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Chapter 1. General Provisions of California Education Code >> Division 1. >> Title 1. >> Part 14. >> Chapter 1.
The Legislature hereby finds and declares that the State
Teachers' Retirement System Cash Balance Plan was created and
established on July 1, 1996, to provide a retirement plan for persons
employed by an employer offering the Cash Balance Plan, excluding a
community college district, to perform creditable service for less
than 50 percent of the full-time equivalent for the position, or
employed by a community college district offering the Cash Balance
Plan to perform creditable service on a temporary basis pursuant to
Section 87474, 87478, 87480, 87481, 87482, or 87482.5, or employed by
an employer offering the Cash Balance Plan to perform creditable
service as a substitute employee. The persons eligible for the Cash
Balance Plan were excluded from mandatory membership in the State
Teachers' Retirement System Defined Benefit Plan. Both plans are
administered by the Teachers' Retirement Board. Because both plans
were intended to provide for the retirement of teachers and other
persons employed in connection with the public schools of this state
and schools supported by this state, a merger of these two plans is
now hereby made for the purpose of establishing a single retirement
plan that shall be known and may be cited as the State Teachers'
Retirement Plan consisting of the different benefit programs set
forth in this part and Part 13 (commencing with Section 22000). The
plan shall be administered by the Teachers' Retirement Board as set
forth in this part and Part 13 (commencing with Section 22000). As a
result of this merger, a Cash Balance Benefit Program will be
provided under the State Teachers' Retirement Plan and that program
is set forth in this part.
The governing board of a school district, community college
district, or county office of education may, by formal action, elect
to provide the benefits of the Cash Balance Benefit Program under
this part for their employees.
An employer whose governing board has elected to provide
the benefits of this part for its employees pursuant to Section 26000
shall enter into an agreement with the State Teachers' Retirement
System. The agreement shall specify the terms and conditions of the
employer's formal action to provide the Cash Balance Benefit Program
and shall remain in effect unless or until the employer exercises the
right to discontinue the program pursuant to Chapter 17 (commencing
with Section 28100).
(a) An election by any employer to provide the benefits of
the Cash Balance Plan for their employees prior to the merger
described in Section 26000 shall be deemed to constitute an election
to provide the Cash Balance Benefit Program under the State Teachers'
Retirement Plan.
(b) Participation in the Cash Balance Plan by any participant prior to the merger described in Section 26000 shall be deemed to constitute participation in the Cash Balance Benefit Program under the State Teachers' Retirement Plan.
(c) Any beneficiary under the Cash Balance Plan prior to the merger described in Section 26000 shall be deemed to be a beneficiary under the Cash Balance Benefit Program under the State Teachers' Retirement Plan.
(b) Participation in the Cash Balance Plan by any participant prior to the merger described in Section 26000 shall be deemed to constitute participation in the Cash Balance Benefit Program under the State Teachers' Retirement Plan.
(c) Any beneficiary under the Cash Balance Plan prior to the merger described in Section 26000 shall be deemed to be a beneficiary under the Cash Balance Benefit Program under the State Teachers' Retirement Plan.
The design and administration of the plan, including the
Cash Balance Benefit Program, shall comply with the applicable
provisions of the Internal Revenue Code and the Revenue and Taxation
Code. The Teachers' Retirement Board may amend the plan to comply
with the applicable federal laws and regulations to the extent
permitted by law, to establish or revise the minimum interest rate,
to declare additional earnings credit, to declare additional annuity
credit, and to adopt and amend actuarial assumptions for all purposes
under the plan.
The Cash Balance Benefit Program shall be administered by
the Teachers' Retirement Board with all of the powers,
responsibilities and duties for administration of the plan set forth
in Chapter 3 (commencing with Section 22200) through Chapter 7
(commencing with Section 22375) of Part 13. In administering the
plan, the board and its officers and employees of the system shall
exercise their fiduciary duties set forth in Chapter 4 (commencing
with Section 22250) of Part 13.
Except as excluded in subdivision (d) of Section 26807.5
or subdivision (c) of Section 26906.5, a person who is the registered
domestic partner of a member, as established pursuant to Section 297
or 299.2 of the Family Code, shall be treated in the same manner as
a "spouse," as defined in Section 26140.
If any provision of this part or the application thereof to
any person or circumstance is held invalid, that invalidity shall not
affect other provisions or applications of this part that can be
given effect without the invalid provision or application, and to
this end the provisions of this part are severable.
Notwithstanding any other provision of law:
(a) The benefits payable to any participant or beneficiary under this part shall be subject to the limitations imposed by Section 415 of Title 26 of the United States Code.
(b) The amount of compensation that is taken into account in computing benefits under this part for a plan year shall not exceed the annual compensation limit applicable to that plan year in accordance with Section 401(a)(17) of Title 26 of the United States Code as that section read on the effective date of this section and as that section may be amended after that date. The determination of compensation for a 12-month period shall be subject to the annual compensation limit in effect for the calendar year in which the 12-month period begins. In a determination of average compensation over more than one 12-month period, the amount of compensation taken into account for each 12-month period shall be subject to the respective annual compensation limit applicable to that period.
(c) Distributions from the plan under this part shall be made in accordance with Section 401(a)(9) of Title 26 of the United States Code, including the incidental death benefit requirements of Section 401(a)(9)(G) and the regulations thereunder. The required beginning date of benefit payments that represent the entire interest of the participant shall be as follows:
(1) In the case of a lump-sum distribution of a retirement benefit, disability benefit, or termination benefit, the lump-sum payment shall be made not later than April 1 of the calendar year following the later of (A) the calendar year in which the participant attains the age at which the Internal Revenue Code of 1986 requires a distribution of benefits or (B) the calendar year in which the participant terminates all employment subject to coverage by the plan.
(2) In the case of a retirement benefit or disability benefit that is to be paid in the form of an annuity, payment of the annuity shall begin not later than April 1 of the calendar year following the later of (A) the calendar year in which the participant attains the age at which the Internal Revenue Code of 1986 requires a distribution of benefits or (B) the calendar year in which the participant terminates employment in all positions subject to coverage by the plan, with the annuity to continue over the life of the participant or the life of the participant and the participant's option beneficiary, or over a period not to exceed the life expectancy of the participant or the life expectancy of the participant and the participant's option beneficiary.
(3) In the case of a death benefit, distributions shall commence no later than the date provided in Section 27001.
(d) If a person becomes entitled to a distribution from the plan under this part that constitutes an eligible rollover distribution within the meaning of Section 401(a)(31) of Title 26 of the United States Code, the person may elect under terms and conditions established by the board to have the distribution or a portion thereof paid directly to a plan that constitutes an eligible retirement plan within the meaning of Section 401(a)(31), as specified by that person. Upon the exercise of the election by a person with respect to a distribution or a portion thereof, the distribution from the plan of the amount so designated, once distributable under the terms of the plan, shall be made in the form of a direct rollover to the eligible retirement plan so specified.
(e) The amount of any benefit from the plan under this part that is determined on the basis of actuarial assumptions shall be based on actuarial assumptions adopted by the board pursuant to Section 26213 as a plan amendment with respect to the Cash Balance Benefit Program and those assumptions shall preclude employer discretion and comply with Section 401(a)(25) of Title 26 of the United States Code.
(a) The benefits payable to any participant or beneficiary under this part shall be subject to the limitations imposed by Section 415 of Title 26 of the United States Code.
(b) The amount of compensation that is taken into account in computing benefits under this part for a plan year shall not exceed the annual compensation limit applicable to that plan year in accordance with Section 401(a)(17) of Title 26 of the United States Code as that section read on the effective date of this section and as that section may be amended after that date. The determination of compensation for a 12-month period shall be subject to the annual compensation limit in effect for the calendar year in which the 12-month period begins. In a determination of average compensation over more than one 12-month period, the amount of compensation taken into account for each 12-month period shall be subject to the respective annual compensation limit applicable to that period.
(c) Distributions from the plan under this part shall be made in accordance with Section 401(a)(9) of Title 26 of the United States Code, including the incidental death benefit requirements of Section 401(a)(9)(G) and the regulations thereunder. The required beginning date of benefit payments that represent the entire interest of the participant shall be as follows:
(1) In the case of a lump-sum distribution of a retirement benefit, disability benefit, or termination benefit, the lump-sum payment shall be made not later than April 1 of the calendar year following the later of (A) the calendar year in which the participant attains the age at which the Internal Revenue Code of 1986 requires a distribution of benefits or (B) the calendar year in which the participant terminates all employment subject to coverage by the plan.
(2) In the case of a retirement benefit or disability benefit that is to be paid in the form of an annuity, payment of the annuity shall begin not later than April 1 of the calendar year following the later of (A) the calendar year in which the participant attains the age at which the Internal Revenue Code of 1986 requires a distribution of benefits or (B) the calendar year in which the participant terminates employment in all positions subject to coverage by the plan, with the annuity to continue over the life of the participant or the life of the participant and the participant's option beneficiary, or over a period not to exceed the life expectancy of the participant or the life expectancy of the participant and the participant's option beneficiary.
(3) In the case of a death benefit, distributions shall commence no later than the date provided in Section 27001.
(d) If a person becomes entitled to a distribution from the plan under this part that constitutes an eligible rollover distribution within the meaning of Section 401(a)(31) of Title 26 of the United States Code, the person may elect under terms and conditions established by the board to have the distribution or a portion thereof paid directly to a plan that constitutes an eligible retirement plan within the meaning of Section 401(a)(31), as specified by that person. Upon the exercise of the election by a person with respect to a distribution or a portion thereof, the distribution from the plan of the amount so designated, once distributable under the terms of the plan, shall be made in the form of a direct rollover to the eligible retirement plan so specified.
(e) The amount of any benefit from the plan under this part that is determined on the basis of actuarial assumptions shall be based on actuarial assumptions adopted by the board pursuant to Section 26213 as a plan amendment with respect to the Cash Balance Benefit Program and those assumptions shall preclude employer discretion and comply with Section 401(a)(25) of Title 26 of the United States Code.
