AMENDED IN SENATE AUGUST 13, 2026
AMENDED IN SENATE JUNE 25, 2026
AMENDED IN ASSEMBLY JANUARY 5, 2026
AMENDED IN ASSEMBLY MARCH 24, 2025
CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION
95
Introduced by Assembly Member Gipson
(Coauthor: Assembly Member Alanis)
February 20, 2025
An act to amend Section 22760 of, and to add Chapter 20 (commencing with Section 21717) to Part 3 of Division 5 of Title 2 of of, the Government Code, relating to retirement.
Vote: majority Appropriation: no Fiscal committee: yes Local program: no
LEGISLATIVE COUNSEL’S DIGEST
Existing law, the County Employees Retirement Law of 1937, prescribes retirement benefits for members of specified county and district retirement systems. Existing law establishes the Deferred Retirement Option Program as an optional benefit program for specified safety members of those systems that, by ordinance or resolution by the county board of supervisors or the governing body, elect to adopt it. The program provides eligible members access, upon service retirement, to a lump sum or, in some cases, monthly payments in addition to a monthly retirement allowance, as specified.
Existing law, the Public Employees’ Retirement Law (PERL), creates the Public Employees’ Retirement System (PERS) for the purpose of providing pension benefits to state employees and employees of contracting agencies and prescribes the rights and duties of members of the system and their beneficiaries. Existing law vests management and control of PERS in its board of administration. PERS provides a defined benefit to members of the program, based on final compensation, credited service, and age at retirement, subject to certain variations.
This bill would establish the Deferred Retirement Option Program as a voluntary program within PERS for employees of State Bargaining Units 5 (Highway Patrol) and 8 (Firefighters). (Firefighters), and certain supervisory or managerial employees of the Department of the California Highway Patrol or the Department of Forestry and Fire Protection. The bill would require certain actions to occur, including completion of an actuarial analysis to determine the proposed
program will be cost neutral, before the program becomes effective and applicable. The bill would require members who elect to participate in the program to meet certain requirements, including waiving any claims with respect to age and other discrimination in employment laws relative to the program. The bill would establish a program account for each participant and would require the Board of Administration of the Public Employees’ Retirement System to, among other things and at least once annually, provide a statement to the participant that displays the value or balance of the participant’s program account. The bill would require PERS to commence paying the member their monthly retirement allowance as of the first day of the month following the deferred retirement date. The bill would authorize the participant to designate a person or persons as beneficiaries of the participant’s program account at
any time during the program period from their election date to the deferred retirement calculation date. Beginning on July 1, 2027, 1 of the fiscal year the program is implemented, and on that date every 5 consecutive fiscal years thereafter, the bill would require the Board of Administration of the Public Employees’ Retirement System to submit a report of an actuarial analysis to specified entities. The bill would entitle participants who entered the program prior to the effective date of any modifications by the Legislature to elect whether to become subject to those modified provisions or to remain subject to the program as it existed on the
participant’s election date. The bill would specify that the Legislature reserves the right to suspend the program through legislative action ratified by the Governor under certain circumstances. If the Legislature and the Governor approve the program’s suspension, the bill would terminate all participants’ benefit accrual and would prohibit any participant, eligible spouse, or beneficiary from having any vested right to any prospective program benefit, as specified. The bill would require the member’s spouse, as applicable, to execute a signed statement acknowledging the spouse’s understanding of, and agreement with, the member’s election to participate in the program together with an express statement of the spouse’s understanding and agreement that benefits payable to the spouse may be reduced as a result of participation in the program.
Existing law requires the board of administration of PERS to administer the Public Employees’ Medical and Hospital Care Act (PEMHCA). PEMHCA further grants the board the power to approve health benefit plans and to contract with carriers offering health benefit plans. Under PEMHCA, an employee or annuitant may enroll in a health benefit plan approved or maintained by the board either as an individual or for self and family. Existing law defines an annuitant for purposes of receiving postretirement health benefits pursuant to PEMHCA and generally requires that a person retire within 120 days of separation from public employment, with specified exceptions.
This bill would expand the definition of annuitant, thereby permitting a person, or a surviving family member of that person, as specified, whose deferred retirement date is within 120 days of separation from the Deferred Retirement Option Program and who receives a retirement allowance under any state retirement system to which the state was a contributing party to enroll in a health benefit plan under PEMHCA.
The people of the State of California do enact as follows:
SECTION 1.
The Legislature finds and declares all of the following:
(a) The Department of the California Highway Patrol (CHP) has taken on an increasingly diverse and dangerous mission, as it is now regularly called upon to serve as both a local and statewide law enforcement entity.
(b) The Department of Forestry and Fire Protection (CAL FIRE) is California’s fire department, and catastrophic disasters have significantly increased the complexity of its mission.
(c) A deficiency in the recruitment and retention of CHP officers and CAL FIRE firefighters has resulted in a chronic shortage of needed personnel, and the challenges now being confronted by both the CHP and CAL FIRE are dangerously protracted, requiring an increasing reliance on existing experience and expertise.
(d) A Deferred Retirement Option Program is a method to address these challenges that other public safety agencies in California successfully use to address these challenges.
(e) A Deferred Retirement Option Program allows sworn peace officers and firefighter personnel who would otherwise retire the ability to remain employed in the same classification by the employer for a period of up to five years beyond their planned date of retirement for service. This benefits California public safety agencies by allowing them to keep highly trained and experienced public safety personnel actively employed, and able to meet the ongoing public safety needs of the state.
(f) To address this immediate and ongoing need, it is the intent of the Legislature to establish a Deferred Retirement Option Program for eligible California Public Employees’ Retirement System safety members of State Bargaining Unit 5 (CHP) and State Bargaining Unit 8 (CAL FIRE) to ensure that California can effectively maintain and provide vital safety services to the public as the next generation prepares to enter these public service professions.
SEC. 2.
Chapter 20 (commencing with Section 21717) is added to Part 3 of Division 5 of Title 2 of the Government Code, to read:
Chapter 20. Deferred Retirement Option Program
This chapter shall be known and may be cited as the Deferred Retirement Option Program.
(a) The Deferred Retirement Option Program is hereby created to add flexibility to the state employers and eligible employees of State Bargaining Unit 5 and State Bargaining Unit 8, respectively, who are a peace officer or firefighter patrol or state peace officer/firefighter member of the California Public Employees’ Retirement System and who may elect to participate in the program to receive a one-time lump-sum payment of their program account upon termination of employment and subsequent retirement from the system through the Deferred Retirement Option
Program.
(b) Pursuant to Sections 21717.4, 21717.5, and 21717.6, as applicable, the Deferred Retirement Option Program shall become operative with respect to peace officer or firefighter patrol members of State Bargaining Unit 5 and or state peace officer/firefighter members of State Bargaining Unit 8, respectively, 8 on the date
specified in a memorandum of understanding between the employer and the recognized employee organization only after certification that the program is cost neutral and the Board of Administration of the Public Employees’ Retirement System has adopted regulations to implement and administer the program pursuant to this chapter.
(a) (1) Unless the context otherwise requires, the definitions and general provisions set forth in this chapter shall govern its construction.
(2) The Public Employees’ Retirement Law (Part 3 (commencing with Section 20000)) shall apply, as necessary and applicable.
(3) Article 4 (commencing with Section 7522) of Chapter 21 of Division 7 of Title 1 shall apply, as necessary and applicable.
(b) Notwithstanding paragraph (3) of subdivision (a), a member who elects to participate in the program shall, on and after the election
date, return to employment with the employer, but shall cease to accrue, nor shall have any right or entitlement to accrue, accrue or purchase, any additional service credit or retirement benefit in any public employee retirement system for service performed during the program period. Service during the program period shall not be counted as “state service” for postretirement health vesting. A member shall not elect to purchase any service credit after the member’s election date for participation in the Deferred Retirement Option Program.
(c) The implementation and administration of the Deferred Retirement Option Program shall conform to the applicable provisions of Title 26 of the United States Code and the Revenue and Taxation Code.
For purposes of this chapter, the following definitions apply:
(a) “Board” has the same meaning as in Section 20021.
(b) “Deferred retirement date” means all of the following:
(1) The date on which the member’s employment shall be terminated.
(2) The date on which the member shall be retired for service from the system, except as otherwise provided in this chapter.
(3) The date on which the member’s program participation shall conclude and be terminated.
(4) The period of time for which the present value of deferred retirement option program benefits, including cumulative contributions and accrued interest in the participant’s account, shall become payable as a one-time lump-sum payment to the participant or their survivor or beneficiary.
(c) “Deferred retirement calculation date” means the date prior to the member’s actual program retirement date at which time benefits under the program shall be calculated for distribution as provided in this chapter.
(d) “Department” means the Department of Human Resources.
(e) “DROP” or “program” means the Deferred Retirement Option Program established by this chapter.
(f) “Election date” means the date the member elects to participate and begins active participation in the program.
(g) “Participant” or “member” means an eligible peace officer patrol member of State Bargaining Unit 5 or firefighter 5, state peace officer/firefighter member of State Bargaining Unit 8, as applicable and consistent with Section 21717.6, or a
supervisory or managerial employee of the Department of the California Highway Patrol or the Department of Forestry and Fire Protection who would otherwise be included in State Bargaining Unit 5 or State Bargaining Unit 8, respectively, but for supervisory or managerial designation, who is an active member of the system and who elects to participate in the program.
(h) “Program account” means an account established by the system for each program participant pursuant to Section 21717.10.
(i) “Program period” means the period of time commencing on the date the member has elected to participate in the program and ending on the member’s deferred retirement date, and where the total duration of program participation by the participant shall not exceed 60 consecutive months from the date of the member’s election date.
(j) “Public retirement system” has the same meaning as subdivision (j) of Section 7522.04.
(k) “Regulations” means the administrative regulations adopted by the board pursuant to subdivision (c) of Section 21717.2, and Sections 21717.4, 21717.5, and 21717.21, providing for the implementation and administration of the program.
(l) “System” means the Public Employees’ Retirement System established pursuant to Article 1 (commencing with Section 20000) of Chapter 1.
(a) This chapter shall become effective and applicable to State Bargaining Unit 5 only after all of the following have occurred:
(1) The department and State Bargaining Unit 5 have agreed to implement the program pursuant to the Ralph C. Dills Act (Chapter 10.3 (commencing with Section 3512) of Division 4 of Title 1).
(2) The board has completed an actuarial analysis of the proposed program pursuant to Section 21717.18 21717.20 and determined that the proposed program will be cost neutral. The actuarial analysis shall be provided to both the Department of Finance and the department.
(3) The board has adopted regulations to implement and administer this chapter.
(b) Notwithstanding paragraph (3) (1) of subdivision (a), the department and State Bargaining Unit 5 shall not agree to the an implementation date of this chapter prior to the completion of paragraphs (1) and (2),
(2) and (3), inclusive, of subdivision (a).
(a) This chapter shall become effective and applicable to State Bargaining Unit 8 only after all of the following have occurred:
(1) The department and State Bargaining Unit 8 have agreed to implement the program pursuant to the Ralph C. Dills Act (Chapter 10.3 (commencing with Section 3512) of Division 4 of Title 1).
(2) The board has completed an actuarial analysis of the proposed program pursuant to Section 21717.18 21717.20 and determined that the proposed program will be cost neutral. The actuarial analysis shall be provided to both the Department of Finance and the department.
(3) The board has adopted regulations to implement and administer this chapter.
(b) Notwithstanding paragraph (3) (1) of subdivision (a), the department and State Bargaining Unit 8 shall not agree to the an implementation date of this chapter prior to the completion of paragraphs (1) and (2),
(2) and (3), inclusive, of subdivision (a).
This chapter shall only apply to the following members of State Bargaining Unit 5 and State Bargaining Unit 8, respectively, and as applicable:
(a) A state safety member whose duties consist of active law enforcement highway patrol service, patrol member, as defined in Section 20045, and 20390, who is a peace officer, as defined in Section
830.2 of the Penal Code.
(b) A state safety member peace officer/firefighter member who renders active fire suppression, active fire search and rescue, or active fire investigatory service.
(c) A supervisory or managerial employee of the Department of the California Highway Patrol who would otherwise be included in State Bargaining Unit 5 but for supervisory or managerial designation.
(d) A supervisory or managerial employee of the Department of Forestry and Fire Protection who would otherwise be included in State Bargaining Unit 8 but for supervisory or managerial designation.
(a) Subject to Sections 21717.4 or 21717.5, as applicable, and Section 21717.6, a member may elect to participate in the program provided that the member has at least attained the requisite minimum age and five years of credited service accrued in the system that they otherwise would be required to attain to be eligible to retire for service.
(b) For purposes of participation pursuant to this chapter, a member shall make the election prior to their retirement for service consistent with this part. A member who has retired for service, retired for disability, or is employed pursuant to Section 7522.56, on or after the effective date of this chapter, shall not be permitted to participate in the program.
(c) A patrol member shall not participate in the program beyond the requirements set in Section 21130.
A member who elects to participate in the program shall be subject to all of the following requirements:
(a) The member shall waive any claims with respect to age and other discrimination in employment laws relative to the program as are required by the employer or the system.
(b) The member shall waive and forfeit any application, claim, or right to any disability retirement benefit administered by any public retirement system of which they are a member, and where such an application, claim, or right to any disability retirement benefit is based on a condition relating to an illness or injury that occurred prior to their election to participate in the program, regardless of whether the illness or injury is industrial or nonindustrial.
(c) The member shall terminate employment and program participation in accordance with their election submitted to the system consistent with paragraphs (1) through (4), inclusive, of subdivision (b) of Section 21717.3.
(d) A member shall not be eligible or authorized to modify their election after submittal to the system, except to identify, modify, or change a beneficiary for the receipt of the program benefit.
(e) The member shall not be authorized or permitted to participate in a reduced worktime schedule for partial service retirement pursuant to Article 4 (commencing with Section 21110) of Chapter 12.
(f) A member who participates in the program and reinstates from retirement shall not be eligible to again elect participation in the program.
(g) The member shall concurrently retire from any other public retirement system of which they are a member upon the termination of employment and subsequent date of their deferred retirement date consistent with their program election. A concurrent retirement from any other public retirement system of which they are a member also applies in the event of a retirement exercised pursuant to Section 21717.16. 21717.17.
(a) An election made by a member who satisfies the requirements in Sections 21717.6 or 21717.7, as applicable, and Section 21717.8, shall be subject to all of the following requirements:
(1) The election shall be one time only and is irrevocable.
(2) The election shall be made in writing and signed by the member on a form prescribed by, and submitted to, the board pursuant to regulations adopted by the board.
(3) If the member is married, the member’s spouse shall execute a signed statement on a form prescribed by the board acknowledging the spouse’s understanding of, and agreement with, the member’s election to participate in the program together with an express statement of the spouse’s understanding and agreement that benefits payable to the spouse may be reduced as a result of participation pursuant to this chapter, as determined by the board.
(b) (1) Upon receipt of the member’s election, the system shall notify the member in writing of the date of its receipt of the election, and the final date, consistent with paragraph (2), by which the member may withdraw their election.
(2) Notwithstanding paragraph (1), a member may withdraw their election no more than 30 calendar days from the date of the system’s receipt of the member’s election.
(3) A withdrawal of an election pursuant to paragraph (2) shall be made in writing and signed by the member on a form prescribed by, and submitted to, the system pursuant to regulations adopted by the board.
(c) The board shall maintain a record of the member’s election, withdrawal, and, as applicable, the executed spousal acknowledgment and understanding forms.
(a) A program account shall be established within the system for each program participant. No system assets shall be separately aggregated for any program account, and a participant shall not have a claim on, or right to claim, any specific assets of the system.
(b) The board shall, at least once annually, provide a statement to the participant that displays the value or balance of the participant’s program account and summarizes any credits to the account or other transactions that occurred after the immediately preceding valuation date.
The rights of a program participant or their spouse under the program shall be subject to any applicable provisions of law or court orders relating to dissolution of marriage, division of community property, including Chapter 9 (commencing with Section 22960.75) of Part 7, and child or spousal support.
The right of a program participant to benefits under the program is not subject to execution or any other process, except to the extent permitted by Section 704.110 of the Code of Civil Procedure, and is unassignable except as otherwise provided by this chapter.
(a) On and after the member’s election date, the participant shall cease to accrue retirement benefits under this part and, instead, shall begin to accrue deferred retirement benefits under the program pursuant to the terms of this chapter, which benefits shall be credited to the participant’s program account pursuant to Section 21717.10.
(b) Except as provided in Section 21717.9, a member’s election to participate shall be irrevocable. However, the board shall revoke participation in the program if the member is injured during the period of program participation and elects to retire for disability, in which case, the member’s participation in the program shall immediately cease and the member’s accrued deferred benefits shall be calculated as of the date of disability determination and distributed as a lump-sum payment to the participant. The member shall not again be permitted to elect participation in the program thereafter.
(c) (1) A participant in the program shall have all rights, privileges, and benefits of employment, but shall be subject to all terms and conditions of that employment, including, but not limited to, eligibility for other benefit programs not related to retirement benefits, and that are subject to the requirements of other laws laws, including the Public Employees’ Medical and Hospital Care Act (Part 5 (commencing
with Section 22750)), or an agreement reached between the employer and recognized employee organization pursuant to the State Employer-Employee Relations Ralph C. Dills Act (Chapter 10.3 (commencing with Section 3512) of Division 4 of Title 1).
(A) If the employment of a participant is terminated for cause, their program participation shall immediately cease on the date of such termination. If a termination for cause is reversed after a final decision, order, determination, or judgment, the participant’s program election shall be reinstated effective the date after the termination. The board shall not disburse a lump-sum payment to a participant until a final decision, order, determination, or judgment has been issued regarding the termination for cause.
(B) On and after the date of a final decision, order, determination, or judgment that has been issued regarding a termination for cause that is not reversed, the board shall disburse a lump-sum payment of the participant’s account minus interest on the balance of their account that accrued from the date of such termination. A program participant shall not have a claim of right, or entitlement to, a deferred retirement program benefit on and after the date of termination for cause that is not reversed.
(2) A participant shall continue to make the normal contribution required under this part, or Article 4 (commencing with Section 7522) of Chapter 21 of Division 7 of Title 1, as applicable, during the program period where such contributions shall be credited to the participant’s program account.
(3) The employer shall not be required to make contributions pursuant to this part, or Article 4 (commencing with Section 7522) of Chapter 21 of Division 7 of Title 1, as applicable, during the participant’s program period. The employer may make contributions
credited to the participant’s account pursuant to this chapter and consistent with contributions required of the employer pursuant to this part, or Section 7522.30, as applicable, and as agreed to by a memorandum of understanding between the employer and recognized employee organization adopted by the parties thereto.
(d) Except as otherwise provided in Section 21717.14, eligibility of a spouse for any program benefits, including survivor benefits, shall be based on the participant’s marital status and the duration of the marriage as of the date of retirement. deferred retirement date.
(a) If a participant dies during the program period prior to their elected deferred retirement date, they shall be deemed to be retired from the program as of the date of their death. No additional deferred retirement benefits resulting from their program participation on and after the date of their death shall accrue, except for interest accrued on the balance of their account through the date of their death. The participant’s eligible spouse, or other beneficiary designated by the participant, shall receive a lump-sum payment of the participant’s account, including accrued interest through the date of the participant’s death, under this chapter as provided in subdivisions (b) and (c).
(b) Eligibility of a spouse for any program benefits shall be based on the participant’s marital status and duration of the marriage as of the date of death.
(c) The balance in the participant’s program account shall be distributed pursuant to Section 21717.15. 21717.16.
(d) If a participant dies during the program period prior to their elected deferred retirement date, the retirement benefits accrued prior to the member’s participation in the program shall be payable pursuant to the applicable provisions in Article 2 (commencing with 21530), Article 3 (commencing with Section 21570), and Article 4 (commencing with Section 21600), of Chapter 14.
As of the first day of the month following the deferred retirement date, the system shall commence paying the member their monthly retirement allowance. The retirement allowance shall be calculated as if the member retired one day prior to the member’s election date into the program and shall include a percentage increase commensurate with the percentage increase of any applicable cost-of-living adjustments the member would have been granted pursuant to Article 3 (commencing with Section 21310) of Chapter 13 if the member had retired one day prior to the member’s election date into the program.
21717.15.21717.16.
(a) A participant may designate a person or persons as beneficiaries of the participant’s program account at any time during the program period from their election date to the deferred retirement calculation date. The beneficiary or beneficiaries shall be designated on a form prescribed by the board, signed by the participant, and filed with the board.
(b) Notwithstanding subdivision (a), the participant’s beneficiary designation shall not be given effect to the extent that the designation would impair the rights of an eligible surviving spouse or surviving children under applicable federal or state laws.
(c) Unless otherwise provided in the beneficiary designation form, each designated beneficiary shall be entitled to equal shares of the lump-sum distribution that shall be payable from the participant’s program account upon the death of the participant.
(d) If a participant dies without a valid beneficiary designation on file with the board, or if a beneficiary or all beneficiaries predecease the participant, the participant’s account shall be payable to the participant’s estate. pursuant to Section 21493.
21717.16.21717.17.
A participant may exercise a retirement at any time during the program period prior to their deferred retirement date and the participant shall only receive a lump-sum payment of accumulated contributions and interest accrued on the balance of their program account as of the date of that retirement. A retirement exercised under this section shall be deemed as an early program retirement and the participant shall not have any right or entitlement to claim a program benefit after the date of such retirement. A participant who exercises a retirement pursuant to this section shall not again be permitted to elect participation in the program pursuant to this chapter.
21717.17.21717.18.
(a) For purposes of this chapter, upon disbursement of a lump-sum retirement benefit by the system to the program participant, their eligible spouse, or their beneficiary pursuant to Section 21717.14, the obligations of the system to the participant, their eligible spouse, or beneficiary shall be construed and deemed to be fully discharged without further obligation.
(b) The board and its employees, agents, and contractors shall be held harmless by the participant, their survivor, or beneficiary after the disbursement of program benefits as directed by the program participant.
21717.18.21717.19.
Program participation and program benefits pursuant to this chapter, including amounts in a participant’s account, are not intended, nor shall be used in any manner, to enhance a member’s retirement benefit provided under this part. Program participation and program benefits pursuant to this chapter, including amounts in a participant’s account, are not intended, nor shall be used in any manner, to calculate a member’s retirement under this part. Participation and program benefits pursuant to this chapter, including amounts in a participant’s account, are not intended, nor shall be used in any manner, to abridge or otherwise circumvent Sections 7522.18, 7522.43, or 7522.44. Compensation earned during participation in the program shall not be applied to the calculation of the participant’s final compensation for purposes of retirement for service or retirement for disability under this part.
21717.19.21717.20.
(a) Prior to the adoption of regulations Upon agreement by the department and the respective State Bargaining Unit to implement the program, pursuant to Sections 21717.4 and 21717.5, the board shall cause an actuarial analysis to be performed to determine whether the program will result in reduced costs
or be cost neutral. The program shall be deemed to be cost neutral only if, based on the applicable actuarial assumptions, it will not result in an increase in the present value of benefits payable to program participants or have a significant negative financial impact on the employer or the retirement system, as specified in subdivisions (b) and (c).
(b) The actuarial analysis shall take into account the impact of the program, including, but not limited to, negotiated employer contributions provided for in paragraph (3) of subdivision (c) of Section 21717.13, the
system’s actuarial accrued liability, if any, and the present value of benefits payable to program participants upon reaching the deferred retirement date. The program shall not be deemed to be cost neutral if there is an anticipated increase in any of these measures attributable to the implementation of the program, except negotiated employer contributions over a period of five consecutive fiscal years. program.
(c) (1) The actuarial analysis shall identify all cost elements anticipated to change due to the implementation of the program and shall include the impact of those changes. These cost elements may include, but are not limited to:
(A) Administration of the program.
(B) Anticipated retirement age for service and election for program participation.
(C) Anticipated retirement age on the deferred retirement date.
(D) Retirement for disability, in which case program participation is terminated.
(2) The actuarial analysis shall not take into account items unrelated to the proposed program, including the investment return on fund assets, minimum interest accrued on a participant’s account pursuant to paragraph (3), subdivision (a) of Section 21717.21,
21717.22, or the life expectancy of active members.
21717.20.21717.21.
(a) On and after implementation of the program pursuant to the requirements of this chapter, commencing July 1, 2027, and on that date every five consecutive fiscal years thereafter, Every five years, commencing with July 1 of the fiscal year the program is implemented pursuant to the requirements of this chapter, the board shall cause an actuarial analysis of the cost impact or cost
neutrality of the program to be performed and submit a report of that analysis to the department, the Department of Finance, and the Legislature, relating to the prior five-year program period. If the Department of Finance determines that the program has resulted in significant increased costs in a manner inconsistent with Section 21717.19, excluding employer contributions negotiated pursuant to paragraph (3) of subdivision (c) of Section 21717.13, 21717.20, the Department of Finance, in consultation with the department and the exclusive representative, shall make recommendations to the Legislature to modify the program in a manner consistent with the actuarial analysis to make the program cost neutral.
(b) Notwithstanding subdivision (a), nothing in this chapter shall prevent the Legislature from making changes to this chapter or the terms of the program.
(c) The report required to be submitted to the Legislature pursuant to subdivision (a) shall be submitted in accordance with Section 9795.
21717.21.21717.22.
(a) Subject to the results of the actuarial analysis required in Section 21717.19, 21717.20, the implementing and administrative regulation adopted by the board shall provide only the following amounts to be credited monthly to the participant’s program account:
(1) All normal contributions of the participant required pursuant to paragraph (2) of subdivision (c) of Section 21717.13 made by, or on behalf of, the participant during the program period.
(3)
(2) All interest credited semiannually at a rate that is equal to the interest rate, if any, applicable to employee contributions to the system
money-weighted rate of return for the prior fiscal year minus 1.5 percent, or a rate determined semiannually by the board. Notwithstanding the foregoing, the interest rate shall not be less than 0 percent annually.
(5) The balance of all unused sick leave accrued during the program period.
(6) The balance of all unused vacation leave accrued during the program period.
(b) The provisions of this section shall not be applied to the calculation of the participant’s final compensation for purposes of a retirement for service or retirement for disability under this part.
21717.22.21717.23.
Notwithstanding any other provision of this chapter, a participant or their survivor or beneficiary shall not be permitted to elect a distribution that does not satisfy the requirements of this chapter or any other state or federal law.
21717.23.21717.24.
Except as provided in Section 21717.25, 21717.26, if the program is modified pursuant to Section 21717.20, 21717.21, participants who entered the program prior to the effective date of the modification shall be entitled to elect
whether to become subject to the modified provisions of the program or to remain subject to the program as it existed on the participant’s election date.
21717.24.21717.25.
Subject to Sections 7522.76, 21717.20, and 21717.25, 21717.21, and 21717.26, a participant has a vested right to 100 percent of the balance of the participant’s account which accrues when the person becomes a participant. If a participant is found guilty of a felony consistent with Section 7522.76, the participant shall forfeit all employer contributions and
the interest accrued on that portion of contributions to the extent that such contributions have been negotiated and agreed to pursuant to
paragraph (3) of subdivision (c) of Section 21717.13, in which case, all employer contributions shall be returned to the credit of the employer. the normal contributions required of the participant.
21717.25.21717.26.
Notwithstanding Section 21717.23 21717.24 or any other law, the Legislature reserves the right to suspend the program through legislative action ratified by the Governor if the Department of Finance, in consultation with the system actuary and the California Actuarial Advisory Panel as established pursuant to Section 7507.2, determines that a deleterious economic event has substantially weakened
the system’s financial position. If the Legislature and the Governor approve the program’s suspension, all participants’ benefit accrual shall terminate upon the effective date of the legislation suspending the program and no participant, eligible spouse, or beneficiary shall have any vested right to any prospective program benefit after the legislation’s effective date.
SEC. 3.
Section 22760 of the Government Code is amended to read:
22760.
“Annuitant” means:
(a) A person, other than a National Guard member defined in Section 20380.5, who has retired within 120 days of separation from employment and who receives a retirement allowance under any state or University of California retirement system to which the state was a contributing party.
(b) A surviving family member receiving an allowance in place of an annuitant who has retired as provided in subdivision (a), (a) or (k), or as the survivor of a deceased employee under Section 21541, 21546, 21547, or 21547.7, or
similar provisions of any other state retirement system.
(c) A person who has retired within 120 days of separation from employment with a contracting agency as defined in Section 22768 or, if applicable, consistent with the provisions of subdivision (b) of Section 22893, and who receives a retirement allowance from the retirement system provided by that employer, or a surviving family member who receives the retirement allowance in place of the deceased.
(d) A judge who receives the benefits provided by subdivision (e) of Section 75522.
(e) A person who was a state member for 30 years or more and who, at the time of retirement, was a local member employed by a contracting agency.
(f) A Member of the Legislature or an elective officer of the state whose office is provided by the California Constitution, who has at least eight years of credited service, and who meets the following conditions:
(1) Permanently separates from state service on or after January 1, 1988, and not more than 10 years before or 10 years after his or her their minimum age for service retirement, or is an inactive member of the Legislators’ Retirement System pursuant to Section 9355.2.
(2) Receives a retirement allowance under a state retirement system supported in whole or in part by state funds other than the University of California Retirement System.
(g) An exempt employee who meets all of the following conditions:
(1) Has at least 10 years of credited state service that includes at least 2 years of credited service while an exempt employee.
(2) Permanently separates from state service on or after January 1, 1988, and not more than 10 years before or 10 years after his or her
their minimum age for service retirement.
(3) Receives a retirement allowance under a state retirement system supported in whole or in part by state funds other than the University of California Retirement System.
(h) A person receiving a survivor allowance pursuant to Article 3 (commencing with Section 21570) of Chapter 14 of Part 3 provided that he or she the person was eligible to enroll in a health benefit plan on the date of the member’s death, on whose account the survivor allowance is payable.
(i) (1) A family member of a deceased retired member of the State Teachers’ Retirement Plan, if the deceased member meets the following conditions:
(A) Retired within 120 days of separation from employment.
(B) Retired before the member’s school employer elected to contract for health benefit coverage under this part.
(C) Prior to his or her their death, received a retirement allowance that did not provide for a survivor allowance to family members.
(2) The family member shall elect coverage as an annuitant within one calendar year from the date that the deceased member’s school employer elected to contract for health benefit coverage under this part.
(j) A person who reinstates benefits pursuant to subparagraph (ii) of paragraph (2) of subdivision (d) of Section 7522.57.
(k) A person whose deferred retirement date is within 120 days of separation from the Deferred Retirement Option Program (Chapter 20 (commencing with Section 21717) of Part 3) and who receives a retirement allowance under any state retirement system to which the state was a contributing party.