Article 11. Prefunding Plan For Health Care Coverage For Annuitants of California Government Code >> Division 5. >> Title 2. >> Part 5. >> Chapter 1. >> Article 11.
(a) There is in the State Treasury the Annuitants' Health
Care Coverage Fund that is a trust fund and a retirement fund, within
the meaning of Section 17 of Article XVI of the California
Constitution. Subject to the limitation provided in subdivision (b),
notwithstanding Section 13340, all moneys in the fund are
continuously appropriated without regard to fiscal years to the board
for expenditure for the prefunding of health care coverage for
annuitants pursuant to this part, including administrative costs. The
board has sole and exclusive control and power over the
administration and investment of the Annuitants' Health Care Coverage
Fund and shall make investments pursuant to Part 3 (commencing with
Section 20000).
(b) (1) Moneys accumulated in the designated state subaccounts of
the fund, or a successor fund, that are derived from investment
income shall not be used to pay benefits for state annuitants and
dependents until the earlier of:
(A) With regard to a particular designated state subaccount, the
date the funded ratio of the designated state subaccount reaches at
least 100 percent as determined in that employer's postemployment
benefits actuarial valuation and then only for the purpose of paying
benefits for state annuitants and dependents associated with that
subaccount.
(B) July 1, 2046.
(2) For purposes of this subdivision, "designated state subaccount"
means a separate account maintained within the fund to identify
prefunding contributions and assets attributable to a specified state
collective bargaining unit or other state entity for the purpose of
providing benefits to state annuitants and dependents associated with
a specified collective bargaining unit or other state entity.
(3) This subdivision shall not be construed as prohibiting an
alternative funding strategy agreed to in a written memorandum of
understanding.
For purposes of this article, the following definitions
shall apply:
(a) "Annuitant" means any of the following:
(1) An annuitant described in Section 22760.
(2) A person who retires from employment with an employer
described in paragraph (2) of subdivision (c) and who receives
postemployment health care benefits or other postemployment benefits
from the prefunding plan provided by that employer.
(3) A surviving family member who receives postemployment health
care benefits or other postemployment benefits as a beneficiary of a
deceased person described in paragraph (2).
(b) "Employee" means an employee described in Section 22772.
"Employee" also means an officer or employee of an employer described
in paragraph (2) of subdivision (c).
(c) "Employer" means either of the following:
(1) An employer described in Section 22773.
(2) An entity described in Section 22920 that has one or more
employees and that entity provides postemployment health care
benefits or other postemployment benefits to annuitants.
An employer authorized by the board may elect to participate
in the prefunding plan established by this article.
The board may, in its discretion and upon terms and
conditions set by the board, authorize an employer to participate in
the prefunding plan established by this article. The governing body
of a participating employer shall enter into a contract with the
board, setting forth the terms and conditions of that employer's
participation in the prefunding plan, including, but not limited to,
funding, expenditures, and actuarial, accounting, reporting, and
investment considerations.
(a) A contract entered into between an employer and the
board pursuant to Section 22944 shall not create, change, or vest the
obligations of an employer or the board that were created under any
other contract, law, ordinance, regulation, or similar actions to
provide benefits for employees or annuitants of a participating
employer.
(b) A contract between an employer and the board entered into
pursuant to Section 22944, in and of itself, shall not create,
change, or vest an obligation for either party to the contract to
provide a specific level of postemployment health care benefits or
other postemployment benefits to employees or annuitants of a
participating employer.
(c) A contract between an employer and the board entered into
pursuant to Section 22944, in and of itself, shall not preclude or in
any way affect the authority of the employer to create, change, or
vest the specific postemployment health care benefits or other
postemployment benefits that the employer may choose to provide to
its employees or annuitants.
(a) Any amount that would otherwise be used to permanently
increase compensation pursuant to Section 19827, effective on July
1, 2009, and on July 1, 2010, shall instead be used to permanently
prefund postemployment health care benefits for patrol members. The
amount used to prefund benefits relative to any increases under the
survey methodology effective July 1, 2010, shall not exceed 2
percent. The state shall take credit for these prefunding
contributions in the survey methodology established in Section 19827
in the same manner as it would for an increase to the base salary for
patrol members.
(b) Patrol members shall contribute an additional 0.5 percent of
base pay toward prefunding retiree health benefit obligations
effective on the first day of the pay period following the effective
date of the act adding this section and the ratification of the
addendum by the members of State Bargaining Unit 5. This contribution
shall not reduce the base salary of patrol members under the survey
methodology established by Section 19827.
(c) Effective July 1, 2012, the state shall contribute toward
prefunding retiree health benefits, on a prospective basis, an amount
at least equal to the combined contribution rate established
pursuant to subdivisions (a) and (b). These contributions may be used
in the survey methodology established by Section 19827 if mutually
agreed in a memorandum of understanding.
(d) Contributions paid pursuant to this section shall be used
exclusively for the cost of providing postemployment health care to
eligible enrolled patrol member annuitants and their eligible
enrolled dependents, beneficiaries, and survivors.
(e) Contributions paid pursuant to this section shall not be
refundable under any circumstances to a patrol member or his or her
beneficiary or survivor.
(f) Any amount used to prefund postemployment health care for
patrol members pursuant to subdivision (a) shall not be included in
any calculation for benefits using final compensation.
(g) If the provisions of this section are in conflict with the
provisions of a memorandum of understanding reached pursuant to
Section 3517.5, the memorandum of understanding shall be controlling
without further legislative action, except that if those provisions
of a memorandum of understanding require the expenditure of funds,
the provisions shall not become effective unless approved by the
Legislature in the annual Budget Act.
(h) For purposes of this section, "patrol member" has the same
meaning as in Section 20390. This section shall not apply to an
employee of a county.
(i) The Director of Human Resources may exercise his or her
discretion to apply the provisions of this section to patrol members
who are excepted from the definition of "state employee" in
subdivision (c) of Section 3513, and an officer or employee of the
executive branch of state government who is not a member of the civil
service.
(a) The state and employees in State Bargaining Unit 9 or
10 shall prefund retiree health care, with the goal of reaching a
50-percent cost sharing of actuarially determined normal costs for
both employer and employees by July 1, 2019.
(b) (1) The employees in State Bargaining Unit 9 shall make
contributions to prefund retiree health care based on the following
schedule, and the state shall make a matching contribution:
(A) Effective July 1, 2017, 0.5 percent of pensionable
compensation.
(B) Effective July 1, 2018, an additional 0.5 percent for a total
employee contribution of 1.0 percent of pensionable compensation.
(C) Effective July 1, 2019, an additional 1.0 percent for a total
employee contribution of 2.0 percent of pensionable compensation.
(2) The employees in State Bargaining Unit 10 shall make
contributions to prefund retiree health care based on the following
schedule, and the state shall make a matching contribution:
(A) Effective July 1, 2017, 0.7 percent of pensionable
compensation.
(B) Effective July 1, 2018, an additional 0.7 percent for a total
employee contribution of 1.4 percent of pensionable compensation.
(C) Effective July 1, 2019, an additional 1.4 percent for a total
employee contribution of 2.8 percent of pensionable compensation.
(c) This section only applies to employees in State Bargaining
Unit 9 or 10 who are eligible for health benefits, including
permanent intermittent employees.
(d) Contributions paid pursuant to this section shall be deposited
in the Annuitants' Health Care Coverage Fund and shall not be
refundable under any circumstances to an employee in State Bargaining
Unit 9 or 10 or his or her beneficiary or survivor.
(e) If the provisions of this section are in conflict with the
provisions of a memorandum of understanding reached pursuant to
Section 3517.5, the memorandum of understanding shall be controlling
without further legislative action, except that if those provisions
of a memorandum of understanding require the expenditure of funds,
the provisions shall not become effective unless approved by the
Legislature in the annual Budget Act.
(f) This section shall also apply to a state employee related to
State Bargaining Unit 9 or 10 who is excepted from the definition of
"state employee" in subdivision (c) of Section 3513.