AB 963: Teachers’ Retirement Law.
- Session Year: 2015-2016
- House: Assembly
- Latest Version Date: 2015-10-11
Existing law, the Teachers Retirement Law, establishes the Defined Benefit Program of the State Teachers Retirement Plan, which provides a defined benefit to members of the program. The defined benefit is based on final compensation, credited service, and age at retirement, subject to certain variations. The State Teachers Retirement System (STRS) is administered by the Teachers Retirement Board. Existing law establishes the Cash Balance Benefit Program, also administered by the Teachers Retirement Board, as a separate benefit program within the State Teachers Retirement Plan in order to provide a retirement plan for persons employed to perform creditable service for less than 50% of full-time service.
This bill would revise and recast the definition of creditable service for purposes of the Defined Benefit Program and the Cash Balance Benefit Program, as specified. The bill would, among other things, include as creditable service for the purposes of the Defined Benefit Program any activities that do not meet the definition of creditable service but were performed for an employer, as defined, on or before December 31, 2015, and were reported as creditable service to STRS. The bill would revise the definition of member to include any person who has performed those activities. The bill would allow members and specified retired members who have performed those activities to irrevocably elect to have that service subject to coverage under a different public retirement system and excluded from coverage by the Defined Benefit Program, as specified. The bill would also allow a person who had service for those activities removed from STRS and reported to a different public retirement system, as directed by STRS, to make an irrevocable election to have all of that service and subsequent service in the same position be subject to coverage by the Defined Benefit Program and excluded from that other system.
Among other things, the bill would require employers, upon request of the system, to provide the system with information relating to certification qualifications, minimum standards, or provisions of approved school charters to perform creditable service, as specified. The bill would include within the definition of creditable service specified activities performed by consulting teachers in the California Peer Assistance and Review Program.
The bill would make other conforming, nonsubstantive changes.
Existing law, the Teachers Retirement Law, establishes the Defined Benefit Program of the State Teachers Retirement Plan, which provides a defined benefit to members of the program. The defined benefit is based on final compensation, credited service, and age at retirement, subject to certain variations. The State Teachers Retirement System (STRS) is administered by the Teachers Retirement Board. Existing law establishes the Cash Balance Benefit Program, also administered by the Teachers Retirement Board, as a separate benefit program within the State Teachers Retirement Plan in order to provide a retirement plan for persons employed to perform creditable service for less than 50% of full-time service.
This bill would revise and recast the definition of creditable service for purposes of the Defined Benefit Program and the Cash Balance Benefit Program, as specified. The bill would, among other things, include as creditable service for the purposes of the Defined Benefit Program any activities that do not meet the definition of creditable service but were performed for an employer, as defined, on or before December 31, 2015, and were reported as creditable service to STRS. The bill would revise the definition of member to include any person who has performed those activities. The bill would allow members and specified retired members who have performed those activities to irrevocably elect to have that service subject to coverage under a different public retirement system and excluded from coverage by the Defined Benefit Program, as specified. The bill would also allow a person who had service for those activities removed from STRS and reported to a different public retirement system, as directed by STRS, to make an irrevocable election to have all of that service and subsequent service in the same position be subject to coverage by the Defined Benefit Program and excluded from that other system.
Among other things, the bill would require employers, upon request of the system, to provide the system with information relating to certification qualifications, minimum standards, or provisions of approved school charters to perform creditable service, as specified. The bill would include within the definition of creditable service specified activities performed by consulting teachers in the California Peer Assistance and Review Program.
The bill would make other conforming, nonsubstantive changes.
Existing law, the Teachers Retirement Law, establishes the Defined Benefit Program of the State Teachers Retirement Plan, which provides a defined benefit to members of the program. The defined benefit is based on final compensation, credited service, and age at retirement, subject to certain variations. The State Teachers Retirement System (STRS) is administered by the Teachers Retirement Board. Existing law establishes the Cash Balance Benefit Program, also administered by the Teachers Retirement Board, as a separate benefit program within the State Teachers Retirement Plan in order to provide a retirement plan for persons employed to perform creditable service for less than 50% of full-time service.
This bill would revise and recast the definition of creditable service for purposes of the Defined Benefit Program and the Cash Balance Benefit Program, as specified. The bill would, among other things, include as creditable service for the purposes of the Defined Benefit Program any activities that do not meet the definition of creditable service but were performed for an employer, as defined, on or before December 31, 2015, and were reported as creditable service to STRS. The bill would revise the definition of member to include any person who has performed those activities. The bill would allow members and specified retired members who have performed those activities to irrevocably elect to have that service subject to coverage under a different public retirement system and excluded from coverage by the Defined Benefit Program, as specified. The bill would also allow a person who had service for those activities removed from STRS and reported to a different public retirement system, as directed by STRS, to make an irrevocable election to have all of that service and subsequent service in the same position be subject to coverage by the Defined Benefit Program and excluded from that other system.
Among other things, the bill would provide that payment for certain part-time creditable service performed by a STRS member as an outgrowth of a school instructional and guidance program be calculated based upon the average compensation earnable for all active members in a prior fiscal year, as specified. The bill would also require employers, upon request of the system, to provide the system with information relating to certification qualifications, minimum standards, or provisions of approved school charters to perform creditable service, as specified. The bill would include within the definition of creditable service specified activities performed by consulting teachers in the California Peer Assistance and Review Program.
The bill would make other conforming, nonsubstantive changes.
Existing law, the Teachers Retirement Law, establishes the Defined Benefit Program of the State Teachers Retirement Plan, which provides a defined benefit to members of the program. The defined benefit is based on final compensation, credited service, and age at retirement, subject to certain variations. The State Teachers Retirement System (STRS) is administered by the Teachers Retirement Board. Existing law establishes the Cash Balance Benefit Program, also administered by the Teachers Retirement Board, as a separate benefit program within the State Teachers Retirement Plan in order to provide a retirement plan for persons employed to perform creditable service for less than 50% of full-time service.
This bill would revise and recast the definition of creditable service for purposes of the Defined Benefit Program and the Cash Balance Benefit Program, as specified. The bill would, among other things, include as creditable service for the purposes of the Defined Benefit Program any activities that do not meet the definition of creditable service but were performed for an employer, as defined, on or before December 31, 2015, and were reported as creditable service to STRS. The bill would revise the definition of member to include any person who has performed those activities. The bill would allow members and specified retired members who have performed those activities to irrevocably elect to have that service subject to coverage under a different public retirement system and excluded from coverage by the Defined Benefit Program, as specified. The bill would also allow a person who had service for those activities removed from STRS and reported to a different public retirement system, as directed by STRS, to make an irrevocable election to have all of that service and subsequent service in the same position be subject to coverage by the Defined Benefit Program and excluded from that other system.
Among other things, the bill would provide that payment for certain part-time creditable service performed by a STRS member as an outgrowth of a school instructional and guidance program be calculated based upon the average compensation earnable for all active members in a prior fiscal year, as specified. The bill would also require employers, upon request of the system, to provide the system with information relating to time creditable service activities and certification qualifications, minimum standards, or provisions of approved school charters to perform creditable service, as specified. The bill would include within the definition of creditable service specified activities performed by consulting teachers in the California Peer Assistance and Review Program.
The bill would make other conforming, nonsubstantive changes.
Existing law, the Teachers Retirement Law, establishes the Defined Benefit Program of the State Teachers Retirement Plan, which provides a defined benefit to members of the program. The defined benefit is based on final compensation, credited service, and age at retirement, subject to certain variations. The State Teachers Retirement System (STRS) is administered by the Teachers Retirement Board. Existing law establishes the Cash Balance Benefit Program, also administered by the Teachers Retirement Board, as a separate benefit program within the State Teachers Retirement Plan in order to provide a retirement plan for persons employed to perform creditable service for less than 50% of full-time service.
This bill would revise and recast the definition of creditable service for purposes of the Defined Benefit Program and the Cash Balance Benefit Program, as specified. The bill would, among other things, include as creditable service for the purposes of the Defined Benefit Program any activities that do not meet the definition of creditable service but were performed for an employer, as defined, on or before December 31, 2015, and were reported as creditable service to STRS. The bill would revise the definition of member to include any person who has performed those activities. The bill would allow members and specified retired members who have performed those activities to irrevocably elect to have that service subject to coverage under a different public retirement system and excluded from coverage by the Defined Benefit Program, as specified. The bill would also allow a person who had service for those activities removed from STRS and reported to a different public retirement system, as directed by STRS, to make an irrevocable election to have all of that service and subsequent service in the same position be subject to coverage by the Defined Benefit Program and excluded from that other system.
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Among other things, the bill would provide that payment for certain part-time creditable service performed by a STRS member as an outgrowth of a school instructional and guidance program be calculated based upon the average compensation earnable for all active members in a prior fiscal year, as specified. The bill would also require employers, upon request of the system, to provide the system with information relating to time creditable service activities and provisions of approved charters to perform creditable service, as specified. The bill would include within the definition of creditable service specified activities performed by consulting teachers in the California Peer Assistance and Review Program.
The bill would make other conforming, nonsubstantive changes.
Existing law, the Teachers Retirement Law, establishes the Defined Benefit Program of the State Teachers Retirement Plan, which provides a defined benefit to members of the program. The defined benefit is based on final compensation, credited service, and age at retirement, subject to certain variations. The State Teachers Retirement System (STRS) is administered by the Teachers Retirement Board. Existing law establishes the Cash Balance Benefit Program, also administered by the Teachers Retirement Board, as a separate benefit program within the State Teachers Retirement Plan in order to provide a retirement plan for persons employed to perform creditable service for less than 50% of full-time service.
This bill would revise and recast the definition of creditable service for purposes of the Defined Benefit Program and the Cash Balance Benefit Program, as specified. The bill would, among other things, include as creditable service for the purposes of the Defined Benefit Program any activities that do not meet the definition of creditable service but were performed for an employer, as defined, on or before December 31, 2015, and were reported as creditable service to STRS. The bill would revise the definition of member to include any person who has performed those activities. The bill would allow members and specified retired members who have performed those activities to irrevocably elect to have that service subject to coverage under a different public retirement system and excluded from coverage by the Defined Benefit Program, as specified. The bill would also allow a person who had service for those activities removed from STRS and reported to a different public retirement system, as directed by STRS, to make an irrevocable election to have all of that service and subsequent service in the same position be subject to coverage by the Defined Benefit Program and excluded from that other system.
The bill would also require employers, upon request of the system, to provide the system with information relating to time creditable service activities and provisions of approved charters to perform creditable service, as specified.
The bill would make other conforming, nonsubstantive changes.
Existing law, the Teachers Retirement Law, establishes the Defined Benefit Program of the State Teachers Retirement Plan, which provides a defined benefit to members of the program. The defined benefit is based on final compensation, credited service, and age at retirement, subject to certain variations. The State Teachers Retirement System (STRS) is administered by the Teachers Retirement Board. Existing law establishes the Cash Balance Benefit Program, also administered by the Teachers Retirement Board, as a separate benefit program within the State Teachers Retirement Plan in order to provide a retirement plan for persons employed to perform creditable service for less than 50% of full-time service.
This bill would revise and recast the definition of creditable service for purposes of the Defined Benefit Program and the Cash Balance Benefit Program, as specified. The bill would, among other things, include as creditable service for the purposes of the Defined Benefit Program, Program any activities that do not meet the definition of creditable service but were performed for an employer, as defined, on or before December 31, 2015, and were reported as creditable service to STRS. The bill would revise the definition of member to include any person who has performed those activities. The bill would allow members and specified retired members who have performed those activities to irrevocably elect to have that service subject to coverage under a different public retirement system and excluded from coverage by the Defined Benefit Program, as specified. The bill would also allow a person who had service for those activities removed from STRS and reported to a different public retirement system, as directed by STRS, to make an irrevocable election to have all of that service and subsequent service in the same position to be subject to coverage by the Defined Benefit Program and excluded from that other system.
The bill would also require employers, upon request of the system, to provide the system with information relating to time creditable service activities and provisions of approved charters to perform creditable service, as specified.
The bill would make other conforming, nonsubstantive changes.
Existing law, the Teachers Retirement Law, establishes the Defined Benefit Program of the State Teachers Retirement Plan, which provides a defined benefit to members of the program. The defined benefit is based on final compensation, credited service, and age at retirement, subject to certain variations. The State Teachers Retirement System (STRS) is administered by the Teachers Retirement Board. Existing law establishes the Cash Balance Benefit Program, also administered by the Teachers Retirement Board, as a separate benefit program within the State Teachers Retirement Plan in order to provide a retirement plan for persons employed to perform creditable service for less than 50% of full-time service.
This bill would revise and recast the definition of creditable service for purposes of the Defined Benefit Program and the Cash Balance Benefit Program, as specified. The bill would, among other things, include as creditable service for the purposes of the Defined Benefit Program, any activities that do not meet the definition of creditable service but were performed for an employer, as defined, on or before December 31, 2015, and were reported as creditable service to STRS. The bill would revise the definition of member to include any person who has performed those activities. The bill would allow members and specified retired members who have performed those activities to irrevocably elect to have that service subject to coverage under a different public retirement system and excluded from coverage by the Defined Benefit Program, as specified. The bill would also allow a person who had service for those activities removed from STRS and reported to a different public retirement system, as directed by STRS, to make an irrevocable election to have all of that service and subsequent service in the same position to be subject to coverage by the Defined Benefit Program and excluded from that other system.
The bill would also require employers, upon request of the system, to provide the system with information relating to time creditable service activities and provisions of approved charters to perform creditable service, as specified.
The bill would make other conforming, nonsubstantive changes.
(a)Compensation earnable means the creditable compensation a person could earn in a school year for creditable service performed on a full-time basis, excluding service for which contributions are credited by the system to the Defined Benefit Supplement Program.
(b)The board may determine compensation earnable for persons employed on a part-time basis.
(c)If service credit for a school year is less than 1.000, compensation earnable shall be the quotient obtained when creditable compensation paid in that year is divided by the service credit for that year, except as provided in subdivision (d).
(d)If a member earns creditable compensation at multiple pay rates during a school year and service credit at the highest pay rate is at least 0.900 of a year, compensation earnable shall be determined as if all service credit for that year had been earned at the highest pay rate. This subdivision shall be applicable only for purposes of determining final compensation. If a member earns creditable compensation at multiple pay rates during a school year and service credit at the highest pay rate is less than 0.900 of a year, compensation earnable shall be determined pursuant to subdivision (c).
(e)If creditable service is not performed on a full-time basis because a member is performing those activities pursuant to subdivision (d) of Section 22119.5, compensation earnable for those activities shall be determined as if the creditable compensation had been earned at the lowest pay rate for other creditable service activities performed by the member for the same employer during the same school year.
(f)(1)Except as provided in subdivision (g), for purposes of determining compensation earnable for a member employed by a community college prior to July 1, 1996, full time shall be defined pursuant to Section 22138.5 and pursuant to Section 20521 of Title 5 of the California Code of Regulations, as those provisions read on June 30, 1996, if application of that definition will increase the compensation earnable or otherwise enhance the benefits of the member.
(2)For purposes of administering this subdivision, the board shall have the authority to do both of the following:
(A)Establish and implement factors and assumptions necessary to calculate and compare the benefits payable under the definition of compensation earnable described in this subdivision. Those factors and assumptions may be based on information reported by the employer, including, but not limited to, all of the following:
(i)Base hours.
(ii)Actual earnings.
(iii)Compensation earnable.
(B)Review member benefit calculations that were performed using the factors and assumptions described in subparagraph (A). If the board determines that an employer failed to identify part-time service performed, the board shall consider that part-time service to be performed in a part-time lecture assignment as defined by the employer. If the board determines by the review of the member benefit calculations that the required information reported by the employer is inaccurate, incomplete, or the factors and assumptions were applied incorrectly, the board may recalculate member benefits using additional factors and assumptions that may include, but are not limited to, all of the following:
(i)Base hours.
(ii)Actual earnings.
(iii)Compensation earnable.
(3)This subdivision shall apply to a member employed by a community college prior to July 1, 1996, if the community college subsequently acts to reduce the minimum standard for full time as described in subdivision (c) of Section 22138.5 for the class of employees, and that community college provides written notice to the system of the act of the community college to reduce that minimum standard.
(4)This subdivision shall not apply to a member employed by a community college that has not reduced the minimum standard as described in subdivision (c) of Section 22138.5.
(g)Subdivision (f) shall not apply to a member subject to the California Public Employees Pension Reform Act of 2013.
SEC. 2.Section 22119.2 of the Education Code is amended to read:22119.2.(a)Creditable compensation means remuneration that is paid in cash by an employer to all persons in the same class of employees for performing creditable service in that position. Creditable compensation shall include:
(1)Salary or wages paid in accordance with a publicly available written contractual agreement, including, but not limited to, a salary schedule or employment agreement.
(2)Remuneration that is paid in addition to salary or wages, provided it is paid to all persons who are in the same class of employees in the same dollar amount, the same percentage of salary or wages, or the same percentage of the amount being distributed.
(3)Remuneration that is paid for the use of sick leave, vacation leave, or an employer-approved compensated leave of absence, except as provided in paragraph (4) of subdivision (c).
(4)Member contributions that are picked up by an employer pursuant to Section 22903 or 22904.
(5)Amounts that are deducted from a members remuneration, including, but not limited to, deductions for participation in a deferred compensation plan; deductions to purchase an annuity contract, tax-deferred retirement plan, or insurance program; and contributions to a plan that meets the requirements of Section 125, 401(a), 401(k), 403(b), 457(b), or 457(f) of Title 26 of the United States Code.
(6)Any other payments the board determines to be creditable compensation.
(b)Any creditable compensation determined by the system to have been paid to enhance a members benefits shall not be credited under the Defined Benefit Program. Contributions on that compensation shall be credited to the Defined Benefit Supplement Program. A presumption by the system that creditable compensation was paid to enhance a members benefits may be rebutted by the member or by the employer on behalf of the member. Upon receipt of sufficient evidence to the contrary, a presumption by the system that creditable compensation was paid to enhance the members benefits may be reversed.
(c)Creditable compensation does not mean and shall not include:
(1)Remuneration that is not paid in cash or is not paid to all persons who are in the same class of employees.
(2)Remuneration that is paid for service that is not creditable service pursuant to Section 22119.5 or 22119.6.
(3)Remuneration that is paid in addition to salary or wages if it is not paid to all persons in the same class of employees in the same dollar amount, the same percentage of salary or wages, or the same percentage of the amount being distributed pursuant to paragraph (2) of subdivision (a).
(4)Remuneration that is paid in exchange for the relinquishment of unused accumulated leave.
(5)Payments, including, but not limited to, those for participation in a deferred compensation plan; to purchase an annuity contract, tax-deferred retirement plan, or insurance program; and for contributions to a plan that meets the requirements of Section 125, 401(a), 401(k), 403(b), 457(b), or 457(f) of Title 26 of the United States Code when the cost is covered by an employer and is not deducted from the members salary.
(6)Fringe benefits provided by an employer.
(7)Expenses paid or reimbursed by an employer.
(8)Severance pay, including lump-sum and installment payments, or money paid in excess of salary or wages to a member as compensatory damages or as a compromise settlement.
(9)Any other payments the board determines not to be creditable compensation.
(d)An employer or individual who knowingly or willfully reports compensation in a manner inconsistent with subdivision (a) or (c) may be subject to prosecution for fraud, theft, or embezzlement in accordance with the Penal Code. The system may establish procedures to ensure that compensation reported by an employer is in compliance with this section.
(e)For purposes of this section, remuneration shall be considered paid if distributed to any person in the same class of employees who meets the qualifications or requirements specified in a publicly available written contractual agreement, including, but not limited to, a collective bargaining agreement or an employment agreement, as a condition of receiving the remuneration.
(f)This definition of creditable compensation reflects sound principles that support the integrity of the retirement fund. Those principles include, but are not limited to, consistent treatment of compensation throughout a members career, consistent treatment of compensation among an entire class of employees, consistent treatment of compensation for the position, preventing adverse selection, and excluding from compensation earnable remuneration that is paid to enhance a members benefits. The system shall determine the appropriate crediting of contributions between the Defined Benefit Program and the Defined Benefit Supplement Program according to these principles, to the extent not otherwise specified pursuant to this part.
(g)The section shall become operative on July 1, 2002.
(h)This section shall not apply to a member subject to the California Public Employees Pension Reform Act of 2013.
SEC. 3.Section 22119.3 of the Education Code is amended to read:22119.3.(a)Creditable compensation for members who are subject to the California Public Employees Pension Reform Act of 2013 means remuneration that is paid each pay period in which creditable service is performed for that position. Creditable compensation shall be paid in cash by an employer to all persons in the same class of employees in accordance with a publicly available written contractual agreement, including, but not limited to, a salary schedule or employment agreement. Creditable compensation shall include:
(1)Remuneration that is paid for the use of sick leave, vacation leave, or an employer-approved compensated leave of absence, except as provided in paragraph (4) of subdivision (b).
(2)Member contributions that are picked up by an employer pursuant to Section 22903 or 22904.
(3)Amounts that are deducted from a members remuneration, including, but not limited to, deductions for participation in a deferred compensation plan; deductions to purchase an annuity contract, tax-deferred retirement plan, or insurance program; and contributions to a plan that meets the requirements of Section 125, 401(a), 401(k), 403(b), 457(b), or 457(f) of Title 26 of the United States Code.
(4)Notwithstanding paragraphs (6) and (8) of subdivision (c) of Section 7522.34 of the Government Code, remuneration that is paid for creditable service that exceeds one year in a school year.
(b)Creditable compensation does not mean and shall not include:
(1)Remuneration that is not paid in cash or is not paid to all persons who are in the same class of employees.
(2)Remuneration that is paid for service that is not creditable service pursuant to Section 22119.5 or 22119.6.
(3)Remuneration that is not paid each pay period in which creditable service is performed for that position.
(4)Remuneration that is paid in exchange for the relinquishment of unused accumulated leave.
(5)Payments, including, but not limited to, those for participation in a deferred compensation plan; to purchase an annuity contract, tax-deferred retirement plan, or insurance program; and for contributions to a plan that meets the requirements of Section 125, 401(a), 401(k), 403(b), 457(b), or 457(f) of Title 26 of the United States Code when the cost is covered by an employer.
(6)Fringe benefits provided by an employer.
(7)Expenses paid or reimbursed by an employer.
(8)Severance pay, including lump sum and installment payments, or money paid in excess of salary or wages to a member as compensatory damages or as a compromise settlement.
(9)Creditable compensation determined by the system to have been paid to enhance a members benefit.
(10)Compensation paid to the member in lieu of benefits provided to the member by the employer or paid directly by the employer to a third party other than the system for the benefit of the member.
(11)Any one-time or ad hoc payments made to a member.
(12)Any employer-provided allowance, reimbursement, or payment, including, but not limited to, one made for housing, vehicle, or uniform.
(13)Any bonus paid in addition to compensation described in subdivision (a).
(14)Any other payments the board determines not to be creditable compensation.
(c)(1)Except for purposes of calculating credited service in the Defined Benefit Program and for reporting compensation earnable on or after January 1, 2013, creditable compensation in any fiscal year shall not exceed:
(A)One hundred twenty percent of the contribution and benefit base, as determined under Section 430(b) of the Social Security Act (42 U.S.C. Sec. 430(b)), on January 1, 2013, for a member whose service is not included in the federal system.
(B)One hundred percent of the contribution and benefit base, as determined under Section 430(b) of the Social Security Act (42 U.S.C. Sec. 430(b)), on January 1, 2013, for a member whose service is included in the federal system pursuant to any changes in state or federal law enacted on or after January 1, 2013.
(2)The system shall adjust the limit based on the annual changes to the Consumer Price Index for All Urban Consumers: U.S. City Average, calculated by dividing the Consumer Price Index for All Urban Consumers: U.S. City Average for the month of February in the fiscal year preceding the adjustment by the Consumer Price Index for All Urban Consumers: U.S. City Average for the month of February of the previous year rounded to the nearest thousandth. Notwithstanding paragraph (1) of subdivision (d) of Section 7522.10 of the Government Code, the adjustment shall be effective annually on July 1, beginning July 1, 2014.
(3)The Legislature reserves the right to modify the requirements of this subdivision with regard to all members subject to this subdivision, except that the Legislature may not modify these provisions in a manner that would result in a decrease in benefits accrued prior to the effective date of the modification.
(4)This subdivision shall apply to compensation paid during the 201314 fiscal year and each fiscal year thereafter.
(d)An employer or individual who knowingly or willfully reports compensation in a manner inconsistent with subdivision (a) or (b) may be subject to prosecution for fraud, theft, or embezzlement in accordance with the Penal Code. The system may establish procedures to ensure that compensation reported by an employer is in compliance with this section.
(e)For purposes of this section, remuneration shall be considered paid if distributed to any person in the same class of employees who meets the qualifications or requirements specified in a publicly available written contractual agreement, including, but not limited to, a collective bargaining agreement or an employment agreement, as a condition of receiving the remuneration.
(f)This definition of creditable compensation reflects sound principles that support the integrity of the retirement fund. Those principles include, but are not limited to, consistent treatment of compensation throughout a members career, consistent treatment of compensation among an entire class of employees, consistent treatment of compensation for the position, preventing adverse selection, and excluding from creditable compensation remuneration that is paid to enhance a members benefits. The system shall determine the appropriate crediting of contributions according to these principles, to the extent not otherwise specified pursuant to this part. A presumption by the system that creditable compensation was paid to enhance the members benefits may be rebutted by the member or by the employer on behalf of the member. Upon receipt of sufficient evidence to the contrary, a presumption by the system that creditable compensation was paid to enhance the members benefits may be reversed.
SEC. 4.Section 22119.5 of the Education Code is amended to read:22119.5.(a)Creditable service means any of the activities described in subdivision (b) performed for any of the following employers:
(1)A prekindergarten through grade 12 employer, including the state, in a position requiring certification qualifications as designated in regulations adopted by the Commission on Teacher Credentialing pursuant to Section 44001.
(2)A community college employer by a faculty member, as defined in Section 87003, in an academic position, as defined in subdivision (b) of Section 87001, or by an educational administrator, as defined in subdivision (b) of Section 87002, subject to the appropriate minimum standards adopted by the Board of Governors of the California Community Colleges pursuant to Section 87356, or pursuant to a contract between a community college district and the United States Department of Defense to provide vocational training.
(3)A charter school employer under the provisions of an approved charter for the operation of a charter school for which the charter school is eligible to receive state apportionment.
(b)The types of activities are any of the following:
(1)The work of teachers, instructors, district interns, and academic employees employed in the instructional program for pupils, including special programs such as adult education, regional occupation programs, child care centers, and prekindergarten programs pursuant to Section 22161.
(2)Education or vocational counseling, guidance, and placement services.
(3)The work of employees who plan courses of study to be used in California public schools, or research connected with the evaluation or efficiency of the instructional program.
(4)The selection, collection, preparation, classification, demonstration, or evaluation of instructional materials of any course of study for use in the development of the instructional program in California public schools, or other services related to California public school curriculum.
(5)The examination, selection, in-service training, mentoring, or assignment of teachers, principals, or other similar personnel involved in the instructional program.
(6)The work of nurses, physicians, speech therapists, psychologists, audiometrists, audiologists, and other California public school health professionals.
(7)Services as a California public school librarian.
(8)Activities connected with the enforcement of the laws relating to compulsory education, coordination of child welfare activities involving the school and the home, and the school adjustment of pupils.
(9)The work of employees who are responsible for the supervision of persons or administration of the duties described in this subdivision.
(c)Creditable service also means any of the activities described in subdivision (b) when they are performed for an employer by:
(1)Superintendents of California public schools, and presidents and chancellors of community college employers.
(2)Consulting teachers employed by an employer to participate in the California Peer Assistance and Review Program for Teachers pursuant to Article 4.5 (commencing with Section 44500) of Chapter 3 of Part 25 of Division 3 of Title 2.
(d)Creditable service also means the performance of California public school activities related to, and an outgrowth of, the instructional and guidance program of the California public school when performed for the same employer for which the member is performing any of the activities described in subdivision (b) or (c).
(e)The board shall have final authority for determining creditable service to cover any activities not already specified.
SEC. 5.Section 22119.6 is added to the Education Code, to read:22119.6.(a)Creditable service shall also include any activities that do not meet the definition of creditable service under Section 22119.5, but were performed for any employer, as defined in Section 22131, on or before December 31, 2015, and were reported as creditable service to the system.
(b)The type of activities described in subdivision (a) performed by a member who becomes employed by the same or a different employer in a new position on or after January 1, 2016, shall be subject to Section 22119.5.
SEC. 6.Section 22146 of the Education Code is amended to read:22146.Member means any person, unless excluded under other provisions of this part, who has performed creditable service as defined in Section 22119.5 or 22119.6 and has earned creditable compensation for that service and has not received a refund for that service and, as a result, is subject to the Defined Benefit Program. A members rights and obligations under this part with respect to the Defined Benefit Program shall be determined by the applicability of subdivision (a), (b), (c), or (d), and subject to any applicable exceptions under other provisions of this part.
(a)An active member is a member who is not retired or disabled and who earns creditable compensation during the school year.
(b)An inactive member is a member who is not retired or disabled and who has not earned creditable compensation during the current or preceding school year.
(c)A disabled member is a member to whom a disability allowance is payable under Chapter 25 (commencing with Section 24001).
(d)A retired member is a member who has terminated employment and has retired for service under the provisions of Chapter 27 (commencing with Section 24201), or has retired for disability under the provisions of Chapter 26 (commencing with Section 24100) or retired for service or disability under the provisions of Chapter 21 (commencing with Section 23400), and to whom a retirement allowance is therefore payable.
SEC. 7.Section 22164.5 of the Education Code is amended to read:22164.5.(a)Retired member activities means one or more activities identified in subdivision (b), (c), or (d) of Section 22119.5 or subdivision (b), (c), or (d) of Section 26113 within the California public school system and performed by a member retired for service under this part as one of the following:
(1)An employee of an employer.
(2)An employee of a third party, except as specified in subdivision (b).
(3)An independent contractor.
(b)The activities of an employee of a third party shall not be included in the definition of retired member activities if all of the following conditions apply:
(1)The employee performs an assignment of 24 months or less.
(2)The third-party employer does not participate in a California public pension system.
(3)The activities performed by the individual are not normally performed by employees of an employer, as defined in Section 22131.
SEC. 8.Section 22458.5 is added to the Education Code, to read:22458.5.Upon request from the system, each employer shall provide the system with information regarding the certification qualifications, minimum standards, or provisions of an approved charter for the operation of a charter school required to perform creditable service pursuant to subdivision (a) of Section 22119.5, in a position.
SEC. 9.Section 22508.7 is added to the Education Code, to read:22508.7.(a)This section shall apply to service deemed creditable service pursuant to subdivision (a) of Section 22119.6 and a person who performs that service.
(b)(1)A member, including a member who retires on or before December 31, 2015, may elect to have all of that service subject to coverage by a different public retirement system and excluded from coverage by the Defined Benefit Program, if the member is not excluded from coverage by that public retirement system.
(2)If an election is made pursuant to this subdivision, all of the following shall apply:
(A)All service that was subject to coverage by the Defined Benefit Program shall be subject to coverage by the other public retirement system, if the member is not excluded from coverage by that public retirement system.
(B)Any member contributions and credited interest, as determined by the system, and employer contributions, less any amounts previously paid to the person, shall be returned to the employer for that service, with the system recovering from the person any amounts that were paid to the person and not recovered from withheld member contributions, credited interest, or employer contributions.
(C)Any amounts not recovered pursuant to subparagraph (B) shall be paid in full by the member before his or her service can be subject to coverage by the other public retirement system.
(3)If an election is made pursuant to this subdivision, the following shall apply:
(A)A member not subject to the California Public Employees Pension Reform Act of 2013 in the Defined Benefit Program shall not be subject to that act in the other public retirement system.
(B)A member subject to the California Public Employees Pension Reform Act of 2013 in the Defined Benefit Program shall be subject to that act in the other public retirement system.
(4)If an election is not made pursuant to this subdivision, all service performed shall continue to be subject to coverage by the Defined Benefit Program until the member becomes employed pursuant to subdivision (b) of Section 22119.6.
(c)(1)A person who had service removed from the system and reported to a different public retirement system, as directed by the system, including a person who is receiving a benefit on or before December 31, 2015, may elect to have all of that service and subsequent service in the same position subject to coverage by the Defined Benefit Program and excluded from coverage by the other public retirement system.
(2)If an election is made pursuant to this subdivision, all of the following shall apply:
(A)All of that service and subsequent service in the same position that was subject to coverage by the other public retirement system shall be subject to coverage by the Defined Benefit Program and reported to the system pursuant to Chapter 17 (commencing with Section 23000).
(B)Any employee and employer contributions for that service and subsequent service in the same position shall be remitted to the system pursuant to Chapter 17 (commencing with Section 23000).
(3)If an election is made pursuant to this subdivision, the following shall apply:
(A)A person not subject to the California Public Employees Pension Reform Act of 2013 in the other public retirement system shall not be subject to that act in the Defined Benefit Program.
(B)A person subject to the California Public Employees Pension Reform Act of 2013 in the other public retirement system shall be subject to that act in the Defined Benefit Program.
(4)If an election is not made pursuant to this subdivision, all service performed will continue to be subject to coverage by the other public retirement system.
(d)The election shall be made in writing and filed with the office of the system on a form prescribed by the system on or before June 30, 2016, and a copy of the election shall be filed with the other public retirement system.
(e)Only a person who has performed service creditable under subdivision (a) of Section 22119.6 can make an election under this section.
(f)An election made pursuant to this section shall be irrevocable.
(g)The board shall be under no obligation to identify, locate, or notify a person who has performed service creditable pursuant to subdivision (a) of Section 22119.6 and is eligible to make an election pursuant to this section.
SEC. 10.Section 26113 of the Education Code is amended to read:26113.(a)Creditable service means any of the activities described in subdivision (b) performed for any of the following employers:
(1)A prekindergarten through grade 12 employer, including the state, in a position requiring certification qualifications as designated in regulations adopted by the Commission on Teacher Credentialing pursuant to Section 44001.
(2)A community college employer by a faculty member, as defined in Section 87003, in an academic position, as defined in subdivision (b) of Section 87001, or by an educational administrator, as defined in subdivision (b) of Section 87002, subject to the appropriate minimum standards adopted by the Board of Governors of the California Community Colleges pursuant to Section 87356, or pursuant to a contract between a community college district and the United States Department of Defense to provide vocational training.
(3)A charter school employer under the provisions of an approved charter for the operation of a charter school for which the charter school is eligible to receive state apportionment.
(b)The types of activities are any of the following:
(1)The work of teachers, instructors, district interns, and academic employees employed in the instructional program for pupils, including special programs such as adult education, regional occupational programs, child care centers, and prekindergarten programs pursuant to Section 22161.
(2)Education or vocational counseling, guidance, and placement services.
(3)The work of employees who plan courses of study to be used in California public schools, or research connected with the evaluation or efficiency of the instructional program.
(4)The selection, collection, preparation, classification, demonstration, or evaluation of instructional materials of any course of study for use in the development of the instructional program in California public schools, or other services related to California public school curriculum.
(5)The examination, selection, in-service training, mentoring, or assignment of teachers, principals, or other similar personnel involved in the instructional program.
(6)The work of nurses, physicians, speech therapists, psychologists, audiometrists, audiologists, and other California public school health professionals.
(7)Services as a California public school librarian.
(8)Activities connected with the enforcement of the laws relating to compulsory education, coordination of child welfare activities involving the school and the home, and the school adjustment of pupils.
(9)The work of employees who are responsible for the supervision of persons or administration of the duties described in this subdivision.
(10)Trustee service as described in Section 26403.
(c)Creditable service also means any of the activities described in subdivision (b) when they are performed for an employer by:
(1)Superintendents of California public schools, and presidents and chancellors of community college employers.
(2)Consulting teachers employed by an employer to participate in the California Peer Assistance and Review Program for Teachers pursuant to Article 4.5 (commencing with Section 44500) of Chapter 3 of Part 25 of Division 3 of Title 2.
(d)Creditable service also means the performance of California public school activities related to, and an outgrowth of, the instructional and guidance program of the California public school when performed for the same employer for which the member is performing any of the activities described in subdivision (b) or (c).
(e)The board shall have final authority for determining creditable service to cover activities not already specified.
SEC. 11.Section 26135.7 of the Education Code is amended to read:26135.7.(a)Retired participant activities means one or more activities identified in subdivision (b), (c), or (d) of Section 22119.5 or (b), (c), or (d) of Section 26113 within the California public school system and performed by a participant retired for service under this part as one of the following:
(1)An employee of an employer.
(2)An employee of a third party, except as specified in subdivision (b).
(3)An independent contractor.
(b)The activities of an employee of a third party shall not be included in the definition of retired participant activities if all of the following conditions apply:
(1)The employee performs an assignment of 24 months or less.
(2)The third-party employer does not participate in a California public pension system.
(3)The activities performed by the individual are not normally performed by employees of an employer, as defined in Section 22131.
(a)Compensation earnable means the creditable compensation a person could earn in a school year for creditable service performed on a full-time basis, excluding service for which contributions are credited by the system to the Defined Benefit Supplement Program.
(b)The board may determine compensation earnable for persons employed on a part-time basis.
(c)If service credit for a school year is less than 1.000, compensation earnable shall be the quotient obtained when creditable compensation paid in that year is divided by the service credit for that year, except as provided in subdivision (d).
(d)If a member earns creditable compensation at multiple pay rates during a school year and service credit at the highest pay rate is at least 0.900 of a year, compensation earnable shall be determined as if all service credit for that year had been earned at the highest pay rate. This subdivision shall be applicable only for purposes of determining final compensation. If a member earns creditable compensation at multiple pay rates during a school year and service credit at the highest pay rate is less than 0.900 of a year, compensation earnable shall be determined pursuant to subdivision (c).
(e)If creditable service is not performed on a full-time basis because a member is performing those activities pursuant to subdivision (d) of Section 22119.5, compensation earnable for those activities shall be determined as if the creditable compensation had been earned at the lowest pay rate for other creditable service activities performed by the member for the same employer during the same school year.
(f)(1)Except as provided in subdivision (g), for purposes of determining compensation earnable for a member employed by a community college prior to July 1, 1996, full time shall be defined pursuant to Section 22138.5 and pursuant to Section 20521 of Title 5 of the California Code of Regulations, as those provisions read on June 30, 1996, if application of that definition will increase the compensation earnable or otherwise enhance the benefits of the member.
(2)For purposes of administering this subdivision, the board shall have the authority to do both of the following:
(A)Establish and implement factors and assumptions necessary to calculate and compare the benefits payable under the definition of compensation earnable described in this subdivision. Those factors and assumptions may be based on information reported by the employer, including, but not limited to, all of the following:
(i)Base hours.
(ii)Actual earnings.
(iii)Compensation earnable.
(B)Review member benefit calculations that were performed using the factors and assumptions described in subparagraph (A). If the board determines that an employer failed to identify part-time service performed, the board shall consider that part-time service to be performed in a part-time lecture assignment as defined by the employer. If the board determines by the review of the member benefit calculations that the required information reported by the employer is inaccurate, incomplete, or the factors and assumptions were applied incorrectly, the board may recalculate member benefits using additional factors and assumptions that may include, but are not limited to, all of the following:
(i)Base hours.
(ii)Actual earnings.
(iii)Compensation earnable.
(3)This subdivision shall apply to a member employed by a community college prior to July 1, 1996, if the community college subsequently acts to reduce the minimum standard for full time as described in subdivision (c) of Section 22138.5 for the class of employees, and that community college provides written notice to the system of the act of the community college to reduce that minimum standard.
(4)This subdivision shall not apply to a member employed by a community college that has not reduced the minimum standard as described in subdivision (c) of Section 22138.5.
(g)Subdivision (f) shall not apply to a member subject to the California Public Employees Pension Reform Act of 2013.
SEC. 2.Section 22119.2 of the Education Code is amended to read:22119.2.(a)Creditable compensation means remuneration that is paid in cash by an employer to all persons in the same class of employees for performing creditable service in that position. Creditable compensation shall include:
(1)Salary or wages paid in accordance with a publicly available written contractual agreement, including, but not limited to, a salary schedule or employment agreement.
(2)Remuneration that is paid in addition to salary or wages, provided it is paid to all persons who are in the same class of employees in the same dollar amount, the same percentage of salary or wages, or the same percentage of the amount being distributed.
(3)Remuneration that is paid for the use of sick leave, vacation leave, or an employer-approved compensated leave of absence, except as provided in paragraph (4) of subdivision (c).
(4)Member contributions that are picked up by an employer pursuant to Section 22903 or 22904.
(5)Amounts that are deducted from a members remuneration, including, but not limited to, deductions for participation in a deferred compensation plan; deductions to purchase an annuity contract, tax-deferred retirement plan, or insurance program; and contributions to a plan that meets the requirements of Section 125, 401(a), 401(k), 403(b), 457(b), or 457(f) of Title 26 of the United States Code.
(6)Any other payments the board determines to be creditable compensation.
(b)Any creditable compensation determined by the system to have been paid to enhance a members benefits shall not be credited under the Defined Benefit Program. Contributions on that compensation shall be credited to the Defined Benefit Supplement Program. A presumption by the system that creditable compensation was paid to enhance a members benefits may be rebutted by the member or by the employer on behalf of the member. Upon receipt of sufficient evidence to the contrary, a presumption by the system that creditable compensation was paid to enhance the members benefits may be reversed.
(c)Creditable compensation does not mean and shall not include:
(1)Remuneration that is not paid in cash or is not paid to all persons who are in the same class of employees.
(2)Remuneration that is paid for service that is not creditable service pursuant to Section 22119.5 or 22119.6.
(3)Remuneration that is paid in addition to salary or wages if it is not paid to all persons in the same class of employees in the same dollar amount, the same percentage of salary or wages, or the same percentage of the amount being distributed pursuant to paragraph (2) of subdivision (a).
(4)Remuneration that is paid in exchange for the relinquishment of unused accumulated leave.
(5)Payments, including, but not limited to, those for participation in a deferred compensation plan; to purchase an annuity contract, tax-deferred retirement plan, or insurance program; and for contributions to a plan that meets the requirements of Section 125, 401(a), 401(k), 403(b), 457(b), or 457(f) of Title 26 of the United States Code when the cost is covered by an employer and is not deducted from the members salary.
(6)Fringe benefits provided by an employer.
(7)Expenses paid or reimbursed by an employer.
(8)Severance pay, including lump-sum and installment payments, or money paid in excess of salary or wages to a member as compensatory damages or as a compromise settlement.
(9)Any other payments the board determines not to be creditable compensation.
(d)An employer or individual who knowingly or willfully reports compensation in a manner inconsistent with subdivision (a) or (c) may be subject to prosecution for fraud, theft, or embezzlement in accordance with the Penal Code. The system may establish procedures to ensure that compensation reported by an employer is in compliance with this section.
(e)For purposes of this section, remuneration shall be considered paid if distributed to any person in the same class of employees who meets the qualifications or requirements specified in a publicly available written contractual agreement, including, but not limited to, a collective bargaining agreement or an employment agreement, as a condition of receiving the remuneration.
(f)This definition of creditable compensation reflects sound principles that support the integrity of the retirement fund. Those principles include, but are not limited to, consistent treatment of compensation throughout a members career, consistent treatment of compensation among an entire class of employees, consistent treatment of compensation for the position, preventing adverse selection, and excluding from compensation earnable remuneration that is paid to enhance a members benefits. The system shall determine the appropriate crediting of contributions between the Defined Benefit Program and the Defined Benefit Supplement Program according to these principles, to the extent not otherwise specified pursuant to this part.
(g)The section shall become operative on July 1, 2002.
(h)This section shall not apply to a member subject to the California Public Employees Pension Reform Act of 2013.
SEC. 3.Section 22119.3 of the Education Code is amended to read:22119.3.(a)Creditable compensation for members who are subject to the California Public Employees Pension Reform Act of 2013 means remuneration that is paid each pay period in which creditable service is performed for that position. Creditable compensation shall be paid in cash by an employer to all persons in the same class of employees in accordance with a publicly available written contractual agreement, including, but not limited to, a salary schedule or employment agreement. Creditable compensation shall include:
(1)Remuneration that is paid for the use of sick leave, vacation leave, or an employer-approved compensated leave of absence, except as provided in paragraph (4) of subdivision (b).
(2)Member contributions that are picked up by an employer pursuant to Section 22903 or 22904.
(3)Amounts that are deducted from a members remuneration, including, but not limited to, deductions for participation in a deferred compensation plan; deductions to purchase an annuity contract, tax-deferred retirement plan, or insurance program; and contributions to a plan that meets the requirements of Section 125, 401(a), 401(k), 403(b), 457(b), or 457(f) of Title 26 of the United States Code.
(4)Notwithstanding paragraphs (6) and (8) of subdivision (c) of Section 7522.34 of the Government Code, remuneration that is paid for creditable service that exceeds one year in a school year.
(b)Creditable compensation does not mean and shall not include:
(1)Remuneration that is not paid in cash or is not paid to all persons who are in the same class of employees.
(2)Remuneration that is paid for service that is not creditable service pursuant to Section 22119.5 or 22119.6.
(3)Remuneration that is not paid each pay period in which creditable service is performed for that position.
(4)Remuneration that is paid in exchange for the relinquishment of unused accumulated leave.
(5)Payments, including, but not limited to, those for participation in a deferred compensation plan; to purchase an annuity contract, tax-deferred retirement plan, or insurance program; and for contributions to a plan that meets the requirements of Section 125, 401(a), 401(k), 403(b), 457(b), or 457(f) of Title 26 of the United States Code when the cost is covered by an employer.
(6)Fringe benefits provided by an employer.
(7)Expenses paid or reimbursed by an employer.
(8)Severance pay, including lump sum and installment payments, or money paid in excess of salary or wages to a member as compensatory damages or as a compromise settlement.
(9)Creditable compensation determined by the system to have been paid to enhance a members benefit.
(10)Compensation paid to the member in lieu of benefits provided to the member by the employer or paid directly by the employer to a third party other than the system for the benefit of the member.
(11)Any one-time or ad hoc payments made to a member.
(12)Any employer-provided allowance, reimbursement, or payment, including, but not limited to, one made for housing, vehicle, or uniform.
(13)Any bonus paid in addition to compensation described in subdivision (a).
(14)Any other payments the board determines not to be creditable compensation.
(c)(1)Except for purposes of calculating credited service in the Defined Benefit Program and for reporting compensation earnable on or after January 1, 2013, creditable compensation in any fiscal year shall not exceed:
(A)One hundred twenty percent of the contribution and benefit base, as determined under Section 430(b) of the Social Security Act (42 U.S.C. Sec. 430(b)), on January 1, 2013, for a member whose service is not included in the federal system.
(B)One hundred percent of the contribution and benefit base, as determined under Section 430(b) of the Social Security Act (42 U.S.C. Sec. 430(b)), on January 1, 2013, for a member whose service is included in the federal system pursuant to any changes in state or federal law enacted on or after January 1, 2013.
(2)The system shall adjust the limit based on the annual changes to the Consumer Price Index for All Urban Consumers: U.S. City Average, calculated by dividing the Consumer Price Index for All Urban Consumers: U.S. City Average for the month of February in the fiscal year preceding the adjustment by the Consumer Price Index for All Urban Consumers: U.S. City Average for the month of February of the previous year rounded to the nearest thousandth. Notwithstanding paragraph (1) of subdivision (d) of Section 7522.10 of the Government Code, the adjustment shall be effective annually on July 1, beginning July 1, 2014.
(3)The Legislature reserves the right to modify the requirements of this subdivision with regard to all members subject to this subdivision, except that the Legislature may not modify these provisions in a manner that would result in a decrease in benefits accrued prior to the effective date of the modification.
(4)This subdivision shall apply to compensation paid during the 201314 fiscal year and each fiscal year thereafter.
(d)An employer or individual who knowingly or willfully reports compensation in a manner inconsistent with subdivision (a) or (b) may be subject to prosecution for fraud, theft, or embezzlement in accordance with the Penal Code. The system may establish procedures to ensure that compensation reported by an employer is in compliance with this section.
(e)For purposes of this section, remuneration shall be considered paid if distributed to any person in the same class of employees who meets the qualifications or requirements specified in a publicly available written contractual agreement, including, but not limited to, a collective bargaining agreement or an employment agreement, as a condition of receiving the remuneration.
(f)This definition of creditable compensation reflects sound principles that support the integrity of the retirement fund. Those principles include, but are not limited to, consistent treatment of compensation throughout a members career, consistent treatment of compensation among an entire class of employees, consistent treatment of compensation for the position, preventing adverse selection, and excluding from creditable compensation remuneration that is paid to enhance a members benefits. The system shall determine the appropriate crediting of contributions according to these principles, to the extent not otherwise specified pursuant to this part. A presumption by the system that creditable compensation was paid to enhance the members benefits may be rebutted by the member or by the employer on behalf of the member. Upon receipt of sufficient evidence to the contrary, a presumption by the system that creditable compensation was paid to enhance the members benefits may be reversed.
SEC. 4.Section 22119.5 of the Education Code is amended to read:22119.5.(a)Creditable service means any of the activities described in subdivision (b) performed for any of the following employers:
(1)A prekindergarten through grade 12 employer, including the state, in a position requiring certification qualifications as designated in regulations adopted by the Commission on Teacher Credentialing pursuant to Section 44001.
(2)A community college employer by a faculty member, as defined in Section 87003, in an academic position, as defined in subdivision (b) of Section 87001, or by an educational administrator, as defined in subdivision (b) of Section 87002, subject to the appropriate minimum standards adopted by the Board of Governors of the California Community Colleges pursuant to Section 87356, or pursuant to a contract between a community college district and the United States Department of Defense to provide vocational training.
(3)A charter school employer under the provisions of an approved charter for the operation of a charter school for which the charter school is eligible to receive state apportionment.
(b)The types of activities are any of the following:
(1)The work of teachers, instructors, district interns, and academic employees employed in the instructional program for pupils, including special programs such as adult education, regional occupation programs, child care centers, and prekindergarten programs pursuant to Section 22161.
(2)Education or vocational counseling, guidance, and placement services.
(3)The work of employees who plan courses of study to be used in California public schools, or research connected with the evaluation or efficiency of the instructional program.
(4)The selection, collection, preparation, classification, demonstration, or evaluation of instructional materials of any course of study for use in the development of the instructional program in California public schools, or other services related to California public school curriculum.
(5)The examination, selection, in-service training, mentoring, or assignment of teachers, principals, or other similar personnel involved in the instructional program.
(6)The work of nurses, physicians, speech therapists, psychologists, audiometrists, audiologists, and other California public school health professionals.
(7)Services as a California public school librarian.
(8)Activities connected with the enforcement of the laws relating to compulsory education, coordination of child welfare activities involving the school and the home, and the school adjustment of pupils.
(9)The work of employees who are responsible for the supervision of persons or administration of the duties described in this subdivision.
(c)Creditable service also means any of the activities described in subdivision (b) when they are performed for an employer by:
(1)Superintendents of California public schools, and presidents and chancellors of community college employers.
(2)Consulting teachers employed by an employer to participate in the California Peer Assistance and Review Program for Teachers pursuant to Article 4.5 (commencing with Section 44500) of Chapter 3 of Part 25 of Division 3 of Title 2.
(d)Creditable service also means the performance of California public school activities related to, and an outgrowth of, the instructional and guidance program of the California public school when performed for the same employer for which the member is performing any of the activities described in subdivision (b) or (c).
(e)The board shall have final authority for determining creditable service to cover any activities not already specified.
SEC. 5.Section 22119.6 is added to the Education Code, to read:22119.6.(a)Creditable service shall also include any activities that do not meet the definition of creditable service under Section 22119.5, but were performed for any employer, as defined in Section 22131, on or before December 31, 2015, and were reported as creditable service to the system.
(b)The type of activities described in subdivision (a) performed by a member who becomes employed by the same or a different employer in a new position on or after January 1, 2016, shall be subject to Section 22119.5.
SEC. 6.Section 22146 of the Education Code is amended to read:22146.Member means any person, unless excluded under other provisions of this part, who has performed creditable service as defined in Section 22119.5 or 22119.6 and has earned creditable compensation for that service and has not received a refund for that service and, as a result, is subject to the Defined Benefit Program. A members rights and obligations under this part with respect to the Defined Benefit Program shall be determined by the applicability of subdivision (a), (b), (c), or (d), and subject to any applicable exceptions under other provisions of this part.
(a)An active member is a member who is not retired or disabled and who earns creditable compensation during the school year.
(b)An inactive member is a member who is not retired or disabled and who has not earned creditable compensation during the current or preceding school year.
(c)A disabled member is a member to whom a disability allowance is payable under Chapter 25 (commencing with Section 24001).
(d)A retired member is a member who has terminated employment and has retired for service under the provisions of Chapter 27 (commencing with Section 24201), or has retired for disability under the provisions of Chapter 26 (commencing with Section 24100) or retired for service or disability under the provisions of Chapter 21 (commencing with Section 23400), and to whom a retirement allowance is therefore payable.
SEC. 7.Section 22164.5 of the Education Code is amended to read:22164.5.(a)Retired member activities means one or more activities identified in subdivision (b), (c), or (d) of Section 22119.5 or subdivision (b), (c), or (d) of Section 26113 within the California public school system and performed by a member retired for service under this part as one of the following:
(1)An employee of an employer.
(2)An employee of a third party, except as specified in subdivision (b).
(3)An independent contractor.
(b)The activities of an employee of a third party shall not be included in the definition of retired member activities if all of the following conditions apply:
(1)The employee performs an assignment of 24 months or less.
(2)The third-party employer does not participate in a California public pension system.
(3)The activities performed by the individual are not normally performed by employees of an employer, as defined in Section 22131.
SEC. 8.Section 22458.5 is added to the Education Code, to read:22458.5.Upon request from the system, each employer shall provide the system with information regarding the certification qualifications, minimum standards, or provisions of an approved charter for the operation of a charter school required to perform creditable service pursuant to subdivision (a) of Section 22119.5, in a position.
SEC. 9.Section 22508.7 is added to the Education Code, to read:22508.7.(a)This section shall apply to service deemed creditable service pursuant to subdivision (a) of Section 22119.6 and a person who performs that service.
(b)(1)A member, including a member who retires on or before December 31, 2015, may elect to have all of that service subject to coverage by a different public retirement system and excluded from coverage by the Defined Benefit Program, if the member is not excluded from coverage by that public retirement system.
(2)If an election is made pursuant to this subdivision, all of the following shall apply:
(A)All service that was subject to coverage by the Defined Benefit Program shall be subject to coverage by the other public retirement system, if the member is not excluded from coverage by that public retirement system.
(B)Any member contributions and credited interest, as determined by the system, and employer contributions, less any amounts previously paid to the person, shall be returned to the employer for that service, with the system recovering from the person any amounts that were paid to the person and not recovered from withheld member contributions, credited interest, or employer contributions.
(C)Any amounts not recovered pursuant to subparagraph (B) shall be paid in full by the member before his or her service can be subject to coverage by the other public retirement system.
(3)If an election is made pursuant to this subdivision, the following shall apply:
(A)A member not subject to the California Public Employees Pension Reform Act of 2013 in the Defined Benefit Program shall not be subject to that act in the other public retirement system.
(B)A member subject to the California Public Employees Pension Reform Act of 2013 in the Defined Benefit Program shall be subject to that act in the other public retirement system.
(4)If an election is not made pursuant to this subdivision, all service performed shall continue to be subject to coverage by the Defined Benefit Program until the member becomes employed pursuant to subdivision (b) of Section 22119.6.
(c)(1)A person who had service removed from the system and reported to a different public retirement system, as directed by the system, including a person who is receiving a benefit on or before December 31, 2015, may elect to have all of that service and subsequent service in the same position subject to coverage by the Defined Benefit Program and excluded from coverage by the other public retirement system.
(2)If an election is made pursuant to this subdivision, all of the following shall apply:
(A)All of that service and subsequent service in the same position that was subject to coverage by the other public retirement system shall be subject to coverage by the Defined Benefit Program and reported to the system pursuant to Chapter 17 (commencing with Section 23000).
(B)Any employee and employer contributions for that service and subsequent service in the same position shall be remitted to the system pursuant to Chapter 17 (commencing with Section 23000).
(3)If an election is made pursuant to this subdivision, the following shall apply:
(A)A person not subject to the California Public Employees Pension Reform Act of 2013 in the other public retirement system shall not be subject to that act in the Defined Benefit Program.
(B)A person subject to the California Public Employees Pension Reform Act of 2013 in the other public retirement system shall be subject to that act in the Defined Benefit Program.
(4)If an election is not made pursuant to this subdivision, all service performed will continue to be subject to coverage by the other public retirement system.
(d)The election shall be made in writing and filed with the office of the system on a form prescribed by the system on or before June 30, 2016, and a copy of the election shall be filed with the other public retirement system.
(e)Only a person who has performed service creditable under subdivision (a) of Section 22119.6 can make an election under this section.
(f)An election made pursuant to this section shall be irrevocable.
(g)The board shall be under no obligation to identify, locate, or notify a person who has performed service creditable pursuant to subdivision (a) of Section 22119.6 and is eligible to make an election pursuant to this section.
SEC. 10.Section 26113 of the Education Code is amended to read:26113.(a)Creditable service means any of the activities described in subdivision (b) performed for any of the following employers:
(1)A prekindergarten through grade 12 employer, including the state, in a position requiring certification qualifications as designated in regulations adopted by the Commission on Teacher Credentialing pursuant to Section 44001.
(2)A community college employer by a faculty member, as defined in Section 87003, in an academic position, as defined in subdivision (b) of Section 87001, or by an educational administrator, as defined in subdivision (b) of Section 87002, subject to the appropriate minimum standards adopted by the Board of Governors of the California Community Colleges pursuant to Section 87356, or pursuant to a contract between a community college district and the United States Department of Defense to provide vocational training.
(3)A charter school employer under the provisions of an approved charter for the operation of a charter school for which the charter school is eligible to receive state apportionment.
(b)The types of activities are any of the following:
(1)The work of teachers, instructors, district interns, and academic employees employed in the instructional program for pupils, including special programs such as adult education, regional occupational programs, child care centers, and prekindergarten programs pursuant to Section 22161.
(2)Education or vocational counseling, guidance, and placement services.
(3)The work of employees who plan courses of study to be used in California public schools, or research connected with the evaluation or efficiency of the instructional program.
(4)The selection, collection, preparation, classification, demonstration, or evaluation of instructional materials of any course of study for use in the development of the instructional program in California public schools, or other services related to California public school curriculum.
(5)The examination, selection, in-service training, mentoring, or assignment of teachers, principals, or other similar personnel involved in the instructional program.
(6)The work of nurses, physicians, speech therapists, psychologists, audiometrists, audiologists, and other California public school health professionals.
(7)Services as a California public school librarian.
(8)Activities connected with the enforcement of the laws relating to compulsory education, coordination of child welfare activities involving the school and the home, and the school adjustment of pupils.
(9)The work of employees who are responsible for the supervision of persons or administration of the duties described in this subdivision.
(10)Trustee service as described in Section 26403.
(c)Creditable service also means any of the activities described in subdivision (b) when they are performed for an employer by:
(1)Superintendents of California public schools, and presidents and chancellors of community college employers.
(2)Consulting teachers employed by an employer to participate in the California Peer Assistance and Review Program for Teachers pursuant to Article 4.5 (commencing with Section 44500) of Chapter 3 of Part 25 of Division 3 of Title 2.
(d)Creditable service also means the performance of California public school activities related to, and an outgrowth of, the instructional and guidance program of the California public school when performed for the same employer for which the member is performing any of the activities described in subdivision (b) or (c).
(e)The board shall have final authority for determining creditable service to cover activities not already specified.
SEC. 11.Section 26135.7 of the Education Code is amended to read:26135.7.(a)Retired participant activities means one or more activities identified in subdivision (b), (c), or (d) of Section 22119.5 or (b), (c), or (d) of Section 26113 within the California public school system and performed by a participant retired for service under this part as one of the following:
(1)An employee of an employer.
(2)An employee of a third party, except as specified in subdivision (b).
(3)An independent contractor.
(b)The activities of an employee of a third party shall not be included in the definition of retired participant activities if all of the following conditions apply:
(1)The employee performs an assignment of 24 months or less.
(2)The third-party employer does not participate in a California public pension system.
(3)The activities performed by the individual are not normally performed by employees of an employer, as defined in Section 22131.
(a)Compensation earnable means the creditable compensation a person could earn in a school year for creditable service performed on a full-time basis, excluding service for which contributions are credited by the system to the Defined Benefit Supplement Program.
(b)The board may determine compensation earnable for persons employed on a part-time basis.
(c)If service credit for a school year is less than 1.000, compensation earnable shall be the quotient obtained when creditable compensation paid in that year is divided by the service credit for that year, except as provided in subdivision (d).
(d)If a member earns creditable compensation at multiple pay rates during a school year and service credit at the highest pay rate is at least 0.900 of a year, compensation earnable shall be determined as if all service credit for that year had been earned at the highest pay rate. This subdivision shall be applicable only for purposes of determining final compensation. If a member earns creditable compensation at multiple pay rates during a school year and service credit at the highest pay rate is less than 0.900 of a year, compensation earnable shall be determined pursuant to subdivision (c).
(e)If creditable service is not performed on a full-time basis because a member is performing those activities pursuant to subdivision (d) of Section 22119.5, compensation earnable for those activities shall, in any one school year, be an amount determined by the system on or before each July 1 equal to the average compensation earnable of all active members during the fiscal year ending in the previous calendar year. shall be determined as if the creditable compensation had been earned at the lowest pay rate for other creditable service activities performed by the member for the same employer during the same school year.
(f)(1)Except as provided in subdivision (g), for purposes of determining compensation earnable for a member employed by a community college prior to July 1, 1996, full time shall be defined pursuant to Section 22138.5 and pursuant to Section 20521 of Title 5 of the California Code of Regulations, as those provisions read on June 30, 1996, if application of that definition will increase the compensation earnable or otherwise enhance the benefits of the member.
(2)For purposes of administering this subdivision, the board shall have the authority to do both of the following:
(A)Establish and implement factors and assumptions necessary to calculate and compare the benefits payable under the definition of compensation earnable described in this subdivision. Those factors and assumptions may be based on information reported by the employer, including, but not limited to, all of the following:
(i)Base hours.
(ii)Actual earnings.
(iii)Compensation earnable.
(B)Review member benefit calculations that were performed using the factors and assumptions described in subparagraph (A). If the board determines that an employer failed to identify part-time service performed, the board shall consider that part-time service to be performed in a part-time lecture assignment as defined by the employer. If the board determines by the review of the member benefit calculations that the required information reported by the employer is inaccurate, incomplete, or the factors and assumptions were applied incorrectly, the board may recalculate member benefits using additional factors and assumptions that may include, but are not limited to, all of the following:
(i)Base hours.
(ii)Actual earnings.
(iii)Compensation earnable.
(3)This subdivision shall apply to a member employed by a community college prior to July 1, 1996, if the community college subsequently acts to reduce the minimum standard for full time as described in subdivision (c) of Section 22138.5 for the class of employees, and that community college provides written notice to the system of the act of the community college to reduce that minimum standard.
(4)This subdivision shall not apply to a member employed by a community college that has not reduced the minimum standard as described in subdivision (c) of Section 22138.5.
(g)Subdivision (f) shall not apply to a member subject to the California Public Employees Pension Reform Act of 2013.
SEC. 2.Section 22119.2 of the Education Code is amended to read:22119.2.(a)Creditable compensation means remuneration that is paid in cash by an employer to all persons in the same class of employees for performing creditable service in that position. Creditable compensation shall include:
(1)Salary or wages paid in accordance with a publicly available written contractual agreement, including, but not limited to, a salary schedule or employment agreement.
(2)Remuneration that is paid in addition to salary or wages, provided it is paid to all persons who are in the same class of employees in the same dollar amount, the same percentage of salary or wages, or the same percentage of the amount being distributed.
(3)Remuneration that is paid for the use of sick leave, vacation leave, or an employer-approved compensated leave of absence, except as provided in paragraph (4) of subdivision (c).
(4)Member contributions that are picked up by an employer pursuant to Section 22903 or 22904.
(5)Amounts that are deducted from a members remuneration, including, but not limited to, deductions for participation in a deferred compensation plan; deductions to purchase an annuity contract, tax-deferred retirement plan, or insurance program; and contributions to a plan that meets the requirements of Section 125, 401(a), 401(k), 403(b), 457(b), or 457(f) of Title 26 of the United States Code.
(6)Any other payments the board determines to be creditable compensation.
(b)Any creditable compensation determined by the system to have been paid to enhance a members benefits shall not be credited under the Defined Benefit Program. Contributions on that compensation shall be credited to the Defined Benefit Supplement Program. A presumption by the system that creditable compensation was paid to enhance a members benefits may be rebutted by the member or by the employer on behalf of the member. Upon receipt of sufficient evidence to the contrary, a presumption by the system that creditable compensation was paid to enhance the members benefits may be reversed.
(c)Creditable compensation does not mean and shall not include:
(1)Remuneration that is not paid in cash or is not paid to all persons who are in the same class of employees.
(2)Remuneration that is paid for service that is not creditable service pursuant to Section 22119.5 or 22119.6.
(3)Remuneration that is paid in addition to salary or wages if it is not paid to all persons in the same class of employees in the same dollar amount, the same percentage of salary or wages, or the same percentage of the amount being distributed pursuant to paragraph (2) of subdivision (a).
(4)Remuneration that is paid in exchange for the relinquishment of unused accumulated leave.
(5)Payments, including, but not limited to, those for participation in a deferred compensation plan; to purchase an annuity contract, tax-deferred retirement plan, or insurance program; and for contributions to a plan that meets the requirements of Section 125, 401(a), 401(k), 403(b), 457(b), or 457(f) of Title 26 of the United States Code when the cost is covered by an employer and is not deducted from the members salary.
(6)Fringe benefits provided by an employer.
(7)Expenses paid or reimbursed by an employer.
(8)Severance pay, including lump-sum and installment payments, or money paid in excess of salary or wages to a member as compensatory damages or as a compromise settlement.
(9)Any other payments the board determines not to be creditable compensation.
(d)An employer or individual who knowingly or willfully reports compensation in a manner inconsistent with subdivision (a) or (c) may be subject to prosecution for fraud, theft, or embezzlement in accordance with the Penal Code. The system may establish procedures to ensure that compensation reported by an employer is in compliance with this section.
(e)For purposes of this section, remuneration shall be considered paid if distributed to any person in the same class of employees who meets the qualifications or requirements specified in a publicly available written contractual agreement, including, but not limited to, a collective bargaining agreement or an employment agreement, as a condition of receiving the remuneration.
(f)This definition of creditable compensation reflects sound principles that support the integrity of the retirement fund. Those principles include, but are not limited to, consistent treatment of compensation throughout a members career, consistent treatment of compensation among an entire class of employees, consistent treatment of compensation for the position, preventing adverse selection, and excluding from compensation earnable remuneration that is paid to enhance a members benefits. The system shall determine the appropriate crediting of contributions between the Defined Benefit Program and the Defined Benefit Supplement Program according to these principles, to the extent not otherwise specified pursuant to this part.
(g)The section shall become operative on July 1, 2002.
(h)This section shall not apply to a member subject to the California Public Employees Pension Reform Act of 2013.
SEC. 3.Section 22119.3 of the Education Code is amended to read:22119.3.(a)Creditable compensation for members who are subject to the California Public Employees Pension Reform Act of 2013 means remuneration that is paid each pay period in which creditable service is performed for that position. Creditable compensation shall be paid in cash by an employer to all persons in the same class of employees in accordance with a publicly available written contractual agreement, including, but not limited to, a salary schedule or employment agreement. Creditable compensation shall include:
(1)Remuneration that is paid for the use of sick leave, vacation leave, or an employer-approved compensated leave of absence, except as provided in paragraph (4) of subdivision (b).
(2)Member contributions that are picked up by an employer pursuant to Section 22903 or 22904.
(3)Amounts that are deducted from a members remuneration, including, but not limited to, deductions for participation in a deferred compensation plan; deductions to purchase an annuity contract, tax-deferred retirement plan, or insurance program; and contributions to a plan that meets the requirements of Section 125, 401(a), 401(k), 403(b), 457(b), or 457(f) of Title 26 of the United States Code.
(4)Notwithstanding paragraphs (6) and (8) of subdivision (c) of Section 7522.34 of the Government Code, remuneration that is paid for creditable service that exceeds one year in a school year.
(b)Creditable compensation does not mean and shall not include:
(1)Remuneration that is not paid in cash or is not paid to all persons who are in the same class of employees.
(2)Remuneration that is paid for service that is not creditable service pursuant to Section 22119.5 or 22119.6.
(3)Remuneration that is not paid each pay period in which creditable service is performed for that position.
(4)Remuneration that is paid in exchange for the relinquishment of unused accumulated leave.
(5)Payments, including, but not limited to, those for participation in a deferred compensation plan; to purchase an annuity contract, tax-deferred retirement plan, or insurance program; and for contributions to a plan that meets the requirements of Section 125, 401(a), 401(k), 403(b), 457(b), or 457(f) of Title 26 of the United States Code when the cost is covered by an employer.
(6)Fringe benefits provided by an employer.
(7)Expenses paid or reimbursed by an employer.
(8)Severance pay, including lump sum and installment payments, or money paid in excess of salary or wages to a member as compensatory damages or as a compromise settlement.
(9)Creditable compensation determined by the system to have been paid to enhance a members benefit.
(10)Compensation paid to the member in lieu of benefits provided to the member by the employer or paid directly by the employer to a third party other than the system for the benefit of the member.
(11)Any one-time or ad hoc payments made to a member.
(12)Any employer-provided allowance, reimbursement, or payment, including, but not limited to, one made for housing, vehicle, or uniform.
(13)Any bonus paid in addition to compensation described in subdivision (a).
(14)Any other payments the board determines not to be creditable compensation.
(c)(1)Except for purposes of calculating credited service in the Defined Benefit Program and for reporting compensation earnable on or after January 1, 2013, creditable compensation in any fiscal year shall not exceed:
(A)One hundred twenty percent of the contribution and benefit base, as determined under Section 430(b) of the Social Security Act (42 U.S.C. Sec. 430(b)), on January 1, 2013, for a member whose service is not included in the federal system.
(B)One hundred percent of the contribution and benefit base, as determined under Section 430(b) of the Social Security Act (42 U.S.C. Sec. 430(b)), on January 1, 2013, for a member whose service is included in the federal system pursuant to any changes in state or federal law enacted on or after January 1, 2013.
(2)The system shall adjust the limit based on the annual changes to the Consumer Price Index for All Urban Consumers: U.S. City Average, calculated by dividing the Consumer Price Index for All Urban Consumers: U.S. City Average for the month of February in the fiscal year preceding the adjustment by the Consumer Price Index for All Urban Consumers: U.S. City Average for the month of February of the previous year rounded to the nearest thousandth. Notwithstanding paragraph (1) of subdivision (d) of Section 7522.10 of the Government Code, the adjustment shall be effective annually on July 1, beginning July 1, 2014.
(3)The Legislature reserves the right to modify the requirements of this subdivision with regard to all members subject to this subdivision, except that the Legislature may not modify these provisions in a manner that would result in a decrease in benefits accrued prior to the effective date of the modification.
(4)This subdivision shall apply to compensation paid during the 201314 fiscal year and each fiscal year thereafter.
(d)An employer or individual who knowingly or willfully reports compensation in a manner inconsistent with subdivision (a) or (b) may be subject to prosecution for fraud, theft, or embezzlement in accordance with the Penal Code. The system may establish procedures to ensure that compensation reported by an employer is in compliance with this section.
(e)For purposes of this section, remuneration shall be considered paid if distributed to any person in the same class of employees who meets the qualifications or requirements specified in a publicly available written contractual agreement, including, but not limited to, a collective bargaining agreement or an employment agreement, as a condition of receiving the remuneration.
(f)This definition of creditable compensation reflects sound principles that support the integrity of the retirement fund. Those principles include, but are not limited to, consistent treatment of compensation throughout a members career, consistent treatment of compensation among an entire class of employees, consistent treatment of compensation for the position, preventing adverse selection, and excluding from creditable compensation remuneration that is paid to enhance a members benefits. The system shall determine the appropriate crediting of contributions according to these principles, to the extent not otherwise specified pursuant to this part. A presumption by the system that creditable compensation was paid to enhance the members benefits may be rebutted by the member or by the employer on behalf of the member. Upon receipt of sufficient evidence to the contrary, a presumption by the system that creditable compensation was paid to enhance the members benefits may be reversed.
SEC. 4.Section 22119.5 of the Education Code is amended to read:22119.5.(a)Creditable service means any of the activities described in subdivision (b) performed for any of the following employers:
(1)A prekindergarten through grade 12 employer, including the state, in a position requiring certification qualifications as designated in regulations adopted by the Commission on Teacher Credentialing pursuant to Section 44001.
(2)A community college employer by a faculty member, as defined in Section 87003, in an academic position, as defined in subdivision (b) of Section 87001, or by an educational administrator, as defined in subdivision (b) of Section 87002, subject to the appropriate minimum standards adopted by the Board of Governors of the California Community Colleges pursuant to Section 87356, or pursuant to a contract between a community college district and the United States Department of Defense to provide vocational training.
(3)A charter school employer under the provisions of an approved charter for the operation of a charter school for which the charter school is eligible to receive state apportionment.
(b)The types of activities are any of the following:
(1)The work of teachers, instructors, district interns, and academic employees employed in the instructional program for pupils, including special programs such as adult education, regional occupation programs, child care centers, and prekindergarten programs pursuant to Section 22161.
(2)Education or vocational counseling, guidance, and placement services.
(3)The work of employees who plan courses of study to be used in California public schools, or research connected with the evaluation or efficiency of the instructional program.
(4)The selection, collection, preparation, classification, demonstration, or evaluation of instructional materials of any course of study for use in the development of the instructional program in California public schools, or other services related to California public school curriculum.
(5)The examination, selection, in-service training, mentoring, or assignment of teachers, principals, or other similar personnel involved in the instructional program.
(6)The work of nurses, physicians, speech therapists, psychologists, audiometrists, audiologists, and other California public school health professionals.
(7)Services as a California public school librarian.
(8)Activities connected with the enforcement of the laws relating to compulsory education, coordination of child welfare activities involving the school and the home, and the school adjustment of pupils.
(9)The work of employees who are responsible for the supervision of persons or administration of the duties described in this subdivision.
(c)Creditable service also means any of the activities described in subdivision (b) when they are performed for an employer by:
(1)Superintendents of California public schools, and presidents and chancellors of community college employers.
(2)Consulting teachers employed by an employer to participate in the California Peer Assistance and Review Program for Teachers pursuant to Article 4.5 (commencing with Section 44500) of Chapter 3 of Part 25 of Division 3 of Title 2.
(d)Creditable service also means the performance of California public school activities related to, and an outgrowth of, the instructional and guidance program of the California public school when performed for the same employer for which the member is performing any of the activities described in subdivision (b) or (c).
(e)The board shall have final authority for determining creditable service to cover any activities not already specified.
SEC. 5.Section 22119.6 is added to the Education Code, to read:22119.6.(a)Creditable service shall also include any activities that do not meet the definition of creditable service under Section 22119.5, but were performed for any employer, as defined in Section 22131, on or before December 31, 2015, and were reported as creditable service to the system.
(b)The type of activities described in subdivision (a) performed by a member who becomes employed by the same or a different employer in a new position on or after January 1, 2016, shall be subject to Section 22119.5.
SEC. 6.Section 22146 of the Education Code is amended to read:22146.Member means any person, unless excluded under other provisions of this part, who has performed creditable service as defined in Section 22119.5 or 22119.6 and has earned creditable compensation for that service and has not received a refund for that service and, as a result, is subject to the Defined Benefit Program. A members rights and obligations under this part with respect to the Defined Benefit Program shall be determined by the applicability of subdivision (a), (b), (c), or (d), and subject to any applicable exceptions under other provisions of this part.
(a)An active member is a member who is not retired or disabled and who earns creditable compensation during the school year.
(b)An inactive member is a member who is not retired or disabled and who has not earned creditable compensation during the current or preceding school year.
(c)A disabled member is a member to whom a disability allowance is payable under Chapter 25 (commencing with Section 24001).
(d)A retired member is a member who has terminated employment and has retired for service under the provisions of Chapter 27 (commencing with Section 24201), or has retired for disability under the provisions of Chapter 26 (commencing with Section 24100) or retired for service or disability under the provisions of Chapter 21 (commencing with Section 23400), and to whom a retirement allowance is therefore payable.
SEC. 7.Section 22164.5 of the Education Code is amended to read:22164.5.(a)Retired member activities means one or more activities identified in subdivision (b), (c), or (d) of Section 22119.5 or subdivision (b), (c), or (d) of Section 26113 within the California public school system and performed by a member retired for service under this part as one of the following:
(1)An employee of an employer.
(2)An employee of a third party, except as specified in subdivision (b).
(3)An independent contractor.
(b)The activities of an employee of a third party shall not be included in the definition of retired member activities if all of the following conditions apply:
(1)The employee performs an assignment of 24 months or less.
(2)The third-party employer does not participate in a California public pension system.
(3)The activities performed by the individual are not normally performed by employees of an employer, as defined in Section 22131.
SEC. 8.Section 22458.5 is added to the Education Code, to read:22458.5.Upon request from the system, each employer shall provide the system with information regarding the certification qualifications, minimum standards, or provisions of an approved charter for the operation of a charter school required to perform creditable service pursuant to subdivision (a) of Section 22119.5, in a position.
SEC. 9.Section 22508.7 is added to the Education Code, to read:22508.7.(a)This section shall apply to service deemed creditable service pursuant to subdivision (a) of Section 22119.6 and a person who performs that service.
(b)(1)A member, including a member who retires on or before December 31, 2015, may elect to have all of that service subject to coverage by a different public retirement system and excluded from coverage by the Defined Benefit Program, if the member is not excluded from coverage by that public retirement system.
(2)If an election is made pursuant to this subdivision, all of the following shall apply:
(A)All service that was subject to coverage by the Defined Benefit Program shall be subject to coverage by the other public retirement system, if the member is not excluded from coverage by that public retirement system.
(B)Any member contributions and credited interest, as determined by the system, and employer contributions, less any amounts previously paid to the person, shall be returned to the employer for that service, with the system recovering from the person any amounts that were paid to the person and not recovered from withheld member contributions, credited interest, or employer contributions.
(C)Any amounts not recovered pursuant to subparagraph (B) shall be paid in full by the member before his or her service can be subject to coverage by the other public retirement system.
(3)If an election is made pursuant to this subdivision, the following shall apply:
(A)A member not subject to the California Public Employees Pension Reform Act of 2013 in the Defined Benefit Program shall not be subject to that act in the other public retirement system.
(B)A member subject to the California Public Employees Pension Reform Act of 2013 in the Defined Benefit Program shall be subject to that act in the other public retirement system.
(4)If an election is not made pursuant to this subdivision, all service performed shall continue to be subject to coverage by the Defined Benefit Program until the member becomes employed pursuant to subdivision (b) of Section 22119.6.
(c)(1)A person who had service removed from the system and reported to a different public retirement system, as directed by the system, including a person who is receiving a benefit on or before December 31, 2015, may elect to have all of that service and subsequent service in the same position subject to coverage by the Defined Benefit Program and excluded from coverage by the other public retirement system.
(2)If an election is made pursuant to this subdivision, all of the following shall apply:
(A)All of that service and subsequent service in the same position that was subject to coverage by the other public retirement system shall be subject to coverage by the Defined Benefit Program and reported to the system pursuant to Chapter 17 (commencing with Section 23000).
(B)Any employee and employer contributions for that service and subsequent service in the same position shall be remitted to the system pursuant to Chapter 17 (commencing with Section 23000).
(3)If an election is made pursuant to this subdivision, the following shall apply:
(A)A person not subject to the California Public Employees Pension Reform Act of 2013 in the other public retirement system shall not be subject to that act in the Defined Benefit Program.
(B)A person subject to the California Public Employees Pension Reform Act of 2013 in the other public retirement system shall be subject to that act in the Defined Benefit Program.
(4)If an election is not made pursuant to this subdivision, all service performed will continue to be subject to coverage by the other public retirement system.
(d)The election shall be made in writing and filed with the office of the system on a form prescribed by the system on or before June 30, 2016, and a copy of the election shall be filed with the other public retirement system.
(e)Only a person who has performed service creditable under subdivision (a) of Section 22119.6 can make an election under this section.
(f)An election made pursuant to this section shall be irrevocable.
(g)The board shall be under no obligation to identify, locate, or notify a person who has performed service creditable pursuant to subdivision (a) of Section 22119.6 and is eligible to make an election pursuant to this section.
SEC. 10.Section 26113 of the Education Code is amended to read:26113.(a)Creditable service means any of the activities described in subdivision (b) performed for any of the following employers:
(1)A prekindergarten through grade 12 employer, including the state, in a position requiring certification qualifications as designated in regulations adopted by the Commission on Teacher Credentialing pursuant to Section 44001.
(2)A community college employer by a faculty member, as defined in Section 87003, in an academic position, as defined in subdivision (b) of Section 87001, or by an educational administrator, as defined in subdivision (b) of Section 87002, subject to the appropriate minimum standards adopted by the Board of Governors of the California Community Colleges pursuant to Section 87356, or pursuant to a contract between a community college district and the United States Department of Defense to provide vocational training.
(3)A charter school employer under the provisions of an approved charter for the operation of a charter school for which the charter school is eligible to receive state apportionment.
(b)The types of activities are any of the following:
(1)The work of teachers, instructors, district interns, and academic employees employed in the instructional program for pupils, including special programs such as adult education, regional occupational programs, child care centers, and prekindergarten programs pursuant to Section 22161.
(2)Education or vocational counseling, guidance, and placement services.
(3)The work of employees who plan courses of study to be used in California public schools, or research connected with the evaluation or efficiency of the instructional program.
(4)The selection, collection, preparation, classification, demonstration, or evaluation of instructional materials of any course of study for use in the development of the instructional program in California public schools, or other services related to California public school curriculum.
(5)The examination, selection, in-service training, mentoring, or assignment of teachers, principals, or other similar personnel involved in the instructional program.
(6)The work of nurses, physicians, speech therapists, psychologists, audiometrists, audiologists, and other California public school health professionals.
(7)Services as a California public school librarian.
(8)Activities connected with the enforcement of the laws relating to compulsory education, coordination of child welfare activities involving the school and the home, and the school adjustment of pupils.
(9)The work of employees who are responsible for the supervision of persons or administration of the duties described in this subdivision.
(10)Trustee service as described in Section 26403.
(c)Creditable service also means any of the activities described in subdivision (b) when they are performed for an employer by:
(1)Superintendents of California public schools, and presidents and chancellors of community college employers.
(2)Consulting teachers employed by an employer to participate in the California Peer Assistance and Review Program for Teachers pursuant to Article 4.5 (commencing with Section 44500) of Chapter 3 of Part 25 of Division 3 of Title 2.
(d)Creditable service also means the performance of California public school activities related to, and an outgrowth of, the instructional and guidance program of the California public school when performed for the same employer for which the member is performing any of the activities described in subdivision (b) or (c).
(e)The board shall have final authority for determining creditable service to cover activities not already specified.
SEC. 11.Section 26135.7 of the Education Code is amended to read:26135.7.(a)Retired participant activities means one or more activities identified in subdivision (b), (c), or (d) of Section 22119.5 or (b), (c), or (d) of Section 26113 within the California public school system and performed by a participant retired for service under this part as one of the following:
(1)An employee of an employer.
(2)An employee of a third party, except as specified in subdivision (b).
(3)An independent contractor.
(b)The activities of an employee of a third party shall not be included in the definition of retired participant activities if all of the following conditions apply:
(1)The employee performs an assignment of 24 months or less.
(2)The third-party employer does not participate in a California public pension system.
(3)The activities performed by the individual are not normally performed by employees of an employer, as defined in Section 22131.
(a)Compensation earnable means the creditable compensation a person could earn in a school year for creditable service performed on a full-time basis, excluding service for which contributions are credited by the system to the Defined Benefit Supplement Program.
(b)The board may determine compensation earnable for persons employed on a part-time basis.
(c)If service credit for a school year is less than 1.000, compensation earnable shall be the quotient obtained when creditable compensation paid in that year is divided by the service credit for that year, except as provided in subdivision (d).
(d)If a member earns creditable compensation at multiple pay rates during a school year and service credit at the highest pay rate is at least 0.900 of a year, compensation earnable shall be determined as if all service credit for that year had been earned at the highest pay rate. This subdivision shall be applicable only for purposes of determining final compensation. If a member earns creditable compensation at multiple pay rates during a school year and service credit at the highest pay rate is less than 0.900 of a year, compensation earnable shall be determined pursuant to subdivision (c).
(e)If creditable service is not performed on a full-time basis because a member is performing those activities pursuant to subdivision (d) of Section 22119.5, compensation earnable for those activities shall, in any one school year, be an amount determined by the system on or before each July 1 equal to the average compensation earnable of all active members during the fiscal year ending in the previous calendar year.
(f)(1)Except as provided in subdivision (g), for purposes of determining compensation earnable for a member employed by a community college prior to July 1, 1996, full time shall be defined pursuant to Section 22138.5 and pursuant to Section 20521 of Title 5 of the California Code of Regulations, as those provisions read on June 30, 1996, if application of that definition will increase the compensation earnable or otherwise enhance the benefits of the member.
(2)For purposes of administering this subdivision, the board shall have the authority to do both of the following:
(A)Establish and implement factors and assumptions necessary to calculate and compare the benefits payable under the definition of compensation earnable described in this subdivision. Those factors and assumptions may be based on information reported by the employer, including, but not limited to, all of the following:
(i)Base hours.
(ii)Actual earnings.
(iii)Compensation earnable.
(B)Review member benefit calculations that were performed using the factors and assumptions described in subparagraph (A). If the board determines that an employer failed to identify part-time service performed, the board shall consider that part-time service to be performed in a part-time lecture assignment as defined by the employer. If the board determines by the review of the member benefit calculations that the required information reported by the employer is inaccurate, incomplete, or the factors and assumptions were applied incorrectly, the board may recalculate member benefits using additional factors and assumptions that may include, but are not limited to, all of the following:
(i)Base hours.
(ii)Actual earnings.
(iii)Compensation earnable.
(3)This subdivision shall apply to a member employed by a community college prior to July 1, 1996, if the community college subsequently acts to reduce the minimum standard for full time as described in subdivision (c) of Section 22138.5 for the class of employees, and that community college provides written notice to the system of the act of the community college to reduce that minimum standard.
(4)This subdivision shall not apply to a member employed by a community college that has not reduced the minimum standard as described in subdivision (c) of Section 22138.5.
(g)Subdivision (f) shall not apply to a member subject to the California Public Employees Pension Reform Act of 2013.
SEC. 2.Section 22119.2 of the Education Code is amended to read:22119.2.(a)Creditable compensation means remuneration that is paid in cash by an employer to all persons in the same class of employees for performing creditable service in that position. Creditable compensation shall include:
(1)Salary or wages paid in accordance with a publicly available written contractual agreement, including, but not limited to, a salary schedule or employment agreement.
(2)Remuneration that is paid in addition to salary or wages, provided it is paid to all persons who are in the same class of employees in the same dollar amount, the same percentage of salary or wages, or the same percentage of the amount being distributed.
(3)Remuneration that is paid for the use of sick leave, vacation leave, or an employer-approved compensated leave of absence, except as provided in paragraph (4) of subdivision (c).
(4)Member contributions that are picked up by an employer pursuant to Section 22903 or 22904.
(5)Amounts that are deducted from a members remuneration, including, but not limited to, deductions for participation in a deferred compensation plan; deductions to purchase an annuity contract, tax-deferred retirement plan, or insurance program; and contributions to a plan that meets the requirements of Section 125, 401(a), 401(k), 403(b), 457(b), or 457(f) of Title 26 of the United States Code.
(6)Any other payments the board determines to be creditable compensation.
(b)Any creditable compensation determined by the system to have been paid to enhance a members benefits shall not be credited under the Defined Benefit Program. Contributions on that compensation shall be credited to the Defined Benefit Supplement Program. A presumption by the system that creditable compensation was paid to enhance a members benefits may be rebutted by the member or by the employer on behalf of the member. Upon receipt of sufficient evidence to the contrary, a presumption by the system that creditable compensation was paid to enhance the members benefits may be reversed.
(c)Creditable compensation does not mean and shall not include:
(1)Remuneration that is not paid in cash or is not paid to all persons who are in the same class of employees.
(2)Remuneration that is paid for service that is not creditable service pursuant to Section 22119.5 or 22119.6.
(3)Remuneration that is paid in addition to salary or wages if it is not paid to all persons in the same class of employees in the same dollar amount, the same percentage of salary or wages, or the same percentage of the amount being distributed pursuant to paragraph (2) of subdivision (a).
(4)Remuneration that is paid in exchange for the relinquishment of unused accumulated leave.
(5)Payments, including, but not limited to, those for participation in a deferred compensation plan; to purchase an annuity contract, tax-deferred retirement plan, or insurance program; and for contributions to a plan that meets the requirements of Section 125, 401(a), 401(k), 403(b), 457(b), or 457(f) of Title 26 of the United States Code when the cost is covered by an employer and is not deducted from the members salary.
(6)Fringe benefits provided by an employer.
(7)Expenses paid or reimbursed by an employer.
(8)Severance pay, including lump-sum and installment payments, or money paid in excess of salary or wages to a member as compensatory damages or as a compromise settlement.
(9)Any other payments the board determines not to be creditable compensation.
(d)An employer or individual who knowingly or willfully reports compensation in a manner inconsistent with subdivision (a) or (c) may be subject to prosecution for fraud, theft, or embezzlement in accordance with the Penal Code. The system may establish procedures to ensure that compensation reported by an employer is in compliance with this section.
(e)For purposes of this section, remuneration shall be considered paid if distributed to any person in the same class of employees who meets the qualifications or requirements specified in a publicly available written contractual agreement, including, but not limited to, a collective bargaining agreement or an employment agreement, as a condition of receiving the remuneration.
(f)This definition of creditable compensation reflects sound principles that support the integrity of the retirement fund. Those principles include, but are not limited to, consistent treatment of compensation throughout a members career, consistent treatment of compensation among an entire class of employees, consistent treatment of compensation for the position, preventing adverse selection, and excluding from compensation earnable remuneration that is paid to enhance a members benefits. The system shall determine the appropriate crediting of contributions between the Defined Benefit Program and the Defined Benefit Supplement Program according to these principles, to the extent not otherwise specified pursuant to this part.
(g)The section shall become operative on July 1, 2002.
(h)This section shall not apply to a member subject to the California Public Employees Pension Reform Act of 2013.
SEC. 3.Section 22119.3 of the Education Code is amended to read:22119.3.(a)Creditable compensation for members who are subject to the California Public Employees Pension Reform Act of 2013 means remuneration that is paid each pay period in which creditable service is performed for that position. Creditable compensation shall be paid in cash by an employer to all persons in the same class of employees in accordance with a publicly available written contractual agreement, including, but not limited to, a salary schedule or employment agreement. Creditable compensation shall include:
(1)Remuneration that is paid for the use of sick leave, vacation leave, or an employer-approved compensated leave of absence, except as provided in paragraph (4) of subdivision (b).
(2)Member contributions that are picked up by an employer pursuant to Section 22903 or 22904.
(3)Amounts that are deducted from a members remuneration, including, but not limited to, deductions for participation in a deferred compensation plan; deductions to purchase an annuity contract, tax-deferred retirement plan, or insurance program; and contributions to a plan that meets the requirements of Section 125, 401(a), 401(k), 403(b), 457(b), or 457(f) of Title 26 of the United States Code.
(4)Notwithstanding paragraphs (6) and (8) of subdivision (c) of Section 7522.34 of the Government Code, remuneration that is paid for creditable service that exceeds one year in a school year.
(b)Creditable compensation does not mean and shall not include:
(1)Remuneration that is not paid in cash or is not paid to all persons who are in the same class of employees.
(2)Remuneration that is paid for service that is not creditable service pursuant to Section 22119.5 or 22119.6.
(3)Remuneration that is not paid each pay period in which creditable service is performed for that position.
(4)Remuneration that is paid in exchange for the relinquishment of unused accumulated leave.
(5)Payments, including, but not limited to, those for participation in a deferred compensation plan; to purchase an annuity contract, tax-deferred retirement plan, or insurance program; and for contributions to a plan that meets the requirements of Section 125, 401(a), 401(k), 403(b), 457(b), or 457(f) of Title 26 of the United States Code when the cost is covered by an employer.
(6)Fringe benefits provided by an employer.
(7)Expenses paid or reimbursed by an employer.
(8)Severance pay, including lump sum and installment payments, or money paid in excess of salary or wages to a member as compensatory damages or as a compromise settlement.
(9)Creditable compensation determined by the system to have been paid to enhance a members benefit.
(10)Compensation paid to the member in lieu of benefits provided to the member by the employer or paid directly by the employer to a third party other than the system for the benefit of the member.
(11)Any one-time or ad hoc payments made to a member.
(12)Any employer-provided allowance, reimbursement, or payment, including, but not limited to, one made for housing, vehicle, or uniform.
(13)Any bonus paid in addition to compensation described in subdivision (a).
(14)Any other payments the board determines not to be creditable compensation.
(c)(1)Except for purposes of calculating credited service in the Defined Benefit Program and for reporting compensation earnable on or after January 1, 2013, creditable compensation in any fiscal year shall not exceed:
(A)One hundred twenty percent of the contribution and benefit base, as determined under Section 430(b) of the Social Security Act (42 U.S.C. Sec. 430(b)), on January 1, 2013, for a member whose service is not included in the federal system.
(B)One hundred percent of the contribution and benefit base, as determined under Section 430(b) of the Social Security Act (42 U.S.C. Sec. 430(b)), on January 1, 2013, for a member whose service is included in the federal system pursuant to any changes in state or federal law enacted on or after January 1, 2013.
(2)The system shall adjust the limit based on the annual changes to the Consumer Price Index for All Urban Consumers: U.S. City Average, calculated by dividing the Consumer Price Index for All Urban Consumers: U.S. City Average for the month of February in the fiscal year preceding the adjustment by the Consumer Price Index for All Urban Consumers: U.S. City Average for the month of February of the previous year rounded to the nearest thousandth. Notwithstanding paragraph (1) of subdivision (d) of Section 7522.10 of the Government Code, the adjustment shall be effective annually on July 1, beginning July 1, 2014.
(3)The Legislature reserves the right to modify the requirements of this subdivision with regard to all members subject to this subdivision, except that the Legislature may not modify these provisions in a manner that would result in a decrease in benefits accrued prior to the effective date of the modification.
(4)This subdivision shall apply to compensation paid during the 201314 fiscal year and each fiscal year thereafter.
(d)An employer or individual who knowingly or willfully reports compensation in a manner inconsistent with subdivision (a) or (b) may be subject to prosecution for fraud, theft, or embezzlement in accordance with the Penal Code. The system may establish procedures to ensure that compensation reported by an employer is in compliance with this section.
(e)For purposes of this section, remuneration shall be considered paid if distributed to any person in the same class of employees who meets the qualifications or requirements specified in a publicly available written contractual agreement, including, but not limited to, a collective bargaining agreement or an employment agreement, as a condition of receiving the remuneration.
(f)This definition of creditable compensation reflects sound principles that support the integrity of the retirement fund. Those principles include, but are not limited to, consistent treatment of compensation throughout a members career, consistent treatment of compensation among an entire class of employees, consistent treatment of compensation for the position, preventing adverse selection, and excluding from creditable compensation remuneration that is paid to enhance a members benefits. The system shall determine the appropriate crediting of contributions according to these principles, to the extent not otherwise specified pursuant to this part. A presumption by the system that creditable compensation was paid to enhance the members benefits may be rebutted by the member or by the employer on behalf of the member. Upon receipt of sufficient evidence to the contrary, a presumption by the system that creditable compensation was paid to enhance the members benefits may be reversed.
SEC. 4.Section 22119.5 of the Education Code is amended to read:22119.5.(a)Creditable service means any of the activities described in subdivision (b) performed for any of the following employers:
(1)A prekindergarten through grade 12 employer, including the state, in a position requiring certification qualifications as designated in regulations adopted by the Commission on Teacher Credentialing pursuant to Section 44001.
(2)A community college employer by a faculty member, as defined in Section 87003, in an academic position, as defined in subdivision (b) of Section 87001, or by an educational administrator, as defined in subdivision (b) of Section 87002, subject to the appropriate minimum standards adopted by the Board of Governors of the California Community Colleges pursuant to Section 87356, or pursuant to a contract between a community college district and the United States Department of Defense to provide vocational training.
(3)A charter school employer under the provisions of an approved charter for the operation of a charter school for which the charter school is eligible to receive state apportionment.
(b)The types of activities are any of the following:
(1)The work of teachers, instructors, district interns, and academic employees employed in the instructional program for pupils, including special programs such as adult education, regional occupation programs, child care centers, and prekindergarten programs pursuant to Section 22161.
(2)Education or vocational counseling, guidance, and placement services.
(3)The work of employees who plan courses of study to be used in California public schools, or research connected with the evaluation or efficiency of the instructional program.
(4)The selection, collection, preparation, classification, demonstration, or evaluation of instructional materials of any course of study for use in the development of the instructional program in California public schools, or other services related to California public school curriculum.
(5)The examination, selection, in-service training, mentoring, or assignment of teachers, principals, or other similar personnel involved in the instructional program.
(6)The work of nurses, physicians, speech therapists, psychologists, audiometrists, audiologists, and other California public school health professionals.
(7)Services as a California public school librarian.
(8)Activities connected with the enforcement of the laws relating to compulsory education, coordination of child welfare activities involving the school and the home, and the school adjustment of pupils.
(9)The work of employees who are responsible for the supervision of persons or administration of the duties described in this subdivision.
(c)Creditable service also means any of the activities described in subdivision (b) when they are performed for an employer by:
(1)Superintendents of California public schools, and presidents and chancellors of community college employers.
(2)Consulting teachers employed by an employer to participate in the California Peer Assistance and Review Program for Teachers pursuant to Article 4.5 (commencing with Section 44500) of Chapter 3 of Part 25 of Division 3 of Title 2.
(d)Creditable service also means the performance of California public school activities related to, and an outgrowth of, the instructional and guidance program of the California public school when performed for the same employer for which the member is performing any of the activities described in subdivision (b) or (c).
(e)(1)All of the activities performed in a position shall be deemed creditable service if the employer requires one or more of the activities described in subdivision (b) or (c) to be performed in that position for more than 50 percent of full time, as established pursuant to Section 22138.5, for a class of employees performing just those activities described in subdivision (b).
(2)Paragraph (1) shall not apply to a position established for fewer days or hours than the employer requires for full time pursuant to Section 22138.5.
(3)All of the activities performed in a position with service that has been deemed creditable pursuant to paragraph (1) shall be subject to coverage under the Defined Benefit Program until the member performing the activities becomes employed by the same or a different employer in a different position at which time an election may be made under Section 22508.
(f)
(e)The board shall have final authority for determining creditable service to cover any activities not already specified.
SEC. 5.Section 22119.6 is added to the Education Code, to read:22119.6.(a)Creditable service shall also include any activities that do not meet the definition of creditable service under Section 22119.5, but were performed for any employer, as defined in Section 22131, on or before December 31, 2015, and were reported as creditable service to the system.
(b)The type of activities described in subdivision (a) performed by a member who becomes employed by the same or a different employer in a new position on or after January 1, 2016, shall be subject to Section 22119.5.
SEC. 6.Section 22146 of the Education Code is amended to read:22146.Member means any person, unless excluded under other provisions of this part, who has performed creditable service as defined in Section 22119.5 or 22119.6 and has earned creditable compensation for that service and has not received a refund for that service and, as a result, is subject to the Defined Benefit Program. A members rights and obligations under this part with respect to the Defined Benefit Program shall be determined by the applicability of subdivision (a), (b), (c), or (d), and subject to any applicable exceptions under other provisions of this part.
(a)An active member is a member who is not retired or disabled and who earns creditable compensation during the school year.
(b)An inactive member is a member who is not retired or disabled and who has not earned creditable compensation during the current or preceding school year.
(c)A disabled member is a member to whom a disability allowance is payable under Chapter 25 (commencing with Section 24001).
(d)A retired member is a member who has terminated employment and has retired for service under the provisions of Chapter 27 (commencing with Section 24201), or has retired for disability under the provisions of Chapter 26 (commencing with Section 24100) or retired for service or disability under the provisions of Chapter 21 (commencing with Section 23400), and to whom a retirement allowance is therefore payable.
SEC. 7.Section 22164.5 of the Education Code is amended to read:22164.5.(a)Retired member activities means one or more activities identified in subdivision (b), (c), or (d) of Section 22119.5 or subdivision (b), (c), or (d) of Section 26113 within the California public school system and performed by a member retired for service under this part as one of the following:
(1)An employee of an employer.
(2)An employee of a third party, except as specified in subdivision (b).
(3)An independent contractor.
(b)The activities of an employee of a third party shall not be included in the definition of retired member activities if all of the following conditions apply:
(1)The employee performs an assignment of 24 months or less.
(2)The third-party employer does not participate in a California public pension system.
(3)The activities performed by the individual are not normally performed by employees of an employer, as defined in Section 22131.
SEC. 8.Section 22458.3 is added to the Education Code, to read:22458.3.Upon request from the system, each employer shall provide the system with information regarding the percentage of time that creditable service activities, as described in paragraph (1) of subdivision (e) of Section 22119.5, are performed in a position.
SEC. 9.SEC. 8.Section 22458.5 is added to the Education Code, to read:22458.5.Upon request from the system, each employer shall provide the system with information regarding the certification qualifications, minimum standards, or provisions of an approved charter for the operation of a charter school required to perform creditable service pursuant to subdivision (a) of Section 22119.5, in a position.
SEC. 10.SEC. 9.Section 22508.7 is added to the Education Code, to read:22508.7.(a)This section shall apply to service deemed creditable service pursuant to subdivision (a) of Section 22119.6 and a person who performs that service.
(b)(1)A member, including a member who retires on or before December 31, 2015, may elect to have all of that service subject to coverage by a different public retirement system and excluded from coverage by the Defined Benefit Program, if the member is not excluded from coverage by that public retirement system.
(2)If an election is made pursuant to this subdivision, all of the following shall apply:
(A)All service that was subject to coverage by the Defined Benefit Program shall be subject to coverage by the other public retirement system, if the member is not excluded from coverage by that public retirement system.
(B)Any member contributions and credited interest, as determined by the system, and employer contributions, less any amounts previously paid to the person, shall be returned to the employer for that service, with the system recovering from the person any amounts that were paid to the person and not recovered from withheld member contributions, credited interest, or employer contributions.
(C)Any amounts not recovered pursuant to subparagraph (B) shall be paid in full by the member before his or her service can be subject to coverage by the other public retirement system.
(3)If an election is made pursuant to this subdivision, the following shall apply:
(A)A member not subject to the California Public Employees Pension Reform Act of 2013 in the Defined Benefit Program shall not be subject to that act in the other public retirement system.
(B)A member subject to the California Public Employees Pension Reform Act of 2013 in the Defined Benefit Program shall be subject to that act in the other public retirement system.
(4)If an election is not made pursuant to this subdivision, all service performed shall continue to be subject to coverage by the Defined Benefit Program until the member becomes employed pursuant to subdivision (b) of Section 22119.6.
(c)(1)A person who had service removed from the system and reported to a different public retirement system, as directed by the system, including a person who is receiving a benefit on or before December 31, 2015, may elect to have all of that service and subsequent service in the same position subject to coverage by the Defined Benefit Program and excluded from coverage by the other public retirement system.
(2)If an election is made pursuant to this subdivision, all of the following shall apply:
(A)All of that service and subsequent service in the same position that was subject to coverage by the other public retirement system shall be subject to coverage by the Defined Benefit Program and reported to the system pursuant to Chapter 17 (commencing with Section 23000).
(B)Any employee and employer contributions for that service and subsequent service in the same position shall be remitted to the system pursuant to Chapter 17 (commencing with Section 23000).
(3)If an election is made pursuant to this subdivision, the following shall apply:
(A)A person not subject to the California Public Employees Pension Reform Act of 2013 in the other public retirement system shall not be subject to that act in the Defined Benefit Program.
(B)A person subject to the California Public Employees Pension Reform Act of 2013 in the other public retirement system shall be subject to that act in the Defined Benefit Program.
(4)If an election is not made pursuant to this subdivision, all service performed will continue to be subject to coverage by the other public retirement system.
(d)The election shall be made in writing and filed with the office of the system on a form prescribed by the system on or before June 30, 2016, and a copy of the election shall be filed with the other public retirement system.
(e)Only a person who has performed service creditable under subdivision (a) of Section 22119.6 can make an election under this section.
(f)An election made pursuant to this section shall be irrevocable.
(g)The board shall be under no obligation to identify, locate, or notify a person who has performed service creditable pursuant to subdivision (a) of Section 22119.6 and is eligible to make an election pursuant to this section.
SEC. 11.SEC. 10.Section 26113 of the Education Code is amended to read:26113.(a)Creditable service means any of the activities described in subdivision (b) performed for any of the following employers:
(1)A prekindergarten through grade 12 employer, including the state, in a position requiring certification qualifications as designated in regulations adopted by the Commission on Teacher Credentialing pursuant to Section 44001.
(2)A community college employer by a faculty member, as defined in Section 87003, in an academic position, as defined in subdivision (b) of Section 87001, or by an educational administrator, as defined in subdivision (b) of Section 87002, subject to the appropriate minimum standards adopted by the Board of Governors of the California Community Colleges pursuant to Section 87356, or pursuant to a contract between a community college district and the United States Department of Defense to provide vocational training.
(3)A charter school employer under the provisions of an approved charter for the operation of a charter school for which the charter school is eligible to receive state apportionment.
(b)The types of activities are any of the following:
(1)The work of teachers, instructors, district interns, and academic employees employed in the instructional program for pupils, including special programs such as adult education, regional occupational programs, child care centers, and prekindergarten programs pursuant to Section 22161.
(2)Education or vocational counseling, guidance, and placement services.
(3)The work of employees who plan courses of study to be used in California public schools, or research connected with the evaluation or efficiency of the instructional program.
(4)The selection, collection, preparation, classification, demonstration, or evaluation of instructional materials of any course of study for use in the development of the instructional program in California public schools, or other services related to California public school curriculum.
(5)The examination, selection, in-service training, mentoring, or assignment of teachers, principals, or other similar personnel involved in the instructional program.
(6)The work of nurses, physicians, speech therapists, psychologists, audiometrists, audiologists, and other California public school health professionals.
(7)Services as a California public school librarian.
(8)Activities connected with the enforcement of the laws relating to compulsory education, coordination of child welfare activities involving the school and the home, and the school adjustment of pupils.
(9)The work of employees who are responsible for the supervision of persons or administration of the duties described in this subdivision.
(10)Trustee service as described in Section 26403.
(c)Creditable service also means any of the activities described in subdivision (b) when they are performed for an employer by:
(1)Superintendents of California public schools, and presidents and chancellors of community college employers.
(2)Consulting teachers employed by an employer to participate in the California Peer Assistance and Review Program for Teachers pursuant to Article 4.5 (commencing with Section 44500) of Chapter 3 of Part 25 of Division 3 of Title 2.
(d)Creditable service also means the performance of California public school activities related to, and an outgrowth of, the instructional and guidance program of the California public school when performed for the same employer for which the member is performing any of the activities described in subdivision (b) or (c).
(e)The board shall have final authority for determining creditable service to cover activities not already specified.
SEC. 12.SEC. 11.Section 26135.7 of the Education Code is amended to read:26135.7.(a)Retired participant activities means one or more activities identified in subdivision (b), (c), or (d) of Section 22119.5 or (b), (c), or (d) of Section 26113 within the California public school system and performed by a participant retired for service under this part as one of the following:
(1)An employee of an employer.
(2)An employee of a third party, except as specified in subdivision (b).
(3)An independent contractor.
(b)The activities of an employee of a third party shall not be included in the definition of retired participant activities if all of the following conditions apply:
(1)The employee performs an assignment of 24 months or less.
(2)The third-party employer does not participate in a California public pension system.
(3)The activities performed by the individual are not normally performed by employees of an employer, as defined in Section 22131.
(a)Compensation earnable means the creditable compensation a person could earn in a school year for creditable service performed on a full-time basis, excluding service for which contributions are credited by the system to the Defined Benefit Supplement Program.
(b)The board may determine compensation earnable for persons employed on a part-time basis.
(c)If service credit for a school year is less than 1.000, compensation earnable shall be the quotient obtained when creditable compensation paid in that year is divided by the service credit for that year, except as provided in subdivision (d).
(d)If a member earns creditable compensation at multiple pay rates during a school year and service credit at the highest pay rate is at least 0.900 of a year, compensation earnable shall be determined as if all service credit for that year had been earned at the highest pay rate. This subdivision shall be applicable only for purposes of determining final compensation. If a member earns creditable compensation at multiple pay rates during a school year and service credit at the highest pay rate is less than 0.900 of a year, compensation earnable shall be determined pursuant to subdivision (c).
(e)If creditable service is not performed on a full-time basis because a member is performing those activities pursuant to paragraph (6) of subdivision (a) (d) of Section 22119.5, compensation earnable for those activities shall be determined as if the creditable compensation had been earned at the lowest pay rate for other creditable service activities performed by the member for the same employer during the same school year. shall, in any one school year, be an amount determined by the system on or before each July 1 equal to the average compensation earnable of all active members during the fiscal year ending in the previous calendar year.
(f)(1)Except as provided in subdivision (g), for purposes of determining compensation earnable for a member employed by a community college prior to July 1, 1996, full time shall be defined pursuant to Section 22138.5 and pursuant to Section 20521 of Title 5 of the California Code of Regulations, as those provisions read on June 30, 1996, if application of that definition will increase the compensation earnable or otherwise enhance the benefits of the member.
(2)For purposes of administering this subdivision, the board shall have the authority to do both of the following:
(A)Establish and implement factors and assumptions necessary to calculate and compare the benefits payable under the definition of compensation earnable described in this subdivision. Those factors and assumptions may be based on information reported by the employer, including, but not limited to, all of the following:
(i)Base hours.
(ii)Actual earnings.
(iii)Compensation earnable.
(B)Review member benefit calculations that were performed using the factors and assumptions described in subparagraph (A). If the board determines that an employer failed to identify part-time service performed, the board shall consider that part-time service to be performed in a part-time lecture assignment as defined by the employer. If the board determines by the review of the member benefit calculations that the required information reported by the employer is inaccurate, incomplete, or the factors and assumptions were applied incorrectly, the board may recalculate member benefits using additional factors and assumptions that may include, but are not limited to, all of the following:
(i)Base hours.
(ii)Actual earnings.
(iii)Compensation earnable.
(3)This subdivision shall apply to a member employed by a community college prior to July 1, 1996, if the community college subsequently acts to reduce the minimum standard for full time as described in subdivision (c) of Section 22138.5 for the class of employees, and that community college provides written notice to the system of the act of the community college to reduce that minimum standard.
(4)This subdivision shall not apply to a member employed by a community college that has not reduced the minimum standard as described in subdivision (c) of Section 22138.5.
(g)Subdivision (f) shall not apply to a member subject to the California Public Employees Pension Reform Act of 2013.
SECTION 1.SEC. 2.Section 22119.2 of the Education Code is amended to read:22119.2.(a)Creditable compensation means remuneration that is paid in cash by an employer to all persons in the same class of employees for performing creditable service in that position. Creditable compensation shall include:
(1)Salary or wages paid in accordance with a publicly available written contractual agreement, including, but not limited to, a salary schedule or employment agreement.
(2)Remuneration that is paid in addition to salary or wages, provided it is paid to all persons who are in the same class of employees in the same dollar amount, the same percentage of salary or wages, or the same percentage of the amount being distributed.
(3)Remuneration that is paid for the use of sick leave, vacation leave, or an employer-approved compensated leave of absence, except as provided in paragraph (4) of subdivision (c).
(4)Member contributions that are picked up by an employer pursuant to Section 22903 or 22904.
(5)Amounts that are deducted from a members remuneration, including, but not limited to, deductions for participation in a deferred compensation plan; deductions to purchase an annuity contract, tax-deferred retirement plan, or insurance program; and contributions to a plan that meets the requirements of Section 125, 401(a), 401(k), 403(b), 457(b), or 457(f) of Title 26 of the United States Code.
(6)Any other payments the board determines to be creditable compensation.
(b)Any creditable compensation determined by the system to have been paid to enhance a members benefits shall not be credited under the Defined Benefit Program. Contributions on that compensation shall be credited to the Defined Benefit Supplement Program. A presumption by the system that creditable compensation was paid to enhance a members benefits may be rebutted by the member or by the employer on behalf of the member. Upon receipt of sufficient evidence to the contrary, a presumption by the system that creditable compensation was paid to enhance the members benefits may be reversed.
(c)Creditable compensation does not mean and shall not include:
(1)Remuneration that is not paid in cash or is not paid to all persons who are in the same class of employees.
(2)Remuneration that is paid for service that is not creditable service pursuant to Section 22119.5 or 22119.6.
(3)Remuneration that is paid in addition to salary or wages if it is not paid to all persons in the same class of employees in the same dollar amount, the same percentage of salary or wages, or the same percentage of the amount being distributed pursuant to paragraph (2) of subdivision (a).
(4)Remuneration that is paid in exchange for the relinquishment of unused accumulated leave.
(5)Payments, including, but not limited to, those for participation in a deferred compensation plan; to purchase an annuity contract, tax-deferred retirement plan, or insurance program; and for contributions to a plan that meets the requirements of Section 125, 401(a), 401(k), 403(b), 457(b), or 457(f) of Title 26 of the United States Code when the cost is covered by an employer and is not deducted from the members salary.
(6)Fringe benefits provided by an employer.
(7)Expenses paid or reimbursed by an employer.
(8)Severance pay, including lump-sum and installment payments, or money paid in excess of salary or wages to a member as compensatory damages or as a compromise settlement.
(9)Any other payments the board determines not to be creditable compensation.
(d)An employer or individual who knowingly or willfully reports compensation in a manner inconsistent with subdivision (a) or (c) may be subject to prosecution for fraud, theft, or embezzlement in accordance with the Penal Code. The system may establish procedures to ensure that compensation reported by an employer is in compliance with this section.
(e)For purposes of this section, remuneration shall be considered paid if distributed to any person in the same class of employees who meets the qualifications or requirements specified in a publicly available written contractual agreement, including, but not limited to, a collective bargaining agreement or an employment agreement, as a condition of receiving the remuneration.
(f)This definition of creditable compensation reflects sound principles that support the integrity of the retirement fund. Those principles include, but are not limited to, consistent treatment of compensation throughout a members career, consistent treatment of compensation among an entire class of employees, consistent treatment of compensation for the position, preventing adverse selection, and excluding from compensation earnable remuneration that is paid to enhance a members benefits. The system shall determine the appropriate crediting of contributions between the Defined Benefit Program and the Defined Benefit Supplement Program according to these principles, to the extent not otherwise specified pursuant to this part.
(g)The section shall become operative on July 1, 2002.
(h)This section shall not apply to a member subject to the California Public Employees Pension Reform Act of 2013.
SEC. 2.SEC. 3.Section 22119.3 of the Education Code is amended to read:22119.3.(a)Creditable compensation for members who are subject to the California Public Employees Pension Reform Act of 2013 means remuneration that is paid each pay period in which creditable service is performed for that position. Creditable compensation shall be paid in cash by an employer to all persons in the same class of employees in accordance with a publicly available written contractual agreement, including, but not limited to, a salary schedule or employment agreement. Creditable compensation shall include:
(1)Remuneration that is paid for the use of sick leave, vacation leave, or an employer-approved compensated leave of absence, except as provided in paragraph (4) of subdivision (b).
(2)Member contributions that are picked up by an employer pursuant to Section 22903 or 22904.
(3)Amounts that are deducted from a members remuneration, including, but not limited to, deductions for participation in a deferred compensation plan; deductions to purchase an annuity contract, tax-deferred retirement plan, or insurance program; and contributions to a plan that meets the requirements of Section 125, 401(a), 401(k), 403(b), 457(b), or 457(f) of Title 26 of the United States Code.
(4)Notwithstanding paragraphs (6) and (8) of subdivision (c) of Section 7522.34 of the Government Code, remuneration that is paid for creditable service that exceeds one year in a school year.
(b)Creditable compensation does not mean and shall not include:
(1)Remuneration that is not paid in cash or is not paid to all persons who are in the same class of employees.
(2)Remuneration that is paid for service that is not creditable service pursuant to Section 22119.5 or 22119.6.
(3)Remuneration that is not paid each pay period in which creditable service is performed for that position.
(4)Remuneration that is paid in exchange for the relinquishment of unused accumulated leave.
(5)Payments, including, but not limited to, those for participation in a deferred compensation plan; to purchase an annuity contract, tax-deferred retirement plan, or insurance program; and for contributions to a plan that meets the requirements of Section 125, 401(a), 401(k), 403(b), 457(b), or 457(f) of Title 26 of the United States Code when the cost is covered by an employer.
(6)Fringe benefits provided by an employer.
(7)Expenses paid or reimbursed by an employer.
(8)Severance pay, including lump sum and installment payments, or money paid in excess of salary or wages to a member as compensatory damages or as a compromise settlement.
(9)Creditable compensation determined by the system to have been paid to enhance a members benefit.
(10)Compensation paid to the member in lieu of benefits provided to the member by the employer or paid directly by the employer to a third party other than the system for the benefit of the member.
(11)Any one-time or ad hoc payments made to a member.
(12)Any employer-provided allowance, reimbursement, or payment, including, but not limited to, one made for housing, vehicle, or uniform.
(13)Any bonus paid in addition to compensation described in subdivision (a).
(14)Any other payments the board determines not to be creditable compensation.
(c)(1)Except for purposes of calculating credited service in the Defined Benefit Program and for reporting compensation earnable on or after January 1, 2013, creditable compensation in any fiscal year shall not exceed:
(A)One hundred twenty percent of the contribution and benefit base, as determined under Section 430(b) of the Social Security Act (42 U.S.C. Sec. 430(b)), on January 1, 2013, for a member whose service is not included in the federal system.
(B)One hundred percent of the contribution and benefit base, as determined under Section 430(b) of the Social Security Act (42 U.S.C. Sec. 430(b)), on January 1, 2013, for a member whose service is included in the federal system pursuant to any changes in state or federal law enacted on or after January 1, 2013.
(2)The system shall adjust the limit based on the annual changes to the Consumer Price Index for All Urban Consumers: U.S. City Average, calculated by dividing the Consumer Price Index for All Urban Consumers: U.S. City Average for the month of February in the fiscal year preceding the adjustment by the Consumer Price Index for All Urban Consumers: U.S. City Average for the month of February of the previous year rounded to the nearest thousandth. Notwithstanding paragraph (1) of subdivision (d) of Section 7522.10 of the Government Code, the adjustment shall be effective annually on July 1, beginning July 1, 2014.
(3)The Legislature reserves the right to modify the requirements of this subdivision with regard to all members subject to this subdivision, except that the Legislature may not modify these provisions in a manner that would result in a decrease in benefits accrued prior to the effective date of the modification.
(4)This subdivision shall apply to compensation paid during the 201314 fiscal year and each fiscal year thereafter.
(d)An employer or individual who knowingly or willfully reports compensation in a manner inconsistent with subdivision (a) or (b) may be subject to prosecution for fraud, theft, or embezzlement in accordance with the Penal Code. The system may establish procedures to ensure that compensation reported by an employer is in compliance with this section.
(e)For purposes of this section, remuneration shall be considered paid if distributed to any person in the same class of employees who meets the qualifications or requirements specified in a publicly available written contractual agreement, including, but not limited to, a collective bargaining agreement or an employment agreement, as a condition of receiving the remuneration.
(f)This definition of creditable compensation reflects sound principles that support the integrity of the retirement fund. Those principles include, but are not limited to, consistent treatment of compensation throughout a members career, consistent treatment of compensation among an entire class of employees, consistent treatment of compensation for the position, preventing adverse selection, and excluding from creditable compensation remuneration that is paid to enhance a members benefits. The system shall determine the appropriate crediting of contributions according to these principles, to the extent not otherwise specified pursuant to this part. A presumption by the system that creditable compensation was paid to enhance the members benefits may be rebutted by the member or by the employer on behalf of the member. Upon receipt of sufficient evidence to the contrary, a presumption by the system that creditable compensation was paid to enhance the members benefits may be reversed.
SEC. 3.SEC. 4.Section 22119.5 of the Education Code is amended to read:22119.5.(a)Creditable service means any of the activities described in subdivision (b) performed for any of the following employers:
(1)A prekindergarten through grade 12 employer employer, including the state, in a position requiring certification qualifications as designated in regulations adopted by the Commission on Teacher Credentialing pursuant to Section 44001.
(2)A community college employer by a faculty member, as defined in Section 87003, in an academic position, as defined in subdivision (b) of Section 87001, or by an educational administrator, as defined in subdivision (b) of Section 87002, subject to the appropriate minimum standards adopted by the Board of Governors of the California Community Colleges pursuant to Section 87356, or pursuant to a contract between a community college district and the United States Department of Defense to provide vocational training.
(3)A charter school employer under the provisions of an approved charter for the operation of a charter school for which the charter school is eligible to receive state apportionment.
(b)The types of activities are any of the following:
(1)The work of teachers, instructors, district interns, and academic employees employed in the instructional program for pupils, including special programs such as adult education, regional occupation programs, child care centers, and prekindergarten programs pursuant to Section 22161.
(2)Education or vocational counseling, guidance, and placement services.
(3)The work of employees who plan courses of study to be used in California public schools, or research connected with the evaluation or efficiency of the instructional program.
(4)The selection, collection, preparation, classification, demonstration, or evaluation of instructional materials of any course of study for use in the development of the instructional program in California public schools, or other services related to California public school curriculum.
(5)The examination, selection, in-service training, mentoring, or assignment of teachers, principals, or other similar personnel involved in the instructional program.
(6)The work of nurses, physicians, speech therapists, psychologists, audiometrists, audiologists, and other California public school health professionals.
(7)Services as a California public school librarian.
(8)Activities connected with the enforcement of the laws relating to compulsory education, coordination of child welfare activities involving the school and the home, and the school adjustment of pupils.
(9)The work of employees who are responsible for the supervision of persons or administration of the duties described in this subdivision.
(c)Creditable service also means the work of superintendents any of the activities described in subdivision (b) when they are performed for an employer by:
(1)Superintendents of California public schools, and presidents and chancellors of community college employers.
(2)Consulting teachers employed by an employer to participate in the California Peer Assistance and Review Program for Teachers pursuant to Article 4.5 (commencing with Section 44500) of Chapter 3 of Part 25 of Division 3 of Title 2.
(d)Creditable service also means the performance of California public school activities related to, and an outgrowth of, the instructional and guidance program of the California public school when performed for the same employer for which the member is performing any of the activities described in subdivision (b) or (c).
(e)(1)All of the activities performed in a position shall be deemed creditable service if the employer requires one or more of the activities described in subdivision (b) or (c) to be performed in that position for more than 50 percent of full time, as established pursuant to Section 22138.5, for a class of employees performing just those activities described in subdivision (b).
(2)This subdivision Paragraph (1) shall not apply to a person who performs creditable service position established for fewer days or hours than the employer requires for full time as established pursuant to Section 22138.5.
(3)All of the activities performed in a position with service that has been deemed creditable pursuant to paragraph (1) shall be subject to coverage under the Defined Benefit Program until the member performing the activities becomes employed by the same or a different employer in a different position at which time an election may be made under Section 22508.
(f)The board shall have final authority for determining creditable service to cover any activities not already specified.
SEC. 4.SEC. 5.Section 22119.6 is added to the Education Code, to read:22119.6.(a)Creditable service shall also include any activities that do not meet the definition of creditable service under Section 22119.5, but were performed for any employer, as defined in Section 22131, on or before December 31, 2015, and were reported as creditable service to the system.
(b)The type of activities described in subdivision (a) performed by a member who becomes employed by the same or a different employer in a new position on or after January 1, 2016, shall be subject to Section 22119.5.
SEC. 5.SEC. 6.Section 22146 of the Education Code is amended to read:22146.Member means any person, unless excluded under other provisions of this part, who has performed creditable service as defined in Section 22119.5 or 22119.6 and has earned creditable compensation for that service and has not received a refund for that service and, as a result, is subject to the Defined Benefit Program. A members rights and obligations under this part with respect to the Defined Benefit Program shall be determined by the applicability of subdivision (a), (b), (c), or (d), and subject to any applicable exceptions under other provisions of this part.
(a)An active member is a member who is not retired or disabled and who earns creditable compensation during the school year.
(b)An inactive member is a member who is not retired or disabled and who has not earned creditable compensation during the current or preceding school year.
(c)A disabled member is a member to whom a disability allowance is payable under Chapter 25 (commencing with Section 24001).
(d)A retired member is a member who has terminated employment and has retired for service under the provisions of Chapter 27 (commencing with Section 24201), or has retired for disability under the provisions of Chapter 26 (commencing with Section 24100) or retired for service or disability under the provisions of Chapter 21 (commencing with Section 23400), and to whom a retirement allowance is therefore payable.
SEC. 6.SEC. 7.Section 22164.5 of the Education Code is amended to read:22164.5.(a)Retired member activities means one or more activities identified in subdivision (b), (c), or (d) of Section 22119.5 or subdivision (b), (c), or (d) of Section 26113 within the California public school system and performed by a member retired for service under this part as one of the following:
(1)An employee of an employer.
(2)An employee of a third party, except as specified in subdivision (b).
(3)An independent contractor.
(b)The activities of an employee of a third party shall not be included in the definition of retired member activities if all of the following conditions apply:
(1)The employee performs an assignment of 24 months or less.
(2)The third-party employer does not participate in a California public pension system.
(3)The activities performed by the individual are not normally performed by employees of an employer, as defined in Section 22131.
SEC. 7.SEC. 8.Section 22458.3 is added to the Education Code, to read:22458.3.Upon request from the system, each employer shall provide the system with information regarding the percentage of time that creditable service activities, as described in paragraph (1) of subdivision (e) of Section 22119.5, are performed in a position.
SEC. 8.SEC. 9.Section 22458.5 is added to the Education Code, to read:22458.5.Upon request from the system, each employer shall provide the system with information regarding the certification qualifications, minimum standards, or provisions of an approved charter for the operation of a charter school required to perform creditable service pursuant to subdivision (a) of Section 22119.5, in a position.
SEC. 9.SEC. 10.Section 22508.7 is added to the Education Code, to read:22508.7.(a)This section shall apply to service deemed creditable service pursuant to subdivision (a) of Section 22119.6 and a person who performs that service.
(b)(1)A member, including a member who retires on or before December 31, 2015, may elect to have all of that service subject to coverage by a different public retirement system and excluded from coverage by the Defined Benefit Program, if the member is not excluded from coverage by that public retirement system.
(2)If an election is made pursuant to this subdivision, all of the following shall apply:
(A)All service that was subject to coverage by the Defined Benefit Program shall be subject to coverage by the other public retirement system, if the member is not excluded from coverage by that public retirement system.
(B)Any member contributions and credited interest, as determined by the system, and employer contributions, less any amounts previously paid to the person, shall be returned to the employer for that service, with the system recovering from the person any amounts that were paid to the person and not recovered from withheld member contributions, credited interest, or employer contributions.
(C)Any amounts not recovered pursuant to subparagraph (B) shall be paid in full by the member before his or her service can be subject to coverage by the other public retirement system.
(3)If an election is made pursuant to this subdivision, the following shall apply:
(A)A member not subject to the California Public Employees Pension Reform Act of 2013 in the Defined Benefit Program shall not be subject to that act in the other public retirement system.
(B)A member subject to the California Public Employees Pension Reform Act of 2013 in the Defined Benefit Program shall be subject to that act in the other public retirement system.
(4)If an election is not made pursuant to this subdivision, all service performed shall continue to be subject to coverage by the Defined Benefit Program until the member becomes employed pursuant to subdivision (b) of Section 22119.6.
(c)(1)A person who had service removed from the system and reported to a different public retirement system, as directed by the system, including a person who is receiving a benefit on or before December 31, 2015, may elect to have all of that service and subsequent service in the same position subject to coverage by the Defined Benefit Program and excluded from coverage by the other public retirement system.
(2)If an election is made pursuant to this subdivision, all of the following shall apply:
(A)All of that service and subsequent service in the same position that was subject to coverage by the other public retirement system shall be subject to coverage by the Defined Benefit Program and reported to the system pursuant to Chapter 17 (commencing with Section 23000).
(B)Any employee and employer contributions for that service and subsequent service in the same position shall be remitted to the system pursuant to Chapter 17 (commencing with Section 23000).
(3)If an election is made pursuant to this subdivision, the following shall apply:
(A)A person not subject to the California Public Employees Pension Reform Act of 2013 in the other public retirement system shall not be subject to that act in the Defined Benefit Program.
(B)A person subject to the California Public Employees Pension Reform Act of 2013 in the other public retirement system shall be subject to that act in the Defined Benefit Program.
(4)If an election is not made pursuant to this subdivision, all service performed will continue to be subject to coverage by the other public retirement system.
(d)The election shall be made in writing and filed with the office of the system on a form prescribed by the system on or before June 30, 2016, and a copy of the election shall be filed with the other public retirement system.
(e)Only a person who has performed service creditable under subdivision (a) of Section 22119.6 can make an election under this section.
(f)An election made pursuant to this section shall be irrevocable.
(g)The board shall be under no obligation to identify, locate, or notify a person who has performed service creditable pursuant to subdivision (a) of Section 22119.6 and is eligible to make an election pursuant to this section.
SEC. 10.SEC. 11.Section 26113 of the Education Code is amended to read:26113.(a)Creditable service means any of the activities described in subdivision (b) performed for any of the following employers:
(1)A prekindergarten through grade 12 employer employer, including the state, in a position requiring certification qualifications as designated in regulations adopted by the Commission on Teacher Credentialing pursuant to Section 44001.
(2)A community college employer by a faculty member, as defined in Section 87003, in an academic position, as defined in subdivision (b) of Section 87001, or by an educational administrator, as defined in subdivision (b) of Section 87002, subject to the appropriate minimum standards adopted by the Board of Governors of the California Community Colleges pursuant to Section 87356, or pursuant to a contract between a community college district and the United States Department of Defense to provide vocational training.
(3)A charter school employer under the provisions of an approved charter for the operation of a charter school for which the charter school is eligible to receive state apportionment.
(b)The types of activities are any of the following:
(1)The work of teachers, instructors, district interns, and academic employees employed in the instructional program for pupils, including special programs such as adult education, regional occupational programs, child care centers, and prekindergarten programs pursuant to Section 22161.
(2)Education or vocational counseling, guidance, and placement services.
(3)The work of employees who plan courses of study to be used in California public schools, or research connected with the evaluation or efficiency of the instructional program.
(4)The selection, collection, preparation, classification, demonstration, or evaluation of instructional materials of any course of study for use in the development of the instructional program in California public schools, or other services related to California public school curriculum.
(5)The examination, selection, in-service training, mentoring, or assignment of teachers, principals, or other similar personnel involved in the instructional program.
(6)The work of nurses, physicians, speech therapists, psychologists, audiometrists, audiologists, and other California public school health professionals.
(7)Services as a California public school librarian.
(8)Activities connected with the enforcement of the laws relating to compulsory education, coordination of child welfare activities involving the school and the home, and the school adjustment of pupils.
(9)The work of employees who are responsible for the supervision of persons or administration of the duties described in this subdivision.
(10)Trustee service as described in Section 26403.
(c)Creditable service also means the work of superintendents any of the activities described in subdivision (b) when they are performed for an employer by:
(1)Superintendents of California public schools, and presidents and chancellors of community college employers.
(2)Consulting teachers employed by an employer to participate in the California Peer Assistance and Review Program for Teachers pursuant to Article 4.5 (commencing with Section 44500) of Chapter 3 of Part 25 of Division 3 of Title 2.
(d)Creditable service also means the performance of California public school activities related to, and an outgrowth of, the instructional and guidance program of the California public school when performed for the same employer for which the member is performing any of the activities described in subdivision (b) or (c).
(e)The board shall have final authority for determining creditable service to cover activities not already specified.
SEC. 11.SEC. 12.Section 26135.7 of the Education Code is amended to read:26135.7.(a)Retired participant activities means one or more activities identified in subdivision (b), (c), or (d) of Section 22119.5 or (b), (c), or (d) of Section 26113 within the California public school system and performed by a participant retired for service under this part as one of the following:
(1)An employee of an employer.
(2)An employee of a third party, except as specified in subdivision (b).
(3)An independent contractor.
(b)The activities of an employee of a third party shall not be included in the definition of retired participant activities if all of the following conditions apply:
(1)The employee performs an assignment of 24 months or less.
(2)The third-party employer does not participate in a California public pension system.
(3)The activities performed by the individual are not normally performed by employees of an employer, as defined in Section 22131.
(a)Creditable compensation means remuneration that is paid in cash by an employer to all persons in the same class of employees for performing creditable service in that position. Creditable compensation shall include:
(1)Salary or wages paid in accordance with a publicly available written contractual agreement, including, but not limited to, a salary schedule or employment agreement.
(2)Remuneration that is paid in addition to salary or wages, provided it is paid to all persons who are in the same class of employees in the same dollar amount, the same percentage of salary or wages, or the same percentage of the amount being distributed.
(3)Remuneration that is paid for the use of sick leave, vacation, and other employer-approved leave, vacation leave, or an employer-approved compensated leave of absence, except as provided in paragraph (4) of subdivision (c).
(4)Member contributions that are picked up by an employer pursuant to Section 22903 or 22904.
(5)Amounts that are deducted from a members remuneration, including, but not limited to, deductions for participation in a deferred compensation plan; deductions to purchase an annuity contract, tax-deferred retirement plan, or insurance program; and contributions to a plan that meets the requirements of Section 125, 401(a), 401(k), 403(b), 457(b), or 457(f) of Title 26 of the United States Code.
(6)Any other payments the board determines to be creditable compensation.
(b)Any creditable compensation determined by the system to have been paid to enhance a members benefits shall not be credited under the Defined Benefit Program. Contributions on that compensation shall be credited to the Defined Benefit Supplement Program. A presumption by the system that creditable compensation was paid to enhance a members benefits may be rebutted by the member or by the employer on behalf of the member. Upon receipt of sufficient evidence to the contrary, a presumption by the system that creditable compensation was paid to enhance the members benefits may be reversed.
(c)Creditable compensation does not mean and shall not include:
(1)Remuneration that is not paid in cash or is not paid to all persons who are in the same class of employees.
(2)Remuneration that is paid for service that is not creditable service pursuant to Section 22119.5 or 22119.6.
(3)Remuneration that is paid in addition to salary or wages if it is not paid to all persons in the same class of employees in the same dollar amount, the same percentage of salary or wages, or the same percentage of the amount being distributed pursuant to paragraph (2) of subdivision (a).
(4)Remuneration that is paid in exchange for the relinquishment of unused accumulated leave.
(5)Payments, including, but not limited to, those for participation in a deferred compensation plan; to purchase an annuity contract, tax-deferred retirement plan, or insurance program; and for contributions to a plan that meets the requirements of Section 125, 401(a), 401(k), 403(b), 457(b), or 457(f) of Title 26 of the United States Code when the cost is covered by an employer and is not deducted from the members salary.
(6)Fringe benefits provided by an employer.
(7)Expenses paid or reimbursed by an employer.
(8)Severance pay, including lump-sum and installment payments, or money paid in excess of salary or wages to a member as compensatory damages or as a compromise settlement.
(9)Any other payments the board determines not to be creditable compensation.
(d)An employer or individual who knowingly or willfully reports compensation in a manner inconsistent with subdivision (a) or (c) may be subject to prosecution for fraud, theft, or embezzlement in accordance with the Penal Code. The system may establish procedures to ensure that compensation reported by an employer is in compliance with this section.
(e)For purposes of this section, remuneration shall be considered paid if distributed to any person in the same class of employees who meets the qualifications or requirements specified in a publicly available written contractual agreement, including, but not limited to, a collective bargaining agreement or an employment agreement, as a condition of receiving the remuneration.
(f)This definition of creditable compensation reflects sound principles that support the integrity of the retirement fund. Those principles include, but are not limited to, consistent treatment of compensation throughout a members career, consistent treatment of compensation among an entire class of employees, consistent treatment of compensation for the position, preventing adverse selection, and excluding from compensation earnable remuneration that is paid to enhance a members benefits. The system shall determine the appropriate crediting of contributions between the Defined Benefit Program and the Defined Benefit Supplement Program according to these principles, to the extent not otherwise specified pursuant to this part.
(g)The section shall become operative on July 1, 2002.
(h)This section shall not apply to a member subject to the California Public Employees Pension Reform Act of 2013.
SEC. 2.Section 22119.3 of the Education Code is amended to read:22119.3.(a)Creditable compensation for members who are subject to the California Public Employees Pension Reform Act of 2013 means remuneration that is paid each pay period in which creditable service is performed for that position. Creditable compensation shall be paid in cash by an employer to all persons in the same class of employees in accordance with a publicly available written contractual agreement, including, but not limited to, a salary schedule or employment agreement. Creditable compensation shall include:
(1)Remuneration that is paid for the use of sick leave, vacation, and other employer-approved leave, vacation leave, or an employer-approved compensated leave of absence, except as provided in paragraph (4) of subdivision (b).
(2)Member contributions that are picked up by an employer pursuant to Section 22903 or 22904.
(3)Amounts that are deducted from a members remuneration, including, but not limited to, deductions for participation in a deferred compensation plan; deductions to purchase an annuity contract, tax-deferred retirement plan, or insurance program; and contributions to a plan that meets the requirements of Section 125, 401(a), 401(k), 403(b), 457(b), or 457(f) of Title 26 of the United States Code.
(4)Notwithstanding paragraphs (6) and (8) of subdivision (c) of Section 7522.34 of the Government Code, remuneration that is paid for creditable service that exceeds one year in a school year.
(b)Creditable compensation does not mean and shall not include:
(1)Remuneration that is not paid in cash or is not paid to all persons who are in the same class of employees.
(2)Remuneration that is paid for service that is not creditable service pursuant to Section 22119.5 or 22119.6.
(3)Remuneration that is not paid each pay period in which creditable service is performed for that position.
(4)Remuneration that is paid in exchange for the relinquishment of unused accumulated leave.
(5)Payments, including, but not limited to, those for participation in a deferred compensation plan; to purchase an annuity contract, tax-deferred retirement plan, or insurance program; and for contributions to a plan that meets the requirements of Section 125, 401(a), 401(k), 403(b), 457(b), or 457(f) of Title 26 of the United States Code when the cost is covered by an employer.
(6)Fringe benefits provided by an employer.
(7)Expenses paid or reimbursed by an employer.
(8)Severance pay, including lump sum and installment payments, or money paid in excess of salary or wages to a member as compensatory damages or as a compromise settlement.
(9)Creditable compensation determined by the system to have been paid to enhance a members benefit.
(10)Compensation paid to the member in lieu of benefits provided to the member by the employer or paid directly by the employer to a third party other than the system for the benefit of the member.
(11)Any one-time or ad hoc payments made to a member.
(12)Any employer-provided allowance, reimbursement, or payment, including, but not limited to, one made for housing, vehicle, or uniform.
(13)Any bonus paid in addition to compensation described in subdivision (a).
(14)Any other payments the board determines not to be creditable compensation.
(c)(1)Except for purposes of calculating credited service in the Defined Benefit Program and for reporting compensation earnable on or after January 1, 2013, creditable compensation in any fiscal year shall not exceed:
(A)One hundred twenty percent of the contribution and benefit base, as determined under Section 430(b) of the Social Security Act (42 U.S.C. Sec. 430(b)), on January 1, 2013, for a member whose service is not included in the federal system.
(B)One hundred percent of the contribution and benefit base, as determined under Section 430(b) of the Social Security Act (42 U.S.C. Sec. 430(b)), on January 1, 2013, for a member whose service is included in the federal system pursuant to any changes in state or federal law enacted on or after January 1, 2013.
(2)The system shall adjust the limit based on the annual changes to the Consumer Price Index for All Urban Consumers: U.S. City Average, calculated by dividing the Consumer Price Index for All Urban Consumers: U.S. City Average for the month of February in the fiscal year preceding the adjustment by the Consumer Price Index for All Urban Consumers: U.S. City Average for the month of February of the previous year rounded to the nearest thousandth. Notwithstanding paragraph (1) of subdivision (d) of Section 7522.10 of the Government Code, the adjustment shall be effective annually on July 1, beginning July 1, 2014.
(3)The Legislature reserves the right to modify the requirements of this subdivision with regard to all members subject to this subdivision, except that the Legislature may not modify these provisions in a manner that would result in a decrease in benefits accrued prior to the effective date of the modification.
(4)This subdivision shall apply to compensation paid during the 201314 fiscal year and each fiscal year thereafter.
(d)An employer or individual who knowingly or willfully reports compensation in a manner inconsistent with subdivision (a) or (b) may be subject to prosecution for fraud, theft, or embezzlement in accordance with the Penal Code. The system may establish procedures to ensure that compensation reported by an employer is in compliance with this section.
(e)For purposes of this section, remuneration shall be considered paid if distributed to any person in the same class of employees who meets the qualifications or requirements specified in a publicly available written contractual agreement, including, but not limited to, a collective bargaining agreement or an employment agreement, as a condition of receiving the remuneration.
(f)This definition of creditable compensation reflects sound principles that support the integrity of the retirement fund. Those principles include, but are not limited to, consistent treatment of compensation throughout a members career, consistent treatment of compensation among an entire class of employees, consistent treatment of compensation for the position, preventing adverse selection, and excluding from creditable compensation remuneration that is paid to enhance a members benefits. The system shall determine the appropriate crediting of contributions according to these principles, to the extent not otherwise specified pursuant to this part. A presumption by the system that creditable compensation was paid to enhance the members benefits may be rebutted by the member or by the employer on behalf of the member. Upon receipt of sufficient evidence to the contrary, a presumption by the system that creditable compensation was paid to enhance the members benefits may be reversed.
SEC. 3.Section 22119.5 of the Education Code is amended to read:22119.5.(a)Creditable service means any of the activities described in subdivision (b) performed for any of the following employers:
(1)A prekindergarten through grade 12 employer in a position requiring certification qualifications as designated in regulations adopted by the Commission on Teacher Credentialing pursuant to Section 44001.
(2)A community college employer by a faculty member, as defined in Section 87003, in an academic position, as defined in subdivision (b) of Section 87001, or by an educational administrator, as defined in subdivision (b) of Section 87002, subject to the appropriate minimum standards adopted by the Board of Governors of the California Community Colleges pursuant to Section 87356, or pursuant to a contract between a community college district and the United States Department of Defense to provide vocational training.
(3)A charter school employer under the provisions of an approved charter for the operation of a charter school for which the charter school is eligible to receive state apportionment.
(b)The types of activities are any of the following:
(1)The work of teachers, instructors, district interns, and academic employees employed in the instructional program for pupils, including special programs such as adult education, regional occupation programs, child care centers, and prekindergarten programs pursuant to Section 22161.
(2)Education or vocational counseling, guidance, and placement services.
(3)The work of employees who plan courses of study to be used in California public schools, or research connected with the evaluation or efficiency of the instructional program.
(4)The selection, collection, preparation, classification, demonstration, or evaluation of instructional materials of any course of study for use in the development of the instructional program in California public schools, or other services related to California public school curriculum.
(5)The examination, selection, in-service training, mentoring, or assignment of teachers, principals, or other similar personnel involved in the instructional program.
(6)The work of nurses, physicians, speech therapists, psychologists, audiometrists, audiologists, and other California public school health professionals.
(7)Services as a California public school librarian.
(8)Activities connected with the enforcement of the laws relating to compulsory education, coordination of child welfare activities involving the school and the home, and the school adjustment of pupils.
(9)The work of employees who are responsible for the supervision of persons or administration of the duties described in this subdivision.
(c)Creditable service also means the work of superintendents of California public schools, and presidents and chancellors of community college employers.
(d)Creditable service also means the performance of California public school activities relating related to, and an outgrowth of, the instructional and guidance program of the California public school when performed in addition to for the same employer for which the member is performing any of the activities described in subdivision (b) or (c).
(e)(1)All of the activities performed in a position shall be deemed creditable service if the employer requires one or more of the activities described in subdivision (b) or (c) to be performed in that position for more than 50 percent of the full time, as established pursuant to Section 22138.5, for a class of employees performing just those activities described in subdivision (b).
(2)This subdivision shall not apply to a person who performs creditable service for fewer days or hours than the employer requires for full time as established pursuant to Section 22138.5.
(3)All of the activities performed in a position with service that has been deemed creditable pursuant to paragraph (1) shall be subject to coverage under the Defined Benefit Program until the member performing the activities becomes employed by the same or a different employer in a different position at which time an election may be made under Section 22508.
(f)The board shall have final authority for determining creditable service to cover any activities not already specified.
SEC. 4.Section 22119.6 is added to the Education Code, to read:22119.6.(a)Creditable service shall also include any activities that do not meet the definition of creditable service under Section 22119.5, but were performed for any employer, as defined in Section 22131, on or before December 31, 2015, and were reported as creditable service to the system.
(b)The type of activities described in subdivision (a) performed by a member who becomes employed by the same or a different employer in a new position on or after January 1, 2016, shall be subject to Section 22119.5.
SEC. 5.Section 22146 of the Education Code is amended to read:22146.Member means any person, unless excluded under other provisions of this part, who has performed creditable service as defined in Section 22119.5 or 22119.6 and has earned creditable compensation for that service and has not received a refund for that service and, as a result, is subject to the Defined Benefit Program. A members rights and obligations under this part with respect to the Defined Benefit Program shall be determined by the applicability of subdivision (a), (b), (c), or (d), and subject to any applicable exceptions under other provisions of this part.
(a)An active member is a member who is not retired or disabled and who earns creditable compensation during the school year.
(b)An inactive member is a member who is not retired or disabled and who has not earned creditable compensation during the current or preceding school year.
(c)A disabled member is a member to whom a disability allowance is payable under Chapter 25 (commencing with Section 24001).
(d)A retired member is a member who has terminated employment and has retired for service under the provisions of Chapter 27 (commencing with Section 24201), or has retired for disability under the provisions of Chapter 26 (commencing with Section 24100) or retired for service or disability under the provisions of Chapter 21 (commencing with Section 23400), and to whom a retirement allowance is therefore payable.
SEC. 6.Section 22164.5 of the Education Code is amended to read:22164.5.(a)Retired member activities means one or more activities identified in subdivision (b), (c), or (d) of Section 22119.5 or subdivision (b), (c), or (d) of Section 26113 within the California public school system and performed by a member retired for service under this part as one of the following:
(1)An employee of an employer.
(2)An employee of a third party, except as specified in subdivision (b).
(3)An independent contractor.
(b)The activities of an employee of a third party shall not be included in the definition of retired member activities if all of the following conditions apply:
(1)The employee performs an assignment of 24 months or less.
(2)The third-party employer does not participate in a California public pension system.
(3)The activities performed by the individual are not normally performed by employees of an employer, as defined in Section 22131.
SEC. 7.Section 22458.3 is added to the Education Code, to read:22458.3.Upon request from the system, each employer shall provide the system with information regarding the percentage of time that creditable service activities, as described in paragraph (1) of subdivision (e) of Section 22119.5, are performed in a position.
SEC. 8.Section 22458.5 is added to the Education Code, to read:22458.5.Upon request from the system, each employer shall provide the system with information regarding the certification qualifications, minimum standards, or provisions of an approved charter for the operation of a charter school required to perform creditable service pursuant to subdivision (a) of Section 22119.5, in a position.
SEC. 9.Section 22508.7 is added to the Education Code, to read:22508.7.(a)This section shall apply to service deemed creditable service pursuant to subdivision (a) of Section 22119.6 and a person who performs that service.
(b)(1)A member, including a member who retires on or before December 31, 2015, may elect to have all of that service subject to coverage by a different public retirement system and excluded from coverage by the Defined Benefit Program, if the member is not excluded from coverage by that public retirement system.
(2)If an election is made pursuant to this subdivision, all of the following shall apply:
(A)All service that was subject to coverage by the Defined Benefit Program shall be subject to coverage by the other public retirement system, if the member is not excluded from coverage by that public retirement system.
(B)Any member contributions and credited interest, as determined by the system, and employer contributions, less any amounts previously paid to the person, shall be returned to the employer for that service, with the system recovering from the person any amounts that were paid to the person and not recovered from withheld member contributions, credited interest, or employer contributions.
(C)Any amounts not recovered pursuant to subparagraph (B) shall be paid in full by the member before his or her service can be subject to coverage by the other public retirement system.
(3)If an election is made pursuant to this subdivision, the following shall apply:
(A)A member not subject to the California Public Employees Pension Reform Act of 2013 in the Defined Benefit Program shall not be subject to that act in the other public retirement system.
(B)A member subject to the California Public Employees Pension Reform Act of 2013 in the Defined Benefit Program shall be subject to that act in the other public retirement system.
(4)If an election is not made pursuant to this subdivision, all service performed shall continue to be subject to coverage by the Defined Benefit Program until the member becomes employed pursuant to subdivision (b) of Section 22119.6.
(c)(1)A person who had service removed from the system and reported to a different public retirement system, as directed by the system, including a person who is receiving a benefit on or before December 31, 2015, may elect to have all of that service and subsequent service in the same position subject to coverage by the Defined Benefit Program and excluded from coverage by the other public retirement system.
(2)If an election is made pursuant to this subdivision, all of the following shall apply:
(A)All of that service and subsequent service in the same position that was subject to coverage by the other public retirement system shall be subject to coverage by the Defined Benefit Program and reported to the system pursuant to Chapter 17 (commencing with Section 23000).
(B)Any employee and employer contributions for that service and subsequent service in the same position shall be remitted to the system pursuant to Chapter 17 (commencing with Section 23000).
(3)If an election is made pursuant to this subdivision, the following shall apply:
(A)A person not subject to the California Public Employees Pension Reform Act of 2013 in the other public retirement system shall not be subject to that act in the Defined Benefit Program.
(B)A person subject to the California Public Employees Pension Reform Act of 2013 in the other public retirement system shall be subject to that act in the Defined Benefit Program.
(4)If an election is not made pursuant to this subdivision, all service performed will continue to be subject to coverage by the other public retirement system.
(d)The election shall be made in writing and filed with the office of the system on a form prescribed by the system on or before June 30, 2016, and a copy of the election shall be filed with the other public retirement system.
(e)Only a person who has performed service creditable under subdivision (a) of Section 22119.6 can make an election under this section.
(f)An election made pursuant to this section shall be irrevocable.
(g)The board shall be under no obligation to identify, locate, or notify a person who has performed service creditable pursuant to subdivision (a) of Section 22119.6 and is eligible to make an election pursuant to this section.
SEC. 10.Section 26113 of the Education Code is amended to read:26113.(a)Creditable service means any of the activities described in subdivision (b) performed for any of the following employers:
(1)A prekindergarten through grade 12 employer in a position requiring certification qualifications as designated in regulations adopted by the Commission on Teacher Credentialing pursuant to Section 44001.
(2)A community college employer by a faculty member, as defined in Section 87003, in an academic position, as defined in subdivision (b) of Section 87001, or by an educational administrator, as defined in subdivision (b) of Section 87002, subject to the appropriate minimum standards adopted by the Board of Governors of the California Community Colleges pursuant to Section 87356, or pursuant to a contract between a community college district and the United States Department of Defense to provide vocational training.
(3)A charter school employer under the provisions of an approved charter for the operation of a charter school for which the charter school is eligible to receive state apportionment.
(b)The types of activities are any of the following:
(1)The work of teachers, instructors, district interns, and academic employees employed in the instructional program for pupils, including special programs such as adult education, regional occupational programs, child care centers, and prekindergarten programs pursuant to Section 22161.
(2)Education or vocational counseling, guidance, and placement services.
(3)The work of employees who plan courses of study to be used in California public schools, or research connected with the evaluation or efficiency of the instructional program.
(4)The selection, collection, preparation, classification, demonstration, or evaluation of instructional materials of any course of study for use in the development of the instructional program in California public schools, or other services related to California public school curriculum.
(5)The examination, selection, in-service training, mentoring, or assignment of teachers, principals, or other similar personnel involved in the instructional program.
(6)The work of nurses, physicians, speech therapists, psychologists, audiometrists, audiologists, and other California public school health professionals.
(7)Services as a California public school librarian.
(8)Activities connected with the enforcement of the laws relating to compulsory education, coordination of child welfare activities involving the school and the home, and the school adjustment of pupils.
(9)The work of employees who are responsible for the supervision of persons or administration of the duties described in this subdivision.
(10)Trustee service as described in Section 26403.
(c)Creditable service also means the work of superintendents of California public schools, and presidents and chancellors of community college employers.
(d)Creditable service also means the performance of California public school activities related to, and an outgrowth of, the instructional and guidance program of the California public school when performed in addition to for the same employer for which the member is performing any of the activities described in subdivision (b) or (c).
(e)The board shall have final authority for determining creditable service to cover activities not already specified.
SEC. 11.Section 26135.7 of the Education Code is amended to read:26135.7.(a)Retired participant activities means one or more activities identified in subdivision (b), (c), or (d) of Section 22119.5 or (b), (c), or (d) of Section 26113 within the California public school system and performed by a participant retired for service under this part as one of the following:
(1)An employee of an employer.
(2)An employee of a third party, except as specified in subdivision (b).
(3)An independent contractor.
(b)The activities of an employee of a third party shall not be included in the definition of retired participant activities if all of the following conditions apply:
(1)The employee performs an assignment of 24 months or less.
(2)The third-party employer does not participate in a California public pension system.
(3)The activities performed by the individual are not normally performed by employees of an employer, as defined in Section 22131.
(a)Creditable compensation means remuneration that is paid in cash by an employer to all persons in the same class of employees for performing creditable service in that position. Creditable compensation shall include:
(1)Salary or wages paid in accordance with a publicly available written contractual agreement, including, but not limited to, a salary schedule or employment agreement.
(2)Remuneration that is paid in addition to salary or wages, provided it is paid to all persons who are in the same class of employees in the same dollar amount, the same percentage of salary or wages, or the same percentage of the amount being distributed.
(3)Remuneration that is paid for the use of sick leave, vacation, and other employer-approved leave, except as provided in paragraph (4) of subdivision (c).
(4)Member contributions that are picked up by an employer pursuant to Section 22903 or 22904.
(5)Amounts that are deducted from a members remuneration, including, but not limited to, deductions for participation in a deferred compensation plan; deductions to purchase an annuity contract, tax-deferred retirement plan, or insurance program; and contributions to a plan that meets the requirements of Section 125, 401(a), 401(k), 403(b), 457(b), or 457(f) of Title 26 of the United States Code.
(6)Any other payments the board determines to be creditable compensation.
(b)Any creditable compensation determined by the system to have been paid to enhance a members benefits shall not be credited under the Defined Benefit Program. Contributions on that compensation shall be credited to the Defined Benefit Supplement Program. A presumption by the system that creditable compensation was paid to enhance a members benefits may be rebutted by the member or by the employer on behalf of the member. Upon receipt of sufficient evidence to the contrary, a presumption by the system that creditable compensation was paid to enhance the members benefits may be reversed.
(c)Creditable compensation does not mean and shall not include:
(1)Remuneration that is not paid in cash or is not paid to all persons who are in the same class of employees.
(2)Remuneration that is paid for service that is not creditable service pursuant to Section 22119.5 or 22119.6.
(3)Remuneration that is paid in addition to salary or wages if it is not paid to all persons in the same class of employees in the same dollar amount, the same percentage of salary or wages, or the same percentage of the amount being distributed pursuant to paragraph (2) of subdivision (a).
(4)Remuneration that is paid in exchange for the relinquishment of unused accumulated leave.
(5)Payments, including, but not limited to, those for participation in a deferred compensation plan; to purchase an annuity contract, tax-deferred retirement plan, or insurance program; and for contributions to a plan that meets the requirements of Section 125, 401(a), 401(k), 403(b), 457(b), or 457(f) of Title 26 of the United States Code when the cost is covered by an employer and is not deducted from the members salary.
(6)Fringe benefits provided by an employer.
(7)Expenses paid or reimbursed by an employer.
(8)Severance pay, including lump-sum and installment payments, or money paid in excess of salary or wages to a member as compensatory damages or as a compromise settlement.
(9)Any other payments the board determines not to be creditable compensation.
(d)An employer or individual who knowingly or willfully reports compensation in a manner inconsistent with subdivision (a) or (c) may be subject to prosecution for fraud, theft, or embezzlement in accordance with the Penal Code. The system may establish procedures to ensure that compensation reported by an employer is in compliance with this section.
(e)For purposes of this section, remuneration shall be considered paid if distributed to any person in the same class of employees who meets the qualifications or requirements specified in a publicly available written contractual agreement, including, but not limited to, a collective bargaining agreement or an employment agreement, as a condition of receiving the remuneration.
(f)This definition of creditable compensation reflects sound principles that support the integrity of the retirement fund. Those principles include, but are not limited to, consistent treatment of compensation throughout a members career, consistent treatment of compensation among an entire class of employees, consistent treatment of compensation for the position, preventing adverse selection, and excluding from compensation earnable remuneration that is paid to enhance a members benefits. The system shall determine the appropriate crediting of contributions between the Defined Benefit Program and the Defined Benefit Supplement Program according to these principles, to the extent not otherwise specified pursuant to this part.
(g)The section shall become operative on July 1, 2002.
(h)This section shall not apply to a member subject to the California Public Employees Pension Reform Act of 2013.
SEC. 2.Section 22119.3 of the Education Code is amended to read:22119.3.(a)Creditable compensation for members who are subject to the California Public Employees Pension Reform Act of 2013 means remuneration that is paid each pay period in which creditable service is performed for that position. Creditable compensation shall be paid in cash by an employer to all persons in the same class of employees in accordance with a publicly available written contractual agreement, including, but not limited to, a salary schedule or employment agreement. Creditable compensation shall include:
(1)Remuneration that is paid for the use of sick leave, vacation, and other employer-approved leave, except as provided in paragraph (4) of subdivision (b).
(2)Member contributions that are picked up by an employer pursuant to Section 22903 or 22904.
(3)Amounts that are deducted from a members remuneration, including, but not limited to, deductions for participation in a deferred compensation plan; deductions to purchase an annuity contract, tax-deferred retirement plan, or insurance program; and contributions to a plan that meets the requirements of Section 125, 401(a), 401(k), 403(b), 457(b), or 457(f) of Title 26 of the United States Code.
(4)Notwithstanding paragraphs (6) and (8) of subdivision (c) of Section 7522.34 of the Government Code, remuneration that is paid for creditable service that exceeds one year in a school year.
(b)Creditable compensation does not mean and shall not include:
(1)Remuneration that is not paid in cash or is not paid to all persons who are in the same class of employees.
(2)Remuneration that is paid for service that is not creditable service pursuant to Section 22119.5 or 22119.6.
(3)Remuneration that is not paid each pay period in which creditable service is performed for that position.
(4)Remuneration that is paid in exchange for the relinquishment of unused accumulated leave.
(5)Payments, including, but not limited to, those for participation in a deferred compensation plan; to purchase an annuity contract, tax-deferred retirement plan, or insurance program; and for contributions to a plan that meets the requirements of Section 125, 401(a), 401(k), 403(b), 457(b), or 457(f) of Title 26 of the United States Code when the cost is covered by an employer.
(6)Fringe benefits provided by an employer.
(7)Expenses paid or reimbursed by an employer.
(8)Severance pay, including lump sum and installment payments, or money paid in excess of salary or wages to a member as compensatory damages or as a compromise settlement.
(9)Creditable compensation determined by the system to have been paid to enhance a members benefit.
(10)Compensation paid to the member in lieu of benefits provided to the member by the employer or paid directly by the employer to a third party other than the system for the benefit of the member.
(11)Any one-time or ad hoc payments made to a member.
(12)Any employer-provided allowance, reimbursement, or payment, including, but not limited to, one made for housing, vehicle, or uniform.
(13)Any bonus paid in addition to compensation described in subdivision (a).
(14)Any other payments the board determines not to be creditable compensation.
(c)(1)Except for purposes of calculating credited service in the Defined Benefit Program and for reporting compensation earnable on or after January 1, 2013, creditable compensation in any fiscal year shall not exceed:
(A)One hundred twenty percent of the contribution and benefit base, as determined under Section 430(b) of the Social Security Act (42 U.S.C. Sec. 430(b)), on January 1, 2013, for a member whose service is not included in the federal system.
(B)One hundred percent of the contribution and benefit base, as determined under Section 430(b) of the Social Security Act (42 U.S.C. Sec. 430(b)), on January 1, 2013, for a member whose service is included in the federal system pursuant to any changes in state or federal law enacted on or after January 1, 2013.
(2)The system shall adjust the limit based on the annual changes to the Consumer Price Index for All Urban Consumers: U.S. City Average, calculated by dividing the Consumer Price Index for All Urban Consumers: U.S. City Average for the month of February in the fiscal year preceding the adjustment by the Consumer Price Index for All Urban Consumers: U.S. City Average for the month of February of the previous year rounded to the nearest thousandth. Notwithstanding paragraph (1) of subdivision (d) of Section 7522.10 of the Government Code, the adjustment shall be effective annually on July 1, beginning July 1, 2014.
(3)The Legislature reserves the right to modify the requirements of this subdivision with regard to all members subject to this subdivision, except that the Legislature may not modify these provisions in a manner that would result in a decrease in benefits accrued prior to the effective date of the modification.
(4)This subdivision shall apply to compensation paid during the 201314 fiscal year and each fiscal year thereafter.
(d)An employer or individual who knowingly or willfully reports compensation in a manner inconsistent with subdivision (a) or (b) may be subject to prosecution for fraud, theft, or embezzlement in accordance with the Penal Code. The system may establish procedures to ensure that compensation reported by an employer is in compliance with this section.
(e)For purposes of this section, remuneration shall be considered paid if distributed to any person in the same class of employees who meets the qualifications or requirements specified in a publicly available written contractual agreement, including, but not limited to, a collective bargaining agreement or an employment agreement, as a condition of receiving the remuneration.
(f)This definition of creditable compensation reflects sound principles that support the integrity of the retirement fund. Those principles include, but are not limited to, consistent treatment of compensation throughout a members career, consistent treatment of compensation among an entire class of employees, consistent treatment of compensation for the position, preventing adverse selection, and excluding from creditable compensation remuneration that is paid to enhance a members benefits. The system shall determine the appropriate crediting of contributions according to these principles, to the extent not otherwise specified pursuant to this part. A presumption by the system that creditable compensation was paid to enhance the members benefits may be rebutted by the member or by the employer on behalf of the member. Upon receipt of sufficient evidence to the contrary, a presumption by the system that creditable compensation was paid to enhance the members benefits may be reversed.
SEC. 3.Section 22119.5 of the Education Code is amended to read:22119.5.(a)Creditable service means any of the activities described in subdivision (b) performed for any of the following employers:
(1)Prekindergarten A prekindergarten through grade 12 employer in a position requiring certification qualifications as designated in regulations adopted by the Commission on Teacher Credentialing pursuant to Section 44001.
(2)Community A community college employer by a faculty member, as defined in Section 87003, in an academic position, as defined in subdivision (b) of Section 87001, or by an educational administrator, as defined in subdivision (b) of Section 87002, subject to the appropriate minimum standards adopted by the Board of Governors of the California Community Colleges pursuant to Section 87356, or pursuant to a contract between a community college district and the United States Department of Defense to provide vocational training.
(3)Charter A charter school employer under the provisions of an approved charter for the operation of a charter school for which the charter school is eligible to receive state apportionment.
(b)The types of activities are any of the following:
(1)The work of teachers, instructors, district interns, and academic employees employed in the instructional program for pupils, including special programs such as adult education, regional occupation programs, child care centers, and prekindergarten programs pursuant to Section 22161.
(2)Education or vocational counseling, guidance, and placement services.
(3)The work of employees who plan courses of study to be used in California public schools, or research connected with the evaluation or efficiency of the instructional program.
(4)The selection, collection, preparation, classification, demonstration, or evaluation of instructional materials of any course of study for use in the development of the instructional program in California public schools, or other services related to California public school curriculum.
(5)The examination, selection, in-service training, mentoring, or assignment of teachers, principals, or other similar personnel involved in the instructional program.
(6)The work of nurses, physicians, speech therapists, psychologists, audiometrists, audiologists, and other California public school health professionals.
(7)Services as a California public school librarian.
(8)Activities connected with the enforcement of the laws relating to compulsory education, coordination of child welfare activities involving the school and the home, and the school adjustment of pupils.
(9)The work of employees who are responsible for the supervision of persons or administration of the duties described in this subdivision.
(c)Creditable service also means the work of superintendents of California public schools, and presidents and chancellors of community college employers.
(d)Creditable service also means the performance of California public school activities relating to, and an outgrowth of, the instructional and guidance program of the California public school if when performed in addition to any of the activities described in subdivision (b) or (c).
(e)(1)All of the activities performed in a position shall be deemed creditable service if the employer requires one or more of the activities described in subdivision (b) or (c) to be performed in that position for more than 50 percent of the time, as established pursuant to Section 22138.5, for a class of employees performing just those activities described in subdivision (b).
(2)This subdivision shall not apply to a person who performs creditable service for fewer days or hours than the employer requires for full time as established pursuant to Section 22138.5.
(3)All of the activities performed in a position with service that has been deemed creditable pursuant to paragraph (1) shall be subject to coverage under the Defined Benefit Program until the member performing the activities becomes employed by the same or a different employer in a different position at which time an election may be made under Section 22508.
(f)The board shall have final authority for determining creditable service to cover any activities not already specified.
SEC. 4.Section 22119.6 is added to the Education Code, to read:22119.6.(a)Creditable service shall also include any activities that do not meet the definition of creditable service under Section 22119.5, but were performed for any employer, as defined in Section 22131, on or before December 31, 2015, and were reported as creditable service to the system.
(b)The type of activities described in subdivision (a) performed by a member who becomes employed by the same or a different employer in a new position on or after January 1, 2016, shall be subject to Section 22119.5.
SEC. 5.Section 22146 of the Education Code is amended to read:22146.Member means any person, unless excluded under other provisions of this part, who has performed creditable service as defined in Section 22119.5 or 22119.6 and has earned creditable compensation for that service and has not received a refund for that service and, as a result, is subject to the Defined Benefit Program. A members rights and obligations under this part with respect to the Defined Benefit Program shall be determined by the applicability of subdivision (a), (b), (c), or (d), and subject to any applicable exceptions under other provisions of this part.
(a)An active member is a member who is not retired or disabled and who earns creditable compensation during the school year.
(b)An inactive member is a member who is not retired or disabled and who has not earned creditable compensation during the current or preceding school year.
(c)A disabled member is a member to whom a disability allowance is payable under Chapter 25 (commencing with Section 24001).
(d)A retired member is a member who has terminated employment and has retired for service under the provisions of Chapter 27 (commencing with Section 24201), or has retired for disability under the provisions of Chapter 26 (commencing with Section 24100) or retired for service or disability under the provisions of Chapter 21 (commencing with Section 23400), and to whom a retirement allowance is therefore payable.
SEC. 6.Section 22164.5 of the Education Code is amended to read:22164.5.(a)Retired member activities means one or more activities identified in subdivision (b), (c), or (d) of Section 22119.5 or subdivision (b), (c), or (d) of Section 26113 within the California public school system and performed by a member retired for service under this part as one of the following:
(1)An employee of an employer.
(2)An employee of a third party, except as specified in subdivision (b).
(3)An independent contractor.
(b)The activities of an employee of a third party shall not be included in the definition of retired member activities if all of the following conditions apply:
(1)The employee performs an assignment of 24 months or less.
(2)The third-party employer does not participate in a California public pension system.
(3)The activities performed by the individual are not normally performed by employees of an employer, as defined in Section 22131.
SEC. 7.Section 22458.3 is added to the Education Code, to read:22458.3.Upon request from the system, each employer shall provide the system with information regarding the percentage of time that creditable service activities, as described in paragraph (1) of subdivision (e) of Section 22119.5, are performed in a position.
SEC. 8.Section 22458.5 is added to the Education Code, to read:22458.5.Upon request from the system, each employer shall provide the system with information regarding the certification qualifications, minimum standards, or provisions of an approved charter for the operation of a charter school required to perform creditable service pursuant to subdivision (a) of Section 22119.5, in a position.
SEC. 9.Section 22508.7 is added to the Education Code, to read:22508.7.(a)This section shall apply to service deemed creditable service pursuant to subdivision (a) of Section 22119.6 and a person who performs that service.
(b)(1)A member, including a member who retires on or before December 31, 2015, may elect to have all of that service subject to coverage by a different public retirement system and excluded from coverage by the Defined Benefit Program, if the member is not excluded from coverage by that public retirement system.
(2)If an election is made pursuant to this subdivision, all of the following shall apply:
(A)All service that was subject to coverage by the Defined Benefit Program shall be subject to coverage by the other public retirement system, if the member is not excluded from coverage by that public retirement system.
(B)Any member contributions and credited interest, as determined by the system, and employer contributions, less any amounts previously paid to the person, shall be returned to the employer for that service, with the system recovering from the person any amounts that were paid to the person and not recovered from withheld member contributions, credited interest, or employer contributions.
(C)Any amounts not recovered pursuant to subparagraph (B) shall be paid in full by the member before his or her service can be subject to coverage by the other public retirement system.
(3)If an election is made pursuant to this subdivision, the following shall apply:
(A)A member not subject to the California Public Employees Pension Reform Act of 2013 in the Defined Benefit Program shall not be subject to that act in the other public retirement system.
(B)A member subject to the California Public Employees Pension Reform Act of 2013 in the Defined Benefit Program shall be subject to that act in the other public retirement system.
(4)If an election is not made pursuant to this subdivision, all service performed shall continue to be subject to coverage by the Defined Benefit Program until the member becomes employed pursuant to subdivision (b) of Section 22119.6.
(c)(1)A person who had service removed from the system and reported to a different public retirement system, as directed by the system, including a person who received is receiving a benefit on or before December 31, 2015, may elect to have all of that service and subsequent service in the same position subject to coverage by the Defined Benefit Program and excluded from coverage by the other public retirement system.
(2)If an election is made pursuant to this subdivision, all of the following shall apply:
(A)All of that service and subsequent service in the same position that was subject to coverage by the other public retirement system shall be subject to coverage by the Defined Benefit Program and reported to the system pursuant to Chapter 17 (commencing with Section 23000).
(B)Any employee and employer contributions for that service and subsequent service in the same position shall be remitted to the system pursuant to Chapter 17 (commencing with Section 23000).
(3)If an election is made pursuant to this subdivision, the following shall apply:
(A)A person not subject to the California Public Employees Pension Reform Act of 2013 in the other public retirement system shall not be subject to that act in the Defined Benefit Program.
(B)A person subject to the California Public Employees Pension Reform Act of 2013 in the other public retirement system shall be subject to that act in the Defined Benefit Program.
(4)If an election is not made pursuant to this subdivision, all service performed will continue to be subject to coverage by the other public retirement system.
(d)The election shall be made in writing and filed with the office of the system on a form prescribed by the system on or before June 30, 2016, and a copy of the election shall be filed with the other public retirement system.
(e)Only a person who has performed service creditable under subdivision (a) of Section 22119.6 can make an election under this section.
(f)An election made pursuant to this section shall be irrevocable.
(g)The board shall be under no obligation to identify, locate, or notify a person who has performed service creditable pursuant to subdivision (a) of Section 22119.6 and is eligible to make an election pursuant to this section.
SEC. 10.Section 26113 of the Education Code is amended to read:26113.(a)Creditable service means any of the activities described in subdivision (b) performed for any of the following employers:
(1)Prekindergarten A prekindergarten through grade 12 employer in a position requiring certification qualifications as designated in regulations adopted by the Commission on Teacher Credentialing pursuant to Section 44001.
(2)Community A community college employer by a faculty member, as defined in Section 87003, in an academic position, as defined in subdivision (b) of Section 87001, or by an educational administrator, as defined in subdivision (b) of Section 87002, subject to the appropriate minimum standards adopted by the Board of Governors of the California Community Colleges pursuant to Section 87356, or pursuant to a contract between a community college district and the United States Department of Defense to provide vocational training.
(3)Charter A charter school employer under the provisions of an approved charter for the operation of a charter school for which the charter school is eligible to receive state apportionment.
(b)The types of activities are any of the following:
(1)The work of teachers, instructors, district interns, and academic employees employed in the instructional program for pupils, including special programs such as adult education, regional occupational programs, child care centers, and prekindergarten programs pursuant to Section 22161.
(2)Education or vocational counseling, guidance, and placement services.
(3)The work of employees who plan courses of study to be used in California public schools, or research connected with the evaluation or efficiency of the instructional program.
(4)The selection, collection, preparation, classification, demonstration, or evaluation of instructional materials of any course of study for use in the development of the instructional program in California public schools, or other services related to California public school curriculum.
(5)The examination, selection, in-service training, mentoring, or assignment of teachers, principals, or other similar personnel involved in the instructional program.
(6)The work of nurses, physicians, speech therapists, psychologists, audiometrists, audiologists, and other California public school health professionals.
(7)Services as a California public school librarian.
(8)Activities connected with the enforcement of the laws relating to compulsory education, coordination of child welfare activities involving the school and the home, and the school adjustment of pupils.
(9)The work of employees who are responsible for the supervision of persons or administration of the duties described in this subdivision.
(10)Trustee service as described in Section 26403.
(c)Creditable service also means the work of superintendents of California public schools, and presidents and chancellors of community college employers.
(d)Creditable service also means the performance of California public school activities related to, and an outgrowth of, the instructional and guidance program of the California public school when performed in addition to any of the activities described in subdivision (b) or (c).
(e)The board shall have final authority for determining creditable service to cover activities not already specified.
SEC. 11.Section 26135.7 of the Education Code is amended to read:26135.7.(a)Retired participant activities means one or more activities identified in subdivision (b), (c), or (d) of Section 22119.5 or (b), (c), or (d) of Section 26113 within the California public school system and performed by a participant retired for service under this part as one of the following:
(1)An employee of an employer.
(2)An employee of a third party, except as specified in subdivision (b).
(3)An independent contractor.
(b)The activities of an employee of a third party shall not be included in the definition of retired participant activities if all of the following conditions apply:
(1)The employee performs an assignment of 24 months or less.
(2)The third-party employer does not participate in a California public pension system.
(3)The activities performed by the individual are not normally performed by employees of an employer, as defined in Section 22131.
(a)Creditable compensation means remuneration that is paid in cash by an employer to all persons in the same class of employees for performing creditable service in that position. Creditable compensation shall include:
(1)Salary or wages paid in accordance with a publicly available written contractual agreement, including, but not limited to, a salary schedule or employment agreement.
(2)Remuneration that is paid in addition to salary or wages, provided it is paid to all persons who are in the same class of employees in the same dollar amount, the same percentage of salary or wages, or the same percentage of the amount being distributed.
(3)Remuneration that is paid for the use of sick leave, vacation, and other employer-approved leave, except as provided in paragraph (4) of subdivision (c).
(4)Member contributions that are picked up by an employer pursuant to Section 22903 or 22904.
(5)Amounts that are deducted from a members remuneration, including, but not limited to, deductions for participation in a deferred compensation plan; deductions to purchase an annuity contract, tax-deferred retirement plan, or insurance program; and contributions to a plan that meets the requirements of Section 125, 401(a), 401(k), 403(b), 457(b), or 457(f) of Title 26 of the United States Code.
(6)Any other payments the board determines to be creditable compensation.
(b)Any creditable compensation determined by the system to have been paid to enhance a members benefits shall not be credited under the Defined Benefit Program. Contributions on that compensation shall be credited to the Defined Benefit Supplement Program. A presumption by the system that creditable compensation was paid to enhance a members benefits may be rebutted by the member or by the employer on behalf of the member. Upon receipt of sufficient evidence to the contrary, a presumption by the system that creditable compensation was paid to enhance the members benefits may be reversed.
(c)Creditable compensation does not mean and shall not include:
(1)Remuneration that is not paid in cash or is not paid to all persons who are in the same class of employees.
(2)Remuneration that is paid for service that is not creditable service pursuant to Section 22119.5. 22119.5 or 22119.6.
(3)Remuneration that is paid in addition to salary or wages if it is not paid to all persons in the same class of employees in the same dollar amount, the same percentage of salary or wages, or the same percentage of the amount being distributed pursuant to paragraph (2) of subdivision (a).
(4)Remuneration that is paid in exchange for the relinquishment of unused accumulated leave.
(5)Payments, including, but not limited to, those for participation in a deferred compensation plan; to purchase an annuity contract, tax-deferred retirement plan, or insurance program; and for contributions to a plan that meets the requirements of Section 125, 401(a), 401(k), 403(b), 457(b), or 457(f) of Title 26 of the United States Code when the cost is covered by an employer and is not deducted from the members salary.
(6)Fringe benefits provided by an employer.
(7)Expenses paid or reimbursed by an employer.
(8)Severance pay, including lump-sum and installment payments, or money paid in excess of salary or wages to a member as compensatory damages or as a compromise settlement.
(9)Any other payments the board determines not to be creditable compensation.
(d)An employer or individual who knowingly or willfully reports compensation in a manner inconsistent with subdivision (a) or (c) may be subject to prosecution for fraud, theft, or embezzlement in accordance with the Penal Code. The system may establish procedures to ensure that compensation reported by an employer is in compliance with this section.
(e)For purposes of this section, remuneration shall be considered paid if distributed to any person in the same class of employees who meets the qualifications or requirements specified in a publicly available written contractual agreement, including, but not limited to, a collective bargaining agreement or an employment agreement, as a condition of receiving the remuneration.
(f)This definition of creditable compensation reflects sound principles that support the integrity of the retirement fund. Those principles include, but are not limited to, consistent treatment of compensation throughout a members career, consistent treatment of compensation among an entire class of employees, consistent treatment of compensation for the position, preventing adverse selection, and excluding from compensation earnable remuneration that is paid to enhance a members benefits. The system shall determine the appropriate crediting of contributions between the Defined Benefit Program and the Defined Benefit Supplement Program according to these principles, to the extent not otherwise specified pursuant to this part.
(g)The section shall become operative on July 1, 2002.
(h)This section shall not apply to a member subject to the California Public Employees Pension Reform Act of 2013.
SEC. 2.Section 22119.3 of the Education Code is amended to read:22119.3.(a)Creditable compensation for members who are subject to the California Public Employees Pension Reform Act of 2013 means remuneration that is paid each pay period in which creditable service is performed for that position. Creditable compensation shall be paid in cash by an employer to all persons in the same class of employees in accordance with a publicly available written contractual agreement, including, but not limited to, a salary schedule or employment agreement. Creditable compensation shall include:
(1)Remuneration that is paid for the use of sick leave, vacation, and other employer-approved leave, except as provided in paragraph (4) of subdivision (b).
(2)Member contributions that are picked up by an employer pursuant to Section 22903 or 22904.
(3)Amounts that are deducted from a members remuneration, including, but not limited to, deductions for participation in a deferred compensation plan; deductions to purchase an annuity contract, tax-deferred retirement plan, or insurance program; and contributions to a plan that meets the requirements of Section 125, 401(a), 401(k), 403(b), 457(b), or 457(f) of Title 26 of the United States Code.
(4)Notwithstanding paragraphs (6) and (8) of subdivision (c) of Section 7522.34 of the Government Code, remuneration that is paid for creditable service that exceeds one year in a school year.
(b)Creditable compensation does not mean and shall not include:
(1)Remuneration that is not paid in cash or is not paid to all persons who are in the same class of employees.
(2)Remuneration that is paid for service that is not creditable service pursuant to Section 22119.5. 22119.5 or 22119.6.
(3)Remuneration that is not paid each pay period in which creditable service is performed for that position.
(4)Remuneration that is paid in exchange for the relinquishment of unused accumulated leave.
(5)Payments, including, but not limited to, those for participation in a deferred compensation plan; to purchase an annuity contract, tax-deferred retirement plan, or insurance program; and for contributions to a plan that meets the requirements of Section 125, 401(a), 401(k), 403(b), 457(b), or 457(f) of Title 26 of the United States Code when the cost is covered by an employer.
(6)Fringe benefits provided by an employer.
(7)Expenses paid or reimbursed by an employer.
(8)Severance pay, including lump sum and installment payments, or money paid in excess of salary or wages to a member as compensatory damages or as a compromise settlement.
(9)Creditable compensation determined by the system to have been paid to enhance a members benefit.
(10)Compensation paid to the member in lieu of benefits provided to the member by the employer or paid directly by the employer to a third party other than the system for the benefit of the member.
(11)Any one-time or ad hoc payments made to a member.
(12)Any employer-provided allowance, reimbursement, or payment, including, but not limited to, one made for housing, vehicle, or uniform.
(13)Any bonus paid in addition to compensation described in subdivision (a).
(14)Any other payments the board determines not to be creditable compensation.
(c)(1)Except for purposes of calculating credited service in the Defined Benefit Program and for reporting compensation earnable on or after January 1, 2013, creditable compensation in any fiscal year shall not exceed:
(A)One hundred twenty percent of the contribution and benefit base, as determined under Section 430(b) of the Social Security Act (42 U.S.C. Sec. 430(b)), on January 1, 2013, for a member whose service is not included in the federal system.
(B)One hundred percent of the contribution and benefit base, as determined under Section 430(b) of the Social Security Act (42 U.S.C. Sec. 430(b)), on January 1, 2013, for a member whose service is included in the federal system pursuant to any changes in state or federal law enacted on or after January 1, 2013.
(2)The system shall adjust the limit based on the annual changes to the Consumer Price Index for All Urban Consumers: U.S. City Average, calculated by dividing the Consumer Price Index for All Urban Consumers: U.S. City Average for the month of February in the fiscal year preceding the adjustment by the Consumer Price Index for All Urban Consumers: U.S. City Average for the month of February of the previous year rounded to the nearest thousandth. Notwithstanding paragraph (1) of subdivision (d) of Section 7522.10 of the Government Code, the adjustment shall be effective annually on July 1, beginning July 1, 2014.
(3)The Legislature reserves the right to modify the requirements of this subdivision with regard to all members subject to this subdivision, except that the Legislature may not modify these provisions in a manner that would result in a decrease in benefits accrued prior to the effective date of the modification.
(4)This subdivision shall apply to compensation paid during the 201314 fiscal year and each fiscal year thereafter.
(d)An employer or individual who knowingly or willfully reports compensation in a manner inconsistent with subdivision (a) or (b) may be subject to prosecution for fraud, theft, or embezzlement in accordance with the Penal Code. The system may establish procedures to ensure that compensation reported by an employer is in compliance with this section.
(e)For purposes of this section, remuneration shall be considered paid if distributed to any person in the same class of employees who meets the qualifications or requirements specified in a publicly available written contractual agreement, including, but not limited to, a collective bargaining agreement or an employment agreement, as a condition of receiving the remuneration.
(f)This definition of creditable compensation reflects sound principles that support the integrity of the retirement fund. Those principles include, but are not limited to, consistent treatment of compensation throughout a members career, consistent treatment of compensation among an entire class of employees, consistent treatment of compensation for the position, preventing adverse selection, and excluding from creditable compensation remuneration that is paid to enhance a members benefits. The system shall determine the appropriate crediting of contributions according to these principles, to the extent not otherwise specified pursuant to this part. A presumption by the system that creditable compensation was paid to enhance the members benefits may be rebutted by the member or by the employer on behalf of the member. Upon receipt of sufficient evidence to the contrary, a presumption by the system that creditable compensation was paid to enhance the members benefits may be reversed.
SEC. 3.Section 22119.5 of the Education Code is amended to read:22119.5.(a)Creditable service means any of the following activities performed for an employer in a position requiring a credential, certificate, or permit pursuant to this code, or under the appropriate minimum standards adopted by the Board of Governors of the California Community Colleges, or under the provisions of an approved charter for the operation of a charter school for which the charter school is eligible to receive state apportionment, or pursuant to a contract between a community college district and the United States Department of Defense to provide vocational training: activities described in subdivision (b) performed for any of the following employers:
(1)Prekindergarten through grade 12 employer in a position requiring certification qualifications as designated in regulations adopted by the Commission on Teacher Credentialing pursuant to Section 44001.
(2)Community college employer by a faculty member, as defined in Section 87003, in an academic position, as defined in Section 87002, subject to the appropriate minimum standards adopted by the Board of Governors of the California Community Colleges pursuant to Section 87356, or pursuant to a contract between a community college district and the United States Department of Defense to provide vocational training.
(3)Charter school employer under the provisions of an approved charter for the operation of a charter school for which the charter school is eligible to receive state apportionment.
(b)The types of activities are any of the following:
(1)The work of teachers, instructors, district interns, and academic employees employed in the instructional program for pupils, including special programs such as adult education, regional occupation programs, child care centers, and prekindergarten programs pursuant to Section 22161.
(2)Education or vocational counseling, guidance, and placement services.
(3)The work of directors, coordinators, and assistant administrators employees who plan courses of study to be used in California public schools, or research connected with the evaluation or efficiency of the instructional program.
(4)The selection, collection, preparation, classification, demonstration, or evaluation of instructional materials of any course of study for use in the development of the instructional program in California public schools, or other services related to California public school curriculum.
(5)The examination, selection, in-service training, mentoring, or assignment of teachers, principals, or other similar personnel involved in the instructional program.
(6)School activities related to, and an outgrowth of, the instructional and guidance program of the school when performed in addition to other activities described in this section.
(7)
(6)The work of nurses, physicians, speech therapists, psychologists, audiometrists, audiologists, and other California public school health professionals.
(8)
(7)Services as a California public school librarian.
(8)Activities connected with the enforcement of the laws relating to compulsory education, coordination of child welfare activities involving the school and the home, and the school adjustment of pupils.
(9)The work of employees who are responsible for the supervision of persons or administration of the duties described in this section. subdivision.
(b)
(c)Creditable service also means the work of superintendents of California public schools. schools, and presidents and chancellors of community college employers.
(d)Creditable service also means the performance of California public school activities relating to, and an outgrowth of, the instructional and guidance program of the California public school if performed in addition to any of the activities described in subdivision (b) or (c).
(e)(1)All of the activities performed in a position shall be deemed creditable service if the employer requires one or more of the activities described in subdivision (b) or (c) to be performed in that position for more than 50 percent of the time, as established pursuant to Section 22138.5, for a class of employees performing just those activities described in subdivision (b).
(2)This subdivision shall not apply to a person who performs creditable service for fewer days or hours than the employer requires for full time as established pursuant to Section 22138.5.
(3)All of the activities performed in a position with service that has been deemed creditable pursuant to paragraph (1) shall be subject to coverage under the Defined Benefit Program until the member performing the activities becomes employed by the same or a different employer in a different position at which time an election may be made under Section 22508.
(c)
(f)The board shall have final authority for determining creditable service to cover any activities not already specified.
SEC. 4.Section 22119.6 is added to the Education Code, to read:22119.6.(a)Creditable service shall also include any activities that do not meet the definition of creditable service under Section 22119.5, but were performed for any employer, as defined in Section 22131, on or before December 31, 2015, and were reported as creditable service to the system.
(b)The type of activities described in subdivision (a) performed by a member who becomes employed by the same or a different employer in a new position on or after January 1, 2016, shall be subject to Section 22119.5.
SEC. 5.Section 22146 of the Education Code is amended to read:22146.Member means any person, unless excluded under other provisions of this part, who has performed creditable service as defined in Section 22119.5 or 22119.6 and has earned creditable compensation for that service and has not received a refund for that service and, as a result, is subject to the Defined Benefit Program. A members rights and obligations under this part with respect to the Defined Benefit Program shall be determined by the applicability of subdivision (a), (b), (c), or (d), and subject to any applicable exceptions under other provisions of this part.
(a)An active member is a member who is not retired or disabled and who earns creditable compensation during the school year.
(b)An inactive member is a member who is not retired or disabled and who has not earned creditable compensation during the current or preceding school year.
(c)A disabled member is a member to whom a disability allowance is payable under Chapter 25 (commencing with Section 24001).
(d)A retired member is a member who has terminated employment and has retired for service under the provisions of Chapter 27 (commencing with Section 24201), or has retired for disability under the provisions of Chapter 26 (commencing with Section 24100) or retired for service or disability under the provisions of Chapter 21 (commencing with Section 23400), and to whom a retirement allowance is therefore payable.
SEC. 6.Section 22164.5 of the Education Code is amended to read:22164.5.(a)Retired member activities means one or more activities identified in subdivision (a) or (b) (b), (c), or (d) of Section 22119.5 or subdivision (a) or (b) (b), (c), or (d) of Section 26113 within the California public school system and performed by a member retired for service under this part as one of the following:
(1)An employee of an employer.
(2)An employee of a third party, except as specified in subdivision (b).
(3)An independent contractor.
(b)The activities of an employee of a third party shall not be included in the definition of retired member activities if all of the following conditions apply:
(1)The employee performs an assignment of 24 months or less.
(2)The third-party employer does not participate in a California public pension system.
(3)The activities performed by the individual are not normally performed by employees of an employer, as defined in Section 22131.
SEC. 7.Section 22458.3 is added to the Education Code, to read:22458.3.Upon request from the system, each employer shall provide the system with information regarding the percentage of time that creditable service activities, as described in paragraph (1) of subdivision (e) of Section 22119.5, are performed in a position.
SEC. 8.Section 22458.5 is added to the Education Code, to read:22458.5.Upon request from the system, each employer shall provide the system with information regarding the certification qualifications, minimum standards, or provisions of an approved charter for the operation of a charter school required to perform creditable service pursuant to subdivision (a) of Section 22119.5, in a position.
SEC. 9.Section 22508.7 is added to the Education Code, to read:22508.7.(a)This section shall apply to service deemed creditable service pursuant to subdivision (a) of Section 22119.6 and a person who performs that service.
(b)(1)A member, including a member who retires on or before December 31, 2015, may elect to have all of that service subject to coverage by a different public retirement system and excluded from coverage by the Defined Benefit Program, if the member is not excluded from coverage by that public retirement system.
(2)If an election is made pursuant to this subdivision, all of the following shall apply:
(A)All service that was subject to coverage by the Defined Benefit Program shall be subject to coverage by the other public retirement system, if the member is not excluded from coverage by that public retirement system.
(B)Any member contributions and credited interest, as determined by the system, and employer contributions, less any amounts previously paid to the person, shall be returned to the employer for that service, with the system recovering from the person any amounts that were paid to the person and not recovered from withheld member contributions, credited interest, or employer contributions.
(C)Any amounts not recovered pursuant to subparagraph (B) shall be paid in full by the member before his or her service can be subject to coverage by the other public retirement system.
(3)If an election is made pursuant to this subdivision, the following shall apply:
(A)A member not subject to the California Public Employees Pension Reform Act of 2013 in the Defined Benefit Program shall not be subject to that act in the other public retirement system.
(B)A member subject to the California Public Employees Pension Reform Act of 2013 in the Defined Benefit Program shall be subject to that act in the other public retirement system.
(4)If an election is not made pursuant to this subdivision, all service performed shall continue to be subject to coverage by the Defined Benefit Program until the member becomes employed pursuant to subdivision (b) of Section 22119.6.
(c)(1)A person who had service removed from the system and reported to a different public retirement system, as directed by the system, including a person who received a benefit on or before December 31, 2015, may elect to have all of that service and subsequent service in the same position subject to coverage by the Defined Benefit Program and excluded from coverage by the other public retirement system.
(2)If an election is made pursuant to this subdivision, all of the following shall apply:
(A)All of that service and subsequent service in the same position that was subject to coverage by the other public retirement system shall be subject to coverage by the Defined Benefit Program and reported to the system pursuant to Chapter 17 (commencing with Section 23000).
(B)Any employee and employer contributions for that service and subsequent service in the same position shall be remitted to the system pursuant to Chapter 17 (commencing with Section 23000).
(3)If an election is made pursuant to this subdivision, the following shall apply:
(A)A person not subject to the California Public Employees Pension Reform Act of 2013 in the other public retirement system shall not be subject to that act in the Defined Benefit Program.
(B)A person subject to the California Public Employees Pension Reform Act of 2013 in the other public retirement system shall be subject to that act in the Defined Benefit Program.
(4)If an election is not made pursuant to this subdivision, all service performed will continue to be subject to coverage by the other public retirement system.
(d)The election shall be made in writing and filed with the office of the system on a form prescribed by the system on or before June 30, 2016, and a copy of the election shall be filed with the other public retirement system.
(e)Only a person who has performed service creditable under subdivision (a) of Section 22119.6 can make an election under this section.
(f)An election made pursuant to this section shall be irrevocable.
(g)The board shall be under no obligation to identify, locate, or notify a person who has performed service creditable pursuant to subdivision (a) of Section 22119.6 and is eligible to make an election pursuant to this section.
SEC. 10.Section 26113 of the Education Code is amended to read:26113.(a)Creditable service means any of the following activities performed for an employer in a position requiring a credential, certificate, or permit pursuant to this code, or under the appropriate minimum standards adopted by the Board of Governors of the California Community Colleges, or under the provisions of an approved charter for the operation of a charter school for which the charter school is eligible to receive state apportionment, or pursuant to a contract between a community college district and the United States Department of Defense to provide vocational training: activities described in subdivision (b) performed for any of the following employers:
(1)Prekindergarten through grade 12 employer in a position requiring certification qualifications as designated in regulations adopted by the Commission on Teacher Credentialing pursuant to Section 44001.
(2)Community college employer by a faculty member, as defined in Section 87003, in an academic position, as defined in subdivision (b) of Section 87001, or by an educational administrator, as defined in subdivision (b) of Section 87002, subject to the appropriate minimum standards adopted by the Board of Governors of the California Community Colleges pursuant to Section 87356, or pursuant to a contract between a community college district and the United States Department of Defense to provide vocational training.
(3)Charter school employer under the provisions of an approved charter for the operation of a charter school for which the charter school is eligible to receive state apportionment.
(b)The types of activities are any of the following:
(1)The work of teachers, instructors, district interns, and academic employees employed in the instructional program for pupils, including special programs such as adult education, regional occupational programs, child care centers, and prekindergarten programs pursuant to Section 22161.
(2)Education or vocational counseling, guidance, and placement services.
(3)The work of directors, coordinators, and assistant administrators employees who plan courses of study to be used in California public schools, or research connected with the evaluation or efficiency of the instructional program.
(4)The selection, collection, preparation, classification, demonstration, or evaluation of instructional materials of any course of study for use in the development of the instructional program in California public schools, or other services related to California public school curriculum.
(5)The examination, selection, in-service training, mentoring, or assignment of teachers, principals, or other similar personnel involved in the instructional program.
(6)School activities related to, and an outgrowth of, the instructional and guidance program of the school when performed in addition to other activities described in this section.
(7)
(6)The work of nurses, physicians, speech therapists, psychologists, audiometrists, audiologists, and other California public school health professionals.
(8)
(7)Services as a California public school librarian.
(8)Activities connected with the enforcement of the laws relating to compulsory education, coordination of child welfare activities involving the school and the home, and the school adjustment of pupils.
(9)The work of county and district superintendents and other employees who are responsible for the supervision of persons or administration of the duties described in this section. subdivision.
(10)Trustee service as described in Section 26403.
(b)
(c)Creditable service also means the work of superintendents of California public schools. schools, and presidents and chancellors of community college employers.
(d)Creditable service also means the performance of California public school activities related to, and an outgrowth of, the instructional and guidance program of the California public school when performed in addition to any of the activities described in subdivision (b) or (c).
(c)
(e)The board shall have final authority for determining creditable service to cover activities not already specified.
SEC. 11.Section 26135.7 of the Education Code is amended to read:26135.7.(a)Retired participant activities means one or more activities identified in subdivision (a) or (b) (b), (c), or (d) of Section 22119.5 or (a) or (b) (b), (c), or (d) of Section 26113 within the California public school system and performed by a participant retired for service under this part as one of the following:
(1)An employee of an employer.
(2)An employee of a third party, except as specified in subdivision (b).
(3)An independent contractor.
(b)The activities of an employee of a third party shall not be included in the definition of retired participant activities if all of the following conditions apply:
(1)The employee performs an assignment of 24 months or less.
(2)The third-party employer does not participate in a California public pension system.
(3)The activities performed by the individual are not normally performed by employees of an employer, as defined in Section 22131.
|
Date
|
Status
|
|---|---|
| Sep 2, 2015 | Read third time. Passed. Ordered to the Assembly. (Ayes 40. Noes 0. Page 2409.). |
| Aug 18, 2015 | From committee: Do pass. (Ayes 7. Noes 0.) (August 17). |
| Aug 19, 2015 | Read second time. Ordered to third reading. |
| Aug 26, 2015 | Ordered to special consent calendar. |
| Aug 27, 2015 | Ordered to third reading. |
| Aug 31, 2015 | Read third time and amended. Ordered to second reading. |
| Sep 1, 2015 | Read second time. Ordered to third reading. |
| Sep 2, 2015 | In Assembly. Concurrence in Senate amendments pending. May be considered on or after September 4 pursuant to Assembly Rule 77. |
| Sep 2, 2015 | Read third time. Passed. Ordered to the Assembly. |
| Jul 16, 2015 | From committee chair, with author's amendments: Amend, and re-refer to committee. Read second time, amended, and re-referred to Com. on APPR. |
| Sep 3, 2015 | Assembly Rule 77 suspended. |
| Sep 3, 2015 | Assembly Rule 77 suspended. (Page 2859.) |
| Sep 3, 2015 | Senate amendments concurred in. To Engrossing and Enrolling. (Ayes 78. Noes 0. Page 2861.). |
| Sep 3, 2015 | Senate amendments concurred in. To Engrossing and Enrolling. (Ayes 78. Noes 0.). |
| Sep 16, 2015 | Enrolled and presented to the Governor at 4 p.m. |
| Oct 11, 2015 | Approved by the Governor. |
| Oct 11, 2015 | Chaptered by Secretary of State - Chapter 782, Statutes of 2015. |
| Feb 26, 2015 | Read first time. To print. |
| Jul 14, 2015 | From committee: Do pass and re-refer to Com. on APPR. (Ayes 5. Noes 0.) (July 13). Re-referred to Com. on APPR. |
| Jul 1, 2015 | 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. |
| May 27, 2015 | 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. |
| May 21, 2015 | Referred to Com. on P.E. & R. |
| May 7, 2015 | Read third time. Passed. Ordered to the Senate. (Ayes 77. Noes 0. Page 1349.) |
| May 7, 2015 | Read third time. Passed. Ordered to the Senate. |
| May 7, 2015 | In Senate. Read first time. To Com. on RLS. for assignment. |
| Apr 30, 2015 | Read second time. Ordered to Consent Calendar. |
| Apr 29, 2015 | From committee: Do pass. To Consent Calendar. (Ayes 17. Noes 0.) (April 29). |
| Apr 22, 2015 | From committee: Do pass and re-refer to Com. on APPR. with recommendation: To Consent Calendar. (Ayes 7. Noes 0.) (April 22). Re-referred to Com. on APPR. |
| Apr 6, 2015 | In committee: Hearing postponed by committee. |
| Mar 25, 2015 | Re-referred to Com. on P.E., R., & S.S. |
| Mar 24, 2015 | From committee chair, with author's amendments: Amend, and re-refer to Com. on P.E., R., & S.S. Read second time and amended. |
| Mar 16, 2015 | Referred to Com. on P.E., R., & S.S. |
| Feb 27, 2015 | From printer. May be heard in committee March 29. |
|
Date
|
Description
|
Location
|
Votes
|
|
|---|---|---|---|---|
| Sep 3, 2015 | AB 963 BONILLA Concurrence in Senate Amendments | Assembly Floor |
Passed |
|
| Sep 2, 2015 | Assembly 3rd Reading AB963 Bonilla By Pan | Senate Floor |
Passed |
|
| Aug 17, 2015 | Do pass | Senate Standing Committee on Appropriations |
Passed |
|
| Jul 13, 2015 | Do pass, but first be re-referred to the Committee on [Appropriations] | Senate Standing Committee on Public Employment and Retirement |
Passed |
|
| May 7, 2015 | AB 963 BONILLA Consent Calendar Second Day Regular Session | Assembly Floor |
Passed |
|
| Apr 29, 2015 | Do pass. To Consent Calendar. | Assembly Standing Committee on Appropriations |
Passed |
|
| Apr 22, 2015 | 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
|
|---|---|---|
| 2 Individual Letters | ** Support | Aug 17, 2015 |
| Alliance of Schools for Cooperative Insurance Programs | ** Support | Sep 2, 2015 |
| Association Of California Community College Administrators | ** Support | Sep 2, 2015 |
| Association Of California School Administrators | ** Support | Sep 2, 2015 |
| Association of Chief Business Officials | ** Support | Aug 17, 2015 |
| Association of Chief Human Resources Officers | ** Support | Sep 2, 2015 |
| Association of the California Community College Administrators | * Support | Aug 17, 2015 |
| California Association Of School Business Officials | ** Support | Sep 2, 2015 |
| California Retired Teachers Association | ** Support | Sep 2, 2015 |
| California School Boards Association | ** Support | Sep 2, 2015 |
| California State Teacher's Retirement System | ** Support | Sep 2, 2015 |
| California Teachers Association | ** Support | Sep 2, 2015 |
| Community College League of California | ** Support | Sep 2, 2015 |
| Equal Employment | ** Support | Sep 2, 2015 |
| Foothill-De Anza Community College District | ** Support | Sep 2, 2015 |
| Los Angeles Community College District | ** Support | Sep 2, 2015 |
| Los Rios Community College District | ** Support | Sep 2, 2015 |
| Mccallum Group, Inc. | * Support | Aug 17, 2015 |
| North Orange County Community College District | ** Support | Sep 2, 2015 |
| Officers | ** Support | Sep 2, 2015 |
| Rancho Santiago Community College District | ** Support | Sep 2, 2015 |
| Riverside Community College District | ** Support | Sep 2, 2015 |
| Riverside County Superintendent of Schools | ** Support | Sep 2, 2015 |
| Santa Clarita Community College District | ** Support | Sep 2, 2015 |
| School Employers Association Of California | ** Support | Sep 2, 2015 |
| Schools Excess Liability Fund | ** Support | Sep 2, 2015 |
| Shasta-Tehama-Trinity Joint Community College District | ** Support | Sep 2, 2015 |
| Siskiyou Joint Community College District | ** Support | Sep 2, 2015 |
| South Orange County Community College District | ** Support | Sep 2, 2015 |
| Statewide Association of Community Colleges | ** Support | Sep 2, 2015 |
| West Kern Community College District | ** Support | Sep 2, 2015 |
AB 963
Page 3
CONCURRENCE IN SENATE AMENDMENTS
AB 963
(Bonilla)
As Amended August 31, 2015
Majority vote
ASSEMBLY: |
77-0 |
(May 7, 2015) |
SENATE: |
40-0 |
(September 2, 2015) |
Original Committee Reference: P.E., R., & S.S.
SUMMARY: Clarifies the definition of service that can be reported to the California State Teachers' Retirement System (CalSTRS) and remedies membership issues for individuals in classified positions who were erroneously reported to CalSTRS. This bill also revises the definition of "compensation earnable" for outgrowth activities. Specifically, this bill:
Reorganizes the definition of "creditable service" and creditable service "activities" in the Defined Benefit (DB) and Cash Balance (CB) Benefit programs to clarify the certification qualifications, minimum standards and other requirements that need to be met in order to perform creditable service for prekindergarten through grade 12, community colleges, and charter school employers.
Specifies that activities connected with the enforcement of laws relating to compulsory education and child welfare activities, and mentoring, including program support advisors and coaches working in teacher and administrator preparation programs, as specified, are creditable in CalSTRS.
Clarifies that a prekindergarten through grade 12 employer may include the state.
Clarifies that outgrowth activities do not require a credential and are only creditable when they are performed for the same employer for which the member is performing creditable service.
Specifies that the work of community college presidents and chancellors is creditable service along with the work of superintendents currently in statute if the work is listed as a creditable activity.
Ensures that the work of consulting teachers participating in the Peer Assistance and Review Program for Teachers is considered creditable service if that work is listed as a creditable activity.
Allows individuals performing service in a partial certificated full-time position (e.g., a superintendent who also acts as a budget director) on a part-time basis to have their service entirely creditable in CalSTRS.
Provides that the service of individuals whose employers have erroneously reported their service to CalSTRS is creditable to the DB Program if the service was performed on or before December 31, 2015, and reported to CalSTRS as creditable service.
Requires employers, upon request from CalSTRS, to provide information regarding the requirements that need to be met in order to perform creditable service.
Allows individuals whose employers have erroneously reported their service to CalSTRS, whose service is deemed creditable, including those who retired on or before December 31, 2015, to elect to have that service covered by a different public retirement system, as specified.
Specifies that if a CalSTRS member elects to have service moved to a different public retirement system, any member contributions, credited interest and employer contributions, less amounts already paid to the individual, shall be returned to the employer. Any amounts due to CalSTRS must be collected from the individual before he or she can be covered by another public retirement system.
Allows individuals who had service removed from CalSTRS and reported to a different public retirement system, at the direction of CalSTRS, including those receiving a benefit on or before December 31, 2015, to elect to have that service covered by the DB Program, as specified. Individuals making this election become CalSTRS members and have all rights of a member, including electing to stay in CalSTRS if he or she is hired into a position that requires membership in a different public retirement system as specified in current statute.
Provides that all individuals who make such an election as outlined above, maintain their current status pursuant to the California Public Employees' Pension Reform Act of 2013 (PEPRA).
Specifies that the election made by an individual who performs service deemed creditable, as specified, is irrevocable and must be made in writing on a form prescribed by CalSTRS on or before June 30, 2016, as specified.
Specifies that CalSTRS is under no obligation to identify, locate, or notify individuals who may have had service erroneously reported by their employers to CalSTRS.
Makes other technical and conforming changes and mirrors amendments also included in AB 991(Public Employees, Retirement and Social Security Committee), Chapter 123, Statutes of 2015, CalSTRS annual housekeeping bill.
The Senate amendments:
Clarify in the definition of "creditable service" that outgrowth activities are only creditable when performed for the same employer for which the member is performing creditable service.
Clarify that a prekindergarten through grade 12 employer includes the state.
Make clear that specified work that does not meet Commission on Teacher Credentialing certification qualifications or California Community Colleges Board of Governors minimum standards must be linked to creditable service activities.
Ensure the work of consulting teachers participating in the Peer Assistance and Review Program for Teachers is considered creditable service.
Delete the provision in the definition of "creditable service" allowing all activities performed in a full-time position to be deemed creditable service if more than 50% of the activities performed are creditable service.
Delete provisions allowing CalSTRS to ask employers to provide the percentage of time creditable service is performed in a position.
Incorporate technical amendments to avoid chaptering out issues with AB 991.
FISCAL EFFECT: According to the Senate Appropriations Committee, CalSTRS indicates that there would likely be a de minimis impact to the retirement fund because the full contributions for service were paid even though the service could not be credited under current law. CalSTRS anticipates one-time technology costs estimated at below $100,000 (non-General Fund). Other administration costs would be minor and absorbable.
COMMENTS: According to CalSTRS, "Existing law requires that employers report creditable service performed by employees based on a list of activities. However, the law is silent on how employers report partial certificated positions in which a person performs both creditable service and service not creditable to CalSTRS. Employees reported to CalSTRS must adhere to credentialing requirements adopted by the Commission on Teacher Credentialing, minimum standards adopted by the California Community Colleges Board of Governors or provisions required under an approved charter for the operation of a charter school. If a CalSTRS member is hired in a position that performs activities not creditable to CalSTRS, he or she can elect in writing within 60 days from the date of hire to stay in CalSTRS, as specified."
According to the author, "Some employers have erroneously reported service to CalSTRS due to confusion surrounding the definition of 'creditable service' in the Teachers' Retirement Law. Due to this perceived vagueness, individuals have been removed from CalSTRS or have had service incorrectly reported to a different public retirement system."
The sponsor, CalSTRS, concludes, "This bill ensures more effective and efficient administration of the retirement plan and helps alleviate confusion among employers on how to determine what service is creditable to CalSTRS."
Analysis Prepared by: Karon Green / P.E., R., & S.S. / (916) 319-3957 FN: 0001892
AB 963
Page 7
|
Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 |
THIRD READING
Bill No: AB 963
Amended: 8/31/15 in Senate
SENATE PUBLIC EMP. & RET. COMMITTEE: 5-0, 7/13/15
AYES: Pan, Morrell, Beall, Fuller, Hall
SENATE APPROPRIATIONS COMMITTEE: 7-0, 8/17/15
AYES: Lara, Bates, Beall, Hill, Leyva, Mendoza, Nielsen
ASSEMBLY FLOOR: 77-0, 5/7/15 (Consent) - See last page for vote
SUBJECT: Teachers’ Retirement Law
SOURCE: California State Teachers’ Retirement System
DIGEST: This bill clarifies the definition of service that can be reported to the California State Teachers' Retirement System (CalSTRS) and provides CalSTRS membership and creditable service for those in partial certificated positions. This bill also remedies membership issues for individuals in classified positions who were erroneously reported to CalSTRS by their employers.
Senate Floor Amendments of 8/31/15 eliminates an earlier amendment specifying the manner in which compensation earnable for the purpose of determining a retirement benefit is calculated for outgrowth activities performed by a member of CalSTRS, thus returning the statute to existing law.
ANALYSIS:
Existing law:
Establishes CalSTRS, which is the state retirement system for certificated educators of students from prekindergarten through community college level and specifies that employees reported to CalSTRS must adhere to certification or credentialing requirements, such as those adopted by the Commission on Teacher Credentialing, the minimum standards adopted by the California Community Colleges Board of Governors, or provisions required under an approved charter for the operation of charter schools, as specified.
Establishes, in CalSTRS, both a traditional defined benefit plan (DB) and a cash balance plan, known as the Defined Benefit Supplement Plan (DBS), which pays an annuity or a lump sum at retirement or separation based on the cash balance in the DBS at that time. In general, employer and member contributions for regular credited service are deposited in the DB and contributions on non-regular service (e.g., service beyond a full year for teaching overload classes) are deposited in the DBS.
Requires that school employers report “creditable service” to CalSTRS and defines which types of employment, or creditable service, may be attributable to the DB for purposes of determining a retirement allowance and which types may be attributable to the DBS. In addition to teachers, school counselors, health professionals, those who design curriculum and train teachers, superintendents, and other educational professionals may have their service credited in CalSTRS. The State is also a CalSTRS school employer because it administers teaching programs in the Department of Corrections and Rehabilitation and state schools for the deaf and blind.
Gives the CalSTRS board the final authority on how educational service not specifically identified in statute may or may not be credited in CalSTRS.
Defines which types of “creditable compensation” may be credited under the DB plan and which types of compensation may be credited under the DBS plan and gives CalSTRS final authority on whether to credit compensation to the DB or the DBS.
Requires that the service of non-certificated employees, such as clerical, maintenance, and law-enforcement staff, be reported and credited in the California Public Employees’ Retirement System (CalPERS), as specified.
Allows an individual whose service has been credited under CalSTRS, who then changes positions to perform service that would be credited under CalPERS, to elect to remain in CalSTRS, and vice versa, as specified.
This bill:
Reorganizes the definition of “creditable service” and creditable service “activities” in the DB and DBS Programs to clarify the certification qualifications, minimum standards and other requirements that need to be met in order to perform creditable service for prekindergarten through grade 12, community colleges, and charter school employers. Sections 22119.5, 26113
Specifies that activities connected with the enforcement of laws relating to compulsory education and child welfare activities, and mentoring, including program support advisors and coaches working in teacher and administrator preparation programs, as specified, are creditable in CalSTRS. Sections 22119.5, 26113
Clarifies that a prekindergarten through grade 12 employer may include the State. Sections 22119.5, 26113
Specifies that the work of community college presidents and chancellors is creditable service along with the work of superintendents currently in statute if the work is listed as a creditable activity. Sections 22119.5, 26113
Ensures that the work of consulting teachers participating in the Peer Assistance and Review Program for Teachers is considered creditable service if that work is listed as a creditable activity. Sections 22119.5, 26113
Clarifies that specified work that does not meet the Commission on Teacher Credentialing certification qualifications or the California Community Colleges Board of Governors minimum standards must be any of the creditable service activities listed in order to be creditable. Sections 22119.5, 26113
Clarifies that outgrowth activities do not require a credential and are only creditable when they are performed in addition to other creditable service. Sections 22119.5, 26113
Allows individuals performing service in a partial certificated full-time position (e.g., a superintendent who also acts as a budget director) on a part-time basis to have their service entirely creditable in CalSTRS. Sections 22119.5, 26113
Provides that the service of individuals whose employers have erroneously reported their service to CalSTRS is creditable to the DB Program if the service was performed on or before December 31, 2015, and reported to CalSTRS as creditable service. Section 22119.6
Requires employers, upon request from CalSTRS, to provide information regarding the requirements that need to be met in order to perform creditable service. Section 22458.5
Allows individuals whose employers have erroneously reported their service to CalSTRS, whose service is deemed creditable, including those who retired on or before December 31, 2015, to elect to have that service covered by a different public retirement system, as specified. Section 22508.7
Specifies that if a CalSTRS member elects to have service moved to a different public retirement system, any member contributions, credited interest and employer contributions, less amounts already paid to the individual, shall be returned to the employer. Any amounts due to CalSTRS shall be collected from the individual before he or she can be covered by another public retirement system. Section 22508.7
Allows individuals who had service removed from CalSTRS and reported to a different public retirement system, at the direction of CalSTRS, including those receiving a benefit on or before December 31, 2015, to elect to have that service covered by the DB Program, as specified. Individuals making this election become CalSTRS members and have all rights of a member, including electing to stay in CalSTRS if he or she is hired into a position that requires membership in a different public retirement system as specified in current statute. Section 22508.7
Provides that all individuals who make such an election as outlined above, maintain their current status pursuant to the California Public Employees’ Pension Reform Act of 2013 (PEPRA). Section 22508.7
Specifies that the election made by an individual who performs service deemed creditable, as specified, is irrevocable and must be made in writing on a form prescribed by CalSTRS on or before June 30, 2016, as specified. Section 22508.7
Specifies that CalSTRS is under no obligation to identify, locate, or notify individuals who may have had service erroneously reported by their employers to CalSTRS. Section 22508.7
Makes other technical and conforming changes and mirrors amendments also included in AB 991(Assembly Public Employees, Retirement and Social Security Committee, Chapter 123, Statutes of 2015), CalSTRS annual housekeeping bill. Sections 22119.2, 22119.322146, 22164.5, 26135.7
Comments
According to CalSTRS, among the activities listed as creditable service are school activities related to, and an outgrowth of, the instructional and guidance program of the school when they are performed in addition to other creditable service.
Employees reported to CalSTRS must adhere to credentialing requirements adopted by the Commission on Teacher Credentialing, minimum standards adopted by the California Community Colleges Board of Governors or provisions required under an approved charter for the operation of a charter school. The work of superintendents is excluded from these requirements. In addition, if a CalSTRS member is hired in a position to perform activities not creditable to CalSTRS, he or she can elect in writing within 60 days from the date of hire to stay in CalSTRS, as specified.
If CalSTRS discovers that an individual has not performed creditable service, the system requires employers to re-report that service to the appropriate retirement system, and contributions received would be returned to the employer. Employers and constituent groups claim that service is being misreported because the credential requirements are confusing, and some of the activities listed in the law are vague. Those groups recommend CalSTRS should, consequently, broaden the definition of “creditable service” to allow certain positions, which they believe are generally performing activities included in the definition of “creditable service,” to be reported to and accepted by the system.
Prior Legislation
SB 1220 (Torres, Chapter 755, Statutes of 2014) made various technical, conforming or minor changes to the Teachers’ Retirement Law to facilitate efficient administration of the State Teachers’ Retirement Plan, including specifying how to determine compensation earnable for outgrowth activities.
AB 1381 (Assembly Public Employees, Retirement and Social Security Committee, Chapter 559, Statutes of 2013) made various technical corrections and conforming changes that align the Teachers’ Retirement Law with the provisions of PEPRA, as enacted in AB 340 (Furutani).
AB 340 (Furutani, Chapter 296, Statutes of 2012) made various changes to the CalSTRS benefit structure that affect all CalSTRS members, including adding the definition of “retired member activities” for the DB Program.
AB 2700 (Lempert, Chapter 1021, Statutes of 2000) made all compensation for creditable service creditable to CalSTRS and credited member and employer contributions for service in excess of 1.000 years of service per school year to the DBS Program.
AB 948 (Gallegos, Chapter 394, Statutes of 1995) established definitions of various employment activities that are considered creditable service and provided that the earnings limitation on postretirement service is applied only to compensation earned from creditable service.
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No
According to the Senate Appropriations Committee, CalSTRS anticipates one-time technology costs estimated at below $100,000 (non General Fund). Other administration costs will be minor and absorbable.
California State Teachers’ Retirement System (source)
Alliance of Schools for Cooperative Insurance Programs
Association of California Community College Administrators
Association of California School Administrators
Association of Chief Human Resources Officers/Equal Employment Officers
California Association of School Business Officials
California Retired Teachers Association
California School Boards Association
California Teachers Association
Community College League of California
Foothill-De Anza Community College District
Los Angeles Community College District
Los Rios Community College District
North Orange County Community College District
Rancho Santiago Community College District
Riverside Community College District
Riverside County Superintendent of Schools
Santa Clarita Community College District
School Employers Association of California
Schools Excess Liability Fund
Shasta-Tehama-Trinity Joint Community College District
Siskiyou Joint Community College District
South Orange County Community College District
Statewide Association of Community Colleges
West Kern Community College District
Two individuals
None received
ARGUMENTS IN SUPPORT: CalSTRS states that some employers have erroneously reported service to CalSTRS due to confusion surrounding the definition of “creditable service” in the Teachers’ Retirement Law. Due to this perceived vagueness, individuals have been removed from CalSTRS or have had service incorrectly reported to a different public retirement system.
CalSTRS is sponsoring AB 963 to ensure more effective and efficient administration of the retirement plan and to help alleviate confusion among employers on how to determine what service is creditable to CalSTRS.
ASSEMBLY FLOOR: 77-0, 5/7/15
AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke, Calderon, Chang, 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, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Atkins
NO VOTE RECORDED: Campos, Roger Hernández, Steinorth
Prepared by: Pamela Schneider / P.E. & R. / (916) 651-1519
9/1/15 21:30:43
**** END ****
AB 963
Page 8
|
Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 |
THIRD READING
Bill No: AB 963
Amended: 7/16/15 in Senate
SENATE PUBLIC EMP. & RET. COMMITTEE: 5-0, 7/13/15
AYES: Pan, Morrell, Beall, Fuller, Hall
SENATE APPROPRIATIONS COMMITTEE: 7-0, 8/17/15
AYES: Lara, Bates, Beall, Hill, Leyva, Mendoza, Nielsen
ASSEMBLY FLOOR: 77-0, 5/7/15 (Consent) - See last page for vote
SUBJECT: Teachers’ Retirement Law
SOURCE: California State Teachers’ Retirement System
DIGEST: This bill clarifies the definition of service that can be reported to the California State Teachers' Retirement System (CalSTRS) and provides CalSTRS membership and creditable service for those in partial certificated positions. This bill also remedies membership issues for individuals in classified positions who were erroneously reported to CalSTRS by their employers and revises the definition of “compensation earnable” for outgrowth activities.
ANALYSIS:
Existing law:
Establishes CalSTRS, which is the state retirement system for certificated educators of students from prekindergarten through community college level and specifies that employees reported to CalSTRS must adhere to certification or credentialing requirements, such as those adopted by the Commission on Teacher Credentialing, the minimum standards adopted by the California Community Colleges Board of Governors, or provisions required under an approved charter for the operation of charter schools, as specified.
Establishes, in CalSTRS, both a traditional defined benefit plan (DB) and a cash balance plan, known as the Defined Benefit Supplement Plan (DBS), which pays an annuity or a lump sum at retirement or separation based on the cash balance in the DBS at that time. In general, employer and member contributions for regular credited service are deposited in the DB and contributions on non-regular service (e.g., service beyond a full year for teaching overload classes) are deposited in the DBS.
Requires that school employers report “creditable service” to CalSTRS and defines which types of employment, or creditable service, may be attributable to the DB for purposes of determining a retirement allowance and which types may be attributable to the DBS. In addition to teachers, school counselors, health professionals, those who design curriculum and train teachers, superintendents, and other educational professionals may have their service credited in CalSTRS. The State is also a CalSTRS school employer because it administers teaching programs in the Department of Corrections and Rehabilitation and state schools for the deaf and blind.
Gives the CalSTRS board the final authority on how educational service not specifically identified in statute may or may not be credited in CalSTRS.
Defines which types of “creditable compensation” may be credited under the DB plan and which types of compensation may be credited under the DBS plan and gives CalSTRS final authority on whether to credit compensation to the DB or the DBS.
Requires that compensation earnable for outgrowth activities be determined as if the creditable compensation is earned at the lowest pay rate for other creditable service activities that the member performs for the same employer during the same year.
Requires that the service of non-certificated employees, such as clerical, maintenance, and law-enforcement staff, be reported and credited in the California Public Employees’ Retirement System (CalPERS), as specified.
Allows an individual whose service has been credited under CalSTRS, who then changes positions to perform service that would be credited under CalPERS, to elect to remain in CalSTRS, and vice versa, as specified.
This bill:
Revises the definition of “compensation earnable” for “outgrowth activities” (i.e., the performance of public school activities relating to, and an outgrowth of, the instructional and guidance program of the school) to be an amount calculated annually by CalSTRS using the average compensation earnable by all active members during the fiscal year ending in the previous calendar year. Section 22115
Reorganizes the definition of “creditable service” and creditable service “activities” in the DB and DBS Programs to clarify the certification qualifications, minimum standards and other requirements that need to be met in order to perform creditable service for prekindergarten through grade 12, community colleges, and charter school employers. Sections 22119.5, 26113
Specifies that activities connected with the enforcement of laws relating to compulsory education and child welfare activities, and mentoring, including program support advisors and coaches working in teacher and administrator preparation programs, as specified, are creditable in CalSTRS. Sections 22119.5, 26113
Clarifies that a prekindergarten through grade 12 employer may include the State. Sections 22119.5, 26113
Specifies that the work of community college presidents and chancellors is creditable service along with the work of superintendents currently in statute if the work is listed as a creditable activity. Sections 22119.5, 26113
Ensures that the work of consulting teachers participating in the Peer Assistance and Review Program for Teachers is considered creditable service if that work is listed as a creditable activity. Sections 22119.5, 26113
Clarifies that specified work that does not meet the Commission on Teacher Credentialing certification qualifications or the California Community Colleges Board of Governors minimum standards must be any of the creditable service activities listed in order to be creditable. Sections 22119.5, 26113
Clarifies that outgrowth activities do not require a credential and are only creditable when they are performed in addition to other creditable service. Sections 22119.5, 26113
Allows individuals performing service in a partial certificated full-time position (e.g., a superintendent who also acts as a budget director) on a part-time basis to have their service entirely creditable in CalSTRS. Sections 22119.5, 26113
Provides that the service of individuals whose employers have erroneously reported their service to CalSTRS is creditable to the DB Program if the service was performed on or before December 31, 2015, and reported to CalSTRS as creditable service. Section 22119.6
Requires employers, upon request from CalSTRS, to provide information regarding the requirements that need to be met in order to perform creditable service. Section 22458.5
Allows individuals whose employers have erroneously reported their service to CalSTRS, whose service is deemed creditable, including those who retired on or before December 31, 2015, to elect to have that service covered by a different public retirement system, as specified. Section 22508.7
Specifies that if a CalSTRS member elects to have service moved to a different public retirement system, any member contributions, credited interest and employer contributions, less amounts already paid to the individual, shall be returned to the employer. Any amounts due to CalSTRS shall be collected from the individual before he or she can be covered by another public retirement system. Section 22508.7
Allows individuals who had service removed from CalSTRS and reported to a different public retirement system, at the direction of CalSTRS, including those receiving a benefit on or before December 31, 2015, to elect to have that service covered by the DB Program, as specified. Individuals making this election become CalSTRS members and have all rights of a member, including electing to stay in CalSTRS if he or she is hired into a position that requires membership in a different public retirement system as specified in current statute. Section 22508.7
Provides that all individuals who make such an election as outlined above, maintain their current status pursuant to the California Public Employees’ Pension Reform Act of 2013 (PEPRA). Section 22508.7
Specifies that the election made by an individual who performs service deemed creditable, as specified, is irrevocable and must be made in writing on a form prescribed by CalSTRS on or before June 30, 2016, as specified. Section 22508.7
Specifies that CalSTRS is under no obligation to identify, locate, or notify individuals who may have had service erroneously reported by their employers to CalSTRS. Section 22508.7
Makes other technical and conforming changes and mirrors amendments also included in AB 991(Assembly Public Employees, Retirement and Social Security Committee, Chapter 123, Statutes of 2015), CalSTRS annual housekeeping bill. Sections 22119.2, 22119.322146, 22164.5, 26135.7
Comments
According to CalSTRS, among the activities listed as creditable service are school activities related to, and an outgrowth of, the instructional and guidance program of the school when they are performed in addition to other creditable service. When reporting compensation earnable for outgrowth activities, employers have limited visibility of whether a member performed creditable service in prior months. For large population employers, this can create a huge manual workload each month. Additionally, while the employer may have been reporting the lowest pay rate accurately throughout the year, the employer would have to make reporting adjustments if a member takes a position with a lower pay rate later that year.
Employees reported to CalSTRS must adhere to credentialing requirements adopted by the Commission on Teacher Credentialing, minimum standards adopted by the California Community Colleges Board of Governors or provisions required under an approved charter for the operation of a charter school. The work of superintendents is excluded from these requirements. In addition, if a CalSTRS member is hired in a position to perform activities not creditable to CalSTRS, he or she can elect in writing within 60 days from the date of hire to stay in CalSTRS, as specified.
If CalSTRS discovers that an individual has not performed creditable service, the system requires employers to re-report that service to the appropriate retirement system, and contributions received would be returned to the employer. Employers and constituent groups claim that service is being misreported because the credential requirements are confusing, and some of the activities listed in the law are vague. Those groups recommend CalSTRS should, consequently, broaden the definition of “creditable service” to allow certain positions, which they believe are generally performing activities included in the definition of “creditable service,” to be reported to and accepted by the system.
Prior Legislation
SB 1220 (Torres, Chapter 755, Statutes of 2014) made various technical, conforming or minor changes to the Teachers’ Retirement Law to facilitate efficient administration of the State Teachers’ Retirement Plan, including specifying how to determine compensation earnable for outgrowth activities.
AB 1381 (Assembly Public Employees, Retirement and Social Security Committee, Chapter 559, Statutes of 2013) made various technical corrections and conforming changes that align the Teachers’ Retirement Law with the provisions of PEPRA, as enacted in AB 340 (Furutani).
AB 340 (Furutani, Chapter 296, Statutes of 2012) made various changes to the CalSTRS benefit structure that affect all CalSTRS members, including adding the definition of “retired member activities” for the DB Program.
AB 2700 (Lempert, Chapter 1021, Statutes of 2000) made all compensation for creditable service creditable to CalSTRS and credited member and employer contributions for service in excess of 1.000 years of service per school year to the DBS Program.
AB 948 (Gallegos, Chapter 394, Statutes of 1995) established definitions of various employment activities that are considered creditable service and provided that the earnings limitation on postretirement service is applied only to compensation earned from creditable service.
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No
According to the Senate Appropriations Committee, CalSTRS anticipates one-time technology costs estimated at below $100,000 (non General fund). Other administration costs will be minor and absorbable.
California State Teachers’ Retirement System (source)
Alliance of Schools for Cooperative Insurance Programs
Association of California Community College Administrators
Association of California School Administrators
Association of Chief Human Resources Officers/Equal Employment Officers
California Association of School Business Officials
California Retired Teachers Association
California School Boards Association
California Teachers Association
Community College League of California
Foothill-De Anza Community College District
Los Angeles Community College District
Los Rios Community College District
North Orange County Community College District
Rancho Santiago Community College District
Riverside Community College District
Riverside County Superintendent of Schools
Santa Clarita Community College District
School Employers Association of California
Schools Excess Liability Fund
Shasta-Tehama-Trinity Joint Community College District
Siskiyou Joint Community College District
South Orange County Community College District
Statewide Association of Community Colleges
West Kern Community College District
Two individuals
OPPOSITION: (Verified 8/18/15)
None received
ARGUMENTS IN SUPPORT: CalSTRS states that some employers have erroneously reported service to CalSTRS due to confusion surrounding the definition of “creditable service” in the Teachers’ Retirement Law. Due to this perceived vagueness, individuals have been removed from CalSTRS or have had service incorrectly reported to a different public retirement system. Additionally, CalSTRS has found that determining compensation earnable for outgrowth activities is administratively burdensome for employers.
CalSTRS is sponsoring AB 963 to ensure more effective and efficient administration of the retirement plan and to help alleviate confusion among employers on how to determine what service is creditable to CalSTRS.
ASSEMBLY FLOOR: 77-0, 5/7/15
AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke, Calderon, Chang, 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, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Atkins
NO VOTE RECORDED: Campos, Roger Hernández, Steinorth
Prepared by: Pamela Schneider / P.E. & R. / (916) 651-1519
8/19/15 20:34:27
**** END ****
AB 963 (Bonilla) Page 2 of 2
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
AB 963 (Bonilla) - Teachers’ Retirement Law
|
|
Version: July 16, 2015 |
Policy Vote: P.E. & R. 5 - 0 |
Urgency: No |
Mandate: No |
Hearing Date: August 17, 2015 |
Consultant: Robert Ingenito |
This bill does not meet the criteria for referral to the Suspense File.
Bill Summary:
AB 963 would (1) clarify the definition of service that can be reported to CalSTRS, (2) remedy membership issues for individuals in classified positions who were erroneously reported to CalSTRS, and (3) revise the definition of “compensation earnable” for outgrowth activities.
Fiscal Impact:
CalSTRS indicates that there would likely be a de minimis impact to the retirement fund because the full contributions for service were paid even though the service could not be credited under current law.
CalSTRS anticipates one-time technology costs estimated at below $100,000 (non General fund). Other administration costs would be minor and absorbable.
Background:
Current law requires that employers, including the State, report creditable service performed by employees based on specified activities. The State may have individuals performing creditable service at entities such as the School for the Deaf, the School for the Blind or the Department of Corrections and Rehabilitation. Among the activities listed as creditable service are school activities related to the instructional and guidance program of the school when they are performed. Compensation earnable for these activities is determined as if the creditable compensation is earned at the lowest pay rate for other creditable service activities that the member performs for the same employer during the same year.
Employees reported to CalSTRS must adhere to credentialing requirements adopted by the Commission on Teacher Credentialing, minimum standards adopted by the California Community Colleges Board of Governors or provisions required under an approved charter for the operation of a charter school. The work of superintendents is excluded from these requirements. In addition, if a CalSTRS member is hired in a position to perform activities not creditable to CalSTRS, he or she can elect in writing within 60 days from the date of hire to stay in CalSTRS, as specified.
Proposed Law:
This bill would, among other things, do the following:
Clarify and add criteria to the definition of “creditable service” to help with those who may have been erroneously reported to CalSTRS. Additionally, the bill would provide guidance for making an election for those who have been misreported.
Clarify that outgrowth activities do not require a credential and are only creditable when they are performed for the same employer for which the member is performing creditable service. The bill also revises the definition of “compensation earnable” for outgrowth activities to be an amount calculated annually by CalSTRS, as specified.
Specify that the work of community college presidents and chancellors is creditable service along with the work of superintendents currently in statute. Because certification qualifications are not established by the Commission on Teacher Credentialing, the work of consulting teachers participating in the Peer Assistance and Review Program for Teachers is also specifically included. The bill would clarify that these types of work, without commission- or board-specified certification qualifications or minimum standards, must be linked to creditable service activities.
Staff Comments:
Some employers have erroneously reported service to CalSTRS due to confusion surrounding the definition of “creditable service” in the Teachers’ Retirement Law. Consequently, individuals have been removed from CalSTRS or have had service incorrectly reported to a different public retirement system.
CalSTRS anticipates one-time technology costs estimated at below $100,000 with an effort that may take up to six months related to returning any contributions to the employer and assuming standard processes for reversing contribution lines. Allowing individuals erroneously reported to CalSTRS the option to stay in the system avoids the need to process re-reporting of service that was not creditable. Other administrative costs and anticipated increase in workload are absorbable.
-- END --
AB 963 (Bonilla) Page 8 of 8
SENATE COMMITTEE ON
PUBLIC EMPLOYMENT AND RETIREMENT
Dr. Richard Pan, Chair
2015 - 2016 Regular
Bill No: AB 963 Hearing Date: 7/13/15
Author: |
Bonilla |
||
Version: |
7/06/15 As amended |
||
Urgency: |
No |
Fiscal: |
Yes |
Consultant: |
Pamela Schneider |
||
Subject: Teachers’ Retirement Law
SOURCE: California State Teachers’ Retirement System
ASSEMBLY VOTES:
Assembly Floor: |
77 - 0 |
Assembly Appropriations Committee: |
17 - 0 |
Assembly Public Employees, Retirement/Soc Sec Committee: |
7 - 0 |
DIGEST: This bill clarifies the definition of service that can be reported to the California State Teachers' Retirement System (CalSTRS) and provides CalSTRS membership and creditable service for those in partial certificated positions. This bill also remedies membership issues for individuals in classified positions who were erroneously reported to CalSTRS by their employers and revises the definition of “compensation earnable” for outgrowth activities.
ANALYSIS:
Existing law:
Establishes CalSTRS, which is the state retirement system for certificated educators of students from prekindergarten through community college level and specifies that employees reported to CalSTRS must adhere to certification or credentialing requirements, such as those adopted by the Commission on Teacher Credentialing, the minimum standards adopted by the California Community Colleges Board of Governors, or provisions required under an approved charter for the operation of charter schools, as specified.
Establishes, in CalSTRS, both a traditional defined benefit plan (DB) and a cash balance plan, known as the Defined Benefit Supplement Plan (DBS), which pays an annuity or a lump sum at retirement or separation based on the cash balance in the DBS at that time. In general, employer and member contributions for regular credited service are deposited in the DB and contributions on non-regular service (e.g., service beyond a full year for teaching overload classes) are deposited in the DBS.
Requires that school employers report “creditable service” to CalSTRS and defines which types of employment, or creditable service, may be attributable to the DB for purposes of determining a retirement allowance and which types may be attributable to the DBS. In addition to teachers, school counselors, health professionals, those who design curriculum and train teachers, superintendents, and other educational professionals may have their service credited in CalSTRS. The State is also a CalSTRS school employer because it administers teaching programs in the Department of Corrections and Rehabilitation and state schools for the deaf and blind.
Gives the CalSTRS board the final authority on how educational service not specifically identified in statute may or may not be credited in CalSTRS.
Defines which types of “creditable compensation” may be credited under the DB plan and which types of compensation may be credited under the DBS plan and gives CalSTRS final authority on whether to credit compensation to the DB or the DBS.
Requires that compensation earnable for outgrowth activities be determined as if the creditable compensation is earned at the lowest pay rate for other creditable service activities that the member performs for the same employer during the same year.
Requires that the service of non-certificated employees, such as clerical, maintenance, and law-enforcement staff, be reported and credited in the California Public Employees’ Retirement System (CalPERS), as specified.
Allows an individual whose service has been credited under CalSTRS, who then changes positions to perform service that would be credited under CalPERS, to elect to remain in CalSTRS, and vice versa, as specified.
This bill:
Revises the definition of “compensation earnable” for “outgrowth activities” (i.e., the performance of public school activities relating to, and an outgrowth of, the instructional and guidance program of the school) to be an amount calculated annually by CalSTRS using the average compensation earnable by all active members during the fiscal year ending in the previous calendar year. Section 22115
Reorganizes the definition of “creditable service” and creditable service “activities” in the DB and DBS Programs to clarify the certification qualifications, minimum standards and other requirements that need to be met in order to perform creditable service for prekindergarten through grade 12, community colleges, and charter school employers. Sections 22119.5, 26113
Specifies that activities connected with the enforcement of laws relating to compulsory education and child welfare activities, and mentoring, including program support advisors and coaches working in teacher and administrator preparation programs, as specified, are creditable in CalSTRS. Sections 22119.5, 26113
Clarifies that a prekindergarten through grade 12 employer may include the State. Sections 22119.5, 26113
Specifies that the work of community college presidents and chancellors is creditable service along with the work of superintendents currently in statute if the work is listed as a creditable activity. Sections 22119.5, 26113
Ensures that the work of consulting teachers participating in the Peer Assistance and Review Program for Teachers is considered creditable service if that work is listed as a creditable activity. Sections 22119.5, 26113
Clarifies that specified work that does not meet the Commission on Teacher Credentialing certification qualifications or the California Community Colleges Board of Governors minimum standards must be any of the creditable service activities listed in order to be creditable. Sections 22119.5, 26113
Clarifies that outgrowth activities do not require a credential and are only creditable when they are performed in addition to other creditable service. Sections 22119.5, 26113
Allows individuals performing service in a partial certificated full-time position (e.g., a superintendent who also acts as a budget director) on a part-time basis to have their service entirely creditable in CalSTRS. Sections 22119.5, 26113
Specifies that all activities performed by an employee in a full-time position are deemed creditable service if more than 50% of the activities performed are creditable service. Individuals in such positions, performing service on either a part-time or full-time basis, would remain CalSTRS members until they become employed in a different position. Section 22119.5
Specifies that these individuals have the full rights of a CalSTRS member to elect to retain membership through the regular 60-day process as specified in current statute if, in the future, they perform creditable service for 50% or less of full time in a different position with the same or a new employer. Section 22119.5
Provides that the service of individuals whose employers have erroneously reported their service to CalSTRS is creditable to the DB Program if the service was performed on or before December 31, 2015, and reported to CalSTRS as creditable service. Section 22119.6
Requires employers, upon request from CalSTRS, to provide the percentage of time creditable service is performed in a position or information regarding the requirements that need to be met in order to perform creditable service. Sections 22458.3, 22458.5
Allows individuals whose employers have erroneously reported their service to CalSTRS, whose service is deemed creditable, including those who retired on or before December 31, 2015, to elect to have that service covered by a different public retirement system, as specified. Section 22508.7
Specifies that if a CalSTRS member elects to have service moved to a different public retirement system, any member contributions, credited interest and employer contributions, less amounts already paid to the individual, shall be returned to the employer. Any amounts due to CalSTRS shall be collected from the individual before he or she can be covered by another public retirement system. Section 22508.7
Allows individuals who had service removed from CalSTRS and reported to a different public retirement system, at the direction of CalSTRS, including those receiving a benefit on or before December 31, 2015, to elect to have that service covered by the DB Program, as specified. Individuals making this election become CalSTRS members and have all rights of a member, including electing to stay in CalSTRS if he or she is hired into a position that requires membership in a different public retirement system as specified in current statute. Section 22508.7
Provides that all individuals who make such an election as outlined above, maintain their current status pursuant to the California Public Employees’ Pension Reform Act of 2013 (PEPRA). Section 22508.7
Specifies that the election made by an individual who performs service deemed creditable, as specified, is irrevocable and must be made in writing on a form prescribed by CalSTRS on or before June 30, 2016, as specified. Section 22508.7
Specifies that CalSTRS is under no obligation to identify, locate, or notify individuals who may have had service erroneously reported by their employers to CalSTRS. Section 22508.7
Makes other technical and conforming changes and mirrors amendments also included in AB 991, CalSTRS annual housekeeping bill. Sections 22119.2, 22119.322146, 22164.5, 26135.7
Background
According to CalSTRS, among the activities listed as creditable service are school activities related to, and an outgrowth of, the instructional and guidance program of the school when they are performed in addition to other creditable service. When reporting a compensation earnable for outgrowth activities, employers have limited visibility of whether a member performed creditable service in prior months. For large population employers, this can create a huge manual workload each month. Additionally, while the employer may have been reporting the lowest pay rate accurately throughout the year, the employer would have to make reporting adjustments if a member takes a position with a lower pay rate later that year.
Employees reported to CalSTRS must adhere to credentialing requirements adopted by the Commission on Teacher Credentialing, minimum standards adopted by the California Community Colleges Board of Governors or provisions required under an approved charter for the operation of a charter school. The work of superintendents is excluded from these requirements. In addition, if a CalSTRS member is hired in a position to perform activities not creditable to CalSTRS, he or she can elect in writing within 60 days from the date of hire to stay in CalSTRS, as specified.
If CalSTRS discovers that an individual has not performed creditable service, the system requires employers to re-report that service to the appropriate retirement system, and contributions received would be returned to the employer. Employers and constituent groups claim that service is being misreported because the credential requirements are confusing, and some of the activities listed in the law are vague. Those groups recommend CalSTRS should, consequently, broaden the definition of “creditable service” to allow certain positions, which they believe are generally performing activities included in the definition of “creditable service,” to be reported to and accepted by the system.
Additionally, when documentation is reviewed for a partial certificated position, current law is not clear on how that entire position should be credited to CalSTRS or another public retirement system. Instead of an employee’s contributions going to one retirement system, an individual’s contributions may be split between multiple retirement systems, which slows service credit accrual in any one retirement system. Furthermore, the Education Code does not specify that 100 percent of the activities performed in a position must meet the definition of “creditable service.” Finally, the law is silent on how employers report partial certificated positions in which a person performs both creditable service and service not creditable to CalSTRS.
Prior/Related Legislation
SB 1220 (Torres, Chapter 755, Statutes of 2014) made various technical, conforming or minor changes to the Teachers’ Retirement Law to facilitate efficient administration of the State Teachers’ Retirement Plan, including specifying how to determine compensation earnable for outgrowth activities.
AB 1381 (Assembly Public Employees, Retirement and Social Security Committee, Chapter 559, Statutes of 2013) made various technical corrections and conforming changes that align the Teachers’ Retirement Law with the provisions of PEPRA, as enacted in AB 340 (Furutani).
AB 340 (Furutani, Chapter 296, Statutes of 2012) made various changes to the CalSTRS benefit structure that affect all CalSTRS members, including adding the definition of “retired member activities” for the DB Program.
AB 2700 (Lempert, Chapter 1021, Statutes of 2000) made all compensation for creditable service creditable to CalSTRS and credited member and employer contributions for service in excess of 1.000 years of service per school year to the Defined Benefit Supplement (DBS) Program.
AB 948 (Gallegos, Chapter 394, Statutes of 1995) established definitions of various employment activities that are considered creditable service and provided that the earnings limitation on postretirement service is applied only to compensation earned from creditable service.
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No
According to the Assembly Appropriations Committee, this bill will result in one-time Special Fund administrative costs of approximately $100,000 to update systems and processes. Additionally, it may create a potential de minimis impact to the Teachers Retirement Fund from any loss of contributions for service paid on service that was not creditable service.
SUPPORT:
California State Teachers’ Retirement System (source)
Alliance of Schools for Cooperative Insurance Programs
Association of California Community College Administrators
Association of California School Administrators
Association of Chief Human Resources Officers/Equal Employment Officers
California Association of School Business Officials
California Retired Teachers Association
California School Boards Association
California Teachers Association
Community College League of California
Foothill-De Anza Community College District
Los Angeles Community College District
Los Rios Community College District
North Orange County Community College District
Rancho Santiago Community College District
Riverside Community College District
Riverside County Superintendent of Schools
Santa Clarita Community College District
School Employers Association of California
Schools Excess Liability Fund
Shasta-Tehama-Trinity Joint Community College District
Siskiyou Joint Community College District
South Orange County Community College District
Statewide Association of Community Colleges
West Kern Community College District
2 Individual Letters
OPPOSITION:
None received
ARGUMENTS IN SUPPORT:
CalSTRS states that some employers have erroneously reported service to CalSTRS due to confusion surrounding the definition of “creditable service” in the Teachers’ Retirement Law. Due to this perceived vagueness, individuals have been removed from CalSTRS or have had service incorrectly reported to a different public retirement system. Additionally, CalSTRS has found that determining compensation earnable for outgrowth activities is administratively burdensome for employers.
CalSTRS is sponsoring AB 963 to ensure more effective and efficient administration of the retirement plan and to help alleviate confusion among employers on how to determine what service is creditable to CalSTRS.
AB 963 (Bonilla) Page 8 of 8
SENATE COMMITTEE ON
PUBLIC EMPLOYMENT AND RETIREMENT
Dr. Richard Pan, Chair
2015 - 2016 Regular
Bill No: AB 963 Hearing Date: 7/13/15
Author: |
Bonilla |
||
Version: |
5/27/15 As amended |
||
Urgency: |
No |
Fiscal: |
Yes |
Consultant: |
Pamela Schneider |
||
Subject: Teachers’ Retirement Law
SOURCE: California State Teachers’ Retirement System
ASSEMBLY VOTES:
Assembly Floor: |
77-0 |
Assembly Appropriations Committee: |
17-0 |
Assembly Public Employees, Retirement/Soc Sec Committee: |
7-0 |
DIGEST: This bill clarifies the definition of service that can be reported to the California State Teachers' Retirement System (CalSTRS) and provides CalSTRS membership and creditable service for those in partial certificated positions. This bill also remedies membership issues for individuals in classified positions who were erroneously reported to CalSTRS by their employers and revises the definition of “compensation earnable” for outgrowth activities.
ANALYSIS:
Existing law:
Establishes CalSTRS, which is the state retirement system for certificated educators of students from prekindergarten through community college level and specifies that employees reported to CalSTRS must adhere to certification or credentialing requirements, such as those adopted by the Commission on Teacher Credentialing, the minimum standards adopted by the California Community Colleges Board of Governors, or provisions required under an approved charter for the operation of charter schools, as specified.
Establishes, in CalSTRS, both a traditional defined benefit plan (DB) and a cash balance plan, known as the Defined Benefit Supplement Plan (DBS), which pays an annuity or a lump sum at retirement or separation based on the cash balance in the DBS at that time. In general, employer and member contributions for regular credited service are deposited in the DB and contributions on non-regular service (e.g., service beyond a full year for teaching overload classes) are deposited in the DBS.
Requires that school employers report “creditable service” to CalSTRS and defines which types of employment, or creditable service, may be attributable to the DB for purposes of determining a retirement allowance and which types may be attributable to the DBS. In addition to teachers, school counselors, health professionals, those who design curriculum and train teachers, superintendents, and other educational professionals may have their service credited in CalSTRS. The State is also a CalSTRS school employer because it administers teaching programs in the Department of Corrections and Rehabilitation and state schools for the deaf and blind.
Gives the CalSTRS board the final authority on how educational service not specifically identified in statute may or may not be credited in CalSTRS.
Defines which types of “creditable compensation” may be credited under the DB plan and which types of compensation may be credited under the DBS plan and gives CalSTRS final authority on whether to credit compensation to the DB or the DBS.
Requires that compensation earnable for outgrowth activities be determined as if the creditable compensation is earned at the lowest pay rate for other creditable service activities that the member performs for the same employer during the same year.
Requires that the service of non-certificated employees, such as clerical, maintenance, and law-enforcement staff, be reported and credited in the California Public Employees’ Retirement System (CalPERS), as specified.
Allows an individual whose service has been credited under CalSTRS, who then changes positions to perform service that would be credited under CalPERS, to elect to remain in CalSTRS, and vice versa, as specified.
This bill:
Revises the definition of “compensation earnable” for “outgrowth activities” (i.e., the performance of public school activities relating to, and an outgrowth of, the instructional and guidance program of the school) to be an amount calculated annually by CalSTRS using the average compensation earnable by all active members during the fiscal year ending in the previous calendar year. Section 22115
Reorganizes the definition of “creditable service” and creditable service “activities” in the DB and DBS Programs to clarify the certification qualifications, minimum standards and other requirements that need to be met in order to perform creditable service for prekindergarten through grade 12, community colleges, and charter school employers. Sections 22119.5, 26113
Specifies that activities connected with the enforcement of laws relating to compulsory education and child welfare activities, and mentoring, including program support advisors and coaches working in teacher and administrator preparation programs, as specified, are creditable in CalSTRS. Sections 22119.5, 26113
Clarifies that a prekindergarten through grade 12 employer may include the State. Sections 22119.5, 26113
Specifies that the work of community college presidents and chancellors is creditable service along with the work of superintendents currently in statute if the work is listed as a creditable activity. Sections 22119.5, 26113
Ensures that the work of consulting teachers participating in the Peer Assistance and Review Program for Teachers is considered creditable service if that work is listed as a creditable activity. Sections 22119.5, 26113
Clarifies that specified work that does not meet the Commission on Teacher Credentialing certification qualifications or the California Community Colleges Board of Governors minimum standards must be any of the creditable service activities listed in order to be creditable. Sections 22119.5, 26113
Clarifies that outgrowth activities do not require a credential and are only creditable when they are performed in addition to other creditable service. Sections 22119.5, 26113
Allows individuals performing service in a partial certificated full-time position (e.g., a superintendent who also acts as a budget director) on a part-time basis to have their service entirely creditable in CalSTRS. Sections 22119.5, 26113
Specifies that all activities performed by an employee in a full-time position are deemed creditable service if more than 50% of the activities performed are creditable service. Individuals in such positions, performing service on either a part-time or full-time basis, would remain CalSTRS members until they become employed in a different position. Section 22119.5
Specifies that these individuals have the full rights of a CalSTRS member to elect to retain membership through the regular 60-day process as specified in current statute if, in the future, they perform creditable service for 50% or less of full time in a different position with the same or a new employer. Section 22119.5
Provides that the service of individuals whose employers have erroneously reported their service to CalSTRS is creditable to the DB Program if the service was performed on or before December 31, 2015, and reported to CalSTRS as creditable service. Section 22119.6
Requires employers, upon request from CalSTRS, to provide the percentage of time creditable service is performed in a position or information regarding the requirements that need to be met in order to perform creditable service. Sections 22458.3, 22458.5
Allows individuals whose employers have erroneously reported their service to CalSTRS, whose service is deemed creditable, including those who retired on or before December 31, 2015, to elect to have that service covered by a different public retirement system, as specified. Section 22508.7
Specifies that if a CalSTRS member elects to have service moved to a different public retirement system, any member contributions, credited interest and employer contributions, less amounts already paid to the individual, shall be returned to the employer. Any amounts due to CalSTRS shall be collected from the individual before he or she can be covered by another public retirement system. Section 22508.7
Allows individuals who had service removed from CalSTRS and reported to a different public retirement system, at the direction of CalSTRS, including those receiving a benefit on or before December 31, 2015, to elect to have that service covered by the DB Program, as specified. Individuals making this election become CalSTRS members and have all rights of a member, including electing to stay in CalSTRS if he or she is hired into a position that requires membership in a different public retirement system as specified in current statute. Section 22508.7
Provides that all individuals who make such an election as outlined above, maintain their current status pursuant to the California Public Employees’ Pension Reform Act of 2013 (PEPRA). Section 22508.7
Specifies that the election made by an individual who performs service deemed creditable, as specified, is irrevocable and must be made in writing on a form prescribed by CalSTRS on or before June 30, 2016, as specified. Section 22508.7
Specifies that CalSTRS is under no obligation to identify, locate, or notify individuals who may have had service erroneously reported by their employers to CalSTRS. Section 22508.7
Makes other technical and conforming changes and mirrors amendments also included in AB 991, CalSTRS annual housekeeping bill. Sections 22119.2, 22119.322146, 22164.5, 26135.7
Background
According to CalSTRS, among the activities listed as creditable service are school activities related to, and an outgrowth of, the instructional and guidance program of the school when they are performed in addition to other creditable service. When reporting a compensation earnable for outgrowth activities, employers have limited visibility of whether a member performed creditable service in prior months. For large population employers, this can create a huge manual workload each month. Additionally, while the employer may have been reporting the lowest pay rate accurately throughout the year, the employer would have to make reporting adjustments if a member takes a position with a lower pay rate later that year.
Employees reported to CalSTRS must adhere to credentialing requirements adopted by the Commission on Teacher Credentialing, minimum standards adopted by the California Community Colleges Board of Governors or provisions required under an approved charter for the operation of a charter school. The work of superintendents is excluded from these requirements. In addition, if a CalSTRS member is hired in a position to perform activities not creditable to CalSTRS, he or she can elect in writing within 60 days from the date of hire to stay in CalSTRS, as specified.
If CalSTRS discovers that an individual has not performed creditable service, the system requires employers to re-report that service to the appropriate retirement system, and contributions received would be returned to the employer. Employers and constituent groups claim that service is being misreported because the credential requirements are confusing, and some of the activities listed in the law are vague. Those groups recommend CalSTRS should, consequently, broaden the definition of “creditable service” to allow certain positions, which they believe are generally performing activities included in the definition of “creditable service,” to be reported to and accepted by the system.
Additionally, when documentation is reviewed for a partial certificated position, current law is not clear on how that entire position should be credited to CalSTRS or another public retirement system. Instead of an employee’s contributions going to one retirement system, an individual’s contributions may be split between multiple retirement systems, which slows service credit accrual in any one retirement system. Furthermore, the Education Code does not specify that 100 percent of the activities performed in a position must meet the definition of “creditable service.” Finally, the law is silent on how employers report partial certificated positions in which a person performs both creditable service and service not creditable to CalSTRS.
Prior/Related Legislation
SB 1220 (Torres, Chapter 755, Statutes of 2014) made various technical, conforming or minor changes to the Teachers’ Retirement Law to facilitate efficient administration of the State Teachers’ Retirement Plan, including specifying how to determine compensation earnable for outgrowth activities.
AB 1381 (Assembly Public Employees, Retirement and Social Security Committee, Chapter 559, Statutes of 2013) made various technical corrections and conforming changes that align the Teachers’ Retirement Law with the provisions of PEPRA, as enacted in AB 340 (Furutani).
AB 340 (Furutani, Chapter 296, Statutes of 2012) made various changes to the CalSTRS benefit structure that affect all CalSTRS members, including adding the definition of “retired member activities” for the DB Program.
AB 2700 (Lempert, Chapter 1021, Statutes of 2000) made all compensation for creditable service creditable to CalSTRS and credited member and employer contributions for service in excess of 1.000 years of service per school year to the Defined Benefit Supplement (DBS) Program.
AB 948 (Gallegos, Chapter 394, Statutes of 1995) established definitions of various employment activities that are considered creditable service and provided that the earnings limitation on postretirement service is applied only to compensation earned from creditable service.
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No
According to the Assembly Appropriations Committee, this bill will result in one-time Special Fund administrative costs of approximately $100,000 to update systems and processes. Additionally, it may create a potential de minimis impact to the Teachers Retirement Fund from any loss of contributions for service paid on service that was not creditable service.
SUPPORT:
California State Teachers’ Retirement System (source)
Alliance of Schools for Cooperative Insurance Programs
Association of California Community College Administrators
Association of California School Administrators
Association of Chief Human Resources Officers/Equal Employment Officers
California Association of School Business Officials
California Retired Teachers Association
California Teachers Association
Foothill-De Anza Community College District
Los Angeles Community College District
Los Rios Community College District
North Orange County Community College District
Rancho Santiago Community College District
Riverside Community College District
Riverside County Superintendent of Schools
Santa Clarita Community College District
School Employers Association of California
Shasta-Tehama-Trinity Joint Community College District
Siskiyou Joint Community College District
South Orange County Community College District
Statewide Association of Community Colleges
West Kern Community College District
2 Individual Letters
OPPOSITION:
None received
ARGUMENTS IN SUPPORT:
CalSTRS states that some employers have erroneously reported service to CalSTRS due to confusion surrounding the definition of “creditable service” in the Teachers’ Retirement Law. Due to this perceived vagueness, individuals have been removed from CalSTRS or have had service incorrectly reported to a different public retirement system. Additionally, CalSTRS has found that determining compensation earnable for outgrowth activities is administratively burdensome for employers.
CalSTRS is sponsoring AB 963 to ensure more effective and efficient administration of the retirement plan and to help alleviate confusion among employers on how to determine what service is creditable to CalSTRS.
AB 963
Page 1
Date of Hearing: April 29, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
AB 963
(Bonilla) – As Amended March 24, 2015
Policy Committee: |
Public Employees, Retirement/Soc Sec |
Vote: |
7 - 0 |
Urgency: No State Mandated Local Program: No Reimbursable: No
SUMMARY:
This bill clarifies the definition of creditable service that can be reported to the California State Teachers' Retirement System (CalSTRS), includes CalSTRS membership for those in partial certificated positions, and remedies membership issues for individuals in classified positions who were erroneously reported to CalSTRS.
FISCAL EFFECT:
1) One-time Special Fund administrative costs of approximately $100,000 to update systems and processes.
2) Potential de minimis impact to the Teachers Retirement Fund from any loss of contributions for service paid on service that was not creditable service.
COMMENTS:
Purpose. According to the sponsor, CalSTRS, existing law is silent as to how employers report creditable service for partial certificated positions when those persons perform both creditable service and service not creditable to CalSTRS. As a result, the author asserts some employers have erroneously reported service to CalSTRS, individuals have been erroneously removed from CalSTRS, and individuals have had service erroneously reported to a different retirement system. This bill is intended to ensure more effective and efficient administration of the retirement plan and alleviate confusion among employers with respect to determining what service is creditable.
Analysis Prepared by: Joel Tashjian / APPR. / (916) 319-2081
Discussed in Hearing
44SEC
Assembly Floor
1MIN
Senate Floor
3MIN
Senate Standing Committee on Appropriations
Bill Author
Bill Co-Author(s):