AB 1246: Public employees’ retirement: Public Employees’ Retirement System optional settlements.
- Session Year: 2023-2024
- House: Assembly
- Latest Version Date: 2024-09-22
Current Status:
Passed
(2024-09-22: Chaptered by Secretary of State - Chapter 350, Statutes of 2024.)
Introduced
In Committee
First Chamber
In Committee
Second Chamber
Enacted
The Public Employees Retirement Law (PERL) establishes the Public Employees Retirement System (PERS) to provide pension and other benefits to members of PERS. Existing law permits a member of PERS who retires on or before December 31, 2017, to elect from among several optional settlements for the purpose of structuring the members retirement allowance. Existing law also permits a member of PERS who retires on or after January 1, 2018, to elect from among several other optional settlements for the purpose of structuring their retirement allowance. Existing law prohibits a member who elects to receive specified optional settlements from changing the members optional settlement and designated beneficiary after election of an optional settlement unless a specified event occurs, including the death of a beneficiary who predeceased the member, a dissolution of marriage or a legal separation in which the judgment dividing the community property awards the total interest in the retirement system to the retired member, or in an annulment of marriage in which the court confirms the annulment.
This bill would, commencing January 1, 2026, permit a member who elected to receive a specified optional settlement at retirement, if the members former spouse was named as beneficiary and a legal judgment awards only a portion of the interest in the retirement system to the retired member, to elect to add their new spouse as the beneficiary of the members interest, subject to meeting certain conditions.
This bill would authorize a member to elect this option only once and would preclude elections that would be in derogation of the former spouses interest in the retirement system. The bill would preclude elections that would result in additional costs to the employer.
The Public Employees Retirement Law (PERL) establishes the Public Employees Retirement System (PERS) to provide pension and other benefits to members of PERS. Existing law permits a member of PERS who retires on or before December 31, 2017, to elect from among several optional settlements for the purpose of structuring the members retirement allowance. Existing law also permits a member of PERS who retires on or after January 1, 2018, to elect from among several other optional settlements for the purpose of structuring their retirement allowance. Existing law prohibits a member who elects to receive specified optional settlements from changing the members optional settlement and designated beneficiary after election of an optional settlement unless a specified event occurs, including the death of a beneficiary who predeceased the member, a dissolution of marriage or a legal separation in which the judgment dividing the community property awards the total interest in the retirement system to the retired member, or in an annulment of marriage in which the court confirms the annulment.
This bill would, commencing January 1, 2026, permit a member who elected to receive a specified optional settlement at retirement, if the members former spouse was named as beneficiary and a legal judgment awards only a portion of the interest in the retirement system to the retired member, to elect to add their new spouse as the beneficiary of the members interest, subject to meeting certain conditions.
This bill would authorize a member to elect this option only once and would preclude elections that would be in derogation of the former spouses interest in the retirement system. The bill would preclude elections that would result in additional costs to the employer.
The Public Employees Retirement Law (PERL) establishes the Public Employees Retirement System (PERS) to provide pension and other benefits to members of PERS. Existing law permits a member of PERS who retires on or before December 31, 2017, to elect from among several optional settlements for the purpose of structuring the members retirement allowance. Existing law also permits a member of PERS who retires on or after January 1, 2018, to elect from among several other optional settlements for the purpose of structuring their retirement allowance. Existing law prohibits a member who elects to receive specified optional settlements from changing the members optional settlement and designated beneficiary after election of an optional settlement unless a specified event occurs, including the death of a beneficiary who predeceased the member, a dissolution of marriage or a legal separation in which the judgment dividing the community property awards the total interest in the retirement system to the retired member, or in an annulment of marriage in which the court confirms the annulment.
This bill would, commencing January 1, 2025, 2026, permit a member who elected to receive a specified optional settlement at retirement, if the members former spouse was named as beneficiary and a legal judgment awards only a portion of the interest in the retirement system to the retired member, to elect to add their new spouse as the beneficiary of the members interest, subject to meeting certain conditions.
This bill would authorize a member to elect this option only once and would preclude elections that would be in derogation of the former spouses interest in the retirement system. The bill would preclude elections that would result in additional costs to the employer.
(2)Existing law establishes the Judges Retirement System II, which provides retirement and other benefits to its members and is administered by the Board of Administration of the Public Employees' Retirement System. Under the Judges Retirement System II, a judge is eligible to retire upon attaining both 65 years of age and 20 or more years of service, or upon attaining 70 years of age with a minimum of 5 years of service.Existing law, on and after January 1, 2024, and until January 1, 2029, additionally authorizes a judge who is 60 years of age and has 15 years or more of service or 65 years of age and has 10 years or more of service who is not eligible to retire pursuant to those provision to elect to retire and defer receipt of a monthly allowance, subject to specified formulations.This bill would require the retirement allowance to be increased for the cost of living in January of each year after the judge receives a retirement allowance under those provisions for more than 6 months, as specified. The bill would make this change operative only if this bill and SB 885 are both enacted, both bills amend Section 75523 of the Government Code, and this bill is enacted last.The
(1)The Public Employees Retirement Law (PERL) establishes the Public Employees Retirement System (PERS) to provide pension and other benefits to members of PERS. Existing law permits a member of PERS who retires on or before December 31, 2017, to elect from among several optional settlements for the purpose of structuring the members retirement allowance. Existing law also permits a member of PERS who retires on or after January 1, 2018, to elect from among several other optional settlements for the purpose of structuring their retirement allowance. Existing law prohibits a member who elects to receive specified optional settlements from changing the members optional settlement and designated beneficiary after election of an optional settlement unless a specified event occurs, including the death of a beneficiary who predeceased the member, a dissolution of marriage or a legal separation in which the judgment dividing the community property awards the total interest in the retirement system to the retired member, or in an annulment of marriage in which the court confirms the annulment.
This bill would, commencing January 1, 2025, permit a member who elected to receive a specified optional settlement at retirement, if the members former spouse was named as beneficiary and a legal judgment awards only a portion of the interest in the retirement system to the retired member, to elect to add their new spouse as the beneficiary of the members interest, subject to meeting certain conditions.
This bill would authorize a member to elect this option only once and would preclude elections that would be in derogation of the former spouses interest in the retirement system. The bill would preclude elections that would result in additional costs to the employer.
(2)Existing law establishes the Judges Retirement System II, which provides retirement and other benefits to its members and is administered by the Board of Administration of the Public Employees' Retirement System. Under the Judges Retirement System II, a judge is eligible to retire upon attaining both 65 years of age and 20 or more years of service, or upon attaining 70 years of age with a minimum of 5 years of service.
Existing law, on and after January 1, 2024, and until January 1, 2029, additionally authorizes a judge who is 60 years of age and has 15 years or more of service or 65 years of age and has 10 years or more of service who is not eligible to retire pursuant to those provision to elect to retire and defer receipt of a monthly allowance, subject to specified formulations.
This bill would require the retirement allowance to be increased for the cost of living in January of each year after the judge receives a retirement allowance under those provisions for more than 6 months, as specified. The bill would make this change operative only if this bill and SB 885 are both enacted, both bills amend Section 75523 of the Government Code, and this bill is enacted last.
The Public Employees Retirement Law (PERL) establishes the Public Employees Retirement System (PERS) to provide pension and other benefits to members of PERS. Existing law permits a member of PERS who retires on or before December 31, 2017, to elect from among several optional settlements for the purpose of structuring the members retirement allowance. Existing law also permits a member of PERS who retires on or after January 1, 2018, to elect from among several other optional settlements for the purpose of structuring their retirement allowance. Existing law prohibits a member who elects to receive specified optional settlements from changing the members optional settlement and designated beneficiary after election of an optional settlement unless a specified event occurs, including the death of a beneficiary who predeceased the member, a dissolution of marriage or a legal separation in which the judgment dividing the community property awards the total interest in the retirement system to the retired member, or in an annulment of marriage in which the court confirms the annulment.
This bill would extend the ability of a retiree to change their designated beneficiary to include naming a new spouse following a retirees divorce and subsequent remarriage. The bill would allow a retirees new spouse to receive the retirees postdivorce retirement settlement benefits. would, commencing January 1, 2025, permit a member who elected to receive a specified optional settlement at retirement, if the members former spouse was named as beneficiary and a legal judgment awards only a portion of the interest in the retirement system to the retired member, to elect to add their new spouse as the beneficiary of the members interest, subject to meeting certain conditions.
This bill would authorize a member to elect this option only once and would preclude elections that would be in derogation of the former spouses interest in the retirement system. The bill would preclude elections that would result in additional costs to the employer.
The Public Employees Retirement Law (PERL) establishes the Public Employees Retirement System (PERS) to provide pension and other benefits to members of PERS. Existing law permits a member of PERS who retires on or before December 1, 31, 2017, to elect from among several optional settlements for the purpose of structuring the members retirement allowance. Existing law prohibits a member who elects to receive specified optional settlements from changing the members retirement status optional settlement and designated beneficiary after election of an optional settlement unless a specified event occurs, including the death of a beneficiary who predeceased the member, a dissolution of marriage or a legal separation in which the judgment dividing the community property awards the total interest in the retirement system to the retired member, or in an annulment of marriage in which the court confirms the annulment.
This bill would make nonsubstantive changes to that provision.This bill would extend the ability of a retiree to change their designated beneficiary to include naming a new spouse following a retirees divorce and subsequent remarriage. The bill would allow a retirees new spouse to receive the retirees postdivorce retirement settlement benefits.
The Public Employees Retirement Law (PERL) establishes the Public Employees Retirement System (PERS) to provide pension and other benefits to members of PERS. Existing law permits a member of PERS who retires on or before December 1, 2017, to elect from among several optional settlements for the purpose of structuring the members retirement allowance. Existing law prohibits a member who elects to receive specified optional settlements from changing the members retirement status after election of an optional settlement unless a specified event occurs, including the death of a beneficiary who predeceased the member, a dissolution of marriage or a legal separation in which the judgment dividing the community property awards the total interest in the retirement system to the retired member, or in an annulment of marriage in which the court confirms the annulment.
This bill would make nonsubstantive changes to that provision.
(a)(1)Notwithstanding any other provision of this part, a member who elected to receive optional settlement 2, 3, or 4 at retirement, involving a life contingency of the beneficiary, may, if the beneficiary predeceases the member or if the member marries and the former spouse was not named as beneficiary, or, if a former spouse was named, in the event of a dissolution of marriage or a legal separation in which the judgment dividing the community property awards the total interest in the retirement system to the retired member, or in an annulment of marriage in which the court confirms the annulment, elect to have the actuarial equivalent reflecting any selection against the fund resulting from the election as of the date of election of the allowance payable for the remainder of the members lifetime under the optional settlement previously chosen applied to a lesser allowance during the members remaining lifetime under one of the optional settlements specified in this article and name a different beneficiary.
(2)Notwithstanding paragraph (1), a member who elected to receive optional settlement 2, 3, or 4 at retirement, involving a life contingency of the beneficiary, may, if the member marries and a former spouse was named as beneficiary, in the event of a dissolution of marriage or a legal separation in which the judgment dividing the community property awards only a portion of the interest in the retirement system to the retired member, elect to convert to a multiple life contingency option to add their new spouse and have the actuarial equivalent reflecting any selection against the fund resulting from the election as of the date of election of the allowance payable for the remainder of the members lifetime under the optional settlement previously chosen applied to a lesser allowance during the members remaining lifetime consisting of the right to have a retirement allowance paid to the member until their death and thereafter to have a monthly allowance paid to their new spouse for life for the remaining interest in the retirement system available to be allocated. Notwithstanding the foregoing, the combined allowance payable to the members named beneficiary or beneficiaries and the members survivor pursuant to Section 21624, 21629, or 21630, if applicable, shall not exceed the amount of the members allowance. The member may elect this option only once. No election shall be made in derogation of the former spouses interest in the retirement system. This paragraph shall become operative on January 1, 2026.
(3)Notwithstanding paragraph (1), for an election under this section that occurs on or after January 1, 2014, a member may name the same beneficiary as previously designated, provided that the resulting benefit to the member and the named beneficiary otherwise meets the requirements of this section.
(b)The election provided by this section is irrevocable and shall be made within 12 months following the death of the beneficiary who predeceased the member, within 12 months of the date of entry of the annulment of marriage or judgment dividing the community property of the parties, or within 12 months following marriage if the spouse is named as beneficiary. The election shall become effective on the date specified on the election, provided that this date is not earlier than the day following receipt of the election in this system under this section.
(c)A member who has a qualifying event prior to January 1, 1988, and who fails to elect by January 1, 1989, or a member who has a qualifying event on or after January 1, 1988, and who fails to elect within 12 months, shall retain the right to make an election under this section. However, this election shall become effective no earlier than 12 months after the date it is filed with the board, provided that neither the member nor the designated beneficiary die prior to the effective date of the election.
(d)This section shall not be construed to mean that designation of a new beneficiary causes the selection of an optional settlement. An optional settlement shall be selected by a member in a writing filed by the member with the board.
(e)Nothing in this section shall be construed to permit any election that will result in additional costs to the employer.
(f)This section shall apply to any member who retires on or before December 31, 2017.
SEC. 2.Section 21481 of the Government Code is amended to read:21481.(a)(1)Notwithstanding any other provision of this part, a member who elected the optional settlement in Section 21475, 21475.5, 21476, 21476.5, or 21477 at retirement, may, if the beneficiary predeceases the member or if the member marries and the former spouse was not named as beneficiary, or, if a former spouse was named, in the event of a dissolution of marriage or a legal separation in which the judgment dividing the community property awards the total interest in the retirement system to the retired member, or in an annulment of marriage in which the court confirms the annulment, elect to have the actuarial equivalent reflecting any selection against the fund resulting from the election as of the date of election of the allowance payable for the remainder of the members lifetime under the optional settlement previously chosen applied to a lesser allowance during the members remaining lifetime under one of the optional settlements specified in this article and name a different beneficiary.
(2)Notwithstanding paragraph (1), a member who elected to receive the optional settlement in Section 21475, 21475.5, 21476, 21476.5, or 21477 at retirement, may, if the member marries and a former spouse was named as beneficiary, in the event of a dissolution of marriage or a legal separation in which the judgment dividing the community property awards only a portion of the interest in the retirement system to the retired member, elect to convert to a multiple life contingency option to add their new spouse and have the actuarial equivalent reflecting any selection against the fund resulting from the election as of the date of election of the allowance payable for the remainder of the members lifetime under the optional settlement previously chosen applied to a lesser allowance during the members remaining lifetime consisting of the right to have a retirement allowance paid to the member until their death and thereafter to have a monthly allowance paid to their new spouse for life for the remaining interest in the retirement system available to be allocated. Notwithstanding the foregoing, the combined allowance payable to the members named beneficiary or beneficiaries and the members survivor pursuant to Section 21624, 21629, or 21630, if applicable, shall not exceed the amount of the members allowance. The member may elect this option only once. No election shall be made in derogation of the former spouses interest in the retirement system. This paragraph shall become operative on January 1, 2026.
(3)Notwithstanding paragraph (1), for an election under this section that occurs on or after January 1, 2014, a member may name the same beneficiary as previously designated, provided that the resulting benefit to the member and the named beneficiary otherwise meets the requirements of this section.
(b)The election provided by this section is irrevocable and shall be made within 12 months following the death of the beneficiary who predeceased the member or within 12 months of the date of entry of the annulment of marriage or judgment dividing the community property of the parties, or within 12 months following marriage if the spouse is named as beneficiary. The election shall become effective on the date specified on the election, provided that this date is not earlier than the day following receipt of the election in this system under this section.
(c)A member who has a qualifying event and who fails to elect within 12 months, shall retain the right to make an election under this section. However, this election shall become effective no earlier than 12 months after the date it is filed with the board, provided that neither the member nor the designated beneficiary die prior to the effective date of the election.
(d)This section shall not be construed to mean that designation of a new beneficiary causes the selection of an optional settlement. An optional settlement shall be selected by a member in a writing filed by the member with the board.
(e)Nothing in this section shall be construed to permit any election that will result in additional costs to the employer.
(f)This section shall apply to any member who retires on or after January 1, 2018.
(a)(1)Notwithstanding any other provision of this part, a member who elected to receive optional settlement 2, 3, or 4 at retirement, involving a life contingency of the beneficiary, may, if the beneficiary predeceases the member or if the member marries and the former spouse was not named as beneficiary, or, if a former spouse was named, in the event of a dissolution of marriage or a legal separation in which the judgment dividing the community property awards the total interest in the retirement system to the retired member, or in an annulment of marriage in which the court confirms the annulment, elect to have the actuarial equivalent reflecting any selection against the fund resulting from the election as of the date of election of the allowance payable for the remainder of the members lifetime under the optional settlement previously chosen applied to a lesser allowance during the members remaining lifetime under one of the optional settlements specified in this article and name a different beneficiary.
(2)Notwithstanding paragraph (1), a member who elected to receive optional settlement 2, 3, or 4 at retirement, involving a life contingency of the beneficiary, may, if the member marries and a former spouse was named as beneficiary, in the event of a dissolution of marriage or a legal separation in which the judgment dividing the community property awards only a portion of the interest in the retirement system to the retired member, elect to convert to a multiple life contingency option to add their new spouse and have the actuarial equivalent reflecting any selection against the fund resulting from the election as of the date of election of the allowance payable for the remainder of the members lifetime under the optional settlement previously chosen applied to a lesser allowance during the members remaining lifetime consisting of the right to have a retirement allowance paid to the member until their death and thereafter to have a monthly allowance paid to their new spouse for life for the remaining interest in the retirement system available to be allocated. Notwithstanding the foregoing, the combined allowance payable to the members named beneficiary or beneficiaries and the members survivor pursuant to Section 21624, 21629, or 21630, if applicable, shall not exceed the amount of the members allowance. The member may elect this option only once. No election shall be made in derogation of the former spouses interest in the retirement system. This paragraph shall become operative on January 1, 2026.
(3)Notwithstanding paragraph (1), for an election under this section that occurs on or after January 1, 2014, a member may name the same beneficiary as previously designated, provided that the resulting benefit to the member and the named beneficiary otherwise meets the requirements of this section.
(b)The election provided by this section is irrevocable and shall be made within 12 months following the death of the beneficiary who predeceased the member, within 12 months of the date of entry of the annulment of marriage or judgment dividing the community property of the parties, or within 12 months following marriage if the spouse is named as beneficiary. The election shall become effective on the date specified on the election, provided that this date is not earlier than the day following receipt of the election in this system under this section.
(c)A member who has a qualifying event prior to January 1, 1988, and who fails to elect by January 1, 1989, or a member who has a qualifying event on or after January 1, 1988, and who fails to elect within 12 months, shall retain the right to make an election under this section. However, this election shall become effective no earlier than 12 months after the date it is filed with the board, provided that neither the member nor the designated beneficiary die prior to the effective date of the election.
(d)This section shall not be construed to mean that designation of a new beneficiary causes the selection of an optional settlement. An optional settlement shall be selected by a member in a writing filed by the member with the board.
(e)Nothing in this section shall be construed to permit any election that will result in additional costs to the employer.
(f)This section shall apply to any member who retires on or before December 31, 2017.
SEC. 2.Section 21481 of the Government Code is amended to read:21481.(a)(1)Notwithstanding any other provision of this part, a member who elected the optional settlement in Section 21475, 21475.5, 21476, 21476.5, or 21477 at retirement, may, if the beneficiary predeceases the member or if the member marries and the former spouse was not named as beneficiary, or, if a former spouse was named, in the event of a dissolution of marriage or a legal separation in which the judgment dividing the community property awards the total interest in the retirement system to the retired member, or in an annulment of marriage in which the court confirms the annulment, elect to have the actuarial equivalent reflecting any selection against the fund resulting from the election as of the date of election of the allowance payable for the remainder of the members lifetime under the optional settlement previously chosen applied to a lesser allowance during the members remaining lifetime under one of the optional settlements specified in this article and name a different beneficiary.
(2)Notwithstanding paragraph (1), a member who elected to receive the optional settlement in Section 21475, 21475.5, 21476, 21476.5, or 21477 at retirement, may, if the member marries and a former spouse was named as beneficiary, in the event of a dissolution of marriage or a legal separation in which the judgment dividing the community property awards only a portion of the interest in the retirement system to the retired member, elect to convert to a multiple life contingency option to add their new spouse and have the actuarial equivalent reflecting any selection against the fund resulting from the election as of the date of election of the allowance payable for the remainder of the members lifetime under the optional settlement previously chosen applied to a lesser allowance during the members remaining lifetime consisting of the right to have a retirement allowance paid to the member until their death and thereafter to have a monthly allowance paid to their new spouse for life for the remaining interest in the retirement system available to be allocated. Notwithstanding the foregoing, the combined allowance payable to the members named beneficiary or beneficiaries and the members survivor pursuant to Section 21624, 21629, or 21630, if applicable, shall not exceed the amount of the members allowance. The member may elect this option only once. No election shall be made in derogation of the former spouses interest in the retirement system. This paragraph shall become operative on January 1, 2026.
(3)Notwithstanding paragraph (1), for an election under this section that occurs on or after January 1, 2014, a member may name the same beneficiary as previously designated, provided that the resulting benefit to the member and the named beneficiary otherwise meets the requirements of this section.
(b)The election provided by this section is irrevocable and shall be made within 12 months following the death of the beneficiary who predeceased the member or within 12 months of the date of entry of the annulment of marriage or judgment dividing the community property of the parties, or within 12 months following marriage if the spouse is named as beneficiary. The election shall become effective on the date specified on the election, provided that this date is not earlier than the day following receipt of the election in this system under this section.
(c)A member who has a qualifying event and who fails to elect within 12 months, shall retain the right to make an election under this section. However, this election shall become effective no earlier than 12 months after the date it is filed with the board, provided that neither the member nor the designated beneficiary die prior to the effective date of the election.
(d)This section shall not be construed to mean that designation of a new beneficiary causes the selection of an optional settlement. An optional settlement shall be selected by a member in a writing filed by the member with the board.
(e)Nothing in this section shall be construed to permit any election that will result in additional costs to the employer.
(f)This section shall apply to any member who retires on or after January 1, 2018.
(a)(1)Notwithstanding any other provision of this part, a member who elected to receive optional settlement 2, 3, or 4 at retirement, involving a life contingency of the beneficiary, may, if the beneficiary predeceases the member or if the member marries and the former spouse was not named as beneficiary, or, if a former spouse was named, in the event of a dissolution of marriage or a legal separation in which the judgment dividing the community property awards the total interest in the retirement system to the retired member, or in an annulment of marriage in which the court confirms the annulment, elect to have the actuarial equivalent reflecting any selection against the fund resulting from the election as of the date of election of the allowance payable for the remainder of the members lifetime under the optional settlement previously chosen applied to a lesser allowance during the members remaining lifetime under one of the optional settlements specified in this article and name a different beneficiary.
(2)Notwithstanding paragraph (1), a member who elected to receive optional settlement 2, 3, or 4 at retirement, involving a life contingency of the beneficiary, may, if the member marries and a former spouse was named as beneficiary, in the event of a dissolution of marriage or a legal separation in which the judgment dividing the community property awards only a portion of the interest in the retirement system to the retired member, elect to convert to a multiple life contingency option to add their new spouse and have the actuarial equivalent reflecting any selection against the fund resulting from the election as of the date of election of the allowance payable for the remainder of the members lifetime under the optional settlement previously chosen applied to a lesser allowance during the members remaining lifetime consisting of the right to have a retirement allowance paid to the member until their death and thereafter to have a monthly allowance paid to their new spouse for life for the remaining interest in the retirement system available to be allocated. Notwithstanding the foregoing, the combined allowance payable to the members named beneficiary or beneficiaries and the members survivor pursuant to Section 21624, 21629, or 21630, if applicable, shall not exceed the amount of the members allowance. The member may elect this option only once. No election shall be made in derogation of the former spouses interest in the retirement system. This paragraph shall become operative on January 1, 2025. 2026.
(3)Notwithstanding paragraph (1), for an election under this section that occurs on or after January 1, 2014, a member may name the same beneficiary as previously designated, provided that the resulting benefit to the member and the named beneficiary otherwise meets the requirements of this section.
(b)The election provided by this section is irrevocable and shall be made within 12 months following the death of the beneficiary who predeceased the member, within 12 months of the date of entry of the annulment of marriage or judgment dividing the community property of the parties, or within 12 months following marriage if the spouse is named as beneficiary. The election shall become effective on the date specified on the election, provided that this date is not earlier than the day following receipt of the election in this system under this section.
(c)A member who has a qualifying event prior to January 1, 1988, and who fails to elect by January 1, 1989, or a member who has a qualifying event on or after January 1, 1988, and who fails to elect within 12 months, shall retain the right to make an election under this section. However, this election shall become effective no earlier than 12 months after the date it is filed with the board, provided that neither the member nor the designated beneficiary die prior to the effective date of the election.
(d)This section shall not be construed to mean that designation of a new beneficiary causes the selection of an optional settlement. An optional settlement shall be selected by a member in a writing filed by the member with the board.
(e)Nothing in this section shall be construed to permit any election that will result in additional costs to the employer.
(f)This section shall apply to any member who retires on or before December 31, 2017.
SEC. 2.Section 21481 of the Government Code is amended to read:21481.(a)(1)Notwithstanding any other provision of this part, a member who elected the optional settlement in Section 21475, 21475.5, 21476, 21476.5, or 21477 at retirement, may, if the beneficiary predeceases the member or if the member marries and the former spouse was not named as beneficiary, or, if a former spouse was named, in the event of a dissolution of marriage or a legal separation in which the judgment dividing the community property awards the total interest in the retirement system to the retired member, or in an annulment of marriage in which the court confirms the annulment, elect to have the actuarial equivalent reflecting any selection against the fund resulting from the election as of the date of election of the allowance payable for the remainder of the members lifetime under the optional settlement previously chosen applied to a lesser allowance during the members remaining lifetime under one of the optional settlements specified in this article and name a different beneficiary.
(2)Notwithstanding paragraph (1), a member who elected to receive the optional settlement in Section 21475, 21475.5, 21476, 21476.5, or 21477 at retirement, may, if the member marries and a former spouse was named as beneficiary, in the event of a dissolution of marriage or a legal separation in which the judgment dividing the community property awards only a portion of the interest in the retirement system to the retired member, elect to convert to a multiple life contingency option to add their new spouse and have the actuarial equivalent reflecting any selection against the fund resulting from the election as of the date of election of the allowance payable for the remainder of the members lifetime under the optional settlement previously chosen applied to a lesser allowance during the members remaining lifetime consisting of the right to have a retirement allowance paid to the member until their death and thereafter to have a monthly allowance paid to their new spouse for life for the remaining interest in the retirement system available to be allocated. Notwithstanding the foregoing, the combined allowance payable to the members named beneficiary or beneficiaries and the members survivor pursuant to Section 21624, 21629, or 21630, if applicable, shall not exceed the amount of the members allowance. The member may elect this option only once. No election shall be made in derogation of the former spouses interest in the retirement system. This paragraph shall become operative on January 1, 2025. 2026.
(3)Notwithstanding paragraph (1), for an election under this section that occurs on or after January 1, 2014, a member may name the same beneficiary as previously designated, provided that the resulting benefit to the member and the named beneficiary otherwise meets the requirements of this section.
(b)The election provided by this section is irrevocable and shall be made within 12 months following the death of the beneficiary who predeceased the member or within 12 months of the date of entry of the annulment of marriage or judgment dividing the community property of the parties, or within 12 months following marriage if the spouse is named as beneficiary. The election shall become effective on the date specified on the election, provided that this date is not earlier than the day following receipt of the election in this system under this section.
(c)A member who has a qualifying event and who fails to elect within 12 months, shall retain the right to make an election under this section. However, this election shall become effective no earlier than 12 months after the date it is filed with the board, provided that neither the member nor the designated beneficiary die prior to the effective date of the election.
(d)This section shall not be construed to mean that designation of a new beneficiary causes the selection of an optional settlement. An optional settlement shall be selected by a member in a writing filed by the member with the board.
(e)Nothing in this section shall be construed to permit any election that will result in additional costs to the employer.
(f)This section shall apply to any member who retires on or after January 1, 2018.
SEC. 3.Section 75523 of the Government Code is amended to read:75523.(a)The retirement allowance of retired judges who have elected to receive a monthly allowance under subdivision (d) of Section 75522 or who have retired for disability and are receiving an allowance under Section 75560.4 shall be adjusted effective in January of each year after a judge has been retired under this chapter for more than six months, to reflect any increase in the cost of living occurring after January 1 of the immediately preceding fiscal year. The United States city average of the Consumer Price Index for all Urban Consumers, as published by the United States Bureau of Statistics, shall be used as the basis for determining changes in the cost of living.(b)The retirement allowance of a retired judge who has elected to retire under Section 75522.5 shall be adjusted effective in January of each year after a judge has received a retirement allowance under this chapter for more than six months, to reflect any increase in the cost of living occurring after January 1 of the immediately preceding fiscal year. The United States city average of the Consumer Price Index for all Urban Consumers, as published by the United States Bureau of Statistics, shall be used as the basis for determining changes in the cost of living.(c)An adjustment shall not be made unless the cost-of-living increase equals or exceeds 1 percent. The allowance shall not be increased more than 3 percent in a single year. Increases shall be compounded.(d)The allowance shall not be decreased as a result of the cost-of-living adjustment.(e)The board shall provide, by rule, any details needed for the implementation of this section.SEC. 4.Section 3 of this bill shall become operative only if (1) this bill and Senate Bill 885 are both enacted and become effective on or before January 1, 2024, (2) each bill amends Section 75523 of the Government Code, and (3) this bill is enacted after Senate Bill 885.(a)(1)Notwithstanding any other provision of this part, a member who elected to receive optional settlement 2, 3, or 4 at retirement, involving a life contingency of the beneficiary, may, if the beneficiary predeceases the member or if the member marries and the former spouse was not named as beneficiary, or, if a former spouse was named, in the event of a dissolution of marriage or a legal separation in which the judgment dividing the community property awards the total interest in the retirement system to the retired member, or in an annulment of marriage in which the court confirms the annulment, elect to have the actuarial equivalent reflecting any selection against the fund resulting from the election as of the date of election of the allowance payable for the remainder of the members lifetime under the optional settlement previously chosen applied to a lesser allowance during the members remaining lifetime under one of the optional settlements specified in this article and name a different beneficiary.
(2)Notwithstanding paragraph (1), a member who elected to receive optional settlement 2, 3, or 4 at retirement, involving a life contingency of the beneficiary, may, if the member marries and a former spouse was named as beneficiary, in the event of a dissolution of marriage or a legal separation in which the judgment dividing the community property awards only a portion of the interest in the retirement system to the retired member, elect to convert to a multiple life contingency option to add their new spouse and have the actuarial equivalent reflecting any selection against the fund resulting from the election as of the date of election of the allowance payable for the remainder of the members lifetime under the optional settlement previously chosen applied to a lesser allowance during the members remaining lifetime consisting of the right to have a retirement allowance paid to the member until their death and thereafter to have a monthly allowance paid to their new spouse for life for the remaining interest in the retirement system available to be allocated. Notwithstanding the foregoing, the combined allowance payable to the members named beneficiary or beneficiaries and the members survivor pursuant to Section 21624, 21629, or 21630, if applicable, shall not exceed the amount of the members allowance. The member may elect this option only once. No election shall be made in derogation of the former spouses interest in the retirement system. This paragraph shall become operative on January 1, 2025.
(3)Notwithstanding paragraph (1), for an election under this section that occurs on or after January 1, 2014, a member may name the same beneficiary as previously designated, provided that the resulting benefit to the member and the named beneficiary otherwise meets the requirements of this section.
(b)The election provided by this section is irrevocable and shall be made within 12 months following the death of the beneficiary who predeceased the member, within 12 months of the date of entry of the annulment of marriage or judgment dividing the community property of the parties, or within 12 months following marriage if the spouse is named as beneficiary. The election shall become effective on the date specified on the election, provided that this date is not earlier than the day following receipt of the election in this system under this section.
(c)A member who has a qualifying event prior to January 1, 1988, and who fails to elect by January 1, 1989, or a member who has a qualifying event on or after January 1, 1988, and who fails to elect within 12 months, shall retain the right to make an election under this section. However, this election shall become effective no earlier than 12 months after the date it is filed with the board, provided that neither the member nor the designated beneficiary die prior to the effective date of the election.
(d)This section shall not be construed to mean that designation of a new beneficiary causes the selection of an optional settlement. An optional settlement shall be selected by a member in a writing filed by the member with the board.
(e)Nothing in this section shall be construed to permit any election that will result in additional costs to the employer.
(f)This section shall apply to any member who retires on or before December 31, 2017.
SEC. 2.Section 21481 of the Government Code is amended to read:21481.(a)(1)Notwithstanding any other provision of this part, a member who elected the optional settlement in Section 21475, 21475.5, 21476, 21476.5, or 21477 at retirement, may, if the beneficiary predeceases the member or if the member marries and the former spouse was not named as beneficiary, or, if a former spouse was named, in the event of a dissolution of marriage or a legal separation in which the judgment dividing the community property awards the total interest in the retirement system to the retired member, or in an annulment of marriage in which the court confirms the annulment, elect to have the actuarial equivalent reflecting any selection against the fund resulting from the election as of the date of election of the allowance payable for the remainder of the members lifetime under the optional settlement previously chosen applied to a lesser allowance during the members remaining lifetime under one of the optional settlements specified in this article and name a different beneficiary.
(2)Notwithstanding paragraph (1), a member who elected to receive the optional settlement in Section 21475, 21475.5, 21476, 21476.5, or 21477 at retirement, may, if the member marries and a former spouse was named as beneficiary, in the event of a dissolution of marriage or a legal separation in which the judgment dividing the community property awards only a portion of the interest in the retirement system to the retired member, elect to convert to a multiple life contingency option to add their new spouse and have the actuarial equivalent reflecting any selection against the fund resulting from the election as of the date of election of the allowance payable for the remainder of the members lifetime under the optional settlement previously chosen applied to a lesser allowance during the members remaining lifetime consisting of the right to have a retirement allowance paid to the member until their death and thereafter to have a monthly allowance paid to their new spouse for life for the remaining interest in the retirement system available to be allocated. Notwithstanding the foregoing, the combined allowance payable to the members named beneficiary or beneficiaries and the members survivor pursuant to Section 21624, 21629, or 21630, if applicable, shall not exceed the amount of the members allowance. The member may elect this option only once. No election shall be made in derogation of the former spouses interest in the retirement system. This paragraph shall become operative on January 1, 2025.
(3)Notwithstanding paragraph (1), for an election under this section that occurs on or after January 1, 2014, a member may name the same beneficiary as previously designated, provided that the resulting benefit to the member and the named beneficiary otherwise meets the requirements of this section.
(b)The election provided by this section is irrevocable and shall be made within 12 months following the death of the beneficiary who predeceased the member or within 12 months of the date of entry of the annulment of marriage or judgment dividing the community property of the parties, or within 12 months following marriage if the spouse is named as beneficiary. The election shall become effective on the date specified on the election, provided that this date is not earlier than the day following receipt of the election in this system under this section.
(c)A member who has a qualifying event and who fails to elect within 12 months, shall retain the right to make an election under this section. However, this election shall become effective no earlier than 12 months after the date it is filed with the board, provided that neither the member nor the designated beneficiary die prior to the effective date of the election.
(d)This section shall not be construed to mean that designation of a new beneficiary causes the selection of an optional settlement. An optional settlement shall be selected by a member in a writing filed by the member with the board.
(e)Nothing in this section shall be construed to permit any election that will result in additional costs to the employer.
(f)This section shall apply to any member who retires on or after January 1, 2018.
SEC. 3.Section 75523 of the Government Code is amended to read:75523.(a)The retirement allowance of retired judges who have elected to receive a monthly allowance under subdivision (d) of Section 75522 or who have retired for disability and are receiving an allowance under Section 75560.4 shall be adjusted effective in January of each year after a judge has been retired under this chapter for more than six months, to reflect any increase in the cost of living occurring after January 1 of the immediately preceding fiscal year. The United States city average of the Consumer Price Index for all Urban Consumers, as published by the United States Bureau of Statistics, shall be used as the basis for determining changes in the cost of living.
(b)The retirement allowance of a retired judge who has elected to retire under Section 75522.5 shall be adjusted effective in January of each year after a judge has received a retirement allowance under this chapter for more than six months, to reflect any increase in the cost of living occurring after January 1 of the immediately preceding fiscal year. The United States city average of the Consumer Price Index for all Urban Consumers, as published by the United States Bureau of Statistics, shall be used as the basis for determining changes in the cost of living.
(b)No(c)An adjustment shall not be made unless the cost-of-living increase equals or exceeds 1 percent. The allowance shall not be increased more than 3 percent in a single year. Increases shall be compounded.
(c)(d)The allowance shall not be decreased as a result of the cost-of-living adjustment.
(d)(e)The board shall provide, by rule, any details needed for the implementation of this section.
SEC. 4.Section 3 of this bill shall become operative only if (1) this bill and Senate Bill 885 are both enacted and become effective on or before January 1, 2024, (2) each bill amends Section 75523 of the Government Code, and (3) this bill is enacted after Senate Bill 885.
(a)(1)Notwithstanding any other provision of this part, a member who elected to receive optional settlement 2, 3, or 4, 4 at retirement, involving a life contingency of the beneficiary, may, if the beneficiary predeceases the member or if the member marries and the former spouse was not named as beneficiary, or, if a former spouse was named, in the event of a dissolution of marriage or a legal separation in which the judgment dividing the community property awards the total interest in the retirement system to the retired member, or in an annulment of marriage in which the court confirms the annulment, elect to have the actuarial equivalent reflecting any selection against the fund resulting from the election as of the date of election of the allowance payable for the remainder of the members lifetime under the optional settlement previously chosen applied to a lesser allowance during the members remaining lifetime under one of the optional settlements specified in this article and name a different beneficiary.
(2)Notwithstanding paragraph (1), a member who elected to receive optional settlement 2, 3, or 4 at retirement, involving a life contingency of the beneficiary, may, if the member marries and a former spouse was named as beneficiary, in the event of a dissolution of marriage or a legal separation in which the judgment dividing the community property awards only a portion of the interest in the retirement system to the retired member, elect to convert to a multiple life contingency option to add their new spouse and have the actuarial equivalent reflecting any selection against the fund resulting from the election as of the date of election of the allowance payable for the remainder of the members lifetime under the optional settlement previously chosen applied to a lesser allowance during the members remaining lifetime consisting of the right to have a retirement allowance paid to the member until their death and thereafter to have a monthly allowance paid to their new spouse for life for the remaining interest in the retirement system available to be allocated. Notwithstanding the foregoing, the combined allowance payable to the members named beneficiary or beneficiaries and the members survivor pursuant to Section 21624, 21629, or 21630, if applicable, shall not exceed the amount of the members allowance. The member may elect this option only once. No election shall be made in derogation of the former spouses interest in the retirement system. This paragraph shall become operative on January 1, 2025.
(2)(3)Notwithstanding paragraph (1), for an election under this section that occurs on or after January 1, 2014, a member may name the same beneficiary as previously designated, provided that the resulting benefit to the member and the named beneficiary otherwise meets the requirements of this section.
(b)The election provided by this section is irrevocable and shall be made within 12 months following the death of the beneficiary who predeceased the member, within 12 months of the date of entry of the annulment of marriage or judgment dividing the community property of the parties, or within 12 months following marriage if the spouse is named as beneficiary. The election shall become effective on the date specified on the election, provided that this date is not earlier than the day following receipt of the election in this system under this section.
(c)A member who has a qualifying event prior to January 1, 1988, and who fails to elect by January 1, 1989, or a member who has a qualifying event on or after January 1, 1988, and who fails to elect within 12 months, shall retain the right to make an election under this section. However, this election shall become effective no earlier than 12 months after the date it is filed with the board, provided that neither the member nor the designated beneficiary die prior to the effective date of the election.
(d)This section shall not be construed to mean that designation of a new beneficiary causes the selection of an optional settlement. An optional settlement shall be selected by a member in a writing filed by the member with the board.
(e)A retiree who divorces after retirement and subsequently remarries may designate their new spouse as a beneficiary of the retirees postdivorce retirement settlement.(e)Nothing in this section shall be construed to permit any election that will result in additional costs to the employer.
(f)This section shall apply to any member who retires on or before December 31, 2017.
SEC. 2.Section 21481 of the Government Code is amended to read:21481.(a)(1)Notwithstanding any other provision of this part, a member who elected the optional settlement in Section 21475, 21475.5, 21476, 21476.5, or 21477, 21477 at retirement, may, if the beneficiary predeceases the member or if the member marries and the former spouse was not named as beneficiary, or, if a former spouse was named, in the event of a dissolution of marriage or a legal separation in which the judgment dividing the community property awards the total interest in the retirement system to the retired member, or in an annulment of marriage in which the court confirms the annulment, elect to have the actuarial equivalent reflecting any selection against the fund resulting from the election as of the date of election of the allowance payable for the remainder of the members lifetime under the optional settlement previously chosen applied to a lesser allowance during the members remaining lifetime under one of the optional settlements specified in this article and name a different beneficiary.
(2)Notwithstanding paragraph (1), a member who elected to receive the optional settlement in Section 21475, 21475.5, 21476, 21476.5, or 21477 at retirement, may, if the member marries and a former spouse was named as beneficiary, in the event of a dissolution of marriage or a legal separation in which the judgment dividing the community property awards only a portion of the interest in the retirement system to the retired member, elect to convert to a multiple life contingency option to add their new spouse and have the actuarial equivalent reflecting any selection against the fund resulting from the election as of the date of election of the allowance payable for the remainder of the members lifetime under the optional settlement previously chosen applied to a lesser allowance during the members remaining lifetime consisting of the right to have a retirement allowance paid to the member until their death and thereafter to have a monthly allowance paid to their new spouse for life for the remaining interest in the retirement system available to be allocated. Notwithstanding the foregoing, the combined allowance payable to the members named beneficiary or beneficiaries and the members survivor pursuant to Section 21624, 21629, or 21630, if applicable, shall not exceed the amount of the members allowance. The member may elect this option only once. No election shall be made in derogation of the former spouses interest in the retirement system. This paragraph shall become operative on January 1, 2025.
(2)(3)Notwithstanding paragraph (1), for an election pursuant to under this section that occurs on or after January 1, 2014, a member may name the same beneficiary as previously designated, provided that the resulting benefit to the member and the named beneficiary otherwise meets the requirements of this section.
(b)The election provided by this section is irrevocable and shall be made within 12 months following the death of the beneficiary who predeceased the member or within 12 months of the date of entry of the annulment of marriage or judgment dividing the community property of the parties, or within 12 months following marriage if the spouse is named as beneficiary. The election shall become effective on the date specified on the election, provided that this date is not earlier than the day following receipt of the election in this system pursuant to under this section.
(c)A member who has a qualifying event and who fails to elect within 12 months, shall retain the right to make an election under this section. However, this election shall become effective no earlier than 12 months after the date it is filed with the board, provided that neither the member nor the designated beneficiary die prior to the effective date of the election.
(d)This section shall not be construed to mean that designation of a new beneficiary causes the selection of an optional settlement. An optional settlement shall be selected by a member in a writing filed by the member with the board.
(e)Nothing in this section shall be construed to permit any election that will result in additional costs to the employer.
(e)(f)This section shall apply to any member who retires on or after January 1, 2018.
(a)(1)Notwithstanding any other provision of this part, a member who elected to receive optional settlement 2, 3, or 4, involving a life contingency of the beneficiary, may, if the beneficiary predeceases the member or if the member marries and the former spouse was not named as beneficiary, or, if a former spouse was named, in the event of a dissolution of marriage or a legal separation in which the judgment dividing the community property awards the total interest in the retirement system to the retired member, or in an annulment of marriage in which the court confirms the annulment, elect to have the actuarial equivalent reflecting any selection against the fund resulting from the election as of the date of election of the allowance payable for the remainder of the members lifetime under the optional settlement previously chosen applied to a lesser allowance during the members remaining lifetime under one of the optional settlements specified in this article and name a different beneficiary.
(2)Notwithstanding paragraph (1), for an election under this section that occurs on or after January 1, 2014, a member may name the same beneficiary as previously designated, provided that the resulting benefit to the member and the named beneficiary otherwise meets the requirements of this section.
(b)The election provided by this section is irrevocable and shall be made within 12 months following the death of the beneficiary who predeceased the member, within 12 months of the date of entry of the annulment of marriage or judgment dividing the community property of the parties, or within 12 months following marriage if the spouse is named as beneficiary. The election shall become effective on the date specified on the election, provided that this date is not earlier than the day following receipt of the election in this system under this section.
(c)A member who has a qualifying event prior to January 1, 1988, and who fails to elect by January 1, 1989, or a member who has a qualifying event on or after January 1, 1988, and who fails to elect within 12 months, shall retain the right to make an election under this section. However, this election shall become effective no earlier than 12 months after the date it is filed with the board, provided that neither the member nor the designated beneficiary die prior to the effective date of the election.
(d)This section shall not be construed to mean that designation of a new beneficiary causes the selection of an optional settlement. An optional settlement shall be selected by a member in a writing filed by the member with the board.
(e)A retiree who divorces after retirement and subsequently remarries may designate their new spouse as a beneficiary of the retirees postdivorce retirement settlement.
This
(f)This section shall apply to any member who retires on or before December 31, 2017.
(a)(1)Notwithstanding any other provision of this part, a member who elected to receive optional settlement 2, 3, or 4, involving a life contingency of the beneficiary, may, if the beneficiary predeceases the member or if the member marries and the former spouse was not named as beneficiary, or, if a former spouse was named, in the event of a dissolution of marriage or a legal separation in which the judgment dividing the community property awards the total interest in the retirement system to the retired member, or in an annulment of marriage in which the court confirms the annulment, elect to have the actuarial equivalent reflecting any selection against the fund resulting from the election as of the date of election of the allowance payable for the remainder of the members lifetime under the optional settlement previously chosen applied to a lesser allowance during the members remaining lifetime under one of the optional settlements specified in this article and name a different beneficiary.
(2)Notwithstanding paragraph (1), for an election pursuant to under this section that occurs on or after January 1, 2014, a member may name the same beneficiary as previously designated, provided that the resulting benefit to the member and the named beneficiary otherwise meets the requirements of this section.
(b)The election provided by this section is irrevocable and shall be made within 12 months following the death of the beneficiary who predeceased the member, within 12 months of the date of entry of the annulment of marriage or judgment dividing the community property of the parties, or within 12 months following marriage if the spouse is named as beneficiary. The election shall become effective on the date specified on the election, provided that this date is not earlier than the day following receipt of the election in this system pursuant to under this section.
(c)A member who has a qualifying event prior to January 1, 1988, and who fails to elect by January 1, 1989, or a member who has a qualifying event on or after January 1, 1988, and who fails to elect within 12 months, shall retain the right to make an election under this section. However, this election shall become effective no earlier than 12 months after the date it is filed with the board, provided that neither the member nor the designated beneficiary die prior to the effective date of the election.
(d)This section shall not be construed to mean that designation of a new beneficiary causes the selection of an optional settlement. An optional settlement shall be selected by a member in a writing filed by the member with the board.
This section shall apply to any member who retires on or before December 31, 2017.
|
Date
|
Status
|
|---|---|
| Sep 22, 2024 | Chaptered by Secretary of State - Chapter 350, Statutes of 2024. |
| Sep 22, 2024 | Approved by the Governor. |
| Sep 5, 2024 | Enrolled and presented to the Governor at 4 p.m. |
| Aug 27, 2024 | Senate amendments concurred in. To Engrossing and Enrolling. (Ayes 77. Noes 0.). |
| Aug 20, 2024 | In Assembly. Concurrence in Senate amendments pending. May be considered on or after August 22 pursuant to Assembly Rule 77. |
| Aug 19, 2024 | Read third time. Passed. Ordered to the Assembly. (Ayes 40. Noes 0. Page 5202.). |
| Jun 19, 2024 | Read second time. Ordered to third reading. |
| Jun 18, 2024 | Read third time and amended. Ordered to second reading. |
| May 20, 2024 | Read second time. Ordered to third reading. |
| May 16, 2024 | Ordered to second reading. |
| May 16, 2024 | From inactive file. |
| Sep 11, 2023 | Ordered to inactive file at the request of Senator Portantino. |
| Sep 11, 2023 | From special consent calendar |
| Sep 8, 2023 | Ordered to special consent calendar. |
| Sep 5, 2023 | Read second time. Ordered to third reading. |
| Sep 1, 2023 | Read second time and amended. Ordered returned to second reading. |
| Sep 1, 2023 | From committee: Amend, and do pass as amended. (Ayes 7. Noes 0.) (September 1). |
| Jul 3, 2023 | In committee: Referred to APPR suspense file. |
| Jun 22, 2023 | From committee: Do pass and re-refer to Com. on APPR with recommendation: To Consent Calendar. (Ayes 5. Noes 0.) (June 22). Re-referred to Com. on APPR. |
| Jun 15, 2023 | From committee chair, with author's amendments: Amend, and re-refer to committee. Read second time, amended, and re-referred to Com. on L., P.E. & R. |
| May 24, 2023 | Referred to Com. on L., P.E. & R. |
| May 11, 2023 | In Senate. Read first time. To Com. on RLS. for assignment. |
| May 11, 2023 | Read third time. Passed. Ordered to the Senate. (Ayes 66. Noes 0. Page 1523.) |
| May 4, 2023 | Read second time. Ordered to Consent Calendar. |
| May 3, 2023 | From committee: Do pass. To Consent Calendar. (Ayes 16. Noes 0.) (May 3). |
| Apr 26, 2023 | In committee: Hearing postponed by committee. |
| Apr 12, 2023 | From committee: Do pass and re-refer to Com. on APPR. (Ayes 7. Noes 0.) (April 12). Re-referred to Com. on APPR. |
| Mar 20, 2023 | Re-referred to Com. on P.E. & R. |
| Mar 16, 2023 | Referred to Com. on P.E. & R. |
| Mar 16, 2023 | From committee chair, with author's amendments: Amend, and re-refer to Com. on P.E. & R. Read second time and amended. |
| Feb 17, 2023 | From printer. May be heard in committee March 19. |
| Feb 16, 2023 | Read first time. To print. |
|
Date
|
Description
|
Location
|
Votes
|
|
|---|---|---|---|---|
| Aug 27, 2024 | AB 1246 Stephanie Nguyen Concurrence in Senate Amendments | Assembly Floor |
Passed |
|
| Aug 19, 2024 | Assembly 3rd Reading AB1246 Stephanie Nguyen By Ashby | Senate Floor |
Passed |
|
| Sep 1, 2023 | Do pass as amended | Senate Standing Committee on Appropriations |
Passed |
|
| Jul 3, 2023 | Placed on suspense file | Senate Standing Committee on Appropriations |
Passed |
|
| Jun 22, 2023 | Do pass, but first be re-referred to the Committee on [Appropriations] with the recommendation: To Consent Calendar | Senate Standing Committee on Labor, Public Employment and Retirement |
Passed |
|
| May 11, 2023 | AB 1246 Stephanie Nguyen Consent Calendar Second Day Regular Session | Assembly Floor |
Passed |
|
| May 3, 2023 | Do pass. To Consent Calendar. | Assembly Standing Committee on Appropriations |
Passed |
|
| Apr 12, 2023 | Do pass and be re-referred to the Committee on [Appropriations] | Assembly Standing Committee on Public Employment and Retirement |
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
|
|---|---|---|
| Cal Fire Local 2881 | ** Support | |
| California Association Of Highway Patrolmen | ** Support | |
| Peace Officers Research Association Of California | ** Support | |
| Retired Public Employees Association | ** Support |
CONCURRENCE IN SENATE AMENDMENTS
CSA1 Bill Id:AB 1246
Author:(Stephanie Nguyen)
As Amended Ver:June 18, 2024
Majority vote
SUMMARY
Authorizes a retired California Public Employees' Retirement System (CalPERS) member who divorces after retirement and subsequently remarries to designate their new spouse as a beneficiary for the member's share of retirement, among other provisions.
Senate Amendments
- Clarify that, commencing January 1, 2026 (instead of January 1, 2025), a CalPERS member who divorces after retirement and subsequently remarries may designate their new spouse as a beneficiary of the retiree's post-divorce retirement settlement irrespective as to whether the member received 100 percent of their retirement allowance in the divorce settlement. The benefit would be funded by a corresponding actuarial reduction in the member's pension allowance.
- Clarify that a member may elect this option only once; preclude elections that would be in derogation of the former spouse's interest in the retirement system; and, preclude elections that would result in additional employer costs.
- Remove provision relating to the Judges Retirement System II plan following enactment of those provisions via AB 658 (Mike Fong) Chapter 538, Statutes of 2023.
COMMENTS
Background
Optional settlements are alternative payments of a CalPERS member's retirement allowance, whereby, the member's retirement allowance is actuarially reduced to provide a lifetime allowance to a designated beneficiary. Optional settlements are distinct from a survivor's continuance which is an allowance for life that is paid to a deceased CalPERS member's statutorily defined survivor (i.e., a spouse or domestic partner, unmarried minor children, unmarried children who became disabled before age 18, or economically dependent parents of the member, as specified). A survivor's continuance is payable to the survivor regardless of any beneficiary designation, and a spouse for example, can be both a survivor entitled to a survivor's continuance and a beneficiary of an optional settlement. However, a member may designate a person other than the survivor as a beneficiary of an optional settlement.
Prior law restricted a member's ability after retirement to revise or revoke an optional settlement beneficiary designation except under certain circumstances. However, previous reforms afforded a member increased flexibility to change beneficiary designations after retirement, provided that doing so resulted in no greater cost to the system or the employer, but instead, was funded by an adjusted reduction to the member's retirement allowance. In cases where a member divorces a spouse after retirement, existing law authorizes a member to add a new beneficiary only if the member received 100% of the member's retirement allowance in the divorce settlement. If the divorce settlement split the retirement account so that the nonmember spouse receives any portion of the member's retirement allowance, the member may not designate a new beneficiary. However, since existing law also protects the nonmember spouse's portion of such a division of a member's account, there is no detrimental effect to the nonmember spouse's interest in allowing the member to designate a new beneficiary for the member's remaining portion given that the member, not the former spouse, system, or the employer, would be funding the new beneficiary's allowance. This bill would allow the member that ability.
According to the Author
"Currently, CalPERS retirees can change their beneficiary if they are awarded 100 percent of their CalPERS retirement benefits in a divorce settlement. "[However,] there is no current avenue for retired CalPERS members who divorce after retirement and who receive less than 100 percent of their benefit to add beneficiaries for their remaining CalPERS benefits should they remarry. [This bill] seeks to remedy this problem…; [does not] impact the former spouse's awarded retirement benefit in any way;" and, "…will ensure that pensioners who have been previously divorced and are now remarried can provide financial security to their new spouse."
Arguments in Support
The California Association of Highway Patrolmen, CAL FIRE Local 2881, and Retired Public Employees Association offer statements similar to those of the author.
Arguments in Opposition
None.
FISCAL COMMENTS
The Senate Appropriations Committee notes that CalPERS indicates that it would incur a one-time General Fund cost of $55,000 to update information technology systems, and this bill would not have a fiscal impact with respect to CalPERS retirement benefits. Instead, it would only affect the distribution of a retiree's benefit.
VOTES:
ASM PUBLIC EMPLOYMENT AND RETIREMENT: 7-0-0
YES: McKinnor, Lackey, Addis, Vince Fong, Haney, Stephanie Nguyen, Schiavo
ASM APPROPRIATIONS: 16-0-0
YES: Holden, Megan Dahle, Bryan, Calderon, Wendy Carrillo, Dixon, Mike Fong, Hart, Lowenthal, Mathis, Papan, Pellerin, Robert Rivas, Sanchez, Weber, Wilson
ASSEMBLY FLOOR: 66-0-14
YES: Addis, Aguiar-Curry, Alanis, Bains, Bennett, Berman, Boerner, Bryan, Calderon, Wendy Carrillo, Chen, Connolly, Megan Dahle, Davies, Essayli, Flora, Mike Fong, Vince Fong, Friedman, Gabriel, Gallagher, Garcia, Gipson, Grayson, Haney, Holden, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Low, Lowenthal, Maienschein, Mathis, McKinnor, Muratsuchi, Stephanie Nguyen, Pacheco, Papan, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Reyes, Luz Rivas, Robert Rivas, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Weber, Wicks, Wilson, Zbur, Rendon
ABS, ABST OR NV: Alvarez, Arambula, Bauer-Kahan, Bonta, Juan Carrillo, Cervantes, Dixon, Hart, Lee, McCarty, Ortega, Jim Patterson, Ward, Wood
SENATE FLOOR: 40-0-0
YES: Allen, Alvarado-Gil, Archuleta, Ashby, Atkins, Becker, Blakespear, Bradford, Caballero, Cortese, Dahle, Dodd, Durazo, Eggman, Glazer, Gonzalez, Grove, Hurtado, Jones, Laird, Limón, McGuire, Menjivar, Min, Newman, Nguyen, Niello, Ochoa Bogh, Padilla, Portantino, Roth, Rubio, Seyarto, Skinner, Smallwood-Cuevas, Stern, Umberg, Wahab, Wiener, Wilk
UPDATED
VERSION: June 18, 2024
CONSULTANT: Michael Bolden / P. E. & R. / (916) 319-3957 FN: 0004202
SENATE RULES COMMITTEE Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | AB 1246 |
THIRD READING
Bill No: AB 1246
Author: Stephanie Nguyen (D)
Amended: 6/18/24 in Senate
Vote: 21
SENATE LABOR, PUB. EMP. & RET. COMMITTEE: 5-0, 6/22/23
AYES: Cortese, Wilk, Durazo, Laird, Smallwood-Cuevas
SENATE APPROPRIATIONS COMMITTEE: 7-0, 9/1/23
AYES: Portantino, Jones, Ashby, Bradford, Seyarto, Wahab, Wiener
ASSEMBLY FLOOR: 66-0, 5/11/23 (Consent) - See last page for vote
SUBJECT: Public employees’ retirement: Public Employees’ Retirement System optional settlements
SOURCE: Cal Fire Local 2881
California Association of Highway Patrolmen
Retired Public Employees Association
DIGEST:
This bill permits a retired California Public Employees’ Retirement System (CalPERS) member who divorces after retirement and subsequently remarries to designate their new spouse as a beneficiary for the member’s share of retirement.
Senate Floor Amendments of 6/18/24 delay implementation of the bill’s provisions related to optional survivor benefits by one year, from January 1, 2025, to January 1, 2026, and delete technical cleanup provisions related to the Judges’ Retirement System that were passed in another bill in 2023.
ANALYSIS:
Existing law:
- Authorizes a CalPERS member to elect receive upon retirement an optional settlement that provides less than 100% of the member’s unmodified retirement allowance in order to fund a retirement allowance for life to the member’s beneficiary upon the member’s death. (Government Code §§ 21450 et seq. for members who retired on or before December 21, 2017, and §§ 21470 et seq. for members who retire on and after January 1, 2023)
- Provides specified circumstances for when a retired member can change their beneficiary designation after retirement. (GC § 21462, § 21481)
This bill allows a retiree, commencing January 1, 2026, who divorces after retirement and subsequently remarries to designate their new spouse as a beneficiary of the retiree’s post-divorce retirement settlement irrespective as to whether the member received 100 % of their retirement allowance in the divorce settlement; the benefit would be funded by a corresponding actuarial reduction in the member’s pension allowance and the first spouse’s benefit would be shielded from the reduction.
Comments
Optional settlements are alternative payments of a member’s pension allowance whereby the member takes an actuarial reduction of the member’s pension to provide a lifetime allowance to a designated beneficiary. These are distinct from the survivor’s continuance which is an allowance for life paid to a deceased CalPERS member’s statutorily defined survivor (a spouse or domestic partner, unmarried minor children, unmarried children who became disabled before age 18, or economically dependent parents of the member, as specified). A survivor’s continuance is always payable to the survivor regardless of any beneficiary designation. A spouse can be both a survivor entitled to a survivor’s continuance and a beneficiary of an optional settlement. However, a member may designate a person other than the survivor as a beneficiary of an optional settlement.
Prior law restricted a member’s ability after retirement to revise or revoke an optional settlement beneficiary designation except for specified circumstances. However, previous reforms permitted a member greater flexibility to change beneficiary designations after retirement provided that doing so resulted in no greater cost to the system or to the employer but rather was funded by an adjusted reduction to the member’s retirement allowance. In cases, where a member divorces a spouse after retirement, statute permits the member to add a new beneficiary only if the member received 100 % of the member’s retirement allowance in the divorce settlement. If the divorce settlement split the retirement account so that the nonmember spouse receives any portion of the member’s retirement allowance, the member may not designate a new beneficiary.
However, since existing law also protects the nonmember spouse’s portion of such a division of a member’s account, there is no detrimental effect to the nonmember spouse’s interest in allowing the member to designate a new beneficiary for the member’s remaining portion because the member (not the ex-spouse, CalPERS, nor the employer) would be funding the new beneficiary’s allowance.
This bill allows the member that ability to name a new beneficiary whose benefit would be funded by a corresponding actuarial reduction in the member’s pension allowance.
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No
According to the Senate Appropriations Committee:
- CalPERS indicates that it would incur a one-time General Fund cost of $55,000 to update IT systems.
- This bill would not have a fiscal impact with respect to CalPERS retirement benefits. Instead, it would only affect the distribution of a retiree’s benefit.
SUPPORT: (Verified 6/18/24)
Cal Fire Local 2881 (co-source)
California Association of Highway Patrolmen (co-source)
Retired Public Employees Association (co-source)
Peace Officers Research Association of California
OPPOSITION: (Verified 6/18/24)
None received.
ARGUMENTS IN SUPPORT: According to Cal Fire Local 2881, California Association of Highway Patrolmen, Retired Public Employees Association:
AB 1246 seeks to remedy this problem by allowing a retired CalPERS member who divorces after retirement and subsequently remarries to designate their new spouse as a beneficiary for the member’s share of retirement.
This bill will not impact former spouses awarded retirement benefits in any way.
According to the Peace Officers Research Association of California,
This bill will provide the fairness needed by taking care of spouses of all retirees regardless of previous divorce settlements.
ASSEMBLY FLOOR: 66-0, 5/11/23
AYES: Addis, Aguiar-Curry, Alanis, Bains, Bennett, Berman, Boerner, Bryan, Calderon, Wendy Carrillo, Chen, Connolly, Megan Dahle, Davies, Essayli, Flora, Mike Fong, Vince Fong, Friedman, Gabriel, Gallagher, Garcia, Gipson, Grayson, Haney, Holden, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Low, Lowenthal, Maienschein, Mathis, McKinnor, Muratsuchi, Stephanie Nguyen, Pacheco, Papan, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Reyes, Luz Rivas, Robert Rivas, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Weber, Wicks, Wilson, Zbur, Rendon
NO VOTE RECORDED: Alvarez, Arambula, Bauer-Kahan, Bonta, Juan Carrillo, Cervantes, Dixon, Hart, Lee, McCarty, Ortega, Jim Patterson, Ward, Wood
Prepared by: Glenn Miles / L., P.E. & R. / (916) 651-1556
6/19/24 11:53:18
**** END ****
SENATE RULES COMMITTEE Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | AB 1246 |
THIRD READING
Bill No: AB 1246
Author: Stephanie Nguyen (D)
Amended: 9/1/23 in Senate
Vote: 21
SENATE LABOR, PUB. EMP. & RET. COMMITTEE: 5-0, 6/22/23
AYES: Cortese, Wilk, Durazo, Laird, Smallwood-Cuevas
ASSEMBLY FLOOR: 66-0, 5/11/23 (Consent) - See last page for vote
SUBJECT: Public employees’ retirement: Public Employees’ Retirement System optional settlements: Judges’ Retirement System II monthly allowance adjustments
SOURCE: Cal Fire Local 2881
California Association of Highway Patrolmen
Retired Public Employees Association
DIGEST:
This bill permits a retired California Public Employees’ Retirement System (CalPERS) member who divorces after retirement and subsequently remarries to designate their new spouse as a beneficiary for the member’s share of retirement. The bill also makes a technical clarifying change to provisions of the Judge’s Retirement System II as added by SB 885.
ANALYSIS:
Existing law:
- Authorizes a CalPERS member to elect receive upon retirement an optional settlement that provides less than 100% of the member’s unmodified retirement allowance in order to fund a retirement allowance for life to the member’s beneficiary upon the member’s death. (Government Code §§ 21450 et seq. for members who retired on or before December 21, 2017, and §§ 21470 et seq. for members who retire on and after January 1, 2023)
- Provides specified circumstances for when a retired member can change their beneficiary designation after retirement. (GC § 21462, § 21481)
- Provides that the retirement allowance of retired judges who have elected to receive a monthly allowance under subdivision (d) of Section 75522 or who have retired for disability and are receiving an allowance under Section 75560.4 shall be adjusted effective in January of each year after a judge has been retired under this chapter for more than six months, to reflect any increase in the cost of living occurring after January 1 of the immediately preceding fiscal year, as specified. (GC § 75523)
- Authorizes Judges’ Retirement System II members to elect to retire at an earlier age or with fewer years of service than the plan’s “full retirement age” factors if they defer receipt of their retirement allowance (1) until they meet full retirement age, whereupon their 3.75 benefit factor would be reduced as specified; or (2) they defer beyond the time they meet the full retirement age, as specified, whereupon they would receive their 3.75 benefit factor. (GC § 75522.5)
This bill:
- Allows a retiree who divorces after retirement and subsequently remarries to designate their new spouse as a beneficiary of the retiree’s post-divorce retirement settlement.
- Makes a clarifying change to technical language that was passed in SB 885 to ensure that a member of the Judges’ Retirement System II who elects to take a deferred retirement may not receive a COLA applied to the judge’s retirement allowance during the deferral period but only after the judge has received a retirement allowance.
Comments
- Pension Allowance Beneficiary Designations
Optional settlements are alternative payments of a member’s pension allowance whereby the member takes an actuarial reduction of the member’s pension to provide a lifetime allowance to a designated beneficiary. These are distinct from the survivor’s continuance which is an allowance for life paid to a deceased CalPERS member’s statutorily defined survivor (a spouse or domestic partner, unmarried minor children, unmarried children who became disabled before age 18, or economically dependent parents of the member, as specified). A survivor’s continuance is always payable to the survivor regardless of any beneficiary designation. A spouse can be both a survivor entitled to a survivor’s continuance and a beneficiary of an optional settlement. However, a member may designate a person other than the survivor as a beneficiary of an optional settlement.
Prior law restricted a member’s ability after retirement to revise or revoke an optional settlement beneficiary designation except for specified circumstances. However, previous reforms permitted a member greater flexibility to change beneficiary designations after retirement provided that doing so resulted in no greater cost to the system or to the employer but rather was funded by an adjusted reduction to the member’s retirement allowance. In cases, where a member divorces a spouse after retirement, statute permits the member to add a new beneficiary only if the member received 100 % of the member’s retirement allowance in the divorce settlement. If the divorce settlement split the retirement account so that the nonmember spouse receives any portion of the member’s retirement allowance, the member may not designate a new beneficiary. However, since existing law also protects the nonmember spouse’s portion of such a division of a member’s account, there is no detrimental effect to the nonmember spouse’s interest in allowing the member to designate a new beneficiary for the member’s remaining portion because the member (not the ex-spouse, CalPERS, nor the employer) would be funding the new beneficiary’s allowance. This bill would allow the member that ability to name a new beneficiary.
- SB 885 - JRS II Deferred Retirement COLA Technical Clarification
SB 885, the annual omnibus public retirement system housekeeping bill, included technical conforming changes to implement last year’s AB 2443 (Chapter 531, Statutes of 2022) related to the JRS II deferred retirement option. Certain provisions of SB 885 were intended to clarify that a judge who takes a deferred retirement is still eligible for statutorily provided COLAs provided under the regular retirement option.
This bill clarifies that those COLAs are available after the judge receives the retirement allowance not during the deferral period.
- Need for this bill?
According to the author,
Currently, CalPERS retirees can change their beneficiary if they are awarded 100% of their CalPERS retirement benefits in a divorce settlement (Calif GOV CODE 21462).
There is no current avenue for retired CalPERS members who divorce after retirement and who receive less than 100 percent of their benefit to add beneficiaries for their remaining CalPERS benefits should they remarry.
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No
According to the Senate Appropriations Committee:
- CalPERS indicates that it would incur a one-time General Fund cost of $55,000 to update IT systems.
- This bill would not have a fiscal impact with respect to CalPERS retirement benefits. Instead, it would only affect the distribution of a retiree’s benefit.
SUPPORT: (Verified 9/1/23)
Cal Fire Local 2881 (co-source)
California Association of Highway Patrolmen (co-source)
Retired Public Employees Association (co-source)
Peace Officers’ Research Association of California
OPPOSITION: (Verified 9/1/23)
None received
ARGUMENTS IN SUPPORT: According to the sponsors,
AB 1246 seeks to remedy this problem by allowing a retired CalPERS member who divorces after retirement and subsequently remarries to designate their new spouse as a beneficiary for the member’s share of retirement.
This bill will not impact former spouses awarded retirement benefits in any way.
According to the Peace Officers Research Association of California,
AB 1246 seeks to remedy a problem whereby a divorced retiree who subsequently remarries may designate their new spouse as a beneficiary only if they are awarded 100% of their CalPERS retirement in a divorce settlement. This bill will provide the fairness needed by taking care of spouses of all retirees regardless of previous divorce settlements.
ASSEMBLY FLOOR: 66-0, 5/11/23
AYES: Addis, Aguiar-Curry, Alanis, Bains, Bennett, Berman, Boerner, Bryan, Calderon, Wendy Carrillo, Chen, Connolly, Megan Dahle, Davies, Essayli, Flora, Mike Fong, Vince Fong, Friedman, Gabriel, Gallagher, Garcia, Gipson, Grayson, Haney, Holden, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Low, Lowenthal, Maienschein, Mathis, McKinnor, Muratsuchi, Stephanie Nguyen, Pacheco, Papan, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Reyes, Luz Rivas, Robert Rivas, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Weber, Wicks, Wilson, Zbur, Rendon
NO VOTE RECORDED: Alvarez, Arambula, Bauer-Kahan, Bonta, Juan Carrillo, Cervantes, Dixon, Hart, Lee, McCarty, Ortega, Jim Patterson, Ward, Wood
Prepared by: Glenn Miles / L., P.E. & R. / (916) 651-1556
9/2/23 14:07:38
**** END ****
SENATE COMMITTEE ON APPROPRIATIONS
Senator Anthony Portantino, Chair
2023 - 2024 Regular Session
AB 1246 (Stephanie Nguyen) - Public Employees’ Retirement System optional settlements
Version: June 15, 2023 | Policy Vote: L., P.E. & R. 5 - 0 |
Urgency: No | Mandate: No |
Hearing Date: September 1, 2023 | Consultant: Robert Ingenito |
Bill Summary:
AB 1246 would permit a retired California Public Employees’ Retirement System (CalPERS) member who divorces after retirement and subsequently remarries to designate their new spouse as a beneficiary for the member’s share of retirement.
*********** ANALYSIS ADDENDUM – SUSPENSE FILE ***********
The following information is revised to reflect amendments
adopted by the committee on September 1, 2023
Fiscal Impact:
- CalPERS indicates that it would incur a one-time General Fund cost of $55,000 to update IT systems.
- This bill would not have a fiscal impact with respect to CalPERS retirement benefits. Instead, it would only affect the distribution of a retiree’s benefit.
Author Amendments:
Clarify language in the Senate Labor, Public Employment and Retirement Committee’s annual technical cleanup bill, SB 885. SB 885 has been enrolled and presented to the Governor. Section 23 of SB 885 clarifies that a judge who takes a deferred retirement (a program passed last year that allows the judge to leave service early, not lose their retirement benefit, but not get it until their regular retirement age) is still eligible for cost of living adjustments (COLAs) they would get if they retired under the regular retirement age. It is possible that the current language could be interpreted to provide the COLAs during a judge’s deferral period. The amendment would clarify that the COLAs would only apply once the judge starts receiving the pension allowance.
-- END --
SENATE COMMITTEE ON
Senator Anthony Portantino, Chair
2023 - 2024 Regular Session
AB 1246 (Stephanie Nguyen) - Public Employees’ Retirement System optional settlements
Version: | Policy Vote: |
Urgency: | Mandate: |
Hearing Date: | Consultant: |
Bill Summary:
AB 1246 would permit a retired California Public Employees’ Retirement System (CalPERS) member who divorces after retirement and subsequently remarries to designate their new spouse as a beneficiary for the member’s share of retirement.
Fiscal Impact:
- CalPERS indicates that it would incur a one-time General Fund cost of $55,000 to update IT systems.
- This bill would not have a fiscal impact with respect to CalPERS retirement benefits. Instead, it would only affect the distribution of a retiree’s benefit.
Background:
Current law authorizes a CalPERS member to elect receive, upon retirement, an optional settlement that provides less than 100 percent of the unmodified retirement allowance in order to fund a retirement allowance for life to the member’s beneficiary upon the member’s death. Such optional settlements are alternative payments of a member’s pension allowance whereby the member takes an actuarial reduction of the member’s pension to provide a lifetime allowance to a designated beneficiary. However, retired CalPERS members who divorce after retirement and who receive less than 100 percent of their benefit are unable to add beneficiaries for their remaining CalPERS benefits, should they remarry.
Proposed Law:
This bill would allow a retiree who divorces after retirement and subsequently remarries to designate their new spouse as a beneficiary of the retiree’s post-divorce retirement settlement.
Related Legislation:
- SB 525 (Pan, Chapter 24, Statutes of 2017) provided, among other provisions, technical clean up language to AB 2404’s (of 2016) reform of optional settlements.
- AB 2404 (Cooley, Chapter 199, Statutes of 2016) revised the optional settlements for CalPERS members that retire on or after January 1, 2018, in order to simplify members’ retirement choices and administration of the retirement system.
Staff Comments:
As noted above, current law prohibits a member who elects to receive specified optional settlements from changing the member’s optional settlement and designated beneficiary unless a specified event occurs, including the death of a beneficiary who predeceased the member, a dissolution of marriage or a legal separation in which the judgment dividing the community property awards the total interest in the retirement system to the retired member, or in an annulment of marriage in which the court confirms the annulment. Thus, retired CalPERS members who divorce after retirement and who receive less than their full benefit are unable to add beneficiaries for their remaining CalPERS benefits, should they remarry.
-- END --
SENATE COMMITTEE ON LABOR, PUBLIC EMPLOYMENT AND RETIREMENT
Senator Dave Cortese, Chair
2023 - 2024 Regular
Bill No: AB 1246 Hearing Date: June 22, 2023
Author: | Stephanie Nguyen | ||
Version: | June 15, 2023 | ||
Urgency: | No | Fiscal: | Yes |
Consultant: | Glenn Miles | ||
SUBJECT: Public Employees’ Retirement System optional settlements
KEY ISSUE
Should a retired California Public Employees’ Retirement System (CalPERS) member who divorces after retirement and subsequently remarries be able to designate their new spouse as a beneficiary for the member’s share of retirement?
ANALYSIS
Existing law:
- Authorizes a CalPERS member to elect receive upon retirement an optional settlement that provides less than 100% of the member’s unmodified retirement allowance in order to fund a retirement allowance for life to the member’s beneficiary upon the member’s death. (Government Code §§ 21450 et seq. for members who retired on or before December 21, 2017, and §§ 21470 et seq. for members who retire on and after January 1, 2023)
- Provides specified circumstances for when a retired member can change their beneficiary designation after retirement (GC § 21462, § 21481)
This bill: Allows a retiree who divorces after retirement and subsequently remarries to designate their new spouse as a beneficiary of the retiree’s post-divorce retirement settlement.
COMMENTS
1. Background
Optional settlements are alternative payments of a member’s pension allowance whereby the member takes an actuarial reduction of the member’s pension to provide a lifetime allowance to a designated beneficiary. These are distinct from the survivor’s continuance which is an allowance for life paid to a deceased CalPERS member’s statutorily defined survivor (a spouse or domestic partner, unmarried minor children, unmarried children who became disabled before age 18, or economically dependent parents of the member, as specified). A survivor’s continuance is always payable to the survivor regardless of any beneficiary designation. A spouse can be both a survivor entitled to a survivor’s continuance and a beneficiary of an optional settlement. However, a member may designate a person other than the survivor as a beneficiary of an optional settlement.
Prior law restricted a member’s ability after retirement to revise or revoke an optional settlement beneficiary designation except for specified circumstances. However, previous reforms permitted a member greater flexibility to change beneficiary designations after retirement provided that doing so resulted in no greater cost to the system or to the employer but rather was funded by an adjusted reduction to the member’s retirement allowance. In cases, where a member divorces a spouse after retirement, statute permits the member to add a new beneficiary only if the member received 100 % of the member’s retirement allowance in the divorce settlement. If the divorce settlement split the retirement account so that the nonmember spouse receives any portion of the member’s retirement allowance, the member may not designate a new beneficiary. However, since existing law also protects the nonmember spouse’s portion of such a division of a member’s account, there is no detrimental effect to the nonmember spouse’s interest in allowing the member to designate a new beneficiary for the member’s remaining portion given that the member, not the ex-spouse nor the system, nor the employer would be funding the new beneficiary’s allowance. This bill would allow the member that ability.
2. Need for this bill?
According to the author,
“Currently, CalPERS retirees can change their beneficiary if they are awarded 100% of their CalPERS retirement benefits in a divorce settlement (Calif GOV CODE 21462).”
“There is no current avenue for retired CalPERS members who divorce after retirement and who receive less than 100 percent of their benefit to add beneficiaries for their remaining CalPERS benefits should they remarry.”
3. Proponent Arguments
According to the sponsors,
“AB 1246 seeks to remedy this problem by allowing a retired CalPERS member who divorces after retirement and subsequently remarries to designate their new spouse as a beneficiary for the member’s share of retirement.”
“This bill will not impact former spouses awarded retirement benefits in any way.”
According to the Peace Officers Research Association of California,
“AB 1246 seeks to remedy a problem whereby a divorced retiree who subsequently remarries may designate their new spouse as a beneficiary only if they are awarded 100% of their CalPERS retirement in a divorce settlement. This bill will provide the fairness needed by taking care of spouses of all retirees regardless of previous divorce settlements.”
4. Opponent Arguments:
None received.
5. Prior Legislation:
SB 525 (Pan), Chapter 24, Statutes of 2017, provided, among other provisions, technical clean up language to AB 2404’s (of 2016) reform of optional settlements.
AB 2404 (Cooley), Chapter 199, Statutes of 2016, revised the optional settlements for CalPERS members that retire on or after January 1, 2018, in order to simplify members’ retirement choices and administration of the retirement system.
SUPPORT
Cal Fire Local 2881 (co-sponsor)
California Association of Highway Patrolmen (co-sponsor)
Retired Public Employees Association (co-sponsor)
Peace Officers’ Research Association of California (PORAC),
OPPOSITION
None received
-- END --
Date of Hearing: May 3, 2023
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Chris Holden, Chair
ABPCA Bill Id:AB 1246
Author:(Stephanie Nguyen) – As Amended Ver:March 16, 2023
Policy Committee: | Public Employment and Retirement | Vote: | 7 - 0 |
|
| ||
|
|
Urgency: No State Mandated Local Program: No Reimbursable: No
SUMMARY:
This bill allows a retired California Public Employees’ Retirement System (CalPERS) member who divorces after retirement and subsequently remarries to designate their new spouse as a beneficiary for the member’s share of retirement.
FISCAL EFFECT:
- Cost neutral with regard to benefits. This bill does not change the amount of a CalPERS benefit available to a member, only its distribution.
- One-time General Fund costs of about $55,000 to update IT systems at CalPERs.
COMMENTS:
Background. Current law establishes CalPERS to provide pension and other benefits to members of CalPERS. Current law permits a member of CalPERS who retires on or before December 1, 31, 2017, to elect from among several optional settlements for the purpose of structuring the member’s retirement allowance. Current law prohibits a member who elects to receive specified optional settlements from changing the member’s optional settlement and designated beneficiary unless a specified event occurs, including the death of a beneficiary who predeceased the member, a dissolution of marriage or a legal separation in which the judgment dividing the community property awards the total interest in the retirement system to the retired member, or in an annulment of marriage in which the court confirms the annulment.
Retired CalPERS members who divorce after retirement and who receive less than 100% of their benefit are unable to add beneficiaries for their remaining CalPERS benefits, should they remarry. This bill allows a retired CalPERS member who divorces after retirement and subsequently remarries to designate their new spouse as a beneficiary for the member’s share of retirement.
Analysis Prepared by: Natasha Collins / APPR. / (916) 319-2081
Date of Hearing: April 12, 2023
ASSEMBLY COMMITTEE ON PUBLIC EMPLOYMENT AND RETIREMENT
Tina S. McKinnor, Chair
ABPCA Bill Id:AB 1246 (
Author:Stephanie Nguyen) – As Amended Ver:March 16, 2023
SUBJECT: Public Employees’ Retirement System optional settlements
SUMMARY: Makes changes to existing law regarding optional settlements by authorizing a California Public Employees’ Retirement System (CalPERS) retiree who divorces after retirement and subsequently remarries, to designate their new spouse as a beneficiary of the retiree’s postdivorce retirement settlement.
EXISTING LAW:
- Provides, among other things under the California Constitution that, "the members of the retirement board of a public pension or retirement system shall discharge their duties with respect to the system solely in the interest of, and for the exclusive purposes of providing benefits to, participants and their beneficiaries, minimizing employer contributions thereto, and defraying reasonable expenses of administrating the system.”[1]
- Establishes the Public Employees’ Retirement Law (PERL), administered by CalPERS, in which its purpose is to effect economy and efficiency in the public service by providing a means whereby employees who become superannuated or otherwise incapacitated may, without hardship or prejudice, be replaced by more capable employees, and to that end provide a retirement system consisting of retirement compensation and death benefits.[2]
- Establishes the Public Employees’ Pension Reform Act of 2013 (PEPRA) – a comprehensive reform of public employee retirement that, among other things, increased contributions towards retirement, decreased benefit formulas, and increased the age of retirement that apply to new members of the system first hired on or after January 1, 2013, and made changes that apply to all members towards resolving unfunded liabilities, manipulation of compensation for purposes of calculating a retirement allowance (i.e., pensions spiking), double-dipping, and other prescribed best practice measures.[3]
- Provides for various retirement benefit options in which a CalPERS member may elect to receive an unmodified allowance (i.e., 100 percent of their retirement allowance) for life, or a reduced (i.e., modified) retirement benefit for life to provide a portion of the member’s ongoing monthly benefit upon their death, to the member’s beneficiary.[4]
- Prohibits a member who elects to receive specified optional settlements from changing their optional settlement and beneficiary after the election, unless a specified event occurs, including the death of the beneficiary who predeceases the member, a dissolution of marriage (i.e., divorce) or a legal separation in which the judgment dividing the community property awards the total interest in the retirement system to the retired member, or in an annulment of marriage in which the court affirms the annulment.[5]
FISCAL EFFECT: Unknown. This bill is flagged as fiscal by Legislative Counsel.
COMMENTS: According to the information provided by the author and as the author states, “[c]urrently, CalPERS retirees can change their beneficiary if they are awarded 100 percent of their CalPERS retirement benefits in a divorce settlement (Section 21462 of the Gov. Code); however, there is no current avenue for retired CalPERS members who divorce after retirement and who receive less than 100 percent of their benefit to add beneficiaries for their remaining CalPERS benefits should they remarry.
“[This bill] seeks to remedy this problem by allowing a retired CalPERS member who divorces after retirement and subsequently remarries to designate their new spouse as a beneficiary for the members’ share of retirement. [It does not] impact the former spouse’s awarded retirement benefit in any way,” and “…will ensure that pensioners who have been previously divorced and are now remarried can provide financial security to their new spouse.”
- The CalPERS Plan
CalPERS is a defined benefit plan funded by a combination of employee contributions, employer contributions, and earnings made on its investments. Generally, most employees contribute a percentage of their salary which accrues interest in their individual CalPERS retirement account.
CalPERS members may choose to withdraw their contributions and interest if they are no longer working for a CalPERS-covered employer, or they may choose to receive a lifetime monthly retirement allowance once they become eligible to retire.
Retirement benefits are provided for in statute, and vary depending on the employer’s agreement with CalPERS.
- Optional Settlements Available to CalPERS Members Upon Retirement
Generally, under existing law, a CalPERS member can elect among various optional retirement payment options upon retirement. A CalPERS member may elect to receive for life, an unmodified (i.e., 100 percent), or modified (i.e., reduced) monthly retirement benefit in which the retirement benefit during the CalPERS member’s life is actuarially reduced to leave an actuarially calculated portion of the retirement benefit to their designated beneficiary. Depending on the retirement benefit option elected, a member may elect to leave no continuing monthly benefit, no return of member contributions, an ongoing monthly benefit, or a lump sum of member contributions, upon their death, to the designated beneficiary.
Once the option is elected by the member, it is irrevocable, unless a specified life event occurs, including the death of the beneficiary who predeceases the member, a dissolution of marriage (i.e., divorce) or a legal separation in which the judgment dividing the community property awards the total interest in the retirement system to the retired member, or in an annulment of marriage in which the court affirms the annulment.
- Community Property Interests and CalPERS
Community property is assets owned in common by [legal marriage] as a result of their having been acquired during the marriage by means other than an inheritance by, or a gift or devise to, one spouse, with each spouse generally holding a one-half interest in the property.[6] Not all states or commonwealths are community property jurisdictions; however, California is a community property jurisdiction.
Generally, upon the dissolution of a marital relationship, community property begins when CalPERS receives written notification of a claim, a summons (i.e., joinder), or a proposed or filed order awarding a nonmember spouse a portion of a member’s benefits. CalPERS then places a hold on the member’s account and benefits are held until the claim is resolved. Upon resolution, CalPERS appropriately apportions the assets in the member’s individual account in accordance with the marital dissolution settlement or order.
The following is a rudimentary example: CalPERS retired member “A” is receiving a $4,000 per month retirement benefit. CalPERS retired member “A” and nonmember spouse “B” are getting divorced, and the divorce settlement stipulates that “B” is entitled to receive 50 percent of “A’s” monthly retirement benefit as part of “B’s” community property share of the marital assets. Thus, after the divorce, CalPERS is notified that “A” would receive a $2,000 monthly retirement benefit, and “B” would receive an equal amount under the terms of the divorce settlement.
- This Bill: Adjusting the Member Retirement Benefit for a Subsequent Spouse-Beneficiary and Prior Spouse Community Property Interests
This bill proposes to authorize a CalPERS retiree who divorces after retirement and subsequently remarries, to designate their new spouse as a beneficiary of the retiree’s postdivorce retirement settlement.
The following is a rudimentary example of the mechanics of this bill: While married to nonmember spouse “B,” CalPERS retiree “A” is receiving a monthly retirement allowance of $4,000. “A” and “B” are now getting divorced. The terms of the marital dissolution settlement stipulate that “B” is awarded a 50 percent community property share of “A’s” monthly retirement. Now, “A” receives $2,000 per month, and “B” receives the same as their sole community property share.
“A” subsequently remarries and wants to leave a portion of their $2,000 monthly retirement benefit, say, $1000, to new spouse “C” – a new designated beneficiary. “A’s” monthly benefit will be reduced by $1,000 per month moving forward to accommodate that purpose. Thus, “A” will receive $1,000 per month for life, and “C,” will receive $1,000 per month after “A” dies (assuming that “C” doesn’t predecease “A,” or “A” and “C” also are not divorcing). “B” will continue to receive their $2,000 per month and no more, as it is not affected following the community property settlement.
The above examples are a very basic, nonliteral, and contextualization of the practical effects of this bill, as proposed. As such, there may be other factors affecting amounts, such as actuarial calculations, the division of community property assets and the terms of the divorce settlement, or any other elections that were made by a retired member, to name a few.
To the extent that a retired member elects the option proposed by this bill, it could result in a divorced retired member’s monthly retirement benefit being further actuarially reduced, thereby, leaving less disposable fixed income to meet the retired member’s financial needs during the remainder of their life.
- Equity Solutions and Maximizing Benefits for Underserved and Marginalized Communities
Pursuant to House Resolution (HR) 39 (Gipson, 2021), to continue the Assembly’s commitment to investing in equity solutions and maximizing benefits for underserved and marginalized communities, legislative analyses of the Assembly must discuss the equity impact that a bill will, or may, have on such communities, if any.
This bill does not present a particular focus towards addressing equity in relation to maximizing benefits for underserved or marginalized communities as articulated in HR 39.
- Prior or Related Legislation
Chapter 199, Statutes 2016 (Assembly Bill 2404, Cooley) eliminated and combined several of the optional retirement benefit settlements available to members of CalPERS, the Judges' Retirement System (JRS I), and the Judges' Retirement System II (JRS II), that retire on or after January 1, 2018, to simplify members' retirement choices and administration of these retirement systems.
- Comments by Supporters
The California Association of Highway Patrolmen, and the Retired Public Employees Association state that, “[c]urrently, there is no avenue for retired CalPERS members who divorce after retirement and who receive less than 100 percent of their benefit to add beneficiaries for their remaining CalPERS benefits, should they remarry. [This bill] seeks to remedy this problem by allowing a retired CalPERS member who divorces after retirement and subsequently remarries to designate their new spouse as a beneficiary for the member’s share of retirement.”
REGISTERED SUPPORT / OPPOSITION:
Support
California Association of Highway Patrolmen (Co-sponsor)
Retired Public Employees Association (Co-sponsor)
Opposition
None on file.
Analysis Prepared by: Michael Bolden / P. E. & R. / (916) 319-3957
Discussed in Hearing
View Older Hearings
Bill Author
Bill Co-Author(s):