2005 California Education Code Sections 22950-22956 CHAPTER 16. EMPLOYER AND STATE CONTRIBUTIONS

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.
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,
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 Supplemental Benefit Maintenance
Account in the Teachers' Retirement Fund.
   (b) 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.  However, for
the 2003-04 fiscal year only, that appropriation is reduced by five
hundred million dollars ($500,000,000).
   (c) The board may deduct from the annual appropriation made
pursuant to this section an amount necessary for the administrative
expenses of Section 24415.
   (d) 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.
   (e) 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.
22954.1.  (a) Beginning in 2006, and every four years thereafter,
the board shall, based on an actuarial valuation approved by the
board, report to the Legislature and the Director of Finance
regarding the anticipated ability of the system to provide the
purchasing power protection contemplated by Chapter 840 of the
Statutes of 2001 during each year until June 30, 2036.  The actuarial
valuation shall take into consideration all expected contributions
to the Supplemental Benefit Maintenance Account, expected
expenditures from the account, and expected investment returns.
   (b) On July 30 of the calendar year following any calendar year in
which the board, as a result of the quadrennial valuation required
by subdivision (a), reports that the funds in the Supplemental
Benefit Maintenance Account will be insufficient in any fiscal year
before July 1, 2036, to provide the purchasing power protection
contemplated by Chapter 840 of the Statutes of 2001, there is hereby
appropriated from the General Fund to the Controller the amount
necessary to provide that purchasing power protection, as determined
by the actuary, taking into consideration all expected contributions
to the Supplemental Benefit Maintenance Account, expected
expenditures from the account, and expected investment returns, and
subject to the limitation in subdivision (c).  The amount
appropriated pursuant to this section shall be transferred by the
Controller to the Supplemental Benefit Maintenance Account upon
certification of the amount by the Director of Finance.
   (c) The aggregate amount of funds appropriated pursuant to
subdivision (b) is limited to an amount equal to five hundred million
dollars ($500,000,000) adjusted by the actual rate of return on
funds in the Supplemental Benefit Maintenance Account from July 1,
2003, after taking into account any amount previously appropriated
pursuant to subdivision (b).  In calculating this limit, the sum of
five hundred million dollars ($500,000,000) shall be treated as an
initial principal amount, and this amount shall be adjusted at the
end of each fiscal year based on the actual investment return of the
Supplemental Benefit Maintenance Account during the preceding fiscal
year and shall be reduced by any amounts appropriated pursuant to
subdivision (b) as of the date of the transfer.
   (d) This section shall become inoperative on July 1, 2036, and, as
of January 1, 2037, is repealed, unless a later enacted statute that
is enacted before January 1, 2037, deletes or extends the dates on
which it becomes inoperative and is repealed.
22954.5.  For the 1998-99 fiscal year, the contributions required by
Section 22954 shall be reduced by the total value of the state's
interest in the school lands from the sale of the Elk Hills Naval
Petroleum Reserve.  That sale is expected in February 1998.
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, to be calculated annually on
October 1, and shall be divided into four equal quarterly payments.
   (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, to be
calculated annually on October 1, 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.  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.
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.