Chapter 3. Plan Administration of California Education Code >> Division 1. >> Title 1. >> Part 14. >> Chapter 3.

Employee contributions, employer contributions, investment earnings, and any other amounts provided under this part shall be deposited into the Teachers' Retirement Fund. Disbursement of money from the fund shall be made upon claims made pursuant to Section 26209 and duly audited in the manner prescribed for the disbursement of other public funds. Notwithstanding Section 13340 of the Government Code, the Teachers' Retirement Fund is continuously appropriated for the payment of benefits and investment transactions pursuant to this part. Disbursements may be made to return funds deposited in the fund in error.

Investment earnings shall be collected by the Treasurer, and together with any other moneys received in connection with the Cash Balance Benefit Program, shall be immediately deposited to the credit of the Teachers' Retirement Fund and reported to the system.

(a) The board shall establish a Gain and Loss Reserve within the Teachers' Retirement Fund for the Cash Balance Benefit Program. The board has sole authority to administer the Gain and Loss Reserve to be drawn upon to the extent necessary to credit interest to employee accounts and employer accounts at the minimum interest rate during years in which the investment earnings of the plan with respect to the Cash Balance Benefit Program are not sufficient for that purpose, and, where necessary, to provide additions to the Annuitant Reserve for monthly annuity payments.
  (b) The board shall establish and periodically review goals regarding the sufficiency of the Gain and Loss Reserve based on the recommendation of the actuary.
  (c) In the event that the total amount of investment earnings of the plan with respect to the Cash Balance Benefit Program for any plan year exceeds the sum of the total amount required to credit all employee and employer accounts at the minimum interest rate for the plan year plus the administrative costs of the plan with respect to the Cash Balance Benefit Program for the plan year, the board shall determine the amount, if any, that is to be credited to the Gain and Loss Reserve for the plan year. That determination shall be made upon recommendation of the actuary following the adoption by the board of the actuarial valuation undertaken following the plan year pursuant to Section 26202, but no later than June 30 following the end of the plan year. In determining whether an amount is to be credited to the Gain and Loss Reserve, the board shall consider the sufficiency of the reserve in light of the goal established for the sufficiency and the recommendations of the actuary.

The board may amortize any unfunded actuarial obligation in accordance with standards established by the Actuarial Standards Board and Governmental Accounting Standards Board.

The board shall establish an Annuitant Reserve within the Teachers' Retirement Fund for the Cash Balance Benefit Program. The board has sole authority to administer the Annuitant Reserve for the payment of annuities. The board may transfer the credits from a participant's employee account and employer account to the Annuitant Reserve upon election of an annuity by the participant or beneficiary of the participant.

The board may transfer amounts between the Gain and Loss Reserve and the Annuitant Reserve upon the recommendation of the actuary.

All administrative costs of the board and system for the plan with respect to the Cash Balance Benefit Program shall be paid from the Teachers' Retirement Fund.

In no event shall the funding of the Cash Balance Benefit Program be a liability of the state or the General Fund, nor shall the General Fund be used to offset or fund any liabilities attributed to the operation of the Cash Balance Benefit Program.

The board shall establish and maintain records and accounts following recognized accounting principles and controls with respect to the Cash Balance Benefit Program.

The board may authorize the transfer and disbursement of funds from the Teachers' Retirement Fund for the purpose of carrying into effect the Cash Balance Benefit Program upon the signature of its chairperson, vice chairperson, the chief executive officer, or any employee of the system designated by the chief executive officer.

The board has exclusive control of the investment of the Retirement Fund with respect to assets attributed to the Cash Balance Benefit Program. In investing the fund, the board and its officers and employees shall exercise their fiduciary duties set forth in Chapter 4 (commencing with Section 22250) and Chapter 6 (commencing with Section 22350) of Part 13.

The board shall acquire the services of an actuary to:
  (a) Perform an actuarial investigation of the demographic and economic experience of the Cash Balance Benefit Program at least once every four years and make recommendations to the board for the adoption of actuarial assumptions for the program that are, in the aggregate, reasonably related to the past experience of the program and the actuary's best estimate of the future experience of the program.
  (b) Perform an annual actuarial valuation of the assets and liabilities of the plan with respect to the Cash Balance Benefit Program, using the actuarial assumptions adopted by the board.
  (c) Recommend to the board all rates and factors necessary to administer the Cash Balance Benefit Program, including, but not limited to, mortality tables, annuity factors, interest rates, additional earnings credits, and employer contribution rates.
  (d) Recommend to the board the goal for maintaining a sufficient Gain and Loss Reserve with respect to the Cash Balance Benefit Program, the amount to be transferred to the Gain and Loss Reserve from investment earnings of the plan each year with respect to the Cash Balance Benefit Program, and a strategy for the amortization of any unfunded actuarial obligation.
  (e) Recommend to the board transfers of amounts between the Gain and Loss Reserve and the Annuitant Reserve with respect to the Cash Balance Benefit Program.
  (f) Perform any other actuarial services that may be required for the administration of the plan with respect to the Cash Balance Benefit Program, as requested by the board.

The board shall maintain all data necessary for the actuarial investigation of the demographic and economic experience of the Cash Balance Benefit Program, and for the actuarial valuation of the assets and liabilities of the plan with respect to the Cash Balance Benefit Program.

The board shall adopt actuarial assumptions, rates, factors and tables necessary to administer the Cash Balance Benefit Program as an amendment to the plan.

(a) Except as provided in subdivision (b), the system shall make available, after the end of the plan year, to each participant having a balance in his or her employee account or employer account, a statement setting forth the balance as of the close of the plan year and amounts credited for the year. The system shall mail a copy of the participant's statement, provided that the employer or participant has informed the system of the participant's current mailing address and the participant has not requested to receive that statement electronically, in lieu of mailing.
  (b) The mode of issuance described in subdivision (a) is subject to Section 22337.

(a) Information filed with the system by a participant or beneficiary is confidential and shall be used by the system for the sole purpose of carrying into effect the provisions of this part. No official or employee of the system who has access to the individual records of a participant or beneficiary shall divulge any confidential information concerning those records to any person except in the following instances:
  (1) To the participant or beneficiary to whom the information relates.
  (2) To the authorized representative of the participant or beneficiary.
  (3) To the governing board of the participant's current or former employer.
  (4) To any department, agency, or political subdivision of this state.
  (5) To other individuals as necessary to locate a person to whom a benefit may be payable.
  (6) Pursuant to subpoena.
  (b) Information filed with the system in a beneficiary designation form may be released after the death of the participant to those persons who may provide information necessary for the distribution of benefits.
  (c) The information is not open to inspection by anyone except the board and its officers and employees of the system, and any person authorized by statute to make inspections.

The board may administer the Cash Balance Benefit Program through an agreement with a qualified third-party administrator that shall provide custodial, recordkeeping, or other administrative services specified under the agreement.