text:
Interest earned on any cash deposit in a bank by the Treasurer and income on other assets constituting a part of the fund shall be credited to the fund as received. Income, of whatever nature, earned on the retirement fund during any fiscal year, in excess of the interest credited to contributions during that year shall be retained in the fund as a reserve against deficiencies in interest earned in other years, losses under investments, court-mandated costs, and actuarial losses resulting from terminations, mergers, and dissolutions of contracting agencies.

Unless specifically authorized by this part, no funds in the reserve against deficiencies shall be available for the payment of benefits. The board, however, may apply to reduce the book value of securities purchased all or part of the excess of the proceeds of the sale or the redemption prior to maturity of securities over the book value of the securities sold (a) if the purchase of securities is made with those proceeds and (b) if the terms of both securities from the date of sale, redemption prior to maturity, or purchase, as the case may be, to the respective dates of maturity do not differ by more than five years. All applications of these excess proceeds, even with greater differences in terms, heretofore made by the board are hereby validated and confirmed.

At the end of each fiscal year, the amount in the reserve against deficiencies that exceeds 0.20 percent of the total assets of this system shall be credited to other accounts as prescribed by this part.

article: 5. The Retirement Fund


kind: section

code: GOV

text: Notwithstanding any other provision of law, funds in the reserve against deficiencies shall not be used to pay any employers’ contribution required by this chapter to be paid by the state, any school employer, or any contracting agency.

history: (History: Added by Stats. 1995, Ch. 379, Sec. 2. Effective January 1, 1996.)

division: 5. PERSONNEL

chapter: 2. Administration of System

article: 5. The Retirement Fund

path: 2. GOVERNMENT OF THE STATE OF CALIFORNIA > 5. PERSONNEL > 2. Administration of System > 5. The Retirement Fund


text: Notwithstanding any other provision of law, no funds in the retirement fund shall be expended for any purpose other than the cost of administration of this system, investments for the benefit of this system, the reduction of employer contributions, and the provision of benefits to the members and retired members of this system and their survivors and beneficiaries.

title: 2. GOVERNMENT OF THE STATE OF CALIFORNIA

article: 5. The Retirement Fund


text: The board shall deposit monthly in the State Treasury to the credit of the retirement fund all amounts received by it under this part.

article: 5. The Retirement Fund


text:
(a) The board shall credit all contributions of members in the retirement fund with interest at an interest crediting rate of 6 percent compounded at each June 30. The retired member reserves in the retirement fund shall be credited with the lesser of the current actuarial interest rate or the current annual interest rate compounded at each June 30. The interest amount that would have been credited to the member’s account on and after June 30, 1991, had the account been credited with the lesser of the current actuarial interest rate or the current annual interest rate, rather than at the 6-percent interest crediting rate, shall be credited to retired member reserves.

(b) Notwithstanding subdivision (a), the difference between the interest amount that was credited to the account of any state or school member of this system who was paid his or her accumulated contributions on or after June 30, 1991, and the lesser of the current actuarial interest rate or the current annual interest rate, shall be transferred to the state or school account, as appropriate, established by the board under Section 21337 to fund the purchasing power protection allowance for retirees, survivors, or beneficiaries of state or school employers.

(c) Notwithstanding subdivisions (a) and (b), if the current net earnings rate for state or school members exceeds the interest rate used to credit the retired member accounts of state or school employers, in addition to the amounts transferred to the separate accounts established for state and school employers under Section 21337, the remaining amounts shall be credited to employer accounts.

(d) The current annual interest rate may be lower than the current actuarial interest rate.

history: (History: Amended by Stats. 2000, Ch. 483, Sec. 1. Effective September 19, 2000. Applicable from July 1, 2000, by Sec. 4 of Ch. 483.)

article: 5. The Retirement Fund


text: The board has exclusive control of the investment of the 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.

article: 6. Investments

path: 2. GOVERNMENT OF THE STATE OF CALIFORNIA > 5. PERSONNEL > 2. Administration of System > 6. Investments


text: The board may itself make any investment authorized by law or sell any security, obligation, or real property in which moneys in the retirement fund are invested, by affirmative vote of at least seven members of the board, or by the same affirmative vote may from time to time adopt an investment resolution that shall contain detailed guidelines by which to designate those securities and real property that are acceptable for purchase. While the resolution is in effect, securities and real property may be purchased for investment by an officer or employee of the board designated by it for that purpose, and sales of securities may be consummated by the officer or employee under the conditions prescribed. Purchases and sales of securities shall be reported to the board, on a monthly basis, at its next regular meeting.

article: 6. Investments


text:
(a) All investment transaction decisions made during a closed session pursuant to paragraph (16) of subdivision (c) of Section 11126 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.

history: (History: Added by Stats. 1998, Ch. 923, Sec. 7. Effective January 1, 1999.)

article: 6. Investments


text: In addition to the other investments authorized by this article, the board may invest in real estate and leases thereof and improvements thereon for business or residential purposes as an investment for the production of income.

article: 6. Investments


text: The board may invest the money in the retirement fund in real property or improvements thereon or to be constructed thereon when the real property or improvements are acquired or to be made by or for sale or lease to the state or a public agency. The board may acquire the real property under Part 11 (commencing with Section 15850) of Division 3. Title to real property acquired by or on behalf of the board pursuant to this section or under Part 11 (commencing with Section 15850) of Division 3 shall be vested in the board. The Director of General Services on behalf of the state may hire or lease as lessee real property or improvements acquired pursuant to this section for lease to the state. The lease may contain an option or options to purchase the property, or a provision that title to the property shall vest in the state at the expiration of the term, and the Director of General Services is authorized to acquire the property. The board also may invest money in any valid special obligations of the state or a public agency or an agency of either issued to finance a public building and secured solely by the building or revenues, rentals or receipts received from operation of the building. This section shall not be construed as authorization to acquire any real property or improvements thereon or to issue any obligation to finance the acquisition on behalf of the state unless that acquisition is authorized by a separate act or appropriation enacted by the Legislature.

article: 6. Investments


text: In addition to the other investments authorized by this article, the board may invest in Property Assessed Clean Energy (PACE) bonds, as defined in Section 26054 of the Public Resources Code.

history: (History: Amended by Stats. 2019, Ch. 396, Sec. 9. (AB 1513) Effective January 1, 2020.)

article: 6. Investments


text:
(a) The board may select, purchase, or acquire in the name of the system, the fee or any lesser interest in real property, improved or unimproved, and may construct or remodel, and equip, an office building, including appropriate satellite structures, in the County of Sacramento, California, for its use and for the use of other state retirement systems excepting the State Teachers’ Retirement System, other departments, boards, and agencies of the state, or appropriate private commercial entities as space may be available from time to time. The office building and satellite structures shall conform to the Capital Master Plan if located within an area subject to the plan.

(b) The board may select, purchase, or acquire in the name of the system, the fee or any lesser interest in real property, improved or unimproved, and may construct or remodel, and equip, business recovery centers in California for use by the system as an alternate facility, emergency operations center, or data center that the board determines is appropriate for disaster preparedness.

(c) If the board acquires bare land, improvements shall be constructed according to plans approved by the State Public Works Board and Department of General Services.

(d) If the board acquires land with improvements thereon, the improvements shall be remodeled or completed in accordance with plans approved by the State Public Works Board and Department of General Services.

(e) If condemnation of the property selected is necessary, the board may elect to deposit the funds deemed necessary with the Treasurer. The funds are appropriated for purchase of the selected property subject to the Property Acquisition Law.

(f) Work on all projects shall be done under contract awarded to the lowest responsible bidder pursuant to bidding procedures set forth in Part 2 (commencing with Section 10100) of Division 2 of the Public Contract Code.

history: (History: Amended by Stats. 2009, Ch. 130, Sec. 14. (AB 966) Effective January 1, 2010.)

article: 6. Investments


text: The board may contract with the Department of General Services or any other state department for assistance and supervision in the acquisition of real property and the construction thereon of buildings and improvements authorized in this article.

article: 6. Investments


text:
All buildings and improvements constructed by the board under this article may contain space in excess of the immediate requirements of the board that, until needed, may be leased by the board upon those terms and conditions as may be approved by the board.

The board may contract with the Department of General Services to handle the rentals of any excess space over and above that required by the board and to furnish general supervision and maintenance of buildings and improvements constructed under the provisions of this article.

history: (History: Amended by Stats. 2010, Ch. 639, Sec. 1. (SB 1139) Effective January 1, 2011.)

article: 6. Investments


text: Any building or improvement constructed by the board under this article shall be subject to the supervision of the board in accordance with rules and regulations established by the board with the assistance of the Department of General Services.

article: 6. Investments


text:
The board shall establish a building account for the transfer of money that is continuously appropriated for that purpose from the retirement fund for the cost of the acquisition of real property, the construction or remodeling of buildings and improvements thereon, the maintenance, repair, and improvement thereof, and for other necessary operational expenses.

For accounting purposes the board shall pay to the building account an amount sufficient to repay all costs for construction and maintenance of space used by the board. Other amounts or contributions received shall be deposited in the building account and disbursed as provided in this section.

The board may contract with the Department of General Services for the purchase of insurance against loss of, or damage to, the property or the loss of use or occupancy of the building, liability insurance and other insurance as is customarily carried on state office buildings. Premiums for the insurance shall be paid from the building account.

Money in the building account that is in excess of current needs shall be paid into the retirement fund monthly. The land, building, equipment, and improvements thereon, shall constitute an asset in the retirement fund and shall be carried on the books thereof as such in accordance with generally accepted accounting practices.

history: (History: Amended by Stats. 2012, Ch. 833, Sec. 3. (SB 987) Effective January 1, 2013.)

article: 6. Investments


text:
(a) Notwithstanding any other provision of law, the board may establish a program utilizing the retirement fund to assist system members, through financing, to obtain homes throughout the United States.

(b) For the purpose of this section, the term “member” means any person who is receiving, or is entitled to receive, a retirement allowance funded by this system, the Legislators’ Retirement System, the Judges’ Retirement System, or the Judges’ Retirement System II, notwithstanding any vesting requirement and without regard to present eligibility to retire.

(c) The board shall adopt regulations governing the program that shall, among other things, provide:

(1) That home loans be made available to members for the purchase of single-family dwellings, two-family dwellings, three-family dwellings, four-family dwellings, single-family cooperative apartments, and single-family condominiums.

(2) That private lending institutions throughout the United States shall originate and service its home loans pursuant to agreements entered into between those institutions and the board.

(3) That the recipients of the loans occupy the homes as their permanent residences in accord with rules and regulations established by the board.

(4) That its home loans shall be available only for the purchase or refinancing of homes throughout the United States and that under no condition shall a member have more than one outstanding loan.

(5) That the amount and length of the loans shall be pursuant to a schedule periodically established by the board that shall provide a loan-to-value ratio of no greater than the following:

(A) One hundred percent for the first loan for a single-family dwelling, single-family cooperative apartment, or single-family condominium.

(B) Ninety-five percent for the first loan on a two-family dwelling.

(C) Ninety percent for the first loan on a three-family dwelling or four-family dwelling.

The portion of any loan exceeding 80 percent of value shall be insured by an admitted mortgage guaranty insurer conforming to Chapter 2A (commencing with Section 12640.01) of Part 6 of Division 2 of the Insurance Code, in an amount so that the unguaranteed portion of the loan does not exceed 75 percent of the market value of the property together with improvements thereon.

(6) That there may be prepayment penalties assessed on its loans in accordance with rules and regulations established by the board.

(7) That the criteria and terms for its loans shall provide the greatest benefit to members consistent with the financial integrity of the program and the sound investment of the retirement fund.

(8) Any other terms and conditions as the board shall deem appropriate.

(d) This section shall be known as, and may be cited as, the Dave Elder Public Employees’ Retirement System Member Home Loan Program Act.

history: (History: Amended by Stats. 2003, Ch. 97, Sec. 1. Effective January 1, 2004.)

article: 6. Investments


text:
(a) It is the intent of the Legislature that the provisions of this section be available to assist members in obtaining homes throughout the United States. The Legislature intends that home loans made pursuant to Section 20200 and this section shall be secured primarily by the property acquired except as authorized pursuant to paragraph (1) of subdivision (b) and shall not exceed the fair market value of the property acquired.

(b) The board shall include in any program established pursuant to Section 20200 a procedure whereby a member may obtain 100-percent financing for the purchase of a single-family dwelling unit in accordance with the following criteria:

(1) The member shall obtain one loan with a loan-to-value ratio not to exceed 95 percent secured by the purchased home and a second personal loan with a loan-to-value ratio not to exceed 5 percent secured by a portion of the accumulated contributions and vested accrued benefits in the member’s individual account. A member can only have one outstanding personal loan.

(2) The loan secured by the purchased home shall be consistent with the loan-to-value ratios specified in the schedules established pursuant to Section 20200.

(3) The amount of a conforming loan on a single-family dwelling unit shall not exceed 95 percent of the Federal National Mortgage Association (FNMA) conforming loan limits. The amount shall be adjusted annually as determined by the Federal National Mortgage Association (FNMA). In no event, shall the loan amount exceed three hundred fifty thousand dollars ($350,000).

(4) In no event may the personal loan secured by the accumulated contributions and vested accrued benefits in the member’s individual account exceed 50 percent of the current value amount of the accumulated contributions.

(5) The pledge of security under this section shall remain in effect until the loan is paid in full.

(c) In the event of a default on the personal loan secured by the member’s contributions as authorized by this section, the board may deduct an amount from the member’s contributions on deposit and adjust the member’s accrued benefit, up to the amount pledged as security, prior to making any disbursement of retirement benefits.

(d) The secured personal loan permitted under this section shall be made available only to currently employed members who meet eligibility criteria the board deems advisable.

(e) If the member is married at the time the home is purchased with a personal loan secured by the member’s contributions as authorized by this section, then the member’s spouse shall agree in writing to the pledge of security, as to his or her community interest in the amount pledged regardless of whether title to the home is in joint tenancy.

(f) The pledge of security under this section shall take binding effect, notwithstanding Section 21255. In the event of default, the accumulated contributions in the member’s account shall be reduced as necessary to recover any outstanding loan balance, not to exceed the pledged amount.

(g) Appropriate administrative costs of implementing this section shall be paid by the members utilizing this section. Those costs may be included in the loan amount.

(h) Appropriate interest rates shall be periodically reviewed and adjusted to provide loans to members consistent with the financial integrity of the member home loan program and the sound and prudent investment of the retirement fund.

(i) The amendments to this section by Chapter 1094 of the Statutes of 1994 shall be deemed to have become operative on November 1, 1993.

(j) The board shall administer this section under other terms and conditions it deems appropriate and in keeping with the investment standard set forth in Section 20151. The board may adopt procedural guidelines as necessary for its administration of this section and to assure compliance with applicable state and federal laws.

history: (History: Amended by Stats. 1998, Ch. 678, Sec. 5. Effective January 1, 1999.)

article: 6. Investments


text:
The board may, subject to and consistent with its fiduciary duty, establish a program utilizing the retirement fund to assist currently employed members and annuitants who are victims of a natural disaster to obtain loans from the retirement fund for the sole purpose of repairing or rebuilding their homes which have been damaged by a natural disaster. In order to qualify for a loan the home of the member or annuitant shall have been damaged by a natural disaster and the home shall have been in an area that has been declared a disaster area in a proclamation of the Governor of a state of emergency affecting the area in which the member or annuitant resides.

The board may lend any amount of money, up to and including 100 percent of the costs of repairing or rebuilding a home of a member or annuitant. However, 5 percent of the loan shall be secured by the contributions of the member who requests the loan.

The board may, under conditions it may deem prudent, require that a member or annuitant pledge other assets as collateral for a loan.

The board shall establish terms for the termination of loans made pursuant to this section upon the separation of members from service, to ensure, in the case of any default, that this system shall not suffer any loss, and to provide, as a condition of retirement, for alternative security. The board may impose other terms and conditions as the board may determine appropriate.

The Legislature hereby reserves full power and authority to change, revise, limit, expand, or repeal the loan program authorized by this section.

history: (History: Repealed and added by Stats. 1995, Ch. 379, Sec. 2. Effective January 1, 1996.)

article: 6. Investments


text:
Notwithstanding any other law, the board may enter into security loan agreements with respect to securities in which the board is authorized by law to invest subject to all of the following conditions:

(a) The borrower shall provide the board with collateral in the form of cash, United States government debt securities, debt obligations issued by United States government agencies, and United States government-sponsored enterprises, marketable public equity securities, or marketable international government bonds, provided that the amount of collateral shall be at least 102 percent of the market value of the loaned securities or an amount consistent with market practice, whichever is greater.

(b) The board shall maintain policies and procedures designed to administer the loan agreements consistent with Section 17 of Article XVI of the California Constitution.

(c) The board shall revalue the collateral to current market value on each business day or as frequently as industry practices require.

(d) The total market value of the loaned securities collateralized by marketable public equities and marketable international government bonds shall not exceed 25 percent of the assets of the retirement fund.

history: (History: Amended by Stats. 2017, Ch. 198, Sec. 1. (AB 679) Effective January 1, 2018.)

article: 6. Investments


text:
The board shall employ investment counsel on its staff or on a consulting basis or trust companies or trust departments of bands to render service in connection with the board’s investment program.

Whenever the board elects to contract with outside firms for investment counseling services it shall obtain proposals from all interested firms and conduct a public meeting at which a consultant or consultants shall be selected by the board. At least once in each three-year period after the prior selection, a consultant or consultants shall be obtained by the same procedure upon submission of new proposals.

article: 6. Investments


text:
(a) The Legislature finds and declares that changing economic conditions and increasing complexity in the investment market make it necessary and desirable that this system obtain the best possible investment expertise.

(b) It is the intent of the Legislature that the board secure investment advisers with the composite expertise necessary for the investment of the retirement fund portfolio.

article: 6. Investments


text:
Upon a finding by the board that necessary investment expertise is not available within existing civil service classifications, and with the approval of the State Personnel Board, the board may contract with qualified investment personnel having demonstrated expertise in the management of large and diverse investment portfolios to render service in connection with the investment program of the board.

The board shall report to the Governor, the Legislature, and the Joint Legislative Budget Committee on the nature, duration, and cost of investment contract services used. The report shall be submitted annually in April.

article: 6. Investments


text:
The board shall, pursuant to the state civil service statutes, either contract with, or establish and fill a full-time position for, a person who is experienced and knowledgeable in corporate management issues to monitor each corporation any of whose shares are owned by this system and to advise the board on the voting of the shares owned by this system and on the responses of this system to merger proposals and tender offers.

Notwithstanding Section 13340, there is hereby continuously appropriated, without regard to fiscal years, from the retirement fund, an amount sufficient to pay all costs arising from this section.

article: 6. Investments


text:
Notwithstanding any other provision of law, the board shall, by contract, retain not less than two separate individual investment advisers. There is hereby appropriated, without regard to fiscal year, from the retirement fund, an amount sufficient to pay all costs arising from this section.

No costs arising from this section shall be paid from the General Fund.

article: 6. Investments


text: The board shall, on the request of a board of retirement of a county retirement system supply information and data necessary for administration of that system as it is affected by membership in and service credited under this system.

history: (History: Amended by Stats. 1996, Ch. 906, Sec. 14. Effective January 1, 1997.)

article: 7. Records and Reports

path: 2. GOVERNMENT OF THE STATE OF CALIFORNIA > 5. PERSONNEL > 2. Administration of System > 7. Records and Reports


text:
Each state agency, school employer, and the chief administrative officer of a contracting agency or any other person who its governing body may designate shall furnish all of the following:

(a) Immediate notice to the board, in the manner prescribed by the system, of the change in status of any member resulting from transfer, promotion, leave of absence, resignation, reinstatement, dismissal, or death.

(b) Any additional information concerning any member that the board may require in the administration of this system.

(c) The services of its officer and departments that the board may request in connection with claims by members against this system.

history: (History: Amended by Stats. 2009, Ch. 130, Sec. 15. (AB 966) Effective January 1, 2010.)

article: 7. Records and Reports


text:
Every state agency, school employer, or contracting agency shall, upon request from the board, provide information on its employees who are not enrolled as members of the system to assist the board to carry out the administration of the system.

(a) The information provided under this section shall be submitted in the manner and under the conditions prescribed by the board.

(b) Nothing in this section shall be construed to supersede or diminish an employer’s responsibility to determine eligibility or to enroll its qualifying employees in membership.

(c) Any information obtained under this section shall be treated as confidential by the system, under the same terms and conditions that apply to information that is confidential pursuant to Section 20230.

history: (History: Added by Stats. 2008, Ch. 261, Sec. 1. Effective January 1, 2009.)

article: 7. Records and Reports


text: The comptroller of the university, or any other official who the university may designate, shall furnish monthly reports to the board showing changes in the status of all members employed by the university during the preceding month, and shall furnish any additional information concerning any members that the board may require in the administration of this system.

article: 7. Records and Reports


text:
(a) The board may, during the course of an audit, require each state employer, school employer, including each school district represented by a school employer, and contracting agency, to provide information or make available for examination or copying at a specified time and place, or both, books, papers, any data, or any records, including, but not limited to, personnel and payroll records, as deemed necessary by the board to determine eligibility for, and the correctness of, retirement benefits, reportable compensation, enrollment in, and reinstatement to this system.

(b) Before initiating an audit, the board shall notify the subject of the audit of the estimated time required to complete the audit. The estimate shall be based upon various factors, including, but not limited to, the following:

(1) The number of employees.

(2) Employment classifications.

(3) Benefits.

(4) Contract provisions.

(5) Geographical location.

(6) Time required for audits of comparable entities.

(7) Additional time factors raised by the subject of the audit.

(c) If an audit requires an excess of the time estimated, the board may assess a reasonable charge upon the employer to recover additional costs incurred for the excess time to complete the audit. A contracting agency shall not be assessed for delays during the course of an audit that are reasonably outside of the agency’s control.

(d) The information obtained from an employer under this section shall remain confidential pursuant to Section 20230.

history: (History: Amended by Stats. 2015, Ch. 244, Sec. 2. (SB 216) Effective January 1, 2016.)

article: 7. Records and Reports


text: Each employee shall file with the board information affecting his or her status as a member as the board may require.

article: 7. Records and Reports


text: If it is impracticable for the board to determine from the records the length of service, compensation, or age of any member, or if any member refuses or fails to give the board a statement of his or her state service, compensation, or age, the board may estimate the length of service, compensation, or age.

article: 7. Records and Reports


text:
(a) In addition to other records and accounts, the board shall keep records and accounts necessary to compute at any time:

(1) The total accumulated contributions of members.

(2) The total accumulated contributions of retired members and of deceased members, to or on account of whom payments involving life contingencies are paid, less the annuity payments made to the members.

(3) The accumulated contributions of the state, school employers, and of contracting agencies held for the benefit of members on account of current service.

(4) All other accumulated contributions of the state, school employers, and of contracting agencies, which shall include the amounts available to meet the obligation of the state, school employers, and of the contracting agencies, respectively, on account of benefits that have been granted to, or on account of, retired and deceased employees and on account of prior service of members.

(b) For the purposes of this section, all employers subject to Chapter 9 (commencing with Section 20790) shall be deemed to be a single account with respect to their local miscellaneous members, all other employers not subject to Chapter 9 shall be deemed to be a single account with respect to their local miscellaneous members, all employers of local safety members shall be deemed to be a single account with respect to those local safety members, and all employers of school members shall be deemed to be a single account with respect to those school members.

However, the purposes of this section shall be construed in conformity with the individual employer contribution rates established pursuant to Section 20815.

article: 7. Records and Reports


text: The records and accounts required under Section 20225 shall not include the contributions made by the state or contracting agencies with respect to the survivor allowances provided for in Article 3 (commencing with Section 21570) of Chapter 14. The board shall keep additional records and accounts with respect to those contributions as will show at any time the accumulated contributions of the state and of contracting agencies held to meet the obligation of the state and of the contracting agencies, respectively, on account of survivor allowances.

article: 7. Records and Reports


text: The actuary shall cause to be published, as of the date of the investigation and valuation made pursuant to Section 20131, a financial statement showing an actuarial valuation of the assets and liabilities of this system and a statement as to the accumulated cash and securities in the retirement fund as certified by the Controller. The actuary may omit from the statement, which shall be published as of July 1 of every other year, assets and liabilities resulting from prior service, and shall include assets and liabilities on account of current service in amounts equal only to accumulated contributions held on account of that service.

article: 7. Records and Reports


text:
The board shall annually employ a certified public accountant, who is not in public employment, to audit the financial statements of this system. The costs of the audit shall be paid from the income of the retirement fund. The audit shall be made annually. The board shall file a copy of the audit report with the Governor, the Secretary of the Senate, and the Chief Clerk of the Assembly.

The board, for purposes of Section 7504, may file internally prepared financial statements with the Controller within six months of the end of the fiscal year, and shall file independently audited financial statements as soon as they are available.

The annual audits of the financial statements of the system shall not be duplicated by the Department of Finance or the State Auditor.

This section does not affect the ability of the State Auditor or the Department of Finance to conduct other types of audits of the system as otherwise authorized by statute. This system shall be exempt from a pro rata general administrative charge for auditing.

history: (History: Amended by Stats. 2010, Ch. 639, Sec. 3. (SB 1139) Effective January 1, 2011.)

article: 7. Records and Reports


text:
(a) The board, notwithstanding Section 10231.5, shall provide the Legislature, the Governor, and the Chair of the California Actuarial Advisory Panel, established pursuant to Section 7507.2, with an annual report that includes all of the following, as these items apply to state employee retirement plans:

(1) (A) A description of the investment return assumption utilized by the board when determining the contribution rates.

(B) A calculation of the contribution rates utilizing an investment return assumption 2 percentage points above and 2 percentage points below the investment return assumption utilized by the board.

(2) (A) A description of the amortization period for any unfunded liabilities utilized by the board when determining the contribution rates.

(B) A calculation of the contribution rates based on an amortization period equal to the estimated average remaining service periods of employees covered by the contributions.

(3) (A) A description of the discount rate utilized by the board for reporting liabilities.

(B) A calculation of those liabilities based upon a discount rate that is 2 percent below the long-term rate of return actually assumed by the board.

(4) The market value of the assets controlled by the board and an explanation of how the actuarial value assigned to those assets differs from the market value of those assets.

(b) Each legislative session, the Chair of the California Actuarial Advisory Panel, or his or her designee, shall, during a publicly noticed joint hearing of the Senate Committee on Public Employment and Retirement and the Assembly Committee on Public Employees, Retirement and Social Security, do all of the following based on information received in the report required by subdivision (a):

(1) Explain the role played by the investment return assumption and amortization period in the calculation of the contribution rates.

(2) Describe the consequences for future state budgets should the investment return assumption not be realized.

(3) Report whether the board’s amortization period exceeds the estimated average remaining service periods of employees covered by the contributions.

(c) The report required by subdivision (a) shall be submitted in compliance with Section 9795.

history: (History: Amended by Stats. 2016, Ch. 415, Sec. 23. (AB 2375) Effective January 1, 2017.)

article: 7. Records and Reports


text:
(a) Data filed with the board by or on behalf of any member, retired member, beneficiary, or annuitant is confidential, and an individual record shall not be divulged by any official or employee having access to it to any person other than the following:

(1) The member, retired member, beneficiary, or annuitant to whom the information relates; their authorized representative; or upon written authorization by the member, retired member, beneficiary, or annuitant to whom the information relates.

(2) A contracting agency, county office of education, school district, community college district, the California State University, or the university, if the member, retired member, beneficiary, or annuitant is or was employed by that entity. A contracting agency, county office of education, school district, community college district, the California State University, or the university may also be provided with records that relate to the beneficiary of a member or retired member who is or was employed by the entity.

(3) Any state department or agency.

(4) Any other California public retirement system that either by statute or agreement provides reciprocal benefits to members of the system.

(b) The information shall be used by the board for the sole purpose of carrying into effect the provisions of this part and Part 5 (commencing with Section 22750). Any information that is requested to which this section applies shall be treated as confidential and shall be used solely for retirement purposes, including, but not limited to, the administration and funding of retirement and health benefits, and related reporting and notice obligations.

(c) The gross amount of any benefit or any refund of a PERS contribution due to a member, retired member, or beneficiary under this part is not confidential and may be released upon request to the board.

(d) The board may seek reimbursement for reasonable administrative expenses incurred when providing information. Unless otherwise required by law, pursuant to a court order of competent jurisdiction, or except as provided by this section, a member’s, retired member’s, beneficiary’s, or annuitant’s address, home telephone number, or other personal information shall not be released.

(e) For purposes of this section:

(1) “Annuitant” has the meaning provided in Section 22760.

(2) “Authorized representative” includes a spouse or a beneficiary if a contrary appointment has not been made and when, in the opinion of the board, the member, retired member, beneficiary, or annuitant is prevented from appointing an authorized representative because of mental or physical incapacity or death.

history: (History: Amended by Stats. 2020, Ch. 275, Sec. 24. (AB 2101) Effective January 1, 2021.)

article: 7. Records and Reports


text: Notwithstanding any other provision of law, the Employment Development Department shall disclose to the board information in its possession relating to the earnings of any person who is receiving a disability retirement allowance from this system and has filed with the board a release permitting the Employment Development Department to furnish that information. The earnings information shall be released to the board only upon written request from the board specifying that the person is receiving a disability retirement allowance from this system. The request may be made by the executive officer of this system or by an employee of this system so authorized and identified by name and title by the executive officer in writing. The board shall notify recipients of disability retirement allowances with prescribed limits based on earnings that earnings information from the Employment Development Department’s records will be released upon request by the board. The board shall not release any earnings information received from the Employment Development Department to any person, agency, or other entity. This system shall reimburse the Employment Development Department for all reasonable administrative expenses incurred pursuant to this section. Any person receiving a disability retirement allowance who declines to authorize the release of earnings information as provided by this section shall instead furnish the board with proof of earnings the board may require, including, but not limited to, copies of the person’s federal and state income tax returns.

article: 7. Records and Reports


text:
As soon as practicable after the close of each fiscal year the board shall file with the Governor and the Legislature a report of its financial statements and investments for the fiscal year. The report shall be submitted in printed or electronic form and shall include, but not be limited to, each of the following:

(a) A copy of the annual audit performed pursuant to Section 20228.

(b) A review of the system’s asset mix strategy, a market review of the economic and financial environment in which investments were made, and a summary of the system’s general investment strategy.

(c) A description of the investments currently held by this system at cost and market value. The description of investments shall include, but not be limited to, the asset classes reported pursuant to Section 20235. The report shall also include a list of all investment holdings at the close of the fiscal year, including any major divestitures taken during the fiscal year.

(d) The following information regarding the rate of return of this system by asset type:

(1) Time-weighted market value rate of return on a five-year, three-year, and one-year basis.

(2) Portfolio return comparisons by asset class that compare investment returns with an alternative theoretical portfolio of comparable funds, universes, and indexes.

(e) The use of outside investment advisers and managers, including costs and fees.

(f) A description of the system’s investments at cost and market value held in the state.

(g) A review of the system’s custodial relationship and daily cash management, purchases, sales, turnover, private placements, soft dollar purchases, and transaction costs such as commissions, dealer spreads, and accommodations.

history: (History: Amended by Stats. 1997, Ch. 951, Sec. 1. Effective January 1, 1998.)

article: 7. Records and Reports


text:
(a) The board shall submit a review of this system’s assets to the Legislature on a semiannual basis. The report shall also be made available to all contracting agencies. The report shall discuss the system’s assets, including review of all defined benefit trusts and defined contribution plans, and shall contain the following information:

(1) Defined benefit trust and defined contribution plan total current market value and allocation of investments across primary asset classes, if appropriate.

(2) Review of all portfolio and partnership current market value by primary asset class and strategy.

(3) Historical time-weighted return for all defined benefit trusts, defined contribution plans, portfolios, and partnerships on a five-year, three-year, and one-year basis.

(4) Summary of performance of an alternative theoretical portfolio for all defined benefit trusts and defined contribution plans based upon policy benchmarks approved by the board.

(5) Description of policy benchmark components represented in the alternative theoretical portfolio.

(b) Upon written request from a contracting agency that does not participate in a risk pool, the board shall also submit quarterly reports to the contracting agency as described in this subdivision. For the first quarter of the fiscal year, the report shall be submitted within 120 days after the end of the quarter and shall contain the agency’s beginning balance for the fiscal year. For the second and third quarters of the fiscal year, the report shall be submitted to the contracting agency within 90 days after the end of the quarter. For the fourth quarter of the fiscal year, the report shall be submitted within 180 days after the end of the quarter and shall contain the agency’s balance as of the end of the fiscal year. The report shall include, but need not be limited to, the following:

(1) All contributions made to the system by the contracting agency and its employees. The contributions shall be reported as the amounts paid and the amounts due from the contracting agency for both employer contributions and employee contributions.

(2) All benefits paid by the system to members of the contracting agency and their survivors and beneficiaries, including payments on account of pension, death, and disability benefits, and withdrawals of contributions. The benefits shall be reported as the total monthly allowances paid to retirees, survivors, and beneficiaries; the amount of total refunds paid; and the amount of any other lump sums paid.

(3) An amount that represents any miscellaneous adjustments, including transfers in and out.

(4) That quarter’s portion of the agency’s estimated share of the system’s administrative costs that shall be assessed at the end of the fiscal year.

(5) The rate of return for the system during the quarter as reported to the board by the investment committee.

(6) The estimated interest applied to the agency’s account as determined by the system. For purposes of this paragraph, the “estimated interest applied” means the estimate of the annual net earnings, as defined in Section 20052, and is subject to adjustment at the end of the fiscal year based on the actual dollar-weighted amount of investment return that shall be credited to the agency’s account for the fiscal year. The report for the fourth quarter of the fiscal year shall also include the actual dollar-weighted amount of investment return for the fiscal year that shall be credited to the contracting agency’s account.

(c) Upon written request from a contracting agency that participates in a risk pool, the board shall submit to the contracting agency quarterly reports that reflect the total contributions made to the system by agencies in the risk pool, the total benefits paid by the system with respect to the risk pool, the total estimated share of administrative costs for the risk pool, and the total estimated share of investment returns for the risk pool.

(d) A contracting agency requesting quarterly reports pursuant to subdivision (b) or (c) shall pay a fee, in an amount determined by the board, not to exceed one thousand five hundred dollars ($1,500) quarterly per agency while the manual process of collecting the information is in use.

(e) Any report received by a contracting agency pursuant to this section shall be made available by the agency to any employee organization that represents the agency’s employees and that requests a copy of the report.

history: (History: Amended by Stats. 2015, Ch. 244, Sec. 3. (SB 216) Effective January 1, 2016.)

article: 7. Records and Reports


text:
(a) The board shall provide the Legislature with an analysis of the asset and liability implications of each bill that would affect the investment strategy of this system, the funding of this system, or the benefit structure of this system. The analysis shall include an explanation of the methodology employed and the assumptions used in its preparation. Neither fiscal committee of the Legislature shall hear any such bill until the analysis has been provided to the committee.

(b) There is hereby continuously appropriated, without regard to fiscal years, from the retirement fund, an amount sufficient to pay all costs arising from subdivision (a), but not to exceed fifty thousand dollars ($50,000) in any one fiscal year.

history: (History: Added by Stats. 1995, Ch. 379, Sec. 2. Effective January 1, 1996.)

article: 7. Records and Reports


text: The provisions of this article shall be deemed to create a right of subrogation only to amounts paid as disability retirement allowances and special death benefits.

article: 8. Subrogation

path: 2. GOVERNMENT OF THE STATE OF CALIFORNIA > 5. PERSONNEL > 2. Administration of System > 8. Subrogation


text: As used in this article, “state fund” means the State Compensation Insurance Fund.

article: 8. Subrogation


text:
If benefits are payable under this part because of an injury to or the death of a member and the injury or death is the proximate consequence of the act of a person other than his or her employer (the state or the employing contracting agency), the board may on behalf of this system recover from that person an amount that is the lesser of the following:

(1) An amount that is equal to one-half of the actuarial equivalent of the benefits for which this system is liable because of such injury or death.

(2) An amount that is equal to one-half of the remaining balance of the amount recovered after allowance of that amount that the employer or its insurance carrier have paid or become obligated to pay.

article: 8. Subrogation


text:
The board may contract with the state fund or the Attorney General for the recovery on behalf of this system of any amounts that the board might recover from third persons under this article or Chapter 5 (commencing with Section 3850) of Part 1 of Division 4 of the Labor Code, or that an insurer might recover under Section 11662 of the Insurance Code, or otherwise.

Under the contract, the state fund, in its own name or in the name of the board, or the Attorney General for the board, may, to recover the amounts regardless of whether the injury or death is industrial, commence and prosecute actions, file liens, or intervene in court proceedings all in the same manner and to the same extent, provided in Chapter 5 (commencing with Section 3850) of Part 1 of Division 4 of the Labor Code, for the state fund or employer, except that the recovery shall not be made from benefits payable under this part because of the injury or death. The state fund or the Attorney General, as the case may be, may compromise claims before or after commencement of suit or entry of judgment for the amount as may be approved by a person duly authorized by the board for that purpose. The agreed cost of the service and the expense incidental thereto is a proper charge against the retirement fund.

article: 8. Subrogation


text: Any amount recovered by way of subrogation by the employer, workers’ compensation insurer or this system shall be applied first to the amounts that the employer or its insurer has paid or become obligated to pay. The balance of the amount recovered as specified in Section 20252 shall be paid to, or retained by, this system.

article: 8. Subrogation


text: Actions brought by the board under this article shall be commenced within three years after the liability of this system to pay benefits is fixed. Liability of this system is fixed at the time the board approves the payment of benefits under this part.

article: 8. Subrogation


text: All computations, payments, and other acts heretofore made or done by the board or its officers and employees are hereby ratified, confirmed, and validated.

history: (History: Amended by Stats. 1996, Ch. 906, Sec. 17. Effective January 1, 1997.)

article: 9. Validation of Prior Acts

path: 2. GOVERNMENT OF THE STATE OF CALIFORNIA > 5. PERSONNEL > 2. Administration of System > 9. Validation of Prior Acts


text: This article does not apply to persons expressly excluded from membership in this system by Article 2 (commencing with Section 20300) and Article 3 (commencing with Section 20320).

chapter: 3. Membership in System

article: 1. Compulsory Membership

path: 2. GOVERNMENT OF THE STATE OF CALIFORNIA > 5. PERSONNEL > 3. Membership in System > 1. Compulsory Membership


text:
All members of the retirement system immediately prior to the time this part becomes operative continue to be members of this system.

An employee of a contracting agency on the effective date of its contract with the board becomes a member immediately.

Every other employee becomes a member upon his or her entry into employment.

article: 1. Compulsory Membership


text:
(a) Notwithstanding Section 20281, a person who becomes a state miscellaneous member or state industrial member of the system on or after the effective date of this section because the person is first employed by the state and qualifies for membership shall be subject to the provisions of this section.

(b) Members subject to this section shall not accrue credit for service in the system and shall not make employee contributions to the system, including the contributions set forth in Section 20677.4, for employment with the state until the first day of the first pay period commencing 24 months after becoming a member of the system.

(c) Notwithstanding subdivision (a), this section shall not apply to any of the following:

(1) Persons who are already members or annuitants of the system at the time they are first employed by the state.

(2) Employees of the California State University, or the legislative or judicial branch of state government.

(3) Members of the Judges’ Retirement System, the Judges’ Retirement System II, the Legislators’ Retirement System, the State Teachers’ Retirement System, or the University of California Retirement Plan.

(4) Persons who are members of a reciprocal retirement system and whose employment was subject to a reciprocal retirement system within the six months prior to membership in this system.

(5) Persons whose service is not included in the federal system.

(6) Persons who are employed by the Department of the California Highway Patrol as students at the department’s training school established pursuant to Section 2262 of the Vehicle Code.

(7) Persons who had ceased to be members pursuant to Section 20340 or 21075.

(8) Persons who are National Guard members pursuant to Section 20380.5.

(d) A separation of employment does not alter the 24-month period described by subdivision (b). A member who separates from state employment shall remain subject to this section if he or she returns to state employment as a state miscellaneous or state industrial member within that 24-month period.

(e) Any regulations adopted by the board to implement the requirements of this section shall not be subject to the review and approval of the Office of Administrative Law, pursuant to Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3. The regulations shall become effective immediately upon filing with the Secretary of State.

(f) This section shall not apply to any person who first becomes a state miscellaneous member or a state industrial member on or after July 1, 2013.

history: (History: Amended by Stats. 2012, Ch. 296, Sec. 19. (AB 340) Effective January 1, 2013.)

article: 1. Compulsory Membership


text: All officers, warrant officers, and enlisted persons who after October 1, 1961, are placed on full-time active duty with the office of the Adjutant General, pursuant to Sections 142, 321, 340 and 551, or former Section 167 of the Military and Veterans Code, shall become members in the manner and under the same conditions as under this article apply to other state employees. The retirement benefit provisions of the Military and Veterans Code shall not apply to those persons. This section shall not apply to the Adjutant General or the Assistant Adjutant General.

history: (History: Amended by Stats. 2018, Ch. 118, Sec. 1. (SB 1501) Effective January 1, 2019.)

article: 1. Compulsory Membership


text:
(a) Any employer that fails to enroll an employee into membership when he or she becomes eligible, or within 90 days thereof, when the employer knows or can reasonably be expected to have known of that eligibility shall be required to pay all arrears costs for member contributions and administrative costs of five hundred dollars ($500) per member as a reimbursement to this system’s current year budget.

(b) An employer shall not pass on to an employee any costs assessed pursuant to subdivision (a).

history: (History: Amended by Stats. 2009, Ch. 130, Sec. 18. (AB 966) Effective January 1, 2010.)

article: 1. Compulsory Membership


text: When any person who is an employee of the state within the meaning of Section 20028 is assigned to the performance of work for which his or her compensation is paid, pursuant to statute or duly authorized contract entered into by the state or the state agency by which the person is employed, out of funds not directly controlled by the state, that person shall continue to be an “employee” of the state for the purposes of this part during the time he or she is assigned to the performance of that work, and the service rendered by him or her during that assignment shall be “state service,” notwithstanding Sections 20028 and 20069 relating to payment of compensation.

history: (History: Amended by Stats. 1996, Ch. 906, Sec. 25. Effective January 1, 1997.)

article: 1. Compulsory Membership


text: Any employee, who was a state member in employment in a function at the time of the assumption of the function by a city and county and became a local member on the date of the assumption and in employment of the city and county in that function under the contract with the city and county, shall continue in membership thereafter so long as he or she continues, without a break exceeding 30 days, in that employment or any other employment, falling in the same membership category under this system, of the city and county or any other public entity in which he or she would be a member of the retirement system of the city and county except for this section. Those employees shall be excluded from membership in the city and county retirement system in that employment. A member electing membership in this system shall make the contributions to this system that would have been required had he or she been a member while in that employment.

history: (History: Amended by Stats. 1996, Ch. 906, Sec. 26. Effective January 1, 1997.)

article: 1. Compulsory Membership


text:
The following persons are excluded from membership in this system:

(a) Inmates of state or public agency institutions who are allowed compensation for the service they are able to perform.

(b) Independent contractors who are not employees.

(c) Persons employed as student assistants in the state colleges and persons employed as student aides in the special schools of the State Department of Education and in the public schools of the state.

(d) Persons employed as teacher assistants pursuant to Section 44926 of the Education Code.

(e) Participants, other than staff officers and employees, in the California Conservation Corps.

(f) Persons employed as participants in a program of, and whose wages are paid in whole or in part by federal funds in accordance with, Section 1501 et seq. of Title 29 of the United States Code. This subdivision does not apply with respect to persons employed in job classes that provide eligibility for patrol or safety membership or to the career staff employees of an employer.

(g) All persons who are members in any teachers’ retirement system, as to the service in which they are members of any teachers’ retirement system.

(h) Except as otherwise provided in this part, persons rendering professional legal services to a city, other than the person holding the office of city attorney, the office of assistant city attorney, or an established position of deputy city attorney.

(i) A person serving the university as a teacher in university extension, whose compensation for that service is established on the basis of class enrollment, either actual or estimated, with respect to that service.

(j) A person serving a California State University as a teacher in extension service, whose compensation for that service is established on the basis of class enrollment, either actual or estimated, with respect to that service.

(k) A teacher or academic employee of the university or any California State University who is otherwise fully employed and who serves as a teacher or in an academic capacity in any summer session or intersession, for which he or she receives compensation specifically attributable to that service in summer session or intersession, with respect to that service.

(l) A person who is employed under the California Senate Fellows, the Assembly Fellowship, the Judicial Administration Fellowship, or the Executive Fellowship programs.

(m) Board members of the State Compensation Insurance Fund, including those appointed by the Governor.

history: (History: Amended by Stats. 2008, Ch. 322, Sec. 2. Effective January 1, 2009.)

article: 2. Exclusions from Membership

path: 2. GOVERNMENT OF THE STATE OF CALIFORNIA > 5. PERSONNEL > 3. Membership in System > 2. Exclusions from Membership


text:
Except as otherwise provided in this section, any person who on October 1, 1963, is employed by the university, and is a member of any retirement system maintained by the university, or who after that date enters university employment, shall be excluded from membership in this system.

A university member who is separated from university employment due to layoff and who is reemployed by the university shall have the right to elect, in accordance with regulations of the board of regents, membership in this system in lieu of membership in any retirement system maintained by the university, if written notice of the election is filed with this system within 30 days after his or her reemployment.

Any member who is employed as a member of the police department or fire department of the university and who elects, in accordance with regulations of the board of regents, to become a sworn officer member of a retirement system of the university in that employment shall be excluded from membership in this system in that employment after the date upon which he or she becomes a member of the university system. The election shall not constitute a permanent separation from state service for purposes of a right to refund of accumulated contributions, but shall constitute a discontinuance of employment as a member of this system and entry into employment as a member of the university system within the meaning of Section 20895.

history: (History: Repealed and added by Stats. 1995, Ch. 379, Sec. 2. Effective January 1, 1996.)

article: 2. Exclusions from Membership


text:
(a) Persons who are members of any other retirement or pension system supported wholly or in part by funds of the United States government, any state government, or any political subdivision thereof and who are receiving credit in the other system for service are, as to that service, excluded from this system.

(b) (1) For the purpose of this section only, persons who are receiving pensions, retirement allowances, or other payments, from any source whatever, because of service rendered to an employer other than the state and while they were not in state service, are not, because of that receipt, members of any other retirement or pension system.

(2) For the purposes of this section only, persons who participate in a deferred compensation plan established pursuant to Chapter 4 (commencing with Section 19993) or Chapter 8.6 (commencing with Section 19999.3) of Part 2.6 or pursuant to Article 1.1 (commencing with Section 53212) of Chapter 2 of Part 1 of Division 2 of Title 5, are not, because of that participation, members of any other retirement or pension system.

(3) For the purposes of this section only, persons who participate in a money purchase pension plan and trust that meets the requirements of Section 401(a) of Title 26 of the United States Code are not, because of that participation, members of any other retirement or pension system, so long as the contracting agency has received a ruling from the Internal Revenue Service stating that the money purchase pension plan and trust qualifies under Section 401(a) and furnishes proof thereof upon request by the board.

(4) For the purposes of this section only, persons who participate in a supplemental defined benefit plan maintained by their employer that meets the requirements of Section 401(a) of Title 26 of the United States Code are not, because of that participation, members of another retirement or pension system, provided that all of the following conditions exist:

(A) The defined benefit plan provided under this part has been designated as the employer’s primary plan for the person.

(B) The supplemental defined benefit plan has received a ruling from the Internal Revenue Service stating that the plan qualifies under Section 401(a) of Title 26 of the United States Code, and has furnished proof thereof to the employer and, upon request, to the board.

(C) The person’s participation in the supplemental defined benefit plan does not, in any way, interfere with the person’s rights to membership in the defined benefit plan, or any benefit provided, under this part.

(5) For purposes of this section only, a person who elects membership pursuant to Section 20326 is deemed, with respect to service with the California National Guard, not to be a member of any other retirement or pension system.

history: (History: Amended by Stats. 2007, Ch. 355, Sec. 6. Effective January 1, 2008.)

article: 2. Exclusions from Membership


text: Notwithstanding Sections 20303 and 20894, nothing shall act to prohibit the receipt of credit in this system, nor the payment of benefits relating thereto, for service that is also being credited in the federal system, and persons shall not be excluded from this system as to the service that is being credited in the federal system.

history: (History: Amended by Stats. 1996, Ch. 906, Sec. 28. Effective January 1, 1997.)

article: 2. Exclusions from Membership


text:
(a) An employee whose appointment or employment contract does not fix a term of full-time, continuous employment in excess of six months is excluded from this system unless:

(1) He or she is a member at the time he or she renders that service and is not otherwise excluded pursuant to this article or by a provision of a contract.

(2) His or her position requires regular, part-time service for one year or longer for at least an average of 20 hours a week, or requires service that is equivalent to at least an average of 20 hours a week for one year or longer, unless he or she elects membership pursuant to Section 20325.

(3) His or her employment is, in the opinion of the board, on a seasonal, limited-term, on-call, emergency, intermittent, substitute, or other irregular basis, and is compensated and meets one of the following conditions:

(A) The appointment or employment contract does not fix a term of full-time, continuous employment in excess of six months, but full-time employment continues for longer than six months, in which case membership shall be effective not later than the first day of the first pay period of the seventh month of employment.

(B) The person completes 125 days, if employed on a per diem basis or, if employed on other than a per diem basis, completes 1,000 hours within the fiscal year, in which case, membership shall be effective not later than the first day of the first pay period of the month following the month in which 125 days or 1,000 hours of service were completed. For purposes of this subdivision, “day” means each eight-hour period of employment worked by an employee paid on a per diem basis so that membership is effective after he or she has completed 1,000 hours of compensated service in a fiscal year.

(C) The person is employed by the Department of Forestry and Fire Protection in one of the positions that provide state safety membership pursuant to Section 20400 or state peace officer/firefighter membership pursuant to Section 20392.

(4) He or she is a temporary faculty member of the California State University and meets one of the following conditions:

(A) He or she works two consecutive semesters or three consecutive quarters at half-time or more, and is not otherwise excluded pursuant to this article, in which case, membership shall be effective with the start of the next consecutive semester or quarter if the appointment requires service of half-time or more.

(B) He or she works two consecutive semesters or three consecutive quarters at a minimum teaching load of six weighted units, and is not otherwise excluded pursuant to this article, in which case membership shall be effective at the start of the next consecutive semester or quarter, but not earlier than July 1, 2004, if the appointment requires service of six weighted units or more. This subparagraph does not apply to faculty members unless provided for in a memorandum of understanding agreed upon, on or after January 1, 2003, pursuant to Chapter 12 (commencing with Section 3560) of Division 4 of Title 1, or authorized by the Trustees of the California State University for employees excluded from collective bargaining.

(5) He or she is a member of the Board of Prison Terms, the State Personnel Board, or the State Air Resources Board and elects to become a member pursuant to Section 20320.

(6) He or she is participating in partial service retirement, pursuant to Article 1.7 (commencing with Section 19996.30) of Chapter 7 of Part 2.6.

(7) He or she is included by specific provision of the board relating to the exclusion of less than full-time employees.

(b) This section shall supersede any contract provision excluding persons in any temporary or seasonal employment basis and shall apply only to persons entering employment on and after January 1, 1975. Except as provided in Section 20502, no contract or contract amendment entered into after January 1, 1981, shall contain any provision excluding persons on an irregular employment basis.

history: (History: Amended by Stats. 2009, Ch. 130, Sec. 19. (AB 966) Effective January 1, 2010.)

article: 2. Exclusions from Membership


text:
(a) Notwithstanding paragraph (1) of subdivision (a) of Section 20305, an employee participating in this system, other than a local safety member, who is credited with less than five years of state service and whose service falls below the minimum service prescribed by paragraph (2) of, or subparagraph (A) or (B) of paragraph (3) of, subdivision (a) of Section 20305 and who is eligible for membership in an alternate retirement plan established or maintained by the county superintendent of schools or the public agency pursuant to Article 1.5 (commencing with Section 53215) of Chapter 2 of Part 1 of Division 2 of Title 5, may participate in that plan in accordance with the following provisions:

(1) Eligibility to participate in an alternate retirement plan for an employee who is employed on or after July 1, 1997, or the effective date of the establishment of an alternate retirement plan, whichever is later, and who is represented by an exclusive bargaining representative shall be determined by the provisions of a memorandum of understanding executed between the public agency and the exclusive bargaining representative of the employee. That memorandum of understanding shall prescribe all of the terms and conditions under which the alternate plan is established including the employer and employee contribution rates.

(2) Eligibility to participate in an alternate retirement plan for an employee who is employed on or after July 1, 1997, or the effective date of the establishment of an alternate retirement plan, whichever is later, and who is not represented by an exclusive bargaining representative shall be determined by the public agency.

(3) Eligibility to participate in an alternate retirement plan established prior to July 1, 1997, for an employee who is employed prior to that date, or for plans established on or after July 1, 1997, for an employee who is employed prior to the date the plan is established, shall be determined by the employee in accordance with the following election procedures:

(A) The employer shall make available to each employee prior to October 1, 1997, or at least 90 days prior to the proposed effective date of the alternate retirement plan, whichever is later, information describing the employee’s rights and responsibilities as a participant in either this system or the alternate retirement plan offered by the employer and describing the benefits provided by this system and that alternate retirement plan. The information shall include all of the terms and conditions under which the system and the alternate retirement plan are established including the employer and employee contribution rates.

(B) An employee who fails to make an election prior to January 1, 1998, or 90 days after being given the election opportunity, whichever is later, shall be informed by the employer by certified mail that the failure to make that election has been deemed an election to participate in the alternate retirement plan whenever his or her employment fall below the requirements prescribed by Section 20305.

(C) The employer shall maintain in its files a written acknowledgment by the employee that the employee received the information required under this section within the specified timeframe and shall maintain election results and election forms of employees.

(D) The employer shall notify the system as to the results of election by employees in the manner prescribed by the board.

(b) An employee’s participation in the alternate retirement plan shall commence as soon as it is reasonable for this system to determine the member’s qualifications pursuant to Section 20305. Employers shall submit all information deemed necessary for this system to make those determinations. Participation in the alternate retirement plan shall continue until the system determines that the employee’s employment meets the conditions for membership in this system, whereupon the employee shall reenter membership in this system.

(c) Each county superintendent of schools may make the school districts in the county responsible for any administrative acts which may be necessary to implement this section. Any cost incurred by a county superintendent of schools in complying with this section shall be reimbursed on a proportional basis by those school districts in the county participating in an alternative retirement system.

history: (History: Added by Stats. 1996, Ch. 1164, Sec. 1. Effective January 1, 1997.)

article: 2. Exclusions from Membership


text:
(a) A member of the system described in subdivision (b) who subsequently is employed to perform service subject to coverage by the Defined Benefit Program of the State Teachers’ Retirement Plan, may elect to retain coverage by this system for that subsequent service. An election to retain coverage under this system shall be submitted in writing by the member to the employer on a form prescribed by the system within 60 days after the member’s date of hire to perform service that requires membership in the Defined Benefit Program of the State Teachers’ Retirement Plan. The employer shall retain a copy of the employee’s signed election form and submit the original signed form to the system. A member who elects to retain coverage under this system pursuant to this section shall be deemed to be a school member while employed by a school employer.

(b) This section shall apply to a member of the system who either (1) was employed by a school employer, the Board of Governors of the California Community Colleges, or the State Department of Education within 120 days before the member’s date of hire to perform service that requires membership in the Defined Benefit Program of the State Teachers’ Retirement Plan or (2) has at least five years of credited service under this system.

(c) Any election made pursuant to this section shall become effective as of the first day of employment in the position that qualified the member to make an election.

(d) A member providing emergency teaching services pursuant to Executive Order No. N-3-22 is eligible to elect to retain coverage under this section, notwithstanding the requirements in subdivision (a). The exception in this subdivision does not exempt any individual from any other requirement for eligibility to make the election authorized by this section. The eligibility to elect to retain coverage as authorized by this subdivision shall remain in effect only until January 1, 2024.

history: (History: Amended by Stats. 2022, Ch. 52, Sec. 100. (AB 181) Effective June 30, 2022.)

article: 2. Exclusions from Membership


text:
(a) Any person who is a member of the Defined Benefit Program of the State Teachers’ Retirement Plan and who subsequently became employed, on or after July 1, 1991, and who continues to be employed by the state to perform service that requires membership in the Public Employees’ Retirement System under Section 21071 and who meets the requirements of subdivision (b) of Section 22508.6 of the Education Code may elect to have his or her state service subject to coverage by the Defined Benefit Program of the State Teachers’ Retirement Plan and excluded from coverage by the Public Employees’ Retirement System.

(b) Upon an election being made pursuant to subdivision (a), the Public Employees’ Retirement System shall transfer to the Teachers’ Retirement Fund an amount equal to the actuarial accrued liability of the system for the service rendered by the person making the election on or after July 1, 1991, to the date of the election, inclusive. The actuarial accrued liability shall be calculated based on the actuarial assumptions of the system for the most recently completed actuarial valuation as of the date of the election.

history: (History: Added by Stats. 2000, Ch. 402, Sec. 11. Effective September 11, 2000.)

article: 2. Exclusions from Membership


text:
(a) A person who was employed by a school employer before January 1, 2018, in a position that includes activities that meet the definition of creditable service under Section 22119.5 of the Education Code, and whose service in that position was reported to this system, shall continue to retain membership in this system and have his or her past and future service in that position credited to this system, if the person was not enrolled into the State Teachers’ Retirement Plan for that same service and is not otherwise excluded from membership in this system.

(b) (1) A school member who performs service as described in subdivision (a), and who has not yet retired from this system, may elect to have all of their service, and subsequent service, in that position subject to coverage by the State Teachers’ Retirement System and excluded from coverage by this system, if the member is not excluded from coverage by that system.

(2) If an election is made pursuant to this subdivision, all of the following shall apply:

(A) The election shall be made in writing on a form prescribed by this system and filed with this system on or before June 30, 2018, and copies of the election form shall be filed with the school employer and the State Teachers’ Retirement System.

(B) A school member not subject to the California Public Employees’ Pension Reform Act of 2013 shall not be subject to that act in the State Teachers’ Retirement System.

(C) A school member subject to the California Public Employees’ Pension Reform Act of 2013 shall be subject to that act in the State Teachers’ Retirement System.

(3) The board shall be under no obligation to identify, locate, or notify persons who are eligible to make an election pursuant to this subdivision.

(4) An election made pursuant to this subdivision shall be irrevocable.

(c) A member described in subdivision (a) who becomes employed by the same or a different employer in a new position performing creditable service under Section 22119.5 on or after January 1, 2018, shall not have his or her service in that new position reported to this system unless that service is otherwise eligible for coverage by this system.

(d) This section shall not apply to a person who has made a valid election pursuant to either Section 20309 or 20309.5.

history: (History: Added by Stats. 2017, Ch. 241, Sec. 4. (SB 525) Effective January 1, 2018.)

article: 2. Exclusions from Membership


text:
(a) A person directly appointed by the Governor, without the nomination of any officer or board, or directly appointed by the Attorney General, Lieutenant Governor, Controller, Secretary of State, Treasurer, or Superintendent of Public Instruction exempt from civil service under Article VII of the California Constitution, except those appointed pursuant to subdivision (i) of Section 4 thereof, is excluded from membership in this system unless the person files with the board an election in writing to become a member. The election effective date shall be the start date of the current appointment, provided the election is received by this system within 90 days of the applicable start date. If the election is not received by this system within 90 days from the start date, the effective date shall be the first day of the month in which the election is received by this system.

(b) Upon electing to become a member, the person may further elect at any time prior to retirement to receive service credit for their prior, excluded state service by making the contributions as specified in Sections 21050 and 21051.

history: (History: Amended by Stats. 2021, Ch. 186, Sec. 7. (SB 634) Effective January 1, 2022.)

article: 3. Optional Membership

path: 2. GOVERNMENT OF THE STATE OF CALIFORNIA > 5. PERSONNEL > 3. Membership in System > 3. Optional Membership


text: Persons appointed to the office of the Adjutant General or Assistant Adjutant General after October 1, 1961, shall have rights to membership as provided in this article for other persons appointed by the Governor and shall have no rights under the retirement benefit provisions of the Military and Veterans Code, except that persons entitled to retirement benefits under the Military and Veterans Code appointed to the office of the Adjutant General or Assistant Adjutant General shall continue to receive military retirement benefits during their term of office.

history: (History: Added by Stats. 1995, Ch. 379, Sec. 2. Effective January 1, 1996.)

article: 3. Optional Membership


text:
(a) An elective officer is excluded from membership in this system unless the officer files with the board an election in writing to become a member. The election effective date shall be the start date of the current term, provided the election is received by this system within 90 days of the applicable start date. If the election is not received by this system within 90 days from the start date, the effective date shall be the first day of the month in which the election is received by this system. Upon electing to become a member, the officer may further elect at any time prior to retirement to receive service credit for their prior, excluded service by making the contributions as specified in Sections 21050 and 21051.

(b) As used in this part, “elective officer” includes any officer of the Senate or Assembly who is elected by vote of the members of either or both of the houses of the Legislature, and any appointive officer of a city or county occupying a fixed term of office, as well as officers of the state or contracting agencies elected by the people, and persons elected to a city council or a county board of supervisors.

(c) Notwithstanding any other provision of subdivision (a) or (b), elected or appointed officers of a county superintendent of schools, school district, or community college district, or of a contracting agency, who serve on public commissions, boards, councils, or similar legislative or administrative bodies are excluded from membership in this system. This exclusion shall only apply to those elected or appointed officers, other than city or county officers, who are first elected or appointed to an office on or after July 1, 1994, or who are elected or appointed to a term of office not consecutive with the term of office held on June 30, 1994. For city or county elected or appointed officers, this exclusion shall only apply to those officers who are first elected or appointed to an office on or after January 1, 1997, or who are elected or appointed to a term of office not consecutive with the term of office held on December 31, 1996. This exclusion shall not apply to persons elected to a city council or county board of supervisors.

(d) Any person holding the office of city attorney or the office of assistant city attorney, whether employed, appointed, or elected, is excluded from the definition of “elective officer” as defined in subdivision (b). This subdivision shall apply only to persons first employed, elected, or appointed on or after July 1, 1994, or following any break in state service while serving in the office if the office was held on June 30, 1994.

(e) In accordance with Section 20125, the board shall be the sole judge of which elected or appointed positions qualify the incumbent as an “elective officer” in this system under this section.

(f) Notwithstanding any other provision of law, with respect to elective officers of contracting agencies, payment by a contracting agency of employer contributions and any other amounts for employer paid benefits under this system shall not be construed as receipt of salary or compensation by the elective officer for purposes of any statutory salary or compensation limitation.

history: (History: Amended by Stats. 2021, Ch. 186, Sec. 8. (SB 634) Effective January 1, 2022.)

article: 3. Optional Membership


text:
For the purposes of this section “veteran” means a member of the Veterans’ Home of California.

Any veteran who is employed by the Veterans’ Home of California is excluded from membership in this system unless he or she files, or has filed prior to October 1, 1959, an election in writing to become a member. The election shall be filed within 90 days after notice of eligibility to participate from this system, and shall not be revocable.

article: 3. Optional Membership


text:
(a) An employee of the Senate or the Assembly, or the respective committees thereof, whose salaries or wages are paid from the Senate Operating Fund or the Assembly Operating Fund or the Operating Funds of the Assembly and Senate, shall be deemed a “legislative employee.” A legislative employee is excluded from membership in this system unless the person files with the board an election in writing to become a member. The election effective date shall be the start date of the current position, provided the election is received by this system within 90 days of the applicable start date. If the election is not received by this system within 90 days from the start date, the effective date shall be the first day of the month in which the election is received by this system. The election shall not be required of a legislative employee who was a member of this system on October 1, 1963.

(b) Upon electing to become a member, a legislative employee may further elect at any time prior to retirement to receive service credit for their prior, excluded legislative service and the legislative employee shall have the option as to how much of that prior legislative service is to be credited. The legislative employee shall make contributions to this system as specified in Sections 21050 and 21051 for the previous service as a legislative employee for which they desire to receive service credit.

history: (History: Amended by Stats. 2021, Ch. 186, Sec. 9. (SB 634) Effective January 1, 2022.)

article: 3. Optional Membership


text:
(a) A county superintendent of schools, a school district, a community college district, or a contracting agency, whose respective resolution or contract contains an election to be subject to this section, may offer to its part-time employees whose service is less than the minimum service prescribed by paragraph (2) of subdivision (a) of Section 20305 the option to elect at any time to become a member by filing an election in writing with the board to become a member. An election by a county superintendent of schools, a school district, or a community college district to be subject to this section shall subject all of its employees whose service is less than the minimum service prescribed by paragraph (2) of subdivision (a) of Section 20305 to mandatory social security coverage but shall not, in and of itself, affect any other county superintendent of schools, school district, or community college district with respect to any social security coverage of employees of the other county superintendent of schools, school district, or community college district.

(b) If a part-time employee elects to become a member, he or she may further elect at any time prior to retirement to receive service credit for past service that was less than the minimum service prescribed by paragraph (2) of subdivision (a) of Section 20305 by making the contributions as specified in Sections 21050 and 21051.

(c) This section shall not apply to those part-time employees of any contracting agency nor to any contracting agency until the contracting agency elects to be subject to this section by amendment to its contract with the board made pursuant to Section 20474 or by express provision in its contract with the board.

(d) This section shall not apply to those part-time employees of any county superintendent of schools or school district or community college district nor to any county superintendent of schools or school district or community college district until the county superintendent of schools, the school district, or community college district, elects to be subject to this section by adopting a resolution to that effect and transmitting that resolution through the county superintendent of schools to the board. Notwithstanding any specified effective date in a resolution, the resolution shall not become effective until it is received by this system.

history: (History: Amended by Stats. 2000, Ch. 489, Sec. 4. Effective January 1, 2001.)

article: 3. Optional Membership


text:
(a) Notwithstanding Section 20305, officers, warrant officers, and enlisted personnel of the California National Guard who are not members pursuant to Section 20282 are excluded from membership in this system unless those officers, warrant officers, and enlisted personnel file a written election with the board to become a member.

(b) The Military Department shall report to the board any employment and other information requested by the board for purposes of this section.

history: (History: Added by Stats. 2007, Ch. 355, Sec. 7. Effective January 1, 2008.)

article: 3. Optional Membership


text:
(a) Notwithstanding any other provision of this part, a National Guard member may, at any time and on a prospective basis, cancel his or her election of membership in this system by filing a written notice of cancellation with the board.

(b) If a National Guard member cancels his or her election of membership, that National Guard member shall not be required to pay contributions as described in Section 20772.5, effective as of the date the written notice of cancellation was filed with the board.

(c) A National Guard member may only elect to cancel his or her membership pursuant to this section one time.

(d) This section shall remain operative until subsequent provisions of law delete the requirement that National Guard members pay the employer contributions as a condition of membership in this system.

history: (History: Added by Stats. 2007, Ch. 355, Sec. 8. Effective January 1, 2008. Conditionally inoperative as provided in subd. (d).)

article: 3. Optional Membership


text:
A person ceases to be a member:

(a) Upon retirement, except while participating in reduced worktime for partial service retirement.

(b) If he or she is paid his or her normal contributions, unless payment of contributions is the result of an election pursuant to paragraph (1) of subdivision (b) of Section 21070, or unless, after reducing the member’s credited service by the service applicable to the contributions being withdrawn, the member meets the requirements of Section 21075 or if he or she is paid a portion of his or her normal contributions where more than one payment is made, or these contributions are held pursuant to Section 21500. For the purposes of this subdivision, deposit in the United States mail of a warrant drawn in favor of a member, addressed to the latest address of the member on file in the office of this system, electronic fund transfer to the person’s bank, savings and loan association, or credit union account, constitutes payment to the person of the amount for which the warrant is drawn or electronically transferred.

(c) If the member has less than five years of service credit, or less than 10 years of service credit if the member is subject to Section 21076 or 21076.5, and no accumulated contributions in the retirement fund at the time of termination of service, unless the member establishes membership in the Judges’ Retirement System, the Judges’ Retirement System II, the Legislators’ Retirement System, the State Teachers’ Retirement System, or the University of California Retirement Plan, or establishes reciprocity with a reciprocal retirement system.

history: (History: Amended by Stats. 2014, Ch. 237, Sec. 2. (AB 2472) Effective January 1, 2015.)

article: 4. Termination of Membership

path: 2. GOVERNMENT OF THE STATE OF CALIFORNIA > 5. PERSONNEL > 3. Membership in System > 4. Termination of Membership


text: When any state member is charged by indictment with the commission of any felony involving the accepting or giving, or offering to accept or give, any bribe, the embezzlement of public money, extortion, theft of public money, perjury, or conspiracy to commit any of those crimes, arising directly out of his or her official duties, and is a fugitive from justice, the board shall conduct an investigation and shall hold a hearing for the purpose of determining whether, in the light of all factors, the offense charged is of such a nature as to justify suspension of his or her membership in this system. If the board so determines, he or she shall be suspended from membership in this system while the charge is pending and until final disposition of the charge. At any time during the period of suspension of membership, the person so suspended shall be entitled to withdraw his or her accumulated contributions from this system, and that withdrawal shall constitute an election to terminate membership in this system.

history: (History: Amended by Stats. 1996, Ch. 906, Sec. 29. Effective January 1, 1997.)

article: 4. Termination of Membership


text: Until his or her return to state service any member absent on military service may resign from this system.

article: 4. Termination of Membership


text: Notwithstanding Section 21259, a person ceases to be a member for any portion of his or her service as an elected public officer that is forfeited pursuant to Section 1243.

history: (History: Added by Stats. 2005, Ch. 322, Sec. 2. Effective January 1, 2006.)

article: 4. Termination of Membership


text: Notwithstanding Section 20638, if a member on deferred retirement from this system is eligible to retire for service from a reciprocal retirement system and does so retire prior to the time the member becomes entitled to retire under this system, his or her retirement shall be deemed a concurrent retirement for purposes of computing final compensation under Section 20638.

history: (History: Amended by Stats. 1999, Ch. 785, Sec. 1. Effective January 1, 2000.)

article: 5. Reciprocity

path: 2. GOVERNMENT OF THE STATE OF CALIFORNIA > 5. PERSONNEL > 3. Membership in System > 5. Reciprocity


text: The provisions of this part extending rights to a member of this system, or subjecting him or her to any limitation by reason of his or her membership in a county retirement system, apply in like manner and under like conditions to a member of this system by reason of his or her membership in any retirement system established under Chapter 2 (commencing with Section 45300) of Division 5 of Title 4 with respect to which an ordinance complying with Section 45310.5 has been filed with and accepted by the board or by reason of his or her membership in a retirement system established by or pursuant to the charter of a city or city and county or by any other public agency of this state and that system, in the opinion of the board, provides a similar modification of rights and benefits because of membership in this system and with respect to which the governing body of the city, city and county or public agency and the board have entered into agreement pursuant to this section. An agreement under this section shall provide that the governing body shall modify its retirement system to conform to any amendments to this part affecting a member’s right because of membership in a county retirement system, and may contain other provisions consistent with this section as the board deems appropriate. This section applies only to a member whose termination and entry into employment resulting in a change in membership from this system to the other system or from the other system to this system occurred after the acceptance by the board or after the effective date specified in the agreement. However, provisions relating to computation of final compensation apply to any other member if the provision would have applied had the termination and entry into employment occurred after the acceptance or determination by the board.

history: (History: Amended by Stats. 2018, Ch. 92, Sec. 106. (SB 1289) Effective January 1, 2019.)

article: 5. Reciprocity