BILL NUMBER: AB 2456	AMENDED
	BILL TEXT

	AMENDED IN SENATE   AUGUST 14, 2000
	AMENDED IN ASSEMBLY   MAY 26, 2000

INTRODUCED BY   Assembly Member Wright
   (Coauthor:  Senator Alarcon)

                        FEBRUARY 24, 2000

    An act to add Chapter 38 (commencing with Section 24980)
to   An act to add and repeal Chapter 27.1 (commencing
with Section 24230) of  Part 13 of Division 1 of Title 1 of the
Education Code, relating to state teachers' retirement.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2456, as amended, R. Wright.  State teachers' retirement:
deferred retirement option program.
   The State Teachers' Retirement Law prescribes service  and
disability  retirement benefits for members of the Defined
Benefit Program of the State Teachers' Retirement System  which
benefits are paid in the form of a monthly allowance  .
   This bill would establish  the Deferred  a
 Retirement Option Program  as a supplemental benefit
program in the Defined Benefit Program   that would
allow members of the Defined Benefit Program to elect to receive a
lump-sum payment and a reduced monthly allowance  , as
specified.  The bill would direct the board of administration of the
system to implement the program no later than January 1, 2002, except
as specified.   The bill's provisions would be repealed on
January 1, 2011. 
   Vote:  majority.  Appropriation:  no.  Fiscal committee:  yes.
State-mandated local program:  no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Chapter  38   27.1 
(commencing with Section  24980   24230 )
is added to Part 13 of Division 1 of Title 1 of the Education Code,
to read:

      CHAPTER  38.  DEFERRED   27.1. 
RETIREMENT OPTION PROGRAM 
      Article 1.  General Provisions 

   24980.  
   24230.   This chapter shall be known and may be cited as the
 "Deferred Retirement   "Retirement  Option
Program." 
   24980.1.  The Deferred  
   24231.  The  Retirement Option Program is hereby created to
add flexibility to the system.  It provides members who elect to
participate in the program access  to a lump sum or
additional monthly payments for a specific period in addition to
their normal monthly   to a lump-sum payment and a
reduced monthly  retirement allowance.  
   24980.2.  
   24232.   The design and administration of the 
Deferred  Retirement Option Program shall conform with the
applicable provisions of Title 26 of the United States Code and the
Revenue and Taxation Code.  
   24980.3.  
   24233.   If any provision of this chapter or application
thereof to any person or circumstance is held invalid, that
invalidity shall not affect other provisions or applications of this
chapter that can be given effect without the invalid provision or
application, and to this end the provisions of this chapter are
severable.  
   24980.4.  The board shall implement the Deferred  
   24234.  The board shall implement the  Retirement Option
Program pursuant to the provisions of this chapter no later than
January 1, 2002, unless the board determines, by resolution, that the
implementation tasks cannot be completed until a later date, in
which case the board shall implement the program pursuant to this
chapter no later than January 1, 2003.  
   24980.5.  
   24235.   The board any adopt regulations to implement the
program.  

      Article 2.  Definitions
 
   24236.  A member who retires for service on or after January 1,
2002, with at least 20 years of credited service and who has reached
normal retirement age may elect, on a form prescribed by the system,
to receive a lump-sum payment and an actuarially reduced monthly
allowance pursuant to this chapter in lieu of the monthly allowance
that would otherwise be payable to the member pursuant to Chapter 27
(commencing with Section 24201).
   24237.  (a) A member who makes the election described in Section
24236 shall receive a one-time, lump-sum payment in an amount that
equals or does not exceed the lesser of the following amounts:
   (1) The actuarial present value of the difference between (A) the
monthly allowance payable to the member pursuant to Chapter 27
(commencing with Section 24201), and (B) an amount equal to 2 percent
of the member's final compensation multiplied by the number of years
of credited service and divided by 12.
   (2) Fifteen percent of the actuarial present value of the monthly
allowance payable to the member under Chapter 27 (commencing with
Section 24201).
   (b) Notwithstanding any other provision of this part, a member who
makes the election described in Section 24236 shall receive a
monthly allowance, pursuant to Chapter 27 (commencing with Section
24201), that shall be actuarially reduced to reflect the lump-sum
amount paid under subdivision (a).
   24238.  This chapter shall remain in effect only until January 1,
2011, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2011, deletes or extends
that date.    _____________________________________   All matter
omitted in this version   of the bill appears in the bill as
amended in the Assembly,   May 26, 2000 (JR 11)
____________________________________