Chapter 27.5. Replacement Benefits Program of California Education Code >> Division 1. >> Title 1. >> Part 13. >> Chapter 27.5.

It is the intent of the Legislature in repealing Sections 22316 and 22317 and adding Section 24275 to revoke the election made on behalf of the plan under Section 415(b)(10) of the Internal Revenue Code of 1986 and to provide for restoration of benefits pursuant to Section 24275.

This chapter shall not apply to a member subject to the California Public Employees' Pension Reform Act of 2013.

(a) There is in the State Treasury a trust fund to be known as the Teachers' Replacement Benefits Program Fund. There shall be deposited directly in that fund, and not transferred from the Teachers' Retirement Fund, that portion of employer contributions determined by the board as necessary to fund the replacement benefits program.
  (b) Notwithstanding Section 13340 of the Government Code, moneys in the Teachers' Replacement Benefits Program Fund are continuously appropriated without regard to fiscal years to pay benefits to members and beneficiaries of the Defined Benefit Program, and to pay related administrative expenses.
  (c) The board may authorize the transfer and disbursement of funds from the Teachers' Replacement Benefits Program Fund for the purpose of carrying into effect this chapter upon the signature of either or both of its chairperson and vice chairperson or the chief executive officer or any employee of the system designated by the chief executive officer.
  (d) Disbursements of money from the Teachers' Replacement Benefits Program Fund of whatever nature shall be made upon claims duly audited in the manner prescribed for the disbursement of other public funds except that, notwithstanding the foregoing, disbursements may be made to return funds deposited in the fund in error.

(a) A replacement benefits program is hereby established under this chapter for the exclusive purpose of providing to members or their beneficiaries in accordance with subdivisions (c) and (d) that portion of the annual benefit of the member or the member's beneficiaries otherwise payable under the provisions of this part that exceeds the limitations on the dollar amount of annual benefit under Section 415 of the Internal Revenue Code of 1986 (26 U.S.C. Sec. 415) as applicable to a governmental plan, as defined in subdivision (d) of Section 414.
  (b) The replacement benefits program established by this chapter is intended to comply with the provisions of Section 415(m) of the Internal Revenue Code of 1986 (26 U.S.C. Sec. 415(m)).
  (c) In any case in which (1) the annual benefit of the member or the member's beneficiaries for the calendar year otherwise payable under the terms of this part, as measured under the provisions of Section 415(b)(2) of the Internal Revenue Code of 1986 (26 U.S.C. Sec. 415(b)(2)) and adjusted to exclude the portion of the annual benefit attributable to employee contributions that are not "picked up" under Section 414(h)(2) of the Internal Revenue Code of 1986 (26 U.S.C. Sec. 414(h)(2)) or attributable to rollover contributions described in Section 415(b)(2) of the Internal Revenue Code of 1986, exceeds (2) the limitation on the dollar amount of an annual benefit applicable for the calendar year under Section 415(b)(1)(A) or subdivision (e) as applicable to a governmental plan, as defined in Section 414(d) of the Internal Revenue Code of 1986 (26 U.S.C. Sec. 414(d)), the amount of the portion of the annual benefit shall be paid to the member or the member's beneficiaries under the replacement benefit program in the manner described in subdivision (d). In no event shall the portion of the annual benefit from the replacement benefits program be payable from the assets of the Teachers' Retirement Fund. In no event shall the replacement benefits program provide to the member or the member's beneficiaries, directly or indirectly, any election to defer compensation.
  (d) Any portion of the annual benefit of a member or the member's beneficiaries for the year described in subdivision (c) shall be payable, at the same time and in the same form as the remainder of the annual benefit and subject to the terms and conditions of this part except as otherwise provided under this section, from the proceeds of the employer contributions due under Section 22950, and, notwithstanding Section 22956, prior to the deposit of those employer contributions in the State Treasury to the Teachers' Retirement Fund. Upon receipt of the warrants for the employer contributions as described in Section 23001, the board shall retain and place in the Teachers' Replacement Benefits Program Fund only the amounts of employer contributions as are necessary for the exclusive purpose of paying currently the monthly installment next due of the portion of the annual benefit payable from the replacement benefits program to the member or the member's beneficiaries as well as any administrative expenses associated with the replacement benefits program. Amounts shall not be accumulated in the Teachers' Replacement Benefits Program Fund for the payment of future benefits, and a member or the member's beneficiaries who are to receive the portion of his or her annual benefit under the replacement benefits program shall have no entitlement to amounts in the Teachers' Replacement Benefits Program Fund until distributed to him or her as a benefit.
  (e) The portion of the annual benefit payable under the replacement benefits program shall be subject to withholding for any applicable income or employment taxes.
  (f) The administrative expenses of the replacement benefits program may include the employer portion of the Medicare payroll tax on the replacement benefits program payments of a retired member who is required to contribute to Medicare. The employee portion of the Medicare payroll tax on the replacement benefits program payments to retired members in this program who are required to contribute to Medicare shall be withheld from the replacement benefits program payments to the retired member.
  (g) The board may by plan amendment amend the terms of the replacement benefits program established under this section as appropriate to comply with applicable federal or state law.
  (h) All references to sections of the Internal Revenue Code of 1986 are to those sections as are amended from time to time or their successor sections.

In the case of any member or member's beneficiaries whose annual benefit otherwise payable under the provisions of this part has been reduced for any year by reason of application of the 100 percent of compensation limitation on benefits under Section 415(b) (1)(B) of the Internal Revenue Code of 1986 (26 U.S.C. Sec. 415(b)(1) (B)) the reduced annual benefit shall be restored to its full amount otherwise payable for that year. In the case of restorations in respect of annual benefits that were paid prior to January 1, 2000, the additional benefit amount shall be paid by the system to the member or the member's beneficiaries on or before April 1, 2000.

(a) Notwithstanding any other provision of this part, the benefits payable to any person shall be subject to the limitations of Section 415 (other than Section 415(b)(1)(B)) of the Internal Revenue Code of 1986 (26 U.S.C. Sec. 415) as applicable to a governmental plan as those sections are amended from time to time or their successor sections.
  (b) This section and Section 24270 shall be applicable to benefits payable in all plan years beginning before, on, or after enactment of this chapter.