Chapter 9. Retirement Benefit of California Education Code >> Division 1. >> Title 1. >> Part 14. >> Chapter 9.

The normal retirement age for the Cash Balance Benefit Program is 60 years of age, or 62 years of age for a participant subject to the California Public Employees' Pension Reform Act of 2013.

A participant's retirement date shall be no earlier than the date on which the participant attains the age of 55 years.

Distribution of the retirement benefit under this part shall commence no later than the required beginning date specified in subdivision (c) of Section 26004.

(a) All creditable service subject to coverage by the Cash Balance Benefit Program and all service with the participant's last employer or employers that is creditable under the Defined Benefit Program shall be terminated prior to the retirement date.
  (b) All employers with which the participant is employed to perform creditable service subject to coverage by the plan shall certify on a form prescribed by the system that the participant's employment has been terminated unless the employment was terminated 12 months or more prior to the member's retirement date.

Application for a retirement benefit under this part shall be made on a form prescribed by the system.

The retirement benefit under this part is a benefit payable in the event of retirement that is an amount equal to the sum of the employee account and the employer account as of the retirement date.

(a) The normal form of retirement benefit under this part is a lump-sum payment. Upon distribution of the lump-sum payment to the participant, no further benefits shall be payable from the plan with respect to the Cash Balance Benefit Program.
  (b) The lump-sum payment in subdivision (a) shall not be payable before 180 calendar days have elapsed following the date of termination of employment.
  (c) Except as provided in subdivision (d) or subdivision (e) of Section 26812, the application for the retirement benefit in the form of a lump-sum payment shall be automatically canceled if the participant performs creditable service within 180 calendar days following the date of termination of employment.
  (d) Subdivision (c) does not apply if the participant has reached that age at which the Internal Revenue Code of 1986 requires a distribution of benefits. A participant who has reached this age shall receive a distribution commencing on the earlier of the date that the participant has met the conditions of subdivision (b) or the conditions of subdivision (c) of Section 26004.

(a) Upon application for a retirement benefit under this part, the participant may elect to receive the retirement benefit in the form of an annuity, provided the sum of the employee account and employer account equals or exceeds three thousand five hundred dollars ($3,500).
  (b) If the participant elects to receive the retirement benefit as an annuity, the participant shall elect one of the following forms of payment:
  (1) A single life annuity without a cash refund feature. This form of payment is the actuarial equivalent of the amount that would be payable to the participant if the participant elected to receive the retirement benefit in a lump-sum payment. This benefit shall be payable for the life of the participant. Upon the death of the participant, no other benefit shall be payable to any beneficiary under this part.
  (2) A single life annuity with a cash refund feature. This form of payment is the actuarial equivalent of the amount that would be payable to the participant if the participant elected to receive the retirement benefit in a lump-sum payment. This benefit shall be payable for the life of the participant and any balance remaining upon the death of the participant shall be payable in a lump sum to the participant's beneficiary.
  (3) A 100-percent joint and survivor annuity with a "pop-up" feature. This form of payment is the actuarial equivalent of the amount that would be payable to the participant if the participant elected to receive the retirement benefit in a lump-sum payment, modified to be payable over the combined lives of the participant and the participant's annuity beneficiary. Upon the death of the participant, the monthly amount that was payable to the participant shall be paid monthly to the participant's annuity beneficiary. However, if the annuity beneficiary predeceases the participant, the annuity payable to the participant shall be the single life annuity with a cash refund feature that would have been payable had the participant elected that form of payment at the commencement of the benefit. That single life annuity shall be payable as of the day following the date of the annuity beneficiary's death upon receipt by the system of proof of the annuity beneficiary's death. If the annuity beneficiary predeceases the participant, the participant may designate a new annuity beneficiary. The effective date of the new designation shall be six months following the date notification, on a properly executed form, is received by the board, provided both the participant and the new designated annuity beneficiary are then living. The designation of the new annuity beneficiary under this paragraph shall be subject to an actuarial modification of the single life annuity with a cash refund feature and shall not result in any additional liability to the fund. The new annuity beneficiary shall not be an existing annuity beneficiary.
  (4) A 50-percent joint and survivor annuity with a "pop-up" feature. This form of payment is the actuarial equivalent of the amount that would be payable to the participant if the participant elected to receive the retirement benefit in a lump-sum payment, modified to be payable over the combined lives of the participant and the participant's annuity beneficiary. Upon the death of the participant, one-half of the monthly amount that was payable to the participant shall be paid monthly to the participant's annuity beneficiary. However, if the annuity beneficiary predeceases the participant, the annuity payable to the participant shall be the single life annuity with a cash refund feature that would have been payable had the participant elected that form of payment at the commencement of the benefit. That single life annuity shall be payable as of the day following the date of the annuity beneficiary's death upon receipt by the system of proof of the annuity beneficiary' s death. If the annuity beneficiary predeceases the participant, the participant may designate a new annuity beneficiary. The effective date of the new designation shall be six months following the date notification, on a properly executed form, is received by the board, provided both the participant and the new designated annuity beneficiary are then living. The designation of the new annuity beneficiary under this paragraph shall be subject to an actuarial modification of the single life annuity with a cash refund feature and shall not result in any additional liability to the fund. The new annuity beneficiary shall not be an existing annuity beneficiary.
  (5) A period certain annuity. This form of payment is an annuity equal to the actuarial equivalent of the sum of the balance of the employee account and the employer account on the date the retirement benefit becomes payable. The annuity shall be payable in whole year increments over a period of years specified by the participant, from a minimum of three years to a maximum of 10 years. However, the annuity period may not exceed the life expectancy of the participant or of the participant and the participant's annuity beneficiary. If the participant's death occurs prior to the end of the period certain, the remaining balance of payments shall be paid to the participant's annuity beneficiary pursuant to Section 27007.
  (c) Except as described in subdivision (e) of Section 26807.5, on or after January 1, 2007, a participant may not make a new election of an annuity described in subdivision (b).
  (d) Any participant with a retirement effective on or after January 1, 2007, shall elect an annuity from the annuities described in Section 26807.5.

(a) Upon application for a retirement benefit under this part, the participant may elect to receive the retirement benefit as an annuity payable in monthly installments, provided the sum of the employee account and employer account equals or exceeds three thousand five hundred dollars ($3,500). If the participant elects to receive the retirement benefit as an annuity, the participant shall elect one of the following forms of payment:
  (1) Participant only annuity. This is a single life annuity with a cash refund feature that is the actuarial equivalent of the amount that would be payable to the participant if the participant elected to receive the retirement benefit in a lump-sum payment. Upon the death of the participant, an amount equal to the remaining balance of the participant's contributions and interest shall be paid in a lump-sum to the participant's beneficiary.
  (2) One hundred percent beneficiary annuity. This is a joint and survivor annuity that is the actuarial equivalent of the lump-sum payment modified to be payable over the combined lives of the participant and the participant's annuity beneficiary. Upon the death of the participant, 100 percent of the monthly amount that was payable to the participant shall be paid monthly to the participant's surviving annuity beneficiary.
  (3) Seventy-five percent beneficiary annuity. This is a joint and survivor annuity that is the actuarial equivalent of the lump-sum payment modified to be payable over the combined lives of the participant and the participant's annuity beneficiary. Pursuant to Section 401(a)(9) of the Internal Revenue Code, unless the annuity beneficiary is the participant's spouse or former spouse who has been awarded a community property interest in the participant's benefits under this part, the participant may not designate an annuity beneficiary under this annuity who is more than exactly 19 years younger than the participant. Upon the death of the participant, 75 percent of the monthly amount that was payable to the participant shall be paid monthly to the participant's surviving annuity beneficiary.
  (4) Fifty percent beneficiary annuity. This is a joint and survivor annuity that is the actuarial equivalent of the lump-sum payment modified to be payable over the combined lives of the participant and the participant's annuity beneficiary. Upon the death of the participant, 50 percent of the monthly amount that was payable to the participant shall be paid monthly to the participant's surviving annuity beneficiary.
  (5) A period certain annuity. This form of payment is an annuity that is equal to the actuarial equivalent of the balance of credits in the participant's Cash Balance Benefit account on the date the retirement benefit becomes payable. The annuity shall be payable in whole year increments over a period of years specified by the participant, from a minimum of three years to a maximum of 10 years. However, the annuity period may not exceed the life expectancy of the participant or of the participant and the participant's annuity beneficiary. If the participant's death occurs prior to the end of the period certain, the remaining balance of payments shall be paid to the participant's annuity beneficiary pursuant to Section 27007.
  (b) If an annuity beneficiary designated pursuant to paragraph (2), (3), or (4) of subdivision (a) predeceases the participant, the annuity shall be paid to the participant as the participant only annuity described in paragraph (1) of subdivision (a) that would have been payable had the participant elected that form of payment at the commencement of the benefit. That participant only annuity shall be payable as of the day following the date of the annuity beneficiary's death upon receipt by the system of proof of the annuity beneficiary' s death. If the annuity beneficiary predeceases the participant, the participant may designate a new annuity beneficiary. The effective date of the new designation shall be six months following the date notification is received by the board, provided both the participant and the new designated annuity beneficiary are then living. Notice to the board of the death of the annuity beneficiary shall be on a properly executed form provided by the system. The designation of the new annuity beneficiary under this paragraph is subject to an actuarial modification of the participant only annuity and may not result in any additional liability to the fund.
  (c) If a nonparticipant spouse elects to receive the retirement benefit as an annuity, the nonparticipant spouse shall elect the form of payment specified in paragraph (1) or (5) of subdivision (a) and, in those paragraphs, references to a "participant" shall apply to the nonparticipant spouse.
  (d) Notwithstanding Section 297 or 299.2 of the Family Code, a spouse as described in paragraph (3) of subdivision (a) does not include the domestic partner of the participant, pursuant to Section 7 of Title 1 of the United States Code.
  (e) If there is a determination of community property rights as described in Chapter 15 (commencing with Section 27400) of this part on or before December 31, 2006, the participant may elect the annuity that is required by the judgment or court order. Nothing in this part shall permit the participant to change the annuity to the detriment of the community property interest of the nonparticipant spouse.

(a) A participant who retired and elected an annuity pursuant to Section 26807 may elect to change annuities, subject to all of the following:
  (1) A participant who elected a single life annuity with or without a cash refund feature or a period certain annuity may not change his or her annuity.
  (2) A participant who elected an annuity under paragraph (3) or (4) of subdivision (b) of Section 26807 may elect an annuity under paragraph (3) of subdivision (a) of Section 26807.5.
  (3) The election of the participant under this section is made on or after January 1, 2007, and prior to July 1, 2007.
  (4) The participant designates the same annuity beneficiary that was designated under the prior annuity elected by the participant, if the annuity and annuity designation were effective on December 31, 2006.
  (5) The annuity beneficiary is not afflicted with a known terminal illness and the participant declares, under penalty of perjury under the laws of this state, that to the best of his or her knowledge, the annuity beneficiary is not afflicted with a known terminal illness.
  (6) The annuity beneficiary has not predeceased the participant as of the effective date of the change in the annuity by the participant.
  (b) The change in the annuity by the participant shall be effective on the date the election is signed, provided that the election is on a properly executed form provided by the system and that election is received at the system's headquarters office within 30 days after the date the election is signed.
  (c) After receipt of a participant's election document, the system shall mail an acknowledgment notice to the participant that sets forth the new annuity elected by the participant.
  (d) If the participant and the annuity beneficiary are alive and not afflicted with a known terminal illness, a participant may cancel the election to change annuities and elect to receive the benefit according to the preexisting annuity election. After cancellation, the participant may elect to make a one-time change from the preexisting annuity to any other annuity provided by and subject to the restrictions of paragraph (1), (2), (3), or (4) of subdivision (a). The cancellation or the cancellation and one-time change shall be made on a properly executed form provided by the system and shall be received at the system's headquarters office no later than 30 calendar days following the date of mailing of the acknowledgment notice. If the participant elects to make the one-time change provided by this subdivision, the change shall be effective as of the participant's signature date on the initial election to change.
  (e) If the system is unable to mail an acknowledgment notice to the participant on or before June 1, 2007, or prior to the end of the election period, provided that the participant and the annuity beneficiary are alive and not afflicted with a known terminal illness, the system shall allow a participant to cancel the election to change annuities and elect to receive the benefit according to the preexisting annuity election. After cancellation, the participant may elect to make a one-time change from the preexisting annuity to any other annuity provided by and subject to the restrictions of paragraph (1), (2), (3), or (4) of subdivision (a). The cancellation or the cancellation and one-time change may be made after the end of the election period if it is made on a properly executed form provided by the system and is received at the system's headquarters office no later than 30 calendar days following the date of mailing of the acknowledgment notice. If the participant elects to make the one-time change provided by this subdivision, the change shall be effective as of the participant's signature date on the initial election to change.
  (f) If the participant elects to change his or her annuity as described in subdivision (a) or (d), the participant's annuity shall be modified in a manner determined by the board to prevent any additional liability to the plan.
  (g) References to a "participant" in paragraph (1) of subdivision (a) shall apply to the nonmember spouse.
  (h) The participant shall not change annuities in derogation of a spouse's or former spouse's community property rights as specified in a court order.

(a) A participant who retired and elected a beneficiary annuity pursuant to Section 26807.5 and designated his or her same-sex spouse or same-sex former spouse as annuity beneficiary may elect to change his or her annuity subject to all of the following:
  (1) A participant who elected the 100 percent beneficiary annuity or the 50 percent beneficiary annuity may elect to change his or her beneficiary annuity to the 75 percent beneficiary annuity described in paragraph (3) of subdivision (a) of Section 26807.5, provided the participant's same-sex spouse or same-sex former spouse is more than exactly 19 years younger than the participant.
  (2) The annuity change made by the participant pursuant to this section is made on or after July 1, 2015, and on or before December 31, 2015.
  (3) The participant married a same-sex spouse, the marriage is or was recognized by the United States government, any state government, or any foreign government, and his or her same-sex spouse or same-sex former spouse was designated as his or her annuity beneficiary prior to July 1, 2015.
  (4) The same-sex spouse or same-sex former spouse is the current annuity beneficiary and remains the annuity beneficiary following the annuity change made pursuant to this section.
  (5) The annuity beneficiary has not predeceased the participant as of the effective date of the annuity change made by the participant pursuant to this section.
  (b) The annuity change made by a participant pursuant to subdivision (a) shall be deemed effective as of the effective date of the prior annuity election or June 26, 2013, whichever is later.
  (c) The annuity change made by the participant pursuant to subdivision (a) shall be on a properly executed form provided by the system subject to the following requirements:
  (1) The form is signed and dated by the participant and the participant's spouse, if applicable, on or after July 1, 2015, and on or before December 31, 2015.
  (2) The date the form is received at the system's headquarters office is within 30 calendar days after the date of the participant's signature and within 30 calendar days after the date of the spouse's signature, if applicable.
  (d) After receipt of a participant's election, the system shall mail an acknowledgment notice to the participant that sets forth the new annuity elected by the participant.
  (e) A participant may cancel an annuity change made pursuant to subdivision (a) and elect to receive his or her benefit according to his or her prior annuity election provided the requirements of paragraphs (4) and (5) of subdivision (a) are still met. The cancellation shall become effective as of the date of the initial option change pursuant to subdivision (b) subject to the following requirements:
  (1) The cancellation is made on a properly executed form provided by the system.
  (2) The form includes the signatures of the participant and his or her spouse, if applicable, and the signatures are dated.
  (3) The form is received at the system's headquarters office within 30 calendar days after the date of the acknowledgment notice described in subdivision (d), regardless of whether the form is received after December 31, 2015.
  (f) If a participant elects to change his or her annuity pursuant to subdivision (a), the participant's annuity shall be modified in a manner determined by the board to prevent any additional liability to the plan.
  (g) A participant shall not change his or her annuity in derogation of a spouse's or former spouse's community property rights as specified in a court order.

(a) The annuity elected under this chapter shall be determined as a value actuarially equivalent to the sum of the employee account and the employer account as of the retirement date. The annuity shall be calculated using the age of the participant and, if the participant elected a joint and survivor option, the age of the beneficiary on the retirement date.
  (b) In the case of a participant who previously received an annuity that was terminated pursuant to Section 26505 or 26810, the portion of the annuity derived from the amounts credited to the employee account and employer account as of the date of reemployment shall be calculated using the actuarial assumptions in effect on the previous retirement date using the age of the participant and, if the participant elected a joint and survivor option, the age of the beneficiary on the current retirement date.

Upon election of an annuity under this part, the credits in the participant's employee account and employer account shall be transferred to the Annuitant Reserve.

(a) A participant who is employed to perform creditable service subject to coverage by the Cash Balance Benefit Program while receiving an annuity under the program may voluntarily terminate the annuity upon employment and make contributions to the program based on salary paid by the employer for the employment, provided the participant has attained normal retirement age and has been receiving a retirement annuity for at least one year. The participant shall continue to be subject to Section 26808.
  (b) The participant shall request in writing within 60 days of employment that the annuity be terminated. Termination of the participant's annuity shall become effective on the first day of the month following the month in which verification of the participant's employment is received by the system from the participant's employer.
  (c) Upon voluntary termination of the annuity, the employee and employer account of the participant shall be credited with respective balances that reflect the actuarial equivalent of the participant's retirement benefit as of the date the participant terminates the annuity and the Annuitant Reserve shall be reduced by the amount of the credits.
  (d) The portion of the annuity derived from the amounts credited to the employee account and employer account, as of the date the participant terminates the annuity, shall be calculated using the actuarial assumptions in effect on the initial retirement date using the age of the participant and, if the participant elected a joint and survivor option the age of the beneficiary on the current retirement date.
  (e) Upon election of a subsequent annuity, the credits in the participant's employee account and employer account shall be transferred to the Annuitant Reserve.

The beneficiary under the joint and survivor annuity elected pursuant to paragraph (3) or (4) of subdivision (b) of Section 26807 or paragraphs (2) to (5), inclusive, of subdivision (a) of Section 26807.5 shall be the person designated by the participant on the application for a retirement benefit under this part, and shall not be changed after the original retirement date unless the beneficiary has predeceased the participant.

(a) A participant retired for service under this part may perform retired participant activities, but the participant shall not make contributions to the plan or accrue service credit under the Defined Benefit Program based on compensation earned from that service. The employer shall maintain accurate records of the earnings of the retired participant and report those earnings monthly to the system and retired participant.
  (b) If a participant is retired for service under this part, the annualized rate of pay for retired participant activities performed by that participant shall not be less than the minimum, nor exceed the maximum, paid by the employer to other employees performing comparable duties.
  (c) A participant retired for service under this part shall not be required to reinstate for performing retired participant activities.
  (d) (1) If all of the following apply to a participant retired for service under this part, the participant's annuity shall be reduced by the amount of the compensation:
  (A) The participant is receiving an annuity under the Cash Balance Benefit Program.
  (B) The participant is below normal retirement age or retired on or after January 1, 2014.
  (C) The participant earns compensation paid in cash for performing retired participant activities, excluding reimbursements paid by an employer for expenses incurred by the participant in which payment of the expenses by the participant is substantiated.
  (2) The reduction in paragraph (1) shall only be made for compensation paid in cash during the first 180 calendar days after a participant retired for service under this part. The amount of the reduction in an individual month shall be no more than the monthly annuity payable in that month, and the total amount of the reduction shall not exceed the amount of the annuity payable during the first 180 calendar days after a participant retired for service under this part. For written agreements pertaining to the performance of retired participant activities entered into, extended, renewed, or amended on or after January 1, 2014, the reduction in paragraph (1) shall also be made for payments made for the performance of retired participant activities, including, but not limited to, those for participation in a deferred compensation plan; to purchase an annuity contract, tax-deferred retirement plan, or insurance program; and for contributions to a plan that meets the requirements of Section 125, 401(a), 401(k), 403(b), 457(b), or 457(f) of Title 26 of the United States Code when the cost is covered by an employer.
  (3) Subject to the limitation described in paragraph (4), if all of the following apply to a participant retired for service under this part, the participant's application for the retirement benefit shall automatically be canceled:
  (A) The participant is anticipated to receive the retirement benefit in the form of a lump-sum payment.
  (B) The participant earns compensation for performing creditable service within 180 calendar days following the date of termination of employment.
  (4) Paragraph (3) does not apply if the participant has reached that age at which the Internal Revenue Code of 1986 requires a distribution of benefits. A participant who has reached that age shall receive a distribution commencing on the earlier of the date that the participant has met the conditions of subdivision (b) of Section 26806 or the conditions of subdivision (c) of Section 26004.
  (e) If the participant has attained normal retirement age at the time the compensation is earned, subdivision (d) shall not apply if the appointment has been approved by the governing body of the employer in a public meeting, as reflected in a resolution adopted by the governing body of the employer prior to the performance of retired participant activities, expressing its intent to seek an exemption from the limitation specified in subdivision (d). Approval of the appointment shall not be placed on a consent calendar. Notwithstanding any other provision of Article 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code or any state or federal law incorporated by subdivision (k) of Section 6254 of the Government Code, the resolution shall be subject to disclosure by the entity adopting the resolution and the system. The resolution shall include the following specific information and findings:
  (1) The nature of the employment.
  (2) A finding that the appointment is necessary to fill a critically needed position before 180 calendar days have passed.
  (3) A finding that the participant is not ineligible for application of this subdivision pursuant to subdivision (g).
  (4) A finding that the termination of employment of the retired participant with the employer is not the basis for the need to acquire the services of the participant.
  (f) Subdivision (e) shall not apply to a retired participant whose termination of employment with the employer is the basis for the need to acquire the services of the participant.
  (g) Subdivision (e) shall not apply if the participant received additional service credit pursuant to Section 22714 or 22715 or received from any public employer any financial inducement to retire. For purposes of this section, "financial inducement to retire" includes, but is not limited to, any form of compensation or other payment that is paid directly or indirectly by a public employer to the participant, even if not in cash, either before or after retirement, if the participant retires for service on or before a specific date or specific range of dates established by a public employer on or before the date the inducement is offered. The system shall liberally interpret this subdivision to further the Legislature' s intent to make subdivision (e) inapplicable to participants if the participant received a financial incentive from any public employer to retire or otherwise terminate employment with a public employer.
  (h) The superintendent, the county superintendent of schools, or the chief executive officer of a community college shall submit all documentation required by the system to substantiate the eligibility of the retired participant for application of subdivision (e), including, but not limited to, the resolution adopted pursuant to that subdivision.
  (i) The documentation required by this section shall be received by the system prior to the retired participant's performance of retired participant activities.
  (j) Within 30 calendar days of the receipt of all documentation required by the system pursuant to this section, the system shall inform the entity seeking application of the exemption specified in subdivision (e) and the retired participant whether the compensation paid to the participant will be subject to the limitation specified in subdivision (d).

A member retired for service under the Defined Benefit Program may perform retired participant activities in any one school year up to the limitation specified in Sections 24214 and 24214.5, but the member shall not make contributions to the fund. The employer shall maintain accurate records of the earnings of the retired member and report those earnings monthly to the system and retired member as described in Section 22461.