AB 2375: Public Employees' Retirement System: omnibus bill.
- Session Year: 2015-2016
- House: Assembly
- Latest Version Date: 2016-09-21
(1)Existing law requires all state and local retirement systems to secure, not less than triennially, the services of an enrolled actuary, who is required to perform a valuation of the system. Existing law requires all state and local public retirement systems to submit audited financial statements to the Controller at the earliest practicable opportunity within 6 months of the close of each fiscal year. Existing law requires the Controller to review these reports and to publish an annual report on the financial condition of all state and local public retirement systems, as specified. Existing law requires the Controller to establish an advisory committee, including enrolled actuaries, to assist state and local systems with their reporting duties. Existing law requires the Legislature and local legislative bodies, when considering changes in retirement benefits or other postemployment benefits, to secure the services of an actuary to provide a statement of the actuarial impact upon future annual costs, except as specified. Existing law establishes the California Actuarial Advisory Panel, which consists of a specified membership that includes enrolled actuaries. Existing law requires the panel to provide impartial and independent information on pensions, other postemployment benefits, and best practices to public agencies.
This bill would delete references to enrolled actuaries for purposes of the provisions described above. The bill would substitute for this designation, for purposes of establishing the advisory committee and the actuarial advisory panel, as described above, actuaries who have attained the designation of Associate or Fellow of the Society of Actuaries. The bill would substitute for the enrolled actuaries designation, for purposes of the triennial valuation and the reporting requirements described above, actuaries who satisfy the qualification standards for actuaries issuing statements of actuarial opinion in the United States with regard to pensions or other postemployment benefits.
(2)Existing law, the Public Employees Retirement Law, creates the Public Employees Retirement System (PERS) for the purpose of providing pension benefits to state employees and employees of contracting agencies and prescribes the rights and duties of members of the system and their beneficiaries. Existing law vests management and control of PERS in its board of administration. PERS provides a defined benefit to members of the program, based on final compensation, credited service, and age at retirement, subject to certain variations.
Existing law prescribes various definitions of final compensation based on employment classification, bargaining unit, date of hire, and date of retirement, among other things.
This bill would revise these definitions to remove redundant language and make technical and style changes.
(3)Existing law requires the board to provide the Legislature, the Governor, and the Chair of the California Actuarial Advisory Panel a specified report in connection with state employee retirement plans. Existing law requires the Chair of the California Actuarial Advisory Panel, within 30 days of receipt of the report, at a specified, publicly noticed hearing, to make a presentation on certain issues relating to investment returns and amortization.
This bill would require that the presentation described above to be made each legislative session and that the presentation be based on the report made by the board.
(4)Existing law authorizes the board to charge interest, at the actuarial interest rate, on the amount of any payment due and unpaid by a contracting agency until payment is received.
This bill would instead permit the board to charge interest on payments due and unpaid at the greater of the annual return on the systems investments for the year prior to the year in which payments are not timely made or a simple annual rate of 10%.
(5)In addition to the above, existing law authorizes the board to assess a contracting agency that fails to make contributions when due interest at an annual rate of 10% and the costs of collection, including reasonable legal fees. In the case of repeated delinquencies, the board may assess the contracting agency a penalty of 10% of the delinquent amount.
This bill would recast these provision to authorize the board, if a contracting agency fails to fully pay any installment of contributions when due, to assess a penalty of 10% of the total amount due and unpaid, including accrued and unpaid interest. The bill would permit the penalty to be assessed once during each 30-day period that the outstanding amount remains unpaid. The bill would also specify that the contracting agency may be assessed the costs of collection, including reasonable legal fees and litigation costs, including, without limitation, legal fees and legal costs incurred in bankruptcy, when necessary to collect any amounts due.
(6)Existing law authorizes the board to terminate a local agency contract if the contracting agency fails for 30 days after demand by the board to pay any installment of required contributions or fails for three months after demand to file any information required for administration of the agencys employees. Existing law permits the board to reduce benefits in certain instances when contributions are inadequate to fund them. Existing law authorizes the board to merge a plan that has been terminated into the terminated agency pool without benefit reduction or with a lesser reduction if certain conditions are met.
This bill would delete references to merging a plan and instead specify that the board may elect to not impose a reduction on a plan, or to impose a lesser reduction on a plan, that has been terminated if those acts will not impact the actuarial soundness of the terminated agency pool. The bill would make related changes by deleting administrative provisions relating to the sequence for transferring assets in relation to the reduction of benefits.
(7)Existing law authorizes certain members who are either academic employees of the California State University or certificated employees of school districts employed on a part-time basis to receive full-time service credit and the benefits related to that status if both the member and employer elect to make the appropriate additional contributions and other requirements are met. Existing law limits the application of these provisions to 5 years of part-time status.
This bill would extend the authorization described above to academic employees of community college districts. The bill would also make a correctional change in this regard.
(8)Existing law requires payment of interest on a preretirement or postretirement death allowance or a preretirement or postretirement lump-sum benefit if not paid within a specified time after the date of death of an annuitant. Existing law prescribes the method of calculating interest for this purpose.
This bill would instead require that interest be calculated at 7%, pursuant to the California Constitution.
(9)Existing law requires a surviving domestic partner be treated in the same manner as a surviving spouse for purposes of postretirement survivors allowances if certain conditions are met.
This bill would require that an individual who is the same gender as a member be treated in the same manner as a surviving spouse for purposes of postretirement survivors allowances if certain conditions are met.
(10)Existing law, the Public Employees Medical and Hospital Care Act (PEMHCA), which is administered by the Board of Administration of the Public Employees Retirement System, authorizes the board to contract for health benefit plans for employees and annuitants, as defined, which may include employees and annuitants of contracting agencies. Existing law grants eligible, uninsured family members of specified firefighters or peace officers whose deaths are the result of injury or disease arising out of their duties the status of annuitants for purposes of receiving benefits under PEMHCA. Existing law requires employers to notify the board within 10 business days of the death of the employee in this context if a spouse of family member may be eligible for enrollment in a health benefit plan in this regard.
This bill would revise the duty of employers to notify the board to also require that they provide updated contact information of the surviving spouse or family member if that person may be eligible for enrollment.
(1)Existing law requires all state and local retirement systems to secure, not less than triennially, the services of an enrolled actuary, who is required to perform a valuation of the system. Existing law requires all state and local public retirement systems to submit audited financial statements to the Controller at the earliest practicable opportunity within 6 months of the close of each fiscal year. Existing law requires the Controller to review these reports and to publish an annual report on the financial condition of all state and local public retirement systems, as specified. Existing law requires the Controller to establish an advisory committee, including enrolled actuaries, to assist state and local systems with their reporting duties. Existing law requires the Legislature and local legislative bodies, when considering changes in retirement benefits or other postemployment benefits, to secure the services of an actuary to provide a statement of the actuarial impact upon future annual costs, except as specified. Existing law establishes the California Actuarial Advisory Panel, which consists of a specified membership that includes enrolled actuaries. Existing law requires the panel to provide impartial and independent information on pensions, other postemployment benefits, and best practices to public agencies.
This bill would delete references to enrolled actuaries for purposes of the provisions described above. The bill would substitute for this designation, for purposes of establishing the advisory committee and the actuarial advisory panel, as described above, actuaries who have attained the designation of Associate or Fellow of the Society of Actuaries. The bill would substitute for the enrolled actuaries designation, for purposes of the triennial valuation and the reporting requirements described above, actuaries who satisfy the qualification standards for actuaries issuing statements of actuarial opinion in the United States with regard to pensions or other postemployment benefits.
(2)Existing law, the Public Employees Retirement Law, creates the Public Employees Retirement System (PERS) for the purpose of providing pension benefits to state employees and employees of contracting agencies and prescribes the rights and duties of members of the system and their beneficiaries. Existing law vests management and control of PERS in its board of administration. PERS provides a defined benefit to members of the program, based on final compensation, credited service, and age at retirement, subject to certain variations.
Existing law prescribes various definitions of final compensation based on employment classification, bargaining unit, date of hire, and date of retirement, among other things.
This bill would revise these definitions to remove redundant language and make technical and style changes.
(3)Existing law requires the board to provide the Legislature, the Governor, and the Chair of the California Actuarial Advisory Panel a specified report in connection with state employee retirement plans. Existing law requires the Chair of the California Actuarial Advisory Panel, within 30 days of receipt of the report, at a specified, publicly noticed hearing, to make a presentation on certain issues relating to investment returns and amortization.
This bill would require that the presentation described above to be made each legislative session and that the presentation be based on the report made by the board.
(4)Existing law authorizes the board to charge interest, at the actuarial interest rate, on the amount of any payment due and unpaid by a contracting agency until payment is received.
This bill would instead permit the board to charge interest on payments due and unpaid at the greater of the annual return on the systems investments for the year prior to the year in which payments are not timely made or a simple annual rate of 10%.
(5)In addition to the above, existing law authorizes the board to assess a contracting agency that fails to make contributions when due interest at an annual rate of 10% and the costs of collection, including reasonable legal fees. In the case of repeated delinquencies, the board may assess the contracting agency a penalty of 10% of the delinquent amount.
This bill would recast these provision to authorize the board, if a contracting agency fails to fully pay any installment of contributions when due, to assess a penalty of 10% of the total amount due and unpaid, including accrued and unpaid interest. The bill would permit the penalty to be assessed once during each 30-day period that the outstanding amount remains unpaid. The bill would also specify that the contracting agency may be assessed the costs of collection, including reasonable legal fees and litigation costs, including, without limitation, legal fees and legal costs incurred in bankruptcy, when necessary to collect any amounts due.
(6)Existing law authorizes the board to terminate a local agency contract if the contracting agency fails for 30 days after demand by the board to pay any installment of required contributions or fails for three months after demand to file any information required for administration of the agencys employees. Existing law permits the board to reduce benefits in certain instances when contributions are inadequate to fund them. Existing law authorizes the board to merge a plan that has been terminated into the terminated agency pool without benefit reduction or with a lesser reduction if certain conditions are met.
This bill would delete references to merging a plan and instead specify that the board may elect to not impose a reduction on a plan, or to impose a lesser reduction on a plan, that has been terminated if those acts will not impact the actuarial soundness of the terminated agency pool. The bill would make related changes by deleting administrative provisions relating to the sequence for transferring assets in relation to the reduction of benefits.
(7)Existing law authorizes certain members who are either academic employees of the California State University or certificated employees of school districts employed on a part-time basis to receive full-time service credit and the benefits related to that status if both the member and employer elect to make the appropriate additional contributions and other requirements are met. Existing law limits the application of these provisions to 5 years of part-time status.
This bill would extend the authorization described above to academic employees of community college districts. The bill would also make a correctional change in this regard.
(8)Existing law requires payment of interest on a preretirement or postretirement death allowance or a preretirement or postretirement lump-sum benefit if not paid within a specified time after the date of death of an annuitant. Existing law prescribes the method of calculating interest for this purpose.
This bill would instead require that interest be calculated at 7%, pursuant to the California Constitution.
(9)Existing law requires a surviving domestic partner be treated in the same manner as a surviving spouse for purposes of postretirement survivors allowances if certain conditions are met.
This bill would require that an individual who is the same gender as a member be treated in the same manner as a surviving spouse for purposes of postretirement survivors allowances if certain conditions are met.
(10)Existing law, the Public Employees Medical and Hospital Care Act (PEMHCA), which is administered by the Board of Administration of the Public Employees Retirement System, authorizes the board to contract for health benefit plans for employees and annuitants, as defined, which may include employees and annuitants of contracting agencies. Existing law grants eligible, uninsured family members of specified firefighters or peace officers whose deaths are the result of injury or disease arising out of their duties the status of annuitants for purposes of receiving benefits under PEMHCA. Existing law requires employers to notify the board within 10 business days of the death of the employee in this context if a spouse of family member may be eligible for enrollment in a health benefit plan in this regard.
This bill would revise the duty of employers to notify the board to also require that they provide updated contact information of the surviving spouse or family member if that person may be eligible for enrollment.
(1)Existing law requires all state and local retirement systems to secure, not less than triennially, the services of an enrolled actuary, who is required to perform a valuation of the system. Existing law requires all state and local public retirement systems to submit audited financial statements to the Controller at the earliest practicable opportunity within 6 months of the close of each fiscal year. Existing law requires the Controller to review these reports and to publish an annual report on the financial condition of all state and local public retirement systems, as specified. Existing law requires the Controller to establish an advisory committee, including enrolled actuaries, to assist state and local systems with their reporting duties. Existing law requires the Legislature and local legislative bodies, when considering changes in retirement benefits or other postemployment benefits, to secure the services of an actuary to provide a statement of the actuarial impact upon future annual costs, except as specified. Existing law establishes the California Actuarial Advisory Panel, which consists of a specified membership that includes enrolled actuaries. Existing law requires the panel to provide impartial and independent information on pensions, other postemployment benefits, and best practices to public agencies.
This bill would delete references to enrolled actuaries for purposes of the provisions described above. The bill would substitute for this designation, for purposes of establishing the advisory committee and the actuarial advisory panel, as described above, actuaries who have attained the designation of Associate or Fellow of the Society of Actuaries. The bill would substitute for the enrolled actuaries designation, for purposes of the triennial valuation and the reporting requirements described above, actuaries who satisfy the qualification standards for actuaries issuing statements of actuarial opinion in the United States with regard to pensions or other postemployment benefits.
(2)Existing law, the Public Employees Retirement Law, creates the Public Employees Retirement System (PERS) for the purpose of providing pension benefits to state employees and employees of contracting agencies and prescribes the rights and duties of members of the system and their beneficiaries. Existing law vests management and control of PERS in its board of administration. PERS provides a defined benefit to members of the program, based on final compensation, credited service, and age at retirement, subject to certain variations.
Existing law prescribes various definitions of final compensation based on employment classification, bargaining unit, date of hire, and date of retirement, among other things.
This bill would revise these definitions to remove redundant language and make technical and style changes.
(3)Existing law requires the board to provide the Legislature, the Governor, and the Chair of the California Actuarial Advisory Panel a specified report in connection with state employee retirement plans. Existing law requires the Chair of the California Actuarial Advisory Panel, within 30 days of receipt of the report, at a specified, publicly noticed hearing, to make a presentation on certain issues relating to investment returns and amortization.
This bill would require that the presentation described above to be made each legislative session and that the presentation be based on the report made by the board.
(4)Existing law authorizes the board to charge interest, at the actuarial interest rate, on the amount of any payment due and unpaid by a contracting agency until payment is received.
This bill would instead permit the board to charge interest on payments due and unpaid at the greater of the annual return on the systems investments for the year prior to the year in which payments are not timely made or a simple annual rate of 10%.
(5)In addition to the above, existing law authorizes the board to assess a contracting agency that fails to make contributions when due interest at an annual rate of 10% and the costs of collection, including reasonable legal fees. In the case of repeated delinquencies, the board may assess the contracting agency a penalty of 10% of the delinquent amount.
This bill would recast these provision to authorize the board, if a contracting agency fails to fully pay any installment of contributions when due, to assess a penalty of 10% of the total amount due and unpaid, including accrued and unpaid interest. The bill would permit the penalty to be assessed once during each 30-day period that the outstanding amount remains unpaid. The bill would also specify that the contracting agency may be assessed the costs of collection, including reasonable legal fees and litigation costs, including, without limitation, legal fees and legal costs incurred in bankruptcy, when necessary to collect any amounts due.
(6)Existing law authorizes the board to terminate a local agency contract if the contracting agency fails for 30 days after demand by the board to pay any installment of required contributions or fails for three months after demand to file any information required for administration of the agencys employees. Existing law permits the board to reduce benefits in certain instances when contributions are inadequate to fund them. Existing law authorizes the board to merge a plan that has been terminated into the terminated agency pool without benefit reduction or with a lesser reduction if certain conditions are met.
This bill would delete references to merging a plan and instead specify that the board may elect to not impose a reduction on a plan, or to impose a lesser reduction on a plan, that has been terminated if those acts will not impact the actuarial soundness of the terminated agency pool. The bill would make related changes by deleting administrative provisions relating to the sequence for transferring assets in relation to the reduction of benefits.
(7)Existing law authorizes certain members who are either academic employees of the California State University or certificated employees of school districts employed on a part-time basis to receive full-time service credit and the benefits related to that status if both the member and employer elect to make the appropriate additional contributions and other requirements are met. Existing law limits the application of these provisions to 5 years of part-time status.
This bill would extend the authorization described above to academic employees of community college districts. The bill would also make a correctional change in this regard.
(8)Existing law grants members in specified member classifications whose retirements are within 4 months of separation from employment specified percentages of service credit for each unused day of sick leave or educational leave.
This bill would specify that a day of unused sick leave or unused educational leave is the equivalent of an 8-hour day.
(9)
(8)Existing law requires payment of interest on a preretirement or postretirement death allowance or a preretirement or postretirement lump-sum benefit if not paid within a specified time after the date of death of an annuitant. Existing law prescribes the method of calculating interest for this purpose.
This bill would instead require that interest be calculated at 7%, pursuant to the California Constitution.
(10)
(9)Existing law requires a surviving domestic partner be treated in the same manner as a surviving spouse for purposes of postretirement survivors allowances if certain conditions are met.
This bill would require that an individual who is the same gender as a member be treated in the same manner as a surviving spouse for purposes of postretirement survivors allowances if certain conditions are met.
(11)
(10)Existing law, the Public Employees Medical and Hospital Care Act (PEMHCA), which is administered by the Board of Administration of the Public Employees Retirement System, authorizes the board to contract for health benefit plans for employees and annuitants, as defined, which may include employees and annuitants of contracting agencies. Existing law grants eligible, uninsured family members of specified firefighters or peace officers whose deaths are the result of injury or disease arising out of their duties the status of annuitants for purposes of receiving benefits under PEMHCA. Existing law requires employers to notify the board within 10 business days of the death of the employee in this context if a spouse of family member may be eligible for enrollment in a health benefit plan in this regard.
This bill would revise the duty of employers to notify the board to also require that they provide updated contact information of the surviving spouse or family member if that person may be eligible for enrollment.
(1)Existing law requires all state and local retirement systems to secure, not less than triennially, the services of an enrolled actuary, who is required to perform a valuation of the system. Existing law requires all state and local public retirement systems to submit audited financial statements to the Controller at the earliest practicable opportunity within 6 months of the close of each fiscal year. Existing law requires the Controller to review these reports and to publish an annual report on the financial condition of all state and local public retirement systems, as specified. Existing law requires the Controller to establish an advisory committee, including enrolled actuaries, to assist state and local systems with their reporting duties. Existing law requires the Legislature and local legislative bodies, when considering changes in retirement benefits or other postemployment benefits, to secure the services of an actuary to provide a statement of the actuarial impact upon future annual costs, except as specified. Existing law establishes the California Actuarial Advisory Panel, which consists of a specified membership that includes enrolled actuaries. Existing law requires the panel to provide impartial and independent information on pensions, other postemployment benefits, and best practices to public agencies.
This bill would delete references to enrolled actuaries for purposes of the provisions described above. The bill would substitute for this designation, for purposes of establishing the advisory committee and the actuarial advisory panel, as described above, actuaries who have attained the designation of Associate or Fellow of the Society of Actuaries. The bill would substitute for the enrolled actuaries designation, for purposes of the triennial valuation and the reporting requirements described above, actuaries who satisfy the qualification standards for actuaries issuing statements of actuarial opinion in the United States with regard to pensions or other postemployment benefits.
(2)Existing law, the Public Employees Retirement Law, creates the Public Employees Retirement System (PERS) for the purpose of providing pension benefits to state employees and employees of contracting agencies and prescribes the rights and duties of members of the system and their beneficiaries. Existing law vests management and control of PERS in its board of administration. PERS provides a defined benefit to members of the program, based on final compensation, credited service, and age at retirement, subject to certain variations.
Existing law prescribes various definitions of final compensation based on employment classification, bargaining unit, date of hire, and date of retirement, among other things.
This bill would revise these definitions to remove redundant language and make technical and style changes.
(3)Existing law requires the board to provide the Legislature, the Governor, and the Chair of the California Actuarial Advisory Panel a specified report in connection with state employee retirement plans. Existing law requires the Chair of the California Actuarial Advisory Panel, within 30 days of receipt of the report, at a specified, publicly noticed hearing, to make a presentation on certain issues relating to investment returns and amortization.
This bill would require that the presentation described above to be made each legislative session and that the presentation be based on the report made by the board.
(4)Existing law authorizes the board to charge interest, at the actuarial interest rate, on the amount of any payment due and unpaid by a contracting agency until payment is received.
This bill would instead permit the board to change charge interest on payments due and unpaid at the greater of the annual return on the systems investments for the year prior to the year in which payments are not timely made or a simple annual rate of 10%.
(5)In addition to the above, existing law authorizes the board to assess a contracting agency that fails to make contributions when due interest at an annual rate of 10% and the costs of collection, including reasonable legal fees. In the case of repeated delinquencies, the board may assess the contracting agency a penalty of 10% of the delinquent amount.
This bill would recast these provision to authorize the board, if a contracting agency fails to fully pay any installment of contributions when due, to assess a penalty of 10% of the total amount due and unpaid, including accrued and unpaid interest. The bill would permit the penalty to be assessed once during each 30-day period that the outstanding amount remains unpaid. The bill would also specify that the contracting agency may be assessed the costs of collection, including reasonable legal fees and litigation costs, including, without limitation, legal fees and legal costs incurred in bankruptcy, when necessary to collect any amounts due.
(6)Existing law authorizes the board to terminate a local agency contract if the contracting agency fails for 30 days after demand by the board to pay any installment of required contributions or fails for three months after demand to file any information required for administration of the agencys employees. Existing law permits the board to reduce benefits in certain instances when contributions are inadequate to fund them. Existing law authorizes the board to merge a plan that has been terminated into the terminated agency pool without benefit reduction or with a lesser reduction if certain conditions are met.
This bill would delete references to merging a plan and instead specify that the board may elect to not impose a reduction on a plan, or to impose a lesser reduction on a plan, that has been terminated if those acts will not impact the actuarial soundness of the terminated agency pool. The bill would make related changes by deleting administrative provisions relating to the sequence for transferring assets in relation to the reduction of benefits.
(7)Existing law authorizes certain members who are either academic employees of the California State University or certificated employees of school districts employed on a part-time basis to receive full-time service credit and the benefits related to that status if both the member and employer elect to make the appropriate additional contributions and other requirements are met. Existing law limits the application of these provisions to 5 years of part-time status.
This bill would extend the authorization described above to academic employees of community college districts. The bill would also make a correctional change in this regard.
(8)Existing law grants members in specified member classifications whose retirements are within 4 months of separation from employment specified percentages of service credit for each unused day of sick leave or educational leave.
This bill would specify that a day of unused sick leave or unused educational leave is the equivalent of an 8-hour day.
(9)Existing law requires the board to transfer funds to separate state and school accounts to fund the purchasing power protection allowance of retirees, survivors, and beneficiaries of state or school employers. Existing law prescribes a method for calculating the amount to be transferred, which is to be the lesser of two amounts, one of which is calculated at one and 1/10th percent of the net earnings on state or school member contributions, as specified.
This bill would revise the calculation described above to be one and 1/10th percent of state or school member contributions.
(10)
(9)Existing law requires payment of interest on a preretirement or postretirement death allowance or a preretirement or postretirement lump-sum benefit if not paid within a specified time after the date of death of an annuitant. Existing law prescribes the method of calculating interest for this purpose.
This bill would instead require that interest be calculated at 7%, pursuant to the California Constitution.
(11)
(10)Existing law requires a surviving domestic partner be treated in the same manner as a surviving spouse for purposes of postretirement survivors allowances if certain conditions are met.
This bill would require that an individual who is the same gender as a member be treated in the same manner as a surviving spouse for purposes of postretirement survivors allowances if certain conditions are met.
(12)
(11)Existing law, the Public Employees Medical and Hospital Care Act (PEMHCA), which is administered by the Board of Administration of the Public Employees Retirement System, authorizes the board to contract for health benefit plans for employees and annuitants, as defined, which may include employees and annuitants of contracting agencies. Existing law grants eligible, uninsured family members of specified firefighters or peace officers whose deaths are the result of injury or disease arising out of their duties the status of annuitants for purposes of receiving benefits under PEMHCA. Existing law requires employers to notify the board within 10 business days of the death of the employee in this context if a spouse of family member may be eligible for enrollment in a health benefit plan in this regard.
This bill would revise the duty of employers to notify the board to also require that they provide updated contact information of the surviving spouse or family member if that person may be eligible for enrollment.
(1)Existing law requires all state and local retirement systems to secure, not less than triennially, the services of an enrolled actuary, who is required to perform a valuation of the system. Existing law requires all state and local public retirement systems to submit audited financial statements to the Controller at the earliest practicable opportunity within 6 months of the close of each fiscal year. Existing law requires the Controller to review these reports and to publish an annual report on the financial condition of all state and local public retirement systems, as specified. Existing law requires the Controller to establish an advisory committee, including enrolled actuaries, to assist state and local systems with their reporting duties. Existing law requires the Legislature and local legislative bodies, when considering changes in retirement benefits or other postemployment benefits, to secure the services of an actuary to provide a statement of the actuarial impact upon future annual costs, except as specified. Existing law establishes the California Actuarial Advisory Panel, which consists of a specified membership that includes enrolled actuaries. Existing law requires the panel to provide impartial and independent information on pensions, other postemployment benefits, and best practices to public agencies.
This bill would delete references to enrolled actuaries for purposes of the provisions described above. The bill would substitute for this designation, for purposes of establishing the advisory committee and the actuarial advisory panel, as described above, actuaries who have attained the designation of Associate or Fellow of the Society of Actuaries. The bill would substitute for the enrolled actuaries designation, for purposes of the triennial valuation and the reporting requirements described above, actuaries who satisfy the qualification standards for actuaries issuing statements of actuarial opinion in the United States with regard to pensions or other postemployment benefits.
Existing
(2)Existing law, the Public Employees Retirement Law, creates the Public Employees Retirement System (PERS) for the purpose of providing pension benefits to state employees and employees of contracting agencies and prescribes the rights and duties of members of the system and their beneficiaries. Existing law vests management and control of PERS in its board of administration. PERS provides a defined benefit to members of the program, based on final compensation, credited service, and age at retirement, subject to certain variations.
(1)Existing
Existing law prescribes various definitions of final compensation based on employment classification, bargaining unit, date of hire, and date of retirement, among other things.
This bill would revise these definitions to remove redundant language and make technical and style changes.
(3)Existing law requires the board to provide the Legislature, the Governor, and the Chair of the California Actuarial Advisory Panel a specified report in connection with state employee retirement plans. Existing law requires the Chair of the California Actuarial Advisory Panel, within 30 days of receipt of the report, at a specified, publicly noticed hearing, to make a presentation on certain issues relating to investment returns and amortization.
This bill would require that the presentation described above to be made each legislative session and that the presentation be based on the report made by the board.
(2)
(4)Existing law authorizes the board to charge interest, at the actuarial interest rate, on the amount of any payment due and unpaid by a contracting agency until payment is received.
This bill would instead permit the board to change interest on payments due and unpaid at the greater of the annual return on the systems investments for the year prior to the year in which payments are not timely made or a simple annual rate of 10%.
(3)
(5)In addition to the above, existing law authorizes the board to assess a contracting agency that fails to make contributions when due interest at an annual rate of 10% and the costs of collection, including reasonable legal fees. In the case of repeated delinquencies, the board may assess the contracting agency a penalty of 10% of the delinquent amount.
This bill would recast these provision to authorize the board, if a contracting agency fails to fully pay any installment of contributions when due, to assess a penalty of 10% of the total amount due and unpaid, including accrued and unpaid interest. The bill would permit the penalty to be assessed once during each 30-day period that the outstanding amount remains unpaid. The bill would also specify that the contracting agency may be assessed the costs of collection, including reasonable legal fees and litigation costs, including, without limitation, legal fees and legal costs incurred in bankruptcy, when necessary to collect any amounts due.
(4)
(6)Existing law authorizes the board to terminate a local agency contract if the contracting agency fails for 30 days after demand by the board to pay any installment of required contributions or fails for three months after demand to file any information required for administration of the agencys employees. Existing law permits the board to reduce benefits in certain instances when contributions are inadequate to fund them. Existing law authorizes the board to merge a plan that has been terminated into the terminated agency pool without benefit reduction or with a lesser reduction if certain conditions are met.
This bill would delete references to merging a plan and instead specify that the board may elect to not impose a reduction on a plan, or to impose a lesser reduction on a plan, that has been terminated if those acts will not impact the actuarial soundness of the terminated agency pool. The bill would make related changes by deleting administrative provisions relating to the sequence for transferring assets in relation to the reduction of benefits.
(7)Existing law authorizes certain members who are either academic employees of the California State University or certificated employees of school districts employed on a part-time basis to receive full-time service credit and the benefits related to that status if both the member and employer elect to make the appropriate additional contributions and other requirements are met. Existing law limits the application of these provisions to 5 years of part-time status.
This bill would extend the authorization described above to academic employees of community college districts. The bill would also make a correctional change in this regard.
(5)
(8)Existing law grants members in specified member classifications whose retirements are within 4 months of separation from employment specified percentages of service credit for each unused day of sick leave or educational leave.
This bill would specify that a day of unused sick leave or unused educational leave is the equivalent of an 8-hour day.
(9)Existing law requires the board to transfer funds to separate state and school accounts to fund the purchasing power protection allowance of retirees, survivors, and beneficiaries of state or school employers. Existing law prescribes a method for calculating the amount to be transferred, which is to be the lesser of two amounts, one of which is calculated at one and 1/10th percent of the net earnings on state or school member contributions, as specified.
This bill would revise the calculation described above to be one and 1/10th percent of state or school member contributions.
(6)
(10)Existing law requires payment of interest on a preretirement or postretirement death allowance or a preretirement or postretirement lump-sum benefit if not paid within a specified time after the date of death of an annuitant. Existing law prescribes the method of calculating interest for this purpose.
This bill would instead require that interest by be calculated at 7%, pursuant to the California Constitution.
(7)
(11)Existing law requires a surviving domestic partner be treated in the same manner as a surviving spouse for purposes of postretirement survivors allowances if certain conditions are met.
This bill would require that an individual who is the same gender as a member be treated in the same manner as a surviving spouse for purposes of postretirement survivors allowances if certain conditions are met.
(12)Existing law, the Public Employees Medical and Hospital Care Act (PEMHCA), which is administered by the Board of Administration of the Public Employees Retirement System, authorizes the board to contract for health benefit plans for employees and annuitants, as defined, which may include employees and annuitants of contracting agencies. Existing law grants eligible, uninsured family members of specified firefighters or peace officers whose deaths are the result of injury or disease arising out of their duties the status of annuitants for purposes of receiving benefits under PEMHCA. Existing law requires employers to notify the board within 10 business days of the death of the employee in this context if a spouse of family member may be eligible for enrollment in a health benefit plan in this regard.
This bill would revise the duty of employers to notify the board to also require that they provide updated contact information of the surviving spouse or family member if that person may be eligible for enrollment.
Existing law, the Public Employees Retirement Law, creates the Public Employees Retirement System (PERS) for the purpose of providing pension benefits to state employees and employees of contracting agencies and prescribes the rights and duties of members of the system and their beneficiaries. Existing law vests management and control of PERS in its board of administration. PERS provides a defined benefit to members of the program, based on final compensation, credited service, and age at retirement, subject to certain variations.
(1)Existing law prescribes various definitions of final compensation based on employment classification, bargaining unit, date of hire, and date of retirement, among other things.
This bill would revise these definitions to remove redundant language and make technical and style changes.
(2)Existing law authorizes the board to charge interest, at the actuarial interest rate, on the amount of any payment due and unpaid by a contracting agency until payment is received.
This bill would instead permit the board to change interest on payments due and unpaid at the greater of the annual return on the systems investments for the year prior to the year in which payments are not timely made or a simple annual rate of 10%.
(3)In addition to the above, existing law authorizes the board to assess a contracting agency that fails to make contributions when due interest at an annual rate of 10% and the costs of collection, including reasonable legal fees. In the case of repeated delinquencies, the board may assess the contracting agency a penalty of 10% of the delinquent amount.
This bill would recast these provision to authorize the board, if a contracting agency fails to fully pay any installment of contributions when due, to assess a penalty of 10% of the total amount due and unpaid, including accrued and unpaid interest. The bill would permit the penalty to be assessed once during each 30-day period that the outstanding amount remains unpaid. The bill would also specify that the contracting agency may be assessed the costs of collection, including reasonable legal fees and litigation costs, including, without limitation, legal fees and legal costs incurred in bankruptcy, when necessary to collect any amounts due.
(4)Existing law authorizes the board to terminate a local agency contract if the contracting agency fails for 30 days after demand by the board to pay any installment of required contributions or fails for three months after demand to file any information required for administration of the agencys employees. Existing law permits the board to reduce benefits in certain instances when contributions are inadequate to fund them. Existing law authorizes the board to merge a plan that has been terminated into the terminated agency pool without benefit reduction or with a lesser reduction if certain conditions are met.
This bill would delete references to merging a plan and instead specify that the board may elect to not impose a reduction on a plan, or to impose a lesser reduction on a plan, that has been terminated if those acts will not impact the actuarial soundness of the terminated agency pool. The bill would make related changes by deleting administrative provisions relating to the sequence for transferring assets in relation to the reduction of benefits.
(5)Existing law grants members in specified member classifications whose retirements are within 4 months of separation from employment specified percentages of service credit for each unused day of sick leave or educational leave.
This bill would specify that a day of unused sick leave or unused educational leave is the equivalent of an 8-hour day.
(6)Existing law requires payment of interest on a preretirement or postretirement death allowance or a preretirement or postretirement lump-sum benefit if not paid within a specified time after the date of death of an annuitant. Existing law prescribes the method of calculating interest for this purpose.
This bill would instead require that interest by calculated at 7%, pursuant to the California Constitution.
(7)Existing law requires a surviving domestic partner be treated in the same manner as a surviving spouse for purposes of postretirement survivors allowances if certain conditions are met.
This bill would require that an individual who is the same gender as a member be treated in the same manner as a surviving spouse for purposes of postretirement survivors allowances if certain conditions are met.
Notwithstanding any other provision, the governing board of a community college district may establish regulations that allow academic employees to reduce their workload from full-time to part-time duties. The regulations shall include, but shall not be limited to, the following if the employees wish to reduce their workload and maintain retirement benefits pursuant to Section 22713 of this code or Section 20900 of the Government Code:
(a)The employee shall have reached the age of 55 prior to reduction in workload.
(b)The employee shall have been employed full time in an academic position or a position requiring certification qualifications, or both, for at least 10 years of which the immediately preceding five years were full-time employment.
(c)During the period immediately preceding a request for a reduction in workload, the employee shall have been employed full time in an academic position or a position requiring certification qualifications, or both, for a total of at least five years without a break in service. For purposes of this subdivision, sabbaticals and other approved leaves of absence shall not constitute a break in service. Time spent on a sabbatical or other approved leave of absence shall not be used in computing the five-year full-time service requirement prescribed by this subdivision.
(d)The option of part-time employment shall be exercised at the request of the employee and can be revoked only with the mutual consent of the employer and the employee.
(e)The employee shall be paid a salary which is the pro rata share of the salary he or she would be earning had he or she not elected to exercise the option of part-time employment but shall retain all other rights and benefits for which he or she makes the payments that would be required if he or she remained in full-time employment.
The employee shall receive health benefits as provided in Section 53201 of the Government Code in the same manner as a full-time employee.
(f)The minimum part-time employment shall be the equivalent of one-half of the number of days of service required by the employees contract of employment during his or her final year of service in a full-time position.
(g)The period of this part-time employment shall not exceed five years for employees subject to Section 20900 of the Government Code or 10 years for employees subject to Section 22713 of this code.
(h)The period of part-time employment of employees subject to Section 20815 of the Government Code shall not extend beyond the end of the college year during which the employee reaches his or her 70th birthday. This subdivision shall not apply to any employee subject to Section 22713 of this code.
SEC. 2.Section 7502 of the Government Code is amended to read:7502.The Controller shall review the annual financial report of each state and local public retirement system submitted pursuant to Section 7504 giving particular consideration to the adequacy of funding of each system. The Controller shall also review the triennial valuation of each public retirement system submitted pursuant to Section 7504 and shall give particular consideration to the assumption concerning the inflation element in salary and wage increases, mortality, service retirement rates, withdrawal rates, disability retirement rates, and rate of return on total assets.
The Controller shall establish an advisory committee that shall include actuaries who have attained the designation of Associate or Fellow of the Society of Actuaries and state and local public retirement system administrators to assist in carrying out the duties imposed by this section.
SEC. 3.Section 7504 of the Government Code is amended to read:7504.(a)All state and local public retirement systems shall, not less than triennially, secure the services of an actuary. For the purposes of this section, actuary means an actuary who satisfies the qualification standards for actuaries issuing statements of actuarial opinion in the United States with regard to pensions or other postemployment benefits and who has demonstrated experience in public retirement systems. The actuary shall perform a valuation of the system utilizing actuarial assumptions and techniques established by the agency that are, in the aggregate, reasonably related to the experience and the actuarys best estimate of anticipated experience under the system. Any differences between the actuarial assumptions and techniques used by the actuary that differ significantly from those established by the agency shall be disclosed in the actuarys report and the effect of the differences on the actuarys statement of costs and obligations shall be shown.
(b)All state and local public retirement systems shall secure the services of a qualified person to perform an attest audit of the systems financial statements. A qualified person means any of the following:
(1)A person who is licensed to practice as a certified public accountant in this state by the California Board of Accountancy.
(2)A person who is registered and entitled to practice as a public accountant in this state by the California Board of Accountancy.
(3)A county auditor in any 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).
(4)A county auditor in any county having a pension trust and retirement plan established pursuant to Section 53216.
(c)All state and local public retirement systems shall submit audited financial statements to the Controller at the earliest practicable opportunity within six months of the close of each fiscal year. However, the Controller may delay the filing date for reports due in the first year until the time as report forms have been developed that, in his or her judgment, will satisfy the requirements of this section. The financial statements shall be prepared in accordance with generally accepted accounting principles in the form and manner prescribed by the Controller. The penalty prescribed in Section 53895 shall be invoked for failure to comply with this section. Upon a satisfactory showing of good cause, the Controller may waive the penalty for late filing provided by this subdivision.
(d)The Controller shall compile and publish a report annually on the financial condition of all state and local public retirement systems containing, but not limited to, the data required in Section 7502. The report shall be published within 12 months of the receipt of the information, and in no case later than 18 months after the end of the fiscal year upon which the information in the report is based.
SEC. 4.Section 7507 of the Government Code is amended to read:7507.(a)For the purpose of this section:
(1)Actuary means an actuary as defined in Section 7504.
(2)Future annual costs includes, but is not limited to, annual dollar changes, or the total dollar changes involved when available, as well as normal cost and any change in accrued liability.
(b)(1)Except as provided in paragraph (2), the Legislature and local legislative bodies, including community college district governing boards, when considering changes in retirement benefits or other postemployment benefits, shall secure the services of an actuary to provide a statement of the actuarial impact upon future annual costs, including normal cost and any additional accrued liability, before authorizing changes in public retirement plan benefits or other postemployment benefits.
(2)The requirements of this subdivision do not apply to:
(A)An annual increase in a premium that does not exceed 3 percent under a contract of insurance.
(B)A change in postemployment benefits, other than pension benefits, mandated by the state or federal government or made by an insurance carrier in connection with the renewal of a contract of insurance.
(c)(1)(A)With regard to local legislative bodies, including community college district governing boards, the future costs of changes in retirement benefits or other postemployment benefits, as determined by the actuary, shall be made public at a public meeting at least two weeks prior to the adoption of any changes in public retirement plan benefits or other postemployment benefits. If the future costs of the changes exceed one-half of 1 percent of the future annual costs, as defined in paragraph (2) of subdivision (a), of the existing benefits for the legislative body, an actuary shall be present to provide information as needed at the public meeting at which the adoption of a benefit change shall be considered. The adoption of any benefit to which this section applies shall not be placed on a consent calendar.
(B)The requirements of this paragraph do not apply to:
(i)An annual increase in a premium that does not exceed 3 percent under a contract of insurance.
(ii)A change in postemployment benefits, other than pension benefits, mandated by the state or federal government or made by an insurance carrier in connection with the renewal of a contract of insurance.
(2)With regard to the Legislature, the future costs as determined by the actuary shall be made public at the policy and fiscal committee hearings to consider the adoption of any changes in public retirement plan benefits or other postemployment benefits. The adoption of any benefit to which this section applies shall not be placed on a consent calendar.
(d)Upon the adoption of any benefit change to which this section applies, the person with the responsibilities of a chief executive officer in an entity providing the benefit, however that person is denominated, shall acknowledge in writing that he or she understands the current and future cost of the benefit as determined by the actuary. For the adoption of benefit changes by the state, this person shall be the Director of Human Resources.
(e)The requirements of this section do not apply to a school district or a county office of education, which shall instead comply with requirements regarding public notice of, and future cost determination for, benefit changes that have been enacted to regulate these entities. These requirements include, but are not limited to, those enacted by Chapter 1213 of the Statutes of 1991 and by Chapter 52 of the Statutes of 2004.
SEC. 5.Section 7507.2 of the Government Code is amended to read:7507.2.(a)There is hereby enacted the California Actuarial Advisory Panel. The panel shall provide impartial and independent information on pensions, other postemployment benefits, and best practices to public agencies and shall meet quarterly.
(b)The responsibilities of the California Actuarial Advisory Panel shall include, but are not limited to:
(1)Defining the range of actuarial model policies and best practices for public retirement plan benefits, including pensions and other postemployment benefits.
(2)Developing pricing and disclosure standards for California public sector benefit improvements.
(3)Developing quality control standards for California public sector actuaries.
(4)Gathering model funding policies and practices.
(5)Replying to policy questions from public retirement systems in California.
(6)Providing comment upon request by public agencies.
(c)The California Actuarial Advisory Panel shall consist of eight members. Each member shall be an actuary who has attained the designation of Associate or Fellow of the Society of Actuaries and who has demonstrated experience with public sector clients. Members shall be appointed by the entities listed below, and each member shall serve a three-year term, provided that, in the initial appointments only, the panelists named by the University of California, the Senate, and one of the panelists named by the Governor shall serve two-year terms. The Governor shall appoint two panelists, and one panelist shall be appointed by each of the following:
(1)The Teachers Retirement Board.
(2)The Board of Administration of the Public Employees Retirement System.
(3)The State Association of County Retirement Systems.
(4)The Board of Regents of the University of California.
(5)The Speaker of the Assembly.
(6)The Senate Committee on Rules.
(d)The California Actuarial Advisory Panel shall be located in the Controllers office, which shall provide support staff to the panel.
(e)The opinions of the California Actuarial Advisory Panel are nonbinding and advisory only. The opinions of the panel shall not, in any case, be used as the basis for litigation.
(f)A member of the California Actuarial Advisory Panel shall receive reimbursement for expenses that shall be paid by the authority that appointed the member.
(g)The California Actuarial Advisory Panel shall report to the Legislature on or before February 1 of each year.
SEC. 6.Section 20034 of the Government Code is amended to read:20034.The highest annual average compensation during any consecutive 12- or 36-month period of employment as a member of any retirement system maintained by the university shall be considered compensation earnable by a member of this system for purposes of computing final compensation for the member providing he or she retires concurrently under both systems.
SEC. 7.Section 20035 of the Government Code is amended to read:20035.(a)Notwithstanding Section 20037, final compensation for the purposes of determining any pension or benefit with respect to a state member who retires or dies on or after July 1, 1991, and with respect to benefits based on service with the state, means the highest annual compensation which was earnable by the state member during any consecutive 12-month period of employment preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier.
(b)With respect to a state member who retires or dies on or after July 1, 1991, and who was a managerial employee, as defined by subdivision (e) of Section 3513, or a supervisory employee, as defined by subdivision (g) of Section 3513, whose monthly salary range was administratively reduced by 5 percent because of the salary range reductions administratively imposed upon managers and supervisors during the 199192 fiscal year, final compensation means the highest annual compensation the state member would have earned had his or her salary range not been reduced by the 5-percent reduction. This subdivision shall only apply if the period during which the state members salary was reduced would have otherwise been included in determining his or her final compensation. The costs, if any, that may result from the use of the higher final compensation shall be paid for by the employer in the same manner as other retirement benefits are funded.
SEC. 8.Section 20035.5 of the Government Code is amended to read:20035.5.Notwithstanding Section 20037, final compensation for the purposes of determining any pension or benefit with respect to a school member who retires or dies on or after January 1, 2000, and with respect to benefits based on service with a school employer, means the highest annual compensation that was earnable by the school member during any consecutive 12-month period of employment preceding the effective date of his or her retirement or the date of his or her last separation from service if earlier.
SEC. 9.Section 20037 of the Government Code is amended to read:20037.For a state member, or for a local member who is an employee of a contracting agency that is subject to this section, final compensation means the highest annual average compensation earnable by a member during any consecutive 36-month period of employment preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier, including any or all of the period or periods of (a) service required for qualification for membership, or (b) prior service which qualifies for credit under this system, if any, immediately preceding membership, or (c) time prior to entering state service at the compensation earnable by him or her in the position first held by him or her in that service, as may be necessary to complete three consecutive years. For the purposes of this section, periods of service separated by a period of retirement or breaks in service may be aggregated to constitute a period of three consecutive years, if the periods of service are consecutive except for such a period of retirement or breaks. If a break in service did not exceed six months in duration, time included in the break and compensation earnable during that time shall be included in computation of final compensation. If a break in service exceeded six months in duration, the first six months thereof and the compensation earnable during those six months shall be included in computation of final compensation, but time included in the break which is in excess of six months and the compensation earnable during that excess time shall be excluded in computation of final compensation. On and after November 13, 1968, this section shall apply to all contracting agencies and to the employees of those agencies whether or not those agencies have previously elected to be subject to this section, except that this section shall not apply to an employee of a contracting agency which has not elected to be subject to this section whose death occurred or whose retirement was effective prior to November 13, 1968.
SEC. 10.Section 20037.5 of the Government Code, as added by Section 56 of Chapter 88 of the Statutes of 1998, is repealed.SEC. 11.Section 20037.5 of the Government Code, as added by Section 56 of Chapter 91 of the Statutes of 1998, is amended to read:20037.5.Notwithstanding Section 20035, final compensation for a state member who has elected to be subject to Section 21353.5, for the purposes of determining any pension or benefit based on service credited under that section, means the highest average annual compensation earnable by the member during any consecutive 36-month period preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier.
SEC. 12.Section 20037.6 of the Government Code is amended to read:20037.6.(a)Notwithstanding Sections 20035 and 20037, final compensation for a person who is employed by the state for the first time and becomes a state member of the system on or after July 1, 2006, and is represented by State Bargaining Unit 2, means the highest average annual compensation earnable by the member during any consecutive 36-month period preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier.
(b)This section applies to service credit accrued while a member of State Bargaining Unit 2.
(c)This section does not apply to:
(1)Former state employees who return to state employment on or after July 1, 2006.
(2)State employees hired prior to July 1, 2006, who were subject to Section 20281.5 during the first 24 months of state employment.
(3)State employees hired prior to July 1, 2006, who become subject to representation by State Bargaining Unit 2 on or after July 1, 2006.
(4)State employees on an approved leave of absence who return to active employment on or after July 1, 2006.
SEC. 13.Section 20037.7 of the Government Code is amended to read:20037.7.(a)Notwithstanding Sections 20035 and 20037, final compensation for a person who is employed by the state for the first time and becomes a state member of the system on or after January 1, 2007, and is represented by State Bargaining Unit 1, 3, 4, 11, 14, 15, 17, 20, or 21, means the highest average annual compensation earnable by the member during any consecutive 36-month period preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier.
(b)This section applies to service credit accrued while a member of State Bargaining Unit 1, 3, 4, 11, 14, 15, 17, 20, or 21.
(c)This section does not apply to:
(1)Former state employees previously employed before January 1, 2007, who return to state employment on or after January 1, 2007.
(2)State employees hired prior to January 1, 2007, who were subject to Section 20281.5 during the first 24 months of state employment.
(3)State employees hired prior to January 1, 2007, who become subject to representation by State Bargaining Unit 1, 3, 4, 11, 14, 15, 17, 20, or 21 on or after January 1, 2007.
(4)State employees on an approved leave of absence employed before January 1, 2007, who return to active employment on or after January 1, 2007.
SEC. 14.Section 20037.8 of the Government Code is amended to read:20037.8.(a)Notwithstanding Sections 20035 and 20037, final compensation for a person who is employed by the state for the first time and becomes a state member of the system on or after January 1, 2007, and is represented by State Bargaining Unit 12 or 13, means the highest average annual compensation earnable by the member during any consecutive 36-month period preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier.
(b)This section applies to service credit accrued while a member of State Bargaining Unit 12 or 13.
(c)This section does not apply to:
(1)Former state employees previously employed before January 1, 2007, who return to state employment on or after January 1, 2007.
(2)State employees hired prior to January 1, 2007, who were subject to Section 20281.5 during the first 24 months of state employment.
(3)State employees hired prior to January 1, 2007, who become subject to representation by State Bargaining Unit 12 or 13 on or after January 1, 2007.
(4)State employees on an approved leave of absence employed before January 1, 2007, who return to active employment on or after January 1, 2007.
SEC. 15.Section 20037.9 of the Government Code is amended to read:20037.9.(a)Notwithstanding Sections 20035 and 20037, final compensation for a person who is employed by the state for the first time and becomes a state member of the system on or after January 1, 2007, and is represented by State Bargaining Unit 16 or 19, means the highest average annual compensation earnable by the member during any consecutive 36-month period preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier.
(b)This section applies to service credit accrued while a member of State Bargaining Unit 16 or 19.
(c)This section does not apply to:
(1)Former state employees previously employed before January 1, 2007, who return to state employment on or after January 1, 2007.
(2)State employees hired prior to January 1, 2007, who were subject to Section 20281.5 during the first 24 months of state employment.
(3)State employees hired prior to January 1, 2007, who become subject to representation by State Bargaining Unit 16 or 19 on or after January 1, 2007.
(4)State employees on an approved leave of absence employed before January 1, 2007, who return to active employment on or after January 1, 2007.
SEC. 16.Section 20037.10 of the Government Code is amended to read:20037.10.(a)Notwithstanding Sections 20035 and 20037, final compensation for a person who is employed by the state for the first time and becomes a state member of the system on or after January 1, 2007, and is represented by State Bargaining Unit 7, means the highest average annual compensation earnable by the member during any consecutive 36-month period immediately preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier.
(b)This section applies to service credit accrued while a member of State Bargaining Unit 7.
(c)This section does not apply to:
(1)Service credit accrued while classified as a state peace officer/firefighter while a member of State Bargaining Unit 7.
(2)Former state employees previously employed before January 1, 2007, who return to state employment on or after January 1, 2007.
(3)State employees hired prior to January 1, 2007, who were subject to Section 20281.5 during the first 24 months of state employment.
(4)State employees hired prior to January 1, 2007, who become subject to representation by State Bargaining Unit 7 on or after January 1, 2007.
(5)State employees on an approved leave of absence employed before January 1, 2007, who return to active employment on or after January 1, 2007.
SEC. 17.Section 20037.11 of the Government Code is amended to read:20037.11.(a)Notwithstanding Sections 20035 and 20037, final compensation for a person who is employed by the state for the first time and becomes a state member of the system on or after January 1, 2007, and is represented by State Bargaining Unit 10, means the highest average annual compensation earnable by the member during any consecutive 36-month period preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier.
(b)This section applies to service credit accrued while a member of State Bargaining Unit 10.
(c)This section does not apply to:
(1)Former state employees previously employed before January 1, 2007, who return to state employment on or after January 1, 2007.
(2)State employees hired prior to January 1, 2007, who were subject to Section 20281.5 during the first 24 months of state employment.
(3)State employees hired prior to January 1, 2007, who become subject to representation by State Bargaining Unit 10 on or after January 1, 2007.
(4)State employees on an approved leave of absence employed before January 1, 2007, who return to active employment on or after January 1, 2007.
SEC. 18.Section 20037.12 of the Government Code is amended to read:20037.12.(a)Notwithstanding Sections 20035 and 20037, final compensation for a person who is employed by the state for the first time and becomes a state member of the system on or after January 1, 2007, and is represented by State Bargaining Unit 18, means the highest average annual compensation earnable by the member during any consecutive 36-month period preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier.
(b)This section applies to service credit accrued while a member of State Bargaining Unit 18.
(c)This section does not apply to:
(1)Former state employees previously employed before January 1, 2007, who return to state employment on or after January 1, 2007.
(2)State employees hired prior to January 1, 2007, who were subject to Section 20281.5 during the first 24 months of state employment.
(3)State employees hired prior to January 1, 2007, who become subject to representation by State Bargaining Unit 18 on or after January 1, 2007.
(4)State employees on an approved leave of absence employed before January 1, 2007, who return to active employment on or after January 1, 2007.
SEC. 19.Section 20037.13 of the Government Code is amended to read:20037.13.(a)Notwithstanding Sections 20035 and 20037, for the purposes of determining any pension or benefit with respect to benefits based on service with the state, final compensation means the highest annual compensation that was earnable by the state member during any consecutive 36-month period of employment preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier.
(b)This section shall only apply to a member appointed to a career executive assignment, as defined in Section 18546, who at the time of appointment meets one or more of the following criteria:
(1)He or she previously had, but does not currently have, permanent status in the civil service.
(2)He or she is a person described in Section 18990 who was not, within the past 12 months, employed by the Legislature for two or more consecutive years.
(3)He or she is a person described in Section 18992 who was not, within the past 12 months, holding a nonelected exempt position in the executive branch.
(c)A state entity that employs a person described in subdivision (b) in a career executive assignment shall notify the Controller of this persons employment status and the Controller shall forward this information to the system.
SEC. 20.Section 20037.14 of the Government Code, as amended by Section 127 of Chapter 296 of the Statutes of 2011, is repealed.SEC. 21.Section 20037.14 of the Government Code, as added by Section 11 of Chapter 163 of the Statutes of 2010, is amended to read:20037.14.(a)Notwithstanding Sections 20035 and 20037, final compensation for a person who is employed by the state for the first time and becomes a state member of the system on or after October 31, 2010, and is represented by State Bargaining Unit 5 or 8, means the highest average annual compensation earnable by the member during any consecutive 36-month period preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier.
(b)This section applies to service credit accrued while a member of State Bargaining Unit 5 or 8 or in a class related to State Bargaining Unit 5 or 8 as an employee who is excepted from the definition of state employee in subdivision (c) of Section 3513, or an officer or employee of the executive branch of state government who is not a member of the civil service.
(c)This section does not apply to:
(1)Former state employees previously employed before October 31, 2010, who return to state employment on or after October 31, 2010.
(2)State employees hired prior to October 31, 2010, who were subject to Section 20281.5 during the first 24 months of state employment.
(3)State employees hired prior to October 31, 2010, who become subject to representation by State Bargaining Unit 5 or 8 on or after October 31, 2010.
(4)State employees on an approved leave of absence employed before October 31, 2010, who return to active employment on or after October 31, 2010.
SEC. 22.Section 20037.15 of the Government Code is amended to read:20037.15.(a)Notwithstanding Sections 3517.8, 20035, and 20037, final compensation for a person who is employed for the first time and becomes a member of the system on or after January 15, 2011, means the highest average annual compensation earnable by the member during any consecutive 36-month period preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier.
(b)This section applies to the following:
(1)Service credit accrued while a member of State Bargaining Unit 6 or 9 or in a class related to State Bargaining Unit 6 or 9 as an employee who is excepted from the definition of state employee in subdivision (c) of Section 3513, or an officer or employee of the executive branch of state government who is not a member of the civil service.
(2)Service credit accrued while a peace officer/firefighter member represented by State Bargaining Unit 7 or in a class related to peace officer/firefighter members in State Bargaining Unit 7 as an employee who is excepted from the definition of state employee in subdivision (c) of Section 3513, or an officer or employee of the executive branch of state government who is not a member of the civil service.
(3)Service credit accrued as an employee who is excepted from the definition of state employee in subdivision (c) of Section 3513, or an officer or employee of the executive branch of state government who is not a member of the civil service.
(4)Service credit accrued as an employee of the Legislature, the judicial branch, or the California State University.
(c)This section does not apply to:
(1)Former employees previously employed before January 15, 2011, who return to employment on or after January 15, 2011, and who were previously subject to a 12-month average.
(2)State employees hired prior to January 15, 2011, who were subject to Section 20281.5 during the first 24 months of state employment, and who were previously subject to a 12-month average.
(3)State employees hired prior to January 15, 2011, who become subject to representation by State Bargaining Unit 6, 7, or 9 on or after January 15, 2011, and who were previously subject to a 12-month average.
(4)Employees on an approved leave of absence employed before January 15, 2011, who return to active employment on or after January 15, 2011, and who were previously subject to a 12-month average.
(d)If this section is in conflict with a memorandum of understanding that is current and in effect on January 15, 2011, the memorandum of understanding shall be controlling while it remains in effect. Upon expiration of the memorandum of understanding that is in effect and current on January 15, 2011, this section shall be controlling and may not be superseded by a subsequent memorandum of understanding.
SEC. 23.Section 20229 of the Government Code is amended to read:20229.(a)The board, notwithstanding Section 10231.5, shall provide the Legislature, the Governor, and the Chair of the California Actuarial Advisory Panel, established pursuant to Section 7507.2, with an annual report that includes all of the following, as these items apply to state employee retirement plans:
(1)(A)A description of the investment return assumption utilized by the board when determining the contribution rates.
(B)A calculation of the contribution rates utilizing an investment return assumption 2 percentage points above and 2 percentage points below the investment return assumption utilized by the board.
(2)(A)A description of the amortization period for any unfunded liabilities utilized by the board when determining the contribution rates.
(B)A calculation of the contribution rates based on an amortization period equal to the estimated average remaining service periods of employees covered by the contributions.
(3)(A)A description of the discount rate utilized by the board for reporting liabilities.
(B)A calculation of those liabilities based upon a discount rate that is 2 percent below the long-term rate of return actually assumed by the board.
(4)The market value of the assets controlled by the board and an explanation of how the actuarial value assigned to those assets differs from the market value of those assets.
(b)Each legislative session, the Chair of the California Actuarial Advisory Panel, or his or her designee, shall, during a publicly noticed joint hearing of the Senate Committee on Public Employment and Retirement and the Assembly Committee on Public Employees, Retirement and Social Security, do all of the following based on information received in the report required by subdivision (a):
(1)Explain the role played by the investment return assumption and amortization period in the calculation of the contribution rates.
(2)Describe the consequences for future state budgets should the investment return assumption not be realized.
(3)Report whether the boards amortization period exceeds the estimated average remaining service periods of employees covered by the contributions.
(c)The report required by subdivision (a) shall be submitted in compliance with Section 9795.
SEC. 24.Section 20537 of the Government Code is amended to read:20537.The board may charge interest on the amount of any payment due and unpaid by a contracting agency until payment is received. Interest shall be charged at the greater of the annual return on the systems investments for the year prior to the year in which payments are not timely made or a simple annual rate of 10 percent. The interest shall be deemed interest earnings for the year in which the late payment is received.
SEC. 25.Section 20572 of the Government Code is amended to read:20572.(a)If a contracting agency fails for 30 days after demand by the board to pay in full any installment of contributions required by its contract, or fails for three months after demand therefor by the board to file any information required in the administration of this system with respect to that contracting agencys employees, or if the board determines that the contracting agency is no longer in existence, the board may terminate that contract by resolution adopted by a majority vote of its members effective 60 days after notice of its adoption has been mailed by registered mail to the governing body of the contracting agency.
(b)In addition to the interest obligations set forth in Section 20537, if a contracting agency fails to pay in full any installment of the contributions when due and the failure continues for a period of three months, the contracting agency may be assessed a penalty of 10 percent of the total amount due and unpaid, including any accrued and unpaid interest. The penalty may be assessed once during each 30-day period that the outstanding amount remains unpaid. In addition, the contracting agency may be assessed the costs of collection, including reasonable legal fees and litigation costs, including, without limitation, legal fees and legal costs incurred in bankruptcy, when necessary to collect any amounts due.
SEC. 26.Section 20577.5 of the Government Code is amended to read:20577.5.Notwithstanding Section 20577, the board may elect not to impose a reduction, or to impose a lesser reduction, on a plan that has been terminated pursuant to Section 20572 if (a) the board has made all reasonable efforts to collect the amount necessary to fully fund the liabilities of the plan and (b) the board finds that not reducing the benefits, or imposing a lesser reduction, will not impact the actuarial soundness of the terminated agency pool.
SEC. 27.Section 20578 of the Government Code is amended to read:20578.(a)Except as provided in subdivision (b), on and after January 1, 1991, the rights and benefits of a former employee of a contracting agency which terminated on or before January 1, 1991, or of his or her beneficiary, shall be the same as if the agency had continued as a contracting agency. Any monthly allowance of that individual, or of his or her beneficiary, that was reduced pursuant to Section 20577 because the contracting agency failed to pay the board the amount of the difference shall not be subject to continued reduction on or after January 1, 1991. As of January 1, 1991, benefits shall be paid at the level provided in the contract prior to that reduction. However, if a former employee of a contracting agency that terminated on or before January 1, 1991, becomes employed by another covered employer after the date of termination, including an employer subject to reciprocity, the benefits shall be calculated by using the highest compensation earned by the individual.
In accordance with Section 20580, an individual who has withdrawn his or her accumulated contributions from the terminated agency shall not be permitted to redeposit any withdrawn contributions upon again becoming a member of this system.
(b)If a contracting agency has not paid the system for any deficit in funding for earned benefits, as determined pursuant to Section 20577, members shall be entitled to the benefits to which members of the plan were entitled 36 months prior to the date the agency notified the board of its intention to terminate its contract or 36 months prior to the date the board notified the agency of its intent to terminate the contract, whichever is earlier. Entitlement to earned benefits under this subdivision shall be subject to Section 20577.5.
SEC. 28.Section 20638 of the Government Code is amended to read:20638.The highest annual average compensation during any consecutive 12- or 36-month period of employment as a member of a county retirement system shall be considered compensation earnable by a member of this system for purposes of computing final compensation for the member provided:
(a)(1)Entry into employment in which he or she became a member in one system occurred on or after October 1, 1957, and within 90 days of discontinuance of employment as a member of the other system.
(2)This subdivision shall not deny the benefit of this section to any person retiring after October 1, 1963, who entered membership prior to October 1, 1957, if he or she entered the employment in which he or she became a member within 90 days of termination of employment in which he or she was a member of the other system, and he or she became a member within seven months of entry into employment, or, if an employee of a district as defined in Section 31468, became a member at the time the district was included in a county retirement system.
(b)He or she retires concurrently under both systems and is credited with the period of service under the county system at the time of retirement.
SEC. 29.Section 20900 of the Government Code is amended to read:20900.(a)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 employees 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 and this system, shall verify the eligibility of the applicant for the reduced workload program. This section shall be applicable only to a member who meets the following criteria:
(1)The member is one of the following:
(A)An academic employee of the California State University.
(B)A certificated employee of a school district.
(C)An academic employee of a community college district.
(2)The member meets the criteria provided in Sections 44922 and 87483 of the Education Code or Section 89516 of the Education Code.
(3)The member is not older than 70 years of age and is limited to a period of five years of part-time status.
(b)The employer shall maintain the necessary records to separately identify each employee receiving credit pursuant to this section.
SEC. 30.Section 21499 of the Government Code is amended to read:21499.(a)Notwithstanding Section 21498, when either an initial payment of a preretirement or postretirement death allowance or a preretirement or postretirement lump-sum benefit is payable in an amount of ten dollars ($10) or more, it shall be authorized to the Controller within 45 days of receipt by this system of all the necessary information, including the return of warrants issued or any overpayment outstanding after the date of the death of the annuitant.
(b)If any payment is not made within that time limitation, the payment shall also include interest at the default interest rate established in Section 1 of Article XV of the California Constitution for time following the expiration of that time limitation.
SEC. 31.Section 21626.5 of the Government Code is amended to read:21626.5.(a)For purposes of Section 21624, 21626, 21627, 21629, or 21630, a surviving domestic partner shall be treated in the same manner as a surviving spouse if either:
(1)The domestic partnership was registered for one year prior to the members service retirement date or at the disability retirement date and continuously until the date of the members death.
(2)The member retired prior to January 1, 2006, and both the member and his or her domestic partner, who currently are in a state-registered domestic partnership, sign an affidavit stating that, at the time prescribed by the retirement system for married spouses to qualify for survivor continuance, the member and the domestic partner would have qualified to be registered as domestic partners pursuant to Section 297 of the Family Code.
(b)For purposes of Section 21624, 21626, 21627, 21629, or 21630, an individual who is the same gender as the member shall be treated in the same manner as a surviving spouse if the following conditions are satisfied:
(1)The individual entered into marriage with the member on or after the date when individuals of the same gender were legally allowed to enter into marriage and was married continuously until the date of the members death.
(2)Either of the following applies:
(A)The member retired prior to the date when individuals of the same gender were legally allowed to enter into marriage, and both the member and his or her spouse, who are currently married, sign an affidavit stating that, at the time prescribed by the retirement system for spouses to qualify for a survivor continuance, the member and the individual would have qualified to be legally married had it been legally possible for people of the same gender to marry.
(B)The individual originally qualified to become a surviving spouse under subdivision (a).
SEC. 32.Section 22820 of the Government Code is amended to read:22820.(a)Upon the death, on or after January 1, 2002, of a firefighter employed by a county, city, city and county, district, or other political subdivision of the state, a firefighter employed by the Department of Forestry and Fire Protection, a firefighter employed by the federal government who was a resident of this state and whose regular duty assignment was to perform firefighting services within this state, or a peace officer as defined in Section 830.1, 830.2, 830.3, 830.31, 830.32, 830.33, 830.34, 830.35, 830.36, 830.37, 830.38, 830.39, 830.4, 830.5, 830.55, or 830.6 of the Penal Code, if the death occurred as a result of injury or disease arising out of and in the course of his or her official duties, the surviving spouse or other eligible family member of the deceased firefighter or peace officer, if uninsured, is deemed to be an annuitant under Section 22760 for purposes of enrollment. All eligible family members of the deceased firefighter or peace officer who are uninsured may enroll in a health benefit plan of the surviving spouses choice. However, an unmarried child of the surviving spouse is not eligible to enroll in a health benefit plan under this section if the child was not a family member under Section 22775 and regulations pertinent thereto prior to the firefighters or peace officers date of death. The employer of the deceased firefighter or peace officer shall notify the board within 10 business days of the death of the employee and any updated contact information of the surviving spouse or family member if that spouse or family member may be eligible for enrollment in a health benefit plan under this section.
(b)Upon notification, the board shall promptly determine eligibility and shall forward to the eligible spouse or family member the materials necessary for enrollment. In the event of a dispute regarding whether a firefighters or peace officers death occurred as a result of injury or disease arising out of and in the course of his or her official duties as required under subdivision (a), that dispute shall be determined by the Workers Compensation Appeals Board, subject to the same procedures and standards applicable to hearings relating to claims for workers compensation benefits. The jurisdiction of the Workers Compensation Appeals Board under this section is limited to the sole issue of industrial causation and this section does not authorize the Workers Compensation Appeals Board to award costs against the system.
(c)(1)Notwithstanding any other provision of law, and except as otherwise provided in subdivision (d), the state shall pay the employer contribution required for enrollment under this part for the uninsured surviving spouse of a deceased firefighter or peace officer for life, and the other uninsured eligible family members of a deceased firefighter or peace officer, provided the family member meets the eligibility requirements of Section 22775 and regulations pertinent thereto.
(2)The contribution payable by the state for each uninsured surviving spouse and other uninsured eligible family members shall be adjusted annually and be equal to the amount specified in Section 22871.
(3)The states contribution under this section shall commence on the effective date of enrollment of the uninsured surviving spouse or other uninsured eligible family members. The contribution of each surviving spouse and eligible family member shall be the total cost per month of the benefit coverage afforded him or her under the plan less the portion contributed by the state pursuant to this section.
(d)The cancellation of coverage by an annuitant, as defined in this section, shall be final without option to reenroll, unless coverage is canceled because of enrollment in an insurance plan from another source.
(e)For purposes of this section, surviving spouse means a spouse who was married to the deceased firefighter or peace officer on the deceaseds date of death and either was married for a continuous period of at least one year prior to the date of death or was married to the deceased prior to the date the deceased firefighter or peace officer sustained the injury or disease resulting in death.
(f)For purposes of this section, uninsured means that the surviving spouse is not enrolled in an employer-sponsored health plan under which the employer contribution covers 100 percent of the cost of health care premiums.
(g)The board has no duty to identify, locate, or notify any surviving spouse or eligible family member who may be or may become eligible for benefits under this section.
Notwithstanding any other provision, the governing board of a community college district may establish regulations that allow academic employees to reduce their workload from full-time to part-time duties. The regulations shall include, but shall not be limited to, the following if the employees wish to reduce their workload and maintain retirement benefits pursuant to Section 22713 of this code or Section 20900 of the Government Code:
(a)The employee shall have reached the age of 55 prior to reduction in workload.
(b)The employee shall have been employed full time in an academic position or a position requiring certification qualifications, or both, for at least 10 years of which the immediately preceding five years were full-time employment.
(c)During the period immediately preceding a request for a reduction in workload, the employee shall have been employed full time in an academic position or a position requiring certification qualifications, or both, for a total of at least five years without a break in service. For purposes of this subdivision, sabbaticals and other approved leaves of absence shall not constitute a break in service. Time spent on a sabbatical or other approved leave of absence shall not be used in computing the five-year full-time service requirement prescribed by this subdivision.
(d)The option of part-time employment shall be exercised at the request of the employee and can be revoked only with the mutual consent of the employer and the employee.
(e)The employee shall be paid a salary which is the pro rata share of the salary he or she would be earning had he or she not elected to exercise the option of part-time employment but shall retain all other rights and benefits for which he or she makes the payments that would be required if he or she remained in full-time employment.
The employee shall receive health benefits as provided in Section 53201 of the Government Code in the same manner as a full-time employee.
(f)The minimum part-time employment shall be the equivalent of one-half of the number of days of service required by the employees contract of employment during his or her final year of service in a full-time position.
(g)The period of this part-time employment shall not exceed five years for employees subject to Section 20900 of the Government Code or 10 years for employees subject to Section 22713 of this code.
(h)The period of part-time employment of employees subject to Section 20815 of the Government Code shall not extend beyond the end of the college year during which the employee reaches his or her 70th birthday. This subdivision shall not apply to any employee subject to Section 22713 of this code.
SEC. 2.Section 7502 of the Government Code is amended to read:7502.The Controller shall review the annual financial report of each state and local public retirement system submitted pursuant to Section 7504 giving particular consideration to the adequacy of funding of each system. The Controller shall also review the triennial valuation of each public retirement system submitted pursuant to Section 7504 and shall give particular consideration to the assumption concerning the inflation element in salary and wage increases, mortality, service retirement rates, withdrawal rates, disability retirement rates, and rate of return on total assets.
The Controller shall establish an advisory committee that shall include actuaries who have attained the designation of Associate or Fellow of the Society of Actuaries and state and local public retirement system administrators to assist in carrying out the duties imposed by this section.
SEC. 3.Section 7504 of the Government Code is amended to read:7504.(a)All state and local public retirement systems shall, not less than triennially, secure the services of an actuary. For the purposes of this section, actuary means an actuary who satisfies the qualification standards for actuaries issuing statements of actuarial opinion in the United States with regard to pensions or other postemployment benefits and who has demonstrated experience in public retirement systems. The actuary shall perform a valuation of the system utilizing actuarial assumptions and techniques established by the agency that are, in the aggregate, reasonably related to the experience and the actuarys best estimate of anticipated experience under the system. Any differences between the actuarial assumptions and techniques used by the actuary that differ significantly from those established by the agency shall be disclosed in the actuarys report and the effect of the differences on the actuarys statement of costs and obligations shall be shown.
(b)All state and local public retirement systems shall secure the services of a qualified person to perform an attest audit of the systems financial statements. A qualified person means any of the following:
(1)A person who is licensed to practice as a certified public accountant in this state by the California Board of Accountancy.
(2)A person who is registered and entitled to practice as a public accountant in this state by the California Board of Accountancy.
(3)A county auditor in any 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).
(4)A county auditor in any county having a pension trust and retirement plan established pursuant to Section 53216.
(c)All state and local public retirement systems shall submit audited financial statements to the Controller at the earliest practicable opportunity within six months of the close of each fiscal year. However, the Controller may delay the filing date for reports due in the first year until the time as report forms have been developed that, in his or her judgment, will satisfy the requirements of this section. The financial statements shall be prepared in accordance with generally accepted accounting principles in the form and manner prescribed by the Controller. The penalty prescribed in Section 53895 shall be invoked for failure to comply with this section. Upon a satisfactory showing of good cause, the Controller may waive the penalty for late filing provided by this subdivision.
(d)The Controller shall compile and publish a report annually on the financial condition of all state and local public retirement systems containing, but not limited to, the data required in Section 7502. The report shall be published within 12 months of the receipt of the information, and in no case later than 18 months after the end of the fiscal year upon which the information in the report is based.
SEC. 4.Section 7507 of the Government Code is amended to read:7507.(a)For the purpose of this section:
(1)Actuary means an actuary as defined in Section 7504.
(2)Future annual costs includes, but is not limited to, annual dollar changes, or the total dollar changes involved when available, as well as normal cost and any change in accrued liability.
(b)(1)Except as provided in paragraph (2), the Legislature and local legislative bodies, including community college district governing boards, when considering changes in retirement benefits or other postemployment benefits, shall secure the services of an actuary to provide a statement of the actuarial impact upon future annual costs, including normal cost and any additional accrued liability, before authorizing changes in public retirement plan benefits or other postemployment benefits.
(2)The requirements of this subdivision do not apply to:
(A)An annual increase in a premium that does not exceed 3 percent under a contract of insurance.
(B)A change in postemployment benefits, other than pension benefits, mandated by the state or federal government or made by an insurance carrier in connection with the renewal of a contract of insurance.
(c)(1)(A)With regard to local legislative bodies, including community college district governing boards, the future costs of changes in retirement benefits or other postemployment benefits, as determined by the actuary, shall be made public at a public meeting at least two weeks prior to the adoption of any changes in public retirement plan benefits or other postemployment benefits. If the future costs of the changes exceed one-half of 1 percent of the future annual costs, as defined in paragraph (2) of subdivision (a), of the existing benefits for the legislative body, an actuary shall be present to provide information as needed at the public meeting at which the adoption of a benefit change shall be considered. The adoption of any benefit to which this section applies shall not be placed on a consent calendar.
(B)The requirements of this paragraph do not apply to:
(i)An annual increase in a premium that does not exceed 3 percent under a contract of insurance.
(ii)A change in postemployment benefits, other than pension benefits, mandated by the state or federal government or made by an insurance carrier in connection with the renewal of a contract of insurance.
(2)With regard to the Legislature, the future costs as determined by the actuary shall be made public at the policy and fiscal committee hearings to consider the adoption of any changes in public retirement plan benefits or other postemployment benefits. The adoption of any benefit to which this section applies shall not be placed on a consent calendar.
(d)Upon the adoption of any benefit change to which this section applies, the person with the responsibilities of a chief executive officer in an entity providing the benefit, however that person is denominated, shall acknowledge in writing that he or she understands the current and future cost of the benefit as determined by the actuary. For the adoption of benefit changes by the state, this person shall be the Director of Human Resources.
(e)The requirements of this section do not apply to a school district or a county office of education, which shall instead comply with requirements regarding public notice of, and future cost determination for, benefit changes that have been enacted to regulate these entities. These requirements include, but are not limited to, those enacted by Chapter 1213 of the Statutes of 1991 and by Chapter 52 of the Statutes of 2004.
SEC. 5.Section 7507.2 of the Government Code is amended to read:7507.2.(a)There is hereby enacted the California Actuarial Advisory Panel. The panel shall provide impartial and independent information on pensions, other postemployment benefits, and best practices to public agencies and shall meet quarterly.
(b)The responsibilities of the California Actuarial Advisory Panel shall include, but are not limited to:
(1)Defining the range of actuarial model policies and best practices for public retirement plan benefits, including pensions and other postemployment benefits.
(2)Developing pricing and disclosure standards for California public sector benefit improvements.
(3)Developing quality control standards for California public sector actuaries.
(4)Gathering model funding policies and practices.
(5)Replying to policy questions from public retirement systems in California.
(6)Providing comment upon request by public agencies.
(c)The California Actuarial Advisory Panel shall consist of eight members. Each member shall be an actuary who has attained the designation of Associate or Fellow of the Society of Actuaries and who has demonstrated experience with public sector clients. Members shall be appointed by the entities listed below, and each member shall serve a three-year term, provided that, in the initial appointments only, the panelists named by the University of California, the Senate, and one of the panelists named by the Governor shall serve two-year terms. The Governor shall appoint two panelists, and one panelist shall be appointed by each of the following:
(1)The Teachers Retirement Board.
(2)The Board of Administration of the Public Employees Retirement System.
(3)The State Association of County Retirement Systems.
(4)The Board of Regents of the University of California.
(5)The Speaker of the Assembly.
(6)The Senate Committee on Rules.
(d)The California Actuarial Advisory Panel shall be located in the Controllers office, which shall provide support staff to the panel.
(e)The opinions of the California Actuarial Advisory Panel are nonbinding and advisory only. The opinions of the panel shall not, in any case, be used as the basis for litigation.
(f)A member of the California Actuarial Advisory Panel shall receive reimbursement for expenses that shall be paid by the authority that appointed the member.
(g)The California Actuarial Advisory Panel shall report to the Legislature on or before February 1 of each year.
SEC. 6.Section 20034 of the Government Code is amended to read:20034.The highest annual average compensation during any consecutive 12- or 36-month period of employment as a member of any retirement system maintained by the university shall be considered compensation earnable by a member of this system for purposes of computing final compensation for the member providing he or she retires concurrently under both systems.
SEC. 7.Section 20035 of the Government Code is amended to read:20035.(a)Notwithstanding Section 20037, final compensation for the purposes of determining any pension or benefit with respect to a state member who retires or dies on or after July 1, 1991, and with respect to benefits based on service with the state, means the highest annual compensation which was earnable by the state member during any consecutive 12-month period of employment preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier.
(b)With respect to a state member who retires or dies on or after July 1, 1991, and who was a managerial employee, as defined by subdivision (e) of Section 3513, or a supervisory employee, as defined by subdivision (g) of Section 3513, whose monthly salary range was administratively reduced by 5 percent because of the salary range reductions administratively imposed upon managers and supervisors during the 199192 fiscal year, final compensation means the highest annual compensation the state member would have earned had his or her salary range not been reduced by the 5-percent reduction. This subdivision shall only apply if the period during which the state members salary was reduced would have otherwise been included in determining his or her final compensation. The costs, if any, that may result from the use of the higher final compensation shall be paid for by the employer in the same manner as other retirement benefits are funded.
SEC. 8.Section 20035.5 of the Government Code is amended to read:20035.5.Notwithstanding Section 20037, final compensation for the purposes of determining any pension or benefit with respect to a school member who retires or dies on or after January 1, 2000, and with respect to benefits based on service with a school employer, means the highest annual compensation that was earnable by the school member during any consecutive 12-month period of employment preceding the effective date of his or her retirement or the date of his or her last separation from service if earlier.
SEC. 9.Section 20037 of the Government Code is amended to read:20037.For a state member, or for a local member who is an employee of a contracting agency that is subject to this section, final compensation means the highest annual average compensation earnable by a member during any consecutive 36-month period of employment preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier, including any or all of the period or periods of (a) service required for qualification for membership, or (b) prior service which qualifies for credit under this system, if any, immediately preceding membership, or (c) time prior to entering state service at the compensation earnable by him or her in the position first held by him or her in that service, as may be necessary to complete three consecutive years. For the purposes of this section, periods of service separated by a period of retirement or breaks in service may be aggregated to constitute a period of three consecutive years, if the periods of service are consecutive except for such a period of retirement or breaks. If a break in service did not exceed six months in duration, time included in the break and compensation earnable during that time shall be included in computation of final compensation. If a break in service exceeded six months in duration, the first six months thereof and the compensation earnable during those six months shall be included in computation of final compensation, but time included in the break which is in excess of six months and the compensation earnable during that excess time shall be excluded in computation of final compensation. On and after November 13, 1968, this section shall apply to all contracting agencies and to the employees of those agencies whether or not those agencies have previously elected to be subject to this section, except that this section shall not apply to an employee of a contracting agency which has not elected to be subject to this section whose death occurred or whose retirement was effective prior to November 13, 1968.
SEC. 10.Section 20037.5 of the Government Code, as added by Section 56 of Chapter 88 of the Statutes of 1998, is repealed.SEC. 11.Section 20037.5 of the Government Code, as added by Section 56 of Chapter 91 of the Statutes of 1998, is amended to read:20037.5.Notwithstanding Section 20035, final compensation for a state member who has elected to be subject to Section 21353.5, for the purposes of determining any pension or benefit based on service credited under that section, means the highest average annual compensation earnable by the member during any consecutive 36-month period preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier.
SEC. 12.Section 20037.6 of the Government Code is amended to read:20037.6.(a)Notwithstanding Sections 20035 and 20037, final compensation for a person who is employed by the state for the first time and becomes a state member of the system on or after July 1, 2006, and is represented by State Bargaining Unit 2, means the highest average annual compensation earnable by the member during any consecutive 36-month period preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier.
(b)This section applies to service credit accrued while a member of State Bargaining Unit 2.
(c)This section does not apply to:
(1)Former state employees who return to state employment on or after July 1, 2006.
(2)State employees hired prior to July 1, 2006, who were subject to Section 20281.5 during the first 24 months of state employment.
(3)State employees hired prior to July 1, 2006, who become subject to representation by State Bargaining Unit 2 on or after July 1, 2006.
(4)State employees on an approved leave of absence who return to active employment on or after July 1, 2006.
SEC. 13.Section 20037.7 of the Government Code is amended to read:20037.7.(a)Notwithstanding Sections 20035 and 20037, final compensation for a person who is employed by the state for the first time and becomes a state member of the system on or after January 1, 2007, and is represented by State Bargaining Unit 1, 3, 4, 11, 14, 15, 17, 20, or 21, means the highest average annual compensation earnable by the member during any consecutive 36-month period preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier.
(b)This section applies to service credit accrued while a member of State Bargaining Unit 1, 3, 4, 11, 14, 15, 17, 20, or 21.
(c)This section does not apply to:
(1)Former state employees previously employed before January 1, 2007, who return to state employment on or after January 1, 2007.
(2)State employees hired prior to January 1, 2007, who were subject to Section 20281.5 during the first 24 months of state employment.
(3)State employees hired prior to January 1, 2007, who become subject to representation by State Bargaining Unit 1, 3, 4, 11, 14, 15, 17, 20, or 21 on or after January 1, 2007.
(4)State employees on an approved leave of absence employed before January 1, 2007, who return to active employment on or after January 1, 2007.
SEC. 14.Section 20037.8 of the Government Code is amended to read:20037.8.(a)Notwithstanding Sections 20035 and 20037, final compensation for a person who is employed by the state for the first time and becomes a state member of the system on or after January 1, 2007, and is represented by State Bargaining Unit 12 or 13, means the highest average annual compensation earnable by the member during any consecutive 36-month period preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier.
(b)This section applies to service credit accrued while a member of State Bargaining Unit 12 or 13.
(c)This section does not apply to:
(1)Former state employees previously employed before January 1, 2007, who return to state employment on or after January 1, 2007.
(2)State employees hired prior to January 1, 2007, who were subject to Section 20281.5 during the first 24 months of state employment.
(3)State employees hired prior to January 1, 2007, who become subject to representation by State Bargaining Unit 12 or 13 on or after January 1, 2007.
(4)State employees on an approved leave of absence employed before January 1, 2007, who return to active employment on or after January 1, 2007.
SEC. 15.Section 20037.9 of the Government Code is amended to read:20037.9.(a)Notwithstanding Sections 20035 and 20037, final compensation for a person who is employed by the state for the first time and becomes a state member of the system on or after January 1, 2007, and is represented by State Bargaining Unit 16 or 19, means the highest average annual compensation earnable by the member during any consecutive 36-month period preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier.
(b)This section applies to service credit accrued while a member of State Bargaining Unit 16 or 19.
(c)This section does not apply to:
(1)Former state employees previously employed before January 1, 2007, who return to state employment on or after January 1, 2007.
(2)State employees hired prior to January 1, 2007, who were subject to Section 20281.5 during the first 24 months of state employment.
(3)State employees hired prior to January 1, 2007, who become subject to representation by State Bargaining Unit 16 or 19 on or after January 1, 2007.
(4)State employees on an approved leave of absence employed before January 1, 2007, who return to active employment on or after January 1, 2007.
SEC. 16.Section 20037.10 of the Government Code is amended to read:20037.10.(a)Notwithstanding Sections 20035 and 20037, final compensation for a person who is employed by the state for the first time and becomes a state member of the system on or after January 1, 2007, and is represented by State Bargaining Unit 7, means the highest average annual compensation earnable by the member during any consecutive 36-month period immediately preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier.
(b)This section applies to service credit accrued while a member of State Bargaining Unit 7.
(c)This section does not apply to:
(1)Service credit accrued while classified as a state peace officer/firefighter while a member of State Bargaining Unit 7.
(2)Former state employees previously employed before January 1, 2007, who return to state employment on or after January 1, 2007.
(3)State employees hired prior to January 1, 2007, who were subject to Section 20281.5 during the first 24 months of state employment.
(4)State employees hired prior to January 1, 2007, who become subject to representation by State Bargaining Unit 7 on or after January 1, 2007.
(5)State employees on an approved leave of absence employed before January 1, 2007, who return to active employment on or after January 1, 2007.
SEC. 17.Section 20037.11 of the Government Code is amended to read:20037.11.(a)Notwithstanding Sections 20035 and 20037, final compensation for a person who is employed by the state for the first time and becomes a state member of the system on or after January 1, 2007, and is represented by State Bargaining Unit 10, means the highest average annual compensation earnable by the member during any consecutive 36-month period preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier.
(b)This section applies to service credit accrued while a member of State Bargaining Unit 10.
(c)This section does not apply to:
(1)Former state employees previously employed before January 1, 2007, who return to state employment on or after January 1, 2007.
(2)State employees hired prior to January 1, 2007, who were subject to Section 20281.5 during the first 24 months of state employment.
(3)State employees hired prior to January 1, 2007, who become subject to representation by State Bargaining Unit 10 on or after January 1, 2007.
(4)State employees on an approved leave of absence employed before January 1, 2007, who return to active employment on or after January 1, 2007.
SEC. 18.Section 20037.12 of the Government Code is amended to read:20037.12.(a)Notwithstanding Sections 20035 and 20037, final compensation for a person who is employed by the state for the first time and becomes a state member of the system on or after January 1, 2007, and is represented by State Bargaining Unit 18, means the highest average annual compensation earnable by the member during any consecutive 36-month period preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier.
(b)This section applies to service credit accrued while a member of State Bargaining Unit 18.
(c)This section does not apply to:
(1)Former state employees previously employed before January 1, 2007, who return to state employment on or after January 1, 2007.
(2)State employees hired prior to January 1, 2007, who were subject to Section 20281.5 during the first 24 months of state employment.
(3)State employees hired prior to January 1, 2007, who become subject to representation by State Bargaining Unit 18 on or after January 1, 2007.
(4)State employees on an approved leave of absence employed before January 1, 2007, who return to active employment on or after January 1, 2007.
SEC. 19.Section 20037.13 of the Government Code is amended to read:20037.13.(a)Notwithstanding Sections 20035 and 20037, for the purposes of determining any pension or benefit with respect to benefits based on service with the state, final compensation means the highest annual compensation that was earnable by the state member during any consecutive 36-month period of employment preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier.
(b)This section shall only apply to a member appointed to a career executive assignment, as defined in Section 18546, who at the time of appointment meets one or more of the following criteria:
(1)He or she previously had, but does not currently have, permanent status in the civil service.
(2)He or she is a person described in Section 18990 who was not, within the past 12 months, employed by the Legislature for two or more consecutive years.
(3)He or she is a person described in Section 18992 who was not, within the past 12 months, holding a nonelected exempt position in the executive branch.
(c)A state entity that employs a person described in subdivision (b) in a career executive assignment shall notify the Controller of this persons employment status and the Controller shall forward this information to the system.
SEC. 20.Section 20037.14 of the Government Code, as amended by Section 127 of Chapter 296 of the Statutes of 2011, is repealed.SEC. 21.Section 20037.14 of the Government Code, as added by Section 11 of Chapter 163 of the Statutes of 2010, is amended to read:20037.14.(a)Notwithstanding Sections 20035 and 20037, final compensation for a person who is employed by the state for the first time and becomes a state member of the system on or after October 31, 2010, and is represented by State Bargaining Unit 5 or 8, means the highest average annual compensation earnable by the member during any consecutive 36-month period preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier.
(b)This section applies to service credit accrued while a member of State Bargaining Unit 5 or 8 or in a class related to State Bargaining Unit 5 or 8 as an employee who is excepted from the definition of state employee in subdivision (c) of Section 3513, or an officer or employee of the executive branch of state government who is not a member of the civil service.
(c)This section does not apply to:
(1)Former state employees previously employed before October 31, 2010, who return to state employment on or after October 31, 2010.
(2)State employees hired prior to October 31, 2010, who were subject to Section 20281.5 during the first 24 months of state employment.
(3)State employees hired prior to October 31, 2010, who become subject to representation by State Bargaining Unit 5 or 8 on or after October 31, 2010.
(4)State employees on an approved leave of absence employed before October 31, 2010, who return to active employment on or after October 31, 2010.
SEC. 22.Section 20037.15 of the Government Code is amended to read:20037.15.(a)Notwithstanding Sections 3517.8, 20035, and 20037, final compensation for a person who is employed for the first time and becomes a member of the system on or after January 15, 2011, means the highest average annual compensation earnable by the member during any consecutive 36-month period preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier.
(b)This section applies to the following:
(1)Service credit accrued while a member of State Bargaining Unit 6 or 9 or in a class related to State Bargaining Unit 6 or 9 as an employee who is excepted from the definition of state employee in subdivision (c) of Section 3513, or an officer or employee of the executive branch of state government who is not a member of the civil service.
(2)Service credit accrued while a peace officer/firefighter member represented by State Bargaining Unit 7 or in a class related to peace officer/firefighter members in State Bargaining Unit 7 as an employee who is excepted from the definition of state employee in subdivision (c) of Section 3513, or an officer or employee of the executive branch of state government who is not a member of the civil service.
(3)Service credit accrued as an employee who is excepted from the definition of state employee in subdivision (c) of Section 3513, or an officer or employee of the executive branch of state government who is not a member of the civil service.
(4)Service credit accrued as an employee of the Legislature, the judicial branch, or the California State University.
(c)This section does not apply to:
(1)Former employees previously employed before January 15, 2011, who return to employment on or after January 15, 2011, and who were previously subject to a 12-month average.
(2)State employees hired prior to January 15, 2011, who were subject to Section 20281.5 during the first 24 months of state employment, and who were previously subject to a 12-month average.
(3)State employees hired prior to January 15, 2011, who become subject to representation by State Bargaining Unit 6, 7, or 9 on or after January 15, 2011, and who were previously subject to a 12-month average.
(4)Employees on an approved leave of absence employed before January 15, 2011, who return to active employment on or after January 15, 2011, and who were previously subject to a 12-month average.
(d)If this section is in conflict with a memorandum of understanding that is current and in effect on January 15, 2011, the memorandum of understanding shall be controlling while it remains in effect. Upon expiration of the memorandum of understanding that is in effect and current on January 15, 2011, this section shall be controlling and may not be superseded by a subsequent memorandum of understanding.
SEC. 23.Section 20229 of the Government Code is amended to read:20229.(a)The board, notwithstanding Section 10231.5, shall provide the Legislature, the Governor, and the Chair of the California Actuarial Advisory Panel, established pursuant to Section 7507.2, with an annual report that includes all of the following, as these items apply to state employee retirement plans:
(1)(A)A description of the investment return assumption utilized by the board when determining the contribution rates.
(B)A calculation of the contribution rates utilizing an investment return assumption 2 percentage points above and 2 percentage points below the investment return assumption utilized by the board.
(2)(A)A description of the amortization period for any unfunded liabilities utilized by the board when determining the contribution rates.
(B)A calculation of the contribution rates based on an amortization period equal to the estimated average remaining service periods of employees covered by the contributions.
(3)(A)A description of the discount rate utilized by the board for reporting liabilities.
(B)A calculation of those liabilities based upon a discount rate that is 2 percent below the long-term rate of return actually assumed by the board.
(4)The market value of the assets controlled by the board and an explanation of how the actuarial value assigned to those assets differs from the market value of those assets.
(b)Each legislative session, the Chair of the California Actuarial Advisory Panel, or his or her designee, shall, during a publicly noticed joint hearing of the Senate Committee on Public Employment and Retirement and the Assembly Committee on Public Employees, Retirement and Social Security, do all of the following based on information received in the report required by subdivision (a):
(1)Explain the role played by the investment return assumption and amortization period in the calculation of the contribution rates.
(2)Describe the consequences for future state budgets should the investment return assumption not be realized.
(3)Report whether the boards amortization period exceeds the estimated average remaining service periods of employees covered by the contributions.
(c)The report required by subdivision (a) shall be submitted in compliance with Section 9795.
SEC. 24.Section 20537 of the Government Code is amended to read:20537.The board may charge interest on the amount of any payment due and unpaid by a contracting agency until payment is received. Interest shall be charged at the greater of the annual return on the systems investments for the year prior to the year in which payments are not timely made or a simple annual rate of 10 percent. The interest shall be deemed interest earnings for the year in which the late payment is received.
SEC. 25.Section 20572 of the Government Code is amended to read:20572.(a)If a contracting agency fails for 30 days after demand by the board to pay in full any installment of contributions required by its contract, or fails for three months after demand therefor by the board to file any information required in the administration of this system with respect to that contracting agencys employees, or if the board determines that the contracting agency is no longer in existence, the board may terminate that contract by resolution adopted by a majority vote of its members effective 60 days after notice of its adoption has been mailed by registered mail to the governing body of the contracting agency.
(b)In addition to the interest obligations set forth in Section 20537, if a contracting agency fails to pay in full any installment of the contributions when due and the failure continues for a period of three months, the contracting agency may be assessed a penalty of 10 percent of the total amount due and unpaid, including any accrued and unpaid interest. The penalty may be assessed once during each 30-day period that the outstanding amount remains unpaid. In addition, the contracting agency may be assessed the costs of collection, including reasonable legal fees and litigation costs, including, without limitation, legal fees and legal costs incurred in bankruptcy, when necessary to collect any amounts due.
SEC. 26.Section 20577.5 of the Government Code is amended to read:20577.5.Notwithstanding Section 20577, the board may elect not to impose a reduction, or to impose a lesser reduction, on a plan that has been terminated pursuant to Section 20572 if (a) the board has made all reasonable efforts to collect the amount necessary to fully fund the liabilities of the plan and (b) the board finds that not reducing the benefits, or imposing a lesser reduction, will not impact the actuarial soundness of the terminated agency pool.
SEC. 27.Section 20578 of the Government Code is amended to read:20578.(a)Except as provided in subdivision (b), on and after January 1, 1991, the rights and benefits of a former employee of a contracting agency which terminated on or before January 1, 1991, or of his or her beneficiary, shall be the same as if the agency had continued as a contracting agency. Any monthly allowance of that individual, or of his or her beneficiary, that was reduced pursuant to Section 20577 because the contracting agency failed to pay the board the amount of the difference shall not be subject to continued reduction on or after January 1, 1991. As of January 1, 1991, benefits shall be paid at the level provided in the contract prior to that reduction. However, if a former employee of a contracting agency that terminated on or before January 1, 1991, becomes employed by another covered employer after the date of termination, including an employer subject to reciprocity, the benefits shall be calculated by using the highest compensation earned by the individual.
In accordance with Section 20580, an individual who has withdrawn his or her accumulated contributions from the terminated agency shall not be permitted to redeposit any withdrawn contributions upon again becoming a member of this system.
(b)If a contracting agency has not paid the system for any deficit in funding for earned benefits, as determined pursuant to Section 20577, members shall be entitled to the benefits to which members of the plan were entitled 36 months prior to the date the agency notified the board of its intention to terminate its contract or 36 months prior to the date the board notified the agency of its intent to terminate the contract, whichever is earlier. Entitlement to earned benefits under this subdivision shall be subject to Section 20577.5.
SEC. 28.Section 20638 of the Government Code is amended to read:20638.The highest annual average compensation during any consecutive 12- or 36-month period of employment as a member of a county retirement system shall be considered compensation earnable by a member of this system for purposes of computing final compensation for the member provided:
(a)(1)Entry into employment in which he or she became a member in one system occurred on or after October 1, 1957, and within 90 days of discontinuance of employment as a member of the other system.
(2)This subdivision shall not deny the benefit of this section to any person retiring after October 1, 1963, who entered membership prior to October 1, 1957, if he or she entered the employment in which he or she became a member within 90 days of termination of employment in which he or she was a member of the other system, and he or she became a member within seven months of entry into employment, or, if an employee of a district as defined in Section 31468, became a member at the time the district was included in a county retirement system.
(b)He or she retires concurrently under both systems and is credited with the period of service under the county system at the time of retirement.
SEC. 29.Section 20900 of the Government Code is amended to read:20900.(a)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 employees 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 and this system, shall verify the eligibility of the applicant for the reduced workload program. This section shall be applicable only to a member who meets the following criteria:
(1)The member is one of the following:
(A)An academic employee of the California State University.
(B)A certificated employee of a school district.
(C)An academic employee of a community college district.
(2)The member meets the criteria provided in Sections 44922 and 87483 of the Education Code or Section 89516 of the Education Code.
(3)The member is not older than 70 years of age and is limited to a period of five years of part-time status.
(b)The employer shall maintain the necessary records to separately identify each employee receiving credit pursuant to this section.
SEC. 30.Section 21499 of the Government Code is amended to read:21499.(a)Notwithstanding Section 21498, when either an initial payment of a preretirement or postretirement death allowance or a preretirement or postretirement lump-sum benefit is payable in an amount of ten dollars ($10) or more, it shall be authorized to the Controller within 45 days of receipt by this system of all the necessary information, including the return of warrants issued or any overpayment outstanding after the date of the death of the annuitant.
(b)If any payment is not made within that time limitation, the payment shall also include interest at the default interest rate established in Section 1 of Article XV of the California Constitution for time following the expiration of that time limitation.
SEC. 31.Section 21626.5 of the Government Code is amended to read:21626.5.(a)For purposes of Section 21624, 21626, 21627, 21629, or 21630, a surviving domestic partner shall be treated in the same manner as a surviving spouse if either:
(1)The domestic partnership was registered for one year prior to the members service retirement date or at the disability retirement date and continuously until the date of the members death.
(2)The member retired prior to January 1, 2006, and both the member and his or her domestic partner, who currently are in a state-registered domestic partnership, sign an affidavit stating that, at the time prescribed by the retirement system for married spouses to qualify for survivor continuance, the member and the domestic partner would have qualified to be registered as domestic partners pursuant to Section 297 of the Family Code.
(b)For purposes of Section 21624, 21626, 21627, 21629, or 21630, an individual who is the same gender as the member shall be treated in the same manner as a surviving spouse if the following conditions are satisfied:
(1)The individual entered into marriage with the member on or after the date when individuals of the same gender were legally allowed to enter into marriage and was married continuously until the date of the members death.
(2)Either of the following applies:
(A)The member retired prior to the date when individuals of the same gender were legally allowed to enter into marriage, and both the member and his or her spouse, who are currently married, sign an affidavit stating that, at the time prescribed by the retirement system for spouses to qualify for a survivor continuance, the member and the individual would have qualified to be legally married had it been legally possible for people of the same gender to marry.
(B)The individual originally qualified to become a surviving spouse under subdivision (a).
SEC. 32.Section 22820 of the Government Code is amended to read:22820.(a)Upon the death, on or after January 1, 2002, of a firefighter employed by a county, city, city and county, district, or other political subdivision of the state, a firefighter employed by the Department of Forestry and Fire Protection, a firefighter employed by the federal government who was a resident of this state and whose regular duty assignment was to perform firefighting services within this state, or a peace officer as defined in Section 830.1, 830.2, 830.3, 830.31, 830.32, 830.33, 830.34, 830.35, 830.36, 830.37, 830.38, 830.39, 830.4, 830.5, 830.55, or 830.6 of the Penal Code, if the death occurred as a result of injury or disease arising out of and in the course of his or her official duties, the surviving spouse or other eligible family member of the deceased firefighter or peace officer, if uninsured, is deemed to be an annuitant under Section 22760 for purposes of enrollment. All eligible family members of the deceased firefighter or peace officer who are uninsured may enroll in a health benefit plan of the surviving spouses choice. However, an unmarried child of the surviving spouse is not eligible to enroll in a health benefit plan under this section if the child was not a family member under Section 22775 and regulations pertinent thereto prior to the firefighters or peace officers date of death. The employer of the deceased firefighter or peace officer shall notify the board within 10 business days of the death of the employee and any updated contact information of the surviving spouse or family member if that spouse or family member may be eligible for enrollment in a health benefit plan under this section.
(b)Upon notification, the board shall promptly determine eligibility and shall forward to the eligible spouse or family member the materials necessary for enrollment. In the event of a dispute regarding whether a firefighters or peace officers death occurred as a result of injury or disease arising out of and in the course of his or her official duties as required under subdivision (a), that dispute shall be determined by the Workers Compensation Appeals Board, subject to the same procedures and standards applicable to hearings relating to claims for workers compensation benefits. The jurisdiction of the Workers Compensation Appeals Board under this section is limited to the sole issue of industrial causation and this section does not authorize the Workers Compensation Appeals Board to award costs against the system.
(c)(1)Notwithstanding any other provision of law, and except as otherwise provided in subdivision (d), the state shall pay the employer contribution required for enrollment under this part for the uninsured surviving spouse of a deceased firefighter or peace officer for life, and the other uninsured eligible family members of a deceased firefighter or peace officer, provided the family member meets the eligibility requirements of Section 22775 and regulations pertinent thereto.
(2)The contribution payable by the state for each uninsured surviving spouse and other uninsured eligible family members shall be adjusted annually and be equal to the amount specified in Section 22871.
(3)The states contribution under this section shall commence on the effective date of enrollment of the uninsured surviving spouse or other uninsured eligible family members. The contribution of each surviving spouse and eligible family member shall be the total cost per month of the benefit coverage afforded him or her under the plan less the portion contributed by the state pursuant to this section.
(d)The cancellation of coverage by an annuitant, as defined in this section, shall be final without option to reenroll, unless coverage is canceled because of enrollment in an insurance plan from another source.
(e)For purposes of this section, surviving spouse means a spouse who was married to the deceased firefighter or peace officer on the deceaseds date of death and either was married for a continuous period of at least one year prior to the date of death or was married to the deceased prior to the date the deceased firefighter or peace officer sustained the injury or disease resulting in death.
(f)For purposes of this section, uninsured means that the surviving spouse is not enrolled in an employer-sponsored health plan under which the employer contribution covers 100 percent of the cost of health care premiums.
(g)The board has no duty to identify, locate, or notify any surviving spouse or eligible family member who may be or may become eligible for benefits under this section.
Notwithstanding any other provision, the governing board of a community college district may establish regulations that allow academic employees to reduce their workload from full-time to part-time duties. The regulations shall include, but shall not be limited to, the following if the employees wish to reduce their workload and maintain retirement benefits pursuant to Section 22713 of this code or Section 20900 of the Government Code:
(a)The employee shall have reached the age of 55 prior to reduction in workload.
(b)The employee shall have been employed full time in an academic position or a position requiring certification qualifications, or both, for at least 10 years of which the immediately preceding five years were full-time employment.
(c)During the period immediately preceding a request for a reduction in workload, the employee shall have been employed full time in an academic position or a position requiring certification qualifications, or both, for a total of at least five years without a break in service. For purposes of this subdivision, sabbaticals and other approved leaves of absence shall not constitute a break in service. Time spent on a sabbatical or other approved leave of absence shall not be used in computing the five-year full-time service requirement prescribed by this subdivision.
(d)The option of part-time employment shall be exercised at the request of the employee and can be revoked only with the mutual consent of the employer and the employee.
(e)The employee shall be paid a salary which is the pro rata share of the salary he or she would be earning had he or she not elected to exercise the option of part-time employment but shall retain all other rights and benefits for which he or she makes the payments that would be required if he or she remained in full-time employment.
The employee shall receive health benefits as provided in Section 53201 of the Government Code in the same manner as a full-time employee.
(f)The minimum part-time employment shall be the equivalent of one-half of the number of days of service required by the employees contract of employment during his or her final year of service in a full-time position.
(g)The period of this part-time employment shall not exceed five years for employees subject to Section 20900 of the Government Code or 10 years for employees subject to Section 22713 of this code.
(h)The period of part-time employment of employees subject to Section 20815 of the Government Code shall not extend beyond the end of the college year during which the employee reaches his or her 70th birthday. This subdivision shall not apply to any employee subject to Section 22713 of this code.
SEC. 2.Section 7502 of the Government Code is amended to read:7502.The State Controller shall review the annual financial report of each state and local public retirement system submitted pursuant to Section 7504 giving particular consideration to the adequacy of funding of each system. The State Controller shall also review the triennial valuation of each public retirement system submitted pursuant to Section 7504 and shall give particular consideration to the assumption concerning the inflation element in salary and wage increases, mortality, service retirement rates, withdrawal rates, disability retirement rates, and rate of return on total assets.
The State Controller shall establish an advisory committee that shall include actuaries who have attained the designation of Associate or Fellow of the Society of Actuaries and state and local public retirement system administrators to assist in carrying out the duties imposed by this section.
SEC. 3.Section 7504 of the Government Code is amended to read:7504.(a)All state and local public retirement systems shall, not less than triennially, secure the services of an actuary. For the purposes of this section, actuary means an actuary who satisfies the qualification standards for actuaries issuing statements of actuarial opinion in the United States with regard to pensions or other postemployment benefits and who has demonstrated experience in public retirement systems. The actuary shall perform a valuation of the system utilizing actuarial assumptions and techniques established by the agency that are, in the aggregate, reasonably related to the experience and the actuarys best estimate of anticipated experience under the system. Any differences between the actuarial assumptions and techniques used by the actuary that differ significantly from those established by the agency shall be disclosed in the actuarys report and the effect of the differences on the actuarys statement of costs and obligations shall be shown.
(b)All state and local public retirement systems shall secure the services of a qualified person to perform an attest audit of the systems financial statements. A qualified person means any of the following:
(1)A person who is licensed to practice as a certified public accountant in this state by the California Board of Accountancy.
(2)A person who is registered and entitled to practice as a public accountant in this state by the California Board of Accountancy.
(3)A county auditor in any 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).
(4)A county auditor in any county having a pension trust and retirement plan established pursuant to Section 53216.
(c)All state and local public retirement systems shall submit audited financial statements to the State Controller at the earliest practicable opportunity within six months of the close of each fiscal year. However, the State Controller may delay the filing date for reports due in the first year until the time as report forms have been developed that, in his or her judgment, will satisfy the requirements of this section. The financial statements shall be prepared in accordance with generally accepted accounting principles in the form and manner prescribed by the State Controller. The penalty prescribed in Section 53895 shall be invoked for failure to comply with this section. Upon a satisfactory showing of good cause, the State Controller may waive the penalty for late filing provided by this subdivision.
(d)The State Controller shall compile and publish a report annually on the financial condition of all state and local public retirement systems containing, but not limited to, the data required in Section 7502. The report shall be published within 12 months of the receipt of the information, and in no case later than 18 months after the end of the fiscal year upon which the information in the report is based.
SEC. 4.Section 7507 of the Government Code is amended to read:7507.(a)For the purpose of this section:
(1)Actuary means an actuary as defined in Section 7504.
(2)Future annual costs includes, but is not limited to, annual dollar changes, or the total dollar changes involved when available, as well as normal cost and any change in accrued liability.
(b)(1)Except as provided in paragraph (2), the Legislature and local legislative bodies, including community college district governing boards, when considering changes in retirement benefits or other postemployment benefits, shall secure the services of an actuary to provide a statement of the actuarial impact upon future annual costs, including normal cost and any additional accrued liability, before authorizing changes in public retirement plan benefits or other postemployment benefits.
(2)The requirements of this subdivision do not apply to:
(A)An annual increase in a premium that does not exceed 3 percent under a contract of insurance.
(B)A change in postemployment benefits, other than pension benefits, mandated by the state or federal government or made by an insurance carrier in connection with the renewal of a contract of insurance.
(c)(1)(A)With regard to local legislative bodies, including community college district governing boards, the future costs of changes in retirement benefits or other postemployment benefits, as determined by the actuary, shall be made public at a public meeting at least two weeks prior to the adoption of any changes in public retirement plan benefits or other postemployment benefits. If the future costs of the changes exceed one-half of 1 percent of the future annual costs, as defined in paragraph (2) of subdivision (a), of the existing benefits for the legislative body, an actuary shall be present to provide information as needed at the public meeting at which the adoption of a benefit change shall be considered. The adoption of any benefit to which this section applies shall not be placed on a consent calendar.
(B)The requirements of this paragraph do not apply to:
(i)An annual increase in a premium that does not exceed 3 percent under a contract of insurance.
(ii)A change in postemployment benefits, other than pension benefits, mandated by the state or federal government or made by an insurance carrier in connection with the renewal of a contract of insurance.
(2)With regard to the Legislature, the future costs as determined by the actuary shall be made public at the policy and fiscal committee hearings to consider the adoption of any changes in public retirement plan benefits or other postemployment benefits. The adoption of any benefit to which this section applies shall not be placed on a consent calendar.
(d)Upon the adoption of any benefit change to which this section applies, the person with the responsibilities of a chief executive officer in an entity providing the benefit, however that person is denominated, shall acknowledge in writing that he or she understands the current and future cost of the benefit as determined by the actuary. For the adoption of benefit changes by the state, this person shall be the Director of Human Resources.
(e)The requirements of this section do not apply to a school district or a county office of education, which shall instead comply with requirements regarding public notice of, and future cost determination for, benefit changes that have been enacted to regulate these entities. These requirements include, but are not limited to, those enacted by Chapter 1213 of the Statutes of 1991 and by Chapter 52 of the Statutes of 2004.
SEC. 5.Section 7507.2 of the Government Code is amended to read:7507.2.(a)There is hereby enacted the California Actuarial Advisory Panel. The panel shall provide impartial and independent information on pensions, other postemployment benefits, and best practices to public agencies and shall meet quarterly.
(b)The responsibilities of the California Actuarial Advisory Panel shall include, but are not limited to:
(1)Defining the range of actuarial model policies and best practices for public retirement plan benefits, including pensions and other postemployment benefits.
(2)Developing pricing and disclosure standards for California public sector benefit improvements.
(3)Developing quality control standards for California public sector actuaries.
(4)Gathering model funding policies and practices.
(5)Replying to policy questions from public retirement systems in California.
(6)Providing comment upon request by public agencies.
(c)The California Actuarial Advisory Panel shall consist of eight members. Each member shall be an actuary who has attained the designation of Associate or Fellow of the Society of Actuaries and who has demonstrated experience with public sector clients. Members shall be appointed by the entities listed below, and each member shall serve a three-year term, provided that, in the initial appointments only, the panelists named by the University of California, the Senate, and one of the panelists named by the Governor shall serve two-year terms. The Governor shall appoint two panelists, and one panelist shall be appointed by each of the following:
(1)The Teachers Retirement Board.
(2)The Board of Administration of the Public Employees Retirement System.
(3)The State Association of County Retirement Systems.
(4)The Board of Regents of the University of California.
(5)The Speaker of the Assembly.
(6)The Senate Committee on Rules.
(d)The California Actuarial Advisory Panel shall be located in the Controllers office, which shall provide support staff to the panel.
(e)The opinions of the California Actuarial Advisory Panel are nonbinding and advisory only. The opinions of the panel shall not, in any case, be used as the basis for litigation.
(f)A member of the California Actuarial Advisory Panel shall receive reimbursement for expenses that shall be paid by the authority that appointed the member.
(g)The California Actuarial Advisory Panel shall report to the Legislature on or before February 1 of each year.
SEC. 6.Section 20034 of the Government Code is amended to read:20034.The highest annual average compensation during any consecutive 12- or 36-month period of employment as a member of any retirement system maintained by the university shall be considered compensation earnable by a member of this system for purposes of computing final compensation for the member providing he or she retires concurrently under both systems.
SEC. 7.Section 20035 of the Government Code is amended to read:20035.(a)Notwithstanding Section 20037, final compensation for the purposes of determining any pension or benefit with respect to a state member who retires or dies on or after July 1, 1991, and with respect to benefits based on service with the state, means the highest annual compensation which was earnable by the state member during any consecutive 12-month period of employment preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier.
(b)With respect to a state member who retires or dies on or after July 1, 1991, and who was a managerial employee, as defined by subdivision (e) of Section 3513, or a supervisory employee, as defined by subdivision (g) of Section 3513, whose monthly salary range was administratively reduced by 5 percent because of the salary range reductions administratively imposed upon managers and supervisors during the 199192 fiscal year, final compensation means the highest annual compensation the state member would have earned had his or her salary range not been reduced by the 5-percent reduction. This subdivision shall only apply if the period during which the state members salary was reduced would have otherwise been included in determining his or her final compensation. The costs, if any, that may result from the use of the higher final compensation shall be paid for by the employer in the same manner as other retirement benefits are funded.
SEC. 8.Section 20035.5 of the Government Code is amended to read:20035.5.Notwithstanding Section 20037, final compensation for the purposes of determining any pension or benefit with respect to a school member who retires or dies on or after January 1, 2000, and with respect to benefits based on service with a school employer, means the highest annual compensation that was earnable by the school member during any consecutive 12-month period of employment preceding the effective date of his or her retirement or the date of his or her last separation from service if earlier.
SEC. 9.Section 20037 of the Government Code is amended to read:20037.For a state member, or for a local member who is an employee of a contracting agency that is subject to this section, final compensation means the highest annual average compensation earnable by a member during any consecutive 36-month period of employment preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier, including any or all of the period or periods of (a) service required for qualification for membership, or (b) prior service which qualifies for credit under this system, if any, immediately preceding membership, or (c) time prior to entering state service at the compensation earnable by him or her in the position first held by him or her in that service, as may be necessary to complete three consecutive years. For the purposes of this section, periods of service separated by a period of retirement or breaks in service may be aggregated to constitute a period of three consecutive years, if the periods of service are consecutive except for such a period of retirement or breaks. If a break in service did not exceed six months in duration, time included in the break and compensation earnable during that time shall be included in computation of final compensation. If a break in service exceeded six months in duration, the first six months thereof and the compensation earnable during those six months shall be included in computation of final compensation, but time included in the break which is in excess of six months and the compensation earnable during that excess time shall be excluded in computation of final compensation. On and after November 13, 1968, this section shall apply to all contracting agencies and to the employees of those agencies whether or not those agencies have previously elected to be subject to this section, except that this section shall not apply to an employee of a contracting agency which has not elected to be subject to this section whose death occurred or whose retirement was effective prior to November 13, 1968.
SEC. 10.Section 20037.5 of the Government Code, as added by Section 56 of Chapter 88 of the Statutes of 1998, is repealed.SEC. 11.Section 20037.5 of the Government Code, as added by Section 56 of Chapter 91 of the Statutes of 1998, is amended to read:20037.5.Notwithstanding Section 20035, final compensation for a state member who has elected to be subject to Section 21353.5, for the purposes of determining any pension or benefit based on service credited under that section, means the highest average annual compensation earnable by the member during any consecutive 36-month period preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier.
SEC. 12.Section 20037.6 of the Government Code is amended to read:20037.6.(a)Notwithstanding Sections 20035 and 20037, final compensation for a person who is employed by the state for the first time and becomes a state member of the system on or after July 1, 2006, and is represented by State Bargaining Unit 2, means the highest average annual compensation earnable by the member during any consecutive 36-month period preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier.
(b)This section applies to service credit accrued while a member of State Bargaining Unit 2.
(c)This section does not apply to:
(1)Former state employees who return to state employment on or after July 1, 2006.
(2)State employees hired prior to July 1, 2006, who were subject to Section 20281.5 during the first 24 months of state employment.
(3)State employees hired prior to July 1, 2006, who become subject to representation by State Bargaining Unit 2 on or after July 1, 2006.
(4)State employees on an approved leave of absence who return to active employment on or after July 1, 2006.
SEC. 13.Section 20037.7 of the Government Code is amended to read:20037.7.(a)Notwithstanding Sections 20035 and 20037, final compensation for a person who is employed by the state for the first time and becomes a state member of the system on or after January 1, 2007, and is represented by State Bargaining Unit 1, 3, 4, 11, 14, 15, 17, 20, or 21, means the highest average annual compensation earnable by the member during any consecutive 36-month period preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier.
(b)This section applies to service credit accrued while a member of State Bargaining Unit 1, 3, 4, 11, 14, 15, 17, 20, or 21.
(c)This section does not apply to:
(1)Former state employees previously employed before January 1, 2007, who return to state employment on or after January 1, 2007.
(2)State employees hired prior to January 1, 2007, who were subject to Section 20281.5 during the first 24 months of state employment.
(3)State employees hired prior to January 1, 2007, who become subject to representation by State Bargaining Unit 1, 3, 4, 11, 14, 15, 17, 20, or 21 on or after January 1, 2007.
(4)State employees on an approved leave of absence employed before January 1, 2007, who return to active employment on or after January 1, 2007.
SEC. 14.Section 20037.8 of the Government Code is amended to read:20037.8.(a)Notwithstanding Sections 20035 and 20037, final compensation for a person who is employed by the state for the first time and becomes a state member of the system on or after January 1, 2007, and is represented by State Bargaining Unit 12 or 13, means the highest average annual compensation earnable by the member during any consecutive 36-month period preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier.
(b)This section applies to service credit accrued while a member of State Bargaining Unit 12 or 13.
(c)This section does not apply to:
(1)Former state employees previously employed before January 1, 2007, who return to state employment on or after January 1, 2007.
(2)State employees hired prior to January 1, 2007, who were subject to Section 20281.5 during the first 24 months of state employment.
(3)State employees hired prior to January 1, 2007, who become subject to representation by State Bargaining Unit 12 or 13 on or after January 1, 2007.
(4)State employees on an approved leave of absence employed before January 1, 2007, who return to active employment on or after January 1, 2007.
SEC. 15.Section 20037.9 of the Government Code is amended to read:20037.9.(a)Notwithstanding Sections 20035 and 20037, final compensation for a person who is employed by the state for the first time and becomes a state member of the system on or after January 1, 2007, and is represented by State Bargaining Unit 16 or 19, means the highest average annual compensation earnable by the member during any consecutive 36-month period preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier.
(b)This section applies to service credit accrued while a member of State Bargaining Unit 16 or 19.
(c)This section does not apply to:
(1)Former state employees previously employed before January 1, 2007, who return to state employment on or after January 1, 2007.
(2)State employees hired prior to January 1, 2007, who were subject to Section 20281.5 during the first 24 months of state employment.
(3)State employees hired prior to January 1, 2007, who become subject to representation by State Bargaining Unit 16 or 19 on or after January 1, 2007.
(4)State employees on an approved leave of absence employed before January 1, 2007, who return to active employment on or after January 1, 2007.
SEC. 16.Section 20037.10 of the Government Code is amended to read:20037.10.(a)Notwithstanding Sections 20035 and 20037, final compensation for a person who is employed by the state for the first time and becomes a state member of the system on or after January 1, 2007, and is represented by State Bargaining Unit 7, means the highest average annual compensation earnable by the member during any consecutive 36-month period immediately preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier.
(b)This section applies to service credit accrued while a member of State Bargaining Unit 7.
(c)This section does not apply to:
(1)Service credit accrued while classified as a state peace officer/firefighter while a member of State Bargaining Unit 7.
(2)Former state employees previously employed before January 1, 2007, who return to state employment on or after January 1, 2007.
(3)State employees hired prior to January 1, 2007, who were subject to Section 20281.5 during the first 24 months of state employment.
(4)State employees hired prior to January 1, 2007, who become subject to representation by State Bargaining Unit 7 on or after January 1, 2007.
(5)State employees on an approved leave of absence employed before January 1, 2007, who return to active employment on or after January 1, 2007.
SEC. 17.Section 20037.11 of the Government Code is amended to read:20037.11.(a)Notwithstanding Sections 20035 and 20037, final compensation for a person who is employed by the state for the first time and becomes a state member of the system on or after January 1, 2007, and is represented by State Bargaining Unit 10, means the highest average annual compensation earnable by the member during any consecutive 36-month period preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier.
(b)This section applies to service credit accrued while a member of State Bargaining Unit 10.
(c)This section does not apply to:
(1)Former state employees previously employed before January 1, 2007, who return to state employment on or after January 1, 2007.
(2)State employees hired prior to January 1, 2007, who were subject to Section 20281.5 during the first 24 months of state employment.
(3)State employees hired prior to January 1, 2007, who become subject to representation by State Bargaining Unit 10 on or after January 1, 2007.
(4)State employees on an approved leave of absence employed before January 1, 2007, who return to active employment on or after January 1, 2007.
SEC. 18.Section 20037.12 of the Government Code is amended to read:20037.12.(a)Notwithstanding Sections 20035 and 20037, final compensation for a person who is employed by the state for the first time and becomes a state member of the system on or after January 1, 2007, and is represented by State Bargaining Unit 18, means the highest average annual compensation earnable by the member during any consecutive 36-month period preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier.
(b)This section applies to service credit accrued while a member of State Bargaining Unit 18.
(c)This section does not apply to:
(1)Former state employees previously employed before January 1, 2007, who return to state employment on or after January 1, 2007.
(2)State employees hired prior to January 1, 2007, who were subject to Section 20281.5 during the first 24 months of state employment.
(3)State employees hired prior to January 1, 2007, who become subject to representation by State Bargaining Unit 18 on or after January 1, 2007.
(4)State employees on an approved leave of absence employed before January 1, 2007, who return to active employment on or after January 1, 2007.
SEC. 19.Section 20037.13 of the Government Code is amended to read:20037.13.(a)Notwithstanding Sections 20035 and 20037, for the purposes of determining any pension or benefit with respect to benefits based on service with the state, final compensation means the highest annual compensation that was earnable by the state member during any consecutive 36-month period of employment preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier.
(b)This section shall only apply to a member appointed to a career executive assignment, as defined in Section 18546, who at the time of appointment meets one or more of the following criteria:
(1)He or she previously had, but does not currently have, permanent status in the civil service.
(2)He or she is a person described in Section 18990 who was not, within the past 12 months, employed by the Legislature for two or more consecutive years.
(3)He or she is a person described in Section 18992 who was not, within the past 12 months, holding a nonelected exempt position in the executive branch.
(c)A state entity that employs a person described in subdivision (b) in a career executive assignment shall notify the Controller of this persons employment status and the Controller shall forward this information to the system.
SEC. 20.Section 20037.14 of the Government Code, as amended by Section 127 of Chapter 296 of the Statutes of 2011, is repealed.SEC. 21.Section 20037.14 of the Government Code, as added by Section 11 of Chapter 163 of the Statutes of 2010, is amended to read:20037.14.(a)Notwithstanding Sections 20035 and 20037, final compensation for a person who is employed by the state for the first time and becomes a state member of the system on or after October 31, 2010, and is represented by State Bargaining Unit 5 or 8, means the highest average annual compensation earnable by the member during any consecutive 36-month period preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier.
(b)This section applies to service credit accrued while a member of State Bargaining Unit 5 or 8 or in a class related to State Bargaining Unit 5 or 8 as an employee who is excepted from the definition of state employee in subdivision (c) of Section 3513, or an officer or employee of the executive branch of state government who is not a member of the civil service.
(c)This section does not apply to:
(1)Former state employees previously employed before October 31, 2010, who return to state employment on or after October 31, 2010.
(2)State employees hired prior to October 31, 2010, who were subject to Section 20281.5 during the first 24 months of state employment.
(3)State employees hired prior to October 31, 2010, who become subject to representation by State Bargaining Unit 5 or 8 on or after October 31, 2010.
(4)State employees on an approved leave of absence employed before October 31, 2010, who return to active employment on or after October 31, 2010.
SEC. 22.Section 20037.15 of the Government Code is amended to read:20037.15.(a)Notwithstanding Sections 3517.8, 20035, and 20037, final compensation for a person who is employed for the first time and becomes a member of the system on or after January 15, 2011, means the highest average annual compensation earnable by the member during any consecutive 36-month period preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier.
(b)This section applies to the following:
(1)Service credit accrued while a member of State Bargaining Unit 6 or 9 or in a class related to State Bargaining Unit 6 or 9 as an employee who is excepted from the definition of state employee in subdivision (c) of Section 3513, or an officer or employee of the executive branch of state government who is not a member of the civil service.
(2)Service credit accrued while a peace officer/firefighter member represented by State Bargaining Unit 7 or in a class related to peace officer/firefighter members in State Bargaining Unit 7 as an employee who is excepted from the definition of state employee in subdivision (c) of Section 3513, or an officer or employee of the executive branch of state government who is not a member of the civil service.
(3)Service credit accrued as an employee who is excepted from the definition of state employee in subdivision (c) of Section 3513, or an officer or employee of the executive branch of state government who is not a member of the civil service.
(4)Service credit accrued as an employee of the Legislature, the judicial branch, or the California State University.
(c)This section does not apply to:
(1)Former employees previously employed before January 15, 2011, who return to employment on or after January 15, 2011, and who were previously subject to a 12-month average.
(2)State employees hired prior to January 15, 2011, who were subject to Section 20281.5 during the first 24 months of state employment, and who were previously subject to a 12-month average.
(3)State employees hired prior to January 15, 2011, who become subject to representation by State Bargaining Unit 6, 7, or 9 on or after January 15, 2011, and who were previously subject to a 12-month average.
(4)Employees on an approved leave of absence employed before January 15, 2011, who return to active employment on or after January 15, 2011, and who were previously subject to a 12-month average.
(d)If this section is in conflict with a memorandum of understanding that is current and in effect on January 15, 2011, the memorandum of understanding shall be controlling while it remains in effect. Upon expiration of the memorandum of understanding that is in effect and current on January 15, 2011, this section shall be controlling and may not be superseded by a subsequent memorandum of understanding.
SEC. 23.Section 20229 of the Government Code is amended to read:20229.(a)The board, notwithstanding Section 10231.5, shall provide the Legislature, the Governor, and the Chair of the California Actuarial Advisory Panel, established pursuant to Section 7507.2 of the Government Code, 7507.2, with an annual report that includes all of the following, as these items apply to state employee retirement plans:
(1)(A)A description of the investment return assumption utilized by the board when determining the contribution rates.
(B)A calculation of the contribution rates utilizing an investment return assumption 2 percentage points above and 2 percentage points below the investment return assumption utilized by the board.
(2)(A)A description of the amortization period for any unfunded liabilities utilized by the board when determining the contribution rates.
(B)A calculation of the contribution rates based on an amortization period equal to the estimated average remaining service periods of employees covered by the contributions.
(3)(A)A description of the discount rate utilized by the board for reporting liabilities.
(B)A calculation of those liabilities based upon a discount rate that is 2 percent below the long-term rate of return actually assumed by the board.
(4)The market value of the assets controlled by the board and an explanation of how the actuarial value assigned to those assets differs from the market value of those assets.
(b)Each legislative session, the Chair of the California Actuarial Advisory Panel, or his or her designee, shall, during a publicly noticed joint hearing of the Senate Committee on Public Employment and Retirement and the Assembly Committee on Public Employees, Retirement and Social Security, do all of the following based on information received in the report required by subdivision (a):
(1)Explain the role played by the investment return assumption and amortization period in the calculation of the contribution rates.
(2)Describe the consequences for future state budgets should the investment return assumption not be realized.
(3)Report whether the boards amortization period exceeds the estimated average remaining service periods of employees covered by the contributions.
(c)The report required by subdivision (a) shall be submitted in compliance with Section 9795.
SEC. 24.Section 20537 of the Government Code is amended to read:20537.The board may charge interest on the amount of any payment due and unpaid by a contracting agency until payment is received. Interest shall be charged at the greater of the annual return on the systems investments for the year prior to the year in which payments are not timely made or a simple annual rate of 10 percent. The interest shall be deemed interest earnings for the year in which the late payment is received.
SEC. 25.Section 20572 of the Government Code is amended to read:20572.(a)If a contracting agency fails for 30 days after demand by the board to pay in full any installment of contributions required by its contract, or fails for three months after demand therefor by the board to file any information required in the administration of this system with respect to that contracting agencys employees, or if the board determines that the contracting agency is no longer in existence, the board may terminate that contract by resolution adopted by a majority vote of its members effective 60 days after notice of its adoption has been mailed by registered mail to the governing body of the contracting agency.
(b)In addition to the interest obligations set forth in Section 20537, if a contracting agency fails to pay in full any installment of the contributions when due and the failure continues for a period of three months, the contracting agency may be assessed a penalty of 10 percent of the total amount due and unpaid, including any accrued and unpaid interest. The penalty may be assessed once during each 30-day period that the outstanding amount remains unpaid. In addition, the contracting agency may be assessed the costs of collection, including reasonable legal fees and litigation costs, including, without limitation, legal fees and legal costs incurred in bankruptcy, when necessary to collect any amounts due.
SEC. 26.Section 20577.5 of the Government Code is amended to read:20577.5.Notwithstanding Section 20577, the board may elect not to impose a reduction, or to impose a lesser reduction, on a plan that has been terminated pursuant to Section 20572 if (a) the board has made all reasonable efforts to collect the amount necessary to fully fund the liabilities of the plan and (b) the board finds that not reducing the benefits, or imposing a lesser reduction, will not impact the actuarial soundness of the terminated agency pool.
SEC. 27.Section 20578 of the Government Code is amended to read:20578.(a)Except as provided in subdivision (b), on and after January 1, 1991, the rights and benefits of a former employee of a contracting agency which terminated on or before January 1, 1991, or of his or her beneficiary, shall be the same as if the agency had continued as a contracting agency. Any monthly allowance of that individual, or of his or her beneficiary, that was reduced pursuant to Section 20577 because the contracting agency failed to pay the board the amount of the difference shall not be subject to continued reduction on or after January 1, 1991. As of January 1, 1991, benefits shall be paid at the level provided in the contract prior to that reduction. However, if a former employee of a contracting agency that terminated on or before January 1, 1991, becomes employed by another covered employer after the date of termination, including an employer subject to reciprocity, the benefits shall be calculated by using the highest compensation earned by the individual.
In accordance with Section 20580, an individual who has withdrawn his or her accumulated contributions from the terminated agency shall not be permitted to redeposit any withdrawn contributions upon again becoming a member of this system.
(b)If a contracting agency has not paid the system for any deficit in funding for earned benefits, as determined pursuant to Section 20577, members shall be entitled to the benefits to which members of the plan were entitled 36 months prior to the date the agency notified the board of its intention to terminate its contract or 36 months prior to the date the board notified the agency of its intent to terminate the contract, whichever is earlier. Entitlement to earned benefits under this subdivision shall be subject to Section 20577.5.
SEC. 28.Section 20638 of the Government Code is amended to read:20638.The highest annual average compensation during any consecutive 12- or 36-month period of employment as a member of a county retirement system shall be considered compensation earnable by a member of this system for purposes of computing final compensation for the member provided:
(a)(1)Entry into employment in which he or she became a member in one system occurred on or after October 1, 1957, and within 90 days of discontinuance of employment as a member of the other system.
(2)This subdivision shall not deny the benefit of this section to any person retiring after October 1, 1963, who entered membership prior to October 1, 1957, if he or she entered the employment in which he or she became a member within 90 days of termination of employment in which he or she was a member of the other system, and he or she became a member within seven months of entry into employment, or, if an employee of a district as defined in Section 31468, became a member at the time the district was included in a county retirement system.
(b)He or she retires concurrently under both systems and is credited with the period of service under the county system at the time of retirement.
SEC. 29.Section 20900 of the Government Code is amended to read:20900.(a)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 employees 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 and this system, shall verify the eligibility of the applicant for the reduced workload program. This section shall be applicable only to a member who meets the following criteria:
(1)The member is one of the following:
(A)An academic employee of the California State University.
(B)A certificated employee of a school district.
(C)An academic employee of a community college district.
(2)The member meets the criteria provided in Sections 44922 and 87483 of the Education Code or Section 89516 of the Education Code.
(3)The member is not older than 70 years of age and is limited to a period of five years of part-time status.
(b)The employer shall maintain the necessary records to separately identify each employee receiving credit pursuant to this section.
SEC. 30.Section 20963 of the Government Code is amended to read:20963.(a)A state, school, or school safety member, whose effective date of retirement is within four months of separation from employment with the employer subject to this section that granted the sick leave credit, shall be credited at his or her retirement with 0.004 year of service credit for each unused day of sick leave certified to the board by the employer. A day of unused sick leave is the equivalent of an eight-hour day. The certification shall report only those days of unused sick leave that were accrued by the member during the normal course of his or her employment and shall not include any additional days of sick leave reported for the purpose of increasing the members retirement benefit. Reports of unused days of sick leave shall be subject to audit and retirement benefits may be adjusted where improper reporting is found. For purposes of this subdivision, sick leave shall not include sick leave earned as a National Guard member as described in Section 20380.5.
(b)Until receipt of certification from an employer concerning unused sick leave, the board may pay an estimated allowance pursuant to this section. At the time of receipt of the certification, the allowance shall be adjusted to reflect any necessary changes.
(c)Notwithstanding any other provisions of this part, this section shall not apply to local members other than local miscellaneous members employed before July 1, 1980, by a school district that is a contracting agency or those school safety members employed before July 1, 1980, by a contracting agency that is a school district or community college district, as defined in subdivision (i) of Section 20057.
(d)This section shall not apply to any of the following:
(1)A person who becomes a school member on and after July 1, 1980, and any person who becomes a local member employed, on and after July 1, 1980, by a school district that is a contracting agency whether or not the person was ever a school member or local member prior to that date.
(2)A state employee, with respect to sick leave credits earned as a state member under Section 21353.5, except that the member shall be entitled to receive credit under this section for the sick leave he or she has earned as a state member subject to any other retirement formula, provided the member has a sick leave credit balance remaining at the time of retirement.
(e)For the purposes of this section, sick leave benefits provided to state employees pursuant to the state sick leave system shall be construed to mean compensation paid to employees on approved leaves of absence because of sickness.
SEC. 31.Section 20963.1 of the Government Code is amended to read:20963.1.(a)A state member whose effective date of retirement is within four months of separation from employment of the state, shall be credited at his or her retirement with 0.004 year of service for each unused day of educational leave credit, as certified to the board by the employer. A day of unused educational leave is the equivalent of an eight-hour day. The provisions of this section shall be effective for eligible state members who retire directly from state employment on and after January 1, 2000.
(b)This section shall apply to eligible state members in state bargaining units that have agreed to this section in a memorandum of understanding or as authorized by the Director of Human Resources for classifications of state employees that are excluded from the definition of state employee by subdivision (c) of Section 3513 of the Government Code.
SEC. 32.Section 20965 of the Government Code is amended to read:20965.A local miscellaneous member and a local safety member, whose effective date of retirement is within four months of separation from employment with the employer which granted the sick leave credit, shall be credited at his or her retirement with 0.004 year of service credit for each unused day of sick leave certified to the board by his or her employer. A day of unused sick leave is the equivalent of an eight-hour day. The certification shall report only those days of unused sick leave that were accrued by the member during the normal course of his or her employment and shall not include any additional days of sick leave reported for the purpose of increasing the members retirement benefit. Reports of unused days of sick leave shall be subject to audit and retirement benefits may be adjusted where improper reporting is found.
This section shall not apply to any contracting agency nor to the employees of a contracting agency until the agency elects to be subject to this section by contract or by amendment to its contract made in the manner prescribed for approval of contracts, except that an election among the employees is not required, or, in the case of contracts made after September 26, 1974, by express provision in the contract making the contracting agency subject to this section.
This section shall only apply to members who retire after the effective date of the contract amendments.
SEC. 33.SEC. 30.Section 21499 of the Government Code is amended to read:21499.(a)Notwithstanding Section 21498, when either an initial payment of a preretirement or postretirement death allowance or a preretirement or postretirement lump-sum benefit is payable in an amount of ten dollars ($10) or more, it shall be authorized to the Controller within 45 days of receipt by this system of all the necessary information, including the return of warrants issued or any overpayment outstanding after the date of the death of the annuitant.
(b)If any payment is not made within that time limitation, the payment shall also include interest at the default interest rate established in Section 1 of Article XV of the California Constitution for time following the expiration of that time limitation.
SEC. 34.SEC. 31.Section 21626.5 of the Government Code is amended to read:21626.5.(a)For purposes of Section 21624, 21626, 21627, 21629, or 21630, a surviving domestic partner shall be treated in the same manner as a surviving spouse if either:
(1)The domestic partnership was registered for one year prior to the members service retirement date or at the disability retirement date and continuously until the date of the members death.
(2)The member retired prior to January 1, 2006, and both the member and his or her domestic partner, who currently are in a state-registered domestic partnership, sign an affidavit stating that, at the time prescribed by the retirement system for married spouses to qualify for survivor continuance, the member and the domestic partner would have qualified to be registered as domestic partners pursuant to Section 297 of the Family Code.
(b)For purposes of Section 21624, 21626, 21627, 21629, or 21630, an individual who is the same gender as the member shall be treated in the same manner as a surviving spouse if the following conditions are satisfied:
(1)The individual entered into marriage with the member on or after the date when individuals of the same gender were legally allowed to enter into marriage and was married continuously until the date of the members death.
(2)Either of the following applies:
(A)The member retired prior to the date when individuals of the same gender were legally allowed to enter into marriage, and both the member and his or her spouse, who are currently married, sign an affidavit stating that, at the time prescribed by the retirement system for spouses to qualify for a survivor continuance, the member and the individual would have qualified to be legally married had it been legally possible for people of the same gender to marry.
(B)The individual originally qualified to become a surviving spouse under subdivision (a).
SEC. 35.SEC. 32.Section 22820 of the Government Code is amended to read:22820.(a)Upon the death, on or after January 1, 2002, of a firefighter employed by a county, city, city and county, district, or other political subdivision of the state, a firefighter employed by the Department of Forestry and Fire Protection, a firefighter employed by the federal government who was a resident of this state and whose regular duty assignment was to perform firefighting services within this state, or a peace officer as defined in Section 830.1, 830.2, 830.3, 830.31, 830.32, 830.33, 830.34, 830.35, 830.36, 830.37, 830.38, 830.39, 830.4, 830.5, 830.55, or 830.6 of the Penal Code, if the death occurred as a result of injury or disease arising out of and in the course of his or her official duties, the surviving spouse or other eligible family member of the deceased firefighter or peace officer, if uninsured, is deemed to be an annuitant under Section 22760 for purposes of enrollment. All eligible family members of the deceased firefighter or peace officer who are uninsured may enroll in a health benefit plan of the surviving spouses choice. However, an unmarried child of the surviving spouse is not eligible to enroll in a health benefit plan under this section if the child was not a family member under Section 22775 and regulations pertinent thereto prior to the firefighters or peace officers date of death. The employer of the deceased firefighter or peace officer shall notify the board within 10 business days of the death of the employee and any updated contact information of the surviving spouse or family member if that spouse or family member may be eligible for enrollment in a health benefit plan under this section.
(b)Upon notification, the board shall promptly determine eligibility and shall forward to the eligible spouse or family member the materials necessary for enrollment. In the event of a dispute regarding whether a firefighters or peace officers death occurred as a result of injury or disease arising out of and in the course of his or her official duties as required under subdivision (a), that dispute shall be determined by the Workers Compensation Appeals Board, subject to the same procedures and standards applicable to hearings relating to claims for workers compensation benefits. The jurisdiction of the Workers Compensation Appeals Board under this section is limited to the sole issue of industrial causation and this section does not authorize the Workers Compensation Appeals Board to award costs against the system.
(c)(1)Notwithstanding any other provision of law, and except as otherwise provided in subdivision (d), the state shall pay the employer contribution required for enrollment under this part for the uninsured surviving spouse of a deceased firefighter or peace officer for life, and the other uninsured eligible family members of a deceased firefighter or peace officer, provided the family member meets the eligibility requirements of Section 22775 and regulations pertinent thereto.
(2)The contribution payable by the state for each uninsured surviving spouse and other uninsured eligible family members shall be adjusted annually and be equal to the amount specified in Section 22871.
(3)The states contribution under this section shall commence on the effective date of enrollment of the uninsured surviving spouse or other uninsured eligible family members. The contribution of each surviving spouse and eligible family member shall be the total cost per month of the benefit coverage afforded him or her under the plan less the portion contributed by the state pursuant to this section.
(d)The cancellation of coverage by an annuitant, as defined in this section, shall be final without option to reenroll, unless coverage is canceled because of enrollment in an insurance plan from another source.
(e)For purposes of this section, surviving spouse means a spouse who was married to the deceased firefighter or peace officer on the deceaseds date of death and either was married for a continuous period of at least one year prior to the date of death or was married to the deceased prior to the date the deceased firefighter or peace officer sustained the injury or disease resulting in death.
(f)For purposes of this section, uninsured means that the surviving spouse is not enrolled in an employer-sponsored health plan under which the employer contribution covers 100 percent of the cost of health care premiums.
(g)The board has no duty to identify, locate, or notify any surviving spouse or eligible family member who may be or may become eligible for benefits under this section.
Notwithstanding any other provision, the governing board of a community college district may establish regulations that allow academic employees to reduce their workload from full-time to part-time duties. The regulations shall include, but shall not be limited to, the following if the employees wish to reduce their workload and maintain retirement benefits pursuant to Section 22713 of this code or Section 20900 of the Government Code:
(a)The employee shall have reached the age of 55 prior to reduction in workload.
(b)The employee shall have been employed full time in an academic position or a position requiring certification qualifications, or both, for at least 10 years of which the immediately preceding five years were full-time employment.
(c)During the period immediately preceding a request for a reduction in workload, the employee shall have been employed full time in an academic position or a position requiring certification qualifications, or both, for a total of at least five years without a break in service. For purposes of this subdivision, sabbaticals and other approved leaves of absence shall not constitute a break in service. Time spent on a sabbatical or other approved leave of absence shall not be used in computing the five-year full-time service requirement prescribed by this subdivision.
(d)The option of part-time employment shall be exercised at the request of the employee and can be revoked only with the mutual consent of the employer and the employee.
(e)The employee shall be paid a salary which is the pro rata share of the salary he or she would be earning had he or she not elected to exercise the option of part-time employment but shall retain all other rights and benefits for which he or she makes the payments that would be required if he or she remained in full-time employment.
The employee shall receive health benefits as provided in Section 53201 of the Government Code in the same manner as a full-time employee.
(f)The minimum part-time employment shall be the equivalent of one-half of the number of days of service required by the employees contract of employment during his or her final year of service in a full-time position.
(g)The period of this part-time employment shall not exceed five years for employees subject to Section 20900 of the Government Code or 10 years for employees subject to Section 22713 of this code.
(h)The period of part-time employment of employees subject to Section 20815 of the Government Code shall not extend beyond the end of the college year during which the employee reaches his or her 70th birthday. This subdivision shall not apply to any employee subject to Section 22713 of this code.
SEC. 2.Section 7502 of the Government Code is amended to read:7502.The State Controller shall review the annual financial report of each state and local public retirement system submitted pursuant to Section 7504 giving particular consideration to the adequacy of funding of each system. The State Controller shall also review the triennial valuation of each public retirement system submitted pursuant to Section 7504 and shall give particular consideration to the assumption concerning the inflation element in salary and wage increases, mortality, service retirement rates, withdrawal rates, disability retirement rates, and rate of return on total assets.
The State Controller shall establish an advisory committee that shall include actuaries who have attained the designation of Associate or Fellow of the Society of Actuaries and state and local public retirement system administrators to assist in carrying out the duties imposed by this section.
SEC. 3.Section 7504 of the Government Code is amended to read:7504.(a)All state and local public retirement systems shall, not less than triennially, secure the services of an actuary. For the purposes of this section, actuary means an actuary who satisfies the qualification standards for actuaries issuing statements of actuarial opinion in the United States with regard to pensions or other postemployment benefits and who has demonstrated experience in public retirement systems. The actuary shall perform a valuation of the system utilizing actuarial assumptions and techniques established by the agency that are, in the aggregate, reasonably related to the experience and the actuarys best estimate of anticipated experience under the system. Any differences between the actuarial assumptions and techniques used by the actuary that differ significantly from those established by the agency shall be disclosed in the actuarys report and the effect of the differences on the actuarys statement of costs and obligations shall be shown.
(b)All state and local public retirement systems shall secure the services of a qualified person to perform an attest audit of the systems financial statements. A qualified person means any of the following:
(1)A person who is licensed to practice as a certified public accountant in this state by the California Board of Accountancy.
(2)A person who is registered and entitled to practice as a public accountant in this state by the California Board of Accountancy.
(3)A county auditor in any 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).
(4)A county auditor in any county having a pension trust and retirement plan established pursuant to Section 53216.
(c)All state and local public retirement systems shall submit audited financial statements to the State Controller at the earliest practicable opportunity within six months of the close of each fiscal year. However, the State Controller may delay the filing date for reports due in the first year until the time as report forms have been developed that, in his or her judgment, will satisfy the requirements of this section. The financial statements shall be prepared in accordance with generally accepted accounting principles in the form and manner prescribed by the State Controller. The penalty prescribed in Section 53895 shall be invoked for failure to comply with this section. Upon a satisfactory showing of good cause, the State Controller may waive the penalty for late filing provided by this subdivision.
(d)The State Controller shall compile and publish a report annually on the financial condition of all state and local public retirement systems containing, but not limited to, the data required in Section 7502. The report shall be published within 12 months of the receipt of the information, and in no case later than 18 months after the end of the fiscal year upon which the information in the report is based.
SEC. 4.Section 7507 of the Government Code is amended to read:7507.(a)For the purpose of this section:
(1) Actuary means an actuary as defined in Section 7504.
(2)Future annual costs includes, but is not limited to, annual dollar changes, or the total dollar changes involved when available, as well as normal cost and any change in accrued liability.
(b)(1)Except as provided in paragraph (2), the Legislature and local legislative bodies, including community college district governing boards, when considering changes in retirement benefits or other postemployment benefits, shall secure the services of an actuary to provide a statement of the actuarial impact upon future annual costs, including normal cost and any additional accrued liability, before authorizing changes in public retirement plan benefits or other postemployment benefits.
(2)The requirements of this subdivision do not apply to:
(A)An annual increase in a premium that does not exceed 3 percent under a contract of insurance.
(B)A change in postemployment benefits, other than pension benefits, mandated by the state or federal government or made by an insurance carrier in connection with the renewal of a contract of insurance.
(c)(1)(A)With regard to local legislative bodies, including community college district governing boards, the future costs of changes in retirement benefits or other postemployment benefits, as determined by the actuary, shall be made public at a public meeting at least two weeks prior to the adoption of any changes in public retirement plan benefits or other postemployment benefits. If the future costs of the changes exceed one-half of 1 percent of the future annual costs, as defined in paragraph (2) of subdivision (a), of the existing benefits for the legislative body, an actuary shall be present to provide information as needed at the public meeting at which the adoption of a benefit change shall be considered. The adoption of any benefit to which this section applies shall not be placed on a consent calendar.
(B)The requirements of this paragraph do not apply to:
(i)An annual increase in a premium that does not exceed 3 percent under a contract of insurance.
(ii)A change in postemployment benefits, other than pension benefits, mandated by the state or federal government or made by an insurance carrier in connection with the renewal of a contract of insurance.
(2)With regard to the Legislature, the future costs as determined by the actuary shall be made public at the policy and fiscal committee hearings to consider the adoption of any changes in public retirement plan benefits or other postemployment benefits. The adoption of any benefit to which this section applies shall not be placed on a consent calendar.
(d)Upon the adoption of any benefit change to which this section applies, the person with the responsibilities of a chief executive officer in an entity providing the benefit, however that person is denominated, shall acknowledge in writing that he or she understands the current and future cost of the benefit as determined by the actuary. For the adoption of benefit changes by the state, this person shall be the Director of Human Resources.
(e)The requirements of this section do not apply to a school district or a county office of education, which shall instead comply with requirements regarding public notice of, and future cost determination for, benefit changes that have been enacted to regulate these entities. These requirements include, but are not limited to, those enacted by Chapter 1213 of the Statutes of 1991 and by Chapter 52 of the Statutes of 2004.
SEC. 5.Section 7507.2 of the Government Code is amended to read:7507.2.(a)There is hereby enacted the California Actuarial Advisory Panel. The panel shall provide impartial and independent information on pensions, other postemployment benefits, and best practices to public agencies and shall meet quarterly.
(b)The responsibilities of the California Actuarial Advisory Panel shall include, but are not limited to:
(1)Defining the range of actuarial model policies and best practices for public retirement plan benefits, including pensions and other postemployment benefits.
(2)Developing pricing and disclosure standards for California public sector benefit improvements.
(3)Developing quality control standards for California public sector actuaries.
(4)Gathering model funding policies and practices.
(5)Replying to policy questions from public retirement systems in California.
(6)Providing comment upon request by public agencies.
(c)The California Actuarial Advisory Panel shall consist of eight members. Each member shall be an actuary who has attained the designation of Associate or Fellow of the Society of Actuaries and who has demonstrated experience with public sector clients. Members shall be appointed by the entities listed below, and each member shall serve a three-year term, provided that, in the initial appointments only, the panelists named by the University of California, the Senate, and one of the panelists named by the Governor shall serve two-year terms. The Governor shall appoint two panelists, and one panelist shall be appointed by each of the following:
(1)The Teachers Retirement Board.
(2)The Board of Administration of the Public Employees Retirement System.
(3)The State Association of County Retirement Systems.
(4)The Board of Regents of the University of California.
(5)The Speaker of the Assembly.
(6)The Senate Committee on Rules.
(d)The California Actuarial Advisory Panel shall be located in the Controllers office, which shall provide support staff to the panel.
(e)The opinions of the California Actuarial Advisory Panel are nonbinding and advisory only. The opinions of the panel shall not, in any case, be used as the basis for litigation.
(f)A member of the California Actuarial Advisory Panel shall receive reimbursement for expenses that shall be paid by the authority that appointed the member.
(g)The California Actuarial Advisory Panel shall report to the Legislature on or before February 1 of each year.
SEC. 6.Section 20034 of the Government Code is amended to read:20034.The highest annual average compensation during any consecutive 12- or 36-month period of employment as a member of any retirement system maintained by the university shall be considered compensation earnable by a member of this system for purposes of computing final compensation for the member providing he or she retires concurrently under both systems.
SEC. 7.Section 20035 of the Government Code is amended to read:20035.(a)Notwithstanding Section 20037, final compensation for the purposes of determining any pension or benefit with respect to a state member who retires or dies on or after July 1, 1991, and with respect to benefits based on service with the state, means the highest annual compensation which was earnable by the state member during any consecutive 12-month period of employment preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier.
(b)With respect to a state member who retires or dies on or after July 1, 1991, and who was a managerial employee, as defined by subdivision (e) of Section 3513, or a supervisory employee, as defined by subdivision (g) of Section 3513, whose monthly salary range was administratively reduced by 5 percent because of the salary range reductions administratively imposed upon managers and supervisors during the 199192 fiscal year, final compensation means the highest annual compensation the state member would have earned had his or her salary range not been reduced by the 5-percent reduction. This subdivision shall only apply if the period during which the state members salary was reduced would have otherwise been included in determining his or her final compensation. The costs, if any, that may result from the use of the higher final compensation shall be paid for by the employer in the same manner as other retirement benefits are funded.
SEC. 8.Section 20035.5 of the Government Code is amended to read:20035.5.Notwithstanding Section 20037, final compensation for the purposes of determining any pension or benefit with respect to a school member who retires or dies on or after January 1, 2000, and with respect to benefits based on service with a school employer, means the highest annual compensation that was earnable by the school member during any consecutive 12-month period of employment preceding the effective date of his or her retirement or the date of his or her last separation from service if earlier.
SEC. 9.Section 20037 of the Government Code is amended to read:20037.For a state member, or for a local member who is an employee of a contracting agency that is subject to this section, final compensation means the highest annual average compensation earnable by a member during any consecutive 36-month period of employment preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier, including any or all of the period or periods of (a) service required for qualification for membership, or (b) prior service which qualifies for credit under this system, if any, immediately preceding membership, or (c) time prior to entering state service at the compensation earnable by him or her in the position first held by him or her in that service, as may be necessary to complete three consecutive years. For the purposes of this section, periods of service separated by a period of retirement or breaks in service may be aggregated to constitute a period of three consecutive years, if the periods of service are consecutive except for such a period of retirement or breaks. If a break in service did not exceed six months in duration, time included in the break and compensation earnable during that time shall be included in computation of final compensation. If a break in service exceeded six months in duration, the first six months thereof and the compensation earnable during those six months shall be included in computation of final compensation, but time included in the break which is in excess of six months and the compensation earnable during that excess time shall be excluded in computation of final compensation. On and after November 13, 1968, this section shall apply to all contracting agencies and to the employees of those agencies whether or not those agencies have previously elected to be subject to this section, except that this section shall not apply to an employee of a contracting agency which has not elected to be subject to this section whose death occurred or whose retirement was effective prior to November 13, 1968.
SEC. 10.Section 20037.5 of the Government Code, as added by Section 56 of Chapter 88 of the Statutes of 1998, is repealed.SEC. 11.Section 20037.5 of the Government Code, as added by Section 56 of Chapter 91 of the Statutes of 1998, is amended to read:20037.5.Notwithstanding Section 20035, final compensation for a state member who has elected to be subject to Section 21353.5, for the purposes of determining any pension or benefit based on service credited under that section, means the highest average annual compensation earnable by the member during any consecutive 36-month period preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier.
SEC. 12.Section 20037.6 of the Government Code is amended to read:20037.6.(a)Notwithstanding Sections 20035 and 20037, final compensation for a person who is employed by the state for the first time and becomes a state member of the system on or after July 1, 2006, and is represented by State Bargaining Unit 2, means the highest average annual compensation earnable by the member during any consecutive 36-month period preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier.
(b)This section applies to service credit accrued while a member of State Bargaining Unit 2.
(c)This section does not apply to:
(1) Former state employees who return to state employment on or after July 1, 2006.
(2)State employees hired prior to July 1, 2006, who were subject to Section 20281.5 during the first 24 months of state employment.
(3)State employees hired prior to July 1, 2006, who become subject to representation by State Bargaining Unit 2 on or after July 1, 2006.
(4) State employees on an approved leave of absence who return to active employment on or after July 1, 2006.
SEC. 13.Section 20037.7 of the Government Code is amended to read:20037.7.(a)Notwithstanding Sections 20035 and 20037, final compensation for a person who is employed by the state for the first time and becomes a state member of the system on or after January 1, 2007, and is represented by State Bargaining Unit 1, 3, 4, 11, 14, 15, 17, 20, or 21, means the highest average annual compensation earnable by the member during any consecutive 36-month period preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier.
(b)This section applies to service credit accrued while a member of State Bargaining Unit 1, 3, 4, 11, 14, 15, 17, 20, or 21.
(c)This section does not apply to:
(1)Former state employees previously employed before January 1, 2007, who return to state employment on or after January 1, 2007.
(2)State employees hired prior to January 1, 2007, who were subject to Section 20281.5 during the first 24 months of state employment.
(3)State employees hired prior to January 1, 2007, who become subject to representation by State Bargaining Unit 1, 3, 4, 11, 14, 15, 17, 20, or 21 on or after January 1, 2007.
(4)State employees on an approved leave of absence employed before January 1, 2007, who return to active employment on or after January 1, 2007.
SEC. 14.Section 20037.8 of the Government Code is amended to read:20037.8.(a)Notwithstanding Sections 20035 and 20037, final compensation for a person who is employed by the state for the first time and becomes a state member of the system on or after January 1, 2007, and is represented by State Bargaining Unit 12 or 13, means the highest average annual compensation earnable by the member during any consecutive 36-month period preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier.
(b)This section applies to service credit accrued while a member of State Bargaining Unit 12 or 13.
(c)This section does not apply to:
(1)Former state employees previously employed before January 1, 2007, who return to state employment on or after January 1, 2007.
(2)State employees hired prior to January 1, 2007, who were subject to Section 20281.5 during the first 24 months of state employment.
(3)State employees hired prior to January 1, 2007, who become subject to representation by State Bargaining Unit 12 or 13 on or after January 1, 2007.
(4)State employees on an approved leave of absence employed before January 1, 2007, who return to active employment on or after January 1, 2007.
SEC. 15.Section 20037.9 of the Government Code is amended to read:20037.9.(a)Notwithstanding Sections 20035 and 20037, final compensation for a person who is employed by the state for the first time and becomes a state member of the system on or after January 1, 2007, and is represented by State Bargaining Unit 16 or 19, means the highest average annual compensation earnable by the member during any consecutive 36-month period preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier.
(b)This section applies to service credit accrued while a member of State Bargaining Unit 16 or 19.
(c)This section does not apply to:
(1)Former state employees previously employed before January 1, 2007, who return to state employment on or after January 1, 2007.
(2)State employees hired prior to January 1, 2007, who were subject to Section 20281.5 during the first 24 months of state employment.
(3)State employees hired prior to January 1, 2007, who become subject to representation by State Bargaining Unit 16 or 19 on or after January 1, 2007.
(4)State employees on an approved leave of absence employed before January 1, 2007, who return to active employment on or after January 1, 2007.
SEC. 16.Section 20037.10 of the Government Code is amended to read:20037.10.(a)Notwithstanding Sections 20035 and 20037, final compensation for a person who is employed by the state for the first time and becomes a state member of the system on or after January 1, 2007, and is represented by State Bargaining Unit 7, means the highest average annual compensation earnable by the member during any consecutive 36-month period immediately preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier.
(b)This section applies to service credit accrued while a member of State Bargaining Unit 7.
(c)This section does not apply to:
(1)Service credit accrued while classified as a state peace officer/firefighter while a member of State Bargaining Unit 7.
(2)Former state employees previously employed before January 1, 2007, who return to state employment on or after January 1, 2007.
(3)State employees hired prior to January 1, 2007, who were subject to Section 20281.5 during the first 24 months of state employment.
(4)State employees hired prior to January 1, 2007, who become subject to representation by State Bargaining Unit 7 on or after January 1, 2007.
(5)State employees on an approved leave of absence employed before January 1, 2007, who return to active employment on or after January 1, 2007.
SEC. 17.Section 20037.11 of the Government Code is amended to read:20037.11.(a)Notwithstanding Sections 20035 and 20037, final compensation for a person who is employed by the state for the first time and becomes a state member of the system on or after January 1, 2007, and is represented by State Bargaining Unit 10, means the highest average annual compensation earnable by the member during any consecutive 36-month period preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier.
(b)This section applies to service credit accrued while a member of State Bargaining Unit 10.
(c)This section does not apply to:
(1)Former state employees previously employed before January 1, 2007, who return to state employment on or after January 1, 2007.
(2)State employees hired prior to January 1, 2007, who were subject to Section 20281.5 during the first 24 months of state employment.
(3)State employees hired prior to January 1, 2007, who become subject to representation by State Bargaining Unit 10 on or after January 1, 2007.
(4)State employees on an approved leave of absence employed before January 1, 2007, who return to active employment on or after January 1, 2007.
SEC. 18.Section 20037.12 of the Government Code is amended to read:20037.12.(a)Notwithstanding Sections 20035 and 20037, final compensation for a person who is employed by the state for the first time and becomes a state member of the system on or after January 1, 2007, and is represented by State Bargaining Unit 18, means the highest average annual compensation earnable by the member during any consecutive 36-month period preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier.
(b)This section applies to service credit accrued while a member of State Bargaining Unit 18.
(c)This section does not apply to:
(1)Former state employees previously employed before January 1, 2007, who return to state employment on or after January 1, 2007.
(2)State employees hired prior to January 1, 2007, who were subject to Section 20281.5 during the first 24 months of state employment.
(3)State employees hired prior to January 1, 2007, who become subject to representation by State Bargaining Unit 18 on or after January 1, 2007.
(4)State employees on an approved leave of absence employed before January 1, 2007, who return to active employment on or after January 1, 2007.
SEC. 19.Section 20037.13 of the Government Code is amended to read:20037.13.(a)Notwithstanding Sections 20035 and 20037, for the purposes of determining any pension or benefit with respect to benefits based on service with the state, final compensation means the highest annual compensation that was earnable by the state member during any consecutive 36-month period of employment preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier.
(b)This section shall only apply to a member appointed to a career executive assignment, as defined in Section 18546, who at the time of appointment meets one or more of the following criteria:
(1)He or she previously had, but does not currently have, permanent status in the civil service.
(2)He or she is a person described in Section 18990 who was not, within the past 12 months, employed by the Legislature for two or more consecutive years.
(3)He or she is a person described in Section 18992 who was not, within the past 12 months, holding a nonelected exempt position in the executive branch.
(c)A state entity that employs a person described in subdivision (b) in a career executive assignment shall notify the Controller of this persons employment status and the Controller shall forward this information to the system.
SEC. 20.Section 20037.14 of the Government Code, as amended by Section 127 of Chapter 296 of the Statutes of 2011, is repealed.SEC. 21.Section 20037.14 of the Government Code, as added by Section 11 of Chapter 163 of the Statutes of 2010, is amended to read:20037.14.(a)Notwithstanding Sections 20035 and 20037, final compensation for a person who is employed by the state for the first time and becomes a state member of the system on or after October 31, 2010, and is represented by State Bargaining Unit 5 or 8, means the highest average annual compensation earnable by the member during any consecutive 36-month period preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier.
(b)This section applies to service credit accrued while a member of State Bargaining Unit 5 or 8 or in a class related to State Bargaining Unit 5 or 8 as an employee who is excepted from the definition of state employee in subdivision (c) of Section 3513, or an officer or employee of the executive branch of state government who is not a member of the civil service.
(c)This section does not apply to:
(1)Former state employees previously employed before October 31, 2010, who return to state employment on or after October 31, 2010.
(2)State employees hired prior to October 31, 2010, who were subject to Section 20281.5 during the first 24 months of state employment.
(3)State employees hired prior to October 31, 2010, who become subject to representation by State Bargaining Unit 5 or 8 on or after October 31, 2010.
(4)State employees on an approved leave of absence employed before October 31, 2010, who return to active employment on or after October 31, 2010.
SEC. 22.Section 20037.15 of the Government Code is amended to read:20037.15.(a) Notwithstanding Sections 3517.8, 20035, and 20037, final compensation for a person who is employed for the first time and becomes a member of the system on or after January 15, 2011, means the highest average annual compensation earnable by the member during any consecutive 36-month period preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier.
(b)This section applies to the following:
(1)Service credit accrued while a member of State Bargaining Unit 6 or 9 or in a class related to State Bargaining Unit 6 or 9 as an employee who is excepted from the definition of state employee in subdivision (c) of Section 3513, or an officer or employee of the executive branch of state government who is not a member of the civil service.
(2)Service credit accrued while a peace officer/firefighter member represented by State Bargaining Unit 7 or in a class related to peace officer/firefighter members in State Bargaining Unit 7 as an employee who is excepted from the definition of state employee in subdivision (c) of Section 3513, or an officer or employee of the executive branch of state government who is not a member of the civil service.
(3)Service credit accrued as an employee who is excepted from the definition of state employee in subdivision (c) of Section 3513, or an officer or employee of the executive branch of state government who is not a member of the civil service.
(4)Service credit accrued as an employee of the Legislature, the judicial branch, or the California State University.
(c)This section does not apply to:
(1)Former employees previously employed before January 15, 2011, who return to employment on or after January 15, 2011, and who were previously subject to a 12-month average.
(2)State employees hired prior to January 15, 2011, who were subject to Section 20281.5 during the first 24 months of state employment, and who were previously subject to a 12-month average.
(3)State employees hired prior to January 15, 2011, who become subject to representation by State Bargaining Unit 6, 7, or 9 on or after January 15, 2011, and who were previously subject to a 12-month average.
(4)Employees on an approved leave of absence employed before January 15, 2011, who return to active employment on or after January 15, 2011, and who were previously subject to a 12-month average.
(d)If this section is in conflict with a memorandum of understanding that is current and in effect on January 15, 2011, the memorandum of understanding shall be controlling while it remains in effect. Upon expiration of the memorandum of understanding that is in effect and current on January 15, 2011, this section shall be controlling and may not be superseded by a subsequent memorandum of understanding.
SEC. 23.Section 20229 of the Government Code is amended to read:20229.(a)The board, notwithstanding Section 10231.5, shall provide the Legislature, the Governor, and the Chair of the California Actuarial Advisory Panel, established pursuant to Section 7507.2 of the Government Code, with an annual report that includes all of the following, as these items apply to state employee retirement plans:
(1)(A)A description of the investment return assumption utilized by the board when determining the contribution rates.
(B)A calculation of the contribution rates utilizing an investment return assumption 2 percentage points above and 2 percentage points below the investment return assumption utilized by the board.
(2)(A)A description of the amortization period for any unfunded liabilities utilized by the board when determining the contribution rates.
(B)A calculation of the contribution rates based on an amortization period equal to the estimated average remaining service periods of employees covered by the contributions.
(3)(A)A description of the discount rate utilized by the board for reporting liabilities.
(B)A calculation of those liabilities based upon a discount rate that is 2 percent below the long-term rate of return actually assumed by the board.
(4)The market value of the assets controlled by the board and an explanation of how the actuarial value assigned to those assets differs from the market value of those assets.
(b)Each legislative session, the Chair of the California Actuarial Advisory Panel, or his or her designee, shall, during a publicly noticed joint hearing of the Senate Committee on Public Employment and Retirement and the Assembly Committee on Public Employees, Retirement and Social Security, do all of the following based on information received in the report required by subdivision (a):
(1)Explain the role played by the investment return assumption and amortization period in the calculation of the contribution rates.
(2)Describe the consequences for future state budgets should the investment return assumption not be realized.
(3)Report whether the boards amortization period exceeds the estimated average remaining service periods of employees covered by the contributions.
(c)The report required by subdivision (a) shall be submitted in compliance with Section 9795.
SEC. 24.Section 20537 of the Government Code is amended to read:20537.The board may charge interest on the amount of any payment due and unpaid by a contracting agency until payment is received. Interest shall be charged at the greater of the annual return on the systems investments for the year prior to the year in which payments are not timely made or a simple annual rate of 10 percent. The interest shall be deemed interest earnings for the year in which the late payment is received.
SEC. 25.Section 20572 of the Government Code is amended to read:20572.(a)If a contracting agency fails for 30 days after demand by the board to pay in full any installment of contributions required by its contract, or fails for three months after demand therefor by the board to file any information required in the administration of this system with respect to that contracting agencys employees, or if the board determines that the contracting agency is no longer in existence, the board may terminate that contract by resolution adopted by a majority vote of its members effective 60 days after notice of its adoption has been mailed by registered mail to the governing body of the contracting agency.
(b)In addition to the interest obligations set forth in Section 20537, if a contracting agency fails to pay in full any installment of the contributions when due and the failure continues for a period of three months, the contracting agency may be assessed a penalty of 10 percent of the total amount due and unpaid, including any accrued and unpaid interest. The penalty may be assessed once during each 30-day period that the outstanding amount remains unpaid. In addition, the contracting agency may be assessed the costs of collection, including reasonable legal fees and litigation costs, including, without limitation, legal fees and legal costs incurred in bankruptcy, when necessary to collect any amounts due.
SEC. 26.Section 20577.5 of the Government Code is amended to read:20577.5.Notwithstanding Section 20577, the board may elect not to impose a reduction, or to impose a lesser reduction, on a plan that has been terminated pursuant to Section 20572 if (a) the board has made all reasonable efforts to collect the amount necessary to fully fund the liabilities of the plan and (b) the board finds that not reducing the benefits, or imposing a lesser reduction, will not impact the actuarial soundness of the terminated agency pool.
SEC. 27.Section 20578 of the Government Code is amended to read:20578.(a)Except as provided in subdivision (b), on and after January 1, 1991, the rights and benefits of a former employee of a contracting agency which terminated on or before January 1, 1991, or of his or her beneficiary, shall be the same as if the agency had continued as a contracting agency. Any monthly allowance of that individual, or of his or her beneficiary, that was reduced pursuant to Section 20577 because the contracting agency failed to pay the board the amount of the difference shall not be subject to continued reduction on or after January 1, 1991. As of January 1, 1991, benefits shall be paid at the level provided in the contract prior to that reduction. However, if a former employee of a contracting agency that terminated on or before January 1, 1991, becomes employed by another covered employer after the date of termination, including an employer subject to reciprocity, the benefits shall be calculated by using the highest compensation earned by the individual.
In accordance with Section 20580, an individual who has withdrawn his or her accumulated contributions from the terminated agency shall not be permitted to redeposit any withdrawn contributions upon again becoming a member of this system.
(b)If a contracting agency has not paid the system for any deficit in funding for earned benefits, as determined pursuant to Section 20577, members shall be entitled to the benefits to which members of the plan were entitled 36 months prior to the date the agency notified the board of its intention to terminate its contract or 36 months prior to the date the board notified the agency of its intent to terminate the contract, whichever is earlier. Entitlement to earned benefits under this subdivision shall be subject to Section 20577.5.
SEC. 28.Section 20638 of the Government Code is amended to read:20638.The highest annual average compensation during any consecutive 12- or 36-month period of employment as a member of a county retirement system shall be considered compensation earnable by a member of this system for purposes of computing final compensation for the member provided:
(a)(1)Entry into employment in which he or she became a member in one system occurred on or after October 1, 1957, and within 90 days of discontinuance of employment as a member of the other system.
(2)This subdivision shall not deny the benefit of this section to any person retiring after October 1, 1963, who entered membership prior to October 1, 1957, if he or she entered the employment in which he or she became a member within 90 days of termination of employment in which he or she was a member of the other system, and he or she became a member within seven months of entry into employment, or, if an employee of a district as defined in Section 31468, became a member at the time the district was included in a county retirement system.
(b)He or she retires concurrently under both systems and is credited with the period of service under the county system at the time of retirement.
SEC. 29.Section 20900 of the Government Code is amended to read:20900.(a)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 employees 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 and this system, shall verify the eligibility of the applicant for the reduced workload program. This section shall be applicable only to a member who meets the following criteria:
(1)The member is one of the following:
(A)An academic employee of the California State University.
(B)A certificated employee of a school district.
(C)An academic employee of a community college district.
(2)The member meets the criteria provided in Sections 44922 and 87483 of the Education Code or Section 89516 of the Education Code.
(3)The member is not older than 70 years of age and is limited to a period of five years of part-time status.
(b)The employer shall maintain the necessary records to separately identify each employee receiving credit pursuant to this section.
SEC. 30.Section 20963 of the Government Code is amended to read:20963.(a)A state, school, or school safety member, whose effective date of retirement is within four months of separation from employment with the employer subject to this section that granted the sick leave credit, shall be credited at his or her retirement with 0.004 year of service credit for each unused day of sick leave certified to the board by the employer. A day of unused sick leave is the equivalent of an eight-hour day. The certification shall report only those days of unused sick leave that were accrued by the member during the normal course of his or her employment and shall not include any additional days of sick leave reported for the purpose of increasing the members retirement benefit. Reports of unused days of sick leave shall be subject to audit and retirement benefits may be adjusted where improper reporting is found. For purposes of this subdivision, sick leave shall not include sick leave earned as a National Guard member as described in Section 20380.5.
(b)Until receipt of certification from an employer concerning unused sick leave, the board may pay an estimated allowance pursuant to this section. At the time of receipt of the certification, the allowance shall be adjusted to reflect any necessary changes.
(c)Notwithstanding any other provisions of this part, this section shall not apply to local members other than local miscellaneous members employed before July 1, 1980, by a school district that is a contracting agency or those school safety members employed before July 1, 1980, by a contracting agency that is a school district or community college district, as defined in subdivision (i) of Section 20057.
(d)This section shall not apply to any of the following:
(1)A person who becomes a school member on and after July 1, 1980, and any person who becomes a local member employed, on and after July 1, 1980, by a school district that is a contracting agency whether or not the person was ever a school member or local member prior to that date.
(2)A state employee, with respect to sick leave credits earned as a state member under Section 21353.5, except that the member shall be entitled to receive credit under this section for the sick leave he or she has earned as a state member subject to any other retirement formula, provided the member has a sick leave credit balance remaining at the time of retirement.
(e)For the purposes of this section, sick leave benefits provided to state employees pursuant to the state sick leave system shall be construed to mean compensation paid to employees on approved leaves of absence because of sickness.
SEC. 31.Section 20963.1 of the Government Code is amended to read:20963.1.(a)A state member whose effective date of retirement is within four months of separation from employment of the state, shall be credited at his or her retirement with 0.004 year of service for each unused day of educational leave credit, as certified to the board by the employer. A day of unused educational leave is the equivalent of an eight-hour day. The provisions of this section shall be effective for eligible state members who retire directly from state employment on and after January 1, 2000.
(b)This section shall apply to eligible state members in state bargaining units that have agreed to this section in a memorandum of understanding or as authorized by the Director of Human Resources for classifications of state employees that are excluded from the definition of state employee by subdivision (c) of Section 3513 of the Government Code.
SEC. 32.Section 20965 of the Government Code is amended to read:20965.A local miscellaneous member and a local safety member, whose effective date of retirement is within four months of separation from employment with the employer which granted the sick leave credit, shall be credited at his or her retirement with 0.004 year of service credit for each unused day of sick leave certified to the board by his or her employer. A day of unused sick leave is the equivalent of an eight-hour day. The certification shall report only those days of unused sick leave that were accrued by the member during the normal course of his or her employment and shall not include any additional days of sick leave reported for the purpose of increasing the members retirement benefit. Reports of unused days of sick leave shall be subject to audit and retirement benefits may be adjusted where improper reporting is found.
This section shall not apply to any contracting agency nor to the employees of a contracting agency until the agency elects to be subject to this section by contract or by amendment to its contract made in the manner prescribed for approval of contracts, except that an election among the employees is not required, or, in the case of contracts made after September 26, 1974, by express provision in the contract making the contracting agency subject to this section.
This section shall only apply to members who retire after the effective date of the contract amendments.
SEC. 33.Section 21337 of the Government Code is amended to read:21337.(a)On an annual basis, the board shall transfer funds to separate supplemental state and school accounts, to fund the purchasing power protection allowance of retirees, survivors, and beneficiaries of state or school employers, respectively. The amounts transferred shall be the lesser of the following:
(1)The amount necessary to increase all monthly allowances paid by this system to retirees, survivors, and beneficiaries of state or school employers to 75 percent of the purchasing power of the initial monthly allowances.
(2)One and one-tenth percent of state or school member contributions.
(b)The funds transferred to the two separate supplemental accounts shall be utilized to increase all monthly allowances paid by this system to retirees, survivors, and beneficiaries of state and school employers, up to a maximum of 75 percent of the purchasing power, as determined by the board, of the initial monthly allowances, notwithstanding the benefit provided by Section 21328, that were received by every retired state or school member or survivor or beneficiary of a state or school member or retiree who was eligible to receive any allowance at the end of each fiscal year. Funds remaining in the state or school account after the payment of benefits under this section shall be transferred to the respective state or school employer accounts.
(c)Annual adjustments in the purchasing power protection allowance shall be effective with the monthly allowance regularly payable on the first day of May, provided that in the first year after enactment of the act adding this subdivision, the purchasing power protection allowance adjustment to the monthly allowance payable on the first day of May shall also reflect an adjustment for the period from January 1 through April 30. The board shall implement the provisions of this subdivision on or before January 1, 2012, unless the board determines that the implementation tasks cannot be completed until a later date, in which case, the board shall be prepared to implement the provisions of this section no later than July 1, 2013.
SEC. 34.SEC. 33.Section 21499 of the Government Code is amended to read:21499.(a)Notwithstanding Section 21498, when either an initial payment of a preretirement or postretirement death allowance or a preretirement or postretirement lump-sum benefit is payable in an amount of ten dollars ($10) or more, it shall be authorized to the Controller within 45 days of receipt by this system of all the necessary information, including the return of warrants issued or any overpayment outstanding after the date of the death of the annuitant.
(b)If any payment is not made within that time limitation, the payment shall also include interest at the default interest rate established in Section 1 of Article XV of the California Constitution for time following the expiration of that time limitation.
SEC. 35.SEC. 34.Section 21626.5 of the Government Code is amended to read:21626.5.(a)For purposes of Section 21624, 21626, 21627, 21629, or 21630, a surviving domestic partner shall be treated in the same manner as a surviving spouse if either:
(1)The domestic partnership was registered for one year prior to the members service retirement date or at the disability retirement date and continuously until the date of the members death.
(2)The member retired prior to January 1, 2006, and both the member and his or her domestic partner, who currently are in a state-registered domestic partnership, sign an affidavit stating that, at the time prescribed by the retirement system for married spouses to qualify for survivor continuance, the member and the domestic partner would have qualified to be registered as domestic partners pursuant to Section 297 of the Family Code.
(b)For purposes of Section 21624, 21626, 21627, 21629, or 21630, an individual who is the same gender as the member shall be treated in the same manner as a surviving spouse if the following conditions are satisfied:
(1)The individual entered into marriage with the member on or after the date when individuals of the same gender were legally allowed to enter into marriage and was married continuously until the date of the members death.
(2)Either of the following applies:
(A)The member retired prior to the date when individuals of the same gender were legally allowed to enter into marriage, and both the member and his or her spouse, who are currently married, sign an affidavit stating that, at the time prescribed by the retirement system for spouses to qualify for a survivor continuance, the member and the individual would have qualified to be legally married had it been legally possible for people of the same gender to marry.
(B)The individual originally qualified to become a surviving spouse under subdivision (a).
SEC. 36.SEC. 35.Section 22820 of the Government Code is amended to read:22820.(a)Upon the death, on or after January 1, 2002, of a firefighter employed by a county, city, city and county, district, or other political subdivision of the state, a firefighter employed by the Department of Forestry and Fire Protection, a firefighter employed by the federal government who was a resident of this state and whose regular duty assignment was to perform firefighting services within this state, or a peace officer as defined in Section 830.1, 830.2, 830.3, 830.31, 830.32, 830.33, 830.34, 830.35, 830.36, 830.37, 830.38, 830.39, 830.4, 830.5, 830.55, or 830.6 of the Penal Code, if the death occurred as a result of injury or disease arising out of and in the course of his or her official duties, the surviving spouse or other eligible family member of the deceased firefighter or peace officer, if uninsured, is deemed to be an annuitant under Section 22760 for purposes of enrollment. All eligible family members of the deceased firefighter or peace officer who are uninsured may enroll in a health benefit plan of the surviving spouses choice. However, an unmarried child of the surviving spouse is not eligible to enroll in a health benefit plan under this section if the child was not a family member under Section 22775 and regulations pertinent thereto prior to the firefighters or peace officers date of death. The employer of the deceased firefighter or peace officer shall notify the board within 10 business days of the death of the employee and any updated contact information of the surviving spouse or family member if that spouse or family member may be eligible for enrollment in a health benefit plan under this section.
(b)Upon notification, the board shall promptly determine eligibility and shall forward to the eligible spouse or family member the materials necessary for enrollment. In the event of a dispute regarding whether a firefighters or peace officers death occurred as a result of injury or disease arising out of and in the course of his or her official duties as required under subdivision (a), that dispute shall be determined by the Workers Compensation Appeals Board, subject to the same procedures and standards applicable to hearings relating to claims for workers compensation benefits. The jurisdiction of the Workers Compensation Appeals Board under this section is limited to the sole issue of industrial causation and this section does not authorize the Workers Compensation Appeals Board to award costs against the system.
(c)(1)Notwithstanding any other provision of law, and except as otherwise provided in subdivision (d), the state shall pay the employer contribution required for enrollment under this part for the uninsured surviving spouse of a deceased firefighter or peace officer for life, and the other uninsured eligible family members of a deceased firefighter or peace officer, provided the family member meets the eligibility requirements of Section 22775 and regulations pertinent thereto.
(2)The contribution payable by the state for each uninsured surviving spouse and other uninsured eligible family members shall be adjusted annually and be equal to the amount specified in Section 22871.
(3)The states contribution under this section shall commence on the effective date of enrollment of the uninsured surviving spouse or other uninsured eligible family members. The contribution of each surviving spouse and eligible family member shall be the total cost per month of the benefit coverage afforded him or her under the plan less the portion contributed by the state pursuant to this section.
(d)The cancellation of coverage by an annuitant, as defined in this section, shall be final without option to reenroll, unless coverage is canceled because of enrollment in an insurance plan from another source.
(e)For purposes of this section, surviving spouse means a spouse who was married to the deceased firefighter or peace officer on the deceaseds date of death and either was married for a continuous period of at least one year prior to the date of death or was married to the deceased prior to the date the deceased firefighter or peace officer sustained the injury or disease resulting in death.
(f)For purposes of this section, uninsured means that the surviving spouse is not enrolled in an employer-sponsored health plan under which the employer contribution covers 100 percent of the cost of health care premiums.
(g)The board has no duty to identify, locate, or notify any surviving spouse or eligible family member who may be or may become eligible for benefits under this section.
Notwithstanding any other provision, the governing board of a community college district may establish regulations that allow academic employees to reduce their workload from full-time to part-time duties. The regulations shall include, but shall not be limited to, the following if the employees wish to reduce their workload and maintain retirement benefits pursuant to Section 22713 of this code or Section 20815 20900 of the Government Code:
(a)The employee shall have reached the age of 55 prior to reduction in workload.
(b)The employee shall have been employed full time in an academic position or a position requiring certification qualifications, or both, for at least 10 years of which the immediately preceding five years were full-time employment.
(c)During the period immediately preceding a request for a reduction in workload, the employee shall have been employed full time in an academic position or a position requiring certification qualifications, or both, for a total of at least five years without a break in service. For purposes of this subdivision, sabbaticals and other approved leaves of absence shall not constitute a break in service. Time spent on a sabbatical or other approved leave of absence shall not be used in computing the five-year full-time service requirement prescribed by this subdivision.
(d)The option of part-time employment shall be exercised at the request of the employee and can be revoked only with the mutual consent of the employer and the employee.
(e)The employee shall be paid a salary which is the pro rata share of the salary he or she would be earning had he or she not elected to exercise the option of part-time employment but shall retain all other rights and benefits for which he or she makes the payments that would be required if he or she remained in full-time employment.
The employee shall receive health benefits as provided in Section 53201 of the Government Code in the same manner as a full-time employee.
(f)The minimum part-time employment shall be the equivalent of one-half of the number of days of service required by the employees contract of employment during his or her final year of service in a full-time position.
(g)The period of this part-time employment shall not exceed five years for employees subject to Section 20815 20900 of the Government Code or 10 years for employees subject to Section 22713 of this code.
(h)The period of part-time employment of employees subject to Section 20815 of the Government Code shall not extend beyond the end of the college year during which the employee reaches his or her 70th birthday. This subdivision shall not apply to any employee subject to Section 22713 of this code.
SEC. 2.Section 7502 of the Government Code is amended to read:7502.The State Controller shall review the annual financial report of each state and local public retirement system submitted pursuant to Section 7504 giving particular consideration to the adequacy of funding of each system. The State Controller shall also review the triennial valuation of each public retirement system submitted pursuant to Section 7504 and shall give particular consideration to the assumption concerning the inflation element in salary and wage increases, mortality, service retirement rates, withdrawal rates, disability retirement rates, and rate of return on total assets.
The State Controller shall establish an advisory committee which that shall include enrolled actuaries, as defined in Section 7504, actuaries who have attained the designation of Associate or Fellow of the Society of Actuaries and state and local public retirement system administrators, administrators to assist in carrying out the duties imposed by this section.
SEC. 3.Section 7504 of the Government Code is amended to read:7504.(a)All state and local public retirement systems shall, not less than triennially, secure the services of an enrolled actuary. An enrolled actuary, for For the purposes of this section, actuary means an actuary enrolled under subtitle C of Title III of the federal Employee Retirement Income Security Act of 1974 (Public Law 93-406) who satisfies the qualification standards for actuaries issuing statements of actuarial opinion in the United States with regard to pensions or other postemployment benefits and who has demonstrated experience in public retirement systems. The actuary shall perform a valuation of the system utilizing actuarial assumptions and techniques established by the agency that are, in the aggregate, reasonably related to the experience and the actuarys best estimate of anticipated experience under the system. Any differences between the actuarial assumptions and techniques used by the actuary that differ significantly from those established by the agency shall be disclosed in the actuarys report and the effect of the differences on the actuarys statement of costs and obligations shall be shown.
(b)All state and local public retirement systems shall secure the services of a qualified person to perform an attest audit of the systems financial statements. A qualified person means any of the following:
(1)A person who is licensed to practice as a certified public accountant in this state by the California Board of Accountancy.
(2)A person who is registered and entitled to practice as a public accountant in this state by the California Board of Accountancy.
(3)A county auditor in any 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).
(4)A county auditor in any county having a pension trust and retirement plan established pursuant to Section 53216.
(c)All state and local public retirement systems shall submit audited financial statements to the State Controller at the earliest practicable opportunity within six months of the close of each fiscal year. However, the State Controller may delay the filing date for reports due in the first year until the time as report forms have been developed that, in his or her judgment, will satisfy the requirements of this section. The financial statements shall be prepared in accordance with generally accepted accounting principles in the form and manner prescribed by the State Controller. The penalty prescribed in Section 53895 shall be invoked for failure to comply with this section. Upon a satisfactory showing of good cause, the State Controller may waive the penalty for late filing provided by this subdivision.
(d)The State Controller shall compile and publish a report annually on the financial condition of all state and local public retirement systems containing, but not limited to, the data required in Section 7502. The report shall be published within 12 months of the receipt of the information, and in no case later than 18 months after the end of the fiscal year upon which the information in the report is based.
SEC. 4.Section 7507 of the Government Code is amended to read:7507.(a)For the purpose of this section:
(1) Actuary means an actuary who is an associate or fellow of the Society of Actuaries. as defined in Section 7504.
(2)Future annual costs includes, but is not limited to, annual dollar changes, or the total dollar changes involved when available, as well as normal cost and any change in accrued liability.
(b)(1)Except as provided in paragraph (2), the Legislature and local legislative bodies, including community college district governing boards, when considering changes in retirement benefits or other postemployment benefits, shall secure the services of an actuary to provide a statement of the actuarial impact upon future annual costs, including normal cost and any additional accrued liability, before authorizing changes in public retirement plan benefits or other postemployment benefits.
(2)The requirements of this subdivision do not apply to:
(A)An annual increase in a premium that does not exceed 3 percent under a contract of insurance.
(B)A change in postemployment benefits, other than pension benefits, mandated by the state or federal government or made by an insurance carrier in connection with the renewal of a contract of insurance.
(c)(1)(A)With regard to local legislative bodies, including community college district governing boards, the future costs of changes in retirement benefits or other postemployment benefits, as determined by the actuary, shall be made public at a public meeting at least two weeks prior to the adoption of any changes in public retirement plan benefits or other postemployment benefits. If the future costs of the changes exceed one-half of 1 percent of the future annual costs, as defined in paragraph (2) of subdivision (a), of the existing benefits for the legislative body, an actuary shall be present to provide information as needed at the public meeting at which the adoption of a benefit change shall be considered. The adoption of any benefit to which this section applies shall not be placed on a consent calendar.
(B)The requirements of this paragraph do not apply to:
(i)An annual increase in a premium that does not exceed 3 percent under a contract of insurance.
(ii)A change in postemployment benefits, other than pension benefits, mandated by the state or federal government or made by an insurance carrier in connection with the renewal of a contract of insurance.
(2)With regard to the Legislature, the future costs as determined by the actuary shall be made public at the policy and fiscal committee hearings to consider the adoption of any changes in public retirement plan benefits or other postemployment benefits. The adoption of any benefit to which this section applies shall not be placed on a consent calendar.
(d)Upon the adoption of any benefit change to which this section applies, the person with the responsibilities of a chief executive officer in an entity providing the benefit, however that person is denominated, shall acknowledge in writing that he or she understands the current and future cost of the benefit as determined by the actuary. For the adoption of benefit changes by the state, this person shall be the Director of Human Resources.
(e)The requirements of this section do not apply to a school district or a county office of education, which shall instead comply with requirements regarding public notice of, and future cost determination for, benefit changes that have been enacted to regulate these entities. These requirements include, but are not limited to, those enacted by Chapter 1213 of the Statutes of 1991 and by Chapter 52 of the Statutes of 2004.
SEC. 5.Section 7507.2 of the Government Code is amended to read:7507.2.(a)There is hereby enacted the California Actuarial Advisory Panel. The panel shall provide impartial and independent information on pensions, other postemployment benefits, and best practices to public agencies and shall meet quarterly.
(b)The responsibilities of the California Actuarial Advisory Panel shall include, but are not limited to:
(1)Defining the range of actuarial model policies and best practices for public retirement plan benefits, including pensions and other postemployment benefits.
(2)Developing pricing and disclosure standards for California public sector benefit improvements.
(3)Developing quality control standards for California public sector actuaries.
(4)Gathering model funding policies and practices.
(5)Replying to policy questions from public retirement systems in California.
(6)Providing comment upon request by public agencies.
(c)The California Actuarial Advisory Panel shall consist of eight members. Each member shall be an actuary, as defined in Section 7507, actuary who has attained the designation of Associate or Fellow of the Society of Actuaries and who has demonstrated experience with public sector clients. Members shall be appointed by the entities listed below, and each member shall serve a three-year term, provided that, in the initial appointments only, the panelists named by the University of California, the Senate, and one of the panelists named by the Governor shall serve two-year terms. The Governor shall appoint two panelists, and one panelist shall be appointed by each of the following:
(1)The Teachers Retirement Board.
(2)The Board of Administration of the Public Employees Retirement System.
(3)The State Association of County Retirement Systems.
(4)The Board of Regents of the University of California.
(5)The Speaker of the Assembly.
(6)The Senate Committee on Rules.
(d)The California Actuarial Advisory Panel shall be located in the Controllers office, which shall provide support staff to the panel.
(e)The opinions of the California Actuarial Advisory Panel are nonbinding and advisory only. The opinions of the panel shall not, in any case, be used as the basis for litigation.
(f)A member of the California Actuarial Advisory Panel shall receive reimbursement for expenses that shall be paid by the authority that appointed the member.
(g)The California Actuarial Advisory Panel shall report to the Legislature on or before February 1 of each year.
SECTION 1.SEC. 6.Section 20034 of the Government Code is amended to read:20034.The highest annual average compensation during any consecutive 12- or 36-month period of employment as a member of any retirement system maintained by the university shall be considered compensation earnable by a member of this system for purposes of computing final compensation for the member providing he or she retires concurrently under both systems.
SEC. 2.SEC. 7.Section 20035 of the Government Code is amended to read:20035.(a)Notwithstanding Section 20037, final compensation for the purposes of determining any pension or benefit with respect to a state member who retires or dies on or after July 1, 1991, and with respect to benefits based on service with the state, means the highest annual compensation which was earnable by the state member during any consecutive 12-month period of employment preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier.
(b)With respect to a state member who retires or dies on or after July 1, 1991, and who was a managerial employee, as defined by subdivision (e) of Section 3513, or a supervisory employee, as defined by subdivision (g) of Section 3513, whose monthly salary range was administratively reduced by 5 percent because of the salary range reductions administratively imposed upon managers and supervisors during the 199192 fiscal year, final compensation means the highest annual compensation the state member would have earned had his or her salary range not been reduced by the 5-percent reduction. This subdivision shall only apply if the period during which the state members salary was reduced would have otherwise been included in determining his or her final compensation. The costs, if any, that may result from the use of the higher final compensation shall be paid for by the employer in the same manner as other retirement benefits are funded.
SEC. 3.SEC. 8.Section 20035.5 of the Government Code is amended to read:20035.5.Notwithstanding Section 20037, final compensation for the purposes of determining any pension or benefit with respect to a school member who retires or dies on or after January 1, 2000, and with respect to benefits based on service with a school employer, means the highest annual compensation that was earnable by the school member during any consecutive 12-month period of employment preceding the effective date of his or her retirement or the date of his or her last separation from service if earlier.
SEC. 4.SEC. 9.Section 20037 of the Government Code is amended to read:20037.For a state member, or for a local member who is an employee of a contracting agency that is subject to this section, final compensation means the highest annual average compensation earnable by a member during any consecutive 36-month period of employment preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier, including any or all of the period or periods of (a) service required for qualification for membership, or (b) prior service which qualifies for credit under this system, if any, immediately preceding membership, or (c) time prior to entering state service at the compensation earnable by him or her in the position first held by him or her in that service, as may be necessary to complete three consecutive years. For the purposes of this section, periods of service separated by a period of retirement or breaks in service may be aggregated to constitute a period of three consecutive years, if the periods of service are consecutive except for such a period of retirement or breaks. If a break in service did not exceed six months in duration, time included in the break and compensation earnable during that time shall be included in computation of final compensation. If a break in service exceeded six months in duration, the first six months thereof and the compensation earnable during those six months shall be included in computation of final compensation, but time included in the break which is in excess of six months and the compensation earnable during that excess time shall be excluded in computation of final compensation. On and after November 13, 1968, this section shall apply to all contracting agencies and to the employees of those agencies whether or not those agencies have previously elected to be subject to this section, except that this section shall not apply to an employee of a contracting agency which has not elected to be subject to this section whose death occurred or whose retirement was effective prior to November 13, 1968.
SEC. 5.SEC. 10.Section 20037.5 of the Government Code, as added by Section 56 of Chapter 88 of the Statutes of 1998, is repealed.SEC. 6.SEC. 11.Section 20037.5 of the Government Code, as added by Section 56 of Chapter 91 of the Statutes of 1998, is amended to read:20037.5.Notwithstanding Section 20035, final compensation for a state member who has elected to be subject to Section 21353.5, for the purposes of determining any pension or benefit based on service credited under that section, means the highest average annual compensation earnable by the member during any consecutive 36-month period preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier.
SEC. 7.SEC. 12.Section 20037.6 of the Government Code is amended to read:20037.6.(a)Notwithstanding Sections 20035 and 20037, final compensation for a person who is employed by the state for the first time and becomes a state member of the system on or after July 1, 2006, and is represented by State Bargaining Unit 2, means the highest average annual compensation earnable by the member during any consecutive 36-month period preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier.
(b)This section applies to service credit accrued while a member of State Bargaining Unit 2.
(c)This section does not apply to:
(1) Former state employees who return to state employment on or after July 1, 2006.
(2)State employees hired prior to July 1, 2006, who were subject to Section 20281.5 during the first 24 months of state employment.
(3)State employees hired prior to July 1, 2006, who become subject to representation by State Bargaining Unit 2 on or after July 1, 2006.
(4) State employees on an approved leave of absence who return to active employment on or after July 1, 2006.
SEC. 8.SEC. 13.Section 20037.7 of the Government Code is amended to read:20037.7.(a)Notwithstanding Sections 20035 and 20037, final compensation for a person who is employed by the state for the first time and becomes a state member of the system on or after January 1, 2007, and is represented by State Bargaining Unit 1, 3, 4, 11, 14, 15, 17, 20, or 21, means the highest average annual compensation earnable by the member during any consecutive 36-month period preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier.
(b)This section applies to service credit accrued while a member of State Bargaining Unit 1, 3, 4, 11, 14, 15, 17, 20, or 21.
(c)This section does not apply to:
(1)Former state employees previously employed before January 1, 2007, who return to state employment on or after January 1, 2007.
(2)State employees hired prior to January 1, 2007, who were subject to Section 20281.5 during the first 24 months of state employment.
(3)State employees hired prior to January 1, 2007, who become subject to representation by State Bargaining Unit 1, 3, 4, 11, 14, 15, 17, 20, or 21 on or after January 1, 2007.
(4)State employees on an approved leave of absence employed before January 1, 2007, who return to active employment on or after January 1, 2007.
SEC. 9.SEC. 14.Section 20037.8 of the Government Code is amended to read:20037.8.(a)Notwithstanding Sections 20035 and 20037, final compensation for a person who is employed by the state for the first time and becomes a state member of the system on or after January 1, 2007, and is represented by State Bargaining Unit 12 or 13, means the highest average annual compensation earnable by the member during any consecutive 36-month period preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier.
(b)This section applies to service credit accrued while a member of State Bargaining Unit 12 or 13.
(c)This section does not apply to:
(1)Former state employees previously employed before January 1, 2007, who return to state employment on or after January 1, 2007.
(2)State employees hired prior to January 1, 2007, who were subject to Section 20281.5 during the first 24 months of state employment.
(3)State employees hired prior to January 1, 2007, who become subject to representation by State Bargaining Unit 12 or 13 on or after January 1, 2007.
(4)State employees on an approved leave of absence employed before January 1, 2007, who return to active employment on or after January 1, 2007.
SEC. 10.SEC. 15.Section 20037.9 of the Government Code is amended to read:20037.9.(a)Notwithstanding Sections 20035 and 20037, final compensation for a person who is employed by the state for the first time and becomes a state member of the system on or after January 1, 2007, and is represented by State Bargaining Unit 16 or 19, means the highest average annual compensation earnable by the member during any consecutive 36-month period preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier.
(b)This section applies to service credit accrued while a member of State Bargaining Unit 16 or 19.
(c)This section does not apply to:
(1)Former state employees previously employed before January 1, 2007, who return to state employment on or after January 1, 2007.
(2)State employees hired prior to January 1, 2007, who were subject to Section 20281.5 during the first 24 months of state employment.
(3)State employees hired prior to January 1, 2007, who become subject to representation by State Bargaining Unit 16 or 19 on or after January 1, 2007.
(4)State employees on an approved leave of absence employed before January 1, 2007, who return to active employment on or after January 1, 2007.
SEC. 11.SEC. 16.Section 20037.10 of the Government Code is amended to read:20037.10.(a)Notwithstanding Sections 20035 and 20037, final compensation for a person who is employed by the state for the first time and becomes a state member of the system on or after January 1, 2007, and is represented by State Bargaining Unit 7, means the highest average annual compensation earnable by the member during any consecutive 36-month period immediately preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier.
(b)This section applies to service credit accrued while a member of State Bargaining Unit 7.
(c)This section does not apply to:
(1)Service credit accrued while classified as a state peace officer/firefighter while a member of State Bargaining Unit 7.
(2)Former state employees previously employed before January 1, 2007, who return to state employment on or after January 1, 2007.
(3)State employees hired prior to January 1, 2007, who were subject to Section 20281.5 during the first 24 months of state employment.
(4)State employees hired prior to January 1, 2007, who become subject to representation by State Bargaining Unit 7 on or after January 1, 2007.
(5)State employees on an approved leave of absence employed before January 1, 2007, who return to active employment on or after January 1, 2007.
SEC. 12.SEC. 17.Section 20037.11 of the Government Code is amended to read:20037.11.(a)Notwithstanding Sections 20035 and 20037, final compensation for a person who is employed by the state for the first time and becomes a state member of the system on or after January 1, 2007, and is represented by State Bargaining Unit 10, means the highest average annual compensation earnable by the member during any consecutive 36-month period preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier.
(b)This section applies to service credit accrued while a member of State Bargaining Unit 10.
(c)This section does not apply to:
(1)Former state employees previously employed before January 1, 2007, who return to state employment on or after January 1, 2007.
(2)State employees hired prior to January 1, 2007, who were subject to Section 20281.5 during the first 24 months of state employment.
(3)State employees hired prior to January 1, 2007, who become subject to representation by State Bargaining Unit 10 on or after January 1, 2007.
(4)State employees on an approved leave of absence employed before January 1, 2007, who return to active employment on or after January 1, 2007.
SEC. 13.SEC. 18.Section 20037.12 of the Government Code is amended to read:20037.12.(a)Notwithstanding Sections 20035 and 20037, final compensation for a person who is employed by the state for the first time and becomes a state member of the system on or after January 1, 2007, and is represented by State Bargaining Unit 18, means the highest average annual compensation earnable by the member during any consecutive 36-month period preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier.
(b)This section applies to service credit accrued while a member of State Bargaining Unit 18.
(c)This section does not apply to:
(1)Former state employees previously employed before January 1, 2007, who return to state employment on or after January 1, 2007.
(2)State employees hired prior to January 1, 2007, who were subject to Section 20281.5 during the first 24 months of state employment.
(3)State employees hired prior to January 1, 2007, who become subject to representation by State Bargaining Unit 18 on or after January 1, 2007.
(4)State employees on an approved leave of absence employed before January 1, 2007, who return to active employment on or after January 1, 2007.
SEC. 14.SEC. 19.Section 20037.13 of the Government Code is amended to read:20037.13.(a)Notwithstanding Sections 20035 and 20037, for the purposes of determining any pension or benefit with respect to benefits based on service with the state, final compensation means the highest annual compensation that was earnable by the state member during any consecutive 36-month period of employment preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier.
(b)This section shall only apply to a member appointed to a career executive assignment, as defined in Section 18546, who at the time of appointment meets one or more of the following criteria:
(1)He or she previously had, but does not currently have, permanent status in the civil service.
(2)He or she is a person described in Section 18990 who was not, within the past 12 months, employed by the Legislature for two or more consecutive years.
(3)He or she is a person described in Sections Section 18992 who was not, within the past 12 months, holding a nonelected exempt position in the executive branch.
(c)A state entity that employs a person described in subdivision (b) in a career executive assignment shall notify the Controller of this persons employment status and the Controller shall forward this information to the system.
SEC. 15.SEC. 20.Section 20037.14 of the Government Code, as amended by Section 127 of Chapter 296 of the Statutes of 2011, is repealed.SEC. 16.SEC. 21.Section 20037.14 of the Government Code, as added by Section 11 of Chapter 163 of the Statutes of 2010, is amended to read:20037.14.(a)Notwithstanding Sections 20035 and 20037, final compensation for a person who is employed by the state for the first time and becomes a state member of the system on or after October 31, 2010, and is represented by State Bargaining Unit 5 or 8, means the highest average annual compensation earnable by the member during any consecutive 36-month period preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier.
(b)This section applies to service credit accrued while a member of State Bargaining Unit 5 or 8 or in a class related to State Bargaining Unit 5 or 8 as an employee who is excepted from the definition of state employee in subdivision (c) of Section 3513, or an officer or employee of the executive branch of state government who is not a member of the civil service.
(c)This section does not apply to:
(1)Former state employees previously employed before October 31, 2010, who return to state employment on or after October 31, 2010.
(2)State employees hired prior to October 31, 2010, who were subject to Section 20281.5 during the first 24 months of state employment.
(3)State employees hired prior to October 31, 2010, who become subject to representation by State Bargaining Unit 5 or 8 on or after October 31, 2010.
(4)State employees on an approved leave of absence employed before October 31, 2010, who return to active employment on or after October 31, 2010.
SEC. 17.SEC. 22.Section 20037.15 of the Government Code is amended to read:20037.15.(a) Notwithstanding Sections 3517.8, 20035, and 20037, final compensation for a person who is employed for the first time and becomes a member of the system on or after January 15, 2011, means the highest average annual compensation earnable by the member during any consecutive 36-month period preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier.
(b)This section applies to the following:
(1)Service credit accrued while a member of State Bargaining Unit 6 or 9 or in a class related to State Bargaining Unit 6 or 9 as an employee who is excepted from the definition of state employee in subdivision (c) of Section 3513, or an officer or employee of the executive branch of state government who is not a member of the civil service.
(2)Service credit accrued while a peace officer/firefighter member represented by State Bargaining Unit 7 or in a class related to peace officer/firefighter members in State Bargaining Unit 7 as an employee who is excepted from the definition of state employee in subdivision (c) of Section 3513, or an officer or employee of the executive branch of state government who is not a member of the civil service.
(3)Service credit accrued as an employee who is excepted from the definition of state employee in subdivision (c) of Section 3513, or an officer or employee of the executive branch of state government who is not a member of the civil service.
(4)Service credit accrued as an employee of the Legislature, the judicial branch, or the California State University.
(c)This section does not apply to:
(1)Former employees previously employed before January 15, 2011, who return to employment on or after January 15, 2011, and who were previously subject to a 12-month average.
(2)State employees hired prior to January 15, 2011, who were subject to Section 20281.5 during the first 24 months of state employment, and who were previously subject to a 12-month average.
(3)State employees hired prior to January 15, 2011, who become subject to representation by State Bargaining Unit 6, 7, or 9 on or after January 15, 2011, and who were previously subject to a 12-month average.
(4)Employees on an approved leave of absence employed before January 15, 2011, who return to active employment on or after January 15, 2011, and who were previously subject to a 12-month average.
(d)If this section is in conflict with a memorandum of understanding that is current and in effect on January 15, 2011, the memorandum of understanding shall be controlling while it remains in effect. Upon expiration of the memorandum of understanding that is in effect and current on January 15, 2011, this section shall be controlling and may not be superseded by a subsequent memorandum of understanding.
SEC. 23.Section 20229 of the Government Code is amended to read:20229.(a)The board, notwithstanding Section 10231.5, shall provide the Legislature, the Governor, and the Chair of the California Actuarial Advisory Panel, established pursuant to Section 7507.2 of the Government Code, with an annual report that includes all of the following, as these items apply to state employee retirement plans:
(1)(A)A description of the investment return assumption utilized by the board when determining the contribution rates.
(B)A calculation of the contribution rates utilizing an investment return assumption 2 percentage points above and 2 percentage points below the investment return assumption utilized by the board.
(2)(A)A description of the amortization period for any unfunded liabilities utilized by the board when determining the contribution rates.
(B)A calculation of the contribution rates based on an amortization period equal to the estimated average remaining service periods of employees covered by the contributions.
(3)(A)A description of the discount rate utilized by the board for reporting liabilities.
(B)A calculation of those liabilities based upon a discount rate that is 2 percent below the long-term rate of return actually assumed by the board.
(4)The market value of the assets controlled by the board and an explanation of how the actuarial value assigned to those assets differs from the market value of those assets.
(b)The Each legislative session, the Chair of the California Actuarial Advisory Panel, or his or her designee, within 30 days of receipt of the report required by subdivision (a) shall, during a publicly noticed joint hearing of the Senate Committee on Public Employment and Retirement and the Assembly Committee on Public Employees, Retirement and Social Security, do all of the following: following based on information received in the report required by subdivision (a):
(1)Explain the role played by the investment return assumption and amortization period in the calculation of the contribution rates.
(2)Describe the consequences for future state budgets should the investment return assumption not be realized.
(3)Report whether the boards amortization period exceeds the estimated average remaining service periods of employees covered by the contributions.
(c)The report required by subdivision (a) shall be submitted in compliance with Section 9795.
SEC. 18.SEC. 24.Section 20537 of the Government Code is amended to read:20537.The board may charge interest on the amount of any payment due and unpaid by a contracting agency until payment is received. Interest shall be charged at the greater of the annual return on the systems investments for the year prior to the year in which payments are not timely made or a simple annual rate of 10 percent. The interest shall be deemed interest earnings for the year in which the late payment is received.
SEC. 19.SEC. 25.Section 20572 of the Government Code is amended to read:20572.(a)If a contracting agency fails for 30 days after demand by the board to pay in full any installment of contributions required by its contract, or fails for three months after demand therefor by the board to file any information required in the administration of this system with respect to that contracting agencys employees, or if the board determines that the contracting agency is no longer in existence, the board may terminate that contract by resolution adopted by a majority vote of its members effective 60 days after notice of its adoption has been mailed by registered mail to the governing body of the contracting agency.
(b)In addition to the interest obligations set forth in Section 20537, if a contracting agency fails to pay in full any installment of the contributions when due and the failure continues for a period of three months, the contracting agency may be assessed a penalty of 10 percent of the total amount due and unpaid, including any accrued and unpaid interest. The penalty may be assessed once during each 30-day period that the outstanding amount remains unpaid. In addition, the contracting agency may be assessed the costs of collection, including reasonable legal fees and litigation costs, including, without limitation, legal fees and legal costs incurred in bankruptcy, when necessary to collect any amounts due.
SEC. 20.SEC. 26.Section 20577.5 of the Government Code is amended to read:20577.5.Notwithstanding Section 20577, the board may elect not to impose a reduction, or to impose a lesser reduction, on a plan that has been terminated pursuant to Section 20572 if (a) the board has made all reasonable efforts to collect the amount necessary to fully fund the liabilities of the plan and (b) the board finds that not reducing the benefits, or imposing a lesser reduction, will not impact the actuarial soundness of the terminated agency pool.
SEC. 21.SEC. 27.Section 20578 of the Government Code is amended to read:20578.(a)Except as provided in subdivision (b), on and after January 1, 1991, the rights and benefits of a former employee of a contracting agency which terminated on or before January 1, 1991, or of his or her beneficiary, shall be the same as if the agency had continued as a contracting agency. Any monthly allowance of that individual, or of his or her beneficiary, that was reduced pursuant to Section 20577 because the contracting agency failed to pay the board the amount of the difference shall not be subject to continued reduction on or after January 1, 1991. As of January 1, 1991, benefits shall be paid at the level provided in the contract prior to that reduction. However, if a former employee of a contracting agency that terminated on or before January 1, 1991, becomes employed by another covered employer after the date of termination, including an employer subject to reciprocity, the benefits shall be calculated by using the highest compensation earned by the individual.
In accordance with Section 20580, an individual who has withdrawn his or her accumulated contributions from the terminated agency shall not be permitted to redeposit any withdrawn contributions upon again becoming a member of this system.
(b)If a contracting agency has not paid the system for any deficit in funding for earned benefits, as determined pursuant to Section 20577, members shall be entitled to the benefits to which members of the plan were entitled 36 months prior to the date the agency notified the board of its intention to terminate its contract or 36 months prior to the date the board notified the agency of its intent to terminate the contract, whichever is earlier. Entitlement to earned benefits under this subdivision shall be subject to Section 20577.5.
SEC. 22.SEC. 28.Section 20638 of the Government Code is amended to read:20638.The highest annual average compensation during any consecutive 12- or 36-month period of employment as a member of a county retirement system shall be considered compensation earnable by a member of this system for purposes of computing final compensation for the member provided:
(a)(1)Entry into employment in which he or she became a member in one system occurred on or after October 1, 1957, and within 90 days of discontinuance of employment as a member of the other system.
(2)This subdivision shall not deny the benefit of this section to any person retiring after October 1, 1963, who entered membership prior to October 1, 1957, if he or she entered the employment in which he or she became a member within 90 days of termination of employment in which he or she was a member of the other system, and he or she became a member within seven months of entry into employment, or, if an employee of a district as defined in Section 31468, became a member at the time the district was included in a county retirement system.
(b)He or she retires concurrently under both systems and is credited with the period of service under the county system at the time of retirement.
SEC. 29.Section 20900 of the Government Code is amended to read:20900.(a)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 employees 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 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 a member who meets the following criteria:
(1)The member is one of the following:
(A)An academic employee of the California State University or who are University.
(B)A certificated employees of school districts and who have met employee of a school district.
(C)An academic employee of a community college district.
(2)The member meets the criteria provided in Sections 44922 and 87483 of the Education Code or Section 89516 of the Education Code and are Code.
(3)The member is not older than 70 years of age and is limited to a period of five years of part-time status. The
(b)The employer shall maintain the necessary records to separately identify each employee receiving credit pursuant to this section.
SEC. 23.SEC. 30.Section 20963 of the Government Code is amended to read:20963.(a)A state, school, or school safety member, whose effective date of retirement is within four months of separation from employment with the employer subject to this section that granted the sick leave credit, shall be credited at his or her retirement with 0.004 year of service credit for each unused day of sick leave certified to the board by the employer. A day of unused sick leave is the equivalent of an eight-hour day. The certification shall report only those days of unused sick leave that were accrued by the member during the normal course of his or her employment and shall not include any additional days of sick leave reported for the purpose of increasing the members retirement benefit. Reports of unused days of sick leave shall be subject to audit and retirement benefits may be adjusted where improper reporting is found. For purposes of this subdivision, sick leave shall not include sick leave earned as a National Guard member as described in Section 20380.5.
(b)Until receipt of certification from an employer concerning unused sick leave, the board may pay an estimated allowance pursuant to this section. At the time of receipt of the certification, the allowance shall be adjusted to reflect any necessary changes.
(c)Notwithstanding any other provisions of this part, this section shall not apply to local members other than local miscellaneous members employed before July 1, 1980, by a school district that is a contracting agency or those school safety members employed before July 1, 1980, by a contracting agency that is a school district or community college district, as defined in subdivision (i) of Section 20057.
(d)This section shall not apply to any of the following:
(1)A person who becomes a school member on and after July 1, 1980, and any person who becomes a local member employed, on and after July 1, 1980, by a school district that is a contracting agency whether or not the person was ever a school member or local member prior to that date.
(2)A state employee, with respect to sick leave credits earned as a state member under Section 21353.5, except that the member shall be entitled to receive credit under this section for the sick leave he or she has earned as a state member subject to any other retirement formula, provided the member has a sick leave credit balance remaining at the time of retirement.
(e)For the purposes of this section, sick leave benefits provided to state employees pursuant to the state sick leave system shall be construed to mean compensation paid to employees on approved leaves of absence because of sickness.
SEC. 24.SEC. 31.Section 20963.1 of the Government Code is amended to read:20963.1.(a)A state member whose effective date of retirement is within four months of separation from employment of the state, shall be credited at his or her retirement with 0.004 year of service for each unused day of educational leave credit, as certified to the board by the employer. A day of unused educational leave is the equivalent of an eight-hour day. The provisions of this section shall be effective for eligible state members who retire directly from state employment on and after January 1, 2000.
(b)This section shall apply to eligible state members in state bargaining units that have agreed to this section in a memorandum of understanding, understanding or as authorized by the Director of Human Resources for classifications of state employees that are excluded from the definition of state employee by paragraph subdivision (c) of Section 3513 of the Government Code.
SEC. 25.SEC. 32.Section 20965 of the Government Code is amended to read:20965.A local miscellaneous member and a local safety member, whose effective date of retirement is within four months of separation from employment with the employer which granted the sick leave credit, shall be credited at his or her retirement with 0.004 year of service credit for each unused day of sick leave certified to the board by his or her employer. A day of unused sick leave is the equivalent of an eight-hour day. The certification shall report only those days of unused sick leave that were accrued by the member during the normal course of his or her employment and shall not include any additional days of sick leave reported for the purpose of increasing the members retirement benefit. Reports of unused days of sick leave shall be subject to audit and retirement benefits may be adjusted where improper reporting is found.
This section shall not apply to any contracting agency nor to the employees of a contracting agency until the agency elects to be subject to this section by contract or by amendment to its contract made in the manner prescribed for approval of contracts, except that an election among the employees is not required, or, in the case of contracts made after September 26, 1974, by express provision in the contract making the contracting agency subject to this section.
This section shall only apply to members who retire after the effective date of the contract amendments.
SEC. 33.Section 21337 of the Government Code is amended to read:21337.(a)On an annual basis, the board shall transfer funds to separate supplemental state and school accounts, to fund the purchasing power protection allowance of retirees, survivors, and beneficiaries of state or school employers, respectively. The amounts transferred shall be the lesser of the following:
(1)The amount necessary to increase all monthly allowances paid by this system to retirees, survivors, and beneficiaries of state or school employers to 75 percent of the purchasing power of the initial monthly allowances.
(2)One and one-tenth percent of the net earnings on state or school member contributions, as determined by Section 20178. contributions.
(b)The funds transferred to the two separate supplemental accounts shall be utilized to increase all monthly allowances paid by this system to retirees, survivors, and beneficiaries of state and school employers, up to a maximum of 75 percent of the purchasing power, as determined by the board, of the initial monthly allowances, notwithstanding the benefit provided by Section 21328, that were received by every retired state or school member or survivor or beneficiary of a state or school member or retiree who was eligible to receive any allowance at the end of each fiscal year. Funds remaining in the state or school account after the payment of benefits under this section shall be transferred to the respective state or school employer accounts.
(c)Annual adjustments in the purchasing power protection allowance shall be effective with the monthly allowance regularly payable on the first day of May, provided that in the first year after enactment of the act adding this subdivision, the purchasing power protection allowance adjustment to the monthly allowance payable on the first day of May shall also reflect an adjustment for the period from January 1 through April 30. The board shall implement the provisions of this subdivision on or before January 1, 2012, unless the board determines that the implementation tasks cannot be completed until a later date, in which case, the board shall be prepared to implement the provisions of this section no later than July 1, 2013.
SEC. 26.SEC. 34.Section 21499 of the Government Code is amended to read:21499.(a)Notwithstanding Section 21498, when either an initial payment of a preretirement or postretirement death allowance or a preretirement or postretirement lump-sum benefit is payable in an amount of ten dollars ($10) or more, it shall be authorized to the Controller within 45 days of receipt by this system of all the necessary information, including the return of warrants issued or any overpayment outstanding after the date of the death of the annuitant.
(b)If any payment is not made within that time limitation, the payment shall also include interest at the default interest rate established in Section 1 of Article XV of the California Constitution for time following the expiration of that time limitation.
SEC. 27.SEC. 35.Section 21626.5 of the Government Code is amended to read:21626.5.(a)For purposes of Section 21624, 21626, 21627, 21629, or 21630, a surviving domestic partner shall be treated in the same manner as a surviving spouse if either:
(1)The domestic partnership was registered for one year prior to the members service retirement date or at the disability retirement date and continuously until the date of the members death.
(2)The member retired prior to January 1, 2006, and both the member and his or her domestic partner, who currently are in a state-registered domestic partnership, sign an affidavit stating that, at the time prescribed by the retirement system for married spouses to qualify for survivor continuance, the member and the domestic partner would have qualified to be registered as domestic partners pursuant to Section 297 of the Family Code.
(b)For purposes of Section 21624, 21626, 21627, 21629, or 21630, an individual who is the same gender as the member shall be treated in the same manner as a surviving spouse if the following conditions are satisfied:
(1)The individual entered into marriage with the member on or after the date when individuals of the same gender were legally allowed to enter into marriage and was married continuously until the date of the members death.
(2)Either of the following applies:
(A)The member retired prior to the date when individuals of the same gender were legally allowed to enter into marriage, and both the member and his or her spouse, who are currently married, sign an affidavit stating that, at the time prescribed by the retirement system for spouses to qualify for a survivor continuance, the member and the individual would have qualified to be legally married had it been legally possible for people of the same gender to marry.
(B)The individual originally qualified to become a surviving spouse under subdivision (a).
SEC. 36.Section 22820 of the Government Code is amended to read:22820.(a)Upon the death, on or after January 1, 2002, of a firefighter employed by a county, city, city and county, district, or other political subdivision of the state, a firefighter employed by the Department of Forestry and Fire Protection, a firefighter employed by the federal government who was a resident of this state and whose regular duty assignment was to perform firefighting services within this state, or a peace officer as defined in Section 830.1, 830.2, 830.3, 830.31, 830.32, 830.33, 830.34, 830.35, 830.36, 830.37, 830.38, 830.39, 830.4, 830.5, 830.55, or 830.6 of the Penal Code, if the death occurred as a result of injury or disease arising out of and in the course of his or her official duties, the surviving spouse or other eligible family member of the deceased firefighter or peace officer, if uninsured, is deemed to be an annuitant under Section 22760 for purposes of enrollment. All eligible family members of the deceased firefighter or peace officer who are uninsured may enroll in a health benefit plan of the surviving spouses choice. However, an unmarried child of the surviving spouse is not eligible to enroll in a health benefit plan under this section if the child was not a family member under Section 22775 and regulations pertinent thereto prior to the firefighters or peace officers date of death. The employer of the deceased firefighter or peace officer shall notify the board within 10 business days of the death of the employee if a and any updated contact information of the surviving spouse or family member if that spouse or family member may be eligible for enrollment in a health benefit plan under this section.
(b)Upon notification, the board shall promptly determine eligibility and shall forward to the eligible spouse or family member the materials necessary for enrollment. In the event of a dispute regarding whether a firefighters or peace officers death occurred as a result of injury or disease arising out of and in the course of his or her official duties as required under subdivision (a), that dispute shall be determined by the Workers Compensation Appeals Board, subject to the same procedures and standards applicable to hearings relating to claims for workers compensation benefits. The jurisdiction of the Workers Compensation Appeals Board under this section is limited to the sole issue of industrial causation and this section does not authorize the Workers Compensation Appeals Board to award costs against the system.
(c)(1)Notwithstanding any other provision of law, and except as otherwise provided in subdivision (d), the state shall pay the employer contribution required for enrollment under this part for the uninsured surviving spouse of a deceased firefighter or peace officer for life, and the other uninsured eligible family members of a deceased firefighter or peace officer, provided the family member meets the eligibility requirements of Section 22775 and regulations pertinent thereto.
(2)The contribution payable by the state for each uninsured surviving spouse and other uninsured eligible family members shall be adjusted annually and be equal to the amount specified in Section 22871.
(3)The states contribution under this section shall commence on the effective date of enrollment of the uninsured surviving spouse or other uninsured eligible family members. The contribution of each surviving spouse and eligible family member shall be the total cost per month of the benefit coverage afforded him or her under the plan less the portion contributed by the state pursuant to this section.
(d)The cancellation of coverage by an annuitant, as defined in this section, shall be final without option to reenroll, unless coverage is canceled because of enrollment in an insurance plan from another source.
(e)For purposes of this section, surviving spouse means a spouse who was married to the deceased firefighter or peace officer on the deceaseds date of death and either was married for a continuous period of at least one year prior to the date of death or was married to the deceased prior to the date the deceased firefighter or peace officer sustained the injury or disease resulting in death.
(f)For purposes of this section, uninsured means that the surviving spouse is not enrolled in an employer-sponsored health plan under which the employer contribution covers 100 percent of the cost of health care premiums.
(g)The board has no duty to identify, locate, or notify any surviving spouse or eligible family member who may be or may become eligible for benefits under this section.
The average monthly salary highest annual average compensation during any consecutive 12- or 36-month period of service employment as a member of any retirement system maintained by the university shall be considered compensation earnable by a member of this system for purposes of computing final compensation for the member providing he or she retires concurrently under both systems.
SEC. 2.Section 20035 of the Government Code is amended to read:20035.(a)Notwithstanding Section 20037, final compensation for the purposes of determining any pension or benefit with respect to a state member who retires or dies on or after July 1, 1991, and with respect to benefits based on service with the state, means the highest annual compensation which was earnable by the state member during the any consecutive 12-month period of employment immediately preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier or during any other period of 12 consecutive months during his or her membership in this system that the member designates on the application for retirement. earlier.
(b)With respect to a state member who retires or dies on or after July 1, 1991, and who was a managerial employee, as defined by subdivision (e) of Section 3513, or a supervisory employee, as defined by subdivision (g) of Section 3513, whose monthly salary range was administratively reduced by 5 percent because of the salary range reductions administratively imposed upon managers and supervisors during the 199192 fiscal year, final compensation means the highest annual compensation the state member would have earned had his or her salary range not been reduced by the 5-percent reduction. This subdivision shall only apply if the period during which the state members salary was reduced would have otherwise been included in determining his or her final compensation. The costs, if any, that may result from the use of the higher final compensation shall be paid for by the employer in the same manner as other retirement benefits are funded.
SEC. 3.Section 20035.5 of the Government Code is amended to read:20035.5.Notwithstanding Section 20037, final compensation for the purposes of determining any pension or benefit with respect to a school member who retires or dies on or after January 1, 2000, and with respect to benefits based on service with a school employer, means the highest annual compensation that was earnable by the school member during the any consecutive 12-month period of employment immediately preceding the effective date of his or her retirement or the date of his or her last separation from service if earlier or during any other period of 12 consecutive months during his or her membership in this system that the member designates on the application for retirement. earlier.
SEC. 4.Section 20037 of the Government Code is amended to read:20037.For a state member, or for a local member who is an employee of a contracting agency that is subject to this section, final compensation means the highest average annual average compensation earnable by a member during the three consecutive years any consecutive 36-month period of employment immediately preceding the effective date of his or her retirement or the date of his or her last separation from state service if earlier or during any other period of three consecutive years during his or her membership in this system which he or she designates in his or her application for retirement, earlier, including any or all of the period or periods of (a) service required for qualification for membership, or (b) prior service which qualifies for credit under this system, if any, immediately preceding membership, or (c) time prior to entering state service at the compensation earnable by him or her in the position first held by him or her in that service, as may be necessary to complete three consecutive years. For the purposes of this section, periods of service separated by a period of retirement or breaks in service may be aggregated to constitute a period of three consecutive years, if the periods of service are consecutive except for such a period of retirement or breaks. If a break in service did not exceed six months in duration, time included in the break and compensation earnable during that time shall be included in computation of final compensation. If a break in service exceeded six months in duration, the first six months thereof and the compensation earnable during those six months shall be included in computation of final compensation, but time included in the break which is in excess of six months and the compensation earnable during that excess time shall be excluded in computation of final compensation. On and after November 13, 1968, this section shall apply to all contracting agencies and to the employees of those agencies whether or not those agencies have previously elected to be subject to this section, except that this section shall not apply to an employee of a contracting agency which has not elected to be subject to this section whose death occurred or whose retirement was effective prior to November 13, 1968.
SEC. 5.Section 20037.5 of the Government Code, as added by Section 56 of Chapter 88 of the Statutes of 1998, is repealed.20037.5.Notwithstanding Section 20035, final compensation for a state member who has elected to be subject to Section 21353.5, for the purposes of determining any pension or benefit based on service credited under that section, means the highest average annual compensation earnable by the member during the consecutive 36-month period immediately preceding the effective date of his or her retirement, or the date of his or her last separation from state service if earlier, or during any other period of 36 consecutive months during his or her state membership that the member designates on the application for retirement.
SEC. 6.Section 20037.5 of the Government Code, as added by Section 56 of Chapter 91 of the Statutes of 1998, is amended to read:20037.5.Notwithstanding Section 20035, final compensation for a state member who has elected to be subject to Section 21353.5, for the purposes of determining any pension or benefit based on service credited under that section, means the highest average annual compensation earnable by the member during the any consecutive 36-month period immediately preceding the effective date of his or her retirement, retirement or the date of his or her last separation from state service if earlier, or during any other period of 36 consecutive months during his or her state membership that the member designates on the application for retirement. earlier.
SEC. 7.Section 20037.6 of the Government Code is amended to read:20037.6.(a)Notwithstanding Sections 20035 and 20037, final compensation for a person who is employed by the state for the first time and becomes a state member of the system on or after July 1, 2006, and is represented by State Bargaining Unit 2, means the highest average annual compensation earnable by the member during the any consecutive 36-month period immediately preceding the effective date of his or her retirement, retirement or the date of his or her last separation from state service if earlier, or during any other period of 36 consecutive months during his or her state membership that the member designates on the application for retirement. earlier.
(b)This section applies to service credit accrued while a member of State Bargaining Unit 2.
(c)This section does not apply to:
(1) Former state employees who return to state employment on or after July 1, 2006.
(2)State employees hired prior to July 1, 2006, who were subject to Section 20281.5 during the first 24 months of state employment.
(3)State employees hired prior to July 1, 2006, who become subject to representation by State Bargaining Unit 2 on or after July 1, 2006.
(4) State employees on an approved leave of absence who return to active employment on or after July 1, 2006.
SEC. 8.Section 20037.7 of the Government Code is amended to read:20037.7.(a)Notwithstanding Sections 20035 and 20037, final compensation for a person who is employed by the state for the first time and becomes a state member of the system on or after January 1, 2007, and is represented by State Bargaining Unit 1, 3, 4, 11, 14, 15, 17, 20, or 21, means the highest average annual compensation earnable by the member during the any consecutive 36-month period immediately preceding the effective date of his or her retirement, retirement or the date of his or her last separation from state service if earlier, or during any other period of 36 consecutive months during his or her state membership that the member designates on the application for retirement. earlier.
(b)This section applies to service credit accrued while a member of State Bargaining Unit 1, 3, 4, 11, 14, 15, 17, 20, or 21.
(c)This section does not apply to:
(1)Former state employees previously employed before January 1, 2007, who return to state employment on or after January 1, 2007.
(2)State employees hired prior to January 1, 2007, who were subject to Section 20281.5 during the first 24 months of state employment.
(3)State employees hired prior to January 1, 2007, who become subject to representation by State Bargaining Unit 1, 3, 4, 11, 14, 15, 17, 20, or 21 on or after January 1, 2007.
(4)State employees on an approved leave of absence employed before January 1, 2007, who return to active employment on or after January 1, 2007.
SEC. 9.Section 20037.8 of the Government Code is amended to read:20037.8.(a)Notwithstanding Sections 20035 and 20037, final compensation for a person who is employed by the state for the first time and becomes a state member of the system on or after January 1, 2007, and is represented by State Bargaining Unit 12 or 13, means the highest average annual compensation earnable by the member during the any consecutive 36-month period immediately preceding the effective date of his or her retirement, retirement or the date of his or her last separation from state service if earlier, or during any other period of 36 consecutive months during his or her state membership that the member designates on the application for retirement. earlier.
(b)This section applies to service credit accrued while a member of State Bargaining Unit 12 or 13.
(c)This section does not apply to:
(1)Former state employees previously employed before January 1, 2007, who return to state employment on or after January 1, 2007.
(2)State employees hired prior to January 1, 2007, who were subject to Section 20281.5 during the first 24 months of state employment.
(3)State employees hired prior to January 1, 2007, who become subject to representation by State Bargaining Unit 12 or 13 on or after January 1, 2007.
(4)State employees on an approved leave of absence employed before January 1, 2007, who return to active employment on or after January 1, 2007.
SEC. 10.Section 20037.9 of the Government Code is amended to read:20037.9.(a)Notwithstanding Sections 20035 and 20037, final compensation for a person who is employed by the state for the first time and becomes a state member of the system on or after January 1, 2007, and is represented by State Bargaining Unit 16 or 19, means the highest average annual compensation earnable by the member during the any consecutive 36-month period immediately preceding the effective date of his or her retirement, retirement or the date of his or her last separation from state service if earlier, or during any other period of 36 consecutive months during his or her state membership that the member designates on the application for retirement. earlier.
(b)This section applies to service credit accrued while a member of State Bargaining Unit 16 or 19.
(c)This section does not apply to:
(1)Former state employees previously employed before January 1, 2007, who return to state employment on or after January 1, 2007.
(2)State employees hired prior to January 1, 2007, who were subject to Section 20281.5 during the first 24 months of state employment.
(3)State employees hired prior to January 1, 2007, who become subject to representation by State Bargaining Unit 16 or 19 on or after January 1, 2007.
(4)State employees on an approved leave of absence employed before January 1, 2007, who return to active employment on or after January 1, 2007.
SEC. 11.Section 20037.10 of the Government Code is amended to read:20037.10.(a)Notwithstanding Sections 20035 and 20037, final compensation for a person who is employed by the state for the first time and becomes a state member of the system on or after January 1, 2007, and is represented by State Bargaining Unit 7, means the highest average annual compensation earnable by the member during the any consecutive 36-month period immediately preceding the effective date of his or her retirement, retirement or the date of his or her last separation from state service if earlier, or during any other period of 36 consecutive months during his or her state membership that the member designates on the application for retirement. earlier.
(b)This section applies to service credit accrued while a member of State Bargaining Unit 7.
(c)This section does not apply to:
(1)Service credit accrued while classified as a state peace officer/firefighter while a member of Bargaining Unit 7.
(2)Former state employees previously employed before January 1, 2007, who return to state employment on or after January 1, 2007.
(3)State employees hired prior to January 1, 2007, who were subject to Section 20281.5 during the first 24 months of state employment.
(4)State employees hired prior to January 1, 2007, who become subject to representation by State Bargaining Unit 7 on or after January 1, 2007.
(5)State employees on an approved leave of absence employed before January 1, 2007, who return to active employment on or after January 1, 2007.
SEC. 12.Section 20037.11 of the Government Code is amended to read:20037.11.(a)Notwithstanding Sections 20035 and 20037, final compensation for a person who is employed by the state for the first time and becomes a state member of the system on or after January 1, 2007, and is represented by State Bargaining Unit 10, means the highest average annual compensation earnable by the member during the any consecutive 36-month period immediately preceding the effective date of his or her retirement, retirement or the date of his or her last separation from state service if earlier, or during any other period of 36 consecutive months during his or her state membership that the member designates on the application for retirement. earlier.
(b)This section applies to service credit accrued while a member of State Bargaining Unit 10.
(c)This section does not apply to:
(1)Former state employees previously employed before January 1, 2007, who return to state employment on or after January 1, 2007.
(2)State employees hired prior to January 1, 2007, who were subject to Section 20281.5 during the first 24 months of state employment.
(3)State employees hired prior to January 1, 2007, who become subject to representation by State Bargaining Unit 10 on or after January 1, 2007.
(4)State employees on an approved leave of absence employed before January 1, 2007, who return to active employment on or after January 1, 2007.
SEC. 13.Section 20037.12 of the Government Code is amended to read:20037.12.(a)Notwithstanding Sections 20035 and 20037, final compensation for a person who is employed by the state for the first time and becomes a state member of the system on or after January 1, 2007, and is represented by State Bargaining Unit 18, means the highest average annual compensation earnable by the member during the any consecutive 36-month period immediately preceding the effective date of his or her retirement, retirement or the date of his or her last separation from state service if earlier, or during any other period of 36 consecutive months during his or her state membership that the member designates on the application for retirement. earlier.
(b)This section applies to service credit accrued while a member of State Bargaining Unit 18.
(c)This section does not apply to:
(1)Former state employees previously employed before January 1, 2007, who return to state employment on or after January 1, 2007.
(2)State employees hired prior to January 1, 2007, who were subject to Section 20281.5 during the first 24 months of state employment.
(3)State employees hired prior to January 1, 2007, who become subject to representation by State Bargaining Unit 18 on or after January 1, 2007.
(4)State employees on an approved leave of absence employed before January 1, 2007, who return to active employment on or after January 1, 2007.
SEC. 14.Section 20037.13 of the Government Code is amended to read:20037.13.(a)Notwithstanding Sections 20035 and 20037, for the purposes of determining any pension or benefit with respect to benefits based on service with the state, final compensation means the highest annual compensation that was earnable by the state member during the any consecutive 36-month period of employment immediately preceding the effective date of his or her retirement or the date of his or her last separation from state service or during any other period of 36 consecutive months during his or her membership in this system that the member designates on the application for retirement. if earlier.
(b)This section shall only apply to a member appointed to a career executive assignment, as defined in Section 18546, who at the time of appointment meets one or more of the following criteria:
(1)He or she previously had, but does not currently have, permanent status in the civil service.
(2)He or she is a person described in Section 18990 who was not, within the past 12 months, employed by the Legislature for two or more consecutive years.
(3)He or she is a person described in Sections 18992 who was not, within the past 12 months, holding a nonelected exempt position in the executive branch.
(c)A state entity that employs a person described in subdivision (b) in a career executive assignment shall notify the Controller of this persons employment status and the Controller shall forward this information to the system.
SEC. 15.Section 20037.14 of the Government Code, as amended by Section 127 of Chapter 296 of the Statutes of 2011, is repealed.20037.14.(a)Notwithstanding Sections 20035 and 20037, final compensation for a person who is employed by the state for the first time and becomes a state member of the system on or after October 31, 2010, and is represented by State Bargaining Unit 5 or 8, means the highest average annual compensation earnable by the member during the consecutive 36-month period immediately preceding the effective date of his or her retirement, or the date of his or her last separation from state service if earlier, or during any other period of 36 consecutive months during his or her state membership that the member designates on the application for retirement.
(b)This section applies to service credit accrued while a member of State Bargaining Unit 5 or 8 or in a class related to State Bargaining Unit 5 or 8 as an employee who is excepted from the definition of state employee in subdivision (c) of Section 3513, or an officer or employee of the executive branch of state government who is not a member of the civil service.
(c)This section does not apply to:
(1)Former state employees previously employed before October 31, 2010, who return to state employment on or after October 31, 2010.
(2)State employees hired prior to October 31, 2010, who were subject to Section 20281.5 during the first 24 months of state employment.
(3)State employees hired prior to October 31, 2010, who become subject to representation by State Bargaining Unit 5 or 8 on or after October 31, 2010.
(4)State employees on an approved leave of absence employed before October 31, 2010, who return to active employment on or after October 31, 2010.
SEC. 16.Section 20037.14 of the Government Code, as added by Section 11 of Chapter 163 of the Statutes of 2010, is amended to read:20037.14.(a)Notwithstanding Sections 20035 and 20037, final compensation for a person who is employed by the state for the first time and becomes a state member of the system on or after October 31, 2010, and is represented by State Bargaining Unit 5 or 8, means the highest average annual compensation earnable by the member during the any consecutive 36-month period immediately preceding the effective date of his or her retirement, retirement or the date of his or her last separation from state service if earlier, or during any other period of 36 consecutive months during his or her state membership that the member designates on the application for retirement. earlier.
(b)This section applies to service credit accrued while a member of State Bargaining Unit 5 or 8 or in a class related to State Bargaining Unit 5 or 8 as an employee who is excepted from the definition of state employee in subdivision (c) of Section 3513, or an officer or employee of the executive branch of state government who is not a member of the civil service.
(c)This section does not apply to:
(1)Former state employees previously employed before October 31, 2010, who return to state employment on or after October 31, 2010.
(2)State employees hired prior to October 31, 2010, who were subject to Section 20281.5 during the first 24 months of state employment.
(3)State employees hired prior to October 31, 2010, who become subject to representation by State Bargaining Unit 5 or 8 on or after October 31, 2010.
(4)State employees on an approved leave of absence employed before October 31, 2010, who return to active employment on or after October 31, 2010.
SEC. 17.Section 20037.15 of the Government Code is amended to read:20037.15.(a) Notwithstanding Sections 3517.8, 20035, and 20037, final compensation for a person who is employed for the first time and becomes a member of the system on or after January 15, 2011, means the highest average annual compensation earnable by the member during the any consecutive 36-month period immediately preceding the effective date of his or her retirement, retirement or the date of his or her last separation from state service if earlier, or during any other period of 36 consecutive months during his or her state membership that the member designates on the application for retirement. earlier.
(b)This section applies to the following:
(1)Service credit accrued while a member of State Bargaining Unit 6 or 9 or in a class related to State Bargaining Unit 6 or 9 as an employee who is excepted from the definition of state employee in subdivision (c) of Section 3513, or an officer or employee of the executive branch of state government who is not a member of the civil service.
(2)Service credit accrued while a peace officer/firefighter member represented by State Bargaining Unit 7 or in a class related to peace officer/firefighter members in State Bargaining Unit 7 as an employee who is excepted from the definition of state employee in subdivision (c) of Section 3513, or an officer or employee of the executive branch of state government who is not a member of the civil service.
(3)Service credit accrued as an employee who is excepted from the definition of state employee in subdivision (c) of Section 3513, or an officer or employee of the executive branch of state government who is not a member of the civil service.
(4)Service credit accrued as an employee of the Legislature, the judicial branch, or the California State University.
(c)This section does not apply to:
(1)Former employees previously employed before January 15, 2011, who return to employment on or after January 15, 2011, and who were previously subject to a 12-month average.
(2)State employees hired prior to January 15, 2011, who were subject to Section 20281.5 during the first 24 months of state employment, and who were previously subject to a 12-month average.
(3)State employees hired prior to January 15, 2011, who become subject to representation by State Bargaining Unit 6, 7, or 9 on or after January 15, 2011, and who were previously subject to a 12-month average.
(4)Employees on an approved leave of absence employed before January 15, 2011, who return to active employment on or after January 15, 2011, and who were previously subject to a 12-month average.
(d)If this section is in conflict with a memorandum of understanding that is current and in effect on January 15, 2011, the memorandum of understanding shall be controlling while it remains in effect. Upon expiration of the memorandum of understanding that is in effect and current on January 15, 2011, this section shall be controlling and may not be superseded by a subsequent memorandum of understanding.
SEC. 18.Section 20537 of the Government Code is amended to read:20537.The board may charge interest on the amount of any payment due and unpaid by a contracting agency until payment is received. Interest shall be charged at the actuarial interest rate. greater of the annual return on the systems investments for the year prior to the year in which payments are not timely made or a simple annual rate of 10 percent. The interest shall be deemed interest earnings for the year in which the late payment is received.
SEC. 19.Section 20572 of the Government Code is amended to read:20572.(a)If a contracting agency fails for 30 days after demand by the board to pay in full any installment of contributions required by its contract, or fails for three months after demand therefor by the board therefor to file any information required in the administration of this system with respect to that contracting agencys employees, or if the board determines that the contracting agency is no longer in existence, the board may terminate that contract by resolution adopted by a majority vote of its members effective 60 days after notice of its adoption has been mailed by registered mail to the governing body of the contracting agency.
(b)Notwithstanding In addition to the interest obligations set forth in Section 20537, if a contracting agency fails to remit pay in full any installment of the contributions when due, the agency may be assessed interest at an annual rate of 10 percent and the costs of collection, including reasonable legal fees, when necessary to collect the amounts due. In the case of repeated delinquencies, due and the failure continues for a period of three months, the contracting agency may be assessed a penalty of 10 percent of the delinquent amount. That total amount due and unpaid, including any accrued and unpaid interest. The penalty may be assessed once during each 30-day period that the outstanding amount remains unpaid. In addition, the contracting agency may be assessed the costs of collection, including reasonable legal fees and litigation costs, including, without limitation, legal fees and legal costs incurred in bankruptcy, when necessary to collect any amounts due.
SEC. 20.Section 20577.5 of the Government Code is amended to read:20577.5.Notwithstanding Section 20577, the board may merge a plan elect not to impose a reduction, or to impose a lesser reduction, on a plan that has been terminated pursuant to Section 20572 into the terminated agency pool without benefit reduction, or with a lesser reduction, 20572 if (a) the board has made all reasonable efforts to collect the amount necessary to fully fund the liabilities of the plan, plan and (b) the board finds that the merger of the plan into the terminated agency pool without benefit reduction not reducing the benefits, or imposing a lesser reduction, will not impact the actuarial soundness of the terminated agency pool.
SEC. 21.Section 20578 of the Government Code is amended to read:20578.(a)Except as provided in subdivision (b), on and after January 1, 1991, the rights and benefits of a former employee of a contracting agency which terminated on or before January 1, 1991, or of his or her beneficiary, shall be the same as if the agency had continued as a contracting agency. Any monthly allowance of that individual, or of his or her beneficiary, that was reduced pursuant to Section 20577 because the contracting agency failed to pay the board the amount of the difference shall not be subject to continued reduction on or after January 1, 1991. As of January 1, 1991, benefits shall be paid at the level provided in the contract prior to that reduction. However, if a former employee of a contracting agency that terminated on or before January 1, 1991, becomes employed by another covered employer after the date of termination, including an employer subject to reciprocity, the benefits shall be calculated by using the highest compensation earned by the individual.
In accordance with Section 20580, an individual who has withdrawn his or her accumulated contributions from the terminated agency shall not be permitted to redeposit any withdrawn contributions upon again becoming a member of this system.
Except as provided in Section 20577.5, benefits shall be reduced proportionally pursuant to Section 20577 prior to the transfer of assets to the pool if the amount of the terminating agencys assets are less than the actuarial equivalent described in clause (1) of subdivision (a) of Section 20576 and if the agency fails to pay the difference.
(b)If a contracting agency has not paid the system for any deficit in funding for earned benefits, as determined pursuant to Section 20577, members shall be entitled to the benefits to which members of the plan were entitled 36 months prior to the date the agency notified the board of its intention to terminate its contract or 36 months prior to the date the board notified the agency of its intent to terminate the contract, whichever is earlier. Entitlement to earned benefits under this subdivision shall be subject to Section 20577.5.
SEC. 22.Section 20638 of the Government Code is amended to read:20638.The average monthly salary highest annual average compensation during any consecutive 12- or 36-month period of service employment as a member of a county retirement system shall be considered compensation earnable by a member of this system for purposes of computing final compensation for the member provided:
(a)(1)Entry into employment in which he or she became a member in one system occurred on or after October 1, 1957, and within 90 days of discontinuance of employment as a member of the other system.
(2)This subdivision shall not deny the benefit of this section to any person retiring after October 1, 1963, who entered membership prior to October 1, 1957, if he or she entered the employment in which he or she became a member within 90 days of termination of employment in which he or she was a member of the other system, and he or she became a member within seven months of entry into employment, or, if an employee of a district as defined in Section 31468, became a member at the time the district was included in a county retirement system.
(b)He or she retires concurrently under both systems and is credited with the period of service under the county system at the time of retirement.
SEC. 23.Section 20963 of the Government Code is amended to read:20963.(a)A state, school, or school safety member, whose effective date of retirement is within four months of separation from employment with the employer subject to this section that granted the sick leave credit, shall be credited at his or her retirement with 0.004 year of service credit for each unused day of sick leave certified to the board by the employer. A day of unused sick leave is the equivalent of an eight-hour day. The certification shall report only those days of unused sick leave that were accrued by the member during the normal course of his or her employment and shall not include any additional days of sick leave reported for the purpose of increasing the members retirement benefit. Reports of unused days of sick leave shall be subject to audit and retirement benefits may be adjusted where improper reporting is found. For purposes of this subdivision, sick leave shall not include sick leave earned as a National Guard member as described in Section 20380.5.
(b)Until receipt of certification from an employer concerning unused sick leave, the board may pay an estimated allowance pursuant to this section. At the time of receipt of the certification, the allowance shall be adjusted to reflect any necessary changes.
(c)Notwithstanding any other provisions of this part, this section shall not apply to local members other than local miscellaneous members employed before July 1, 1980, by a school district that is a contracting agency or those school safety members employed before July 1, 1980, by a contracting agency that is a school district or community college district, as defined in subdivision (i) of Section 20057.
(d)This section shall not apply to any of the following:
(1)A person who becomes a school member on and after July 1, 1980, and any person who becomes a local member employed, on and after July 1, 1980, by a school district that is a contracting agency whether or not the person was ever a school member or local member prior to that date.
(2)A state employee, with respect to sick leave credits earned as a state member under Section 21353.5, except that the member shall be entitled to receive credit under this section for the sick leave he or she has earned as a state member subject to any other retirement formula, provided the member has a sick leave credit balance remaining at the time of retirement.
(e)For the purposes of this section, sick leave benefits provided to state employees pursuant to the state sick leave system shall be construed to mean compensation paid to employees on approved leaves of absence because of sickness.
SEC. 24.Section 20963.1 of the Government Code is amended to read:20963.1.(a)A state member whose effective date of retirement is within four months of separation from employment of the state, shall be credited at his or her retirement with 0.004 year of service for each unused day of educational leave credit, as certified to the board by the employer. A day of unused educational leave is the equivalent of an eight-hour day. The provisions of this section shall be effective for eligible state members who retire directly from state employment on and after January 1, 2000.
(b)This section shall apply to eligible state members in state bargaining units that have agreed to this section in a memorandum of understanding, or as authorized by the Director of Human Resources for classifications of state employees that are excluded from the definition of state employee by paragraph (c) of Section 3513 of the Government Code.
SEC. 25.Section 20965 of the Government Code is amended to read:20965.A local miscellaneous member and a local safety member, whose effective date of retirement is within four months of separation from employment with the employer which granted the sick leave credit, shall be credited at his or her retirement with 0.004 year of service credit for each unused day of sick leave certified to the board by his or her employer. A day of unused sick leave is the equivalent of an eight-hour day. The certification shall report only those days of unused sick leave that were accrued by the member during the normal course of his or her employment and shall not include any additional days of sick leave reported for the purpose of increasing the members retirement benefit. Reports of unused days of sick leave shall be subject to audit and retirement benefits may be adjusted where improper reporting is found.
This section shall not apply to any contracting agency nor to the employees of a contracting agency until the agency elects to be subject to this section by contract or by amendment to its contract made in the manner prescribed for approval of contracts, except that an election among the employees is not required, or, in the case of contracts made after September 26, 1974, by express provision in the contract making the contracting agency subject to this section.
This section shall only apply to members who retire after the effective date of the contract amendments.
SEC. 26.Section 21499 of the Government Code is amended to read:21499.(a)Notwithstanding Section 21498, when either an initial payment of a preretirement or postretirement death allowance or a preretirement or postretirement lump-sum benefit is payable in an amount of ten dollars ($10) or more, it shall be authorized to the Controller within 45 days of receipt by this system of all the necessary information, including the return of warrants issued or any overpayment outstanding after the date of the death of the annuitant.
(b)If any payment is not made within that time limitation, the payment shall also include interest at the greater of the interest crediting rate specified in Section 20178 or the net earnings rate (including capital gains and losses) in effect at the time the payment is made, default interest rate established in Section 1 of Article XV of the California Constitution for time following the expiration of that time limitation.
SEC. 27.Section 21626.5 of the Government Code is amended to read:21626.5.(a)For purposes of Section 21624, 21626, 21627, 21629, or 21630, a surviving domestic partner shall be treated in the same manner as a surviving spouse if either:
(a)
(1)The domestic partnership was registered for one year prior to the members service retirement date or at the disability retirement date and continuously until the date of the members death.
(b)
(2)The member retired prior to January 1, 2006, and both the member and his or her domestic partner, who currently are in a state-registered domestic partnership, sign an affidavit stating that, at the time prescribed by the retirement system for married spouses to qualify for survivor continuance, the member and the domestic partner would have qualified to be registered as domestic partners pursuant to Section 297 of the Family Code.
(b)For purposes of Section 21624, 21626, 21627, 21629, or 21630, an individual who is the same gender as the member shall be treated in the same manner as a surviving spouse if the following conditions are satisfied:
(1)The individual entered into marriage with the member on or after the date when individuals of the same gender were legally allowed to enter into marriage and was married continuously until the date of the members death.
(2)Either of the following applies:
(A)The member retired prior to the date when individuals of the same gender were legally allowed to enter into marriage, and both the member and his or her spouse, who are currently married, sign an affidavit stating that, at the time prescribed by the retirement system for spouses to qualify for a survivor continuance, the member and the individual would have qualified to be legally married had it been legally possible for people of the same gender to marry.
(B)The individual originally qualified to become a surviving spouse under subdivision (a).
|
Date
|
Status
|
|---|---|
| May 26, 2016 | Referred to Com. on P.E. & R. |
| Sep 9, 2016 | Enrolled and presented to the Governor at 2:30 p.m. |
| Aug 30, 2016 | Senate amendments concurred in. To Engrossing and Enrolling. (Ayes 80. Noes 0. Page 6439.). |
| Aug 30, 2016 | Senate amendments concurred in. To Engrossing and Enrolling. |
| Aug 25, 2016 | In Assembly. Concurrence in Senate amendments pending. May be considered on or after August 28 pursuant to Assembly Rule 77. |
| Aug 23, 2016 | Read third time. Passed. Ordered to the Assembly. (Ayes 39. Noes 0. Page 5314.). |
| Aug 23, 2016 | Read third time. Passed. Ordered to the Assembly. |
| Aug 9, 2016 | Read second time. Ordered to third reading. |
| Aug 8, 2016 | Read third time and amended. Ordered to second reading. |
| Aug 2, 2016 | Read second time. Ordered to third reading. |
| Aug 1, 2016 | From committee: Be placed on second reading file pursuant to Senate Rule 28.8. |
| Jun 27, 2016 | From committee: Do pass and re-refer to Com. on APPR. (Ayes 5. Noes 0.) (June 27). Re-referred to Com. on APPR. |
| Jun 20, 2016 | From committee chair, with author's amendments: Amend, and re-refer to committee. Read second time, amended, and re-referred to Com. on P.E. & R. |
| Feb 18, 2016 | Read first time. To print. |
| May 19, 2016 | Read third time. Passed. Ordered to the Senate. (Ayes 76. Noes 0.) |
| May 19, 2016 | Read third time. Passed. Ordered to the Senate. (Ayes 76. Noes 0. Page 4870.) |
| May 19, 2016 | Read third time. Passed. Ordered to the Senate. |
| May 19, 2016 | In Senate. Read first time. To Com. on RLS. for assignment. |
| May 12, 2016 | Read second time. Ordered to Consent Calendar. |
| May 11, 2016 | From committee: Do pass. To Consent Calendar. (Ayes 20. Noes 0.) (May 11). |
| May 5, 2016 | Re-referred to Com. on APPR. |
| May 4, 2016 | From committee chair, with author's amendments: Amend, and re-refer to Com. on APPR. Read second time and amended. |
| Apr 20, 2016 | From committee: Do pass and re-refer to Com. on APPR. with recommendation: To Consent Calendar. (Ayes 7. Noes 0.) (April 20). Re-referred to Com. on APPR. |
| Mar 8, 2016 | Referred to Com. on P.E., R., & S.S. |
| Feb 19, 2016 | From printer. May be heard in committee March 20. |
|
Date
|
Description
|
Location
|
Votes
|
|
|---|---|---|---|---|
| Aug 30, 2016 | AB 2375 P.E., R. & S.S. Concurrence in Senate Amendments By BONTA | Assembly Floor |
Passed |
|
| Aug 23, 2016 | Assembly 3rd Reading AB2375 P.E., R., and S.S. (Bonta) By Pan | Senate Floor |
Passed |
|
| Jun 27, 2016 | Do pass, but first be re-referred to the Committee on [Appropriations] | Senate Standing Committee on Public Employment and Retirement |
Passed |
|
| May 19, 2016 | AB 2375 BAKER Consent Calendar Second Day Regular Session | Assembly Floor |
Passed |
|
| May 11, 2016 | Do pass. To Consent Calendar. | Assembly Standing Committee on Appropriations |
Passed |
|
| Apr 20, 2016 | Do pass and be re-referred to the Committee on [Appropriations] with recommendation: To Consent Calendar | Assembly Standing Committee on Public Employees, Retirement, and Social Security |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
|
Organization
|
Position
|
Date
|
|---|---|---|
| California Public Employees' Retirement System | ** Support | Aug 23, 2016 |
| California State Controller | ** Support | Aug 23, 2016 |
| California State Controller Betty Yee | ** Support | Aug 23, 2016 |
CONCURRENCE IN SENATE AMENDMENTS
CSA1 Bill Id:AB 2375
Author:(Committee on Public Employees, Retirement, and Social Security)
As Amended Ver:August 8, 2016
Majority vote
ASSEMBLY: | 76-0 | (May 19, 2016) | SENATE: | 39-0 | (August 23, 2016) |
Original Committee Reference: P.E.,R., & S.S.
SUMMARY: Makes various technical and non-controversial changes to various sections of the Government Code governing the California Public Employees' Retirement System (CalPERS) to maintain and ensure effective administration of the system. Specifically, this bill:
- Corrects an erroneous statutory reference in the Education Code to the correct section of the Government Code authorizing the CalPERS reduced workload program for California State University (CSU), school district, and community college members and clarifies and makes consistent the eligibility requirements for participation in the program.
- Eliminates the requirement that actuaries be enrolled by the Joint Board of the United States Department of the Treasury and the Department of Labor and instead requires that actuaries performing duties required, as specified, must have attained the designation of Associate or Fellow of the Society of Actuaries and have demonstrated experience with public sector clients.
- Clarifies that the final compensation of a CalPERS member applying for concurrent retirement using their final compensation earnable under the University of California Retirement System or a 1937 Act County Retirement System is based on their highest annual average compensation during any consecutive 12 or 36 month period.
- Removes language that allows a member to designate his or her highest final compensation period for purposes of calculating retirement benefits because the my|CalPERS system now automatically searches payroll records for a member's highest final compensation period when calculating retirement benefits.
- Eliminates the requirement that the California Actuarial Advisory Panel (CAAP) Chair make a presentation of the annual CAAP report to a publicly noticed joint hearing of the Senate Committee on Public Employment and Retirement and the Assembly Committee on Public Employees, Retirement, and Social Security within 30 days of receiving the report from the CalPERS board and instead requires the presentation be made at the beginning of each legislative session.
- Clarifies the interest payment owed to CalPERS when contracting agencies do not pay their contributions in a timely manner, by replacing the interest charged for amounts due and unpaid at the actuarial interest rate, with the higher of a 10% interest rate or investment return rate for the prior fiscal year. In addition, it clarifies that the penalty assessment for a contracting agency more than three months delinquent is in addition to the interest charged to contracting agencies until their payment is received.
- Specifies that CalPERS may take action to reduce member benefits only after their employers' plan has been placed in the Terminated Agency Pool and the employer fails to remit the contributions necessary to fully fund the liabilities of the plan.
- Changes the interest rate to be paid on delayed payments of death benefits from 6% or the net earnings rate in effect at the time of payment minus expenses, whichever is greater, to a fixed rate of 7% per annum simple (non-compounding) interest, to ensure consistency in payment of death benefits and reduce CalPERS administrative costs.
- Provides survivor continuance to same-sex married couples who never entered into a registered domestic partnership and who retired before it was legally possible to marry their same-sex spouse so long as they sign an affidavit that they would have met the conditions had same-sex marriage been legal at the time of their retirement.
- Requires the employer of a deceased firefighter or peace officer member when notifying CalPERS of the member's death to also provide any updated contact information of the surviving spouse or family member if that spouse or family member may be eligible for enrollment in a CalPERS health benefit plan.
The Senate amendments delete provisions related to unused sick leave and purchasing power protection for state and school members.
FISCAL EFFECT: According to the Senate Appropriations Committee, pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS: CalPERS annually sponsors "housekeeping" legislation to provide technical and non-controversial amendments to portions of the Government Code that CalPERS administers.
Analysis Prepared by: Karon Green / P.E.,R., & S.S. / (916) 319-3957 FN: 0004761
Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | AB |
THIRD READING
Bill No: AB 2375
:
SENATE PUBLIC EMP. & RET. COMMITTEE: 5-0, 6/27/16
AYES: Pan, Morrell, Beall, Hall, Moorlach
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
ASSEMBLY FLOOR: 76-0, 5/19/16 (Consent) - See last page for vote
SOURCE: California Public Employees' Retirement System
DIGEST: This bill is the annual CalPERS housekeeping bill which makes various technical and non-controversial changes to statutory provisions governing the California Public Employees' Retirement System (CalPERS) to maintain and ensure effective administration of the system.
Senate Floor Amendments of 8/8/16 return the bill to existing law by eliminating the current amendment to the statute regarding service credit conversion of unused leave. The amendments also make minor, technical changes to statutory references to the State Controller.
ANALYSIS:
Existing law:
- CalPERS University and School Member Reduced Workload Program (Ed Code 87486 and GC 20900)
Allows an academic or certificated California State University (CSU), school district, or community college district member to reduce workload from full-time to part-time and maintain retirement benefits, as specified. The member must not be older than 70 years and is limited to a period of five years of part-time status. The program allows the member to work part-time but receive service credit and have the retirement allowance calculated as if the member had worked full-time provided that the member and the employer both elect to contribute to the retirement fund the amount that would have been contributed if the member were employed on a full-time basis.
- Public Retirement System Actuary Qualifications (GC 7502, 7504, 7505, and 7507.2)
Defines an enrolled actuary to mean an actuary enrolled under subtitle C of Title III of the federal Employee Retirement Income Security Act of 1974 (ERISA) and prescribes that certain actions, as specified, require the services of an enrolled actuary or that membership on certain advisory committees shall include enrolled actuaries.
Under ERISA, an enrolled actuary is an actuary who has been licensed by a Joint Board of the Department of the Treasury and the Department of Labor for the Enrollment of Actuaries to perform a variety of actuarial tasks required of U.S. pension plans. The Joint Board administers two examinations to prospective enrolled actuaries. Once the two examinations have been passed, and an individual has also obtained sufficient relevant professional experience, that individual becomes an enrolled actuary.
- Clarification of Final Compensation for Concurrent Retirement (GC 20034 and 20638)
Requires CalPERS to consider a member’s average monthly salary during any period of service as a member of the University of California retirement system or a County Employees Retirement Act of 1937 (’37 Act) retirement system as compensation earnable for purposes of computing final compensation for the member provided the member retires concurrently under both CalPERS and the other system and is credited with the period of service under the other system at the time of retirement.
- Elimination of Member’s Ability to Designate Final Compensation Period (GC 20035, 20035.5, 20037, and 20037.5 through 20037.15)
Defines “final compensation” for the purposes of determining any CalPERS pension or benefit generally to mean the highest annual compensation which was earnable by the member during the consecutive 12-month or 36-month period of employment immediately preceding the member’s effective retirement date or last separation from service, if earlier, or during any other period of 12 or 36 consecutive months during membership in CalPERS that the member designates on the application for retirement.
- California Actuarial Advisory Panel Report – Biennial Instead of Annual Presentation (GC 20229)
Requires the CalPERS board to provide the Legislature, the Governor, and the Chair of the California Actuarial Advisory Panel (CAAP) an annual report, as specified, related to state employee retirement plans and requires the CAAP Chair to provide a presentation regarding the report within 30 days of its receipt to a publicly noticed joint hearing of the Senate Committee on Public Employment and Retirement and the Assembly Committee on Public Employees, Retirement, and Social Security.
- Interest Charges and Penalty Assessments for Non-Payment of Contributions (GC 20537 and 20572)
Authorizes CalPERS to charge interest at the actuarial interest rate on the amount of any payment due and unpaid by a contracting agency until payment is received.
Permits CalPERS to terminate a contract with a contracting agency if the agency fails to pay any installment of contributions required by its contract 30 days after a demand by the board or fails for three months to provide required information to CalPERS.
Allows CalPERS to assess a contracting agency interest at an annual rate of 10 percent and the costs of collection, including reasonable legal fees, when necessary to collect the amounts due, if the agency fails to remit the contributions when due.
CalPERS may assess the contracting agency a penalty of 10 percent of the delinquent amount. In the case of repeated delinquencies the penalty may be assessed once during each 30-day period that the amount remains unpaid.
- Terminated Agency Pool - Reduction of Member Benefits (GC 20577.5 and 20578)
Authorizes CalPERS to merge a plan that has been terminated into the Terminated Agency Pool (TAP) if the board has made all reasonable efforts to collect the amount necessary to fully fund the liabilities of the plan and the board finds that the merger of the plan into TAP without benefit reduction will not impact the actuarial soundness of TAP.
Requires benefits to be reduced proportionally prior to the transfer of assets to TAP if the amount of the terminating agency’s assets are less than the actuarial equivalent of the amount CalPERS will be obligated to pay to persons who are or were employed by the terminating agency and the agency fails to pay the difference.
- Interest on Late Payments of Death Benefits (GC 21499)
Requires CalPERS to authorize to the Controller the initial payment of a preretirement or postretirement death allowance or a preretirement or postretirement lump-sum benefit of ten dollars ($10) or more within 45 days of receipt of all necessary information.
Provides that if any death benefit payment is not made within the allocated time, the payment shall also include interest at the greater of the 6 percent compounded interest crediting rate or the net earnings rate in effect at the time the payment is made for the time payment was delayed.
- Definition of Domestic Partner for Post-Retirement Survivor Allowance (GC 21626.5)
Provides, upon the death of a retired member, a retirement benefit allowance to the member’s surviving spouse and treats a surviving domestic partner in the same manner as a surviving spouse, as specified.
- Firefighter/ Peace Officer Death Notification (GC 22820)
Requires the employer of a deceased firefighter or peace officer member to notify CalPERS within 10 business days of the member’s death if the member has a spouse or family member who may be eligible for enrollment in a CalPERS health benefit plan.
This bill:
- CalPERS University and School Member Reduced Workload Program (Ed Code 87486 and GC 20900)
Corrects an erroneous statutory reference in the Education Code to the correct section of the Government Code authorizing the CalPERS reduced workload program for CSU, school district, and community college members and clarifies and makes consistent the eligibility requirements for participation in the program.
- Public Retirement System Actuary Qualifications (GC 7502, 7504, 7505, and 7507.2)
Eliminates the requirement that actuaries be enrolled by the Joint Board of the U.S. Department of the Treasury and the Department of Labor and instead requires that actuaries performing duties required, as specified, shall have attained the designation of Associate or Fellow of the Society of Actuaries and have demonstrated experience with public sector clients.
- Clarification of Final Compensation for Concurrent Retirement (GC 20034 and 20638)
Clarifies that when a CalPERS member applies for concurrent retirement using the final compensation earnable under the University of California Retirement System or a 1937 Act County Retirement System the final compensation is based on the member’s highest annual average compensation during any consecutive 12 or 36 month period.
- Elimination of Member’s Ability to Designate Final Compensation Period (GC 20035, 20035.5, 20037, and 20037.5 through 20037.15)
Clarifies that final compensation means the highest annual compensation which was earnable by the member during any consecutive 12-month or 36-month period of employment and eliminates language that allows a member to designate his or her highest final compensation period because the my|CalPERS system now automatically searches payroll records for a member’s highest final compensation period when calculating retirement benefits.
- California Actuarial Advisory Panel Report - Biennial Instead of Annual Presentation (GC 20229)
Eliminates the requirement that the CAAP Chair make a presentation of the annual CAAP report to a publicly noticed joint hearing of the Senate Committee on Public Employment and Retirement and the Assembly Committee on Public Employees, Retirement, and Social Security within 30 days of receiving the report from the CalPERS board and instead requires the presentation be made at the beginning of each legislative session.
- Interest Charges and Penalty Assessments for Non-Payment of Contributions (GC 20537 and 20572)
Instead of the actuarial interest rate, authorizes CalPERS to charge contracting agencies that do not pay their contributions in a timely manner the greater of either the annual return on the system’s investments for the year prior to the year in which payments are not timely made or a simple annual rate of 10 percent.
Clarifies that the penalty assessment on a contract agency that is more than three months delinquent in paying contributions is in addition to the amount of interest charged on the agency’s overdue outstanding contributions.
Provides that the contracting agency may be assessed the costs of collection, including reasonable legal fees and litigation costs, including, without limitation, legal fees and legal costs incurred in bankruptcy, when necessary to collect any amounts due.
- Terminated Agency Pool - Reduction of Member Benefits (GC 20577.5 and 20578)
Authorizes the board to elect not to impose a reduction, or to impose a lesser reduction, on a plan that has been terminated if the board has made all reasonable efforts to collect the amount necessary to fully fund the liabilities of the plan and the board finds that not reducing the benefits, or imposing a lesser reduction will not impact the actuarial soundness of TAP.
Eliminates the requirement that CalPERS reduce benefits for employees of a terminating agency prior to the transfer of assets to TAP if the amount of the terminating agency’s assets are less than the actuarial equivalent of the amount required to pay the benefits and the agency fails to pay the difference. Thus, CalPERS will be authorized to reduce the employees’ benefits only after the plan has been placed in TAP and the employer fails to remit the contributions necessary to fully fund the plan’s liabilities.
- Interest on Late Payments of Death Benefits (GC 21499)
Changes the interest rate to be paid on delayed payments of death benefits from either 6% or the net earnings rate in effect at the time of payment minus expenses, whichever is greater, to a fixed rate of 7% per annum simple (non-compounding) interest to ensure consistency in the payment of death benefits and reduce CalPERS administrative costs.
- Definition of Domestic Partner for Post-Retirement Survivor Allowance (GC 21626.5)
Authorizes the post-retirement survivor allowance to same-sex married couples who never entered into a registered domestic partnership and who retired before it was legally possible to marry their same-sex spouse so long as they sign an affidavit that they would have met the conditions had same-sex marriage been legal at the time of their retirement.
- Firefighter/ Peace Officer Death Notification (GC 22820)
Requires the employer of a deceased firefighter or peace officer member when notifying CalPERS of the member’s death to also provide any updated contact information of the surviving spouse or family member if that spouse or family member may be eligible for enrollment in a CalPERS health benefit plan.
Related/Prior Legislation
AB 2472 (Assembly Committee on Public Employees, Retirement, and Social Security, Chapter 237, Statutes of 2014) served as CalPERS’ annual housekeeping bill and made technical and non-controversial changes to the Government Code governing CalPERS.
SB 216 (Pan, Chapter 244, Statutes of 2015) served as CalPERS’ annual housekeeping bill and made technical and non-controversial changes to the Government Code governing CalPERS.
FISCAL EFFECT: Appropriation: Fiscal Com.: Local:
California Public Employees' Retirement System (source)
California State Controller
None received
ARGUMENTS IN SUPPORT: According to the sponsor, this bill will “ensure the statutes administered by CalPERS are as clear and unambiguous as possible.”
According to the State Controller, the bill distinguishes “the requirements of actuaries performing professional services for state or local public retirement plans from those serving in a general advisory capacity, and would more appropriately define those actuaries who are qualified to serve the public sector.”
ASSEMBLY FLOOR: 76-0, 5/19/16
AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mayes, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Wood, Rendon
NO VOTE RECORDED: Chang, Mathis, McCarty, Williams
8/10/16 15:57:26
Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | AB |
THIRD READING
Bill No: AB 2375
:
SENATE PUBLIC EMP. & RET. COMMITTEE: 5-0, 6/27/16
AYES: Pan, Morrell, Beall, Hall, Moorlach
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
ASSEMBLY FLOOR: 76-0, 5/19/16 (Consent) - See last page for vote
SOURCE: California Public Employees' Retirement System
DIGEST: This bill is the annual CalPERS housekeeping bill which makes various technical and non-controversial changes to statutory provisions governing the California Public Employees' Retirement System (CalPERS) to maintain and ensure effective administration of the system.
ANALYSIS:
Existing law:
- CalPERS University and School Member Reduced Workload Program (Ed Code 87486 and GC 20900)
Allows an academic or certificated California State University (CSU), school district, or community college district member to reduce workload from full-time to part-time and maintain retirement benefits, as specified. The member must not be older than 70 years and is limited to a period of five years of part-time status. The program allows the member to work part-time but receive service credit and have the retirement allowance calculated as if the member had worked full-time provided that the member and the employer both elect to contribute to the retirement fund the amount that would have been contributed if the member were employed on a full-time basis.
- Public Retirement System Actuary Qualifications (GC 7502, 7504, 7505, and 7507.2)
Defines an enrolled actuary to mean an actuary enrolled under subtitle C of Title III of the federal Employee Retirement Income Security Act of 1974 (ERISA) and prescribes that certain actions, as specified, require the services of an enrolled actuary or that membership on certain advisory committees shall include enrolled actuaries.
Under ERISA, an enrolled actuary is an actuary who has been licensed by a Joint Board of the Department of the Treasury and the Department of Labor for the Enrollment of Actuaries to perform a variety of actuarial tasks required of U.S. pension plans. The Joint Board administers two examinations to prospective enrolled actuaries. Once the two examinations have been passed, and an individual has also obtained sufficient relevant professional experience, that individual becomes an enrolled actuary.
- Clarification of Final Compensation for Concurrent Retirement (GC 20034 and 20638)
Requires CalPERS to consider a member’s average monthly salary during any period of service as a member of the University of California retirement system or a County Employees Retirement Act of 1937 (’37 Act) retirement system as compensation earnable for purposes of computing final compensation for the member provided the member retires concurrently under both CalPERS and the other system and is credited with the period of service under the other system at the time of retirement.
- Elimination of Member’s Ability to Designate Final Compensation Period (GC 20035, 20035.5, 20037, and 20037.5 through 20037.15)
Defines “final compensation” for the purposes of determining any CalPERS pension or benefit generally to mean the highest annual compensation which was earnable by the member during the consecutive 12-month or 36-month period of employment immediately preceding the member’s effective retirement date or last separation from service, if earlier, or during any other period of 12 or 36 consecutive months during membership in CalPERS that the member designates on the application for retirement.
- California Actuarial Advisory Panel Report – Biennial Instead of Annual Presentation (GC 20229)
Requires the CalPERS board to provide the Legislature, the Governor, and the Chair of the California Actuarial Advisory Panel (CAAP) an annual report, as specified, related to state employee retirement plans and requires the CAAP Chair to provide a presentation regarding the report within 30 days of its receipt to a publicly noticed joint hearing of the Senate Committee on Public Employment and Retirement and the Assembly Committee on Public Employees, Retirement, and Social Security.
- Interest Charges and Penalty Assessments for Non-Payment of Contributions (GC 20537 and 20572)
Authorizes CalPERS to charge interest at the actuarial interest rate on the amount of any payment due and unpaid by a contracting agency until payment is received. Permits CalPERS to terminate a contract with a contracting agency if the agency fails to pay any installment of contributions required by its contract 30 days after a demand by the board or fails for three months to provide required information to CalPERS.
Allows CalPERS to assess a contracting agency interest at an annual rate of 10 percent and the costs of collection, including reasonable legal fees, when necessary to collect the amounts due, if the agency fails to remit the contributions when due. CalPERS may assess the contracting agency a penalty of 10 percent of the delinquent amount. In the case of repeated delinquencies the penalty may be assessed once during each 30-day period that the amount remains unpaid.
- Terminated Agency Pool - Reduction of Member Benefits (GC 20577.5 and 20578)
Authorizes CalPERS to merge a plan that has been terminated into the Terminated Agency Pool (TAP) if the board has made all reasonable efforts to collect the amount necessary to fully fund the liabilities of the plan and the board finds that the merger of the plan into TAP without benefit reduction will not impact the actuarial soundness of TAP.
Requires benefits to be reduced proportionally prior to the transfer of assets to TAP if the amount of the terminating agency’s assets are less than the actuarial equivalent of the amount CalPERS will be obligated to pay to persons who are or were employed by the terminating agency and the agency fails to pay the difference.
- Conversion of Unused Sick Leave or Educational Leave to Service Credit (GC 20963, 20963.1, and 20965)
Provides that CalPERS members, as specified, whose effective date of retirement is within four months of separation from employment, shall be credited at retirement with 0.004 (i.e., 8 hours) year of service credit for each unused day of sick leave or educational leave certified to the board by the employer.
- Interest on Late Payments of Death Benefits (GC 21499)
Requires CalPERS to authorize to the Controller the initial payment of a preretirement or postretirement death allowance or a preretirement or postretirement lump-sum benefit of ten dollars ($10) or more within 45 days of receipt of all necessary information. Provides that if any death benefit payment is not made within the allocated time, the payment shall also include interest at the greater of the 6 percent compounded interest crediting rate or the net earnings rate in effect at the time the payment is made for the time payment was delayed.
- Definition of Domestic Partner for Post-Retirement Survivor Allowance (GC 21626.5)
Provides, upon the death of a retired member, a retirement benefit allowance to the member’s surviving spouse and treats a surviving domestic partner in the same manner as a surviving spouse, as specified.
- Firefighter/ Peace Officer Death Notification (GC 22820)
Requires the employer of a deceased firefighter or peace officer member to notify CalPERS within 10 business days of the member’s death if the member has a spouse or family member who may be eligible for enrollment in a CalPERS health benefit plan.
This bill:
- CalPERS University and School Member Reduced Workload Program (Ed Code 87486 and GC 20900)
Corrects an erroneous statutory reference in the Education Code to the correct section of the Government Code authorizing the CalPERS reduced workload program for CSU, school district, and community college members and clarifies and makes consistent the eligibility requirements for participation in the program.
- Public Retirement System Actuary Qualifications (GC 7502, 7504, 7505, and 7507.2)
Eliminates the requirement that actuaries be enrolled by the Joint Board of the U.S. Department of the Treasury and the Department of Labor and instead requires that actuaries performing duties required, as specified, shall have attained the designation of Associate or Fellow of the Society of Actuaries and have demonstrated experience with public sector clients.
- Clarification of Final Compensation for Concurrent Retirement (GC 20034 and 20638)
Clarifies that when a CalPERS member applies for concurrent retirement using the final compensation earnable under the University of California Retirement System or a 1937 Act County Retirement System the final compensation is based on the member’s highest annual average compensation during any consecutive 12 or 36 month period.
- Elimination of Member’s Ability to Designate Final Compensation Period (GC 20035, 20035.5, 20037, and 20037.5 through 20037.15)
Clarifies that final compensation means the highest annual compensation which was earnable by the member during any consecutive 12-month or 36-month period of employment and eliminates language that allows a member to designate his or her highest final compensation period because the my|CalPERS system now automatically searches payroll records for a member’s highest final compensation period when calculating retirement benefits.
- California Actuarial Advisory Panel Report - Biennial Instead of Annual Presentation (GC 20229)
Eliminates the requirement that the CAAP Chair make a presentation of the annual CAAP report to a publicly noticed joint hearing of the Senate Committee on Public Employment and Retirement and the Assembly Committee on Public Employees, Retirement, and Social Security within 30 days of receiving the report from the CalPERS board and instead requires the presentation be made at the beginning of each legislative session.
- Interest Charges and Penalty Assessments for Non-Payment of Contributions (GC 20537 and 20572)
Authorizes, instead of the actuarial interest rate, CalPERS to charge contracting agencies that do not pay their contributions in a timely manner the greater of either the annual return on the system’s investments for the year prior to the year in which payments are not timely made or a simple annual rate of 10 percent.
Clarifies that the penalty assessment on a contract agency that is more than three months delinquent in paying contributions is in addition to the amount of interest charged on the agency’s overdue outstanding contributions. Provides that the contracting agency may be assessed the costs of collection, including reasonable legal fees and litigation costs, including, without limitation, legal fees and legal costs incurred in bankruptcy, when necessary to collect any amounts due.
- Terminated Agency Pool - Reduction of Member Benefits (GC 20577.5 and 20578)
Authorizes the board to elect not to impose a reduction, or to impose a lesser reduction, on a plan that has been terminated if the board has made all reasonable efforts to collect the amount necessary to fully fund the liabilities of the plan and the board finds that not reducing the benefits, or imposing a lesser reduction will not impact the actuarial soundness of TAP.
Eliminates the requirement that CalPERS reduce benefits for employees of a terminating agency prior to the transfer of assets to TAP if the amount of the terminating agency’s assets are less than the actuarial equivalent of the amount required to pay the benefits and the agency fails to pay the difference. Thus, CalPERS will be authorized to reduce the employees’ benefits only after the plan has been placed in TAP and the employer fails to remit the contributions necessary to fully fund the plan’s liabilities.
- Conversion of Unused Sick Leave or Education Leave to Service Credit (GC 20963, 20963.1, and 20965)
Clarifies that for purposes of converting unused sick leave or educational leave to service credit, a day of unused sick leave or educational leave is deemed to be the equivalent of an eight-hour day.
- Interest on Late Payments of Death Benefits (GC 21499)
Changes the interest rate to be paid on delayed payments of death benefits from either 6% or the net earnings rate in effect at the time of payment minus expenses, whichever is greater, to a fixed rate of 7% per annum simple (non-compounding) interest to ensure consistency in the payment of death benefits and reduce CalPERS administrative costs.
- Definition of Domestic Partner for Post-Retirement Survivor Allowance (GC 21626.5)
Authorizes the post-retirement survivor allowance to same-sex married couples who never entered into a registered domestic partnership and who retired before it was legally possible to marry their same-sex spouse so long as they sign an affidavit that they would have met the conditions had same-sex marriage been legal at the time of their retirement.
- Firefighter/ Peace Officer Death Notification (GC 22820)
Requires the employer of a deceased firefighter or peace officer member when notifying CalPERS of the member’s death to also provide any updated contact information of the surviving spouse or family member if that spouse or family member may be eligible for enrollment in a CalPERS health benefit plan.
Related/Prior Legislation
SB 216 (Pan, Chapter 244, Statutes of 2015) served as CalPERS’ annual housekeeping bill and made technical and non-controversial changes to the Government Code governing CalPERS.
AB 2472 (Assembly Committee on Public Employees, Retirement, and Social Security, Chapter 237, Statutes of 2014) served as CalPERS’ annual housekeeping bill and made technical and non-controversial changes to the Government Code governing CalPERS.
FISCAL EFFECT: Appropriation: Fiscal Com.: Local:
California Public Employees' Retirement System (source)
California State Controller Betty Yee
None received
ARGUMENTS IN SUPPORT: According to the sponsor, this bill will “ensure the statutes administered by CalPERS are as clear and unambiguous as possible.”
According to the State Controller, the bill distinguishes “the requirements of actuaries performing professional services for state or local public retirement plans from those serving in a general advisory capacity, and would more appropriately define those actuaries who are qualified to serve the public sector.”
ASSEMBLY FLOOR: 76-0, 5/19/16
AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mayes, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Wood, Rendon
NO VOTE RECORDED: Chang, Mathis, McCarty, Williams
8/3/16 18:36:26
**** END ****
SENATE COMMITTEE ON
PUBLIC EMPLOYMENT AND RETIREMENT
Dr. Richard Pan, Chair
2015 - 2016 Regular
Bill No: AB 2375 Hearing Date: 6/27/16
Author: | Committee on Public Employees, Retirement, and Social Security | ||
Version: | 6/20/16 As amended | ||
Urgency: | No | Fiscal: | Yes |
Consultant: | Glenn Miles | ||
Subject: Public Employees’ Retirement System: omnibus bill
SOURCE: California Public Employees’ Retirement System
California State Controller
ASSEMBLY VOTES:
Assembly Floor: | 76 - 0 |
Assembly Appropriations Committee: | 20 - 0 |
Assembly Public Employees, Retirement/Soc Sec Committee: | 7 - 0 |
DIGEST: This bill is the annual CalPERS housekeeping bill which makes various technical and non-controversial changes to statutory provisions governing the California Public Employees' Retirement System (CalPERS) to maintain and ensure effective administration of the system.
ANALYSIS:
Existing law:
- CalPERS University and School Member Reduced Workload Program (Ed Code 87486 and GC 20900)
Allows an academic or certificated California State University (CSU), school district, or community college district member to reduce workload from full-time to part-time and maintain retirement benefits, as specified. The member must not be older than 70 years and is limited to a period of five years of part-time status. The program allows the member to work part-time but receive service credit and have the retirement allowance calculated as if the member had worked full-time provided that the member and the employer both elect to contribute to the retirement fund the amount that would have been contributed if the member were employed on a full-time basis.
- Public Retirement System Actuary Qualifications (GC 7502, 7504, 7505, and 7507.2)
Defines an enrolled actuary to mean an actuary enrolled under subtitle C of Title III of the federal Employee Retirement Income Security Act of 1974 (ERISA) and prescribes that certain actions, as specified, require the services of an enrolled actuary or that membership on certain advisory committees shall include enrolled actuaries.
Under ERISA, an enrolled actuary is an actuary who has been licensed by a Joint Board of the Department of the Treasury and the Department of Labor for the Enrollment of Actuaries to perform a variety of actuarial tasks required of U.S. pension plans. The Joint Board administers two examinations to prospective enrolled actuaries. Once the two examinations have been passed, and an individual has also obtained sufficient relevant professional experience, that individual becomes an enrolled actuary.
- Clarification of Final Compensation for Concurrent Retirement (GC 20034 and 20638)
Requires CalPERS to consider a member’s average monthly salary during any period of service as a member of the University of California retirement system or a County Employees Retirement Act of 1937 (’37 Act) retirement system as compensation earnable for purposes of computing final compensation for the member provided the member retires concurrently under both CalPERS and the other system and is credited with the period of service under the other system at the time of retirement.
- Elimination of Member’s Ability to Designate Final Compensation Period (GC 20035, 20035.5, 20037, and 20037.5 through 20037.15)
Defines “final compensation” for the purposes of determining any CalPERS pension or benefit generally to mean the highest annual compensation which was earnable by the member during the consecutive 12-month or 36-month period of employment immediately preceding the member’s effective retirement date or last separation from service, if earlier, or during any other period of 12 or 36 consecutive months during membership in CalPERS that the member designates on the application for retirement.
- California Actuarial Advisory Panel Report – Biennial Instead of Annual Presentation (GC 20229)
Requires the CalPERS board to provide the Legislature, the Governor, and the Chair of the California Actuarial Advisory Panel (CAAP) an annual report, as specified, related to state employee retirement plans and requires the CAAP Chair to provide a presentation regarding the report within 30 days of its receipt to a publicly noticed joint hearing of the Senate Committee on Public Employment and Retirement and the Assembly Committee on Public Employees, Retirement, and Social Security.
- Interest Charges and Penalty Assessments for Non-Payment of Contributions (GC 20537 and 20572)
Authorizes CalPERS to charge interest at the actuarial interest rate on the amount of any payment due and unpaid by a contracting agency until payment is received.
Permits CalPERS to terminate a contract with a contracting agency if the agency fails to pay any installment of contributions required by its contract 30 days after a demand by the board or fails for three months to provide required information to CalPERS.
Allows CalPERS to assess a contracting agency interest at an annual rate of 10 percent and the costs of collection, including reasonable legal fees, when necessary to collect the amounts due, if the agency fails to remit the contributions when due.
CalPERS may assess the contracting agency a penalty of 10 percent of the delinquent amount. In the case of repeated delinquencies the penalty may be assessed once during each 30-day period that the amount remains unpaid.
- Terminated Agency Pool - Reduction of Member Benefits (GC 20577.5 and 20578)
Authorizes CalPERS to merge a plan that has been terminated into the Terminated Agency Pool (TAP) if the board has made all reasonable efforts to collect the amount necessary to fully fund the liabilities of the plan and the board finds that the merger of the plan into TAP without benefit reduction will not impact the actuarial soundness of TAP.
Requires benefits to be reduced proportionally prior to the transfer of assets to TAP if the amount of the terminating agency’s assets are less than the actuarial equivalent of the amount CalPERS will be obligated to pay to persons who are or were employed by the terminating agency and the agency fails to pay the difference.
- Conversion of Unused Sick Leave or Educational Leave to Service Credit (GC 20963, 20963.1, and 20965)
Provides that CalPERS members, as specified, whose effective date of retirement is within four months of separation from employment, shall be credited at retirement with 0.004 (i.e., 8 hours) year of service credit for each unused day of sick leave or educational leave certified to the board by the employer.
- Interest on Late Payments of Death Benefits (GC 21499)
Requires CalPERS to authorize to the Controller the initial payment of a preretirement or postretirement death allowance or a preretirement or postretirement lump-sum benefit of ten dollars ($10) or more within 45 days of receipt of all necessary information.
Provides that if any death benefit payment is not made within the allocated time, the payment shall also include interest at the greater of the 6 percent compounded interest crediting rate or the net earnings rate in effect at the time the payment is made for the time payment was delayed.
- Definition of Domestic Partner for Post-Retirement Survivor Allowance (GC 21626.5)
Upon the death of a retired member, provides a retirement benefit allowance to the member’s surviving spouse and treats a surviving domestic partner in the same manner as a surviving spouse, as specified.
- Firefighter/ Peace Officer Death Notification (GC 22820)
Requires the employer of a deceased firefighter or peace officer member to notify CalPERS within 10 business days of the member’s death if the member has a spouse or family member who may be eligible for enrollment in a CalPERS health benefit plan.
This bill:
- CalPERS University and School Member Reduced Workload Program (Ed Code 87486 and GC 20900)
Corrects an erroneous statutory reference in the Education Code to the correct section of the Government Code authorizing the CalPERS reduced workload program for CSU, school district, and community college members and clarifies and makes consistent the eligibility requirements for participation in the program.
- Public Retirement System Actuary Qualifications (GC 7502, 7504, 7505, and 7507.2)
Eliminates the requirement that actuaries be enrolled by the Joint Board of the U.S. Department of the Treasury and the Department of Labor and instead requires that actuaries performing duties required, as specified, shall have attained the designation of Associate or Fellow of the Society of Actuaries and have demonstrated experience with public sector clients.
- Clarification of Final Compensation for Concurrent Retirement (GC 20034 and 20638)
Clarifies that when a CalPERS member applies for concurrent retirement using the final compensation earnable under the University of California Retirement System or a 1937 Act County Retirement System the final compensation is based on the member’s highest annual average compensation during any consecutive 12 or 36 month period.
- Elimination of Member’s Ability to Designate Final Compensation Period (GC 20035, 20035.5, 20037, and 20037.5 through 20037.15)
Clarifies that final compensation means the highest annual compensation which was earnable by the member during any consecutive 12-month or 36-month period of employment and eliminates language that allows a member to designate his or her highest final compensation period because the my|CalPERS system now automatically searches payroll records for a member’s highest final compensation period when calculating retirement benefits.
- California Actuarial Advisory Panel Report - Biennial Instead of Annual Presentation (GC 20229)
Eliminates the requirement that the CAAP Chair make a presentation of the annual CAAP report to a publicly noticed joint hearing of the Senate Committee on Public Employment and Retirement and the Assembly Committee on Public Employees, Retirement, and Social Security within 30 days of receiving the report from the CalPERS board and instead requires the presentation be made at the beginning of each legislative session.
- Interest Charges and Penalty Assessments for Non-Payment of Contributions (GC 20537 and 20572)
Instead of the actuarial interest rate, authorizes CalPERS to charge contracting agencies that do not pay their contributions in a timely manner the greater of either the annual return on the system’s investments for the year prior to the year in which payments are not timely made or a simple annual rate of 10 percent.
Clarifies that the penalty assessment on a contract agency that is more than three months delinquent in paying contributions is in addition to the amount of interest charged on the agency’s overdue outstanding contributions.
Provides that the contracting agency may be assessed the costs of collection, including reasonable legal fees and litigation costs, including, without limitation, legal fees and legal costs incurred in bankruptcy, when necessary to collect any amounts due.
- Terminated Agency Pool - Reduction of Member Benefits (GC 20577.5 and 20578)
Authorizes the board to elect not to impose a reduction, or to impose a lesser reduction, on a plan that has been terminated if the board has made all reasonable efforts to collect the amount necessary to fully fund the liabilities of the plan and the board finds that not reducing the benefits, or imposing a lesser reduction will not impact the actuarial soundness of TAP.
Eliminates the requirement that CalPERS reduce benefits for employees of a terminating agency prior to the transfer of assets to TAP if the amount of the terminating agency’s assets are less than the actuarial equivalent of the amount required to pay the benefits and the agency fails to pay the difference. Thus, CalPERS will be authorized to reduce the employees’ benefits only after the plan has been placed in TAP and the employer fails to remit the contributions necessary to fully fund the plan’s liabilities.
- Conversion of Unused Sick Leave or Education Leave to Service Credit (GC 20963, 20963.1, and 20965)
Clarifies that for purposes of converting unused sick leave or educational leave to service credit, a day of unused sick leave or educational leave is deemed to be the equivalent of an eight-hour day.
- Interest on Late Payments of Death Benefits (GC 21499)
Changes the interest rate to be paid on delayed payments of death benefits from either 6% or the net earnings rate in effect at the time of payment minus expenses, whichever is greater, to a fixed rate of 7% per annum simple (non-compounding) interest to ensure consistency in the payment of death benefits and reduce CalPERS administrative costs.
- Definition of Domestic Partner for Post-Retirement Survivor Allowance (GC 21626.5)
Authorizes the post-retirement survivor allowance to same-sex married couples who never entered into a registered domestic partnership and who retired before it was legally possible to marry their same-sex spouse so long as they sign an affidavit that they would have met the conditions had same-sex marriage been legal at the time of their retirement.
- Firefighter/ Peace Officer Death Notification (GC 22820)
Requires the employer of a deceased firefighter or peace officer member when notifying CalPERS of the member’s death to also provide any updated contact information of the surviving spouse or family member if that spouse or family member may be eligible for enrollment in a CalPERS health benefit plan.
Related/Prior Legislation
AB 2472 (Assembly Committee on Public Employees, Retirement, and Social Security, Chapter 237, Statutes of 2014) served as CalPERS’ annual housekeeping bill and made technical and non-controversial changes to the Government Code governing CalPERS.
SB 216 (Pan, Chapter 244, Statutes of 2015) served as CalPERS’ annual housekeeping bill and made technical and non-controversial changes to the Government Code governing CalPERS.
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No
SUPPORT:
California Public Employees' Retirement System (source)
OPPOSITION:
None received
ARGUMENTS IN SUPPORT: According to the sponsor, this bill will “ensure the statutes administered by CalPERS are as clear and unambiguous as possible.”
According to the State Controller, the bill distinguishes “the requirements of actuaries performing professional services for state or local public retirement plans from those serving in a general advisory capacity, and would more appropriately define those actuaries who are qualified to serve the public sector.”
Date of Hearing: May 11, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
ABPCA Bill Id:AB 2375
Author:(Committee on Public Employees, Retirement / Soc Sec) – As Amended Ver:May 4, 2016
Policy Committee: | Public Employees, Retirement/Soc Sec | Vote: | 7 - 0 |
|
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Urgency: No State Mandated Local Program: No Reimbursable: No
SUMMARY:
This bill makes various technical changes related to the California Public Employees’ Retirement System (CalPERS) and the California State Teachers’ Retirement System (CalSTRS), and the State Controller’s Office (SCO).
FISCAL EFFECT:
No additional state costs
COMMENTS:
Purpose. This bill is the annual Assembly Committee on Public Employees, Retirement, and Social Security’s “housekeeping" legislation that provides technical, non-controversial, and cost-neutral amendments to portions of the Government Code that affects CalPERS, CalSTRS, and SCO. The bill is sponsored by CalPERS.
Analysis Prepared by: Luke Reidenbach / APPR. / (916) 319-2081
Discussed in Hearing
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Bill Author
Bill Co-Author(s):