Published: 2015-07-08
Key Benefits:
(a) Employers shall contribute monthly to the system 8 percent of the creditable compensation upon which members’ contributions under this part are based.
(b) From the contributions required under subdivision (a), there shall be deposited in the Teachers’ Retirement Fund an amount, determined by the board, that is not less than the amount, determined in an actuarial valuation of the Defined Benefit Program pursuant to Section 22311.5, necessary to finance the liabilities associated with the benefits of the Defined Benefit Program over the funding period adopted by the board, after taking into account the contributions made pursuant to Sections 22901, 22951, and 22955.
(c) The amount of contributions required under subdivision (a) that is not deposited in the Teachers’ Retirement Fund pursuant to subdivision (b) shall be deposited directly into the Teachers’ Health Benefits Fund, as established in Section 25930, and shall not be deposited into or transferred from the Teachers’ Retirement Fund.
(d) (1) Notwithstanding subdivisions (b) and (c), there may be deposited into the Teachers’ Retirement Program Development Fund, as established in Section 22307.5, from the contributions required under subdivision (a), an amount determined by the board, not to exceed the limit specified in paragraph (2).
(2) The balance of deposits into the Teachers’ Retirement Program Development Fund, minus the subsequent transfer of funds, with interest, into the Teachers’ Retirement Fund pursuant to subdivision (e) of Section 22307.5, shall not exceed 0.01 percent of the total of the creditable compensation of the fiscal year ending in the immediately preceding calendar year upon which member’s contributions to the Defined Benefit Program are based.
(3) The deposits described in this subdivision shall not be deposited into, or transferred from, the Teachers’ Retirement Fund.
(Amended by Stats. 2007, Ch. 130, Sec. 55. Effective January 1, 2008.)
(a) Commencing July 1, 2014, the amount of contributions required under subdivision (a) of Section 22950 shall increase by the following percentages of the creditable compensation upon which members’ contributions under the Defined Benefit Program are based:
(1) On July 1, 2014, by 0.63 percent.
(2) On July 1, 2015, by 2.48 percent.
(3) On July 1, 2016, by 4.33 percent.
(4) On July 1, 2017, by 6.18 percent.
(5) On July 1, 2018, by 8.03 percent.
(6) On July 1, 2019, by 9.88 percent.
(7) On July 1, 2020, by 10.85 percent.
(b) (1) For fiscal year 2021–22 and each fiscal year thereafter, the board shall increase or decrease the percentages paid specified in this section from the percentage paid during the prior fiscal year to reflect the contribution required to eliminate by June 30, 2046, the remaining unfunded actuarial obligation with respect to service credited to members before July 1, 2014, as determined by the board based upon a recommendation from its actuary.
(2) If a rate adjustment is required, the percentages authorized in paragraph (1) shall not change in any single fiscal year by more than 1.00 percent of the creditable compensation upon which members’ contributions to the Defined Benefit Program are based. The percentages described in subdivision (a) and as may be adjusted pursuant to this subdivision shall not exceed 12.00 percent of the creditable compensation upon which members’ contributions to the Defined Benefit Program are based, inclusive of the percentages identified in subdivision (a).
(3) The board shall not increase the rates in order to supplant the state’s obligation pursuant to Section 22955.1.
(c) (1) Except as described in paragraph (2), this section shall become inoperative on July 1, 2046, and as of January 1, 2047, is repealed.
(2) Notwithstanding paragraph (1), on July 1 of the first fiscal year after a 30-day notice has been sent to the Joint Legislative Budget Committee and the Controller in compliance with subdivision (d) of Section 22957, this section shall become inoperative and, as of the following January 1, is repealed.
(Added by Stats. 2014, Ch. 47, Sec. 7. Effective June 24, 2014. Section inoperative July 1, 2046, or sooner as prescribed in subd. (c). Adding action may become inoperative under conditions prescribed by Stats. 2014, Ch. 47, Sec. 13, subds. (b), (c), and (d). Repealed on or before January 1, 2047, by its own provisions.)
In addition to any other contributions required by this part, employers shall, on account of liability for benefits pursuant to Section 22717, contribute monthly to the Teachers’ Retirement Fund 0.25 percent of the creditable compensation upon which members’ contributions under this part are based.
(Amended by Stats. 2000, Ch. 1025, Sec. 22. Effective January 1, 2001.)
In addition to any other contributions required by this part, if the board determines that the Supplemental Benefit Maintenance Account will not have sufficient funds to make the maximum payment under this part pursuant to Section 24417, the board may increase the employer contribution rate as provided in Section 24416.
(Amended by Stats. 1998, Ch. 965, Sec. 117. Effective January 1, 1999.)
(a) Notwithstanding Section 13340 of the Government Code, a continuous appropriation is hereby annually made from the General Fund to the Controller, pursuant to this section, for transfer to the Supplemental Benefit Maintenance Account in the Teachers’ Retirement Fund.
(b) Except as reduced pursuant to subdivision (c), the total amount of the appropriation for each year shall be equal to 2.5 percent of the total of the creditable compensation of the fiscal year ending in the immediately preceding calendar year upon which members’ contributions are based for purposes of funding the supplemental payments authorized by Section 24415, as reported annually to the Director of Finance, the Chairperson of the Joint Legislative Budget Committee, and the Legislative Analyst pursuant to Section 22955.5.
(c) Beginning with the 2008–09 fiscal year, the appropriation in subdivision (b) shall be reduced in accordance with the following schedule:
| 2008–09 ........................ $66,386,000 |
| 2009–10 ........................ $70,000,000 |
| 2010–11 ........................ $71,000,000 |
| 2011–12 and each fiscal year thereafter ........................ $72,000,000 |
(d) Transfers made to the Supplemental Benefit Maintenance Account, pursuant to subdivision (a) shall be made on October 15 and April 15 of each fiscal year with each payment to be 50 percent of the annual appropriation.
(e) Notwithstanding subdivision (d), for the 2010–11 fiscal year only, the transfer that would have been made pursuant to subdivision (d) on October 15, 2010, shall be made on November 15, 2010, and the transfer that would have been made pursuant to subdivision (d) on April 15, 2011, shall be made on March 14, 2011.
(f) The board may deduct from the annual appropriation made pursuant to this section an amount necessary for the administrative expenses of Section 24415.
(g) It is the intent of the Legislature in enacting this section to establish the supplemental payments pursuant to Section 24415 as vested benefits pursuant to a contractually enforceable promise to make annual contributions from the General Fund to the Supplemental Benefit Maintenance Account in the Teachers’ Retirement Fund in order to provide a continuous annual source of revenue for the purposes of making the supplemental payments under Section 24415.
(Amended by Stats. 2010, Ch. 713, Sec. 2. Effective October 8, 2010.)
(a) Consistent with a process it establishes pursuant to subdivision (e), the board shall periodically adopt an actuarial projection regarding the ability of the system to continue providing, over a term to be established by the board, the purchasing power protection that is, at the time of the projection, being provided from the funds of the Supplemental Benefit Maintenance Account.
(b) If the board, in adopting the actuarial projection described in subdivision (a), determines that the annual transfers to the Supplemental Benefit Maintenance Account described in Section 22954, combined with all other anticipated sources of income to the account, are likely to be more than sufficient over the term established by the board to continue providing the purchasing power protection being provided at the time of the projection, it shall identify the maximum level of purchasing power protection benefits that it expects to be sustainable over that term from these contributions and other sources of income.
(c) If the board, in adopting the actuarial projection described in subdivision (a), determines that the annual transfers to the Supplemental Benefit Maintenance Account described in Section 22954, combined with all other anticipated sources of income to the account, are likely to be less than sufficient over the term established by the board to continue providing the purchasing power protection being provided at the time of the projection, it shall identify the maximum level of purchasing power protection benefits that it expects to be sustainable over that term from these contributions and other sources of income.
(d) It is the intent of the Legislature that the board shall adopt the projections and determinations described in subdivisions (a), (b), and (c) pursuant to its powers and responsibilities under Section 17 of Article XVI of the California Constitution, including, but not limited to, the board’s fiduciary responsibility to the system’s participants and their beneficiaries and the board’s sole and exclusive power to provide for actuarial services of the system. Therefore, in its adoption of the projections and determinations required in subdivisions (a), (b), and (c), the board may utilize any actuarial assumptions, methods, and standards that it deems appropriate to determine the level of purchasing power protection benefits that it expects can be sustained over the term established by the board by funds of the Supplemental Benefit Maintenance Account.
(e) The board shall determine the frequency and timing of its adoption of the actuarial projection described in subdivision (a) in regulations that it adopts pursuant to subdivision (e) of Section 24415.5.
(f) The board shall promptly provide to the Director of Finance, the Chairperson of the Joint Legislative Budget Committee, the chairpersons of the Senate Committee on Public Employment and Retirement and the Assembly Committee on Public Employees, Retirement and Social Security, and the Legislative Analyst a summary of its actuarial projections and other determinations, as adopted pursuant to subdivisions (a), (b), and (c). The report shall include a description of any adjustments of benefits made pursuant to Section 24415.5.
(Amended by Stats. 2008, Ch. 751, Sec. 6. Effective September 30, 2008.)
(a) In addition to the amounts appropriated for transfer to the Supplemental Benefit Maintenance Account in Section 22954, there is hereby appropriated from the General Fund to the Controller for transfer to the Supplemental Benefit Maintenance Account in the Teachers’ Retirement Fund the following amounts in each of the specified fiscal years, as follows:
| 2009–10 ........................ $56,979,949 |
| 2010–11 ........................ $56,979,949 |
| 2011–12 ........................ $56,979,949 |
| 2012–13 ........................ $56,979,949 |
(b) It is the intent of the Legislature that the annual Budget Act for each of the fiscal years described in subdivision (a) display the amounts listed above in Item 1920-011-0001 as an informational item, along with other estimated amounts required to be transferred from the General Fund to the Teachers’ Retirement Fund pursuant to Sections 22954 and 22955. In the reports, calculations, and schedules that the system submits pursuant to Section 22955.5 for the purpose of informing the Department of Finance, the Legislature, and the Controller of the state’s appropriations pursuant to Sections 22954 and 22955 in each of the fiscal years listed in subdivision (a), the system shall also include the amounts appropriated for transfer to the Supplemental Benefit Maintenance Account in subdivision (a). Upon appropriation, the amounts listed in subdivision (a) may be transferred on or after July 1 in each of the fiscal years indicated.
(c) The appropriation in subdivision (a) fulfills the intent of the Legislature described in Chapter 59 of the Statutes of 2008 to pay interest on the judgment in the case of Teachers’ Retirement Board v. Genest and Chiang, Sacramento County Superior Court Case No. 03CS01503.
(Repealed and added by Stats. 2008, Ch. 751, Sec. 8. Effective September 30, 2008.)
(a) Notwithstanding Section 13340 of the Government Code, commencing July 1, 2003, a continuous appropriation is hereby annually made from the General Fund to the Controller, pursuant to this section, for transfer to the Teachers’ Retirement Fund. The total amount of the appropriation for each year shall be equal to 2.017 percent of the total of the creditable compensation of the fiscal year ending in the immediately preceding calendar year upon which members’ contributions are based, as reported annually to the Director of Finance, the Chairperson of the Joint Legislative Budget Committee, and the Legislative Analyst pursuant to Section 22955.5, and shall be divided into four equal payments. The payments shall be made on, or the following business day after, July 1, October 1, December 15, and April 15 of each fiscal year.
(b) Notwithstanding Section 13340 of the Government Code, commencing October 1, 2003, a continuous appropriation, in addition to the appropriation made by subdivision (a), is hereby annually made from the General Fund to the Controller for transfer to the Teachers’ Retirement Fund. The total amount of the appropriation for each year shall be equal to 0.524 percent of the total of the creditable compensation of the fiscal year ending in the immediately preceding calendar year upon which members’ contributions are based, as reported annually to the Director of Finance, the Chairperson of the Joint Legislative Budget Committee, and the Legislative Analyst pursuant to Section 22955.5, and shall be divided into four equal quarterly payments. The percentage shall be adjusted to reflect the contribution required to fund the normal cost deficit or the unfunded obligation as determined by the board based upon a recommendation from its actuary. If a rate increase is required, the adjustment may be for no more than 0.25 percent per year and in no case may the transfer made pursuant to this subdivision exceed 1.505 percent of the total of the creditable compensation of the fiscal year ending in the immediately preceding calendar year upon which members’ contributions are based. At any time when there is neither an unfunded obligation nor a normal cost deficit, the percentage shall be reduced to zero. The funds transferred pursuant to this subdivision shall first be applied to eliminating on or before June 30, 2027, the unfunded actuarial liability of the fund identified in the actuarial valuation as of June 30, 1997.
(c) For the purposes of this section, the term “normal cost deficit” means the difference between the normal cost rate as determined in the actuarial valuation required by Section 22311 and the total of the member contribution rate required under Section 22901 and the employer contribution rate required under Section 22950, and shall exclude (1) the portion for unused sick leave service credit granted pursuant to Section 22717, and (2) the cost of benefit increases that occur after July 1, 1990. The contribution rates prescribed in Section 22901 and Section 22950 on July 1, 1990, shall be utilized to make the calculations. The normal cost deficit shall then be multiplied by the total of the creditable compensation upon which member contributions under this part are based to determine the dollar amount of the normal cost deficit for the year.
(d) Pursuant to Section 22001 and case law, members are entitled to a financially sound retirement system. It is the intent of the Legislature that this section shall provide the retirement fund stable and full funding over the long term.
(e) This section continues in effect but in a somewhat different form, fully performs, and does not in any way unreasonably impair, the contractual obligations determined by the court in California Teachers’ Association v. Cory, 155 Cal.App.3d 494.
(f) Subdivision (b) shall not be construed to be applicable to any unfunded liability resulting from any benefit increase or change in contribution rate under this part that occurs after July 1, 1990.
(g) The provisions of this section shall be construed and implemented to be in conformity with the judicial intent expressed by the court in California Teachers’ Association v. Cory, 155 Cal.App.3d 494.
(h) Subdivisions (a) through (g), inclusive, shall be inoperative on and after July 1, 2014, and shall become operative beginning the earlier of July 1, 2046, or July 1 of the first fiscal year after a 30-day notice has been sent to the Joint Legislative Budget Committee and the Controller in compliance with subdivision (d) of Section 22957.
(Amended by Stats. 2014, Ch. 47, Sec. 8. Effective June 24, 2014. Section inoperative from July 1, 2014, until operation resumes on date prescribed in subd. (h) (July 1, 2046, or sooner). Amending action may become inoperative under conditions prescribed by Stats. 2014, Ch. 47, Sec. 13, subd. (b).)
(a) Notwithstanding Section 13340 of the Government Code, commencing July 1, 2003, a continuous appropriation is hereby annually made from the General Fund to the Controller, pursuant to this section, for transfer to the Teachers’ Retirement Fund. The total amount of the appropriation for each year shall be equal to 2.017 percent of the total of the creditable compensation of the fiscal year ending in the immediately preceding calendar year upon which members’ contributions are based, as reported annually to the Director of Finance, the Chairperson of the Joint Legislative Budget Committee, and the Legislative Analyst pursuant to Section 22955.5, and shall be divided into four equal payments. The payments shall be made on, or the following business day after, July 1, October 1, December 15, and April 15 of each fiscal year.
(b) (1) Commencing July 1, 2014, the amount of the appropriation required under subdivision (a) shall increase by the following percentages of the creditable compensation upon which that appropriation is based:
(A) On July 1, 2014, by 1.437 percent.
(B) On July 1, 2015, by 2.874 percent.
(C) On July 1, 2016, by 4.311 percent.
(2) For fiscal year 2017–18 and each fiscal year thereafter, the board shall increase or decrease the percentage specified in this subdivision from the percentage paid during the prior fiscal year to reflect the contribution required to eliminate the remaining unfunded actuarial obligation, as determined by the board based upon a recommendation from its actuary. If a rate increase is required, the adjustment may be for no more than 0.50 percent per year of the total of the creditable compensation of the fiscal year ending in the immediately preceding calendar year upon which members’ contributions are based. At any time when there is not an unfunded actuarial obligation as determined by the board, the percentage specified in this subdivision shall be reduced to zero.
(c) Pursuant to Section 22001 and case law, members are entitled to a financially sound retirement system. It is the intent of the Legislature that this section shall provide the retirement fund stable and full funding over the long term.
(d) This section continues in effect but in a somewhat different form, fully performs, and does not in any way unreasonably impair, the contractual obligations determined by the court in California Teachers’ Association v. Cory, 155 Cal.App.3d 494.
(e) Subdivision (b) shall not be construed to be applicable to any unfunded actuarial obligation resulting from any benefit increase or change in member or employer contribution rate under this part that occurs after July 1, 1990.
(f) The provisions of this section shall be construed and implemented to be in conformity with the judicial intent expressed by the court in California Teachers’ Association v. Cory, 155 Cal.App.3d 494.
(g) (1) Except as described in paragraph (2), this section shall become inoperative on July 1, 2046, and as of January 1, 2047, is repealed.
(2) Notwithstanding paragraph (1), on July 1 of the first fiscal year after a 30-day notice has been sent to the Joint Legislative Budget Committee and the Controller in compliance with subdivision (d) of Section 22957, this section shall become inoperative and, as of the following January 1, is repealed.
(Added by Stats. 2014, Ch. 47, Sec. 9. Effective June 24, 2014. Section inoperative July 1, 2046, or sooner as prescribed in subd. (g). Adding action may become inoperative under conditions prescribed by Stats. 2014, Ch. 47, Sec. 13, subds. (b), (c), and (d). Repealed on or before January 1, 2047, by its own provisions.)
(a) For purposes of Sections 22954, 22955, and 22955.1, “creditable compensation” shall include only creditable compensation for which member contributions are credited under the Defined Benefit Program.
(b) On or after October 1 and on or before October 25 of each year, beginning in 2008, the board shall calculate the total amount of creditable compensation for the fiscal year that ended on the immediately preceding June 30. For the purpose of informing the Department of Finance and the Legislature of the amount of the state’s appropriations pursuant to Sections 22954, 22955, and 22955.1 in the next fiscal year, the system shall immediately submit a report that includes this calculation to the Director of Finance, the Chairperson of the Joint Legislative Budget Committee, and the Legislative Analyst.
(c) After submission of the report described in subdivision (b), on or before the April 15 after submission of the report described in subdivision (b), the system shall notify the Director of Finance, the Chairperson of the Joint Legislative Budget Committee, and the Legislative Analyst of any revisions in its calculation of the total amount of creditable compensation for the fiscal year that ended on the immediately preceding June 30.
(d) The last revised calculation submitted pursuant to subdivision (c) on or before April 15 of each year or, if no such revised calculation is submitted, the calculation in the report submitted pursuant to subdivision (b) shall be the calculation of creditable compensation upon which the state’s appropriations pursuant to Sections 22954, 22955, and 22955.1 will be based in the next fiscal year. On or after April 15 and on or before May 1 of each year, the system shall submit to the Controller a copy of this calculation, along with a requested schedule of transfers to be made pursuant to the appropriations in Sections 22954, 22955, and 22955.1 in the next fiscal year beginning on the next July 1. The system shall also provide a copy of this schedule to the Director of Finance and the Legislative Analyst.
(Amended by Stats. 2014, Ch. 47, Sec. 10. Effective June 24, 2014. Amending action may become inoperative under conditions prescribed by Stats. 2014, Ch. 47, Sec. 13, subd. (b).)
Employer and state contributions made to the plan pursuant to this part for service credited under the Defined Benefit Program shall not be credited to the individual member accounts. These contributions shall be held in the reserves of the plan to finance the employers’ share of the cost of all benefits payable under the plan with respect to the Defined Benefit Program. Under no circumstances shall these employer and state contributions be allocated or awarded to individual members, their spouses, or beneficiaries.
(Amended by Stats. 2000, Ch. 1025, Sec. 23. Effective January 1, 2001.)
(a) The Legislature hereby finds and declares that the provisions of Section 22950.5 do not constitute a new functional responsibility for schools and community colleges pursuant to subdivision (c) of Section 41204, and do not require an adjustment pursuant to subdivision (b) of Section 8 of Article XVI of the California Constitution. The Legislature further finds and declares that the provisions of Section 22950.5 do not constitute a reimbursable mandate for school districts pursuant to Article XIII B of the California Constitution. Any challenge to these findings shall be filed in Sacramento Superior Court within 60 days of the effective date of the act adding this section. Any action so filed shall be consolidated with any action filed pursuant to Section 22958.
(b) On or before June 1 of each year, the Director of Finance shall determine if an adjustment to the constitutional minimum guarantee of funding for schools shall be made pursuant to a final, unappealable judicial decision holding that the increased contributions in Section 22950.5 constitute a new functional responsibility for schools and community colleges, pursuant to subdivision (c) of Section 41204, or any other final, unappealable, judicial decision holding that the increased contributions in Section 22950.5 require an adjustment in funding provided to schools and community colleges pursuant to subdivision (b) of Section 8 of Article XVI of the California Constitution. If the Director of Finance estimates that an adjustment will require increased General Fund expenditures of more than ten million dollars ($10,000,000), then the determination described in this subdivision shall be considered to have been met. This estimate shall be calculated solely within the discretion of the Director of Finance.
(c) On or before June 1 of each year, the Director of Finance shall determine if any amounts are needed to fund school districts or other local governments due to a final unappealable administrative or judicial decision holding that the increased contributions in Section 22950.5 constitute a reimbursable mandate pursuant to Article XIII B of the California Constitution. If the Director of Finance estimates that the cost of the mandate is more than ten million dollars ($10,000,000), then the determination described in this subdivision shall be considered to have been met. This estimate shall be solely within the discretion of the Director of Finance, and the director need not wait for a final cost estimate, nor any other administrative determination, from the Commission of State Mandates prior to making this determination.
(d) If, before June 1 of each year, the Director of Finance determines that the determinations described in subdivisions (b) or (c) have been met, then the Director of Finance shall immediately notify, in writing, the Joint Legislative Budget Committee and the Controller of this determination.
(Added by Stats. 2014, Ch. 47, Sec. 11. Effective June 24, 2014. Adding action may become inoperative under conditions prescribed by Stats. 2014, Ch. 47, Sec. 13, subd. (b).)
(a) Any action or proceeding challenging the validity of any matter authorized by the act adding this section by any person or entity shall be brought in accordance with, and within the time specified in, Chapter 9 (commencing with Section 860) of Title 10 of Part 2 of the Code of Civil Procedure.
(b) This section provides the authorization for all entities referenced in the act adding this section as required by Section 860 of the Code of Civil Procedure.
(c) Any action initiated pursuant to this section shall be brought in the Superior Court of the County of Sacramento.
(Added by Stats. 2014, Ch. 47, Sec. 12. Effective June 24, 2014. Adding action may become inoperative under conditions prescribed by Stats. 2014, Ch. 47, Sec. 13, subd. (b).)