2005 California Government Code Sections 20790-20842 CHAPTER 9. EMPLOYER CONTRIBUTIONS

20790.  Except as provided in Section 20815, "employer" for purposes
of this chapter means any contracting agency, except a contracting
agency on and after the effective date of the contracting agency's
election to be subject to any amendment of this part that provides
that it is inapplicable to a contracting agency until the agency
elects to be subject thereto.
20799.  The board shall credit all contributions of the state,
school employer, and contracting agencies in the retirement fund with
interest at the current net earnings rate compounded at each June
30.
20805.  As used in determining the state's contribution,
"compensation paid" includes the compensation a member absent on
military service would have received were it not for his or her
absence is that service, if the normal contributions for the period
of absence are made.  The rate of his or her compensation shall be
his or her compensation at the commencement of his or her absence.
The percentages of state contribution specified in this chapter apply
to all compensation upon the basis of which member's contributions
are deducted after those percentages became or become effective,
without regard to the time when the service was rendered for which
the compensation is paid.
20806.  Each contracting agency and school employer that is an
employer for purposes of this chapter shall make contributions in
addition to those otherwise specified in this chapter in amounts to
be fixed and determined by the board on account of unpaid liability
for prior service and on account of liability for benefits under
Sections 21624 through 21628, inclusive, and 21571 and benefits
provided local safety members.  Payments shall be under any
arrangement as may be agreed to by the board.
20808.  (a) The actuary may, in determining contributions required
of contracting agencies, establish a contribution with respect to
industrial disability allowances, special death benefits, and any
other death benefit, singly or in any combination, separate from and
independent of the contribution required for other benefits under
their contracts.  The total contribution, in that case, for the
agencies as a group shall be established and from time to time
adjusted by actuarial valuation performed by the actuary of the
liability for the benefit or benefits on account of the employees of
all those agencies. Adjustments shall affect only future
contributions and shall take into account the difference between
contributions on hand and the amount required to fund the allowances
or benefits for which entitlement has already been established as
well as liability for future entitlements to benefits.  The
contribution as so established and adjusted from time to time shall
be allocated between the agencies on a basis that, in the opinion of
the board, after recommendation of the actuary, provides an equitable
distribution between the agencies.  However, the allocation shall
not be based on differences in the incidence of death or disability
in the respective agencies.
   (b) Whenever the board, pursuant to subdivision (a), establishes a
separate contribution, it shall maintain the contribution and any
contributions required to be made by employees towards the cost of
the benefit or benefits as a separate account, which shall be
available only for payment of the benefit or benefits and shall not
be a part of the accumulated contributions under this system of any
of the employers or members included.
   All contributions in that account, irrespective of the agency from
which they were received, shall be available for payment of the
benefit or benefits with respect to the employees of any agency
included, and in the event of termination of any the agency's
participation in this system the liability with respect to all those
benefits to which the agency's employees have become entitled, after
establishment of the rate and prior to the termination, shall be its
contributions, as established under subdivision (a), which have
become due and payable as of the date of termination.
20809.  The state shall make the increased contributions required on
account of liability for benefits provided by Section 20414 from
social security contributions which would have been payable by the
employer had Section 20414 not been enacted up to an amount necessary
to fully fund the cost of those benefits.
20810.  The state shall make the increased contributions required on
account of liability for benefits provided by Section 20415 from
social security contributions which would have been payable by the
employer had Section 20415 not been enacted up to an amount necessary
to fully fund the cost of those benefits.
20811.  The state shall make the increased contribution required on
the account of liability for benefits provided by Sections 20409,
20410, and 21151 from social security contributions that would have
been payable by the employer had Sections 20409 and 20410 not been
enacted, up to an amount necessary to fully fund the cost of those
benefits.
20812.  Notwithstanding any other provision of this part, the board
may adopt a funding period of 30 years to amortize unfunded accrued
actuarial obligations for current and prior service for the purpose
of determining employer contribution rates for contracting agencies
and school employers.  The board shall approve new amortization
periods based upon requests from contracting agencies or school
employers that can demonstrate a financial necessity.  The board may
deny a request when the request would subject the fund to an unsound
financial risk.  This section shall not affect the current procedure
for setting the school employer rate.  The board shall continue to
treat the school category as a total experience pool with no
requirement to establish separate rates for a school district subject
to this section.  A contracting agency or school employer may not
request a new amortization period pursuant to this section more than
once.
20813.  The board may adopt an amortization period of 40 years for
any unfunded actuarial liability for the benefits applicable to all
state miscellaneous members and all state peace officer/firefighter
members.
20814.  (a) Notwithstanding any other provision of law, the state's
contribution under this chapter shall be adjusted from time to time
in the annual Budget Act according to the following method.  As part
of the proposed budget submitted pursuant to Section 12 of Article IV
of the California Constitution, the Governor shall include the
contribution rates submitted by the actuary of the liability for
benefits on account of employees of the state.  The Legislature shall
adopt the actuary's contribution rates and authorize the
appropriation in the Budget Act.
   (b) The employer contribution rates for all other public employers
under this system shall be determined on an annual basis by the
actuary and shall be effective on the July 1 following notice of a
change in rate.
20815.  (a) Notwithstanding any other provision of this part,
including, but not limited to, Sections 20225 and 20790, the board
shall not combine the assets and liabilities of public agency
employers into a single account for the purpose of setting a uniform
rate of employer contributions for all public agency employers.  The
rate at which a public employer's contribution to this system shall
be fixed shall be based upon its own experience.  Provisions of law
that provide authority for this system to combine the assets and
liabilities of public employers into a single account for purposes of
establishing a uniform rate are superseded to the extent that they
provide that authority.  For purposes of this section only,
references to public employers shall not be construed to include
school employers.
   (b) Notwithstanding subdivision (a), the assets and liabilities of
a county and a trial court jointly contracting with the board under
Section 20460.1 shall be combined for purposes of setting the
employer contribution rate for both the county and the trial court.
20816.  (a) Notwithstanding any other provision of this part, all
assets of an employer shall be used in the determination of the
employer contribution rate for the membership comprising the basis of
the computation.  Assets held shall be recognized over the same
funding period used to amortize unfunded accrued actuarial
obligations, whether in excess of the accrued actuarial obligation or
not, using the entry age normal funding method.
   (b) On and after January 1, 1999, contracting agencies for which
the actuarial value of assets exceeds the present value of benefits
as of the most recently completed valuation, as determined by the
chief actuary, may request that the board transfer employer assets to
member-accumulated contribution accounts to satisfy all or a portion
of the member contributions required by this part.  That transfer
shall be over a 12-month period provided the actuarial value of
assets exceeds the present value of benefits.  In determining the
present value of benefits and the actuarial value of assets for
purposes of this part, liabilities and assets attributed to the 1959
survivor allowance may not be included.  On and after January 1,
2003, a transfer of assets may not be made pursuant to this
subdivision unless all or the same portion of the member
contributions of each member in a membership classification are
satisfied through the transfer.  An employer electing a transfer of
assets pursuant to this subdivision shall satisfy the members'
contributions for a period of not less than one month and not more
than one year.
   (c) On and after January 1, 2002, any contracting agency for which
the actuarial value of assets exceeds the present value of benefits
as of the most recently completed valuation, as determined by the
chief actuary, may request that the board transfer from the
contracting agency's employer account excess assets, as determined by
the board subject to the requirements and limitations of Section 420
of the Internal Revenue Code (26 U.S.C. Sec. 420), to a retiree
health account established by the board, in its discretion, in the
contracting agency's employer account pursuant to Section 401(h) of
the Internal Revenue Code (26 U.S.C. 401(h)) for the purpose of
providing health benefits to the contracting agency's retirees and
their covered dependents.  The board may, in its discretion, transfer
excess assets from the contracting agency's employer account to that
contracting agency's retiree health account within that agency's
employer account, if the transfer meets the conditions of a qualified
transfer pursuant to Section 420 of the Internal Revenue Code (26
U.S.C. Sec. 420).  The transferred assets shall be used solely for
the payment of current retiree health liabilities.  That qualified
transfer shall be made only once each year.  The board may adopt
regulations necessary to implement this subdivision.  Notwithstanding
any other provision of law, the regulations may provide for the
nonforfeiture of accrued pension benefits of participants and
beneficiaries of a plan from which excess assets are transferred to
the extent necessary for the transfer to meet the conditions of a
qualified transfer pursuant to Section 420 of the Internal Revenue
Code (26 U.S.C. Sec.  420), and may include any other provision
necessary under Section 420 of the Internal Revenue Code (26 U.S.C.
Sec. 420) or Section 401(h) of the Internal Revenue Code (26 U.S.C.
Sec. 401(h)) to accomplish the purposes of this subdivision.
   (d) For the purpose of this section, "employer" means any
contracting agency, the state, or a school employer.
   (e) The actuarial report in the annual financial report shall also
express the effect upon employer contribution rates of this section
and of the recognition of net unrealized gains and losses.
20820.  Notwithstanding Section 20816, surplus funds credited to the
patrol member category shall be used to reduce the state employer
contribution to this system.  Surplus funds in the patrol member
category may also be used to reduce the member contributions required
by Section 20681, under the terms of a memorandum of understanding
reached pursuant to Section 3517.5.
20821.  (a) The contribution to the retirement fund of a school
employer or a contracting agency electing to be subject to Section
20325 with respect to school members and local members making
payments pursuant to Section 20325 for past service that was less
than the minimum prescribed by paragraph (2) of subdivision (a) of
Section 20305 because of service of less than 20 hours a week, prior
to the enactment of Section 20325, shall be increased by an amount or
a percentage of the compensation paid to those members determined by
the board.
   (b) The additional contribution imposed pursuant to subdivision
(a) shall include an amount to pay the reasonable administrative
expenses incurred by the board in establishing the additional
contribution required in subdivision (a).
20822.  (a) From the General Fund in the State Treasury there is
appropriated quarterly, to the retirement fund, the state's
contribution for all of the following:
   (1) All state miscellaneous members and all other categories of
members whose compensation is paid from the General Fund.
   (2) All university members whose compensation is paid from funds
of, or funds appropriated to, the university.
   (3) All state miscellaneous members who are employed by the State
Department of Education or the Department of Rehabilitation and whose
compensation is paid from the Vocational Education Federal Fund, the
Vocational Rehabilitation Federal Fund, or any other fund received,
in whole or in part, as a donation to the state under restrictions
preventing its use for state contributions to the retirement system.
   (4) All state miscellaneous members and all other categories of
members whose compensation is paid from the Senate Operating Fund or
the Assembly Operating Fund or the Operating Funds of the Assembly
and Senate.
   (b) No appropriation shall be required pursuant to this section
with respect to any state member who, pursuant to Section 20281.5, is
not accruing service credit during the first 24 months of service,
unless and until that service credit is credited to the member.
20824.  (a) From each other fund in the State Treasury there is
appropriated quarterly to the retirement fund the state's
contribution for all members whose compensation is paid from that
fund and in respect to which compensation the state's contribution is
not required to be made from the General Fund.
   (b) No appropriation shall be required pursuant to this section
with respect to any state member who, pursuant to Section 20281.5, is
not accruing service credit during the first 24 months of service,
unless and until that service credit is credited to the member.
20826.  The board shall certify to the Controller at the end of each
quarter the total amount of compensation in respect to which state
contributions are payable from the General Fund and each other fund
in the State Treasury, and the Controller shall transfer the state's
contribution from each fund, respectively, to the retirement fund.
Compensation shall be included in the certification at the end of the
month in which the member's contributions based upon it are paid.
20827.  The contributions of the state and all employers, as defined
in Section 20790, with respect to miscellaneous members shall be
applied by the board during each fiscal year to collectively meet the
obligations with respect to miscellaneous members under this system
as follows:
   (a) First, in an amount equal to the liabilities accruing (1)
because of state service of members for which normal contributions
have been made, (2) on account of current service pensions and
disability retirement pensions, and (3) the portion of death
allowance provided from state and employer contributions.  The amount
shall be determined by the most recent actuarial valuation as
interpreted by the actuary.
   (b) Second, in an amount equal to the payments of death benefits
made from state and employer contributions during the fiscal year for
deaths not qualifying for death allowances.
   (c) Third, the balance of the contributions, on the liabilities
accrued on account of prior service pensions.
20828.  The contributions of all school employers with respect to
school members shall be applied by the board during each fiscal year
to meet the obligations of all school employers collectively with
respect to school members under this system as follows:
   (a) First, in an amount equal to the liabilities accruing (1)
because of state service of members for which normal contributions
have been made, (2) on account of current service pensions and
disability retirement pensions, and (3) the portion of death
allowances provided from employer contributions.  The amount shall be
determined by the most recent actuarial valuation as interpreted by
the actuary.
   (b) Second, in an amount equal to the payments of death benefits
made from employer contributions during the fiscal year for deaths
not qualifying for death allowances.
   (c) Third, the balance of the contributions, on the liabilities
accrued on account of prior service pensions.
20829.  Any state fund out of which payments are made under this
chapter may be reimbursed to the extent of the payments by transfer
of a sufficient sum from other funds under the control of the same
disbursing officer.  The disbursing officer shall certify to the
Controller the amounts to be transferred, the funds from and to which
the transfer is to be made, and the Controller shall make the
transfer as directed in the certificate.
20830.  All payments required by this chapter to be made by the
state to the retirement fund, are continuing obligations of the
state.
20831.  Notwithstanding any other provision of law, neither the
state, any school employer, nor any contracting agency shall fail or
refuse to pay the employers' contribution required by this chapter or
to pay the employers' contributions required by this chapter within
the applicable time limitations.
20831.1.  Any school employer that fails or refuses to report an
employee's compensation earnable required by this chapter within the
applicable time limitations shall be required to pay administrative
costs of five hundred dollars ($500) per member as a reimbursement to
this system's current year budget.
20832.  Accumulated contributions other than contributions for prior
service credited to or held as of June 21, 1971, as having been made
by a contracting agency to the extent subject to Section 20506, with
respect to miscellaneous members, and all contributions thereafter
made by an employer pursuant to this chapter, other than
contributions pursuant to Section 20806, with respect to those
members shall be held for the benefit of all the members of this
system who are now or hereafter credited with service rendered as
employees of those employers, and for beneficiaries of this system
who are now or hereafter entitled to receive benefits on account of
that service.
20833.  Contributions of the state with respect to state
miscellaneous members shall be held exclusively for the benefit of
state miscellaneous members, retired employees who were state
miscellaneous members and beneficiaries of those members and retired
employees.
20834.  A contracting agency that is not an employer or that ceases
to be an employer for purposes of this chapter shall thereafter make
contributions as otherwise provided in Chapter 5 (commencing with
Section 20460).  Except as provided in Section 20578, if a
contracting agency ceases to be an employer for purposes of this
section, its contributions thereafter and the accumulated
contributions credited to or held as having been made by the agency
adjusted by addition of all contributions thereafter made by the
employer and subtraction of amounts paid thereafter to or on account
of employees of the contracting agency shall be held, on and after
the date upon which the contracting agency ceases to be an employer,
exclusively for the benefit of its employees, retired employees and
beneficiaries of the employees and retired employees.
   A contracting agency shall not be an employer for purposes of this
section, if the board determines that the agency has no active
employees eligible for coverage under this section.
20835.  A public agency which becomes a contracting agency on or
after January 1, 1977, or which amends its contract to include the
benefits provided in Sections 21624 and 21626, shall not be an
employer for purpose of Section 20834, and all contributions of the
contracting agency shall be held exclusively for the benefit of its
employees, its retired employees, and beneficiaries of those
employees and retired employees.
20836.  The contribution of a contracting agency described in
Section 20834 in respect to miscellaneous members is increased by a
sum equal to 0.08 percent of the compensation paid to those members
by the employer.
20837.  Each school employer and each contracting agency that is a
school district, on account of liability for the benefits provided by
Section 20963.5 shall make contributions in addition to those
otherwise specified in this chapter in amounts to be fixed and
determined by the board.
20840.  (a) Notwithstanding Sections 20616, 20618, and 20815, the
board may create, combine or eliminate risk pools for local
miscellaneous members and local safety members.
   (b) The board shall establish, by regulation, the criteria under
which contracting agencies shall participate in a risk pool and the
criteria under which contracting agencies, county offices of
education, school districts, and community college districts may
participate in a risk pool.  The criteria shall specify that county
offices of education, school districts, and community college
districts may only participate in a risk pool if the retirement
formula of the risk pool is higher than the retirement formula
applicable to school members.  In determining the criteria, the board
shall consider the expected variability of the employer contribution
rate due to demographic events.  In no event shall contracting
agencies with more than 100 active members in a member classification
be required to commence participation in a risk pool for members in
that member classification.  For the purpose of this subdivision an
active member is a member who is an employee of the contracting
agency.
   (c) If a contracting agency, county office of education, school
district, or community college district participates in a risk pool,
the assets and liabilities with respect to the affected member
classification shall be combined with those of the risk pool.
   (d) The board shall establish, by regulation, the circumstances
under which a contracting agency may cease participation in a risk
pool for a member classification.
   (e) All of the following provisions shall apply, without election
by the contracting agency participating in a risk pool, to local
members included in a risk pool:
   (1) Sections 20965, 21022, 21026, 21037, 21536, and 21548.
   (2) Provisions to elect to receive credit for public service
pursuant to Article 5 (commencing with Section 21020) of Chapter 11
that require the member to make the contributions as specified in
Sections 21050 and 21052.
20841.  (a) The employer contribution rate for a contracting agency,
county office of education, school district, or community college
district participating in a risk pool shall be determined by the
actuary, taking into account the difference between the assets and
liabilities that were brought into the risk pool with respect to the
affected member classifications.
   (b) The employer contribution rate for a contracting agency,
county office of education, school district, or community college
district participating in a risk pool may take into account the
differences in the benefits provided by each employer to its members
in the classification included in the risk pool.
   (c) If a county office of education, school district, or community
college district participates in a risk pool pursuant to this
section and pays a contribution rate that differs from the rate
established for school employers participating in a single account
with respect to school members pursuant to subdivision (b) of Section
20225, the actual rate of employer contributions made to the Public
Employees' Retirement System, for purposes of Section 42238.12 of the
Education Code, shall be deemed to be the contributions that the
county office of education or the district would have paid had the
county office of education or the district participated in a single
account for school members pursuant to subdivision (b) of Section
20225.
20842.  Within six months after the effective date of any new option
available to contracting agencies, the board shall (a) notify all
contracting agencies participating in risk pools of the availability
and approximate cost of the new option, (b) include the new option in
at least one of the risk pools applicable to each member category to
which the new option may apply, and (c) notify the contracting
agencies of their options if they are participating in a risk pool to
which the new option is added and choose not to offer the new option
to their employees.