2005 California Education Code Sections 24400-24417 CHAPTER 29. BENEFIT MAINTENANCE

24400.  The Legislature recognizes that inflation erodes the
purchasing power of benefits paid under the plan under this part. It
is the intent of the Legislature to understand the degree of erosion
of these benefits. The board shall report to the Governor and
Legislature no later than June 1 of each year on the extent to which
inflation has eroded the purchasing power of benefits provided under
the Defined Benefit Program. The board shall indicate the amount of
supplementary increases in retirement allowances required to preserve
the purchasing power of benefits provided by the Defined Benefit
Program. The board shall also determine and report on the increases.
24401.  This chapter does not give any  retired member, or a retired
member's successors in interest or beneficiary, any claim against
the board, system, or plan for any increase in any allowance paid or
payable prior to July 1, 1972.
24402.  (a) Service retirement allowances, disability allowances,
disability retirement allowances, family allowances, and survivor
benefit allowances payable pursuant to this part shall be increased
by application of the benefit improvement factor.
   (b) Allowances payable to beneficiaries on account of options
elected under Section 24300, 24301, or 24307 shall be increased by
application of the improvement factor.  This factor shall be
applicable on the same date when it would have been applied to the
allowance of the deceased person.
   (c) The benefit improvement factor shall not be applied to an
annuity that is the actuarial equivalent of the accumulated annuity
deposit contributions standing to the credit of the member's account
on the effective date of a service or disability retirement.
24403.  The allowances that commenced to accrue prior to July 1,
1972, and payable on August 1, 1972, exclusive of annuities from the
Annuity Deposit Fund and tax-sheltered annuities payable under former
Sections 14193, 14280 and 14284, as those sections read on June 30,
1972, shall be increased by application of the benefit improvement
factor on September 1, 1973, and annually thereafter.
24404.  (a) Effective July 1, 1973, the benefits of persons eligible
for survivor benefits pursuant to former Section 14186 as it read on
June 30, 1972, shall be increased as follows:
   (1) Those eligible for ninety dollars ($90) per month shall be
increased to one hundred five dollars ($105) per month.
   (2) Those eligible for one hundred eighty dollars ($180) per month
shall be increased to two hundred ten dollars ($210) per month.
   (3) Those eligible for two hundred fifty dollars ($250) per month
shall be increased to two hundred ninety-five dollars ($295) per
month.
   (b) These benefits shall be subject to the provisions of Sections
22140 and 24403 with the first annual improvement to occur on
September 1, 1974, and annually thereafter.
24405.  The first three hundred dollars ($300) of the monthly
allowances payable  to retired members, disabled members, and
beneficiaries are increased as of July 1, 1976, as follows if the
member had 20 or more years of credited service:
   (a) For those with effective dates prior to July 1, 1972, 9
percent.
   (b) For those with effective dates from July 1, 1972, to June 30,
1973, 6 percent.
   (c) For those with effective dates from July 1, 1973, to June 30,
1974, 3 percent.
24406.  The first three hundred dollars ($300) of the monthly
allowances payable  to retired members, disabled members, and
beneficiaries are increased as of July 1, 1978, for those members
receiving allowances on July 1, 1978, if the member had less than 20
years of credited service, as follows:
   (a) For those with effective dates prior to July 1, 1972, 9
percent.
   (b) For those with effective dates from July 1, 1972, to June 30,
1973, 6 percent.
   (c) For those with effective dates from July 1, 1973, to June 30,
1974, 3 percent.
24407.  (a) The monthly allowances payable  to retired members,
disabled members, and beneficiaries are increased as of January 1,
1980, for those persons receiving allowances with respect to members
who retired or died prior to June 30, 1973, to the amount that
results when the initial allowance that was received by those members
is multiplied by the percentage set forth opposite the year of
retirement or death in the following schedule:
         Period During Which
     Retirement or Death Occurred                      Percentage
   On or before June 30, 1958 ..........................  180.4
   12 months ending June 30, 1959 ......................  175.8
   12 months ending June 30, 1960 ......................  172.2
   12 months ending June 30, 1961 ......................  169.8
   12 months ending June 30, 1962 ......................  167.8
   12 months ending June 30, 1963 ......................  165.5
   12 months ending June 30, 1964 ......................  163.0
   12 months ending June 30, 1965 ......................  159.8
   12 months ending June 30, 1966 ......................  156.7
   12 months ending June 30, 1967 ......................  153.1
   12 months ending June 30, 1968 ......................  147.5
   12 months ending June 30, 1969 ......................  141.6
   12 months ending June 30, 1970 ......................  134.5
   12 months ending June 30, 1971 ......................  128.7
   12 months ending June 30, 1972 ......................  124.5
   12 months ending June 30, 1973 ......................  119.6
   (b) For those  retired members, disabled members, and
beneficiaries receiving an allowance with an effective date prior to
July 1, 1965, the initial allowance, for purposes of this section,
shall be deemed to be the allowance payable on July 1, 1965.
However, for purposes of determining the allowance payable under this
section, the percentage corresponding to the actual year of
retirement shall be applied.
24408.  (a) The minimum unmodified allowance, exclusive of annuities
from accumulated annuity deposit and tax-sheltered contributions, of
a person retired prior to January 1, 1981, shall be an amount equal
to at least sixteen dollars ($16) per month multiplied by the years
of credited service.  This guaranteed amount shall be increased as of
October 1, 1980, and shall be reduced by the amount of an unmodified
allowance payable from a local system based on service credited
under this part.  If the retirement was effective at less than age 60
years, this allowance shall be reduced by one-half of 1 percent for
each full month or fraction of a month that would have elapsed until
the retired member would have reached age 60 years.  If the retired
member elected to have the allowance modified under Option 2 or 3,
the increase in the retired member's allowance shall be modified
under the option selected.
   (b) The board may make lump sum payments for increases between
October 1, 1980, and January 1, 1981.
24409.  The minimum unmodified allowance, exclusive of annuities
from accumulated annuity deposit and tax-sheltered contributions, of
(a) a person who retired on or before December 31, 1981, (b) the
option beneficiary of a person who retired on or before December 31,
1981, or (c) a person receiving a monthly allowance in lieu of the
death benefit payable on account of the death of a member whose death
occurred prior to July 1, 1972, shall be an amount equal to at least
eighteen dollars ($18) per month multiplied by the years of credited
service.  This guaranteed amount is increased as of September 1,
1981, and is applicable to allowances paid on and after September 1,
1981.  If the retirement was effective at less than age 60 years,
this allowance shall be reduced by one-quarter of 1 percent for each
full month or fraction of a month that would have elapsed until the
retired member reached age 55 years, and the allowance shall be
reduced by one-half of 1 percent for each full month or fraction of a
month between age 55 and age 60 years.  If the retired member
elected to have his or her allowance modified under Option 2 or 3,
the increase in the retired member's allowance shall be modified
under the option selected.
24410.  (a) If projected final compensation is used to calculate the
service retirement allowance following the termination of the
disability allowance or if the disability allowance is continued as
the lesser of the two allowance calculations under Section 24212 or
24213, then the original disability allowance effective date shall be
retained as the base date for purposes of determining postretirement
benefit increases.
   (b) This section shall be applicable for determining the base date
for applicable postretirement increases made on or after January 1,
1982.
   (c) This section shall only apply to service retirements effective
the day after the termination date of the disability allowance.
24410.5.  (a) Notwithstanding any provision of this part, including,
but not limited to, subdivision (e) of Section 22664, the annual
allowance payable on the effective date of this section to a retired
member, an option beneficiary, or a surviving spouse receiving an
allowance pursuant to either Section 23805 or 23855 shall not be less
than the amount identified in the following schedule for the number
of years of the member's credited service under the Defined Benefit
Program at the time of the member's retirement, disability, or death,
excluding service credited pursuant to Sections 22714, 22715, 22717,
and 22826, after the application of all allowances and allowance
increases authorized by this part, including those specified in
Sections 24412 and 24415, as those sections read on December 31,
1999, and excluding annuities payable from the accumulated annuity
deposit contributions or the accumulated tax-sheltered annuity
contributions:
    20 years of credited service ..............   $15,000
    21 years of credited service ..............   $15,500
    22 years of credited service ..............   $16,000
    23 years of credited service ..............   $16,500
    24 years of credited service ..............   $17,000
    25 years of credited service ..............   $17,500
    26 years of credited service ..............   $18,000
    27 years of credited service ..............   $18,500
    28 years of credited service ..............   $19,000
    29 years of credited service ..............   $19,500
    30 years or more of credited service ......   $20,000
   (b) Notwithstanding subdivision (a), the amount identified in the
schedule in subdivision (a) shall be reduced:
   (1) By 50 percent for a beneficiary receiving an allowance under
Option 3 or Option 7.
   (2) By one-third for an option beneficiary receiving an allowance
under Option 4 after the death of the member or for a member
receiving an allowance under Option 4 after the death of the option
beneficiary.
   (3) By 50 percent for an option beneficiary receiving an allowance
under Option 5 after the death of the member or for a member
receiving an allowance under Option 5 after the death of the option
beneficiary.
   (4) By a percentage equal to 100 percent minus the percentage of
the member's modified allowance received by the option beneficiary
for each option beneficiary receiving an allowance under Option 8.
   (5) By 60 percent for a surviving spouse receiving an allowance
pursuant to subdivision (a) of Section 23805.
   (6) By 50 percent for a surviving spouse receiving an allowance
pursuant to subdivision (c) of Section 23805 or Section 23855.
   (c) A member to whom a disability allowance is payable on January
1, 2000, who subsequently receives a service retirement allowance
pursuant to Section 24213 shall, upon the retirement for service,
receive an increase in the service retirement allowance pursuant to
this section.
   (d) A member, beneficiary, or surviving spouse may receive an
allowance pursuant to this section only if the member was an active
member at the time of the member's retirement, or death and, for
those members who retired for service, the member retired on or after
age 55, unless the member's allowance was not subject to a reduction
due to retirement prior to an age specified in this part.
   (e) A retired member, option beneficiary, or surviving spouse
subject to this section shall receive the annual minimum allowance
pursuant to this section unless the system receives in writing, on a
form prescribed by the system, notification from the member, option
beneficiary, or surviving spouse before May 1, 2000, of his or her
election not to receive the increase provided under this section.
   (f) Benefits payable under this section shall be initially paid by
the system on July 1, 2000.
24410.6.  (a) Notwithstanding any provision of this part, including,
but not limited to, subdivision (e) of Section 22664, and except as
provided in subdivisions (b) and (c), the annual allowance payable on
the effective date of this section to a retired member, an option
beneficiary, or a surviving spouse receiving an allowance pursuant to
either Section 23805 or 23855 shall not be less than the amount
identified in the following schedule for the number of years of the
member's credited service under the Defined Benefit Program at the
time of the member's retirement, disability, or death, excluding
service credited pursuant to Sections 22714, 22715, 22717, and 22826,
after the application of all allowances and allowance increases
authorized by this part, including those specified in Sections 24412
and 24415, as those sections read on December 31, 2000, and excluding
increases authorized by Section 24410.7 and annuities payable from
the accumulated annuity deposit contributions or the accumulated
tax-sheltered annuity contributions:
    20 years of credited service ..............   $15,000
    21 years of credited service ..............   $15,500
    22 years of credited service ..............   $16,000
    23 years of credited service ..............   $16,500
    24 years of credited service ..............   $17,000
    25 years of credited service ..............   $17,500
    26 years of credited service ..............   $18,000
    27 years of credited service ..............   $18,500
    28 years of credited service ..............   $19,000
    29 years of credited service ..............   $19,500
    30 years or more of credited service ......   $20,000
   (b) Notwithstanding subdivision (a), the amount identified in the
schedule in subdivision (a) shall be reduced:
   (1) By 50 percent for a beneficiary receiving an allowance under
Option 3 or Option 7.
   (2) By one-third for an option beneficiary receiving an allowance
under Option 4 after the death of the member or for a member
receiving an allowance under Option 4 after the death of the option
beneficiary.
   (3) By 50 percent for an option beneficiary receiving an allowance
under Option 5 after the death of the member or for a member
receiving an allowance under Option 5 after the death of the option
beneficiary.
   (4) By a percentage equal to 100 percent minus the percentage of
the member's modified allowance received by the option beneficiary
for each option beneficiary receiving an allowance under Option 8.
   (5) By 60 percent for a surviving spouse receiving an allowance
pursuant to subdivision (a) of Section 23805.
   (6) By 50 percent for a surviving spouse receiving an allowance
pursuant to subdivision (c) of Section 23805 or Section 23855.
   (c) A benefit shall be paid pursuant to this section if both of
the following apply:
   (1) The retired member, the option beneficiary, or the surviving
spouse had an allowance payable on January 1, 2000, and was not
eligible to receive a benefit pursuant to Section 24410.5.
   (2) The retired member or the member whose service was the basis
of the allowance payable to the option beneficiary or surviving
spouse was one of the following:
   (A) A member who retired prior to the age of 55 years, provided
the minimum allowance specified in subdivision (a) shall be reduced
to an amount equal to that minimum allowance multiplied by the ratio
of the percentage of final compensation per year of credited service
on which the member's initial allowance was based to 1.4.
   (B) A member who was paid a retirement allowance pursuant to
Section 24213, if the member's credited service, excluding service
credited pursuant to Sections 22714, 22715, 22717, and 22826, was
less than 20 years but whose projected service to normal retirement
age, excluding service credited pursuant to Sections 22714, 22715,
22717, and 22826, was equal to or greater than 20 years, provided
that the minimum allowance payable shall be based on 20 years of
credited service.
   (C) A member who retired as an inactive member.
   (D) A member who retired prior to March 21, 1974, with 19.5 years
or more of credited service, provided that the minimum allowance
payable shall be based on 20 years of credited service.
   (E) A member who retired on or after March 21, 1974, and prior to
January 1, 2000, and whose credited service, excluding service
credited pursuant to Sections 22714, 22715, 22717, and 22826, was
less than 20 years, but whose credited service, excluding service
credited pursuant to Sections 22714, 22715, and 22826, but including
service credited pursuant to Section 22717, was equal to or greater
than 20 years, provided that the minimum allowance payable shall be
based on 20 years of credited service.
   (F) A member whose credited service, excluding service credited
pursuant to Sections 22714, 22715, and 22826, but including credited
service that a court has ordered be awarded to the member's nonmember
spouse pursuant to Section 22652, equaled at least 20 years,
provided that the amount payable to the member pursuant to this
section shall be based on the amount of service credited to the
member, excluding service credited pursuant to Sections 22714, 22715,
22717, and 22826, and the amount awarded to the nonmember spouse,
and further provided that the minimum allowance specified in
subdivision (a) shall be reduced to an amount equal to that minimum
allowance multiplied by the ratio of (i) the amount of service
credited to the member, excluding service credited pursuant to
Sections 22714, 22715, 22717, and 22826, to (ii) the sum of the
amount of service credited to the member, excluding service credited
pursuant to Sections 22714, 22715, 22717, and 22826, and the amount
awarded to the nonmember spouse.
   (d) A benefit shall be paid pursuant to this section to a retired
member receiving a benefit pursuant to Section 24410.5 if (1) the
member meets the criteria of subparagraph (F) of paragraph (2) of
subdivision (c), and (2) the allowance payable under that
subparagraph, after the application of all allowances and allowance
increases authorized by this part, including those specified in
Sections 24412 and 24415, is greater than the allowance payable under
Section 24410.5, after the application of all allowances and
allowance increases authorized by this part, including those
specified in Sections 24412 and 24415.
   (e) A retired member, option beneficiary, or surviving spouse
subject to this section shall receive the annual minimum allowance
pursuant to this section unless the system receives in writing, on a
form prescribed by the system, notification from the member, option
beneficiary, or surviving spouse of his or her election not to
receive the increase provided under this section.
   (f) Benefits payable under this section shall be initially paid by
the system on or before September 1, 2001.
24410.7.  (a) The monthly allowance payable on the effective date of
this section, excluding annuities payable from accumulated annuity
deposit contributions and tax-sheltered annuity contributions and
benefits payable pursuant to Sections 24410.5 and 24410.6, to retired
members and nonmember spouses, disabled members, and beneficiaries,
including option beneficiaries, shall be increased by the percentage
set forth opposite the applicable period during which retirement,
disability, or death occurred set forth in the following schedule:
    Period during which retirement,
    disability, or death occurred:               Percentage:
    36 months ending Dec. 31, 2000               0.0%
    12 months ending Dec. 31, 1997               1.0%
    24 months ending Dec. 31, 1996               2.0%
    60 months ending Dec. 31, 1994               3.0%
    60 months ending Dec. 31, 1989               4.0%
    120 months ending Dec. 31, 1984              5.0%
    Dec. 31, 1974 or earlier                     6.0%
   (b) The increase provided pursuant to this section is in addition
to any payments received by a retired member or nonmember spouse,
disabled member, or beneficiary, including an option beneficiary,
under Section 24415.
   (c) Benefits payable under this section shall be initially payable
by the system on or before July 1, 2001.
24411.  (a) (1) Annual cost-of-living adjustments for retired
members, disabled members, and beneficiaries in excess of the
2-percent adjustment authorized by Section 22140 may be included as a
General Fund appropriation in the annual Budget Act.  In the annual
budget submitted to the Legislature, the Governor shall include a
budget item equal to 5 percent of the average annualized statewide
increase in payroll for certificated personnel over the three
previous school years among school districts, county offices of
education, and community college districts.
   (2) The amount submitted in the annual Budget Act pursuant to this
section shall be considered as part of the overall budget
allocations to the public schools and community colleges.
   (b) The annual appropriation shall be made to the system on July
1, and shall be placed in a segregated account called the Retirees'
Purchasing Power Protection Account.  The proceeds of that account
are continuously appropriated and shall be distributed annually in
quarterly payments commencing on September 1 to retired members,
disabled members, and beneficiaries under the Defined Benefit Program
as follows:
   (1) The proceeds shall be allocated among those retired members,
disabled members, and beneficiaries under the Defined Benefit Program
whose allowances, after applying the 2-percent adjustment authorized
by Section 22140, have the lowest purchasing power percentage, based
on the amount that would be paid had the original allowance been
increased by the increases in the index then being used by the
Department of Finance to measure changes in the cost of living,
increasing those allowances to a common minimum purchasing power
level.  In any year in which the purchasing power of the allowances
of all retired members, disabled members, and beneficiaries under the
Defined Benefit Program equals not less than 80 percent and
additional funds remain from the allocation authorized by this
section, those funds shall be allocated by the board to general
accounts to reduce the unfunded actuarial liability of the fund.
   (2) The board may deduct from the annual appropriation an amount
necessary for administrative expenses to implement this section.
   (c) The board shall inform each recipient of an allowance under
subdivision (b) that the increases are not cumulative, are not part
of the base allowance, and shall be available only as appropriated
annually in the Budget Act.
   (d) The adjustments authorized by this section shall not be
included in the base allowance for purposes of calculating the
2-percent adjustment authorized by Section 22140.
   (e) This section shall not be operative in any fiscal year during
which, as determined by the board, distributions provided for by
Section 24415 are being made.
24412.  (a) The annual revenues deposited to the Teachers'
Retirement Fund pursuant to Section 6217.5 of the Public Resources
Code are continuously appropriated without regard to fiscal year for
the purposes of this section and shall be distributed annually in
quarterly supplemental payments commencing on September 1 of each
year to retired members, disabled members, and beneficiaries under
the Defined Benefit Program.  The amount available for distribution
in any year shall be the income for that year from the sale or use of
school lands and lieu lands, as estimated by the State Lands
Commission prior to the beginning of the fiscal year, adjusted by the
difference between the estimated and actual income for the preceding
fiscal year.  The board shall deduct from the revenues an amount
necessary for administrative expenses to implement this section.
   (b) The net revenues to be distributed shall be allocated among
those retired members, disabled members, and beneficiaries, as
defined in subdivision (a) of Section 22107, whose allowances under
the Defined Benefit Program, after sequentially applying the annual
improvement factor as defined in Section 22140 and the annual
supplemental payment as specified in Section 24411, if any, are below
  80 percent of the original purchasing power.  The purchasing power
calculation for each individual allowance shall be based on the
change in the All Urban California Consumer Price Index between June
of the calendar year of retirement and June of the fiscal year
preceding the fiscal year of the distribution.  The allocation shall
provide a pro rata share of the amount needed to restore the
allowance payable, after sequential application of the current year
annual improvement factor and the supplemental payment under Section
24411, to 80 percent of the original purchasing power.
   (c) The allowance increase shall not be applicable to annuities
payable from the accumulated annuity deposit contributions or the
accumulated tax-sheltered annuity contributions.
   (d) In any year that the net revenues from school lands and lieu
lands is greater than that needed to adjust the allowances of all
retired members, disabled members, and beneficiaries, as defined in
subdivision (a) of Section 22107, under the Defined Benefit Program
to 80 percent of the original purchasing power, the net revenues in
excess of that needed for distribution shall be used by the board to
reduce the unfunded actuarial obligation of the fund, if any.
   (e) The board shall inform each recipient of supplemental payments
under this section that the increases are not cumulative and are not
part of the base allowance.
24413.  Notwithstanding Section 24412, revenues from school lands or
lieu lands related to the claim of the State of California to the
school lands within the area referred to as the Elk Hills Naval
Petroleum Reserve, shall be deposited in the Supplemental Benefit
Maintenance Account.
24415.  (a) The proceeds of the Supplemental Benefit Maintenance
Account shall be distributed annually in quarterly supplemental
payments commencing on September 1, 1990, to retired members,
disabled members, and beneficiaries, as defined in subdivision (a) of
Section 22107.  The amount available for distribution in any fiscal
year shall not exceed the amount necessary to restore purchasing
power up to 80 percent of the purchasing power of the initial monthly
allowance after the application of all allowance increases
authorized by this part, including those specified in Section 24412,
and excluding those provided pursuant to Sections 24410.5, 24410.6,
and 24410.7.
   (b) The net revenues to be distributed shall be allocated among
those retired members, disabled members, and beneficiaries, as
defined in subdivision (a) of Section 22107, whose allowances, after
sequentially applying the annual improvement factor as defined in
Sections 22140 and 22141, and the annual supplemental payment as
specified in Section 24412, have the lowest purchasing power
percentage.  The purchasing power calculation for each individual
shall be based on the change in the All Urban California Consumer
Price Index between June of the calendar year of retirement and June
of the fiscal year preceding the fiscal year of distribution.  In any
year in which the purchasing power of the allowances of all retired
members, disabled members, and beneficiaries, as defined in
subdivision (a) of Section 22107, equals not less than 80 percent and
additional funds remain from the allocation authorized by this
section, those funds shall remain in the Supplemental Benefit
Maintenance Account for allocation in future years.
   (c) The allowance increase shall not be applicable to annuities
payable from the accumulated annuity deposit contributions or the
accumulated tax-sheltered annuity contributions.
   (d) The increases provided by subdivision (b) are not cumulative,
not part of the base allowance, and will be payable only to the
extent that funds are available from the Supplemental Benefit
Maintenance Account.  The board shall inform each recipient of the
contents of this subdivision.
   (e) The adjustments authorized by this section are vested only up
to the amount payable as a result of the annual appropriation made
pursuant to Section 22954 and shall not be included in the base
allowance for purposes of calculating the annual improvement defined
by Sections 22140 and 22141.
   (f) Notwithstanding subdivision (b), for purposes of restoring the
purchasing power of benefits provided pursuant to Section 24410.5
for members and beneficiaries receiving benefits pursuant to
subdivision (b), the purchasing power calculation shall be based on
80 percent of the change in the All Urban California Consumer Price
Index between January 2000 and June of the fiscal year preceding the
fiscal year of distribution, after the application of increases
authorized by Section 24412 that are made to the allowances provided
pursuant to Section 24410.5.
   (g) Notwithstanding subdivision (b), for purposes of restoring the
purchasing power of benefits provided pursuant to Sections 24410.6
and 24410.7 for members and beneficiaries receiving benefits pursuant
to subdivision (b), the purchasing power calculation shall be based
on  80 percent of the change in the All Urban California Consumer
Price Index between January 2001 and June of the fiscal year
preceding the fiscal year of distribution, after the application of
increases authorized by Section 24412 that are made to the allowances
provided pursuant to Sections 24410.6 and 24410.7.
24416.  (a) If the board determines by June 30 of the then current
fiscal year that the Supplemental Benefit Maintenance Account will
not have sufficient funds to provide purchasing power of up to 80
percent for the subsequent fiscal year, the board, for that year, may
do either, or a combination of the following:
   (1) Increase the employer contribution rate commencing in the next
fiscal year by an amount that would provide sufficient funds for no
more than the estimated difference between the funds in the
Supplemental Benefit Maintenance Account and the amount needed to pay
the benefit level specified by the board, provided the benefit level
is no more than 80 percent.  Notwithstanding any other provision of
this part, the increase in the employer contribution rate shall only
become operative if the increase is approved or authorized in the
Budget Act.
   (2) Reduce the supplemental benefit payment for the subsequent
fiscal year to the amount that can be funded by the available funds
in the Supplemental Benefit Maintenance Account.
   (b) If the board finds that there is no unfunded obligation, as
determined by the board's professional consulting actuary and
affirmed by the Director of Finance, then in addition to the
authority pursuant to subdivision (a), the board may transfer to an
auxiliary Supplemental Benefit Maintenance Account, from any funds
that are in excess of the amount needed to fund fully the benefits
for which the Teachers' Retirement Fund is liable, an amount that
would provide sufficient funds for no more than the estimated
difference between the funds in the Supplemental Benefit Maintenance
Account and the amount needed to pay the benefit level specified by
the board, provided the benefit level is no more than 80 percent.
   (c) If the board increases the employer contribution rate pursuant
to paragraph (1) of subdivision (a), the increase between the
current fiscal year contribution rate and the contribution rate in
the next fiscal year, shall not exceed one-quarter of 1 percent of
the creditable compensation upon which contributions are based.
24417.  (a) The proceeds of an auxiliary Supplemental Benefit
Maintenance Account shall be distributed annually in quarterly
supplemental payments, commencing when funds in the Supplemental
Benefit Maintenance Account are insufficient to support 80 percent,
to retired members, disabled members, and beneficiaries, as defined
in subdivision (a) of Section 22107.  The amount available for
distribution in any fiscal year shall not exceed the amount necessary
to restore purchasing power up to 80 percent of the purchasing power
of the initial monthly allowance after the application of all
allowance increases authorized by this part, including those
specified in Sections 24412 and 24415, and excluding those provided
pursuant to Sections 24410.5, 24410.6, and 24410.7.
   (b) The net revenues to be distributed shall be allocated among
those retired members, disabled members, and beneficiaries, as
defined in subdivision (a) of Section 22107, whose allowances, after
sequentially applying the annual improvement factor as defined in
Sections 22140 and 22141, and the annual supplemental payment as
specified in Sections 24412 and 24415, have the lowest purchasing
power percentage.  The purchasing power calculation for each
individual shall be based on the change in the All Urban California
Consumer Price Index between June of the calendar year of the benefit
effective date and June of the fiscal year preceding the fiscal year
of distribution.
   (c) The allowance increase shall not be applicable to annuities
payable from the accumulated annuity deposit contributions or the
accumulated tax-sheltered annuity contributions.
   (d) The increases provided by subdivision (b) are not cumulative,
nor part of the base allowance, and will be payable only to the
extent that funds are available from the Supplemental Benefit
Maintenance Account and the auxiliary Supplemental Benefit
Maintenance Account.  The board shall inform each recipient of the
contents of this subdivision.
   (e) The distributions authorized by this section are vested only
up to the amount payable as a result of the annual appropriation made
pursuant to Section 22954 and shall not be included in the base
allowance for purposes of calculating the annual improvement defined
by Sections 22140 and 22141.
   (f) Notwithstanding subdivision (b), for purposes of restoring the
purchasing power of benefits provided pursuant to Section 24410.5
for members and beneficiaries receiving benefits pursuant to
subdivision (b), the purchasing power calculation shall be based on
80 percent of the change in the All Urban California Consumer Price
Index between January 2000 and June of the fiscal year preceding the
fiscal year of distribution, after the application of increases
authorized by Section 24412 that are made to the allowances provided
pursuant to Section 24410.5.
   (g) Notwithstanding subdivision (b), for purposes of restoring the
purchasing power of benefits provided pursuant to Sections 24410.6
and 24410.7 for members and beneficiaries receiving benefits pursuant
to subdivision (b), the purchasing power calculation shall be based
on 80 percent of the change in the All Urban California Consumer
Price Index between January 2001 and June of the fiscal year
preceding the fiscal year of distribution, after the application of
increases authorized by Section 24412 that are made to the allowances
provided pursuant to Sections 24410.6 and 24410.7.