22950. (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.
22951. 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.
22951.5. 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.
22954. (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.
22954.1. (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.
22954.5. (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.
22955. (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) This section shall become operative on July 1, 2003, if the
revenue limit cost-of-living adjustment computed by the
Superintendent of Public Instruction for the 2001-02 fiscal year is
equal to or greater than 3.5 percent. Otherwise this section shall
become operative on July 1, 2004.
22955.5. (a) For purposes of Sections 22954 and 22955, "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 and 22955 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 and 22955 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 and 22955 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.
22956. 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.
22950. (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.
22951. 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.
22951.5. 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.
22954. (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.
22954.1. (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.
22954.5. (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.
22955. (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) This section shall become operative on July 1, 2003, if the
revenue limit cost-of-living adjustment computed by the
Superintendent of Public Instruction for the 2001-02 fiscal year is
equal to or greater than 3.5 percent. Otherwise this section shall
become operative on July 1, 2004.
22955.5. (a) For purposes of Sections 22954 and 22955, "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 and 22955 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 and 22955 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 and 22955 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.
22956. 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.
22950. (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.
22951. 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.
22951.5. 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.
22954. (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.
22954.1. (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.
22954.5. (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.
22955. (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) This section shall become operative on July 1, 2003, if the
revenue limit cost-of-living adjustment computed by the
Superintendent of Public Instruction for the 2001-02 fiscal year is
equal to or greater than 3.5 percent. Otherwise this section shall
become operative on July 1, 2004.
22955.5. (a) For purposes of Sections 22954 and 22955, "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 and 22955 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 and 22955 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 and 22955 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.
22956. 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.
