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Chapter 3. Retirement Board of California Education Code >> Division 1. >> Title 1. >> Part 13. >> Chapter 3.
(a) The plan and the system are administered by the Teachers'
Retirement Board. On and after January 1, 2004, the members of the
board are as follows:
(1) The Superintendent of Public Instruction.
(2) The Controller.
(3) The Treasurer.
(4) The Director of Finance.
(5) Three persons who are either members of the Defined Benefit Program or participants in the Cash Balance Benefit Program, as follows:
(A) One person who, at the time of election, is an active member of the Defined Benefit Program or an active participant of the Cash Balance Benefit Program employed by a school district that provides instruction for prekindergarten, kindergarten, or grades 1 to 12, inclusive, or a county office of education, in a position other than a school administrator that requires a services credential with a specialization in administrative services. This member shall be elected by the active members of the Defined Benefit Program and active participants of the Cash Balance Benefit Program who are employed by a school district that provides instruction for prekindergarten, kindergarten, or grades 1 to 12, inclusive, or county office of education, pursuant to regulations adopted by the board, for a four-year term commencing on January 1, 2004.
(B) One person who, at the time of election, is an active member of the Defined Benefit Program or an active participant of the Cash Balance Benefit Program employed by a school district that provides instruction for prekindergarten, kindergarten, or grades 1 to 12, inclusive, or a county office of education. This member shall be elected by the active members of the Defined Benefit Program and active participants of the Cash Balance Benefit Program who are employed by a school district that provides instruction for prekindergarten, kindergarten, or grades 1 to 12, inclusive, or a county office of education, pursuant to regulations adopted by the board, for a four-year term commencing on January 1, 2004.
(C) One person who, at the time of election, is a community college instructor and an active member of the Defined Benefit Program or an active participant of the Cash Balance Benefit Program employed by a community college district, who shall be elected by the active community college members of the Defined Benefit Program and the active community college participants of the Cash Balance Benefit Program, pursuant to regulations adopted by the board, for a four-year term commencing on January 1, 2004.
(6) Five persons appointed by the Governor for a term of four years, subject to confirmation by the Senate, as follows:
(A) One person who, at the time of appointment, is a member of the governing board of a school district or a community college district.
(B) One person who is either a retired member under this part or a retired participant under Part 14 (commencing with Section 26000).
(C) Three persons representing the public, whose terms shall be staggered by varying the first terms of these members, as follows:
(i) One person to a term expiring December 31, 2005.
(ii) One person to a term expiring December 31, 2006.
(iii) One person to a term expiring December 31, 2007.
(b) A person who is employed to perform creditable service by a community college district and either a school district that provides instruction for prekindergarten, kindergarten, or grades 1 to 12, inclusive, or a county office of education, may only be elected to the position on the board that corresponds to the position in which he or she accrued the most service credit during the prior school year.
(c) The members of the board shall annually elect a chairperson and vice chairperson.
(1) The Superintendent of Public Instruction.
(2) The Controller.
(3) The Treasurer.
(4) The Director of Finance.
(5) Three persons who are either members of the Defined Benefit Program or participants in the Cash Balance Benefit Program, as follows:
(A) One person who, at the time of election, is an active member of the Defined Benefit Program or an active participant of the Cash Balance Benefit Program employed by a school district that provides instruction for prekindergarten, kindergarten, or grades 1 to 12, inclusive, or a county office of education, in a position other than a school administrator that requires a services credential with a specialization in administrative services. This member shall be elected by the active members of the Defined Benefit Program and active participants of the Cash Balance Benefit Program who are employed by a school district that provides instruction for prekindergarten, kindergarten, or grades 1 to 12, inclusive, or county office of education, pursuant to regulations adopted by the board, for a four-year term commencing on January 1, 2004.
(B) One person who, at the time of election, is an active member of the Defined Benefit Program or an active participant of the Cash Balance Benefit Program employed by a school district that provides instruction for prekindergarten, kindergarten, or grades 1 to 12, inclusive, or a county office of education. This member shall be elected by the active members of the Defined Benefit Program and active participants of the Cash Balance Benefit Program who are employed by a school district that provides instruction for prekindergarten, kindergarten, or grades 1 to 12, inclusive, or a county office of education, pursuant to regulations adopted by the board, for a four-year term commencing on January 1, 2004.
(C) One person who, at the time of election, is a community college instructor and an active member of the Defined Benefit Program or an active participant of the Cash Balance Benefit Program employed by a community college district, who shall be elected by the active community college members of the Defined Benefit Program and the active community college participants of the Cash Balance Benefit Program, pursuant to regulations adopted by the board, for a four-year term commencing on January 1, 2004.
(6) Five persons appointed by the Governor for a term of four years, subject to confirmation by the Senate, as follows:
(A) One person who, at the time of appointment, is a member of the governing board of a school district or a community college district.
(B) One person who is either a retired member under this part or a retired participant under Part 14 (commencing with Section 26000).
(C) Three persons representing the public, whose terms shall be staggered by varying the first terms of these members, as follows:
(i) One person to a term expiring December 31, 2005.
(ii) One person to a term expiring December 31, 2006.
(iii) One person to a term expiring December 31, 2007.
(b) A person who is employed to perform creditable service by a community college district and either a school district that provides instruction for prekindergarten, kindergarten, or grades 1 to 12, inclusive, or a county office of education, may only be elected to the position on the board that corresponds to the position in which he or she accrued the most service credit during the prior school year.
(c) The members of the board shall annually elect a chairperson and vice chairperson.
(a) The board shall conduct the elections of members
described in Section 22200 pursuant to regulations adopted by the
board.
(b) The board shall hold special elections to fill vacancies that occur during the term of the elected members of the board. If, at the time a vacancy occurs, the unexpired term is less than two years, the new member elected to fill the vacancy shall hold office for a period equal to the remainder of the term of the vacated office plus four years.
(c) The regulations adopted by the board pursuant to this section and Section 22200 shall not be subject to Article 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code.
(d) The regulations adopted by the board shall provide that the elections be conducted in the most cost-effective manner deemed feasible. The board, where practicable, shall consolidate election mailings with other mailings and shall address any other feasible cost-saving measures.
(b) The board shall hold special elections to fill vacancies that occur during the term of the elected members of the board. If, at the time a vacancy occurs, the unexpired term is less than two years, the new member elected to fill the vacancy shall hold office for a period equal to the remainder of the term of the vacated office plus four years.
(c) The regulations adopted by the board pursuant to this section and Section 22200 shall not be subject to Article 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code.
(d) The regulations adopted by the board shall provide that the elections be conducted in the most cost-effective manner deemed feasible. The board, where practicable, shall consolidate election mailings with other mailings and shall address any other feasible cost-saving measures.
(a) The board shall set policy and shall have the sole power
and authority to hear and determine all facts pertaining to
application for benefits under the plan or any matters pertaining to
administration of the plan and the system.
(b) The board shall meet at least once every calendar quarter at such times as it may determine. The meetings shall be presided over by the chairperson. In the event of the chairperson's absence from a meeting the vice chairperson shall act as presiding officer and perform all other duties of the chairperson.
(b) The board shall meet at least once every calendar quarter at such times as it may determine. The meetings shall be presided over by the chairperson. In the event of the chairperson's absence from a meeting the vice chairperson shall act as presiding officer and perform all other duties of the chairperson.
A quorum of the board shall consist of the majority of the
board members. In determining whether or not a quorum is present,
vacant positions on the board shall not be considered. The
concurrence of the majority of the board members present shall be
necessary to the validity of any action taken by the board.
The chief executive officer of the system shall act as
secretary of the board and shall have charge of all board
correspondence and shall keep a record of board proceedings.
The board has exclusive control of the administration of the
funds. No transfers or disbursements of any amount from the funds
shall be made except upon the authorization of the board for the
purpose of carrying into effect the provisions of this part and Part
14 (commencing with Section 26000).
The board has exclusive control of the investment of the
Teachers' Retirement Fund. Except as otherwise restricted by the
California Constitution and by law, the board may in its discretion
invest the assets of the fund through the purchase, holding, or sale
thereof of any investment, financial instrument, or financial
transaction when the investment, financial instrument, or financial
transaction is prudent in the informed opinion of the board.
(a) All investment transaction decisions made during a
closed session, pursuant to paragraph (16) of subdivision (c) of
Section 11126 of the Government Code, shall be by rollcall vote
entered into the minutes of that meeting.
(b) The board, within 12 months of the close of an investment transaction or the transfer of system assets for an investment transaction, whichever occurs first, shall disclose and report the investment at a public meeting.
(b) The board, within 12 months of the close of an investment transaction or the transfer of system assets for an investment transaction, whichever occurs first, shall disclose and report the investment at a public meeting.
Each member of the board may administer oaths and
affirmations to witnesses and others transacting the business of the
system.
The board has the authority to negotiate, and enter into
agreements with other states of the United States on the subject of
the transfer of members' contributions and regular interest between
the retirement systems of California and other states.
(a) As often as the board determines necessary, it may audit
or cause to be audited the records of any public agency.
(b) The board may excuse any audit finding provided all of the following conditions are met:
(1) The audit finding relates to a period of time prior to July 1, 2002.
(2) The audit finding identifies an issue that is not in compliance with the provisions of this part with respect to creditable service or creditable compensation.
(3) The noncompliance would not have existed if the service and compensation crediting changes that shall become operative on July 1, 2002, as a result of legislation enacted during the second year of the 1999-2000 Regular Session, had been operative during the period of time investigated in the audit.
(4) The audit finding was included in an audit report issued on or after January 1, 2001.
(5) Excusing the audit finding will not have an adverse effect on the integrity of the retirement fund.
(c) The board's authority pursuant to subdivision (b) shall extend to service and compensation issues identified through activities outside the audit function that address compliance with the provisions of this part.
(b) The board may excuse any audit finding provided all of the following conditions are met:
(1) The audit finding relates to a period of time prior to July 1, 2002.
(2) The audit finding identifies an issue that is not in compliance with the provisions of this part with respect to creditable service or creditable compensation.
(3) The noncompliance would not have existed if the service and compensation crediting changes that shall become operative on July 1, 2002, as a result of legislation enacted during the second year of the 1999-2000 Regular Session, had been operative during the period of time investigated in the audit.
(4) The audit finding was included in an audit report issued on or after January 1, 2001.
(5) Excusing the audit finding will not have an adverse effect on the integrity of the retirement fund.
(c) The board's authority pursuant to subdivision (b) shall extend to service and compensation issues identified through activities outside the audit function that address compliance with the provisions of this part.
The board shall perform any other acts necessary for the
administration of the system and the plan in carrying into effect the
provisions of this part and Part 14 (commencing with Section 26000),
which may include, but shall not be limited to, requesting the
following information from a member, participant, or beneficiary:
(a) Financial statements, certified copies of state and federal income tax records, or evidence of financial status.
(b) Employment, legal, or medical documentation.
(a) Financial statements, certified copies of state and federal income tax records, or evidence of financial status.
(b) Employment, legal, or medical documentation.
The board may appoint a committee of two or more of its
members to perform any act within the power of the board itself to
perform. The board may also delegate authority to the chief executive
officer to perform any such act. Except where the board, in
delegating that authority, provides that the committee or the chief
executive officer may act finally, all acts of the committee or the
chief executive officer shall be reported to the board at its next
regular meeting and shall be subject to review, ratification, or
reversal by the board.
The office of chief executive officer shall be filled by
appointment by the board and the appointee shall serve at the
pleasure of the board.
(a) Reversal by the board of any act of the committee or the
chief executive officer shall be effective on the date fixed by the
board.
(b) Payment of benefits prior to the board's action of reversal may not be affected by such an action, except for the recovery of the amounts paid, from the beneficiary receiving the amounts, as the board may direct.
(b) Payment of benefits prior to the board's action of reversal may not be affected by such an action, except for the recovery of the amounts paid, from the beneficiary receiving the amounts, as the board may direct.
The board shall appoint such employees as are necessary to
administer the plan and the system.
(a) Except as otherwise provided in subdivision (d), this
section shall apply to the following positions in the system: chief
executive officer, system actuary, general counsel, chief investment
officer, and other investment officers and portfolio managers whose
positions are designated managerial pursuant to Section 18801.1 of
the Government Code.
(b) Notwithstanding Sections 19816, 19825, 19826, 19829, and 19832 of the Government Code, the board shall fix the compensation for the positions specified in subdivision (a). In so doing, the board shall be guided by the principles contained in Sections 19826 and 19829 of the Government Code, consistent with its fiduciary responsibility to its members to recruit and retain highly qualified and effective employees for these positions.
(c) When a position specified in subdivision (a) is filled through a general civil service appointment, it shall be filled from an eligible list based on an examination that was held on an open basis, and tenure in those positions shall be subject to the provisions of Article 2 (commencing with Section 19590) of Chapter 7 of Part 2 of Division 5 of Title 2 of the Government Code. In addition to the causes for action specified in that article, the board may take action under the article for causes related to its fiduciary responsibility to its members, including the employee's failure to meet specified performance objectives.
(d) An individual who held a position designated in subdivision (a), or was a member of the board, a chief of staff, a deputy chief executive officer, chief financial officer, or was in an equivalent senior management position, shall not, for a period of two years after leaving that position, for compensation, act as agent or attorney for, or otherwise represent, any other person, except the state, by making any formal or informal appearance before or by making any oral or written communication to the board, or any officer or employee thereof, if the appearance or communication is made for the purpose of influencing administrative or legislative action or any action or proceeding involving the issuance, amendment, awarding, or revocation of a permit, license, grant, contract, or sale or purchase of goods or property.
(b) Notwithstanding Sections 19816, 19825, 19826, 19829, and 19832 of the Government Code, the board shall fix the compensation for the positions specified in subdivision (a). In so doing, the board shall be guided by the principles contained in Sections 19826 and 19829 of the Government Code, consistent with its fiduciary responsibility to its members to recruit and retain highly qualified and effective employees for these positions.
(c) When a position specified in subdivision (a) is filled through a general civil service appointment, it shall be filled from an eligible list based on an examination that was held on an open basis, and tenure in those positions shall be subject to the provisions of Article 2 (commencing with Section 19590) of Chapter 7 of Part 2 of Division 5 of Title 2 of the Government Code. In addition to the causes for action specified in that article, the board may take action under the article for causes related to its fiduciary responsibility to its members, including the employee's failure to meet specified performance objectives.
(d) An individual who held a position designated in subdivision (a), or was a member of the board, a chief of staff, a deputy chief executive officer, chief financial officer, or was in an equivalent senior management position, shall not, for a period of two years after leaving that position, for compensation, act as agent or attorney for, or otherwise represent, any other person, except the state, by making any formal or informal appearance before or by making any oral or written communication to the board, or any officer or employee thereof, if the appearance or communication is made for the purpose of influencing administrative or legislative action or any action or proceeding involving the issuance, amendment, awarding, or revocation of a permit, license, grant, contract, or sale or purchase of goods or property.
The board shall regulate the duties of employers, employing
agencies, and other public authorities, imposed upon them by this
part, and shall require reports from employers, employing agencies,
and other public authorities, as it deems advisable in connection
with the performance of its duties.
The board may take any action it deems necessary to ensure
the continued right of members or beneficiaries to receive monthly
payments.
The board shall determine the service performed by members
to be credited toward qualification for retirement, and shall fix and
modify allowances provided under this part.
(a) The board shall annually adopt as a plan amendment with
respect to the Defined Benefit Program the rate of credited interest
to be credited to members' accumulated retirement contributions for
service performed after June 30, 1935, and the accumulated annuity
deposit contributions excluding all accumulated contributions while
being paid as disability allowances, family allowances, and
retirement allowances.
(b) The board shall credit interest to all other accumulated reserves at the actuarially assumed interest rate.
(b) The board shall credit interest to all other accumulated reserves at the actuarially assumed interest rate.
(a) The board shall employ a certified public accountant or
public accountant, who is not in public employment, to audit the
financial statements of the system. The costs of the audit shall be
paid from the income of the retirement fund. The audit shall be made
annually and the audit report shall be incorporated into the annual
report filed with the Governor and the Legislature pursuant to
Section 22324.
(b) These audits shall not be duplicated by the Department of Finance or the State Auditor. The system shall be exempt from a pro rata general administrative charge for auditing.
(b) These audits shall not be duplicated by the Department of Finance or the State Auditor. The system shall be exempt from a pro rata general administrative charge for auditing.
The board shall establish and maintain records and accounts
following recognized accounting principles and controls.
(a) The board may in its discretion hold a hearing for the
purpose of determining any question presented to it involving any
right, benefit, or obligation of a person under this part.
(b) When a hearing is held, the proceedings shall be conducted in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, relating to administrative adjudication, and the board shall have all of the powers granted in that chapter. However, the provisions of Section 11508 of the Government Code relating to the location of the hearing shall not apply, and the hearing shall be held at the time and place determined by the board.
(b) When a hearing is held, the proceedings shall be conducted in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, relating to administrative adjudication, and the board shall have all of the powers granted in that chapter. However, the provisions of Section 11508 of the Government Code relating to the location of the hearing shall not apply, and the hearing shall be held at the time and place determined by the board.
In addition to the authority granted pursuant to Section
11181 of the Government Code, the board may subpoena witnesses and
compel their attendance to testify before it.
The board shall adopt, upon the recommendation of the
actuary of the system, any mortality and other tables and interest
rates necessary to do the following:
(a) Permit valuation of the assets and liabilities of the system.
(b) Make any determination or calculation necessary to carry out this part.
(a) Permit valuation of the assets and liabilities of the system.
(b) Make any determination or calculation necessary to carry out this part.
The board may adjust the amounts of the death payments based
on changes in the All Urban California Consumer Price Index, and
shall adopt as a plan amendment with respect to the Defined Benefit
Program any adjusted amount, provided that the most recent actuarial
valuation report indicates that the adjustment would not increase the
normal cost.
The members of the board who are not active members of the
Defined Benefit Program or active participants of the Cash Balance
Benefit Program and who are appointed by the Governor pursuant to
Section 22200 shall receive one hundred dollars ($100) for every day
of actual attendance at meetings of the board or any meeting of any
committee of the board of which the person is a member, and that is
conducted for the purpose of carrying out the powers and duties of
the board, together with their necessary traveling expenses incurred
in connection with performance of their official duties.
Members of the Defined Benefit Program and participants of
the Cash Balance Benefit Program, who are either elected to the board
or appointed to the board by the Governor pursuant to Section 22200,
or who are appointed by the board to serve on a committee or
subcommittee of the board or a panel of the system, shall be granted,
by his or her employer, sufficient time away from regular duties,
without loss of compensation or other benefits to which the person is
entitled by reason of employment, to attend meetings of the board or
any of its committees or subcommittees of which the person is a
member, or to serve as a member of a panel of the system, and to
attend to the duties expected to be performed by the person.
(a) The compensation of the members of the Defined Benefit
Program and participants of the Cash Balance Benefit Program who are
either elected to the board or appointed to the board by the Governor
pursuant to Section 22200, or who are appointed by the board to a
committee or subcommittee, or to a panel of the system, may not be
reduced by his or her employer for any absence from service
occasioned by attendance upon the business of the board, pursuant to
Section 22224.
(b) Each employer that employs either a member of the Defined Benefit Program or a participant of the Cash Balance Benefit Program elected or appointed pursuant to Section 22224 and that employs a person to replace the member or participant during attendance at meetings of the board, its committees or subcommittees, or when serving as a member of a panel of the system, or when carrying out other duties approved by the board, shall be reimbursed from the retirement fund for the cost incurred by employing a replacement.
(b) Each employer that employs either a member of the Defined Benefit Program or a participant of the Cash Balance Benefit Program elected or appointed pursuant to Section 22224 and that employs a person to replace the member or participant during attendance at meetings of the board, its committees or subcommittees, or when serving as a member of a panel of the system, or when carrying out other duties approved by the board, shall be reimbursed from the retirement fund for the cost incurred by employing a replacement.
(a) The board shall conduct a study on providing health
insurance benefits, including vision and dental care benefits, for
active, disabled, and retired members, beneficiaries, children, and
dependent parents. The health insurance may include vision and dental
care.
(b) The study shall include, but not be limited to, assessing the lack of access of health insurance benefits for retired teachers and shall evaluate the following:
(1) The demand for health insurance benefits.
(2) The integration of health insurance benefits and Medicare coverage.
(3) The manner in which health insurance benefits would be administered and provided.
(c) There is hereby appropriated from the Teachers' Retirement Fund to the State Teachers' Retirement Board the sum of two hundred thousand dollars ($200,000) conduct a study for the purposes identified in this section. If this study results in the implementation of health insurance benefits as described in subdivision (a), the State Teachers' Retirement Board shall reimburse the sum of two hundred thousand dollars ($200,000) to the Teachers' Retirement Fund from administrative fees charged to recipients of the health insurance benefits.
(b) The study shall include, but not be limited to, assessing the lack of access of health insurance benefits for retired teachers and shall evaluate the following:
(1) The demand for health insurance benefits.
(2) The integration of health insurance benefits and Medicare coverage.
(3) The manner in which health insurance benefits would be administered and provided.
(c) There is hereby appropriated from the Teachers' Retirement Fund to the State Teachers' Retirement Board the sum of two hundred thousand dollars ($200,000) conduct a study for the purposes identified in this section. If this study results in the implementation of health insurance benefits as described in subdivision (a), the State Teachers' Retirement Board shall reimburse the sum of two hundred thousand dollars ($200,000) to the Teachers' Retirement Fund from administrative fees charged to recipients of the health insurance benefits.
It is the intent of the Legislature that candidates for
board seats described in paragraph (5) of subdivision (a) of Section
22200, including incumbent board members running for reelection,
shall file campaign statements with the Secretary of State according
to campaign reporting, contribution limits, and conflict of interest
provisions of the Political Reform Act, adapted for the unique
characteristics of elected member seats on state retirement system
boards.
(a) Commencing August 1, 2012, the board shall provide a
five-year strategic plan for emerging investment manager
participation across all asset classes.
(b) The board shall submit a report to the Legislature, commencing March 1, 2014, and each March 1 thereafter, regarding the progress of the strategic plan. The report shall be submitted in compliance with Section 9795 of the Government Code.
(c) The board shall define the term "emerging investment manager" for purposes of this section.
(d) Nothing in this section shall require the board to take action that is not consistent with the fiduciary responsibilities of the board as described in Section 17 of Article XVI of the California Constitution.
(e) This section shall remain in effect only until January 1, 2018, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2018, deletes or extends that date.
(b) The board shall submit a report to the Legislature, commencing March 1, 2014, and each March 1 thereafter, regarding the progress of the strategic plan. The report shall be submitted in compliance with Section 9795 of the Government Code.
(c) The board shall define the term "emerging investment manager" for purposes of this section.
(d) Nothing in this section shall require the board to take action that is not consistent with the fiduciary responsibilities of the board as described in Section 17 of Article XVI of the California Constitution.
(e) This section shall remain in effect only until January 1, 2018, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2018, deletes or extends that date.
