money, up to and including
100 percent of the current appraised value of a home of a currently
employed member or retired member. However, 5 percent of the loan
may, at the discretion of the board, be secured by the contributions
of the member who requests the loan.
(c) The board may, under such conditions as it may deem prudent,
require that a currently employed member or retired member pledge
other assets as collateral for a loan.
(d) The board shall establish terms for the termination of loans
made pursuant to this section upon the separation of members from
service, to ensure, in the case of any default, that the fund shall
not suffer any loss and to provide, as a condition of retirement, for
alternative security. The board may impose any other terms and
conditions the board may determine appropriate.
(e) The Legislature hereby reserves full power and authority to
change, revise, limit, expand, or repeal the loan program authorized
by this section.
SEC. 45. The heading of Chapter 7 (commencing with Section 22375)
of Part 13 of Division 1 of Title 1 of the Education Code is amended
to read:
CHAPTER 7. SYSTEM PLAN
HEADQUARTERS
SEC. 46. Section 22375 of the Education Code is amended to read:
22375. Notwithstanding Section 20205.9 or Part
11 (commencing with Section 15850) of Division 3 of Title 2 of the
Government Code, the board may select, purchase, or acquire in the
name of the plan, the fee or any lesser interest in real property,
improved or unimproved, and may remodel and equip, or construct an
office building in the County of Sacramento for the purposes of
establishing a permanent headquarters facility for the
system plan .
SEC. 47. Section 22400 of the Education Code is amended to read:
22400. (a) There is in the State Treasury a special
trust fund to be known as the The Teachers'
Retirement Fund . There shall be deposited in that fund
is abolished and the assets of the plan and its
predecessors, consisting of employee contributions, employer
contributions, state contributions, appropriations made to it by the
Legislature, income on investments, other interest income, income
from fees and penalties, donations, legacies, bequests made to it and
accepted by the board, and any other amounts provided by this part
and Part 14 (commencing with Section 26000) shall be deposited
and held in trust, for the benefit of the members and retired members
of the Defined Benefit Program and participants and retired
participants of the Cash Balance Benefit Program, in the Public
Employees' Retirement Fund pursuant to Article 5 (commencing with
Section 20170) of Part 3 of Division 5 of Title 2 of the Government
Code . General Fund transfers pursuant to Section 22954 shall
be placed in a segregated account known as the Supplemental Benefit
Maintenance Account within the retirement fund, which account
is continuously appropriated without regard to fiscal years,
notwithstanding Section 13340 of the Government Code, for expenditure
for the purposes of Section 24415.
(b) Disbursement of money from the retirement fund of whatever
nature shall be made upon claims duly audited in the manner
prescribed for the disbursement of other public funds except that
notwithstanding the foregoing disbursements may be made to return
funds deposited in the fund in error.
SEC. 48. Section 22401 of the Education Code is repealed.
22401. Return on investments shall be collected by the Treasurer,
and together with any other moneys received for the retirement fund
shall be immediately deposited to the credit of that fund and
reported immediately to the system. Money in whatever form received
directly by the system shall be deposited immediately in the State
Treasury to the credit of that fund.
SEC. 49. Section 22403 of the Education Code is repealed.
22403. The Legislature hereby finds and declares that pursuant to
the authorizing legislation creating and establishing the Cash
Balance Plan, the board transferred one million dollars ($1,000,000)
in the form of a loan from the retirement fund holding assets at that
time exclusively for the State Teachers' Retirement System Defined
Benefit Plan to the newly created Cash Balance Plan. That loan
represented an asset receivable to the State Teachers' Retirement
System Defined Benefit Plan and a liability obligation to the State
Teachers' Retirement System Cash Balance Plan. As a result of the
merger of these two plans authorized under this part, the assets held
in the retirement fund shall hereby reflect the combined assets of
the State Teachers' Retirement Plan. That loan shall be discharged
by the creation and establishment of the State Teachers' Retirement
Plan pursuant to the merger.
SEC. 50. Section 22500.5 is added to the Education Code, to read:
22500.5. All persons who were members of the Defined Benefit
Program under the plan on December 31, 2000, are members of the
Defined Benefit Program under the plan in the Public Employees'
Retirement System.
SEC. 51. Section 22508 of the Education Code is amended to read:
22508. (a) A member who becomes employed by the same or a
different school district, community college district, or a county
superintendent to perform service that requires membership in a
different public retirement system or under the state or local
miscellaneous classification under this system , may elect to
have that service subject to coverage by the Defined Benefit Program
of this plan and excluded from coverage by the other public
retirement system or in the state or local miscellaneous
classification under this system . The election shall be made
in writing on a form prescribed by this system within 60 days from
the date of hire in the position requiring membership in the other
public retirement system or under the state or local
miscellaneous classification under this system . If that
election is made, the service performed for the employer after the
date of hire shall be considered creditable service for purposes of
this part.
(b) A member of the Public Employees' Retirement System
system who is employed by a school district,
community college district, or a county superintendent and who is
subsequently employed to perform creditable service subject to
coverage by the Defined Benefit Program of this plan may elect to
have that service subject to coverage by the Public
Employees' Retirement System system under the
applicable state or local miscellaneous classification and
excluded from coverage by the Defined Benefit Program. The election
shall be made in writing on a form prescribed by this system within
60 days from the date of hire to perform creditable service. If that
election is made, creditable service performed for the employer
after the date of hire shall be subject to coverage by the
Public Employees' Retirement System considered
creditable service for purposes state or local miscellaneous
classification under this system .
(c) An election made by a member pursuant to this section shall be
irrevocable.
SEC. 52. Section 22508.5 of the Education Code is amended to read:
22508.5. (a) Any person who is a member of the Defined Benefit
Program of the State Teachers' Retirement Plan employed by a
community college district who subsequently is employed by the Board
of Governors of the California Community Colleges to perform duties
that are subject to membership in a different public retirement
system or in the state miscellaneous membership classification
under this system , shall be excluded from membership in that
different system or classification if he or she elects, in
writing, and files that election in the office of the State
Teachers' Retirement System system within 60
days after the person's entry into the new position, to continue as a
member of the Defined Benefit Program. Only a person who has
achieved plan vesting is eligible to elect to continue as a member of
the program.
(b) A member of the State Teachers' Retirement System
system who is employed by the Board of Governors
of the California Community Colleges who subsequently is employed by
a community college district to perform creditable service subject
to coverage under the Defined Benefit Program, may elect to have that
service subject to coverage by the Public Employees'
Retirement System under the state miscellaneous
classification and excluded from coverage under the Defined
Benefit Program pursuant to Section 20309 of the Government Code.
(c) This section shall apply to changes in employment effective on
or after January 1, 1998.
SEC. 53. Section 22509 of the Education Code is amended to read:
22509. (a) Within 10 working days of the date of hire of an
employee who has the right to make an election pursuant to Section
22508 or 22508.5, the employer shall inform the employee of the right
to make an election and shall make available to the employee written
information provided by each this system and
the other retirement system , if any, concerning
the benefits provided under that the
applicable classification or classifications in this system and in
the retirement system , if any, to assist the
employee in making an election.
(b) Any election made pursuant to subdivision (a) of
Section 22508 or subdivision (a) of Section
22508.5 shall be filed with the office of the
State Teachers' Retirement System system and
, if applicable, a copy of the election shall be filed
with the other public retirement system. Any election made
pursuant to subdivision (b) of Section 22508 or subdivision (b) of
Section 22508.5 shall be filed with the office of the Public
Employees' Retirement System and a copy of the election shall be
filed with the office of this system.
(c) Any election made pursuant to Section 22508 or
Section 22508.5 shall become effective as of the first day
of employment in the position that qualified the employee to make an
election.
SEC. 54. Section 22510 of the Education Code is repealed.
22510. Members who on January 1, 1976, are in state service
positions according to former Section 13948 as it read on December
31, 1975, or who are employees of the Trustees of the California
State University, may elect in writing prior to July 1, 1976, not to
continue as members of this system and to transfer membership to the
Public Employees' Retirement System. Failure to execute and file the
election, which shall be received in the office of this system by
the close of business on June 30, 1976, shall be deemed a decision to
remain a member of the plan.
SEC. 55. Section 22512 of the Education Code is repealed.
22512. If a member elects membership in the Public Employees'
Retirement System under Section 22510, this election shall not be
counted as a break in service if employment is continuous.
SEC. 56. Section 22513 of the Education Code is amended to read:
22513. Members of the Defined Benefit Program who elect
membership in the Public Employees' Retirement System
state or local miscellaneous classification under this
system and have achieved plan vesting according to Section
22156 shall retain the vested rights to survivor and disability
benefits under this part until they qualify for the similar benefits
in the Public Employees' Retirement System
state or local miscellaneous classification under this system .
SEC. 57. Section 22514 of the Education Code is amended to read:
22514. Members who have not achieved plan vesting shall become
eligible for benefits under the Defined Benefit Program when total
service under the Defined Benefit Program and the Public
Employees' Retirement System state or local
miscellaneous classification equals the minimum required under
Sections 23801 and 23804. These members shall retain vested rights
to survivor and disability benefits under this plan until they
qualify for the similar benefits under the Public Employees'
Retirement System state or local miscellaneous
classification .
SEC. 58. Section 22801 of the Education Code is amended to read:
22801. (a) A member who elects to receive additional service
credit as provided in this chapter shall pay, prior to retirement,
all contributions with respect to that service at the contribution
rate for additional service credit, adopted by the board as a plan
amendment, in effect at the time of election. If the system is
unable to inform the member or beneficiary of the amount required to
purchase additional service credit prior to the effective date of the
applicable allowance, the member or beneficiary may make the
required payment within 30 working days after the date of mailing of
the statement of contributions and interest required or the effective
date of the appropriate allowance, whichever is later. The payment
shall be paid in full before a member or beneficiary receives any
adjustment in the appropriate allowance due because of that payment.
Contributions shall be made in a lump sum, or in not more than 120
monthly installments. No installment, except the final installment,
shall be less than twenty-five dollars ($25).
(b) If the member is employed to perform creditable service
subject to coverage by the Defined Benefit Program at the time of the
election, the contributions shall be based upon the compensation
earnable in the current school year or either of the two immediately
preceding school years, whichever is highest.
(c) If the member is not employed to perform creditable service
subject to coverage by the Defined Benefit Program at the time of the
election, the contributions shall be based upon the compensation
earnable in the last school year of credited service or either of the
two immediately preceding school years, whichever is highest.
(d) The employer may pay the amount required as employer
contributions for additional service credited under paragraphs (2),
(6), (7), (8), and (9) , and (10) of
subdivision (a) of Section 22803.
(e) The Public Employees' Retirement System shall
transfer the actuarial present value of the assets of a person who
makes an election pursuant to paragraph (10) of subdivision (a) of
Section 22803.
(f) Regular interest shall be charged on all
contributions from the end of the school year on which the
contributions were based to the date of payment.
(g)
(f) Regular interest shall be charged on the monthly unpaid
balance if the member pays in installments. Regular interest shall
not be charged or be payable for the period of a delay caused by the
system's inability or failure to determine and inform the member or
beneficiary of the amount of contributions and interest that is
payable. The period of delay shall commence on the 20th day
following the day on which the member or beneficiary who wishes to
make payment evidences in writing to the system that he or she is
ready, willing, and able to make payment to the system. The period
of delay shall cease on the first day of the month following the
mailing of notification of contributions and interest payable.
SEC. 59. Section 22803 of the Education Code is amended to read:
22803. (a) A member may elect to receive credit for any of the
following:
(1) Service performed in a teaching position in a publicly
supported and administered university or college in this state.
(2) Service performed in a certificated teaching position in a
child care center operated by a county superintendent of schools or a
school district in this state.
(3) Service performed in a teaching position in the California
School for the Deaf or the California School for the Blind, or in
special classes maintained by the public schools of this state for
the instruction of the deaf, the hard of hearing, the blind, or the
semisighted.
(4) Service performed in a certificated teaching position in a
federally supported and administered Indian school in this state.
(5) Time served, not to exceed two years, in a certificated
teaching position in a job corps center administered by the United
States government in this state if the member was employed to perform
creditable service subject to coverage under the Defined Benefit
Program within one year prior to entering the job corps and returned
to employment to perform creditable service subject to coverage under
the Defined Benefit Program within six months following the date of
termination of service in the job corps.
(6) Time spent on a sabbatical leave after July 1, 1956.
(7) Time spent on an approved leave to participate in any program
under the federal Mutual Educational and Cultural Exchange
Program.
(8) Time spent on an approved maternity or paternity leave of two
years or less in duration, regardless of whether or not the leave was
taken before or after the addition of this subdivision.
(9) Time spent on an approved leave, up to four months in any
12-month period, for family care or medical leave purposes, as
defined by Section 12945.2 of the Government Code, as it read on the
date leave was granted, excluding maternity and paternity leave.
(10) Time spent employed by the Board of Governors of the
California Community Colleges in a position subject to
coverage by the Public Employees' Retirement System
the state or local miscellaneous classification under this system
between July 1, 1991, and December 31, 1997, provided the
member has elected to return to coverage under the State
Teachers' Retirement System Defined Benefit Program
pursuant to Section 20309 of the Government Code.
(b) In no event shall the member receive credit for service or
time described in paragraphs (1) to (10), inclusive, of subdivision
(a) if the member has received or is eligible to receive credit for
the same service or time in the Cash Balance Benefit Program under
Part 14 (commencing with Section 26000) or another retirement system.
SEC. 60. Section 22950 of the Education Code is amended to read:
22950. Employers shall contribute monthly to the
Teachers' Retirement Fund retirement fund 8
percent of the creditable compensation upon which members'
contributions under this part are based.
SEC. 61. Section 22951 of the Education Code is amended to read:
22951. In addition to any other contributions required by this
part, employers shall, on account of liability for benefits pursuant
to Section 22717, contribute monthly to the Teachers'
Retirement Fund retirement fund 0.25 percent of
the creditable compensation upon which members' contributions are
based.
SEC. 62. Section 22954 of the Education Code is amended to read:
22954. (a) Notwithstanding Section 13340 of the Government Code,
commencing July 1, 1999, a continuous appropriation is hereby
annually made from the General Fund to the Controller, pursuant to
this section, for transfer to the Supplemental Benefit Maintenance
Account in the Teachers' Retirement Fund
retirement fund . The total amount of the appropriation for
each year shall be equal to 2.5 percent of the total of the
creditable compensation of the immediately preceding calendar year
upon which members' contributions are based for purposes of funding
the supplemental payments authorized by Section 24415.
(b) The board may deduct from the annual appropriation made
pursuant to this section an amount necessary for the administrative
expenses of Section 24415.
(c) It is the intent of the Legislature in enacting this section
to establish the supplemental payments pursuant to Section 24415 as
vested benefits pursuant to a contractually enforceable promise to
make annual contributions from the General Fund to the Supplemental
Benefit Maintenance Account in the Teachers' Retirement Fund
retirement fund in order to provide a
continuous annual source of revenue for the purposes of making the
supplemental payments under Section 24415.
SEC. 63. Section 22954.5 of the Education Code is repealed.
22954.5. For the 1998-99 fiscal year, the contributions required
by Section 22954 shall be reduced by the total value of the state's
interest in the school lands from the sale of the Elk Hills Naval
Petroleum Reserve. That sale is expected in February 1998.
SEC. 64. Section 22955 of the Education Code is amended to read:
22955. (a) Notwithstanding Section 13340 of the Government Code,
commencing July 1, 1999, a continuous appropriation is hereby
annually made from the General Fund to the Controller, pursuant to
this section, for transfer to the Teachers' Retirement Fund
retirement fund . The total amount of the
appropriation for each year shall be equal to 3.102 percent of the
total of the creditable compensation of the immediately preceding
calendar year upon which members' contributions are based, to be
calculated annually on October 1, and shall be divided into four
equal quarterly payments.
(b) Notwithstanding Section 13340 of the Government Code,
commencing October 1, 1998, a continuous appropriation, in addition
to the appropriation made by subdivision (a), is hereby annually made
from the General Fund to the Controller for transfer to the
Teachers' Retirement Fund retirement fund .
The total amount of the appropriation for each year shall be equal to
0.524 percent of the total of the creditable compensation of the
immediately preceding calendar year upon which members' contributions
are based, to be calculated annually on October 1, and shall be
divided into four equal quarterly payments. The percentage shall be
adjusted to reflect the contribution required to fund the normal cost
deficit or the unfunded obligation as determined by the board based
upon a recommendation from its actuary. If a rate increase is
required, the adjustment may be for no more than 0.25 percent per
year and in no case may the transfer made pursuant to this
subdivision exceed 1.505 percent of the total of the creditable
compensation of the immediately preceding calendar year upon which
members' contributions are based. At any time when there is neither
an unfunded obligation nor a normal cost deficit, the percentage
shall be reduced to zero.
The funds transferred pursuant to this subdivision shall first be
applied to eliminating on or before June 30, 2027, the unfunded
actuarial liability of the fund identified in the actuarial valuation
as of June 30, 1997.
(c) For the purposes of this section, the term "normal cost
deficit" means the difference between the normal cost rate as
determined in the actuarial valuation required by Section
22311 and the total of the member contribution rate
required under Section 22901 and the employer contribution rate
required under Section 22950, and shall exclude (1) the portion for
unused sick leave service credit granted pursuant to Section 22717,
and (2) the cost of benefit increases that occur after July 1, 1990.
The contribution rates prescribed in Section 22901 and Section 22950
on July 1, 1990, shall be utilized to make the calculations. The
normal cost deficit shall then be multiplied by the total of the
creditable compensation upon which member contributions under this
part are based to determine the dollar amount of the normal cost
deficit for the year.
(d) Pursuant to Section 22001 and case law,
members are entitled to a financially sound retirement system. It is
the intent of the Legislature that this section shall provide the
retirement fund stable and full funding over the long term.
(e) This section continues in effect but in a somewhat different
form, fully performs, and does not in any way unreasonably impair,
the contractual obligations determined by the court in California
Teachers' Association v. Cory, 155 Cal.App.3d 494.
(f) Subdivision (b) shall not be construed to be applicable to any
unfunded liability resulting from any benefit increase or change in
contribution rate under this part that occurs after July 1, 1990.
(g) The amendments to this section during the 1991-92 Regular
Session shall be construed and implemented to be in conformity with
the judicial intent expressed by the court in California Teachers'
Association v. Cory, 155 Cal.App.3d 494.
SEC. 65. Section 23001 of the Education Code is amended to read:
23001. Each county superintendent shall draw his or her
requisitions for contributions required by Sections 22901 and 22950
in favor of the State Teachers' Public
Employees' Retirement System, and the requisitions, when
allowed and signed by the county auditor, shall constitute a warrant
against the county treasury. The county superintendent thereupon
shall forward the warrants to the board in Sacramento. The amounts
received shall be deposited immediately in the State Treasury to the
Teachers' Retirement Fund retirement fund
.
SEC. 66. Section 23007 of the Education Code is amended to read:
23007. Should any county superintendent fail to make payment of
any assessment by the board, the Controller shall, upon order of the
board, withhold subsequent payments from the State School Fund to the
county for deposit in the county school service fund or, upon the
request of a county superintendent of schools to the county auditor,
he or she shall withhold payments to a school district for deposit in
the district general fund until the contributions and report are
received in acceptable form in the office of the system and the board
directs the Controller to make those payments less the amount of the
assessments to the county that would have been paid had no payments
been withheld. The Controller shall thereupon pay to the system the
amount of the assessments withheld for deposit in the State Treasury
to the Teachers' Retirement Fund retirement
fund .
SEC. 67. Section 23008 of the Education Code is amended to read:
23008. (a) If more or less than the required contributions
specified in this part and Section 44987 are paid to the system based
on any payment of creditable compensation to a member, proper
adjustments shall be made by the county superintendent or other
employing agency on a monthly report within 60 days of discovery or
of notification by the system and any refunds shall be made to the
member within the same time period by the employing agency.
(b) The board may assess penalties for late or improper
adjustments pursuant to Section 23006. These penalties shall be no
more than the regular interest as defined in Section 22162. The
penalty so assessed shall be deemed interest earned in the year in
which it was received.
(c) If a required report contains erroneous information and the
system, acting in good faith, disburses funds from the
Teachers' Retirement Fund retirement fund based
on that information, the county superintendent or other employing
agency who submitted the report shall reimburse the retirement fund
in full for the amount of the erroneous disbursement. Reimbursement
shall be made immediately upon notification by the system.
SEC. 68. 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 or membership
classifications defined in Section 22115.2, may elect to
redeposit 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. 69. Section 24201 of the Education Code is amended to read:
24201. (a) A member may retire for service under this part upon
written application for retirement to the board, under paragraph (1)
or (2) as follows:
(1) The member has attained the age of 55 years or more and has at
least five years of credited service, at least one year of which has
been performed subsequent to the most recent refund of accumulated
retirement contributions. The five years of credited service may
include out-of-state service purchased pursuant to Section 22820.
The number of years of credited service performed in California shall
not be less than the number of years necessary to determine final
compensation pursuant to Section 22134 or 22135, whichever is
applicable to the member.
(2) The member is credited with service that is not used as a
basis for benefits under any other public retirement system or
under any other membership classification , excluding the
federal social security system, if the member has attained the age of
55 years or older and retires concurrently under one or more of the
retirement systems or membership classifications with
which the member has concurrent membership as defined in Section
22115.2.
(b) Application for retirement under paragraph (2) of subdivision
(a) may be made even if the member has not earned five years of
service.
SEC. 70. Section 24255 of the Education Code is amended to read:
24255. (a) There is in the State Treasury a trust fund to be
known as the Teachers' Replacement Benefits Program Fund. There
shall be deposited directly in that fund, and not transferred from
the Teachers' Retirement Fund retirement fund
, that portion of employer contributions determined by the
board as necessary to fund the replacement benefits program.
(b) Notwithstanding Section 13340 of the Government Code, moneys
in the Teachers' Replacement Benefits Program Fund are continuously
appropriated without regard to fiscal years to pay benefits to
members and beneficiaries of the defined benefit program
Defined Benefit Program , and to pay related
administrative expenses.
(c) The board may authorize the transfer and disbursement of funds
from the Teachers' Replacement Benefits Program Fund for the purpose
of carrying into effect this chapter upon the signature of either or
both of its chairperson and vice chairperson or the chief executive
officer or any employee of the system designated by the chief
executive officer.
(d) Disbursements of money from the Teachers' Replacement Benefits
Program Fund of whatever nature shall be made upon claims duly
audited in the manner prescribed for the disbursement of other public
funds except that notwithstanding the foregoing disbursements may be
made to return funds deposited in the fund in error.
SEC. 71. Section 24260 of the Education Code is amended to read:
24260. (a) A replacement benefits program is hereby established
under this chapter for the exclusive purpose of providing to members
or their beneficiaries in accordance with subdivisions (c) and (d)
that portion of the annual benefit of the member or the member's
beneficiaries otherwise payable under the provisions of this part
that exceeds the limitations on the dollar amount of annual benefit
under Section 415 of the Internal Revenue Code of 1986 (26 U.S.C.
Sec. 415) as applicable to a governmental plan, as defined in
subdivision (d) of Section 414.
(b) The replacement benefits program established by this chapter
is intended to comply with the provisions of Section 415(m) of the
Internal Revenue Code of 1986 (26 U.S.C. Sec. 415(m)).
(c) In any case in which (1) the annual benefit of the member or
the member's beneficiaries for the calendar year otherwise payable
under the terms of this part, as measured under the provisions of
Section 415(b)(2) of the Internal Revenue Code of 1986 (26 U.S.C.
Sec. 415(b)(2)) and adjusted to exclude the portion of the annual
benefit attributable to employee contributions that are not "picked
up" under Section 414(h)(2) of the Internal Revenue Code of 1986 (26
U.S.C. Sec. 414(h)(2)) or attributable to rollover contributions
described in Section 415(b)(2) of the Internal Revenue Code of 1986,
exceeds (2) the limitation on the dollar amount of an annual benefit
applicable for the calendar year under Section 415(b)(1)(A) or
subdivision (e) as applicable to a governmental plan, as defined in
Section 414(d) of the Internal Revenue Code of 1986 (26 U.S.C. Sec.
414(d)), the amount of the portion of the annual benefit shall be
paid to the member or the member's beneficiaries under the
replacement benefit program in the manner described in subdivision
(d). In no event shall the portion of the annual benefit from the
replacement benefits program be payable from the assets of the
Teachers' Retirement Fund retirement fund
. In no event shall the replacement benefits program provide
to the member or the member's beneficiaries, directly or indirectly,
any election to defer compensation.
(d) Any portion of the annual benefit of a member or the member's
beneficiaries for the year described in subdivision (c) shall be
payable, at the same time and in the same form as the remainder of
the annual benefit and subject to the terms and conditions of this
part except as otherwise provided under this section, from the
proceeds of the employer contributions due under Section 22950, and,
notwithstanding Section 22956, prior to the deposit of those employer
contributions in the State Treasury to the Teachers'
Retirement Fund retirement fund . Upon receipt
of the warrants for the employer contributions as described in
Section 23001, the board shall retain and place in the Teachers'
Replacement Benefits Program Fund only the amounts of employer
contributions as are necessary for the exclusive purpose of paying
currently the monthly installment next due of the portion of the
annual benefit payable from the replacement benefits program to the
member or the member's beneficiaries as well as any administrative
expenses associated with the replacement benefits program. Amounts
shall not be accumulated in the Teachers' Replacement Benefits
Program Fund for the payment of future benefits, and a member or the
member's beneficiaries who are to receive the portion of his or her
annual benefit under the replacement benefits program shall have no
entitlement to amounts in the Teachers' Replacement Benefits Program
Fund until distributed to him or her as a benefit.
(e) The portion of the annual benefit payable under the
replacement benefits program shall be subject to withholding for any
applicable income or employment taxes.
(f) The board may by plan amendment amend the terms of the
replacement benefits program established under this section as
appropriate to comply with applicable federal or state law.
(g) All references to sections of the Internal Revenue Code of
1986 are to such sections as are amended from time to time or their
successor sections.
SEC. 72. Section 24412 of the Education Code is amended to read:
24412. (a) The annual revenues deposited to the Teachers'
Retirement Fund retirement fund pursuant to
Section 6217.5 of the Public Resources Code are continuously
appropriated without regard to fiscal year for the purposes of this
section and shall be distributed annually in quarterly supplemental
payments commencing on September 1 of each year to retired members,
disabled members, and beneficiaries. The amount available for
distribution in any year shall be the income for that year from the
sale or use of school lands and lieu lands, as estimated by the State
Lands Commission prior to the beginning of the fiscal year, adjusted
by the difference between the estimated and actual income for the
preceding fiscal year. The board shall deduct from the revenues an
amount necessary for administrative expenses to implement this
section.
(b) The net revenues to be distributed shall be allocated among
those retired members, disabled members, and beneficiaries whose
allowances, after sequentially applying the annual improvement factor
as defined in Section 22140 and the annual supplemental payment as
defined in Section 24411, if any, are below 75 percent of original
purchasing power. The purchasing power calculation for each
individual allowance shall be based on the change in the All Urban
California Consumer Price Index between June of the calendar year of
retirement and June of the fiscal year preceding the fiscal year of
the distribution. The allocation shall provide a pro rata share of
the amount needed to restore the allowance payable, after sequential
application of the current year annual improvement factor and the
supplemental payment under Section 24411, to 75 percent of original
purchasing power.
(c) The allowance increase shall not be applicable to annuities
payable from the accumulated annuity deposit contributions or the
accumulated tax-sheltered annuity contributions.
(d) In any year that the net revenues from school lands and lieu
lands is greater than that needed to adjust the allowances of all
retired members, disabled members, and beneficiaries to 75 percent of
original purchasing power, the net revenues in excess of that needed
for distribution shall be used by the board to reduce the unfunded
actuarial obligation of the fund.
(e) The board shall inform each recipient of supplemental payments
under this section that the increases are not cumulative and are not
part of the base allowance.
SEC. 73. Section 24702 of the Education Code is amended to read:
24702. (a) All persons on the San Francisco system retired rolls
on June 30, 1972, shall remain on the local rolls. The
State Teachers' Retirement System system shall
continue the subvention in Section 24706 for those persons, shall
apply the percentage update and annual improvement factor to payments
being made under the Defined Benefit Program directly to those
persons, and shall pay the retired death payment upon their death.
(b) The allowance that would have been payable had the member
retired solely under the Defined Benefit Program, including the
percentage update calculated under Sections 14332, 14333, and 14334,
as enacted by Chapter 2 of the Statutes of 1959, as those sections
read on December 31, 1974, shall be taken into account in computing
the amount of increase for the ten dollar ($10) a month per year of
service minimum unmodified allowance.
SEC. 74. Section 24975 of the Education Code is amended to read:
24975. (a) The board may develop one or more deferred
compensation plans under Section 457 of the Internal Revenue Code
that an employer may choose to establish and offer to its employees
who are members of the plan under this part or Part 14 (commencing
with Section 26000).
(b) If an employer adopts a deferred compensation plan described
in subdivision (a):
(1) The employer shall enter into a written contractual
arrangement with the system under which the system, or a third-party
administrator acting on behalf of the system, shall provide
investment, recordkeeping, and administrative services for the
deferred compensation plan.
(2) The initial period of the contractual arrangement described in
paragraph (1) shall be for a term of five years.
(3) The deferred compensation plan shall continue to constitute a
separate plan established and maintained by the adopting employer.
(4) The system shall be treated as acting on behalf of the
employer in administering the deferred compensation plan.
(5) The terms and administration of the deferred compensation plan
shall be in accordance with the applicable provisions of Section 457
of the Internal Revenue Code.
(6) In administering the deferred compensation plan on behalf of
the employer, the board shall have the same investment authority and
discretion and be subject to the same fiduciary standards pursuant to
Chapter 4 (commencing with Section 22250), with respect to amounts
deferred under the deferred compensation plan as applied by the
system with respect to the Teachers' Retirement Fund
retirement fund .
(c) If an employer establishes and maintains a deferred
compensation plan described in subdivision (a), the deferred
compensation plan shall be offered to all of its employees who are
members of the plan under this part or Part 14 (commencing with
Section 26000).
(d) An employee participating in a deferred compensation plan
established by an employer under this section shall enter into a
written agreement with the employer for the deferral of compensation
prior to the performance of the services to which that compensation
relates.
(e) If an employer chooses to establish and maintain a deferred
compensation plan described in subdivision (a) that is to be
administered by the system, the employer shall take all necessary or
appropriate action to implement this section in cooperation with the
system.
SEC. 75. Section 25000 of the Education Code is amended to read:
25000. (a) The State Teachers' Retirement System
system shall develop a program to provide health
care benefits for members, beneficiaries, children, and dependent
parents.
(b) All costs incurred by the system pursuant to this part shall
be paid by allocations from the Teachers' Retirement Fund
retirement fund as appropriated for that
purpose.
(c) The health care benefits program developed by the system
pursuant to this part shall not be implemented by the system unless
specifically authorized by a statute enacted by the Legislature.
SEC. 76. Section 26000 of the Education Code is amended to read:
26000. (a) The Legislature hereby finds and declares
that the State Teachers' Retirement System Cash Balance Plan was
created and established on July 1, 1996, to provide a retirement plan
for persons employed to perform creditable service for less than 50
percent of the full-time equivalent for the position. The persons
eligible for the Cash Balance Plan were excluded from mandatory
membership in the State Teachers' Retirement System Defined Benefit
Plan. Both plans are were administered
by the Teachers' Retirement Board. Because both plans were intended
to provide for the retirement of teachers and other persons employed
in connection with the public schools of this state and schools
supported by this state, a merger of these two plans is now
hereby was made for the purpose of establishing
a single retirement plan that shall be known and may be cited as the
State Teachers' Retirement Plan consisting of the different benefit
programs set forth in this part and Part 13 (commencing with Section
22000). The
(b) The Legislature hereby further finds and declares that on
January 1, 2001, the State Teachers' Retirement System was merged
into the Public Employees' Retirement System and, as a result, the
plan shall be administered by the Teachers' Retirement
Board of Administration of the Public Employees'
Retirement System as set forth in this part and
, Part 13 (commencing with Section 22000) ,
and Chapter 2 (commencing with Section 20090) of Part 3 of Division
5 of Title 2 of the Government Code . As a result of
this merger these mergers , a Cash Balance
Benefit Program will be provided under the State Teachers' Retirement
Plan of the Public Employees' Retirement System and that
program is set forth in this part.
(c) The governing board of a school
district, community college district, or county office of education
may, by formal action, elect to provide the benefits of the Cash
Balance Benefit Program under this part for their employees.
SEC. 77. Section 26000.5 of the Education Code is amended to read:
26000.5. (a) An employer whose governing board has elected to
provide the benefits of this part for its employees pursuant to
Section 26000 shall enter into an agreement with the State
Teachers' Public Employees' Retirement System.
The agreement shall specify the terms and conditions of the employer'
s formal action to provide the Cash Balance Benefit Program and shall
remain in effect unless or until the employer exercises the right to
discontinue the plan pursuant to Chapter 17 (commencing with Section
28100).
SEC. 78. Section 26000.6 of the Education Code is amended to read:
26000.6. (a) An election by any employer to provide the benefits
of the Cash Balance Plan for their employees prior to the merger
described in subdivision (a) of Section 26000 shall be
deemed to constitute an election to provide the Cash Balance Benefit
Program under the State Teachers' Retirement Plan.
(b) Participation in the Cash Balance Plan by any participant
prior to the merger described in subdivision (a) of
Section 26000 shall be deemed to constitute participation in the Cash
Balance Benefit Program under the State Teachers' Retirement Plan.
(c) Any beneficiary under the Cash Balance Plan prior to the
merger described in subdivision (a) of Section 26000 shall
be deemed to be a beneficiary under the Cash Balance Benefit Program
under the State Teachers' Retirement Plan.
SEC. 79. Section 26001 of the Education Code is amended to read:
26001. The design and administration of the plan, including the
Cash Balance Benefit Program, shall comply with the applicable
provisions of the Internal Revenue Code and the Revenue and Taxation
Code. The Teachers' Retirement Board of
Administration of the Public Employees' Retirement System may
amend the plan to comply with the applicable federal laws and
regulations to the extent permitted by law, to establish or revise
the minimum interest rate, to declare additional earnings credit, to
declare additional annuity credit, and to adopt and amend actuarial
assumptions for all purposes under the plan.
SEC. 80. Section 26002 of the Education Code is amended to read:
26002. The Cash Balance Benefit Program shall be administered by
the Teachers' Retirement Board of
Administration of the Public Employees' Retirement System with
all of the powers, responsibilities and duties for administration of
the plan set forth in Chapter 3 (commencing with Section
22200) through Chapter 7 (commencing with Section 22375) of Part 13.
In administering the plan, the board and its officers and employees
of the system shall exercise their fiduciary duties set forth in
Chapter 4 (commencing with Section 22250) of Part 13 2
(commencing with Section 20090) of Part 3 of Division 5 of Title 2
of the Government Code .
SEC. 81. Section 26105 of the Education Code is amended to read:
26105. "Annuitant Reserve" means the reserve account established
by the board within the State Teachers' Retirement Fund
retirement fund for the payment of monthly
annuities with respect to the Cash Balance Benefit Program.
SEC. 82. Section 26109 of the Education Code is amended to read:
26109. "Board" means the Teachers' Retirement
Board of Administration of the Public Employees' Retirement
System .
SEC. 83. Section 26138.5 is added to the Education Code, to read:
26138.5. "Retirement fund" means the Public Employees' Retirement
Fund as provided in Article 5 (commencing with Section 20170) of
Part 3 of Division 5 of Title 2 of the Government Code.
SEC. 84. Section 26142 of the Education Code is amended to read:
26142. "System" means the State Teachers'
Public Employees' Retirement System.
SEC. 85. Section 26200 of the Education Code is amended to read:
26200. Employee contributions, employer contributions, investment
earnings, and any other amounts provided under this part shall be
deposited into the Teachers' Retirement Fund
retirement fund . Disbursement of money from the fund shall be
made upon claims made pursuant to Section 26209 and duly audited in
the manner prescribed for the disbursement of other public funds.
Notwithstanding Section 13340 of the Government Code, the
Teachers' Retirement Fund retirement fund is
continuously appropriated for the payment of benefits and investment
transactions pursuant to this part. Disbursements may be made to
return funds deposited in the fund in error.
SEC. 86. Section 26201 of the Education Code is amended to read:
26201. Investment earnings shall be collected by the Treasurer,
and together with any other moneys received in connection with the
Cash Balance Benefit Program, shall be immediately deposited to the
credit of the Teachers' Retirement Fund
retirement fund and reported to the system.
SEC. 87. Section 26202 of the Education Code is amended to read:
26202. (a) The board shall establish a Gain and Loss Reserve
within the Teachers' Retirement Fund
retirement fund for the Cash Balance Benefit Program. The
board has sole authority to administer the Gain and Loss Reserve to
be drawn upon to the extent necessary to credit interest to employee
accounts and employer accounts at the minimum interest rate during
years in which the investment earnings of the plan with respect to
the Cash Balance Benefit Program are not sufficient for that purpose,
and, where necessary, to provide additions to the Annuitant Reserve
for monthly annuity payments.
(b) The board shall establish and periodically review goals
regarding the sufficiency of the Gain and Loss Reserve based on the
recommendation of the actuary.
(c) In the event that the total amount of investment earnings of
the plan with respect to the Cash Balance Benefit Program for any
plan year exceeds the sum of the total amount required to credit all
employee and employer accounts at the minimum interest rate for the
plan year plus the administrative costs of the plan with respect to
the Cash Balance Benefit Program for the plan year, the board shall
determine the amount, if any, that is to be credited to the Gain and
Loss Reserve for the plan year. That determination shall be made
upon recommendation of the actuary following the adoption by the
board of the actuarial valuation undertaken following the plan year
pursuant to Section 26202, but no later than June 30 following the
end of the plan year. In determining whether an amount is to be
credited to the Gain and Loss Reserve, the board shall consider the
sufficiency of the reserve in light of the goal established for the
sufficiency and the recommendations of the actuary.
SEC. 88. Section 26204 of the Education Code is amended to read:
26204. The board shall establish an Annuitant Reserve within the
Teachers' Retirement Fund retirement fund
for the Cash Balance Benefit Program. The board has sole
authority to administer the Annuitant Reserve for the payment of
annuities. The board may transfer the credits from a participant's
employee account and employer account to the Annuitant Reserve upon
election of an annuity by the participant or beneficiary of the
participant.
SEC. 89. Section 26206 of the Education Code is amended to read:
26206. All administrative costs of the board and system for the
plan with respect to the Cash Balance Benefit Program shall be paid
from the Teachers' Retirement Fund retirement
fund .
SEC. 90. Section 26209 of the Education Code is amended to read:
26209. The board may authorize the transfer and disbursement of
funds from the Teachers' Retirement Fund
retirement fund for the purpose of carrying into effect the
Cash Balance Benefit Program upon the signature of its chairperson,
vice chairperson, the chief executive officer, or any employee of the
system designated by the chief executive officer.
SEC. 91. Section 26210 of the Education Code is amended to read:
26210. The board has exclusive control of the investment of the
Retirement Fund retirement fund with
respect to assets attributed to the Cash Balance Benefit Program.
In investing the fund, the board and its officers and
employees shall exercise their fiduciary duties set forth in Chapter
4 (commencing with Section 22250) and Chapter 6 (commencing with
Section 22350) of Part 13.
SEC. 92. Section 20057 of the Government Code is amended to read:
20057. "Public agency" also includes the following:
(a) The Commandant, Veterans' Home of California, with respect to
employees of the Veterans' Home Exchange and other post fund
activities whose compensation is paid from the post fund of the
Veterans' Home of California.
(b) Any auxiliary organization operating pursuant to Chapter 7
(commencing with Section 89900) of Part 55 of the Education Code and
in conformity with regulations adopted by the Trustees of the
California State University and any auxiliary organization operating
pursuant to Article 6 (commencing with Section 72670) of Chapter 6 of
Part 45 of the Education Code and in conformity with regulations
adopted by the Board of Governors of the California Community
Colleges.
(c) Any student body or nonprofit organization composed
exclusively of students of the California State University or
community college or of members of the faculty of the California
State University or community college, or both, and established for
the purpose of providing essential activities related to, but not
normally included as a part of, the regular instructional program of
the California State University or community college.
(d) A state organization of governing boards of school districts,
the primary purpose of which is the advancing of public education
through research and investigation.
(e) Any nonprofit corporation whose membership is confined to
public agencies as defined in Section 20056.
(f) A section of the California Interscholastic Federation.
(g) Any credit union incorporated under Division 5 (commencing
with Section 14000) of the Financial Code, or incorporated pursuant
to federal law, with 95 percent of its membership limited to
employees who are members of or retired members of this system or the
State Teachers' Retirement System, and their immediate families, and
employees of any credit union. For the purposes of this
subdivision, "immediate family" means those persons related by blood
or marriage who reside in the household of a member of the credit
union who is a member of or retired member of this system or
, including a member of or retired member of
the State Teachers' Retirement System Plan
. The credit union shall pay any costs that are in addition to
the normal charges required to enter into a contract with the board.
All the payments made by the credit union that are in addition to
the normal charges required shall be added to the total amount
appropriated by the Budget Act for the administrative expense of this
system. For purposes of this subdivision, a credit union shall not
be deemed to be a public agency unless it has entered into a contract
with the board pursuant to Chapter 5 (commencing with Section 20460)
prior to January 1, 1988. After January 1, 1988, the board shall
not enter into a contract with any credit union as a public agency.
(h) Any county superintendent of schools that was a contracting
agency on July 1, 1983, and any school district or community college
district that was a contracting agency with respect to local
policemen, as defined in Section 20430, on July 1, 1983.
(i) Any school district or community college district that has
established a police department, pursuant to Section 39670 or 72330
of the Education Code, and has entered into a contract with the board
on or after January 1, 1990, for school safety members, as defined
in Section 20444.
(j) A nonprofit corporation formed for the primary purpose of
assisting the development and expansion of the educational, research,
and scientific activities of a district agricultural association
formed pursuant to Part 3 (commencing with Section 3801) of Division
3 of the Food and Agricultural Code, and the nonprofit corporation
described in the California State Exposition and Fair Law (former
Article 3 (commencing with Section 3551) of Chapter 3 of Part 2 of
Division 3 of the Food and Agricultural Code, as added by Chapter 15
of the Statutes of 1967).
(k) A public or private nonprofit corporation that operates a
regional center for the developmentally disabled in accordance with
Chapter 5 (commencing with Section 4620) of Division 4.5 of the
Welfare and Institutions Code. "Public agency" for purposes of this
part shall only constitute the employees of the regional center.
Notwithstanding any other provision of this part, the agency may
elect by appropriate provision or amendment of its contract not to
provide credit for service prior to the effective date of its
contract.
(l) Independent data-processing centers formed pursuant to former
Article 2 (commencing with Section 10550) of Chapter 6 of Part 7 of
the Education Code, as it read on December 31, 1990. An agency
included pursuant to this subdivision shall only provide benefits
that are identical to those provided to a school member.
(m) Any local agency formation commission.
(n) A nonprofit corporation organized for the purpose of and
engaged in conducting a citrus fruit fair as defined in Section 4603
of the Food and Agricultural Code.
(o) (1) A public or private nonprofit corporation that operates an
independent living center providing services to severely handicapped
people and established pursuant to federal P.L. 93-112, that
receives the approval of the board, and that provides at least three
of the following services:
(A) Assisting severely handicapped people to obtain personal
attendants who provide in-home supportive services.
(B) Locating and distributing information about housing in the
community usable by severely handicapped people.
(C) Providing information about financial resources available
through federal, state and local government, and private and public
agencies to pay all or part of the cost of the in-home supportive
services and other services needed by severely handicapped people.
(D) Counseling by people with similar disabilities to aid the
adjustment of severely handicapped people to handicaps.
(E) Operation of vans or buses equipped with wheelchair lifts to
provide accessible transportation to otherwise unreachable locations
in the community where services are available to severely handicapped
people.
(2) "Public agency" for purposes of this part shall constitute
only the employees of the independent living center.
(3) Notwithstanding any other provisions of this part, the public
or private nonprofit corporation may elect by appropriate provision
or amendment of its contract not to provide credit for service prior
to the effective date of its contract.
(p) A hospital that is managed by a city legislative body in
accordance with Article 8 (commencing with Section 37650) of Chapter
5 of Part 2 of Division 3 of Title 4.
(q) (1) Except as provided in paragraph (2), "public agency" also
includes any entity formed pursuant to the Federal Job Training
Partnership Act of 1982 (29 U.S.C. Sec. 1501 et seq.) or Division 8
(commencing with Section 15000) of the Unemployment Insurance Code.
(2) "Public agency," for purposes of this part, does not include a
private industry council as set forth in the Federal Job Training
Partnership Act of 1982 (29 U.S.C. Sec. 1501 et seq.) or Division 8
(commencing with Section 15000) of the Unemployment Insurance Code.
(r) The Tahoe transportation district that is established by
Article IX of Section 66801.
(s) The California Firefighter Joint Apprenticeship Program formed
pursuant to Chapter 4 (commencing with Section 3070) of Division 3
of the Labor Code.
(t) A public health department or district that is managed by the
governing body of a county of the 15th class, as defined by Sections
28020 and 28036, as amended by Chapter 1204 of the Statutes of 1971.
(u) A nonprofit corporation or association conducting an
agricultural fair pursuant to Section 25905 may enter into a contract
with the board for the participation of its employees as members of
this system, upon obtaining a written advisory opinion from the
United States Department of Labor that the participation of the
officers and employees of the nonprofit corporation or association in
this system would not affect this system's exemption as a
governmental plan under Section 1001 et seq. of Title 29 of the
United States Code. The nonprofit corporation or association shall
be deemed a "public agency" only for this purpose.
(v) An auxiliary organization established pursuant to Article 2.5
(commencing with Section 69522) of Chapter 2 of Part 42 of the
Education Code upon obtaining a written advisory opinion from the
United States Department of Labor that the participation of the
officers and employees of the auxiliary organization in this system
would not affect this system's exemption as a governmental plan under
Section 1001 et seq. of Title 29 of the United States Code. The
auxiliary organization is a "public agency" only for this purpose.
(w) The Western Association of Schools and Colleges upon obtaining
a written advisory opinion from the United States Department of
Labor that the participation of the officers and employees of the
association in this system would not affect this system's exemption
as a governmental plan under Section 1001 et seq. of Title 29 of the
United States Code. The association shall be deemed a "public agency"
only for this purpose.
SEC. 93. Section 20090.5 is added to the Government Code, to read:
20090.5. (a) As used in paragraph (1) of subdivision (g) of
Section 20090, "members of this system" includes those persons
described in Sections 20281.5 and 20281.6.
(b) As used in paragraph (3) of subdivision (g) of Section 20090,
"active local members of this system who are employees of a school
district or a county superintendent of schools" includes those
persons described in Sections 20281.5 and 20281.6.
(c) As used in paragraph (5) of subdivision (g) of Section 20090,
"retired members of this system" includes retired members and
participants of the State Teachers' Retirement Plan.
SEC. 94. Section 20170 of the Government Code is amended to read:
20170. (a) The Public Employees' Retirement Fund in
the State Treasury is continued in existence.
(b) The Public Employees' Retirement Fund is a trust
fund created, and administered in accordance with this part, solely
for the benefit of the members and retired members of this system
, including the members and retired members of the Defined
Benefit Program of the State Teachers' Retirement Plan, and
their survivors and beneficiaries.
(c) All funds previously deposited and held in the Teachers'
Retirement Fund shall be deposited, held, and administered in
accordance with this part.
SEC. 95. Section 20175 of the Government Code is amended to read:
20175. Notwithstanding any other provision of law, funds in the
reserve against deficiencies shall not be used to pay any employers'
contribution required by this chapter part
to be paid by the state, any school employer, or any
contracting agency or by the State Teachers' Retirement Law to
be paid by any employer .
SEC. 96. Section 20176 of the Government Code is amended to read:
20176. Notwithstanding any other provision of law, no funds in
the retirement fund shall be expended for any purpose other than the
cost of administration of this system, investments for the benefit of
this system, the reduction of employer contributions, and the
provision of benefits to the members and retired members of this
system , including members of the State Teachers' Retirement
Plan, and their survivors and beneficiaries.
SEC. 97. Section 20177 of the Government Code is amended to read:
20177. The board shall deposit monthly in the State Treasury to
the credit of the retirement fund all amounts received by it under
this part and under Part 13 (commencing with Section 22000) and
Part 14 (commencing with Section 26000) of Division 1 of Title 1 of
the Education Code .
SEC. 98. Section 20178 of the Government Code is amended to read:
20178. (a) The board shall credit all contributions of members in
the retirement fund with interest at an interest crediting rate of 6
percent compounded at each June 30. The retired member reserves in
the retirement fund shall be credited with the lesser of the current
actuarial interest rate or the current annual interest rate
compounded at each June 30. The interest amount that would have been
credited to the member's account on and after June 30, 1991, had the
account been credited with the lesser of the current actuarial
interest rate or the current annual interest rate, rather than at the
6 percent interest crediting rate, shall be credited to retirement
member reserves.
(b) Notwithstanding subdivision (a), the difference between the
interest amount that was credited to the account of any member of
this system who was paid his or her accumulated contributions on or
after June 30, 1991, and the lesser of the current actuarial interest
rate or the current annual interest rate, shall be transferred to
the account established by the board under Section 21337 to fund the
purchasing power protection allowance.
(c) If the current net earnings rate exceeds the interest rate
used to credit the retired member accounts, in addition to the amount
transferred to the fund established under Section 21337, the
remaining amount shall be credited to employer accounts.
(d) The current annual interest rate may be lower than the current
actuarial interest rate.
(e) This section shall not apply to contributions of members of
the State Teachers' Retirement Plan.
SEC. 99. Section 20195 of the Government Code is amended to read:
20195. (a) The board may select, purchase, or acquire in the name
of the system, the fee or any lesser interest in real property,
improved or unimproved, and may construct or remodel, and equip, an
office building, including appropriate satellite structures, in the
County of Sacramento, California, for its use and for the use of
the State Teachers' Retirement System, other state
retirement systems and plans , other departments, boards,
and agencies of the state, or appropriate private commercial
entities as space may be available from time to time. The office
building and satellite structures shall conform to the Capital Master
Plan if located within an area subject to the plan.
(b) In the event that If the board
acquires bare land, improvements shall be constructed according to
plans approved by the State Public Works Board and Department of
General Services.
(c) In the event that If the board
acquires land with improvements thereon, the improvements shall be
remodeled or completed in accordance with plans approved by the State
Public Works Board and Department of General Services.
(d) In the event that If
condemnation of the property selected is necessary, the board may
elect to deposit the funds deemed necessary with the Treasurer. The
funds are appropriated for purchase of the selected property subject
to the Property Acquisition Law.
(e) Work on all projects shall be done under contract awarded to
the lowest responsible bidder pursuant to bidding procedures set
forth in Part 2 (commencing with Section 10100) of the Public
Contract Code.
SEC. 100. Section 20281.5 is added to the Government Code, to
read:
20281.5. (a) All members of the Defined Benefit Program in the
State Teachers' Retirement Plan immediately prior to the time this
section becomes operative continue to be members of that program
within this system, and pursuant to Part 13 (commencing with Section
22000) of Division 1 of Title 1 of the Education Code.
(b) Any person who, on or after the operative date of this
section, is a person described in Section 22146 of the Education Code
shall be a member of the Defined Benefit Program provided in the
State Teachers' Retirement Plan within this system.
(c) The persons described in this section shall not be subject to
the provisions of this part unless otherwise expressly provided. The
rights and obligations of those persons within this system shall be
governed by Part 13 (commencing with Section 22000) of Division 1 of
Title 1 of the Education Code.
SEC. 101. Section 20281.6 is added to the Government Code, to
read:
20281.6. (a) All participants of the Cash Balance Benefit Program
in the State Teachers' Retirement Plan immediately prior to the time
this section becomes operative continue to be participants of that
program within this system, and pursuant to Part 14 (commencing with
Section 26000) of Division 1 of Title 1 of the Education Code.
(b) Any person who, on or after the operative date of this
section, is a person described in Section 26132 of the Education
Code, shall be a participant of the Cash Balance Benefit Program in
this State Teachers' Retirement Plan within this system.
(c) The persons described in this section shall not be subject to
the provisions of this part unless otherwise expressly provided. The
rights and obligations of those persons within this system shall be
governed by Part 14 (commencing with Section 26000) of Division 1 of
Title 1 of the Education Code.
SEC. 102. Section 20300 of the Government Code is amended to read:
20300. The following persons are excluded from membership in this
system:
(a) Inmates of state or public agency institutions who are allowed
compensation for the service they are able to perform.
(b) Independent contractors who are not employees.
(c) Persons employed as student assistants in the state colleges
and persons employed as student aides in the special schools of the
State Department of Education and in the public schools of the state.
(d) Persons employed as student teachers and excluded under
Section 22609 of the Education Code.
(e) Participants, other than staff officers and employees, in the
California Conservation Corps.
(f) Persons employed as participants in a program of, and whose
wages are paid in whole or in part by federal funds in accordance
with Section 1501 et seq. of Title 29 of the United States Code.
This subdivision does not apply with respect to persons employed in
job classes that provide eligibility for patrol or safety membership,
or to the career staff employees of an employer.
(g) All Except as otherwise provided in
this part, all persons who are members in any teachers'
retirement system, as to the service in which they are members of any
teachers' retirement system.
(h) Except as otherwise provided in this part, persons rendering
professional legal services to a city, other than the person holding
the office of city attorney, the office of assistant city attorney,
or an established position of deputy city attorney.
(i) A person serving the university as a teacher in university
extension, whose compensation for that service is established on the
basis of class enrollment either actual or estimated, with respect to
that service.
(j) A person serving a California State University as a teacher in
extension service, whose compensation for that service is
established on the basis of class enrollment either actual or
estimated, with respect to that service.
(k) A teacher or academic employee of the university or any
California State University who is otherwise fully employed and who
serves as a teacher or in an academic capacity in any summer session
or intersession, for which he or she receives compensation
specifically attributable to that service in summer session or
intersession, with respect to that service.
(l) A person who is employed under the Senate Fellows, the
Assembly Fellows, or the Executive Fellows programs.
SEC. 103. Section 20309 of the Government Code is amended to read:
20309. (a) A miscellaneous member of the
Public Employees' Retirement System who is employed by the
Board of Governors of the California Community Colleges and who
subsequently is employed by a community college district to perform
service subject to coverage by the State Teachers' Retirement
System Plan , may elect to retain
coverage by the Public Employees' Retirement System
as a miscellaneous member for that service. An election
to retain coverage under the Public Employees' Retirement
System as a miscellaneous member shall be
submitted in writing by the member to the Public Employees'
Retirement System system on a form prescribed by
the system, and a copy of the election shall be submitted
to the State Teachers' Retirement System, within 60 days
of after the date the member's change
in employment is effective.
(b) (1) A member who had been a member of the State
Teachers' Retirement System and who changed employment and became a
member of the Public Employees' Retirement System on or after July 1,
1991, but before January 1, 1998, may elect to return to coverage
under the State Teachers' Retirement System if an election to do so
is made in writing to each system on or before March 1, 1998.
Members who elect to transfer to the State Teachers' Retirement
System shall pay, prior to retirement, all contributions with respect
to service in the Public Employees' Retirement System at the
contribution rate for additional service credit in effect at the time
of the transfer to the State Teachers' Retirement System.
(2) The Public Employees' Retirement System shall transfer the
actuarial present value of the assets of a person who makes an
election pursuant to this subdivision to the State Teachers'
Retirement System.
(3) The Public Employees' Retirement System is not required to
identify and notify members who may be eligible for the election
allowed by this section.
(c) Subdivision (a) shall apply to changes in employment
effective on or after January 1, 1998.
SEC. 104. Section 20370 of the Government Code is amended to read:
20370. (a) "Member" means an employee who has qualified for
membership in this system and on whose behalf an employer has become
obligated to pay contributions.
(b) "State member" includes:
(1) State miscellaneous members.
(2) University members.
(3) Patrol members.
(4) State safety members.
(5) State industrial members.
(6) State peace officer/firefighter members.
(c) "Local member" includes:
(1) Local miscellaneous members.
(2) Local safety members.
(d) "School member" includes all employees within the jurisdiction
of a school employer, other than local policemen and school safety
members.
(e) Except as otherwise expressly provided under this part,
"member" does not mean those persons described in Section 20281.5 or
20281.6.
SEC. 105. Section 20501 of the Government Code is amended to read:
20501. Contracts with school employers may include school
district employees in this system only with respect to service
rendered in a status in which they are not eligible for membership in
the State Teachers' Retirement System Plan
.
SEC. 106. Section 20610 of the Government Code is amended to read:
20610. Every county superintendent of schools shall enter into a
contract with the board for the inclusion in this system of (a) all
of the employees of the office of county superintendent whose
compensation is paid from the county school service fund other than
employees electing pursuant to Section 1313 of the Education Code to
continue in membership in a county system; and (b) all of the
employees of school districts and community college districts
existing on July 1, 1949, or thereafter formed, within his or her
jurisdiction, other than school districts that are contracting
agencies or that maintain a district, joint district, or other local
retirement system, in respect to service rendered in a status in
which they are not eligible for membership in the State Teachers'
Retirement System Plan . The effective
date of each contract shall be not later than July 1, 1949. For the
purposes of this part those school district employees shall be
considered to be employees of the county superintendent of schools
having jurisdiction over the school district by which they are
employed and service to the district shall be considered as service
to the county superintendent of schools.
SEC. 107. Section 20611 of the Government Code is amended to read:
20611. A regional occupational center established pursuant to
Chapter 9 (commencing with Section 52300) of Division 4 of the
Education Code by two or more school districts by a joint powers
agreement shall be deemed a school district for purposes of this
part. The board and the county superintendent of schools, upon the
request of the governing body of any center in the county, shall
amend the contract entered into under this chapter to include the
employees of the center who are not eligible to membership in the
State Teachers' Retirement System Plan
. Credit shall not be granted for any service in that employment
prior to the effective date of the amendment. However, on the
request of the governing body of the center, the amendment may
provide that the membership of any person becoming a member in that
employment on the effective date of the amendment shall be
retroactive to the date of that person's entry into that employment.
If the amendment provides for the retroactive membership, both the
member and the center shall contribute to the retirement fund for the
period the amounts they would have contributed had the amendment
been in effect on the date of the entry into employment.
SEC. 108. Section 20752 of the Government Code is amended to read:
20752. A member of the Judges' Retirement System, the Legislators'
Retirement System, the State Teachers' Retirement System, the
University of California Retirement System
Plan , or a county retirement system, who has withdrawn
accumulated contributions from this system shall have the right to
redeposit those contributions, subject to the same conditions as
imposed for redeposits of accumulated contributions by Section 20750,
including the right as he or she would have had under Section 20638
had he or she not withdrawn his or her contributions.
Provisions of this section extending a right to redeposit
accumulated contributions withdrawn from this system shall also apply
to members of any retirement system established under Chapter 2
(commencing with Section 45300) of Division 5 of Title 4 with respect
to which an ordinance complying with Section 45310.5 has been filed
with and accepted by the board or any retirement system established
by or pursuant to the charter of a city or city and county or by any
other public agency of this state which system, in the opinion of the
board, provides a similar modification of rights and benefits
because of membership in this system and with respect to which the
governing body of the city, city and county or public agency and the
board have entered into agreement pursuant to Section 20351.
A member who elects to redeposit under this section shall have the
same rights with respect thereto as a member who has elected
pursuant to Section 20731 to leave his or her accumulated
contributions on deposit in the fund.
SEC. 109. Section 20900 of the Government Code is amended to read:
20900. Notwithstanding any other provision of this part, a member
employed on a part-time basis on and after January 1, 1976, shall,
for the period of part-time employment, receive the credit the member
would receive if he or she was employed on a full-time basis and
have his or her retirement allowance, as well as any other benefits
the member is entitled to under this part, based upon the salary that
he or she would have received if employed on a full-time basis, if
the member and his or her employer both elect to contribute to the
retirement fund the amount that would have been contributed if the
member was employed on a full-time basis. Prior to the reduction of
an employee's workload under this section, the district personnel
responsible for the administration of this program, in conjunction
with the administrative staff of the State Teachers' Retirement
System Plan and this system, shall
verify the eligibility of the applicant for the reduced workload
program. This section shall be applicable only to members who are
academic employees of the California State University or who are
certificated employees of school districts and who have met the
criteria provided in Sections 44922 and 87483 of the Education Code
or Section 89516 of the Education Code and are not older than 70
years and is limited to a period of five years of part-time status.
The employer shall maintain the necessary records to separately
identify each employee receiving credit pursuant to this section.
SEC. 110. Section 21220 of the Government Code is amended to read:
21220. (a) A person who has been retired under this system, for
service or for disability, shall not be employed in any capacity
thereafter by the state, the university, a school employer, or by a
contracting agency, unless the employment qualifies for service
credit in the University of California Retirement System or the State
Teachers' Retirement System Plan ,
unless he or she has first been reinstated from retirement pursuant
to this chapter, or unless the employment, without reinstatement, is
authorized by this article. A retired person whose employment
without reinstatement is authorized by this article shall acquire no
service credit or retirement rights under this part with respect to
the employment.
(b) Any retired member employed in violation of this article
shall:
(1) Reimburse this system for any retirement allowance received
during the period or periods of employment that are in violation of
law.
(2) Pay to this system an amount of money equal to the employee
contributions that would otherwise have been paid during the period
or periods of unlawful employment, plus interest thereon.
(3) Contribute toward reimbursement of this system for
administrative expenses incurred in responding to this situation, to
the extent the member is determined by the executive officer to be at
fault.
(c) Any public employer that employs a retired member in violation
of this article shall:
(1) Pay to this system an amount of money equal to employer
contributions that would otherwise have been paid for the period or
periods of time that the member is employed in violation of this
article, plus interest thereon.
(2) Contribute toward reimbursement of this system for
administrative expenses incurred in responding to this situation, to
the extent the employer is determined by the executive officer of
this system to be at fault.
SEC. 111. Section 21661 of the Government Code is amended to read:
21661. (a) The board shall contract with carriers offering
long-term care insurance plans and enter into health care service
plan contracts covering long-term care.
The long-term care insurance plans and health care service plan
contracts covering long-term care shall be made available
periodically during open enrollment periods determined by the board.
(b) The board shall award contracts to carriers who are qualified
to provide long-term care benefits, and may develop and administer
self-funded long-term care insurance plans. The board may offer one
or more long-term care insurance plans or health care service plan
contracts covering long-term care and may offer service or
indemnity-type plans.
(c) The long-term care insurance plans and health care service
plan contracts covering long-term care shall include home, community,
and institutional care and shall, to the extent determined by the
board, provide substantially equivalent coverage to that required
under Chapter 2.6 (commencing with Section 10230) of Part 2 of
Division 2 of the Insurance Code, if the carrier has been approved by
the Department of Managed Care pursuant to Chapter 2.2 (commencing
with Section 1340) of Division 2 of the Health and Safety Code.
(d) The classes of persons who shall be eligible to enroll are:
(1) Active and retired members and annuitants of the Public
Employees' System, and their spouses, their parents, and their
spouses' parents.
(2) Active and retired members and annuitants of any county or
district subject to the County Employees Retirement Law of 1937, and
their spouses, their parents, and their spouses' parents.
(3) Active and retired members and annuitants of the State
Teachers' Retirement System Plan , and
their spouses, their parents, and their spouses' parents.
(4) Active employees and retirees and annuitants of any public
agency that is a contracting agency under this part or Part 5
(commencing with Section 22751), and their spouses, their parents,
and their spouses' parents.
(5) Active and retired members and annuitants of the Judges'
Retirement System, and their spouses, their parents, and their
spouses' parents.
(6) Active and retired members and annuitants of the Judges'
Retirement System II, and their spouses, their parents, and their
spouses' parents.
(7) Active and retired members and annuitants of the Legislators'
Retirement System, and their spouses, their parents, and their
spouses' parents.
(8) Members of the California Assembly and Senate and their
spouse, their parents and their spouse's parents.
(9) Active and retired members and annuitants, and other classes
of employees of other public employee retirement systems or public
employers as the board determines may be eligible under the standards
the board may prescribe, and their spouses, their parents, and their
spouses' parents.
(10) Active employees and retirees and annuitants of any agency
specified in paragraphs (1) through (9) who reside in the United
States, its territories and possessions, or in a country in which a
provider network can be established comparable in quality and
effectiveness to those established in the United States.
(e) Any California public agency or retirement system may contract
with the board to extend the provisions of this article to its
active and retired employees and annuitants.
(f) Irrespective of paragraphs (1) through (10) of subdivision
(d), no person shall be enrolled unless he or she meets the
eligibility and underwriting criteria established by the board.
(g) Irrespective of paragraphs (1) through (10) of subdivision
(d), enrollment of active employees of the State of California shall
be subject to Section 19867.
(h) The board shall establish eligibility criteria for enrollment,
establish appropriate underwriting criteria for potential enrollees,
define the scope of covered benefits, define the criteria to receive
benefits, and set any other standards as needed.
(i) The full cost of enrollment in a long-term care insurance plan
or in health care service plan contracts covering long-term care
shall be paid by the enrollees.
(j) The long-term care insurance plans and health care service
plan contracts covering long-term care shall not become part of, or
subject to, the retirement or health benefits programs administered
by the system.
(k) For any self-funded long-term care plan developed by the
board, the premiums shall be deposited in the Public Employees'
Long-term Care Fund.
SEC. 112. Section 22009.03 of the Government Code is amended to
read:
22009.03. "Public agency" also includes a school district, a
county superintendent of schools, and a regional occupational center
or program established pursuant to Article 1 (commencing with Section
6500) of Chapter 5 of Division 7 of Title 1, with respect to
employees eligible for membership in the State Teachers' Retirement
System Plan .
This section shall become inoperative on July 1, 2004, and, as of
January 1, 2005, is repealed, unless a later enacted statute, which
becomes effective on or before January 1, 2005, deletes or extends
the dates on which it becomes inoperative and is repealed.
SEC. 113. Section 22009.1 of the Government Code is amended to
read:
22009.1. "Retirement system" includes:
(a) A pension, annuity, retirement or similar fund or system
established by a public agency and covering only positions of that
agency.
(b) The Public Employees' Retirement System with respect only to
employees of the state and employees of the University of California
in positions covered by that system.
(c) The Public Employees' Retirement System with respect to
employees of all school districts in positions covered under each
contract entered into by a county superintendent of schools and the
system.
(d) The State Teachers' Public Employees'
Retirement System with respect to all employees in positions
subject to coverage under the Defined Benefit Program system
of the Teachers' Retirement Plan except
employees of a public agency having any employees in positions
covered by such system the plan who are
also in positions covered by a local retirement system for the
retirement of teachers, or for membership in which public school
teachers are eligible, operated by city, city and county, county or
other public agency or combination of public agencies of the state.
(e) The Legislators' Retirement System with respect to all
employees in positions covered by that system.
(f) The Judges' Retirement System with respect to all employees in
positions covered by that system.
(g) The University of California Retirement System only with
respect to all employees in positions covered by that system.
(h) The San Francisco City and County Employees' Retirement System
with respect to all employees in positions covered by that system.
(i) Any other retirement system with respect only to employees of
any two or more of the public agencies having employees in positions
covered by such that system, as
designated by the board and with regard to which the board authorizes
conduct of a referendum.
(j) Any retirement system with respect only to employees of a
hospital which that is an integral part
of a city incorporated between January 15, 1898 and July 15, 1898 in
positions covered by the system, as designated by the board on
request of the city.
(k) Except as otherwise provided in subdivisions (b) through (j)
above, any retirement system with respect to employees of each of the
public agencies having employees in positions covered by the system.
(l) Each division or part of a retirement system, as defined in
subdivisions (a), (b), (c), (e), (g), (h), (i), (j), (k), and (m) of
this section, which that is divided
pursuant to this chapter into two parts:
(1) The part composed of the positions of members of such
the system who desire coverage under the
federal system.
(2) The part composed of the positions of members of such
the system who do not desire coverage under the
federal system.
(m) The State Teachers' Public Employees'
Retirement System with respect to all employees of each public
agency, as defined by Section 22009.03, in positions covered by that
system. This subdivision shall become inoperative on July 1, 2004.
SEC. 114. Section 22018 of the Government Code is amended to read:
22018. (a) It is the intent of the Legislature that, to the
extent possible, members of the State Teachers' Retirement
System Plan earn credit towards Medicare
coverage.
(b) In accomplishing the goal specified in subdivision (a), the
board shall make available to school districts, community college
districts, and county superintendents of schools information
concerning the procedure for earning credit for social security
coverage for school related service not credited under the State
Teachers' Retirement Law.
SEC. 115. Section 22156 of the Government Code is amended to read:
22156. (a) A division of the State Teachers' Retirement
System Plan is hereby authorized by the
Legislature to provide Medicare coverage for employees of a public
agency as defined in Section 22009.03, upon the request of the public
agency.
(b) The division authorized by subdivision (a) shall be conducted
pursuant to this article.
(c) A member of the State Teachers' Retirement System
Plan on whose behalf a request is made pursuant
to subdivision (a), may elect to be covered by Medicare, pursuant to
Section 218 of the federal Social Security Act (42 U.S.C. Sec. 418),
and applicable federal regulations if (1) the member was employed in
a position covered by the system plan
on March 31, 1986, and (2) the member has not since been mandated
into Medicare coverage due to the enactment of Public Law 99-272, and
(3) the member is in a position covered or the member is eligible to
elect to be covered by the retirement system
plan on the date of the division.
(d) The public agency shall, immediately after the elections
authorized in subdivision (b) have been made, make application
pursuant to Chapter 2 (commencing with Section 22200) of this part
for Medicare coverage for those members who have elected to receive
Medicare coverage.
(e) The effective date of the coverage may be retroactive a
maximum of five years but not earlier than January 1, 1987.
(f) This section shall become inoperative on July 1, 2004, and, as
of January 1, 2005, is repealed, unless a later enacted statute,
which becomes effective on or before January 1, 2005, deletes or
extends the dates on which it becomes inoperative and is repealed.
SEC. 116. Section 22202 of the Government Code is amended to read:
22202. With respect to employees in the coverage group defined in
subdivision (a) of Section 22100, the application shall be deemed to
be made by a public agency if made by the Adjutant General.
With respect to employees in positions covered by the retirement
system set forth in subdivision (d) of Section 22009.1, the
application shall be deemed to be made by a public agency if made by
the Teachers' Retirement Board. With respect to employees
in positions covered by the retirement system set forth in
subdivision (g) of Section 22009.1, the application shall be deemed
to be made by a public agency if made by the Regents of the
University of California.
SEC. 117. Section 22203 of the Government Code is amended to read:
22203. Notwithstanding Section 22201, before the board shall
execute on behalf of the state an agreement with the federal agency
as provided in this chapter, the public agency and the board shall
enter into a written agreement, which that
shall include provisions not inconsistent with this part
which that the board deems necessary in
the administration of the federal system as it affects the state and
the public agency and its employees.
For the purposes of this section, the state shall not be deemed to
be a public agency, but nevertheless an agreement entered into
pursuant to this part by the board and the Teachers'
Retirement Board or the Adjutant General or the Regents of
the University of California shall be deemed to be entered into by
the board and a public agency.
SEC. 118. Section 22204 of the Government Code is amended to read:
22204. The agreement between the state and the federal agency
shall include each coverage group or retirement system coverage group
as to which formal request for the inclusion is made by the
legislative or governing body of the employing public agency pursuant
to this chapter, prior to the effective date of the agreement. For
the purposes of this section, the state shall not be deemed to be a
public agency, but nevertheless any formal request for the inclusion
made by the Teachers' Retirement Board
upon authorization by the Legislature with respect to
employees in positions covered by the retirement system set forth in
subdivision (d) of Section 22009.1 or by the Regents of the
University of California, or by the Adjutant General, shall be deemed
to be made by the governing body of an employing public agency.
SEC. 119. Section 22208 of the Government Code is amended to read:
22208. With
respect to each retirement system coverage group, the legislative or
governing body of every public agency having employees in positions
covered by a retirement system, may, upon the affirmative vote of a
majority of eligible retirement system employees of the retirement
system coverage group at a referendum conducted in accordance with
Article 2 (commencing with Section 22300) of this chapter and the
rules and regulations promulgated by the board pursuant to this part,
make formal application to the board for the inclusion of the
employees in each retirement system coverage group in the agreement.
With respect to employees in positions covered by the retirement
system set forth in subdivision (d) of Section 22009.1, the formal
application shall be deemed to be made, if made prior to July 1,
2004, by the legislative or governing body of a public agency as
defined in Section 22009.03, or if on or after July 1, 2004, by the
Teachers' Retirement Board board .
SEC. 120. Section 22302 of the Government Code is amended to read:
22302. In the case of employees in positions covered by the
retirement system set forth in subdivision (d) of Section 22009.1, if
prior to July 1, 2004, the legislative or governing body of a public
agency as defined in Section 22009.03, or if on or after July 1,
2004, the Teachers' Retirement Board board
shall conduct the referendum; if the referendum is authorized
by the Legislature.
In the case of employees in positions covered by the retirement
system set forth in subdivision (g) of Section 22009.1 the board
shall authorize the referendum upon the request of the regents of the
University of California and the regents shall conduct the
referendum.
SEC. 121. Section 22502 of the Government Code is amended to read:
22502. Agreements as defined in Section 22006, and all
applications and agreements and contracts and any amendments thereto
between the board and the Adjutant General, the State
Teachers Retirement Board, the Regents of the University of
California and any public agency, except the State executed by the
board pursuant to this part are hereby excepted from the provisions
of Section 13370 of the Government Code, and of any other statutory
provision which that would otherwise
require the approval of any such agreements and contracts and any
amendments thereto by any other state officer or agency.
SEC. 122. Section 22754 of the Government Code is amended to read:
22754. As used in this part the following definitions, unless the
context otherwise requires, shall govern the interpretation of
terms:
(a) "Board" means the Board of Administration of the Public
Employees' Retirement System.
(b) "Employee" means:
(1) Any officer or employee of the State of California or of any
agency, department, authority, or instrumentality of the state
including the University of California, or any officer or employee
who is a local or school member of the Public Employees' Retirement
System Plan employed by a contracting
agency that has elected to be or otherwise has become subject to this
part, or who is a member or retirant of the State Teachers'
Retirement System employed by an employer who has elected to become
subject to this part, or who is an employee or annuitant of a special
district or county subject to the County Employees Retirement Law of
1937 (Chapter 3 (commencing with Section 31450) of Part 3 of
Division 4 of Title 3) that has elected to become subject to this
part, or who is an employee or annuitant of a special district, as
defined in subdivision (i), that has elected to become subject to
this part, except persons employed on an intermittent, irregular or
less than half-time basis, or employees similarly situated, or
employees in respect to whom contributions by the state for any type
of plan or program offering prepaid hospital and medical care are
otherwise authorized by law.
(2) Any officer or employee who participates in the retirement
system of a contracting agency as defined in paragraph (2) of
subdivision (g) that has elected to become subject to this part,
except persons employed less than half time or who are otherwise
determined to be ineligible.
(3) Any annuitant of the Public Employees' Retirement System
employed by a contracting agency as defined in subdivision (g) that
has elected to become subject to this part who is a person retired
under Section 21228.
(c) "Carrier" means a private insurance company holding a valid
outstanding certificate of authority from the Insurance Commissioner
of the state, a medical society or other medical group, a nonprofit
hospital service plan qualifying under Chapter 11A (commencing with
Section 11491) of Part 2 of Division 2 of the Insurance Code, or
nonprofit membership corporation lawfully operating under Section
9200 or Section 9201 of the Corporations Code, or a health care
service plan as defined under subdivision (f) of Section 1345 of the
Health and Safety Code, or a health maintenance organization approved
under Title XIII of the federal Public Health Services Act, that is
lawfully engaged in providing, arranging, paying for, or reimbursing
the cost of personal health services under insurance policies or
contracts, medical and hospital service agreements, membership
contracts, or the like, in consideration of premiums or other
periodic charges payable to it.
(d) "Health benefits plan" means any program or entity that
provides, arranges, pays for, or reimburses the cost of health
benefits.
(e) "Annuitant" means:
(1) Any person who has retired within 120 days of separation from
employment and who receives any retirement allowance under any state
or University of California retirement system to which the state was
a contributing party.
(2) A family member receiving an allowance as the survivor of an
annuitant who has retired as provided in paragraph (1), or as the
survivor of a deceased employee under Section 21541, 21546, or 21547
or similar provisions of any other state retirement system.
(3) Any employee who has retired under the retirement system
provided by a contracting agency as defined in paragraph (2) of
subdivision (g) and who receives a retirement allowance from that
retirement system, or a surviving family member who receives the
retirement allowance in place of the deceased.
(4) Any person who was a state member for 30 years or more and
who, at the time of retirement, was a local member employed by a
contracting agency.
(f) "Family member" means an employee's or annuitant's spouse and
any unmarried child (including an adopted child, a stepchild, or
recognized natural child who lives with the employee or annuitant in
a regular parent-child relationship). The board shall, by
regulation, prescribe age limits and other conditions and limitations
pertaining to unmarried children.
(g) "Contracting agency" means:
(1) Any contracting agency as defined in Section 20022, any county
or special district subject to the County Employees Retirement Law
of 1937 (Chapter 3 (commencing with Section 31450) of Part 3 of
Division 4 of Title 3), and any special district, school district,
county board of education, personnel commission of a school district
or a county superintendent of schools.
(2) Any public body or agency of, or within California not covered
by the Public Employees' Retirement System or subject to the County
Employees Retirement Law of 1937 (Chapter 3 (commencing with Section
31450) of Part 3 of Division 4 of Title 3), that provides a
retirement system for its employees funded wholly or in part by
public funds.
(h) "Employer" means the state, any contracting agency employing
an employee, and any agency that has elected to become subject to
this part pursuant to Section 22856.
(i) "Special district" means a nonprofit, self-governed public
agency, within the State of California and comprised solely of public
employees, performing a governmental rather than proprietary
function.
SEC. 123. Section 22754.2 of the Government Code, as added by
Chapter 41 of the Statutes of 1998, is amended to read:
22754.2. As used in this part the following definitions, unless
the context otherwise requires, shall govern the interpretation of
terms:
(a) "Board" means the Board of Administration of the Public
Employees' Retirement System.
(b) "Employee" means:
(1) Any officer or employee of the State of California or of any
agency, department, authority, or instrumentality of the state
including the University of California, or any officer or employee
who is a local or school member of the Public Employees' Retirement
System Plan employed by a contracting
agency that has elected to be or otherwise has become subject to this
part, or who is a member or retirant of the State Teachers'
Retirement System employed by an employer who has elected to become
subject to this part, or who is an employee or annuitant of a special
district or county subject to the County Employees Retirement Law of
1937 (Chapter 3 (commencing with Section 31450) of Part 3 of
Division 4 of Title 3) that has elected to become subject to this
part, or who is an employee or annuitant of a special district, as
defined in subdivision (i), that has elected to become subject to
this part, except persons employed on an intermittent, irregular or
less than half-time basis, or employees similarly situated, or
employees in respect to whom contributions by the state for any type
of plan or program offering prepaid hospital and medical care are
otherwise authorized by law.
(2) Any officer or employee who participates in the retirement
system of a contracting agency as defined in paragraph (2) of
subdivision (g) that has elected to become subject to this part,
except persons employed less than half time or who are otherwise
determined to be ineligible.
(3) Any annuitant of the Public Employees' Retirement System
employed by a contracting agency as defined in subdivision (g) that
has elected to become subject to this part who is a person retired
under Section 21228.
(4) Notwithstanding paragraph (1), "eligible employee" of the
State of California, as it applies to state employees in State
Bargaining Unit 19, means (A) a permanent employee appointed half
time or more; (B) an employee who is a limited term or temporary
authorization appointee who continues coverage based on prior
continuous permanent status; (C) an employee who is in a half time or
more limited-term appointment shall qualify after working six
consecutive months; and (D) an employee appointed half time or more
to a temporary appointment in lieu of a permanent appointment; and
(E) a permanent intermittent employee who works a minimum of 480
hours in a six-month control period. All other limited-term,
nonstatus employees as defined by the Department of Personnel
Administration and temporary authorization employees are not
eligible.
(c) "Carrier" means a private insurance company holding a valid
outstanding certificate of authority from the Insurance Commissioner
of the state, a medical society or other medical group, a nonprofit
hospital service plan qualifying under Chapter 11A (commencing with
Section 11491) of Part 2 of Division 2 of the Insurance Code, or
nonprofit membership corporation lawfully operating under Section
9200 or Section 9201 of the Corporations Code, or a health care
service plan as defined under subdivision (f) of Section 1345 of the
Health and Safety Code, or a health maintenance organization approved
under Title XIII of the federal Public Health Services Act,
which that is lawfully engaged in providing,
arranging, paying for, or reimbursing the cost of personal health
services under insurance policies or contracts, medical and hospital
service agreements, membership contracts, or the like, in
consideration of premiums or other periodic charges payable to it.
(d) "Health benefits plan" means any program or entity that
provides, arranges, pays for, or reimburses the cost of health
benefits.
(e) "Annuitant" means:
(1) Any person who has retired within 120 days of separation from
employment and who receives any retirement allowance under any state
or University of California retirement system to which the state was
a contributing party.
(2) A family member receiving an allowance as the survivor of an
annuitant who has retired as provided in paragraph (1), or as the
survivor of a deceased employee under Section 21541, 21546, or 21571
or similar provisions of any other state retirement system.
(3) Any employee who has retired under the retirement system
provided by a contracting agency as defined in paragraph (2) of
subdivision (g) and who receives a retirement allowance from that
retirement system, or a surviving family member who receives the
retirement allowance in place of the deceased.
(4) Any person who was a state member for 30 years or more and
who, at the time of retirement, was a local member employed by a
contracting agency.
(f) "Family member" means an employee's or annuitant's spouse and
any unmarried child (including an adopted child, a stepchild, or
recognized natural child who lives with the employee or annuitant in
a regular parent-child relationship). The board shall, by
regulation, prescribe age limits and other conditions and limitations
pertaining to unmarried children.
(g) "Contracting agency" means:
(1) Any contracting agency as defined in Section 20022, any county
or special district subject to the County Employees Retirement Law
of 1937 (Chapter 3 (commencing with Section 31450) of Part 3 of
Division 4 of Title 3), and any special district, school district,
county board of education, personnel commission of a school district
or a county superintendent of schools.
(2) Any public body or agency of, or within California not covered
by the Public Employees' Retirement System or subject to the County
Employees Retirement Law of 1937 (Chapter 3 (commencing with Section
31450) of Part 3 of Division 4 of Title 3), which
that provides a retirement system for its employees funded
wholly or in part by public funds.
(h) "Employer" means the state, any contracting agency employing
an employee, and any agency which that
has elected to become subject to this part pursuant to Section 22856.
(i) "Special district" means a nonprofit, self-governed public
agency, within the State of California and comprised solely of public
employees, performing a governmental rather than proprietary
function.
SEC. 124. Section 31565 of the Government Code is amended to read:
31565. Any member of a system established under this chapter who
is employed in a status requisite for membership in the State
Teachers' Retirement System Plan , may
elect to transfer his or her membership to that system.
Any member who elects to transfer his or her membership
pursuant to this section may also elect in writing to withdraw his
or her accumulated contributions, and in such
that event he the member
shall be paid all of his or her accumulated
contributions in the county retirement system.
SEC. 125. Section 31840.8 of the Government Code is amended to
read:
31840.8. The provisions of this chapter extending rights to a
member of a county retirement system established under this chapter
by reason of his or her membership in the Public Employees'
Retirement System Plan shall also apply
to members of the State Teachers' Retirement System
Defined Benefit Plan of the State Teachers' Retirement
Plan .
SEC. 126. Section 6217.5 of the Public Resources Code is amended
to read:
6217.5. Except for the revenues distributed pursuant to Section
3826, all net revenues, moneys, and remittances from the use of
school lands and lieu lands shall be deposited in the State Treasury
to the credit of the Teachers' Retirement
Public Employees' Retirement Fund and shall be expended
pursuant to Section 24702 of the Education Code.