AMENDED IN SENATE AUGUST 6, 2026

AMENDED IN SENATE JUNE 4, 2026

AMENDED IN ASSEMBLY APRIL 20, 2026

CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION

96

Introduced by Committee on Public Employment and Retirement (Assembly Members McKinnor (Chair), Boerner, Garcia, and Michelle Rodriguez)

March 9, 2026

An act to amend Sections 22170.5, 22250, 22455.5, 24201.5, 24204, 24209, 24209.3, 24210, 25006, 25009, 26300, and 26606 of, and to amend, repeal, and add Sections 22164.5, 26004, 26113, 26135.7, 26139, and 26139.5 of, the Education Code, and to amend Sections 20405, 20407, 20408, 20409, 20410, 21023.5, 21020.5, 31520, 31520.1, 31520.2, 31621.7, 31622, 31639.3, 31641, 31641.2, 31641.6, 31641.20, 31641.21, and 31835 of, to repeal Section 20411 of, and to add Sections 31540.5 and 31789.6 to, and to repeal Section 20411 of, the Government Code, relating to retirement, and making an appropriation therefor.

Vote: majority   Appropriation: yes   Fiscal committee: yes   Local program: no

LEGISLATIVE COUNSEL’S DIGEST

(1) Existing law, the Teachers’ Retirement Law, establishes the State Teachers’ Retirement System (STRS) and creates the Defined Benefit Program of the State Teachers’ Retirement Plan, which provides a defined benefit to members of the program, based on final compensation, creditable service, and age at retirement, subject to certain variations. STRS is administered by the Teachers’ Retirement Board. Existing law creates the Teachers’ Retirement Fund, which is continuously appropriated for specified purposes, into which certain moneys are deposited, including employee contributions. Existing law requires employers and employees to make contributions to the system based on the member’s creditable compensation. Existing law defines terms for the purposes of STRS.

Existing law defines “retired member activities” to mean one or more of specified identified activities within the California public school system and performed by a member retired for service under STRS, as prescribed.

This bill, commencing July 1, 2027, would redefine “retired member activities” to mean all service performed within the California public school system by a member retired for service under STRS when the member is employed in specified positions, including as an employee or independent contractor.

(2) Existing law defines “sick leave days,” “basic sick leave day,” and “excess sick leave days” for purposes of STRS. For specified standards concerning service credit that are expressed only in terms of hours, existing law requires the number of hours to be divided by 6 to determine the number of sick days.

This bill would delete the above provision on calculating the number of hours. The bill would instead provide that, when determining the number of days, including for those identified standards, one day shall be equivalent to the number of hours of creditable service performed in a day in that position on a full-time basis, but no less than 6 hours.

(3) Existing law requires the retirement board and employees of STRS to discharge their duties with respect to the system and the plan solely in the interest of the members and beneficiaries, as specified. This includes by diversifying the investments of the plan so as to minimize the risk of large losses unless under the circumstances it is clearly prudent not to do so.

This bill would revise that provision to instead require diversifying the investments of the plan so as to minimize the risk of loss and to maximize the rate of return unless under the circumstances it is clearly not prudent to do so.

(4) Existing law requires employers to make available criteria for membership, including optional membership, in a timely manner to all persons employed to perform creditable service subject to coverage by the Defined Benefit Program and to inform part-time and substitute employees, within 30 days of the date of hire, or by March 1, 1995, whichever is later, that they may elect membership in the plan’s Defined Benefit Program at any time while employed.

This bill would shorten the above-described timeframe for notifying those employees to within 10 working days of the date of hire.

(5) Existing law establishes the circumstances in which a member who is eligible and applies for a disability allowance or retirement may apply to receive a service retirement allowance pending the determination of their application for disability. Under those provisions, a member who applies for service retirement in these circumstances does not receive service credit for each day of accumulated or unused leave of absence for illness or injury or for education, as specified.

This bill would also provide that a member who applies for retirement under those provisions shall not receive an additional 2 years of service credit granted in specified circumstances.

Existing law requires the retirement board to determine a date based on when the system has the capacity to implement specified changes to the above provisions. Existing law further requires the board to post that date on its website no later than January 1, 2026.

This bill would delete the above-described language.

(6) Existing law provides that a service retirement allowance becomes effective upon any date designated by the member, provided all of specified conditions are met. This includes a requirement that the member file an application for service retirement on a form provided by STRS, executed no earlier than 6 months before the effective date of the member’s retirement allowance.

This bill would also require the application for service retirement allowance to be received by STRS within 30 days after the date of the member’s signature and, if applicable, the spouse’s or registered domestic partner’s signature.

Existing law permits a member who files an application for service retirement to change or cancel their retirement application if certain conditions are met. Existing law requires that the form provided by STRS be received by the system no later than 30 days from the date the member’s initial benefit payment for the member’s most recent retirement under the Defined Benefit Program is paid by the system.

This bill would also require that the form be received by STRS within 30 days after the date of the member’s signature and, if applicable, the spouse’s or registered domestic partner’s signature. The bill would additionally authorize a member to elect to change a retirement annuity from the defined Benefit Supplement Program to a lump-sum payment any time after retirement, subject to using a form provided by the system and meeting other specified requirements.

Existing law requires the retirement board to determine a date based on when the system has the capacity to implement specified changes to these provisions and to post the date on its website no later than January 1, 2026.

This bill would delete the above-described language.

(7) Existing law specifies the amount a member is to receive upon retirement for service following reinstatement, which is based on specified factors. Existing law also specifies circumstances in which a member who reinstates and performs other creditable service is entitled to a service retirement allowance. Existing law also specifies the amount a member is entitled to receive upon retirement for service following a prior disability retirement, as prescribed.

This bill would require benefits calculated pursuant to the above provisions to be modified by an option if elected pursuant to that law.

(8) Existing law authorizes the retirement board to declare an additional earnings credit to be applied to Defined Benefit Supplement accounts for a plan year, subject to certain considerations by the board. Existing law requires the board to specify, for any plan year for which it declares an additional earnings credit, the amount to be added to members’ accounts as a percentage increase. Existing law prohibits additional earnings credit from being added to the balance of credits transferred from a member’s Defined Benefit Supplement account to the Annuitant Reserve.

This bill would delete the above-described provision prohibiting additional earnings credit from being added to the balance of credits transferred.

(9) Existing law requires a member’s retirement benefit under the Defined Benefit Supplement Program to be an amount equal to the balance of credits in the member’s Defined Benefit Supplement account on the date the retirement benefit becomes payable. Existing law requires the retirement benefit to be a lump-sum payment or an annuity payable in monthly installments, or a combination thereof.

This bill would establish specified conditions if a member elects to change their retirement annuity from the Defined Benefit Supplement Program to a lump-sum payment, including providing for termination of payment of the annuity based on the balance of credits and making the election irrevocable.

(10) Existing law provides that benefits payable to participants or beneficiaries of STRS are subject to limits imposed by specified provisions of federal law and shall not exceed those limitations.

This bill, commencing July 1, 2027, for a STRS participant subject to the California Public Employees’ Pension Reform Act of 2013, would specify those limits for participants whose service is included in federal social security and those whose service is not subject to social security. The bill would make those provisions subject to annual changes in the consumer price index and other conditions. The bill, commencing July 1, 2027, would also redefine various terms applicable to STRS and would make other related changes to those provisions.

(11) Existing law, the Public Employees’ Retirement Law, creates the Public Employees’ Retirement System (PERS), which is administered by the Board of Administration of the Public Employees’ Retirement System. PERS provides defined benefits to its members based on their final compensation, credited service, and age at retirement, subject to certain variations. Existing law establishes the Public Employees’ Retirement Fund, which is a trust fund that is appropriated continuously for specified purposes, into which certain moneys are deposited, including employee contributions.

Existing law authorizes a member of PERS to elect to receive service credit for certain public service outside the system, including time served employed under specified governmental fellowship programs or as a volunteer in the Peace Corps or AmeriCorps, by making specified contributions to the system.

This bill would also authorize a member to receive service credit for public service service, not to exceed one year, as a fellow with the California Council on Science and Technology, subject to making the required contributions for that service.

Existing law, for purposes of PERS benefits, defines “state safety member” in specified provisions to include officers and employees of certain state departments in listed employment classifications, identified by classification code.

This bill would revise those definitions to include officers and employees of the California Correctional Health Care Services in listed classifications. Among other changes, the bill would remove obsolete employment classification references and would update classification terms and codes.

(12) Existing law, the County Employees Retirement Law of 1937, authorizes counties to establish retirement systems pursuant to its provisions in order to provide pension benefits to county, city, and district employees and their beneficiaries. Existing law sets forth the membership composition for boards of retirement and boards of investment, as specified. Existing law requires specified members of the retirement board to be active members of the association elected by it.

This bill would revise the above provisions to require those board members to be elected by those active members. The bill would also redefine “active member” to specify that it refers to a member in county service, as otherwise defined, and would make related changes to other definitions under that law.

Existing law, for the County of Los Angeles, establishes certain legal obligations of the retirement system to its members and their beneficiaries. Existing law specifies that, for purposes of payments into or out of the retirement fund for adjustment of errors or omissions, the period of limitation of actions is 3 years. Existing law also establishes a 10-year period of limitation for cases in which payment is erroneous because of the death of the retired member or beneficiary or because of remarriage or due to fraudulent reports of compensation, as specified.

This bill would establish similar obligations applicable for counties other than Los Angeles. The bill would specify that in cases in which payment is erroneous because of the death of the retired member or beneficiary or because of the remarriage of the beneficiary, the period of limitation of actions shall be 10 years. The bill would also provide a 10-year limitation period for cases in which payment has been made as a result of fraudulent reports, as specified. The bill would make various other related and conforming changes to these retirement provisions.

(13) By increasing the contributions to continuously appropriated retirement funds, the bill would make an appropriation.

The people of the State of California do enact as follows:

SECTION 1.

Section 22164.5 of the Education Code is amended to read:

22164.5.

(a) “Retired member activities” means one or more activities identified in subdivision (b), (c), or (d) of Section 22119.5 or subdivision (b), (c), or (d) of Section 26113 within the California public school system and performed by a member retired for service under this part as one of the following:

(1) An employee of an employer.

(2) An employee of a third party, except as specified in subdivision (b).

(3) An independent contractor.

(b) The activities of an employee of a third party shall not be included in the definition of “retired member activities” if all of the following conditions apply:

(1) The employee performs an assignment of 24 months or less.

(2) The third-party employer does not participate in a California public pension system.

(3) The activities performed by the individual are not normally performed by employees of an employer, as defined in Section 22131.

(c) This section shall become inoperative on July 1, 2027, and, as of January 1, 2028, is repealed.

SEC. 2.

Section 22164.5 is added to the Education Code, to read:

22164.5.

(a) “Retired member activities” means all service performed within the California public school system by a member retired for service under this part when the member is employed as one of the following:

(1) An employee of an employer.

(2) An employee of a third party, except as specified in subdivision (b).

(3) An independent contractor.

(b) Service performed by an employee of a third party shall not be included in the definition of “retired member activities” if all of the following conditions apply:

(1) The employee performs an assignment of 24 months or less.

(2) The third-party employer does not participate in a California public pension system.

(3) The activities performed by the individual are not normally performed by employees of an employer, as defined in Section 22131.

(c) This section shall become operative on July 1, 2027.

SEC. 3.

Section 22170.5 of the Education Code is amended to read:

22170.5.

(a) “Sick leave days” means the number of days of accumulated and unused leave of absence for illness or injury granted by each employer.

(b) “Basic sick leave day” means the days of paid leave of absence due to illness or injury granted by each employer that are not excess sick leave days.

(c) “Excess sick leave days” means the day or total number of days of paid leave of absence due to illness or injury granted by each employer in excess of 12 days per school year.

(d) When determining the number of days pursuant to this section, including for those standards identified in Section 22138.5, one day shall be equivalent to the number of hours of creditable service performed in a day in that position on a full-time basis but shall be no less than six hours.

SEC. 4.

Section 22250 of the Education Code is amended to read:

22250.

The board and its officers and employees of the system shall discharge their duties with respect to the system and the plan solely in the interest of the members and beneficiaries of the Defined Benefit Program as well as the participants and beneficiaries of the Cash Balance Benefit Program as follows:

(a) For the exclusive purpose of the following:

(1) Providing benefits to members and beneficiaries of the Defined Benefit Program as well as the participants and beneficiaries of the Cash Balance Benefit Program.

(2) Defraying reasonable expenses of administering the plan.

(b) With the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with those matters would use in the conduct of an enterprise of a like character and with like aims.

(c) By diversifying the investments of the plan so as to minimize the risk of loss and to maximize the rate of return unless under the circumstances it is clearly not prudent to do so.

(d) In accordance with the documents and instruments governing the plan and the system insofar as those documents and instruments are consistent with this part and Part 14 (commencing with Section 26000).

SEC. 5.

Section 22455.5 of the Education Code is amended to read:

22455.5.

(a) The Legislature finds and declares that the federal Omnibus Budget Reconciliation Act of 1990 (P.L. 101-508) requires all public employers to provide their employees with either social security coverage or membership in a qualified retirement plan.

(b) Employers shall make available criteria for membership, including optional membership, in a timely manner to all persons employed to perform creditable service subject to coverage by the Defined Benefit Program, and shall inform part-time and substitute employees, within 10 working days of the date of hire, or by March 1, 1995, whichever is later, that they may elect membership in the plan’s Defined Benefit Program at any time while employed. Written acknowledgment by the employee shall be maintained in employer files on a form provided by this system.

(c) Employers shall be liable to the plan for employee and employer contributions and interest with respect to the Defined Benefit Program from the date of hire, or March 1, 1995, whichever is later, in addition to system administrative and audit costs, if an audit or a member’s complaint reveals noncompliance. However, no employer shall be liable for employee contributions for service performed prior to January 1, 1995.

SEC. 6.

Section 24201.5 of the Education Code is amended to read:

24201.5.

(a) A member who is eligible and applies for a disability allowance or retirement pursuant to Section 24001 or 24101 may apply to receive a service retirement allowance pending the determination of their application for disability, subject to all of the following:

(1) The member is eligible to retire for service under Section 24201 or 24203.

(2) The member submits the application on a form provided by the system, subject to all of the following:

(A) The application is executed no earlier than the date the application for disability benefits is executed and no earlier than six months before the effective date of the retirement allowance.

(B) The effective date is no earlier than the first day of the month in which the application for disability benefits is received by the system, unless the application for disability benefits is denied or canceled and the member has indicated an earlier service retirement date on the application to use if denied or canceled. If the application for disability benefits is denied or canceled, the service retirement date of a member who submits an application for retirement pursuant to this section shall be no earlier than 270 calendar days prior to when the application for service retirement is received by the system.

(C) The effective date is later than the last day the member earned creditable compensation pursuant to Section 22119.2 or 22119.3.

(D) The effective date is no earlier than one year following the date on which a retirement allowance was terminated pursuant to Section 24208, unless the application for disability benefits is denied or canceled and the member has indicated an earlier service retirement date on the application to use if denied or canceled. If the application for disability benefits is denied or canceled, the service retirement date is no earlier than one day after the date on which a retirement allowance was terminated pursuant to Section 24208, provided that the retirement allowance is terminated no earlier than 270 calendar days prior to when the application for service retirement is received by the system.

(E) The effective date is no earlier than one year following the date on which a retirement allowance was terminated pursuant to subdivision (a) of Section 24117.

(3) The effective date of the service retirement allowance can be no earlier than the date upon and continuously after which the member is determined to the satisfaction of the board to have been mentally incompetent.

(4) A member who applies for service retirement under this section is not eligible to receive a lump-sum payment and an actuarially reduced monthly allowance pursuant to Section 24221.

(5) A member who applies for service retirement under this section is not eligible to receive an allowance calculated pursuant to Section 24205.

(6) A member who applies for service retirement under this section and elects to receive their retirement benefit pursuant to Section 25009 as a lump-sum payment is not eligible to elect a disability benefit pursuant to Section 25016 or 25018.1.

(7) (A) Except as described in subparagraph (B), a member who applies for service retirement under this section shall not receive service credit for each day of accumulated and unused leave of absence for illness or injury or for education pursuant to Section 22717 or 22717.5 or service credit granted pursuant to Section 22714.

(B) If the application for disability is denied or canceled, the member’s service retirement allowance shall be adjusted to the effective date of the service retirement to include service credited pursuant to Section 22714, 22717, or 22717.5.

(8) If the application for disability is denied or canceled, a member who applies for a service retirement allowance under this section is subject to all of the following:

(A) Unless otherwise provided in this part, a member who, on their application for service retirement, elects an option pursuant to Section 24300.1 or 24307 may not change or revoke that option.

(B) If the member receives a modified service retirement allowance based on the election of an option pursuant to Section 24300.1 or 24307, that modified service retirement allowance shall continue in effect and unchanged.

(C) If the member did not elect an option pursuant to Section 24300.1 or 24307 and receives an unmodified service retirement allowance, that unmodified service retirement allowance shall continue in effect and unchanged.

(b) A member who applies for service retirement under this section may change or cancel their service retirement application pursuant to Section 24204, or may terminate their service retirement allowance pursuant to Section 24208.

(c) A member may not cancel their application for disability prior to a determination of that application unless they submit a written request to the system. If a member elects to cancel their service retirement application or elects to terminate their service retirement allowance as described in subdivision (b), that election shall not cancel the application for disability.

(d) (1) Subparagraph (C) of paragraph (1) of subdivision (a) of Section 24001 and paragraph (3) of subdivision (a) of Section 24101 shall not apply to a member who cancels an application for service retirement pursuant to Section 24204 or who terminates a service retirement allowance pursuant to Section 24208, if all of the following apply:

(A) The member earned at least one year of credited service subsequent to the most recent terminated service retirement allowance.

(B) The member’s application for disability under this section is pending determination by the board.

(2) If the member’s application for disability under this section is denied or canceled, subparagraph (C) of paragraph (1) of subdivision (a) of Section 24001 and paragraph (3) of subdivision (a) of Section 24101 shall apply if the member submits a new application for disability.

(e) (1) If the board approves the application for disability, and notwithstanding subdivision (f) of Section 24204, the board shall cancel the member’s application for service retirement and shall authorize payment of a disability allowance or disability retirement.

(2) If the board approves the application for disability and the member has received service retirement allowance payments under this part, the effective date for the disability allowance or disability retirement shall be the same as the effective date of the service retirement allowance.

(f) If a member who applies for service retirement under this section dies prior to a determination by the board on the application for disability, the member shall be considered retired for service at the time of death, and any subsequent benefits shall be paid accordingly.

(g) If a member who applies for service retirement under this section dies after the board has approved the member’s application for disability, the member shall be considered a disabled member, or retired for disability, at the time of death, and any subsequent benefits shall be paid accordingly, even if the member died prior to receiving notification of the approval of their application for disability.

(h) If the member changes or cancels their service retirement application or terminates their service retirement allowance as described in subdivision (b), the system shall make appropriate adjustments to the applicable service retirement allowance, disability allowance, or disability retirement allowance, retroactive to the effective date of the disability allowance or disability retirement allowance. Subdivision (a) of Section 24617 shall not apply.

(i) The system may recover a service retirement allowance overpayment made to a member by deducting that overpayment from any subsequent disability benefit payable to the member.

(j) Nothing in this section shall be construed to allow a member or beneficiary to receive more than one type of retirement or disability allowance for the same period of time.

SEC. 7.

Section 24204 of the Education Code is amended to read:

24204.

(a) A service retirement allowance under this part shall become effective upon any date designated by the member, provided all of the following conditions are met:

(1) An application for service retirement allowance is filed on a form provided by the system, which is executed no earlier than six months before the effective date of retirement allowance and received by the system within 30 days after the date of the member’s signature and, if applicable, the spouse’s or registered domestic partner’s signature.

(2) The effective date of a member who files an application for retirement pursuant to Section 24201 is no earlier than 270 calendar days prior to when the application for service retirement is received by the system.

(3) The effective date is later than the last day the member earned creditable compensation pursuant to Section 22119.2 or 22119.3.

(4) The effective date is no earlier than one day after the date on which the retirement allowance was terminated under Section 24208.

(5) The effective date is no earlier than one year following the date on which the retirement allowance was terminated under subdivision (a) of Section 24117.

(6) The effective date is no earlier than the date upon and continuously after which the member is determined to the satisfaction of the board to have been mentally incompetent.

(7) The effective date is no earlier than one day after the date upon which the member completes payment of a service credit purchase pursuant to Section 22801, 22820, or 22826, or payment of a redeposit of contributions pursuant to Section 23200, except as provided in Section 22801 or 22829.

(b) A member who files an application for service retirement may change or cancel their retirement application if all of the following are met:

(1) The form provided by the system is received by the system no later than 30 days from the date the member’s initial benefit payment for the member’s most recent retirement under the Defined Benefit Program is paid by the system and received by the system within 30 days after the date of the member’s signature and, if applicable, the spouse’s or registered domestic partner’s signature.

(2) The member returns the total gross distribution amount of all payments for any canceled benefit, including a lump-sum payment being changed to an annuity, to the system no later than 45 days from the date of the member’s initial benefit payment. The member shall be liable for any adverse tax consequences that may result from these actions.

(c) A member may elect to change a retirement annuity from the Defined Benefit Supplement Program to a lump-sum payment any time after retirement subject to Section 25009 using a form provided by the system. The form shall be received by the system within 30 days after the date of the member’s signature and, if applicable, the spouse’s or registered domestic partner’s signature.

(d) Nothing in this section shall be construed to allow a member to receive more than one type of retirement or disability allowance for the same period of time by virtue of the member’s own membership.

SEC. 8.

Section 24209 of the Education Code is amended to read:

24209.

(a) Upon retirement for service following reinstatement, the member shall receive a service retirement allowance equal to the sum of both of the following:

(1) An amount equal to the monthly allowance the member was eligible to receive immediately preceding the most recent reinstatement, exclusive of any amounts payable pursuant to Section 22714 or 22715, increased by the improvement factor that would have been applied to the allowance if the member had not reinstated.

(2) An amount calculated pursuant to Section 24202, 24202.5, 24202.6, 24203, 24203.5, or 24206 based on credited service accrued, including any service granted pursuant to Section 22717 or 22717.5, subsequent to the most recent reinstatement, the member’s age on the last day of the month in which the retirement allowance begins to accrue, and final compensation.

(b) If the total amount of credited service accrued, other than that accrued pursuant to Sections 22714, 22715, 22717, 22717.5, and 22826, except as provided in subdivision (c) of Section 22121, is equal to or greater than 30 years, the amounts identified in paragraphs (1), for members who initially retired on or after January 1, 1999, and (2) of subdivision (a) shall be calculated pursuant to Section 24203.5.

(c) If the total amount of credited service accrued, other than that accrued pursuant to Sections 22714, 22715, 22717, 22717.5, and 22826, except as provided in subdivision (c) of Section 22121, is equal to or greater than 30 years, upon retirement for service following reinstatement, a member who retired pursuant to Section 24213, and received the terminated disability allowance for the prior retirement, shall receive a service retirement allowance equal to the sum of the following:

(1) An amount based on the credited service accrued, including any service granted pursuant to Section 22717 or 22717.5, prior to the effective date of the disability allowance, the member’s age at the prior retirement increased by the factor provided in Section 24203.5, and projected final compensation.

(2) An amount calculated pursuant to Section 24202, 24202.5, 24202.6, 24203.5, or 24206 based on credited service accrued, including any service granted pursuant to Section 22717 or 22717.5, subsequent to the reinstatement, the member’s age on the last day of the month in which the retirement allowance begins to accrue, and final compensation using compensation earnable, or projected final compensation, or a combination of both.

(d) Benefits calculated pursuant to this section shall not take into consideration the benefit comparison described in Section 24203.8.

(e) Benefits calculated pursuant to this section shall be modified by an option if elected pursuant to this part.

SEC. 9.

Section 24209.3 of the Education Code is amended to read:

24209.3.

(a) Notwithstanding subdivision (a) of Section 24209, and exclusive of any amounts payable during the prior retirement for service pursuant to Section 22714, or 22715:

(1) A member who retired, other than pursuant to Section 24210, 24211, 24212, or 24213, and who reinstates and performs creditable service, as defined in Section 22119.5, after the most recent reinstatement, in an amount equal to two or more years of credited service, shall, upon retirement for service on or after the effective date of this section, receive a service retirement allowance equal to the sum of the following:

(A) An amount calculated pursuant to this chapter based on credited service accrued, including any service granted pursuant to Section 22717 or 22717.5, prior to the most recent reinstatement, using the member’s age at the subsequent service retirement, from which age shall be deducted the total time during which the member was retired for service, and final compensation.

(B) An amount calculated pursuant to this chapter based on credited service accrued, including any service granted pursuant to Section 22717 or 22717.5, subsequent to the most recent reinstatement, using the member’s age on the last day of the month in which the retirement allowance begins to accrue, and final compensation.

(2) A member who retired pursuant to Section 24210 and who reinstates and performs creditable service, as defined in Section 22119.5, after the most recent reinstatement, in an amount equal to two or more years of credited service, shall, upon retirement for service on or after the effective date of this section, receive a service retirement allowance equal to the sum of the following:

(A) An amount calculated pursuant to this chapter based on credited service accrued, including any service granted pursuant to Section 22717 or 22717.5, prior to the effective date of the disability retirement, using the member’s age at the subsequent service retirement, from which age shall be deducted the total time during which the member was retired for service, and indexed final compensation to the effective date of the initial service retirement.

(B) An amount calculated pursuant to this chapter based on the credited service accrued, including any service granted pursuant to Section 22717 or 22717.5, after termination of the disability retirement, excluding credited service accrued or granted subsequent to the most recent reinstatement, using the member’s age at the subsequent service retirement, from which age shall be deducted the total time during which the member was retired for service, and final compensation.

(C) An amount calculated pursuant to this chapter based on credited service accrued, including any service granted pursuant to Section 22717 or 22717.5, subsequent to the most recent reinstatement, using the member’s age on the last day of the month in which the retirement allowance begins to accrue, and final compensation.

(3) A member who retired pursuant to Section 24211 and who reinstates and performs creditable service, as defined in Section 22119.5, after the most recent reinstatement, in an amount equal to two or more years of credited service, shall, upon retirement for service on or after the effective date of this section, receive a service retirement allowance equal to the sum of the following:

(A) The greater of (i) the disability allowance the member was eligible to receive immediately prior to termination of that allowance, excluding the children’s portion, or (ii) an amount calculated pursuant to this chapter based on credited service accrued prior to the effective date of the disability allowance, excluding credited service accrued or granted pursuant to Section 22717 or 22717.5 or Chapter 14 (commencing with Section 22800) or Chapter 14.2 (commencing with Section 22820) or Chapter 19 (commencing with Section 23200), using the member’s age at the subsequent service retirement, from which age shall be deducted the total time during which the member was retired for service, and final compensation using compensation earnable, or projected final compensation earnable, or a combination of both.

(B) An amount equal to either of the following:

(i) For a member who was receiving a benefit pursuant to subdivision (a) of Section 24211, an amount calculated pursuant to this chapter based on credited service accrued at the time of the retirement pursuant to Section 24211, excluding credited service accrued or granted prior to the effective date of the disability allowance or pursuant to Section 22717 or 22717.5 or Chapter 14 (commencing with Section 22800) or Chapter 14.2 (commencing with Section 22820) or Chapter 19 (commencing with Section 23200), the member’s age at the subsequent service retirement, from which age shall be deducted the total time during which the member was retired for service, and final compensation using compensation earnable, or projected final compensation, or a combination of both.

(ii) For a member who was receiving a benefit pursuant to subdivision (b) of Section 24211, an amount calculated pursuant to this chapter based on projected service at the time of the retirement pursuant to Section 24211, excluding credited service accrued or granted prior to the effective date of the disability allowance or pursuant to Section 22717 or 22717.5 or Chapter 14 (commencing with Section 22800) or Chapter 14.2 (commencing with Section 22820) or Chapter 19 (commencing with Section 23200), the member’s age at the subsequent service retirement, from which age shall be deducted the total time during which the member was retired for service, and final compensation using compensation earnable, or projected final compensation, or a combination of both.

(C) An amount based on any credited service accrued or granted pursuant to Section 22717 or 22717.5 or Chapter 14 (commencing with Section 22800) or Chapter 14.2 (commencing with Section 22820) or Chapter 19 (commencing with Section 23200), at the time of the retirement pursuant to Section 24211, using the member’s age at the subsequent service retirement, from which age shall be deducted the total time during which the member was retired for service, and final compensation using compensation earnable, or projected final compensation, or a combination of both.

(D) An amount calculated pursuant to this chapter based on credited service accrued subsequent to the most recent reinstatement, including credited service accrued or granted pursuant to Section 22714, 22715, 22717, or 22717.5 or Chapter 14 (commencing with Section 22800) or Chapter 14.2 (commencing with Section 22820) or Chapter 19 (commencing with Section 23200), using the member’s age on the last day of the month in which the retirement allowance begins to accrue, and final compensation using compensation earnable, or projected final compensation, or a combination of both.

(4) A member who retired pursuant to Section 24212 or 24213 and who reinstates and performs creditable service, as defined in Section 22119.5, after the most recent reinstatement, in an amount equal to two or more years of credited service, shall, upon retirement for service on or after the effective date of this section, receive a service retirement allowance equal to the sum of the following:

(A) An amount calculated pursuant to this chapter based on the member’s projected service at the time of the retirement pursuant to Section 24212 or 24213, including credited service accrued or granted pursuant to Section 22717 or 22717.5 or Chapter 14 (commencing with Section 22800) or Chapter 14.2 (commencing with Section 22820) or Chapter 19 (commencing with Section 23200), using the member’s age at the subsequent service retirement, from which age shall be deducted the total time during which the member was retired for service, and final compensation using compensation earnable, or projected final compensation, or a combination of both.

(B) An amount calculated pursuant to this chapter based on credited service accrued subsequent to the most recent reinstatement, including credited service accrued or granted pursuant to Section 22714, 22715, 22717, or 22717.5 or Chapter 14 (commencing with Section 22800) or Chapter 14.2 (commencing with Section 22820) or Chapter 19 (commencing with Section 23200), using the member’s age on the last day of the month in which the retirement allowance begins to accrue, and final compensation using compensation earnable, or projected final compensation, or a combination of both.

(b) If the total amount of credited service, other than projected service, or service that accrued or was granted pursuant to Sections 22714, 22715, 22717, 22717.5, and 22826, except as provided in subdivision (c) of Section 22121, is equal to or greater than the number of years required to be eligible for an increased allowance pursuant to this chapter or Section 22134.5, the amounts identified in this section shall be calculated pursuant to the section authorizing the increased benefit.

(c) For members receiving an allowance pursuant to Section 24410.5 or 24410.6, the amount payable pursuant to this section shall not be less than the amount payable to the member as of the effective date of reinstatement.

(d) The amount payable pursuant to this section shall not be less than the amount that would be payable to the member pursuant to Section 24209.

(e) For purposes of determining an allowance increase pursuant to Sections 24415 and 24417, the calendar year of retirement shall be the year of the subsequent retirement if the final compensation used to calculate the allowance pursuant to this section is higher than the final compensation used to calculate the allowance for the prior retirement.

(f) The allowance paid pursuant to this section to a member receiving a lump-sum payment pursuant to Section 24221 shall be actuarially reduced to reflect that lump-sum payment.

(g) Benefits calculated pursuant to this section shall not take into consideration the benefit comparison described in Section 24203.8.

(h) Benefits calculated pursuant to this section shall be modified by an option if elected pursuant to this part.

SEC. 10.

Section 24210 of the Education Code is amended to read:

24210.

(a) Upon retirement for service following a prior disability retirement granted pursuant to Chapter 26 (commencing with Section 24100) that was terminated, the member shall receive a service retirement allowance calculated pursuant to Section 24202, 24202.5, 24202.6, 24203, 24203.5, 24203.6, or 24206 and equal to the sum of both of the following:

(1) An amount based on credited service accrued, including any service granted pursuant to Section 22717 or 22717.5, prior to the effective date of the disability retirement, the member’s age on the last day of the month in which the retirement allowance begins to accrue, and indexed final compensation to the effective date of the service retirement.

(2) An amount based on the credited service accrued, including any service granted pursuant to Section 22717 or 22717.5, after termination of the disability retirement, the member’s age on the last day of the month in which the retirement allowance begins to accrue, and final compensation.

(b) Benefits calculated pursuant to this section shall be modified by an option if elected pursuant to this part.

SEC. 11.

Section 25006 of the Education Code is amended to read:

25006.

(a) The board may declare an additional earnings credit to be applied to Defined Benefit Supplement accounts for a plan year. Prior to declaring an additional earnings credit, the board shall consider all of the following:

(1) Whether the plan’s investment earnings with respect to the Defined Benefit Supplement Program for the plan year exceed the amount required to meet the liabilities identified in paragraphs (2), (3), and (4).

(2) The amount required for the plan year to credit interest on members’ nominal accounts at the minimum interest rate.

(3) The amount of the plan’s administrative expenses with respect to the Defined Benefit Supplement Program for the plan year.

(4) The sufficiency of the Gain and Loss Reserve and whether any additions must be made to that reserve.

(b) For any plan year that the board declares an additional earnings credit, the board shall specify the amount to be added to members’ accounts as a percentage increase. The additional earnings credit shall be applied to the balance of credits in each member’s nominal account as of the last day of the plan year and shall be applied as of the date specified by the board.

(c) The declaration of an additional earnings credit shall be made as a plan amendment adopted by the board with respect to the Defined Benefit Supplement Program upon recommendation of the actuary based on the actuarial valuation undertaken following the plan year pursuant to Section 22311.5, but no later than June 30 following the end of the plan year.

SEC. 12.

Section 25009 of the Education Code is amended to read:

25009.

(a) A member’s retirement benefit under the Defined Benefit Supplement Program shall be an amount equal to the balance of credits in the member’s Defined Benefit Supplement account on the date the retirement benefit becomes payable.

(b) A retirement benefit shall be a lump-sum payment, or an annuity payable in monthly installments, or a combination of both a lump-sum payment and an annuity, as elected by the member on the application for a retirement benefit. Any retirement benefit paid as an annuity under this chapter shall be subject to Section 25011 or 25011.1.

(c) If a member elects to change their retirement annuity from the Defined Benefit Supplement Program to a lump-sum payment pursuant to subdivision (c) of Section 24204, all of the following shall apply:

(1) Payment of the annuity based on the balance of credits that was transferred from the member’s Defined Benefit Supplement account to the Annuitant Reserve shall terminate.

(2) The member’s Defined Benefit Supplement account shall be credited with the balance of credits remaining in the member’s Annuitant Reserve account as of the date the annuity is terminated, and the Annuitant Reserve shall be reduced by the amount credited to the member’s account.

(3) The lump-sum payment based on the remaining balance of credits in the member’s Defined Benefit Supplement account at the time of the lump-sum payment shall become payable pursuant to this section, and no additional interest shall be issued.

(4) The election is irrevocable.

(d) Upon distribution of the entire retirement benefit in a lump-sum payment, no other benefit shall be payable to the member or the member’s beneficiary under the Defined Benefit Supplement Program.

(e) A member may not apply a lump-sum payment made to the member pursuant to this section for any of the following purposes:

(1) Purchasing service credit pursuant to Chapter 14 (commencing with Section 22800), Chapter 14.2 (commencing with Section 22820), or Chapter 14.5 (commencing with Section 22850).

(2) Redepositing previously refunded retirement contributions pursuant to Chapter 19 (commencing with Section 23200).

SEC. 13.

Section 26004 of the Education Code is amended to read:

26004.

Notwithstanding any other provision of law:

(a) The benefits payable to any participant or beneficiary under this part shall be subject to the limitations imposed by Section 415 of Title 26 of the United States Code.

(b) The amount of compensation that is taken into account in computing benefits under this part for a plan year shall not exceed the annual compensation limit applicable to that plan year in accordance with Section 401(a)(17) of Title 26 of the United States Code as that section read on the effective date of this section and as that section may be amended after that date. The determination of compensation for a 12-month period shall be subject to the annual compensation limit in effect for the calendar year in which the 12-month period begins. In a determination of average compensation over more than one 12-month period, the amount of compensation taken into account for each 12-month period shall be subject to the respective annual compensation limit applicable to that period.

(c) Distributions from the plan under this part shall be made in accordance with Section 401(a)(9) of Title 26 of the United States Code, including the incidental death benefit requirements of Section 401(a)(9)(G) and the regulations thereunder. The required beginning date of benefit payments that represent the entire interest of the participant shall be as follows:

(1) In the case of a lump-sum distribution of a retirement benefit, disability benefit, or termination benefit, the lump-sum payment shall be made not later than April 1 of the calendar year following the later of (A) the calendar year in which the participant attains the age at which the Internal Revenue Code of 1986 requires a distribution of benefits or (B) the calendar year in which the participant terminates all employment subject to coverage by the plan.

(2) In the case of a retirement benefit or disability benefit that is to be paid in the form of an annuity, payment of the annuity shall begin not later than April 1 of the calendar year following the later of (A) the calendar year in which the participant attains the age at which the Internal Revenue Code of 1986 requires a distribution of benefits or (B) the calendar year in which the participant terminates employment in all positions subject to coverage by the plan, with the annuity to continue over the life of the participant or the life of the participant and the participant’s option beneficiary, or over a period not to exceed the life expectancy of the participant or the life expectancy of the participant and the participant’s option beneficiary.

(3) In the case of a death benefit, distributions shall commence as follows:

(A) The normal form of the benefit or other lump-sum distribution shall be paid in accordance with Section 401(a)(9) of Title 26 of the United States Code and the regulations thereunder.

(B) Annuity payments shall commence as follows:

(i) If the spouse is the sole beneficiary, not later than December 31 of the later of the calendar year in which the participant would have attained the age at which the Internal Revenue Code of 1986 requires a distribution of benefits or the calendar year following the calendar year of the participant’s death.

(ii) If the spouse is not the sole beneficiary, not later than December 31 of the calendar year following the calendar year of the participant’s death.

(d) If a person becomes entitled to a distribution from the plan under this part that constitutes an eligible rollover distribution within the meaning of Section 401(a)(31) of Title 26 of the United States Code, the person may elect under terms and conditions established by the board to have the distribution or a portion thereof paid directly to a plan that constitutes an eligible retirement plan within the meaning of Section 401(a)(31), as specified by that person. Upon the exercise of the election by a person with respect to a distribution or a portion thereof, the distribution from the plan of the amount so designated, once distributable under the terms of the plan, shall be made in the form of a direct rollover to the eligible retirement plan so specified.

(e) The amount of any benefit from the plan under this part that is determined on the basis of actuarial assumptions shall be based on actuarial assumptions adopted by the board pursuant to Section 26213 as a plan amendment with respect to the Cash Balance Benefit Program and those assumptions shall preclude employer discretion and comply with Section 401(a)(25) of Title 26 of the United States Code.

(f) This section shall become inoperative on July 1, 2027, and, as of January 1, 2028, is repealed.

SEC. 14.

Section 26004 is added to the Education Code, to read:

26004.

Notwithstanding any other provision of law:

(a) The benefits payable to any participant or beneficiary under this part shall be subject to the limitations imposed by Section 415 of Title 26 of the United States Code.

(b) The amount of compensation that is taken into account in computing benefits under this part for a plan year shall not exceed the following limitations:

(1) The annual compensation limit applicable to that plan year in accordance with Section 401(a)(17) of Title 26 of the United States Code as that section read on the effective date of this section and as that section may be amended after that date. The determination of compensation for a 12-month period shall be subject to the annual compensation limit in effect for the calendar year in which the 12-month period begins. In a determination of average compensation over more than one 12-month period, the amount of compensation taken into account for each 12-month period shall be subject to the respective annual compensation limit applicable to that period.

(2) For a participant subject to the California Public Employees’ Pension Reform Act of 2013:

(A) (i) One hundred twenty percent of the “contribution and benefit base,” as determined under Section 430(b) of the Social Security Act (42 U.S.C. Sec. 430(b)), on January 1, 2013, for a participant whose service is not included in the federal system.

(ii) One hundred percent of the “contribution and benefit base,” as determined under Section 430(b) of the Social Security Act (42 U.S.C. Sec. 430(b)), on January 1, 2013, for a participant whose service is included in the federal system pursuant to any changes in state or federal law enacted on or after January 1, 2013.

(B) The system shall adjust the limit based on the annual changes to the Consumer Price Index for All Urban Consumers: U.S. City Average, calculated by dividing the Consumer Price Index for All Urban Consumers: U.S. City Average for the month of February in the fiscal year preceding the adjustment by the Consumer Price Index for All Urban Consumers: U.S. City Average for the month of February of the previous year rounded to the nearest thousandth. Notwithstanding paragraph (1) of subdivision (d) of Section 7522.10 of the Government Code, the adjustment shall be effective annually on July 1, beginning July 1, 2014.

(C) The Legislature reserves the right to modify the requirements of this paragraph with regard to all participants subject to this subdivision, except that the Legislature shall not modify these provisions in a manner that would result in a decrease in benefits accrued before the operative date of the modification.

(c) Distributions from the plan under this part shall be made in accordance with Section 401(a)(9) of Title 26 of the United States Code, including the incidental death benefit requirements of Section 401(a)(9)(G) and the regulations thereunder. The required beginning date of benefit payments that represent the entire interest of the participant shall be as follows:

(1) In the case of a lump-sum distribution of a retirement benefit, disability benefit, or termination benefit, the lump-sum payment shall be made not later than April 1 of the calendar year following the later of (A) the calendar year in which the participant attains the age at which the Internal Revenue Code of 1986 requires a distribution of benefits or (B) the calendar year in which the participant terminates all employment subject to coverage by the plan.

(2) In the case of a retirement benefit or disability benefit that is to be paid in the form of an annuity, payment of the annuity shall begin not later than April 1 of the calendar year following the later of (A) the calendar year in which the participant attains the age at which the Internal Revenue Code of 1986 requires a distribution of benefits or (B) the calendar year in which the participant terminates employment in all positions subject to coverage by the plan, with the annuity to continue over the life of the participant or the life of the participant and the participant’s option beneficiary, or over a period not to exceed the life expectancy of the participant or the life expectancy of the participant and the participant’s option beneficiary.

(3) In the case of a death benefit, distributions shall commence as follows:

(A) The normal form of the benefit or other lump-sum distribution shall be paid in accordance with Section 401(a)(9) of Title 26 of the United States Code and the regulations thereunder.

(B) Annuity payments shall commence as follows:

(i) If the spouse is the sole beneficiary, not later than December 31 of the later of the calendar year in which the participant would have attained the age at which the Internal Revenue Code of 1986 requires a distribution of benefits or the calendar year following the calendar year of the participant’s death.

(ii) If the spouse is not the sole beneficiary, not later than December 31 of the calendar year following the calendar year of the participant’s death.

(d) If a person becomes entitled to a distribution from the plan under this part that constitutes an eligible rollover distribution within the meaning of Section 401(a)(31) of Title 26 of the United States Code, the person may elect under terms and conditions established by the board to have the distribution or a portion thereof paid directly to a plan that constitutes an eligible retirement plan within the meaning of Section 401(a)(31), as specified by that person. Upon the exercise of the election by a person with respect to a distribution or a portion thereof, the distribution from the plan of the amount so designated, once distributable under the terms of the plan, shall be made in the form of a direct rollover to the eligible retirement plan so specified.

(e) The amount of any benefit from the plan under this part that is determined on the basis of actuarial assumptions shall be based on actuarial assumptions adopted by the board pursuant to Section 26213 as a plan amendment with respect to the Cash Balance Benefit Program and those assumptions shall preclude employer discretion and comply with Section 401(a)(25) of Title 26 of the United States Code.

(f) This section shall become operative on July 1, 2027.

SEC. 15.

Section 26113 of the Education Code is amended to read:

26113.

(a) “Creditable service” means any of the activities described in subdivision (b) performed for any of the following employers:

(1) A prekindergarten through grade 12 employer in a position with certification qualifications authorized by the Commission on Teacher Credentialing pursuant to Section 44001.

(2) A community college employer by a faculty member, as defined in Section 87003, in an academic position, as defined in subdivision (b) of Section 87001, or by an educational administrator, as defined in subdivision (b) of Section 87002, subject to the appropriate minimum standards adopted by the Board of Governors of the California Community Colleges pursuant to Section 87356, or pursuant to a contract between a community college district and the United States Department of Defense to provide vocational training.

(3) A charter school employer under the provisions of an approved charter for the operation of a charter school for which the charter school is eligible to receive state apportionment.

(b) The types of activities are any of the following:

(1) The work of teachers, instructors, district interns, and academic employees employed in the instructional program for pupils, including special programs such as adult education, regional occupational programs, childcare centers, and prekindergarten programs pursuant to Section 22161.

(2) Education or vocational counseling, guidance, and placement services.

(3) The work of employees who plan courses of study to be used in California public schools, or research connected with the evaluation or efficiency of the instructional program.

(4) The selection, collection, preparation, classification, demonstration, or evaluation of instructional materials of any course of study for use in the development of the instructional program in California public schools, or other services related to California public school curriculum.

(5) The examination, selection, in-service training, mentoring, or assignment of teachers, principals, or other similar personnel involved in the instructional program.

(6) The work of nurses, physicians, speech therapists, psychologists, audiologists, and other California public school health professionals.

(7) Services as a California public school librarian.

(8) Activities connected with the enforcement of the laws relating to compulsory education, coordination of child welfare activities involving the school and the home, and the school adjustment of pupils.

(9) The work of employees who are responsible for the supervision of persons or administration of the duties described in this subdivision.

(c) “Creditable service” also means any of the activities described in subdivision (b) when they are performed for an employer by:

(1) Superintendents of California public schools, and presidents and chancellors of community college employers.

(2) Consulting teachers employed by an employer to participate in the California Peer Assistance and Review Program for Teachers pursuant to Article 4.5 (commencing with Section 44500) of Chapter 3 of Part 25 of Division 3 of Title 2.

(3) Audiometrists who hold a certificate of registration issued by the State Department of Health Care Services.

(d) “Creditable service” also means the performance of California public school activities related to, and an outgrowth of, the instructional and guidance program of the California public school when performed for the same employer for which the member is performing any of the activities described in subdivision (b) or (c).

(e) “Creditable service” also means trustee service as defined in Section 26144.5, if eligible pursuant to Section 26403.

(f) The board shall have final authority for determining creditable service to cover activities not already specified.

(g) This section shall become inoperative on July 1, 2027, and, as of January 1, 2028, is repealed.

SEC. 16.

Section 26113 is added to the Education Code, to read:

26113.

(a) “Creditable service” means service in a position subject to membership as defined in Section 22156.07.

(b) “Creditable service” also means trustee service as defined in Section 26144.5, if eligible pursuant to Section 26403.

(c) This section shall become operative on July 1, 2027.

SEC. 17.

Section 26135.7 of the Education Code is amended to read:

26135.7.

(a) “Retired participant activities” means one or more activities identified in subdivision (b), (c), or (d) of Section 22119.5 or (b), (c), or (d) of Section 26113 within the California public school system and performed by a participant retired for service under this part as one of the following:

(1) An employee of an employer.

(2) An employee of a third party, except as specified in subdivision (b).

(3) An independent contractor.

(b) The activities of an employee of a third party shall not be included in the definition of “retired participant activities” if all of the following conditions apply:

(1) The employee performs an assignment of 24 months or less.

(2) The third-party employer does not participate in a California public pension system.

(3) The activities performed by the individual are not normally performed by employees of an employer, as defined in Section 22131.

(c) This section shall become inoperative on July 1, 2027, and, as of January 1, 2028, is repealed.

SEC. 18.

Section 26135.7 is added to the Education Code, to read:

26135.7.

(a) “Retired participant activities” means all service performed within the California public school system by a participant retired for service under this part when the participant is employed as one of the following:

(1) An employee of an employer.

(2) An employee of a third party, except as specified in subdivision (b).

(3) An independent contractor.

(b) Service performed by an employee of a third party shall not be included in the definition of “retired participant activities” if all of the following conditions apply:

(1) The employee performs an assignment of 24 months or less.

(2) The third-party employer does not participate in a California public pension system.

(3) The activities performed by the individual are not normally performed by employees of an employer, as defined in Section 22131.

(c) This section shall become operative on July 1, 2027.

SEC. 19.

Section 26139 of the Education Code is amended to read:

26139.

(a) “Salary” means remuneration paid in cash by an employer to a participant for creditable service performed in that position subject to coverage under the Cash Balance Benefit Program. Salary shall include:

(1) Money paid in accordance with a publicly available written contractual agreement, including, but not limited to, a salary schedule, based on years of training and years of experience as specified in Section 45028 for creditable service performed.

(2) For participants not paid according to a salary schedule, money paid for creditable service performed in accordance with a publicly available written contractual agreement, including, but not limited to, a collective bargaining agreement or an employment agreement.

(3) Money paid for the participant’s absence from performance of creditable service as approved by an employer, except as provided in paragraph (5) of subdivision (b).

(4) Employee contributions picked up by an employer pursuant to Section 26502.

(5) Amounts deducted by an employer from the participant’s salary, including, but not limited to, deductions for participation in a deferred compensation plan; deductions for the purchase of an annuity contract, tax-deferred retirement plan, or other insurance program; and deductions for participation in a plan that meets the requirements of Section 125, 401(a), 401(k), 403(b), 457(b), or 457(f) of Title 26 of the United States Code.

(6) Money paid by an employer in addition to salary paid under paragraph (1) or (2) if paid to all employees in a class in the same dollar amount, the same percentage of salary, or the same percentage of the amount being distributed.

(7) Any other payments the board determines by plan amendment to be “salary.”

(b) “Salary” does not mean and shall not include:

(1) Money paid for service that is not creditable service.

(2) Money paid by an employer in addition to salary paid under paragraph (1) or (2) if not paid to all employees in a class in the same dollar amount, the same percentage of salary, or the same percentage of the amount being distributed.

(3) Fringe benefits provided by an employer.

(4) Expenses paid or reimbursed by an employer.

(5) Money paid in exchange for the relinquishment of unused accumulated leave.

(6) Severance pay, including lump-sum and installment payments, or money paid in excess of salary or wages to a participant as compensatory damages or as a compromise settlement.

(7) Payments, including, but not limited to, those for participation in a deferred compensation plan; to purchase an annuity contract, tax-deferred retirement program, or other insurance program; and for participation in a plan that meets the requirements of Section 125, 401(a), 401(k), 403(b), 457(b), or 457(f) of Title 26 of the United States Code that are purchased by an employer for a participant.

(8) Any payments determined by the system to have been made by an employer to enhance a participant’s benefits.

(9) Any other payments the board determines by plan amendment not to be “salary.”

(c) Any employer or person who knowingly or willfully reports salary in a manner inconsistent with the provisions of subdivisions subdivision (a) or (b) may be subject to prosecution for fraud, theft, or embezzlement in accordance with provisions of the Penal Code. The system may establish procedures to ensure that salary reported by an employer is in compliance with this section.

(d) For purposes of this section, remuneration shall be considered paid if distributed to any person in the same class of employees who meets the qualifications or requirements specified in a publicly available written contractual agreement, including, but not limited to, a collective bargaining agreement or an employment agreement, as a condition of receiving the remuneration.

(e) This section shall be deemed to have become operative on July 1, 1996.

(f) This section shall not apply to a participant subject to the California Public Employees’ Pension Reform Act of 2013.

(g) This section shall become inoperative on July 1, 2027, and, as of January 1, 2028, is repealed.

SEC. 20.

Section 26139 is added to the Education Code, to read:

26139.

(a) “Salary” means remuneration paid in cash by an employer to a participant who performs creditable service in a position subject to coverage under the Cash Balance Benefit Program. Salary shall include any compensation except that which is specified in subdivision (c) of Section 22119.3.

(b) Salary in any fiscal year shall not exceed the limits described in subdivision (b) of Section 26004.

(c) Any employer or person who knowingly or willfully reports salary in a manner inconsistent with the provisions of subdivisions subdivision (a) or (b) may be subject to prosecution for fraud, theft, or embezzlement in accordance with provisions of the Penal Code. The system may establish procedures to ensure that salary reported by an employer is in compliance with this section.

(d) This section shall become operative on July 1, 2027.

SEC. 21.

Section 26139.5 of the Education Code is amended to read:

26139.5.

(a) “Salary,” for participants subject to the California Public Employees’ Pension Reform Act of 2013, means remuneration paid each pay period in cash by an employer to a participant for creditable service performed in that position subject to coverage under the Cash Balance Benefit Program in accordance with a publicly available written contractual agreement, including, but not limited to, a salary schedule or employment agreement, based on years of training and years of experience as specified in Section 45028. Salary shall include:

(1) Money paid for the participant’s absence from performance of creditable service as approved by an employer, except as provided in paragraph (5) of subdivision (b).

(2) Employee contributions picked up by an employer pursuant to Section 26502.

(3) Amounts deducted by an employer from the participant’s salary, including, but not limited to, deductions for participation in a deferred compensation plan; deductions for the purchase of an annuity contract, tax-deferred retirement plan, or other insurance program; and deductions for participation in a plan that meets the requirements of Section 125, 401(a), 401(k), 403(b), 457(b), or 457(f) of Title 26 of the United States Code.

(4) Any other payments the board determines by plan amendment to be “salary.”

(b) “Salary” does not mean and shall not include:

(1) Money paid for service that is not creditable service.

(2) Money not paid each pay period in which creditable service is performed for that position.

(3) Fringe benefits provided by an employer.

(4) Expenses paid or reimbursed by an employer.

(5) Money paid in exchange for the relinquishment of unused accumulated leave.

(6) Severance pay, including lump-sum and installment payments, or money paid in excess of salary to a participant as compensatory damages or as a compromise settlement.

(7) Payments, including, but not limited to, those for participation in a deferred compensation plan; to purchase an annuity contract, tax-deferred retirement program, or other insurance program; and for participation in a plan that meets the requirements of Section 125, 401(a), 401(k), 403(b), 457(b), or 457(f) of Title 26 of the United States Code that are purchased by an employer for a participant.

(8) Any payments determined by the system to have been made by an employer to enhance a participant’s benefits under the plan.

(9) Money paid to the participant in lieu of benefits provided to the participant by the employer or paid directly by the employer to a third party other than the system for the benefit of the participant.

(10) Any one-time or ad hoc payments made to a participant.

(11) Any employer-provided allowance, reimbursement, or payment, including, but not limited to, one made for housing, vehicle, or uniform.

(12) Any bonus paid in addition to compensation described in subdivision (a).

(13) Any other payments the board determines by plan amendment not to be “salary.”

(c) (1) Salary in any fiscal year shall not exceed:

(A) One hundred twenty percent of the “contribution and benefit base,” as determined under Section 430(b) of the Social Security Act (42 U.S.C. Sec. 430(b)), on January 1, 2013, for a participant whose service is not included in the federal system.

(B) One hundred percent of the “contribution and benefit base,” as determined under Section 430(b) of the Social Security Act (42 U.S.C. Sec. 430(b)), on January 1, 2013, for a participant whose service is included in the federal system pursuant to any changes in state or federal law enacted on or after January 1, 2013.

(2) The system shall adjust the limit based on the annual changes to the Consumer Price Index for All Urban Consumers: U.S. City Average, calculated by dividing the Consumer Price Index for All Urban Consumers: U.S. City Average for the month of February in the fiscal year preceding the adjustment by the Consumer Price Index for All Urban Consumers: U.S. City Average for the month of February of the previous year rounded to the nearest thousandth. Notwithstanding paragraph (1) of subdivision (d) of Section 7522.10 of the Government Code, the adjustment shall be effective annually on July 1, beginning July 1, 2014.

(3) The Legislature reserves the right to modify the requirements of this subdivision with regard to all participants subject to this subdivision, except that the Legislature may not modify these provisions in a manner that would result in a decrease in benefits accrued prior to the effective date of the modification.

(d) Any employer or person who knowingly or willfully reports salary in a manner inconsistent with the provisions of subdivisions subdivision (a) or (b) may be subject to prosecution for fraud, theft, or embezzlement in accordance with provisions of the Penal Code. The system may establish procedures to ensure that salary reported by an employer is in compliance with this section.

(e) For purposes of this section, remuneration shall be considered paid if distributed to any person in the same class of employees who meets the qualifications or requirements specified in a publicly available written contractual agreement, including, but not limited to, a collective bargaining agreement or an employment agreement, as a condition of receiving the remuneration.

(f) This section shall become inoperative on July 1, 2027, and, as of January 1, 2028, is repealed.

SEC. 22.

Section 26139.5 is added to the Education Code, to read:

26139.5.

(a) “Service” means work performed for compensation, except as otherwise specifically provided in this part.

(b) This section shall become operative on July 1, 2027.

SEC. 23.

Section 26300 of the Education Code is amended to read:

26300.

(a) Within 10 working days following the later of the first day of employment, the date of the employer’s governing board’s action to provide the Cash Balance Benefit Program, or the effective date of the employer’s governing board’s action to provide the Cash Balance Benefit Program, the employer shall make available to the employee the following information:

(1) The employee’s rights and responsibilities as a participant in the program, the employer’s responsibilities under the program, and the benefits payable under the program.

(2) The employee’s right to elect membership in the Defined Benefit Program in lieu of participation in the Cash Balance Benefit Program, the rights and responsibilities of a member and the employer under the Defined Benefit Program, and benefits payable under the Defined Benefit Program.

(b) Written acknowledgment by the employee that they have received the information specified in subdivision (a) shall be retained in the employer’s files on a form prescribed by the system.

(c) If an employer’s governing board’s action to provide the Cash Balance Benefit Program gives employees the right to elect other coverage in lieu of the Cash Balance Benefit Program pursuant to Section 26400, the employer shall, within 10 working days following the later of the first day of employment, the date of the employer’s governing board’s action to provide the program or the effective date of the employer’s governing board’s action to provide the program, notify existing employees of the following:

(1) The employee’s right to elect other coverage if offered by the employer in lieu of participation in the Cash Balance Benefit Program.

(2) The rights and responsibilities of the employer and a participant in an alternative retirement plan if offered by the employer.

(3) The benefits payable under an alternative retirement plan if offered by the employer.

SEC. 24.

Section 26606 of the Education Code is amended to read:

26606.

Any additional earnings credit declared shall be determined as a specified percentage increase in the closing balance of each employee account and employer account with respect to the Cash Balance Benefit Program measured as of the last day of the plan year. The additional earnings credit shall be credited to employee account and employer account balances as of the date the board declares the additional earnings credit is to be applied.

SEC. 25.

Section 20405 of the Government Code is amended to read:

20405.

(a) “State safety member” shall also include officers and employees of the Department of Corrections and Rehabilitation or the California Correctional Health Care Services in the following classifications:

(b) In addition, “state safety member” shall also include officers and employees of the Department of Corrections and Rehabilitation in any classification of Vocational Instructor, Industrial Supervisor, Industrial Superintendent, Assistant Industrial Superintendent, or Production Manager II (Prison Industries) that is established on or after January 1, 1984, if the Department of Human Resources and the State Personnel Board approve the inclusion of the classification.

(c) “State safety member” shall also include officers and employees in parenthetical specialty classes when the core class has already been expressly included in the state safety membership category if the Department of Human Resources and the State Personnel Board approve the inclusion of the classifications. The inclusion shall not be effective until notice of the inclusion has been received by the board.

(d) Any of these officers or employees in employment on the operative date of an amendment to this section and who becomes a state safety member as a result of that amendment, may elect by a writing filed with the board prior to 90 days after notification by the board, to be restored to their previous status as a state industrial member. Upon the filing of the election the member shall cease to be a state safety member, and their rights and obligations shall be restored prospectively and retroactively to the operative date of that amendment.

SEC. 26.

Section 20407 of the Government Code is amended to read:

20407.

“State safety member” also includes officers and employees with the State Department of State Hospitals, the Department of Corrections and Rehabilitation, and the California Correctional Health Care Services in the following classifications:

“State safety member” also includes an officer or employee of the State Department of State Hospitals at any hospital that is deemed a forensic facility, who either is excluded from the definition of state employee in subdivision (c) of Section 3513 or is a nonelected officer or employee of the executive branch of government who is not a member of the civil service. An officer or employee may be a state safety member under this paragraph only if the person has responsibility for the direct supervision of state safety personnel specified in the classifications listed in this section and if the State Personnel Board determines that these officers and employees meet the state safety membership criteria established pursuant to Section 18717. The Department of Human Resources shall determine which classes meet the above conditions and report its findings to the Public Employees’ Retirement System, whereupon the change in membership categories shall take effect.

Any person so designated pursuant to this section may elect, within 90 days of notification by the board, to remain subject to the miscellaneous service retirement benefit and contribution rate by filing an irrevocable notice of election with the board. A member who so elects shall be subject to the reduced benefit factors specified in Section 21353 or 21354.1, as applicable, only for service also included in the federal system.

SEC. 27.

Section 20408 of the Government Code is amended to read:

20408.

“State safety member” also includes officers and employees with the State Department of State Hospitals in the following classification:

“State safety member” also includes an officer or employee of the State Department of State Hospitals who either is excluded from the definition of state employee in subdivision (c) of Section 3513, or is a nonelected officer or employee of the executive branch of government who is not a member of the civil service. An officer or employee may be a state safety member under this paragraph only if the person has responsibility for the supervision of state safety personnel specified in the classifications listed in this section and if the State Personnel Board determines that these officers and employees meet the state safety membership criteria established pursuant to Section 18717. The Department of Human Resources shall determine which classes meet the above conditions and report its findings to this system, whereupon the change in membership categories shall take effect.

SEC. 28.

Section 20409 of the Government Code is amended to read:

20409.

(a) “State safety member” shall also include officers and employees of the following departments with the following class titles:

(b) Any person employed in the classifications described in subdivision (a) in the department indicated may elect, within 90 days of September 27, 1982, to remain subject to the miscellaneous service retirement benefit by filing an irrevocable notice of election with the board. A member who so elects shall be subject to the reduced benefit factors specified in Section 21353 or 21354.1, as applicable, only for service also included in the federal system.

(c) This section shall not become applicable to any member included in a classification until a ruling or regulation authorizing the inclusion of persons employed in that classification within the definition of “policeman” or “fireman,” or both, is issued by the federal agency for purposes of Section 418(d)(5)(A) of Title 42 of the United States Code.

SEC. 29.

Section 20410 of the Government Code is amended to read:

20410.

“State safety member” also includes all persons in the Department of Alcoholic Beverage Control, the Board of Parole Hearings, the Department of Consumer Affairs, the Department of Developmental Services, the Department of Health Care Services, the Department of Toxic Substances Control, the California Horse Racing Board, the Department of Industrial Relations, the Department of Insurance, the State Department of State Hospitals, the Department of Motor Vehicles, and the Department of Social Services employed with the class title of Special Investigator (Class Code 8610), 8612), and persons in the classes of Supervising Special Investigator I (Class Code 8548) and Special Investigator II (Class Code 8547) who have been designated as peace officers as defined in Sections 830.2 and 830.3 of the Penal Code.

SEC. 30.

Section 20411 of the Government Code is repealed.

SEC. 31.

Section 21020.5 of the Government Code is amended to read:

21020.5.

(a) “Public service” also means time, on or after October 14, 1991, during which a person was employed under the California Senate Fellows, the Assembly Fellowship, or the Executive Fellowship programs, and time, on or after January 1, 2003, during which a person was employed under the Judicial Administration Fellowship program.

(c) A member may elect at any time prior to retirement to receive service credit for that public service by making the contributions as specified in Sections 21050 and 21052.

(d) This section shall not apply to any contracting agency nor to the employees of any contracting agency until the agency elects to be subject to this section by contract or by amendment to its contract made in the manner prescribed for approval of contracts.

SEC. 32.

Section 31520 of the Government Code is amended to read:

31520.

Except as otherwise delegated to the board of investment and except for the statutory duties of the county treasurer, the management of the retirement system is vested in the board of retirement, consisting of five members, one of whom shall be the county treasurer. The second and third members of the board shall be active members of the association elected by those active members within 30 days after the retirement system becomes operative in a manner determined by the board of supervisors. The fourth and fifth members shall be qualified electors of the county who are not connected with county government in any capacity, except one may be a supervisor and one may be a retired member, and shall be chosen by the board of supervisors. The first persons chosen as the second and fourth members shall serve for two years from the date the system becomes operative and the third and fifth members shall serve for a term of three years from that date. Thereafter the terms of office of the four elected members are three years.

As used in this section “active member” means a member in county service pursuant to Section 31640 and a “retired member” means a member, including a member under former Section 31555, retired for service or disability.

SEC. 33.

Section 31520.1 of the Government Code is amended to read:

31520.1.

(a) In any county subject to Articles 6.8 (commencing with Section 31639) and 7.5 (commencing with Section 31662.2), the board of retirement shall consist of nine members and one alternate, one of whom shall be the county treasurer. The second and third members of the board shall be active members of the association, other than safety members, elected by those active members within 30 days after the retirement system becomes operative in a manner determined by the board of supervisors. The fourth, fifth, sixth, and ninth members shall be qualified electors of the county who are not connected with the county government in any capacity, except one may be a supervisor, and shall be appointed by the board of supervisors. A supervisor appointed as a member of the retirement board may not serve beyond their term of office as supervisor. The seventh member shall be a safety active member of the association elected by the safety active members. The eighth member shall be a retired member elected by the retired members of the association in a manner to be determined by the board of supervisors. The alternate member shall be that candidate, if any, for the seventh member from the group under Section 31470.2 or 31470.4, or any other eligible safety member in a county if there is no eligible candidate from the groups under Sections 31470.2 and 31470.4, which is not represented by a board member who received the highest number of votes of all candidates in that group, and shall be referred to as the alternate seventh member. If there is no eligible candidate there may not be an alternate seventh member. The first person chosen as the second and fourth members shall serve for a term of two years beginning with the date the system becomes operative, the third and fifth members shall serve for a term of three years beginning with that date, and the sixth, seventh and alternate seventh members shall serve for a term of two years beginning on the date on which a retirement system established by this chapter becomes operative. The eighth and ninth members shall take office as soon as practicable for an initial term to expire concurrent with the expiration of the longest remaining term of an elected member. Thereafter, the terms of office of the elected, appointed, and alternate seventh members are three years, except as provided in Section 31523.

(b) The alternate seventh member provided for by this section shall vote as a member of the board only if the second, third, seventh, or eighth member is absent from a board meeting for any cause, or if there is a vacancy with respect to the second, third, seventh, or eighth member, the alternate seventh member shall fill the vacancy until a successor qualifies. The alternate seventh member shall sit on the board in place of the seventh member if a member of the same service is before the board for determination of their retirement.

(c) The alternate seventh member shall be entitled to both of the following:

(1) The alternate seventh member shall have the same rights, privileges, responsibilities, and access to closed sessions as the second, third, seventh, and eighth member.

(2) The alternate seventh member may hold positions on committees of the board independent of the second, third, seventh, or eighth member and may participate in the deliberations of the board or any of its committees to which the alternate seventh member has been appointed whether or not the second, third, seventh, or eighth member is present.

(d) As used in this section, “active member” means a member in county service pursuant to Section 31640 and a “retired member” means a member, including a member under former Section 31555, retired for service or disability.

SEC. 34.

Section 31520.2 of the Government Code is amended to read:

31520.2.

(a) In any county in which the assets of the retirement system exceed eight hundred million dollars ($800,000,000), the board of supervisors may, by resolution, establish a board of investments. The board shall consist of nine members, one of whom shall be the county treasurer. The second and third members shall be general active members of the association elected by the general membership of the association for a three-year term. The fourth member shall be a safety active member elected by the safety membership of the association for a three-year term. The eighth member shall be a retired member of the association elected by the retired membership of the association for a three-year term. The fifth, sixth, seventh, and ninth members shall be qualified electors of the county who are not connected with county government in any capacity, and shall be appointed by the board of supervisors. They shall also have had significant experience in institutional investing, either as investment officer of a bank, or trust company; or as investment officer of an insurance company, or in an active, or advisory, capacity as to investments of institutional or endowment funds. The first person chosen as a fifth, sixth, or seventh member shall serve for a three-year term, the second person chosen shall serve a four-year term, and the third person chosen shall serve a two-year term. The first person appointed as the ninth member shall serve a one-year term. Thereafter, all terms of all appointed members shall be three years.

(b) The board of investments shall be responsible for all investments of the retirement system.

(c) As used in this section, “active member” means a member in county service pursuant to Section 31640 and a “retired member” means a member, including a member under former Section 31555, retired for service or disability.

SEC. 35.

Section 31540.5 is added to the Government Code, to read:

31540.5.

(a) The obligations of the retirement system to its members continue throughout their respective memberships, and the obligations of the retirement system to, and in respect to, retired members continue throughout the lives of the retired members, and thereafter until all obligations to the members’ beneficiaries under optional settlements have been discharged. The obligations of the county or district to the retirement system with respect to members employed by them, respectively, continue throughout the memberships of the members, and the obligations of the county or district to the retirement system with respect to retired members formerly employed by them, respectively, continue until all of the obligations of the retirement system to those retired members have been discharged. The obligations of any member to the retirement system continue throughout their membership, and thereafter until all of the obligations of the retirement system to that member have been discharged.

(b) In cases in which payment is erroneous because of the death of the retired member or beneficiary or because of the remarriage of the beneficiary, the period of limitation of actions shall be 10 years and that period shall commence with the discovery of the erroneous payment.

(c) If any payment has been made as a result of fraudulent reports for compensation made, or caused to be made, by a member for their own benefit, the period of limitation of actions shall be 10 years and that period shall commence either from the date of payment or upon discovery of the fraudulent reporting, whichever date is later.

(d) The board shall determine the applicability of the period of limitation in any case, and its determination with respect to the running of any period of limitation shall be conclusive and binding for purposes of correcting the error or omission.

(e) This section does not apply to a county of the first class.

SEC. 36.

Section 31621.7 of the Government Code is amended to read:

31621.7.

The normal rates of contribution for members covered by Section 31751 shall be such as will provide an average annuity at age 55 equal to one-three hundredth of the member’s final compensation, according to the tables adopted by the board of supervisors, for each year of service rendered after entering the system.

Until revised pursuant to Sections 31453 and 31454, the normal rate of contribution of each member is that percentage of the member’s compensation earnable, shown in the following table according to the member’s age at the time of entry into the retirement system:

SEC. 37.

Section 31622 of the Government Code is amended to read:

31622.

Until revised pursuant to Sections 31453 and 31454, the rate of contribution of each member not covered by Article 6.8 is that percentage of the member’s compensation earnable shown in the following tables according to age and sex at the time of entry into the retirement system:

SEC. 38.

Section 31639.3 of the Government Code is amended to read:

31639.3.

Until revised pursuant to Sections 31453 and 31454, the rate of contribution of each safety member is that percentage of the member’s compensation earnable shown in the following tables according to age at the time of entry into the retirement system:

SEC. 39.

Section 31641 of the Government Code is amended to read:

31641.

“Service” means uninterrupted employment of any person appointed or elected for that period of time:

(a) For which deductions are made from the person’s compensation earnable or pensionable compensation from the county or district for such service while the person is a member of the retirement association.

(b) In military service for which the county or district or member is authorized by other provisions of this chapter to make, and does make, contributions.

(c) For which the member receives credit for county service or for public service or for both pursuant to the provisions of this article.

(d) Allowed for prior service.

SEC. 40.

Section 31641.2 of the Government Code is amended to read:

31641.2.

Any member of the retirement system who elects pursuant to Section 31641.1 to make contributions and receive credit as service for time for which the member claims credit because of public service shall contribute to the retirement fund, prior to the effective date of their retirement, by lump sum payment or by installment payments over a period not to exceed five years, an amount equal to the sum of:

(a) Twice the contributions the member would have made to the retirement fund if they had been a member during the same length of time as that for which they elected to receive credit as service, computed by applying the rate of contribution first applicable to them upon commencement of their membership in this system to the monthly compensation first earnable by them at the time as provided in Section 31641.3, multiplied by the number of months for which they elected to receive credit for county service, including time, if any, prior to the establishment of the system, and which will constitute current service under this system.

(b) The “regular interest” that would have accrued to the member contributions if they had been made on the date used to determine on what compensation earnable or pensionable compensation contributions pursuant to this section shall be based, from that date until the completion of payment of those contributions, computed at the current interest rate.

(c) Except as prohibited by Section 31640.7, the governing body by a four-fifths vote may provide that it shall make on behalf of officers and employees eligible to receive credit for prior service under this chapter, and who so elect prior to filing an application for retirement, part of the contributions specified in paragraphs (a) and (b) of this section. The contributions made by a governmental agency pursuant to this section shall be available only for purposes of retirement for service or for disability and a member resigning from county service shall be entitled to withdraw only that portion of their accumulated contributions made.

SEC. 41.

Section 31641.6 of the Government Code is amended to read:

31641.6.

An employee of a city who has become a county employee upon the assumption by the county of the functions of the city department in which they were employed, may, if the employee is not covered by the city under a contract with the Public Employees’ Retirement System, elect to receive credit in the county retirement system for service for the city prior to the cessation of their employment by the city. When such person elects to receive credit, membership in the retirement system shall commence with the first day of the month in which credit is granted.

Any such person shall be entitled to credit in the county retirement system for service performed for the city when and if (a) the board of retirement receives certification from the city of the city service and compensation earnable or pensionable compensation of the employee; and (b) the employee deposits into the employees’ retirement system the amount of contributions they would have made had they been a county employee during their city employment; and (c) there is also deposited in the employees’ retirement system by the city, the employee, or both, the amount that the county would have been required to deposit to the employees’ retirement fund based on the city salary paid to such employee.

Upon deposit of such funds, the employee’s age at entry shall be considered to be their age at time of employment with the city or at the time this chapter was effective in the county whichever is later. Such money deposited under (b) above shall be considered as accumulated normal contributions of the employee and any such money deposited under (c) above shall be considered as contributions of the employer county.

If all of the money called for under (b) above is not paid within 90 days after employment by the county, only the part of city employment latest in date covered by such deposit shall be credited and the age at entry and the amount under (c) above shall be adjusted accordingly.

An employee shall receive credit for city employment prior to their employment by the county only for such service for which they are not entitled to receive a pension or retirement from such city.

This section shall become operative in any county on the first day of the calendar month after the board of supervisors adopts by four-fifths vote a resolution making it operative in the county.

SEC. 42.

Section 31641.20 of the Government Code is amended to read:

31641.20.

Any member of the retirement system who elects pursuant to Section 31641.1 to make contributions and receive credit as service for time for which they claim credit because of public service shall contribute to the retirement fund, prior to the effective date of their retirement, by lump-sum payment or by installment payments over a period not to exceed five years, an amount equal to the sum of:

(a) Twice the contributions they would have made to the retirement fund if they had been a member during the same length of time as that for which they have elected to receive credit as service, computed by applying the rate of contribution at the time of the election to the monthly compensation earnable or pensionable compensation by them at the time of the election pursuant to Section 31641.1, multiplied by the number of months for which they have elected to receive credit for county service, including time, if any, prior to the establishment of the system, and which will constitute current service under this system.

(b) The “regular interest” which would have accrued to the member contributions if they had been made on the date used to determine on what compensation earnable or pensionable compensation contributions pursuant to this section shall be based, from that date until the completion of payment of those contributions, computed at the current interest rate.

(c) The governing body by a four-fifths vote may provide that it shall make on behalf of officers and employees eligible to receive credit for prior service under this chapter, and who so elect prior to filing an application for retirement, part of the contributions specified in paragraphs subdivisions (a) and (b) of this section. The contributions made by a governmental agency pursuant to this section shall be available only for purposes of retirement for service or for disability and a member resigning from county service shall be entitled to withdraw only that portion of their accumulated contributions made by them.

(d) This section shall only apply in counties of the third class, as established by Sections 28020 and 28024, as amended by Chapter 1204 of the Statutes of 1971, but it shall not apply in those counties unless and until it is adopted by a majority vote of the board of supervisors.

SEC. 43.

Section 31641.21 of the Government Code is amended to read:

31641.21.

Regular interest computed at the current interest rate as used in subdivision (b) of Section 31641.2 shall mean that amount of interest which would have been credited to the account of the member on the amount to be deposited at the interest rates established for the system if the contribution required by that section had been on deposit from the date used to determine the compensation earnable or pensionable compensation on which such contributions are based until the amount required to be deposited has been paid.

SEC. 44.

Section 31789.6 is added to the Government Code, to read:

31789.6.

If the beneficiary of a member retired under this chapter or the California Public Employees’ Pension Reform Act of 2013 established reciprocity and is entitled to receive a lump-sum death benefit from the reciprocal retirement system in which the person was a member in employment subsequent to their last employment in which the person was a member of a retirement system established under this chapter, no payment shall be made under Section 31789, 31789.01, 31789.1, 31789.12, 31789.13, 31789.2, 31789.3, 31789.5, or 31790 providing for payment of a lump-sum death benefit to a member’s designated beneficiary.

SEC. 45.

Section 31835 of the Government Code is amended to read:

31835.

The average compensation during any period of service as a member of the Public Employees’ Retirement System, a member of the Judges’ Retirement System or Judges’ Retirement System II, a member of a retirement system established under this chapter in another county, a member of the State Teachers’ Retirement System, or a member of a retirement system of any other public agency of the state that has established reciprocity with the Public Employees’ Retirement System subject to the conditions of Section 31840.2, shall be considered compensation earnable or pensionable compensation pursuant to Section 7522.34, whichever is applicable, by a member for purposes of computing final compensation for that member provided:

(a) The period intervening between active memberships in the respective systems does not exceed 90 days, or 6 months if Section 31840.4 applies. That period shall not include any time during which the member was prohibited by law from becoming a member of the system of another county.

Notwithstanding anything in this chapter to the contrary, the 90-day or 6-month restriction referred to in this section or any other provision of this chapter affecting deferred retirement shall not be applicable to any members who left county or district service prior to October 1, 1949, and subsequently redeposited.

(b) The member retires concurrently under both systems and is credited with the period of service under that other system at the time of retirement.

(c) For the purposes of this section and Section 31835.02, “concurrently” means retiring on the same date or on different dates, not to exceed a difference of 30 calendar days, provided that the member does not perform service subject to coverage under the other system between the two retirement dates.

The provisions of this section shall be applicable to all members and beneficiaries of the system.