(1) Existing law, the Teachers’ Retirement Law, establishes the State Teachers’ Retirement System (STRS) and creates the Defined Benefit Program of the State Teachers’ Retirement Plan, which provides a defined benefit to members of the program, based on final compensation, credited service, and age at retirement, subject to certain variations. STRS is administered by the Teachers’ Retirement Board. The Defined Benefit Program is funded by employer and employee contributions, as well as investment returns and state appropriations, which are deposited or credited to the Teachers’ Retirement Fund.
Existing law authorizes a member to elect continued defined benefit coverage in STRS when taking a position that provides a defined benefit in another public retirement system, and requires the election to be made in writing and to
be filed with STRS and the other public retirement system.
This bill would remove the requirement that the election be filed with the other public retirement system, and would instead require the employer to retain a copy of the election form.
(2) Existing law defines creditable service for purposes of STRS to include, among other things, the work of audiometrists performed for a prekindergarten through grade 12 employer in a position requiring Commission on Teacher Credentialing certification qualifications, for a community college employer by a faculty member, or for a charter school employer, as provided. Existing law grants the Teachers’ Retirement Board final authority for determining creditable service to cover any activities not specified.
This bill would instead include as creditable service activities performed for an employer by an audiometrist who
holds a certificate of registration issued by the State Department of Health Care Services.
(3) Existing law creates the Teachers’ Retirement Fund, which is continuously appropriated for specified purposes, and into which employee contributions are deposited. Existing law requires employees to make contributions to the system based on their creditable compensation, as defined. Existing law defines “leave of absence” for purposes of the Teachers’ Retirement Law as a period of leave to which a member is entitled that is expressly authorized or required pursuant to specified provisions. Among other things, these provisions provide for leaves of absence for military service, service as an elected member of the Legislature, and service on certain boards and commissions, subject to specified requirements.
This bill would define “leave of absence” to also mean an employer-approved compensated leave taken on or after January 1, 2016, that is otherwise excluded from the definition of leave of absence described above. The bill would require that remuneration that is paid for an employer-approved compensated leave be creditable compensation, as specified. Based on the increase in creditable compensation, the bill would increase employee contributions into continuously appropriated Teachers’ Retirement Fund, thereby making an appropriation.
(4) Existing law grants a member of STRS service credit at retirement for
accumulated and unused sick leave days, as specified. Existing law defines sick leave days for these purposes to mean the number of days of accumulated and unused leave of absence for illness or injury, and defines basic sick leave to mean the equivalent of one day’s paid leave of absence per pay period due to illness or injury. Existing law also grants a member service credit during the time the member is serving as an elected officer of an employee organization and is on a compensated leave of absence.
This bill would instead define sick leave to be the number of days of accumulated and unused leave of absence for illness or injury granted by each employer, and would define basic sick leave to mean the days of paid leave of absence due to illness or injury granted by each employer, not to exceed 12 days per school year. The bill would specify that a member is prohibited from receiving service credit for accumulated, unused sick leave that the member receives
service credit for in another public retirement system. The bill would grant a member who is an elected officer of an employee organization on a compensated leave of absence STRS benefits that the member would have received had the member not been on a compensated leave of absence.
(5) Existing law authorizes an employer, for purposes of STRS, to offer an additional 2 years of service credit to specified members if the member elects to retire in a defined period. Existing law requires a member to forfeit the additional 2 years of service credit if the retired member takes any job within the school district, community college district, or county office of education that
granted the member the service credit less than 5 years after receiving the additional credit.
This bill would require a member to forfeit the additional 2 years of service credit if the member takes any job within the school district, community college district, or county office of education as an employee, an independent contractor, or an employee of a third party.
(6) Existing law establishes the Defined Benefit Supplement Program in STRS for the purpose of providing supplemental benefits to members whose earnings are in excess of specified amounts. Existing law establishes the Cash Balance Benefit Program, administered by
the Teachers’ Retirement Board, as a separate benefit program within the State Teachers’ Retirement Plan in order to provide a retirement plan for persons employed to perform creditable service for less than 50% of full-time service. Existing law requires a termination benefit under the Defined Benefit Supplement Program and Cash Balance Benefit Program to be payable 6 months after the member terminates employment.
This bill would instead require the termination benefit to be payable 180 calendar days after the member terminates employment. The bill would make additional administrative changes to the Cash Balance Benefit Program to conform with the administration of the defined benefit program.
(7) Existing law authorizes the Teachers’ Retirement Board to assess penalties and interest if an employer fails to make a payment of contributions to STRS.
The bill would require penalties and interest overpaid to STRS to be considered additional contributions, to be deposited in the Teachers’ Retirement Fund, and to be treated in the same manner as other contributions paid to STRS.
(8) The Public Employees’ Retirement Law (PERL) establishes the Public Employees’ Retirement System (PERS) for the purpose of providing pension benefits to state employees and employees of contracting agencies. Existing law requires
administration of PERS by the Board of Administration of PERS. Existing law creates the Public Employees’ Retirement Fund as a trust fund to be expended only for purposes related to the system and its administration, as specified, and provides that the fund is continuously appropriated for these purposes. Existing law, the California Public Employees’ Pension Reform Act of 2013 (PEPRA), on and after January 1, 2013, generally requires a public retirement system, as defined, to modify its plan or plans to comply with the act, as specified.
Under existing law, data filed with the board by any member, retired member, beneficiary, or annuitant is confidential. Existing law prohibits system officials and employees from divulging the data except pursuant to specified parties and entities.
This bill would make various technical and clarifying changes to these provisions, including specifying that data filed on behalf of any
member, retired member, beneficiary, or annuitant is also confidential and that data may be divulged to other retirement systems that provide reciprocal benefits to members of PERS.
Existing law authorizes a member of PERS, who is credited with less than a certain number of years of service and who enters employment as a member of another public retirement system supported by state funds, within 6 months of leaving state service, to elect to leave their accumulated contributions on deposit in the retirement fund. Existing law specifies that a member’s failure to make an election to withdraw accumulated contributions is deemed an election to leave the member’s accumulated contributions on deposit in the retirement fund. Existing law provides that a member may revoke their election to allow accumulated contributions to remain in the retirement system, except under specified circumstances. Existing law requires a member who is permanently separated from all PERS
covered service, who meets specified conditions, and who attains 70 years of age, to be provided with an election to withdraw contributions, or, if vested, an election to either apply for service retirement or to withdraw contributions.
This bill would instead require a member permanently separated under the circumstances described above to attain 711/2 years of age before being provided with those election options. This bill would also correct an obsolete cross reference.
(9) The PERL contains the State Peace Officers’ and
Firefighters’ Defined Contribution Plan as a separate supplemental plan for certain peace officers and firefighters, and is administered by the board of PERS. Existing law establishes the State Peace Officers’ and Firefighters’ Defined Contribution Plan Fund as a trust fund, with moneys in the fund continuously appropriated to the board for purposes of administering the plan.
Under PERL, a participant, nonparticipant, spouse, or beneficiary is not permitted to elect a distribution under the plan that does not satisfy specified requirements of federal law related to being a qualified pension trust plan. Existing law requires the beginning date of distributions that reflect the entire interest of the participant, for a lump-sum distribution, to be made not later than April 1 of the calendar year following the later of the calendar year in which the participant attains
701/2 or the calendar year in which the participant terminates all employment subject to plan coverage. Existing law also requires, for a distribution to the participant in the form of installment payments or an annuity, that payment begin not later than April 1 of the calendar year following the later of the calendar year in which the participant attains 701/2 years of age or the calendar year in which the participant terminates all employment subject to plan coverage. Existing law also requires, if a benefit is payable on account of the participant’s death, and the beneficiary is the participant’s spouse, the distributions to commence on or before the later of either December 31 of the calendar year immediately following the calendar year in which the participant dies, or December 31 of the calendar year in
which the participant would have attained 701/2 years of age.
This bill would raise the age for required distributions, in the circumstances described above, from 701/2 years of age to 72 years of age.
(10) Existing law establishes the Supplemental Contributions Program as a defined contribution plan to supplement the benefits provided under PERL. Existing law establishes the Supplemental Contributions Program Fund as a special
trust fund, with moneys in the fund continuously appropriated to the board of PERS, for purposes of the program. Under existing law, a participant, nonparticipant, spouse, or beneficiary is not permitted to elect a distribution under the plan that does not satisfy federal requirements related to being a qualified pension trust plan. Existing law requires the beginning date of distributions that reflect the entire interest of the participant, for a lump-sum distribution to the participant, to be made not later than April 1 of the calendar year following the later of the calendar year in which the participant attains 701/2 years of age or the calendar year in which the participant terminates all employment. Existing law requires the beginning date of distributions, if provided in periodic payments, to begin not later than April 1 of the calendar year following the later of the calendar year in which the
participant attains 701/2 years of age or the calendar year in which the participant terminates all employment subject to plan coverage. Existing law also requires, if a benefit is payable on account of the participant’s death, and the beneficiary is the participant’s spouse, that distributions commence on or before the later of either December 31 of the calendar year immediately following the calendar year in which the participant dies or December 31 of the calendar year in which the participant would have attained 701/2 years of age.
This bill would raise the age for required distributions, in the circumstances described above, from 701/2 years of age to 72 years of
age.
(11) The Judges’ Retirement Law prescribes retirement benefits for judges, as defined, who were first elected or appointed to judicial office before November 9, 1994. Existing law also establishes the Extended Service Incentive Program to provide enhanced retirement benefits for those judges who continue in service beyond retirement age, as specified, and directs the board of administration of PERS to implement the program. Existing law prescribes that the required beginning date of distributions that reflect the entire interest of the judge, for a lump-sum
distribution, be made not later than April 1 of the calendar year following the later of the calendar year in which the judge attains 701/2 years of age or the calendar year in which the judge terminates employment. Existing law also requires, if a benefit is payable on account of the judge’s death, and the beneficiary is the judge’s spouse, that distributions commence on or before the later of December 31 of the calendar year immediately following the calendar year in which the judge dies or December 31 of the calendar year in which the judge would have attained 701/2 years of age.
This bill would raise the age for required distributions, in the circumstances described above, from
701/2 years of age to 72 years of age.
(12) The County Employees Retirement Law of 1937 (CERL) authorizes counties to establish retirement systems pursuant to its provisions for the purpose of providing pension and death benefits to county and district employees.
This bill would correct several erroneous and obsolete cross-references within CERL.
(13) The California Constitution commits plenary authority for administration of public employee retirement systems, and for the provision of actuarial services for the systems, to their boards of administration. CERL prescribes actuarial requirements for CERL systems and, upon the basis of the investigation, valuation, and recommendation of the actuary, the retirement board is required to recommend to the county board of supervisors the changes in rates of interest, in rates of member contributions, and in county and district appropriations that are necessary. A similar process is prescribed for districts within the system, but that are not governed by the board of supervisors.
This bill would make a statement of legislative affirmation regarding a ruling in a specified court
case upholding a retirement board’s plenary authority to recommend adjustments to county and district contributions necessary to ensure the appropriate funding of the retirement system.
(14) CERL authorizes a member who returns to active service following an uncompensated leave of absence on account of illness to receive service credit for the period of the absence upon payment of the contributions that the member would have paid during that period, together with the interest that the contributions would have accrued.
This bill would similarly authorize a member who returns to active
service following an uncompensated leave of absence on account of approved parental leave to receive service credit for the period upon payment of contributions and interest. The bill would prohibit service credit to be received for such a period of absence from exceeding 12 consecutive months and would prescribe requirements for payments. This provision would be operative in a county only if the board of supervisors elect to make it so, as specified, and would apply to parental leave that begins after the election.
(15) CERL authorizes a member who resigns or obtains a leave of absence to enter, and who does enter, the Armed Forces of the United
States on a voluntary or involuntary basis, under prescribed circumstances, to obtain service credit for the period during which the member was out of county service.
This bill would recast these provisions and would generally require that CERL comply with the federal Uniformed Services Employment and Reemployment Rights Act of 1994, as it may be amended. The bill would also authorize a member who does not qualify for reemployment benefits due to the length of military service and who returns to county or district employment within one year of being honorably discharged from the Armed Forces of the United States, to receive credit for service for all or any part of the member’s military service upon making specified payments.
(16) CERL requires boards of retirement to provide for the retirement of members who meet age and service requirements.
This bill would authorize a system administrator or other personnel to exercise a board’s power to retire members as described above. The bill would require that service retirements be reported to the board at its next public meeting after the retirement.
(17) CERL prescribes requirements for calculating
the effective date of retirement under different membership conditions, generally providing that the date not be more than 60 days after the date of filing.
This bill would prescribe general requirements regarding the effective date of retirement to prohibit it from beginning earlier than the date the application is filed with the board or more than 60 days after the date of filing or more than a number of days that has been approved by the board.
(18) CERL and other existing laws prescribe requirements for reinstatement after retirement and for service without reinstatement. CERL
prescribes different requirements, to be elected by a county, regarding member status in a retirement system upon reemployment, including how the rate of contributions and retirement allowance are to be calculated upon a subsequent retirement.
This bill would require that people who have retired under CERL following an involuntary termination of employment who are subsequently reinstated to that employment pursuant to a final administrative or judicial proceeding, as specified, be reinstated from retirement as if there were no intervening period of retirement. The bill would require the person to repay an allowance paid to the person to the retirement system from which they retired in accordance with the retirement system’s repayment policy and that contributions be made for any period for which salary is awarded in the administrative or judicial proceedings in the amount that would have been contributed had the member’s employment not been
terminated. The bill would require that the person receive service credit for the period for which salary is awarded. The retirement system would be granted discretion regarding the timing of repayment.
(19) CERL prescribes requirements regarding notification of members who have left service and elected to leave accumulated contributions in the retirement fund or have been deemed to have elected deferred retirement, as specified. Existing law requires the retirement system to start paying the member an unmodified retirement allowance in the year in which the member attains
701/2 years of age, if the member can be located but does not make proper application for a deferred retirement allowance, as specified. Existing law prescribes alternate requirements if a member cannot be located. CERL establishes the Deferred Retirement Option Program, which a county or district may elect to offer and which provides an additional benefit on retirement to participating members.
This bill would require that members who have left service, as described above, in addition to notification regarding retirement allowances, also be notified regarding their eligibility for a one-time distribution of accumulated contributions and interest. The bill would revise the age at which the retirement system is required to provide the above-described notice, as well as when the retirement system must start payment of an unmodified retirement
allowance, to 72 years of age. The bill would further require the retirement system at that time to make a one-time distribution of accumulated contributions if the member is ineligible for a deferred retirement allowance, as specified. The bill would change the age threshold from 701/2 years of age to 72 years of age with regard to requirements that apply when members cannot be located and with reference to when distributions are to be made to members who are participating in a Deferred Retirement Option Program.
(20) CERL establishes various rights
to benefits that accrue to children of members and their surviving spouses under specified circumstances. In these instances, generally, these benefits will accrue provided that the children are under 18 years of age and unmarried and they continue until every child dies, marries, or attains age 18. Existing law authorizes the continuance of the benefits, in specified instances, to children through the age of 21 if the children remain unmarried and are regularly enrolled as full-time students in an accredited school, as specified.
This bill would revise the above-described standard applicable to children through the age of 21 to instead be up to the 22nd birthdays of the children. The bill would make a related change with regard to a provision that provides an alternative to survivorship benefits under federal social security benefits.