Article 4. California Public Employees’ Pension Reform Act Of 2013 of California Government Code >> Division 7. >> Title 1. >> Chapter 21. >> Article 4.
This article shall be known as the California Public
Employees' Pension Reform Act of 2013.
(a) (1) Notwithstanding any other law, except as provided
in this article, on and after January 1, 2013, this article shall
apply to all state and local public retirement systems and to their
participating employers, including the Public Employees' Retirement
System, the State Teachers' Retirement System, the Legislators'
Retirement System, the Judges' Retirement System, the Judges'
Retirement System II, county and district retirement systems created
pursuant to the County Employees Retirement Law of 1937 (Chapter 3
(commencing with Section 31450) of Part 3 of Division 4 of Title 3),
independent public retirement systems, and to individual retirement
plans offered by public employers. However, this article shall be
subject to the Internal Revenue Code and Section 17 of Article XVI of
the California Constitution. The administration of the requirements
of this article shall comply with applicable provisions of the
Internal Revenue Code and the Revenue and Taxation Code.
(2) Notwithstanding paragraph (1), this article shall not apply to
the entities described in Section 9 of Article IX of, and Sections 4
and 5 of Article XI of, the California Constitution, except to the
extent that these entities continue to be participating employers in
any retirement system governed by state statute. Accordingly, any
retirement plan approved before January 1, 2013, by the voters of any
entity excluded from coverage by this section shall not be affected
by this article.
(3) (A) Notwithstanding paragraph (1), this article shall not
apply to a public employee whose interests are protected under
Section 5333(b) of Title 49 of the United States Code until a federal
district court rules that the United States Secretary of Labor, or
his or her designee, erred in determining that the application of
this article precludes certification under that section, or until
January 1, 2016, whichever is sooner.
(B) If a federal district court upholds the determination of the
United States Secretary of Labor, or his or her designee, that
application of this article precludes him or her from providing a
certification under Section 5333(b) of Title 49 of the United States
Code, this article shall not apply to a public employee specified in
subparagraph (A).
(4) Notwithstanding paragraph (1), this article shall not apply to
a multiemployer plan authorized by Section 302(c)(5) of the federal
Taft-Hartley Act (29 U.S.C. Sec. 186(c)(5)) if the public employer
began participation in that plan prior to January 1, 2013, and the
plan is regulated by the federal Employee Retirement Income Security
Act of 1974 (29 U.S.C. Sec. 1001 et seq.).
(b) The benefit plan required by this article shall apply to
public employees who are new members as defined in Section 7522.04.
(c) (1) Individuals who were employed by any public employer
before January 1, 2013, and who became employed by a subsequent
public employer for the first time on or after January 1, 2013, shall
be subject to the retirement plan that would have been available to
employees of the subsequent employer who were first employed by the
subsequent employer on or before December 31, 2012, if the individual
was subject to concurrent membership for which creditable service
was performed in the previous six months or reciprocity established
under any of the following provisions:
(A) Article 5 (commencing with Section 20350) of Chapter 3 of Part
3 of Division 5 of Title 2.
(B) Chapter 3 (commencing with Section 31450) of Part 3 of
Division 4 of Title 3.
(C) Any agreement between public retirement systems to provide
reciprocity to members of the systems.
(D) Section 22115.2 of the Education Code.
(2) An individual who was employed before January 1, 2013, and
who, without a separation from employment, changed employment
positions and became subject to a different defined benefit plan in a
different public retirement system offered by his or her employer
shall be subject to that defined benefit plan as it would have been
available to employees who were first employed on or before December
31, 2012.
(d) If a public employer, before January 1, 2013, offers a defined
benefit pension plan that provides a defined benefit formula with a
lower benefit factor at normal retirement age and results in a lower
normal cost than the defined benefit formula required by this
article, that employer may continue to offer that defined benefit
formula instead of the defined benefit formula required by this
article, and shall not be subject to the requirements of Section
7522.10 for pensionable compensation subject to that formula.
However, if the employer adopts a new defined benefit formula on or
after January 1, 2013, that formula must conform to the requirements
of this article or must be determined and certified by the retirement
system's chief actuary and the retirement board to have no greater
risk and no greater cost to the employer than the defined benefit
formula required by this article and must be approved by the
Legislature. New members of the defined benefit plan may only
participate in the lower cost defined benefit formula that was in
place before January 1, 2013, or a defined benefit formula that
conforms to the requirements of this article or is approved by the
Legislature as provided in this subdivision.
(e) If a public employer, before January 1, 2013, offers a
retirement benefit plan that consists solely of a defined
contribution plan, that employer may continue to offer that plan
instead of the defined benefit pension plan required by this article.
However, if the employer adopts a new defined benefit pension plan
or defined benefit formula on or after January 1, 2013, that plan or
formula must conform to the requirements of this article or must be
determined and certified by the retirement system's chief actuary and
the system's board to have no greater risk and no greater cost to
the employer than the defined benefit formula required by this
article and must be approved by the Legislature. New members of the
employer's plan may only participate in the defined contribution plan
that was in place before January 1, 2013, or a defined contribution
plan or defined benefit formula that conforms to the requirements of
this article. This subdivision shall not be construed to prohibit an
employer from offering a defined contribution plan on or after
January 1, 2013, either with or without a defined benefit plan,
whether or not the employer offered a defined contribution plan prior
to that date.
(f) (1) If, on or after January 1, 2013, the Cities of Brea and
Fullerton form a joint powers authority pursuant to the provisions of
the Joint Exercise of Powers Act (Article 1 (commencing with Section
6500) of Chapter 5), that joint powers authority may provide
employees the defined benefit plan or formula that those employees
received from their respective employers prior to the exercise of a
common power, to which the employee is associated, by the joint
powers authority to any employee of the City of Brea, the City of
Fullerton, or a city described in paragraph (2) who is not a new
member and subsequently is employed by the joint powers authority
within 180 days of the city providing for the exercise of a common
power, to which the employee was associated, by the joint powers
authority.
(2) On or before January 1, 2017, a city in Orange County that is
contiguous to the City of Brea or the City of Fullerton may join the
joint powers authority described in paragraph (1) but not more than
three cities shall be permitted to join.
(3) The formation of a joint powers authority on or after January
1, 2013, shall not act in a manner as to exempt a new employee or a
new member, as defined by Section 7522.04, from the requirements of
this article. New members may only participate in a defined benefit
plan or formula that conforms to the requirements of this article.
(g) The Judges' Retirement System and the Judges' Retirement
System II shall not be required to adopt the defined benefit formula
required by Section 7522.20 or 7522.25 or the compensation
limitations defined in Section 7522.10.
(h) This article shall not be construed to provide membership in
any public retirement system for an individual who would not
otherwise be eligible for membership under that system's applicable
rules or laws.
(i) On and after January 1, 2013, each public retirement system
shall modify its plan or plans to comply with the requirements of
this article and may adopt regulations or resolutions for this
purpose.
For the purposes of this article:
(a) "Defined benefit formula" means a formula used by the
retirement system to determine a retirement benefit based on age,
years of service, and pensionable compensation earned by an employee
up to the limit defined in Section 7522.10.
(b) "Employee contributions" means the contributions to a public
retirement system required to be paid by a member of the system, as
fixed by law, regulation, administrative action, contract, contract
amendment, or other written agreement recognized by the retirement
system as establishing an employee contribution.
(c) "Federal system" means the old age, survivors, disability, and
health insurance provisions of the federal Social Security Act (42
U.S.C. Sec. 301 et seq.).
(d) "Member" means a public employee who is a member of any type
of a public retirement system or plan.
(e) "New employee" means either of the following:
(1) An employee, including one who is elected or appointed, of a
public employer who is employed for the first time by any public
employer on or after January 1, 2013, and who was not employed by any
other public employer prior to that date.
(2) An employee, including one who is elected or appointed, of a
public employer who is employed for the first time by any public
employer on or after January 1, 2013, and who was employed by another
public employer prior to that date, but who was not subject to
reciprocity under subdivision (c) of Section 7522.02.
(f) "New member" means any of the following:
(1) An individual who becomes a member of any public retirement
system for the first time on or after January 1, 2013, and who was
not a member of any other public retirement system prior to that
date.
(2) An individual who becomes a member of a public retirement
system for the first time on or after January 1, 2013, and who was a
member of another public retirement system prior to that date, but
who was not subject to reciprocity under subdivision (c) of Section
7522.02.
(3) An individual who was an active member in a retirement system
and who, after a break in service of more than six months, returned
to active membership in that system with a new employer. For purposes
of this subdivision, a change in employment between state entities
or from one school employer to another shall not be considered as
service with a new employer.
(g) "Normal cost" means the portion of the present value of
projected benefits under the defined benefit that is attributable to
the current year of service, as determined by the public retirement
system's actuary according to the most recently completed valuation.
For the purpose of determining normal cost, the system's actuary may
use a single rate of contribution or an age-based rate of
contribution as is applicable to that retirement system.
(h) "Public employee" means an officer, including one who is
elected or appointed, or an employee of a public employer.
(i) "Public employer" means:
(1) The state and every state entity, including, but not limited
to, the Legislature, the judicial branch, including judicial
officers, and the California State University.
(2) Any political subdivision of the state, or agency or
instrumentality of the state or subdivision of the state, including,
but not limited to, a city, county, city and county, a charter city,
a charter county, school district, community college district, joint
powers authority, joint powers agency, and any public agency,
authority, board, commission, or district.
(3) Any charter school that elects or is required to participate
in a public retirement system.
(j) "Public retirement system" means any pension or retirement
system of a public employer, including, but not limited to, an
independent retirement plan offered by a public employer that the
public employer participates in or offers to its employees for the
purpose of providing retirement benefits, or a system of benefits for
public employees that is governed by Section 401(a) of Title 26 of
the United States Code.
(a) On and after January 1, 2013, each public retirement
system shall modify its plan or plans to comply with the requirements
of this section for each public employer that participates in the
system.
(b) Whenever pensionable compensation, as defined in Section
7522.34, is used in the calculation of a benefit, the pensionable
compensation shall be subject to the limitations set forth in
subdivision (c).
(c) The pensionable compensation used to calculate the defined
benefit paid to a new member who retires from the system shall not
exceed the following applicable percentage of the contribution and
benefit base specified in Section 430(b) of Title 42 of the United
States Code on January 1, 2013:
(1) One hundred percent for a member whose service is included in
the federal system.
(2) One hundred twenty percent for a member whose service is not
included in the federal system.
(d) (1) The retirement system shall adjust the pensionable
compensation described in subdivision (c) based on the annual changes
to the Consumer Price Index for All Urban Consumers: U.S. City
Average, calculated by dividing the Consumer Price Index for All
Urban Consumers: U.S. City Average, for the month of September in the
calendar year preceding the adjustment by the Consumer Price Index
for All Urban Consumers: U.S. City Average, for the month of
September of the previous year rounded to the nearest thousandth. The
adjustment shall be effective annually on January 1, beginning in
2014.
(2) The Legislature reserves the right to modify the requirements
of this subdivision with regard to all public employees subject to
this section, except that the Legislature may not modify these
provisions in a manner that would result in a decrease in benefits
accrued prior to the effective date of the modification.
(e) A public employer shall not offer a defined benefit or any
combination of defined benefits, including a defined benefit offered
by a private provider, on compensation in excess of the limitation in
subdivision (c).
(f) (1) Subject to the limitation in subdivision (c) of Section
7522.42, a public employer may provide a contribution to a defined
contribution plan for compensation in excess of the limitation in
subdivision (c) provided the plan and the contribution meet the
requirements and limits of federal law.
(2) A public employee who receives an employer contribution to a
defined contribution plan shall not have a vested right to continue
receiving the employer contribution.
(g) Any employer contributions to any employee defined
contribution plan above the pensionable compensation limits in
subdivision (c) shall not exceed the employer's contribution rate, as
a percentage of pay, required to fund the defined benefit plan for
income subject to the limitation in subdivision (c) of Section
7522.42.
(h) The retirement system shall limit the pensionable compensation
used to calculate the contributions required of an employer or a new
member to the amount of compensation that would be used for
calculating a defined benefit as set forth in subdivision (c) or (d).
Except as provided in subdivisions (d) and (e) of Section
7522.02, each public employer and each public retirement system that
offers a defined benefit plan shall offer only the defined benefit
formulas established pursuant to Sections 7522.20 and 7522.25 to new
members.
(a) A public employer that does not offer a supplemental
defined benefit plan before January 1, 2013, shall not offer a
supplemental defined benefit plan for any employee on or after
January 1, 2013.
(b) A public employer that provides a supplemental defined benefit
plan, including a defined benefit plan offered by a private
provider, before January 1, 2013, shall not offer a supplemental
defined benefit plan to any additional employee group to which the
plan was not provided before January 1, 2013.
(c) Except as provided in Chapter 38 (commencing with Section
25000) of Article 1 of Part 13 of Title 1 of the Education Code, a
public employer shall not offer or provide a supplemental defined
benefit plan, including a defined benefit plan offered by a private
provider, to any employee hired on or after January 1, 2013.
(a) Each retirement system that offers a defined benefit
plan for nonsafety members of the system shall use the formula
prescribed by this section. The defined benefit plan shall provide a
pension at retirement for service equal to the percentage of the
member's final compensation set forth opposite the member's age at
retirement, taken to the preceding quarter year, in the following
table, multiplied by the number of years of service in the system as
a nonsafety member. A member may retire for service under this
section after five years of service and upon reaching 52 years of
age.
Age of Retirement Fraction
52 ..................... 1.000
52 1/4.................. 1.025
52 1/2.................. 1.050
52 3/4 ................. 1.075
53 .................... 1.100
53 1/4.................. 1.125
53 1/2.................. 1.150
53 3/4.................. 1.175
54 ..................... 1.200
54 1/4.................. 1.225
54 1/2.................. 1.250
54 3/4.................. 1.275
55 ..................... 1.300
55 1/4.................. 1.325
55 1/2.................. 1.350
55 3/4.................. 1.375
56 ..................... 1.400
56 1/4.................. 1.425
56 1/2.................. 1.450
56 3/4.................. 1.475
57 ..................... 1.500
57 1/4.................. 1.525
57 1/2.................. 1.550
57 3/4.................. 1.575
58 ..................... 1.600
58 1/4.................. 1.625
58 1/2.................. 1.650
58 3/4.................. 1.675
59 ..................... 1.700
59 1/4.................. 1.725
59 1/2.................. 1.750
59 3/4.................. 1.775
60 ..................... 1.800
60 1/4.................. 1.825
60 1/2.................. 1.850
60 3/4.................. 1.875
61 ..................... 1.900
61 1/4.................. 1.925
61 1/2.................. 1.950
61 3/4.................. 1.975
62 ..................... 2.000
62 1/4.................. 2.025
62 1/2.................. 2.050
62 3/4.................. 2.075
63 ..................... 2.100
63 1/4.................. 2.125
63 1/2.................. 2.150
63 3/4.................. 2.175
64 ..................... 2.200
64 1/4.................. 2.225
64 1/2.................. 2.250
64 3/4.................. 2.275
65 ..................... 2.300
65 1/4.................. 2.325
65 1/2.................. 2.350
65 3/4.................. 2.375
66 ..................... 2.400
66 1/4.................. 2.425
66 1/2.................. 2.450
66 3/4.................. 2.475
67 ..................... 2.500
(b) Pensionable compensation used to calculate the defined benefit
shall be limited as described in Section 7522.10.
(c) A new member of the State Teachers' Retirement System shall be
subject to the formula established pursuant to Section 24202.6 of
the Education Code.
(a) Each retirement system that offers a defined benefit
plan for safety members of the system shall use one or more of the
defined benefit formulas prescribed by this section. A member may
retire for service under any of the formulas in this section after
five years of service and upon reaching 50 years of age.
(b) The Basic Safety Plan shall provide a pension at retirement
for service equal to the percentage of the member's final
compensation set forth opposite the member's age at retirement, taken
to the preceding quarter year, in the following table, multiplied by
the number of years of service in the system as a safety member.
Age at Retirement Fraction
50 ............................. 1.426
50 1/4.......................... 1.447
50 1/2.......................... 1.467
50 3/4.......................... 1.488
51 ............................. 1.508
51 1/4.......................... 1.529
51 1/2.......................... 1.549
51 3/4.......................... 1.570
52 ............................. 1.590
52 1/4.......................... 1.611
52 1/2.......................... 1.631
52 3/4.......................... 1.652
53 ............................. 1.672
53 1/4.......................... 1.693
53 1/2.......................... 1.713
53 3/4.......................... 1.734
54 ............................. 1.754
54 1/4.......................... 1.775
54 1/2.......................... 1.795
54 3/4.......................... 1.816
55 ............................. 1.836
55 1/4.......................... 1.857
55 1/2.......................... 1.877
55 3/4.......................... 1.898
56 ............................. 1.918
56 1/4.......................... 1.939
56 1/2.......................... 1.959
56 3/4.......................... 1.980
57 and over .................... 2.000
(c) The Safety Option Plan One shall provide a pension at
retirement for service equal to the percentage of the member's final
compensation set forth opposite the member's age at retirement, taken
to the preceding quarter year, in the following table, multiplied by
the number of years of service in the system as a safety member.
Age at Retirement Fraction
50 .............................. 2.000
50 1/4........................... 2.018
50 1/2........................... 2.036
50 3/4........................... 2.054
51 .............................. 2.071
51 1/4........................... 2.089
51 1/2........................... 2.107
51 3/4........................... 2.125
52 .............................. 2.143
52 1/4........................... 2.161
52 1/2........................... 2.179
52 3/4........................... 2.196
53 .............................. 2.214
53 1/4........................... 2.232
53 1/2........................... 2.250
53 3/4........................... 2.268
54 .............................. 2.286
54 1/4........................... 2.304
54 1/2........................... 2.321
54 3/4........................... 2.339
55............................... 2.357
55 1/4........................... 2.375
55 1/2........................... 2.393
55 3/4........................... 2.411
56............................... 2.429
56 1/4........................... 2.446
56 1/2........................... 2.464
56 3/4........................... 2.482
57 and over...................... 2.500
(d) The Safety Option Plan Two shall provide a pension at
retirement for service equal to the percentage of the member's final
compensation set forth opposite the member's age at retirement, taken
to the preceding quarter year, in the following table, multiplied by
the number of years of service in the system as a safety member.
Age at Retirement Fraction
50 ............................. 2.000
50 1/4.......................... 2.025
50 1/2.......................... 2.050
50 3/4.......................... 2.075
51 ............................. 2.100
51 1/4.......................... 2.125
51 1/2.......................... 2.150
51 3/4.......................... 2.175
52 ............................. 2.200
52 1/4.......................... 2.225
52 1/2.......................... 2.250
52 3/4.......................... 2.275
53 ............................. 2.300
53 1/4.......................... 2.325
53 1/2.......................... 2.350
53 3/4.......................... 2.375
54 ............................. 2.400
54 1/4.......................... 2.425
54 1/2.......................... 2.450
54 3/4.......................... 2.475
55 ............................. 2.500
55 1/4.......................... 2.525
55 1/2.......................... 2.550
55 3/4.......................... 2.575
56 ............................. 2.600
56 1/4.......................... 2.625
56 1/2.......................... 2.650
56 3/4.......................... 2.675
57 and over .................... 2.700
(e) On and after January 1, 2013, an employer shall offer one or
more of the safety formulas prescribed by this section to new members
who are safety employees. The formula offered shall be the formula
that is closest to, and provides a lower benefit at 55 years of age
than, the formula provided to members in the same retirement
classification offered by the employer on December 31, 2012.
(f) On and after January 1, 2013, an employer and its employees
subject to Safety Option Plan One or Safety Option Plan Two may agree
in a memorandum of understanding to be subject to Safety Option Plan
One or the Basic Safety Plan, subject to the following:
(1) The lower plan shall apply to members first employed on or
after the effective date of the lower plan, and shall be agreed to in
a memorandum of understanding that has been collectively bargained
in accordance with applicable laws.
(2) A retirement plan contract amendment with a public retirement
system to alter a retirement formula pursuant to this subdivision
shall not be implemented by the employer in the absence of a
memorandum of understanding that has been collectively bargained in
accordance with applicable laws.
(3) An employer shall not use impasse procedures to impose the
lower plan.
(4) An employer shall not provide a different defined benefit for
nonrepresented, managerial, or supervisory employees than the
employer provides for other public employees, including represented
employees, of the same employer who are in the same membership
classifications.
(g) Pensionable compensation used to calculate the defined benefit
shall be limited as described in Section 7522.10.
(a) This section shall apply to all public employers and
to all new members. Equal sharing of normal costs between public
employers and public employees shall be the standard. The standard
shall be that employees pay at least 50 percent of normal costs and
that employers not pay any of the required employee contribution.
(b) The "normal cost rate" shall mean the annual actuarially
determined normal cost for the plan of retirement benefits provided
to the new member and shall be established based on the actuarial
assumptions used to determine the liabilities and costs as part of
the annual actuarial valuation. The plan of retirement benefits shall
include any elements that would impact the actuarial determination
of the normal cost, including, but not limited to, the retirement
formula, eligibility and vesting criteria, ancillary benefit
provisions, and any automatic cost-of-living adjustments as
determined by the public retirement system.
(c) New members employed by those public employers defined in
paragraphs (2) and (3) of subdivision (i) of Section 7522.04, the
Legislature, the California State University, and the judicial branch
who participate in a defined benefit plan shall have an initial
contribution rate of at least 50 percent of the normal cost rate for
that defined benefit plan, rounded to the nearest quarter of 1
percent, unless a greater contribution rate has been agreed to
pursuant to the requirements in subdivision (e). This contribution
shall not be paid by the employer on the employee's behalf.
(d) Notwithstanding subdivision (c), once established, the
employee contribution rate described in subdivision (c) shall not be
adjusted on account of a change to the normal cost rate unless the
normal cost rate increases or decreases by more than 1 percent of
payroll above or below the normal cost rate in effect at the time the
employee contribution rate is first established or, if later, the
normal cost rate in effect at the time of the last adjustment to the
employee contribution rate under this section.
(e) Notwithstanding subdivision (c), employee contributions may be
more than one-half of the normal cost rate if the increase has been
agreed to through the collective bargaining process, subject to the
following conditions:
(1) The employer shall not contribute at a greater rate to the
plan for nonrepresented, managerial, or supervisory employees than
the employer contributes for other public employees, including
represented employees, of the same employer who are in related
retirement membership classifications.
(2) The employer shall not increase an employee contribution rate
in the absence of a memorandum of understanding that has been
collectively bargained in accordance with applicable laws.
(3) The employer shall not use impasse procedures to increase an
employee contribution rate above the rate required by this section.
(f) If the terms of a contract, including a memorandum of
understanding, between a public employer and its public employees,
that is in effect on January 1, 2013, would be impaired by any
provision of this section, that provision shall not apply to the
public employer and public employees subject to that contract until
the expiration of that contract. A renewal, amendment, or any other
extension of that contract shall be subject to the requirements of
this section.
For the purposes of determining a retirement benefit to be
paid to a new member of a public retirement system, the following
shall apply:
(a) Final compensation shall mean the highest average annual
pensionable compensation earned by the member during a period of at
least 36 consecutive months, or at least three consecutive school
years if applicable, immediately preceding his or her retirement or
last separation from service if earlier, or during any other period
of at least 36 consecutive months, or at least three consecutive
school years if applicable, during the member's applicable service
that the member designates on the application for retirement.
(b) On or after January 1, 2013, an employer shall not modify a
benefit plan to permit a calculation of final compensation on a basis
of less than the average annual compensation earned by the member
during a consecutive 36-month period, or three school years if
applicable, for members who have been subject to at least a 36-month
or three-school-year calculation prior to that date.
(a) "Pensionable compensation" of a new member of any
public retirement system means the normal monthly rate of pay or base
pay of the member paid in cash to similarly situated members of the
same group or class of employment for services rendered on a
full-time basis during normal working hours, pursuant to publicly
available pay schedules, subject to the limitations of subdivision
(c).
(b) Compensation that has been deferred shall be deemed
pensionable compensation when earned rather than when paid.
(c) Notwithstanding any other law, "pensionable compensation" of a
new member does not include the following:
(1) Any compensation determined by the board to have been paid to
increase a member's retirement benefit under that system.
(2) Compensation that had previously been provided in kind to the
member by the employer or paid directly by the employer to a third
party other than the retirement system for the benefit of the member
and which was converted to and received by the member in the form of
a cash payment.
(3) Any one-time or ad hoc payments made to a member.
(4) Severance or any other payment that is granted or awarded to a
member in connection with or in anticipation of a separation from
employment, but is received by the member while employed.
(5) Payments for unused vacation, annual leave, personal leave,
sick leave, or compensatory time off, however denominated, whether
paid in a lump sum or otherwise, regardless of when reported or paid.
(6) Payments for additional services rendered outside of normal
working hours, whether paid in a lump sum or otherwise.
(7) Any employer-provided allowance, reimbursement, or payment,
including, but not limited to, one made for housing, vehicle, or
uniforms.
(8) Compensation for overtime work, other than as defined in
Section 207(k) of Title 29 of the United States Code.
(9) Employer contributions to deferred compensation or defined
contribution plans.
(10) Any bonus paid in addition to the compensation described in
subdivision (a).
(11) Any other form of compensation a public retirement board
determines is inconsistent with the requirements of subdivision (a).
(12) Any other form of compensation a public retirement board
determines should not be pensionable compensation.
(13) (A) Any form of compensation identified that has been agreed
to be nonpensionable pursuant to a memorandum of understanding for
state employees bound by the memorandum of understanding. The state
employer subject to the memorandum of understanding shall inform the
retirement system of the excluded compensation and provide a copy of
the memorandum of understanding.
(B) The state employer may determine if excluded compensation
identified in subparagraph (A) shall apply to nonrepresented state
employees who are aligned with state employees subject to the
memorandum of understanding described in subparagraph (A). The state
employer shall inform the retirement system of the exclusion of this
compensation and provide a copy of the public pay schedule detailing
the exclusion.
(a) A public employer shall not provide to a public
employee who is elected or appointed, a trustee, excluded from
collective bargaining, exempt from civil service, or a manager any
vesting schedule for the employer contribution payable for
postretirement health benefits that is more advantageous than that
provided generally to other public employees, including represented
employees, of the same public employer who are in related retirement
membership classifications.
(b) This section shall not require an employer to change the
vesting schedule for the employer contribution payable for
postretirement health benefits of any public employee who was subject
to a specific vesting schedule pursuant to statute, collective
bargaining agreement, or resolution for these employer contributions
prior to January 1, 2013, or who had a contractual agreement with an
employer prior to January 1, 2013, for a specific vesting schedule
for these employer contributions.
(a) In addition to any other benefit limitation prescribed
by law, for the purposes of determining a public retirement benefit
paid to a new member of a public retirement system, the maximum
salary, compensation, or payrate taken into account under the plan
for any year shall not exceed the amount permitted to be taken into
account under Section 401(a)(17) of Title 26 of the United States
Code or its successor.
(b) A public employer shall not seek an exception to the
prohibition in subdivision (a) on or after January 1, 2013.
(c) For employees first hired on or after January 1, 2013, a
public employer shall not make employer contributions to any
qualified retirement plan or plans on behalf of an employee based on
that portion of the amount of total pensionable compensation that
exceeds the amount specified in Section 401(a)(17) of Title 26 of the
United States Code, or its successor.
(d) This section shall not apply to salary, compensation, or
payrate paid to individuals who, due to their dates of hire, are not
subject to the limits specified in subdivision (a).
(a) A public employer shall not offer a plan of
replacement benefits for members and any survivors or beneficiaries
whose retirement benefits are limited by Section 415 of Title 26 of
the United States Code. This section shall apply to new members.
(b) A public retirement system may continue to administer a plan
of replacement benefits for employees first hired prior to January 1,
2013.
(c) A public employer that does not offer a plan of replacement
benefits prior to January 1, 2013, shall not offer such a plan for
any employee on or after January 1, 2013.
(d) A public employer that offers a plan of replacement benefits
prior to January 1, 2013, shall not offer such a plan to any
additional employee group to which the plan was not provided prior to
January 1, 2013.
This section shall apply to all public employers and to
all public employees:
(a) Any enhancement to a public employee's retirement formula or
retirement benefit adopted on or after January 1, 2013, shall apply
only to service performed on or after the operative date of the
enhancement and shall not be applied to any service performed prior
to the operative date of the enhancement.
(b) If a change to a member's retirement membership classification
or a change in employment results in an enhancement in the
retirement formula or retirement benefit applicable to that member,
that enhancement shall apply only to service performed on or after
the operative date of the change and shall not be applied to any
service performed prior to the operative date of the change.
(c) For purposes of this section, "operative date" in a collective
bargaining agreement means one of the following:
(1) The date that the agreement is signed by the parties.
(2) A date agreed to by the parties that will occur after the date
that the agreement is signed by the parties.
(3) A date designated by the parties that occurred prior to the
date the agreement was signed if the most recent collective
bargaining contract was expired at the time of the agreement and the
date designated is not earlier than 12 months prior to the date of
the agreement or the day after the last day of the expired bargaining
contract, whichever occurred later.
(d) For purposes of this section, an increase to a retiree's
annual cost-of-living adjustment within existing statutory limits
shall not be considered to be an enhancement to a retirement benefit.
(a) A public retirement system shall not allow the
purchase of nonqualified service credit, as defined by Section 415(n)
(3)(C) of the Internal Revenue Code of 1986 (26 U.S.C. Sec. 415(n)(3)
(C)).
(b) Subdivision (a) shall not apply to an official application to
purchase nonqualified service credit that is received by the public
retirement system prior to January 1, 2013, that is subsequently
approved by the system.
(a) Final compensation of a member for the purpose of
determining any pension or benefit resulting from service as an
elective or appointed officer on a city council or a county board of
supervisors accrued while in membership of a public retirement system
shall be based on the highest average annual pensionable
compensation earned by the member during the period of service in
each elective or appointed office. Where that elective or appointed
service is a consideration in the computation of any pension or
benefit, the member may have more than one final compensation.
(b) Any final compensation calculation shall otherwise be subject
to this article except that if any individual period of elective
service is less than 36 months or three years, then the entire period
of that individual's elected service shall be used to determine the
final compensation for that period of service.
(c) This section shall apply to a member first elected or
appointed to a city council or a county board of supervisors on or
after January 1, 2013.
(a) In any fiscal year, a public employer's contribution
to a defined benefit plan, in combination with employee contributions
to that defined benefit plan, shall not be less than the normal cost
rate, as defined in Section 7522.30, for that defined benefit plan
for that fiscal year.
(b) The board of a public retirement system may suspend
contributions when all of the following apply:
(1) The plan is funded by more than 120 percent, based on a
computation by the retirement system actuary in accordance with the
Governmental Accounting Standards Board requirements that is included
in the annual valuation.
(2) The retirement system actuary, based on the annual valuation,
determines that continuing to accrue excess earnings could result in
disqualification of the plan's tax-exempt status under the provisions
of the federal Internal Revenue Code.
(3) The board determines that the receipt of any additional
contributions required under this section would conflict with its
fiduciary responsibility set forth in Section 17 of Article XVI of
the California Constitution.
(a) This section shall apply to any person who is
receiving a pension benefit from a public retirement system and shall
supersede any other provision in conflict with this section.
(b) A retired person shall not serve, be employed by, or be
employed through a contract directly by, a public employer in the
same public retirement system from which the retiree receives the
benefit without reinstatement from retirement, except as permitted by
this section.
(c) A person who retires from a public employer may serve without
reinstatement from retirement or loss or interruption of benefits
provided by the retirement system upon appointment by the appointing
power of a public employer either during an emergency to prevent
stoppage of public business or because the retired person has skills
needed to perform work of limited duration.
(d) Appointments of the person authorized under this section shall
not exceed a total for all employers in that public retirement
system of 960 hours or other equivalent limit, in a calendar or
fiscal year, depending on the administrator of the system. The rate
of pay for the employment shall not be less than the minimum, nor
exceed the maximum, paid by the employer to other employees
performing comparable duties, divided by 173.333 to equal an hourly
rate. A retired person whose employment without reinstatement is
authorized by this section shall acquire no service credit or
retirement rights under this section with respect to the employment
unless he or she reinstates from retirement.
(e) (1) Notwithstanding subdivision (c), any retired person shall
not be eligible to serve or be employed by a public employer if,
during the 12-month period prior to an appointment described in this
section, the retired person received any unemployment insurance
compensation arising out of prior employment subject to this section
with a public employer. A retiree shall certify in writing to the
employer upon accepting an offer of employment that he or she is in
compliance with this requirement.
(2) A retired person who accepts an appointment after receiving
unemployment insurance compensation as described in this subdivision
shall terminate that employment on the last day of the current pay
period and shall not be eligible for reappointment subject to this
section for a period of 12 months following the last day of
employment.
(f) A retired person shall not be eligible to be employed pursuant
to this section for a period of 180 days following the date of
retirement unless he or she meets one of the following conditions:
(1) The employer certifies the nature of the employment and that
the appointment is necessary to fill a critically needed position
before 180 days have passed and the appointment has been approved by
the governing body of the employer in a public meeting. The
appointment may not be placed on a consent calendar.
(2) (A) Except as otherwise provided in this paragraph, for state
employees, the state employer certifies the nature of the employment
and that the appointment is necessary to fill a critically needed
state employment position before 180 days have passed and the
appointment has been approved by the Department of Human Resources.
The department may establish a process to delegate appointing
authority to individual state agencies, but shall audit the process
to determine if abuses of the system occur. If necessary, the
department may assume an agency's appointing authority for retired
workers and may charge the department an appropriate amount for
administering that authority.
(B) For legislative employees, the Senate Committee on Rules or
the Assembly Rules Committee certifies the nature of the employment
and that the appointment is necessary to fill a critically needed
position before 180 days have passed and approves the appointment in
a public meeting. The appointment may not be placed on a consent
calendar.
(C) For employees of the California State University, the Trustees
of the California State University certifies the nature of the
employment and that the appointment is necessary to fill a critically
needed position before 180 days have passed and approves the
appointment in a public meeting. The appointment may not be placed on
a consent calendar.
(3) The retiree is eligible to participate in the Faculty Early
Retirement Program pursuant to a collective bargaining agreement with
the California State University that existed prior to January 1,
2013, or has been included in subsequent agreements.
(4) The retiree is a public safety officer or firefighter hired to
perform a function or functions regularly performed by a public
safety officer or firefighter.
(g) A retired person who accepted a retirement incentive upon
retirement shall not be eligible to be employed pursuant to this
section for a period of 180 days following the date of retirement and
subdivision (f) shall not apply.
(h) This section shall not apply to a person who is retired from
the State Teachers' Retirement System, and who is subject to Section
24214, 24214.5, or 26812 of the Education Code.
(i) This section shall not apply to (1) a subordinate judicial
officer whose position, upon retirement, is converted to a judgeship
pursuant to Section 69615, and he or she returns to work in the
converted position, and the employer is a trial court, or (2) a
retiree of the Judges' Retirement System or the Judges' Retirement
System II who is assigned to serve in a court pursuant to Section
68543.5.
(a) This section shall apply to any retired person who is
receiving a pension benefit from a public retirement system and is
first appointed on or after January 1, 2013, to a salaried position
on a state board or commission. This section shall supersede any
other provision in conflict with this section.
(b) A person who is retired from a public retirement system may
serve without reinstatement from retirement or loss or interruption
of benefits provided that appointment is to a part-time state board
or commission. A retired person whose employment without
reinstatement is authorized by this subdivision shall acquire no
benefits, service credit, or retirement rights with respect to the
employment. Unless otherwise defined in statute, for the purpose of
this section, a part-time appointment shall mean an appointment with
a salary of no more than $60,000 annually, which shall be increased
in any fiscal year in which a general salary increase is provided for
state employees. The amount of the increase provided by this section
shall be comparable to, but shall not exceed, the percentage of the
general salary increases provided for state employees during that
fiscal year.
(c) A person who is retired from the Public Employees' Retirement
System shall not serve on a full-time basis on a state board or
commission without reinstatement unless that person serves as a
nonsalaried member of the board or commission and receives only per
diem authorized to all members of the board or commission. A person
who serves as a nonsalaried member of a board or commission shall not
earn any service credit or benefits in the Public Employees'
Retirement System or make contributions with respect to the service
performed.
(d) A person retired from a public retirement system other than
the Public Employees' Retirement System who is appointed on a
full-time basis to a state board or commission shall choose one of
the following options:
(1) The person may serve as a nonsalaried member of the board or
commission and continue to receive his or her retirement allowance,
in addition to any per diem authorized to all members of the board or
commission. The person shall not earn service credit or benefits in
the Public Employees' Retirement System and shall not make
contributions with respect to the service performed.
(2) (A) The person may suspend his or her retirement allowance or
allowances and instate as a new member of the Public Employees'
Retirement System for the service performed on the board or
commission. The pensionable compensation earned pursuant to this
paragraph shall not be eligible for reciprocity with any other
retirement system or plan.
(B) Upon retiring for service after serving on the board or
commission, the appointee shall be entitled to reinstatement of any
suspended benefits, including employer provided retiree health
benefits, that he or she was entitled to at the time of being
appointed to the board or commission.
(e) Notwithstanding subdivisions (c) and (d), a person who retires
from a public employer may serve without reinstatement from
retirement or loss or interruption of benefits provided by the
retirement system upon appointment to a full-time state board
pursuant to Section 5075 of the Penal Code.
(a) This section shall apply to any elected public officer
who takes public office, or is reelected to public office, on or
after January 1, 2006.
(b) If an elected public officer is convicted during or after
holding office of any felony involving accepting or giving, or
offering to give, any bribe, the embezzlement of public money,
extortion or theft of public money, perjury, or conspiracy to commit
any of those crimes arising directly out of his or her official
duties as an elected public officer, he or she shall forfeit all
rights and benefits under, and membership in, any public retirement
system in which he or she is a member, effective on the date of final
conviction.
(c) (1) The elected public officer described in subdivision (b)
shall forfeit only that portion of his or her rights and benefits
that accrued on or after January 1, 2006, on account of his or her
service in the elected public office held when the felony occurred.
(2) Paragraph (1) shall apply to the extent permissible by law.
(d) Any contributions made by the elected public officer described
in subdivision (b) to the public retirement system that arose
directly from or accrued solely as a result of his or her forfeited
service as an elected public officer shall be returned, without
interest, to the public officer.
(e) The public agency that employs an elected public officer
described in subdivision (b) shall notify the public retirement
system in which the officer is a member of the officer's conviction.
(f) An elected public officer shall not forfeit his or her rights
and benefits pursuant to subdivision (b) if the governing body of
the elected public officer's employer, including, but not limited to,
the governing body of a city, county, or city and county, authorizes
the public officer to receive those rights and benefits.
(g) For purposes of this section, "public officer" means an
officer of the state, or an officer of a county, city, city and
county, district, or authority, or any department, division, bureau,
board, commission, agency, or instrumentality of any of these
entities.
(h) This section applies to any person appointed to service for
the period of an elected public officer's unexpired term of office.
(i) On and after January 1, 2013, this section shall not apply in
any instance in which Section 7522.72 or 7522.74 applies.
(a) This section shall apply to a public employee first
employed by a public employer or first elected or appointed to an
office before January 1, 2013, and, on and after that date, Section
7522.70 shall not apply.
(b) (1) If a public employee is convicted by a state or federal
trial court of any felony under state or federal law for conduct
arising out of or in the performance of his or her official duties,
in pursuit of the office or appointment, or in connection with
obtaining salary, disability retirement, service retirement, or other
benefits, he or she shall forfeit all accrued rights and benefits in
any public retirement system in which he or she is a member to the
extent provided in subdivision (c) and shall not accrue further
benefits in that public retirement system, effective on the date of
the conviction.
(2) If a public employee who has contact with children as part of
his or her official duties is convicted of a felony that was
committed within the scope of his or her official duties against or
involving a child who he or she has contact with as part of his or
her official duties, he or she shall forfeit all accrued rights and
benefits in any public retirement system in which he or she is a
member to the extent provided in subdivision (c) and shall not accrue
further benefits in that public retirement system, effective on the
date of the conviction.
(c) (1) A member shall forfeit all the rights and benefits earned
or accrued from the earliest date of the commission of any felony
described in subdivision (b) to the forfeiture date, inclusive. The
rights and benefits shall remain forfeited notwithstanding any
reduction in sentence or expungement of the conviction following the
date of the member's conviction. Rights and benefits attributable to
service performed prior to the date of the first commission of the
felony for which the member was convicted shall not be forfeited as a
result of this section.
(2) Paragraph (1) shall apply to the extent permissible by law.
(3) For purposes of this subdivision, "forfeiture date" means the
date of the conviction.
(d) (1) Any contributions to the public retirement system made by
the public employee described in subdivision (b) on or after the
earliest date of the commission of any felony described in
subdivision (b) shall be returned, without interest, to the public
employee upon the occurrence of a distribution event unless otherwise
ordered by a court or determined by the pension administrator.
(2) Any funds returned to the public employee pursuant to
subdivision (d) shall be disbursed by electronic funds transfer to an
account of the public employee, in a manner conforming with the
requirements of the Internal Revenue Code, and the public retirement
system shall notify the court and the district attorney at least
three business days before that disbursement of funds.
(3) For the purposes of this subdivision, a "distribution event"
means any of the following:
(A) Separation from employment.
(B) Death of the member.
(C) Retirement of the member.
(e) (1) Upon conviction, a public employee as described in
subdivision (b) and the prosecuting agency shall notify the public
employer who employed the public employee at the time of the
commission of the felony within 60 days of the felony conviction of
all of the following information:
(A) The date of conviction.
(B) The date of the first known commission of the felony.
(2) The operation of this section is not dependent upon the
performance of the notification obligations specified in this
subdivision.
(f) The public employer that employs or employed a public employee
described in subdivision (b) and that public employee shall each
notify the public retirement system in which the public employee is a
member of that public employee's conviction within 90 days of the
conviction. The operation of this section is not dependent upon the
performance of the notification obligations specified in this
subdivision.
(g) A public retirement system may assess a public employer a
reasonable amount to reimburse the cost of audit, adjustment, or
correction, if it determines that the public employer failed to
comply with this section.
(h) If a public employee's conviction is reversed and that
decision is final, the employee shall be entitled to do either of the
following:
(1) Recover the forfeited rights and benefits as adjusted for the
contributions received pursuant to subdivision (d).
(2) Redeposit those contributions and interest that would have
accrued during the forfeiture period, as determined by the system
actuary, and then recover the full amount of the forfeited rights and
benefits.
(i) The forfeiture of rights and benefits provided in this
section, with respect to judges, are in addition to and supplement
the forfeitures and other requirements provided in Section 75033.2,
75062, 75526, or 75563. If there is a conflict between this section
and Section 75033.2, 75062, 75526, or 75563, the provisions that
result in the greatest forfeiture or provide the most stringent
procedural requirements to the claim of a judge shall apply.
(j) A public employee first employed by a public employer or first
elected or appointed to an office on or after January 1, 2013, shall
be subject to Section 7522.74.
(a) This section shall apply to a public employee first
employed by a public employer or first elected or appointed to an
office on or after January 1, 2013, and on and after that date,
Section 7522.70 shall not apply.
(b) (1) If a public employee is convicted by a state or federal
trial court of any felony under state or federal law for conduct
arising out of or in the performance of his or her official duties,
in pursuit of the office or appointment, or in connection with
obtaining salary, disability retirement, service retirement, or other
benefits, he or she shall forfeit all accrued rights and benefits in
any public retirement system in which he or she is a member to the
extent provided in subdivision (c) and shall not accrue further
benefits in that public retirement system, effective on the date of
the conviction.
(2) If a public employee who has contact with children as part of
his or her official duties is convicted of a felony that was
committed within the scope of his or her official duties against or
involving a child who he or she has contact with as part of his or
her official duties, he or she shall forfeit all accrued rights and
benefits in any public retirement system in which he or she is a
member to the extent provided in subdivision (c) and shall not accrue
further benefits in that public retirement system, effective on the
date of the conviction.
(c) (1) A member shall forfeit all the rights and benefits earned
or accrued from the earliest date of the commission of any felony
described in subdivision (b) to the forfeiture date, inclusive. The
rights and benefits shall remain forfeited notwithstanding any
reduction in sentence or expungement of the conviction following the
date of the member's conviction. Rights and benefits attributable to
service performed prior to the date of the first commission of the
felony for which the member was convicted shall not be forfeited as a
result of this section.
(2) Paragraph (1) shall apply to the extent permissible by law.
(3) For purposes of this subdivision, "forfeiture date" means the
date of the conviction.
(d) (1) Any contributions to the public retirement system made by
the public employee described in subdivision (b) on or after the
earliest date of the commission of any felony described in
subdivision (b) shall be returned, without interest, to the public
employee upon the occurrence of a distribution event unless otherwise
ordered by a court or determined by the pension administrator.
(2) Any funds returned to the public employee pursuant to
subdivision (d) shall be disbursed by electronic funds transfer to an
account of the public employee, in a manner conforming with the
requirements of the Internal Revenue Code, and the public retirement
system shall notify the court and the district attorney at least
three business days before that disbursement of funds.
(3) For the purposes of this subdivision, a "distribution event"
means any of the following:
(A) Separation from employment.
(B) Death of the member.
(C) Retirement of the member.
(e) (1) Upon conviction, a public employee as described in
subdivision (b) and the prosecuting agency shall notify the public
employer who employed the public employee at the time of the
commission of the felony within 60 days of the felony conviction of
all of the following information:
(A) The date of conviction.
(B) The date of the first known commission of the felony.
(2) The operation of this section is not dependent upon the
performance of the notification obligations specified in this
subdivision.
(f) The public employer that employs or employed a public employee
described in subdivision (b) and that public employee shall each
notify the public retirement system in which the public employee is a
member of that public employee's conviction within 90 days of the
conviction. The operation of this section is not dependent upon the
performance of the notification obligations specified in this
subdivision.
(g) A public retirement system may assess a public employer a
reasonable amount to reimburse the cost of audit, adjustment, or
correction, if it determines that the public employer failed to
comply with this section.
(h) If a public employee's conviction is reversed and that
decision is final, the employee shall be entitled to do either of the
following:
(1) Recover the forfeited rights and benefits as adjusted for the
contributions received pursuant to subdivision (d).
(2) Redeposit those contributions and interest that would have
accrued during the forfeiture period, as determined by the system
actuary, and then recover the full amount of the forfeited rights and
benefits.
(i) The forfeiture of rights and benefits provided in this
section, with respect to judges, are in addition to and supplement
the forfeitures and other requirements provided in Section 75033.2,
75062, 75526, or 75563. If there is a conflict between this section
and Section 75033.2, 75062, 75526, or 75563, the provisions that
result in the greatest forfeiture or provide the most stringent
procedural requirements to the claim of a judge shall apply.
(j) A public employee first employed by a public employer or first
elected or appointed to an office before January 1, 2013, shall be
subject to Section 7522.72.