2005 California Government Code Sections 7500-7514.5 CHAPTER 21. PUBLIC PENSION AND RETIREMENT PLANS

7500.  Any city with a population of 1,000,000 or more, and any
agency thereof, which has established any pension and retirement plan
which requires officers and employees of one sex to pay greater
contributions than those of another sex who are the same age shall
revise the plan so that the contributions are the same commencing
with contributions for service on and after January 1, 1975.  This
section shall not be construed as requiring or authorizing an
increase in the contributions of any members of a pension and
retirement plan.
   This section shall not be applicable to the Public Employees'
Retirement System.
7501.  It is the intent and purpose of the Legislature, in enacting
this chapter, to safeguard the solvency of all public retirement
systems and funds. The Legislature finds and declares that public
agencies maintaining retirement systems can benefit from periodic and
independent analysis of their financial condition.  It is the
purpose of Sections 7502, 7503, and 7504 to enable the State
Controller to gather information to compare and evaluate the
financial condition of such systems and to make such comparisons and
evaluations.
7502.  The State Controller shall review the annual financial report
of each state and local public retirement system submitted pursuant
to Section 7504 giving particular consideration to the adequacy of
funding of each system.  The State Controller shall also review the
triennial valuation of each public retirement system submitted
pursuant to Section 7504 and shall give particular consideration to
the assumption concerning the inflation element in salary and wage
increases, mortality, service retirement rates, withdrawal rates,
disability retirement rates, and rate of return on total assets.
   The State Controller shall establish an advisory committee which
shall include enrolled actuaries, as defined in Section 7504, and
state and local public retirement system administrators, to assist in
carrying out the duties imposed by this section.
7503.  All state and local public retirement systems shall prepare
an annual report in accordance with generally accepted accounting
principles.
7504.  (a) All state and local public retirement systems shall, not
less than triennially, secure the services of an enrolled actuary.
An enrolled actuary, for the purposes of this section, means an
actuary enrolled under subtitle C of Title III of the federal
Employee Retirement Income Security Act of 1974 (Public Law 93-406)
and who has demonstrated experience in public retirement systems.
The actuary shall perform a valuation of the system utilizing
actuarial assumptions and techniques established by the agency that
are, in the aggregate, reasonably related to the experience and the
actuary's best estimate of anticipated experience under the system.
Any differences between the actuarial assumptions and techniques used
by the actuary that differ significantly from those established by
the agency shall be disclosed in the actuary's report and the effect
of the differences on the actuary's statement of costs and
obligations shall be shown.
   (b) All state and local public retirement systems shall secure the
services of a qualified person to perform an attest audit of the
system's financial statements.  A qualified person means any of the
following:
   (1) A person who is licensed to practice as a certified public
accountant in this state by the California Board of Accountancy.
   (2) A person who is registered and entitled to practice as a
public accountant in this state by the California Board of
Accountancy.
   (3) A county auditor in any county subject to the County Employees
Retirement Law of 1937 (Chapter 3 (commencing with Section 31450) of
Part 3 of Division 4 of Title 3).
   (4) A county auditor in any county having a pension trust and
retirement plan established pursuant to Section 53216.
   (c) All state and local public retirement systems shall submit
audited financial statements to the State Controller at the earliest
practicable opportunity within six months of the close of each fiscal
year.  However, the State Controller may delay the filing date for
reports due in the first year until the time as report forms have
been developed that, in his or her judgment, will satisfy the
requirements of this section.  The financial statements shall be
prepared in accordance with generally accepted accounting principles
in the form and manner prescribed by the State Controller.  The
penalty prescribed in Section 53895 shall be invoked for failure to
comply with this section.  Upon a satisfactory showing of good cause,
the State Controller may waive the penalty for late filing provided
by this subdivision.
   (d) The State Controller shall compile and publish a report
annually on the financial condition of all state and local public
retirement systems containing, but not limited to, the data required
in Section 7502.
7505.  Every state and local public retirement system shall permit
any person entitled to the receipt of benefits to designate that
payment of such benefits shall be transmitted to a bank, savings and
loan association, or credit union for deposit in the person's
account, and the transmittal of such payment pursuant to this section
shall discharge the public agency's obligations in respect to such
payment.
7506.  Notwithstanding any other provision of law, any person
entitled to the receipt of benefits from any state retirement system
may authorize the payment of the benefits to be directly deposited by
electronic fund transfer into the person's account at the financial
institution of his or her choice under a program for direct deposit
by electronic transfer established by the Controller pursuant to
Section 7506.5.  The direct deposit shall discharge the state agency'
s obligation in respect to that payment.
7506.5.  The Controller shall make an agreement with one or more
financial institutions participating in the Automated Clearing House
pursuant to the local rules, and shall establish a program, for the
direct deposit by electronic fund transfer of the benefits, after any
withholding required by law and authorized deductions, of any person
entitled to the receipt of benefits from any state retirement system
who authorizes the direct deposit thereof by electronic fund
transfer into the person's account at the financial institution of
his or her choice.
7507.  The Legislature and local legislative bodies shall secure the
services of an enrolled actuary to provide a statement of the
actuarial impact upon future annual costs before authorizing
increases in public retirement plan benefits.  An "enrolled actuary"
means an actuary enrolled under subtitle C of Title III of the
federal Employee Retirement Income Security Act of 1974 and "future
annual costs" shall include, but not be limited to, annual dollar
increases or the total dollar increases involved when available.
   The future annual costs as determined by the actuary shall be made
public at a public meeting at least two weeks prior to the adoption
of any increases in public retirement plan benefits.
7507.5.  It is the intent of the Legislature that the Regents of the
University of California provide written notice to the Legislature
of any proposed changes to retirement plan benefits, employer or
employee contribution rates, or actuarial assumptions affecting the
University of California Retirement System, at least 60 days prior to
the effective date thereof.  The written notice shall be provided to
the Joint Legislative Budget Committee and the fiscal subcommittees
and shall consist of:
   (a) A description and explanation of each specific proposed change
to the benefit structure, contribution rates, or actuarial
assumptions.
   (b) The actuarial impact upon future annual costs of each proposed
change.
7508.  A retired member of a state retirement system, other than the
University of California Retirement System, the Judges' Retirement
System, the Judges' Retirement System II, and the State Teachers'
Retirement System, may, notwithstanding Section 9359.12, serve on a
public board or commission and be entitled to receive for that
service, per diem compensation for every day or portion thereof of
actual attendance at meetings of the board or commission or any
committee thereof, and necessary traveling expenses incurred in
connection with the performance of his or her official duties,
without loss or interruption of benefits provided by the system, so
long as the service does not exceed a total of 50 meeting days.
   This section shall not apply to service as a member of a board or
commission the annual salary for which is prescribed by Chapter 6
(commencing with Section 11550) of Division 3 of Title 2.
7509.  The restrictions upon rates of interest contained in Section
1 of Article XV of the State Constitution shall not apply to any
loans made by, or forbearances of, any state or local public
retirement system including but not limited to, any public retirement
system authorized and regulated by the State Teachers' Retirement
Law, the Public Employees' Retirement Law, the County Employees
Retirement Law of 1937, any public retirement system administered by
the Teachers Retirement Board or Board of Administration of the
Public Employees' Retirement System, or any public retirement system
acting pursuant to the laws of this state or the laws of any local
agency.
   For the purposes of this section, local agency shall mean county,
city, city and county, district, school district, or any public or
municipal corporation, political subdivison, or other public agency
of the state, or any instrumentality of one or more of any such
agencies.
   This section creates and authorizes any state or local retirement
system as an exempt class of persons pursuant to Section 1 of Article
XV of the State Constitution.
7510.  (a) (1) Except as provided in subdivision (b), a public
retirement system, which has invested assets in real property and
improvements thereon for business or residential purposes for the
production of income, shall pay annually to the city or county, in
whose jurisdiction the real property is located and has been removed
from the secured roll, a fee for general governmental services equal
to the difference between the amount that would have accrued as real
property secured taxes and the amount of possessory interest
unsecured taxes paid for that property.  The governing bodies of
local entities may adopt ordinances and regulations authorizing
retirement systems to invest assets in real property subject to the
foregoing requirements.
   (2) This subdivision shall not apply to any retirement system
which is established by a local governmental entity if that entity is
presently authorized by statute or ordinance to invest retirement
assets in real property.
   (3) This subdivision shall not apply to property owned by any
state public retirement system.
   (b) (1) Whenever a state public retirement system, which has
invested assets in real property and improvements thereon for
business or residential purposes for the production of income, leases
the property, the lease shall provide, pursuant to Section 107.6 of
the Revenue and Taxation Code, that the lessee's possessory interest
may be subject to property taxation and that the party in whom the
possessory interest is vested may be subject to the payment of
property taxes levied on that interest.  The lease shall also provide
that the full cash value, as defined in Sections 110 and 110.1 of
the Revenue and Taxation Code, of the possessory interest upon which
property taxes will be based shall equal the greater of (A) the full
cash value of the possessory interest, or (B), if the lessee has
leased less than all of the property, the lessee's allocable share of
the full cash value of the property that would have been enrolled if
the property had been subject to property tax upon acquisition by
the state public retirement system.  The full cash value as provided
for pursuant to either (A) or (B) of the preceding sentence shall
reflect the anticipated term of possession if, on the lien date
described in Section 2192 of the Revenue and Taxation Code, that term
is expected to terminate prior to the end of the next succeeding
fiscal year.  The lessee's allocable share shall, subject to the
preceding sentence, be the lessee's leasable square feet divided by
the total leasable square feet of the property.
   (2) Except as provided in this subdivision, the property shall be
assessed and its taxes computed and collected in the same manner as
privately owned property.  The lessee's possessory interest shall be
placed on the unsecured roll and the tax on the possessory interest
shall be subject to the collection procedures for unsecured property
taxes.
   (3) An investment by a state public retirement system in a legal
entity that invests assets in real property and improvements thereon
shall not constitute an investment by the state public retirement
system of assets in real property and improvements thereon.  For
purposes of this paragraph, "legal entity" includes, but is not
limited to, partnership, joint venture, corporation, trust, or
association.  When a state public retirement system invests in a
legal entity, the state public retirement system shall be deemed to
be a person for the purpose of determining a change in ownership
under Section 64 of the Revenue and Taxation Code.
   (4) Notwithstanding any other provision of law, fees charged
pursuant to this section and collected prior to July 1, 1992, shall
be deemed valid and not refundable under any circumstance.
Notwithstanding any other provision of law, fees, interest and
penalties, if any, asserted to be due pursuant to this section that
were not charged or collected prior to July 1, 1992, shall be deemed
invalid and not collectable under any circumstance.
   (5) This subdivision shall apply to the assessment, computation,
and collection of taxes for the fiscal year beginning on July 1,
1992, and each fiscal year thereafter.  For the 1992-93  and 1993-94
fiscal years, in the case where a lessee's possessory interest
existed for less than the full fiscal year for which the tax was
levied, the amount of tax shall be prorated in accordance with the
number of months for which the lessee's interest existed.
7511.  Notwithstanding any other provision to the contrary:
   (a) A public retirement system may purchase insurance for its
fiduciaries or for itself to cover liability or losses occurring by
reason of the act or omission of a fiduciary, if the insurance
permits recourse by the insurer against the fiduciary in the case of
a breach of a fiduciary obligation by the fiduciary.
   (b) A fiduciary may purchase insurance to cover liability under
this section from and for his or her own account.
   (c) An employer or an employee organization may purchase insurance
to cover potential liability of one or more persons who serve in a
fiduciary capacity with regard to an employee benefit plan.
7512.  Each state and local public pension or retirement system
shall, on and after the 90th day following the completion of the
annual audit of the system, mail or otherwise provide to any member
who makes a request therefor and pays, if required, a fee, a concise
annual report on the investments and earnings of the system and other
related matters.  The report shall be published in a low-cost
format.
   Each local public pension or retirement system may impose a fee
for each copy of the report in an amount sufficient to pay all costs
incurred in the preparation and dissemination of the report.
7513.  (a) In the case of a state or local retirement system or plan
that is subject to Section 401(a)(31) of the Internal Revenue Code,
if, under the terms of the system or plan, a person becomes entitled
to a distribution that constitutes an "eligible rollover distribution"
within the meaning of Section 401(a)(31)(C) of the Internal Revenue
Code, the person may elect, under terms and conditions to be
established by the administrator of the system or plan, to have the
distribution or a portion thereof paid directly to a plan that
constitutes an "eligible retirement plan" within the meaning of
Section 401(a)(31)(D) of the Internal Revenue Code, as specified by
the person.  Upon the exercise of the election by a person with
respect to a distribution or portion thereof, the distribution by the
system or plan of the amount so designated, once distributable under
the terms of the system or plan, shall be made in the form of a
direct rollover to the eligible retirement plan so specified.
   (b) The purpose and intent of this section is to enable the state
and local retirement systems and plans that are subject to Section
401(a)(31) of the Internal Revenue Code of 1986, as amended, to
comply with the requirements of that section regarding the provision
of an election for direct rollover of certain plan distributions.
7513.5.  (a) On or before the first day of March of each year, the
Teachers' Retirement Board and the Board of Administration of the
Public Employees' Retirement System, respectively, shall investigate
and report to the Legislature on the extent to which United States
and international corporations operating in Northern Ireland, in
which the assets of the State Teachers' Retirement System and the
Public Employees' Retirement System are invested, adhere, in
compliance with the law applicable in Northern Ireland, to the
principles of nondiscrimination in employment and freedom of
workplace opportunity.
   (b) The Teachers' Retirement Board and the Board of Administration
of the Public Employees' Retirement System, respectively, shall
compile a list of domestic and international corporations that,
directly or through a subsidiary, do business in Northern Ireland,
and in whose stocks or obligations it has invested, and determine
whether each corporation on the list has, during the preceding year,
taken substantial action, in compliance with the law applicable in
Northern Ireland, designed to lead toward the achievement of the
following goals:
   (1) Increased representation of individuals from underrepresented
religious groups in the work force, including managerial,
supervisory, administrative, clerical, and technical jobs.
   (2) Adequate security for the protection of minority employees
both at the workplace and while traveling to and from work.
   (3) Banning of provocative religious or political emblems from the
workplace.
   (4) Public advertisement of all job openings and the use of
special recruitment efforts to attract applicants from
underrepresented religious groups.
   (5) Establishment of layoff, recall, and termination procedures
which do not, in practice, favor particular religious groupings.
   (6) Abolition of job reservations, apprenticeship restrictions,
and differential employment criteria, which discriminate on the basis
of religion or ethnic origin.
   (7) The development of training programs that will prepare
substantial numbers of current minority employees for skilled jobs,
including the expansion of existing programs and the creation of new
programs to train, upgrade, and improve the skills of minority
employees.
   (8) The establishment of procedures to assess, identify, and
actively recruit minority employees with potential for further
advancement.
   (9) The appointment of senior management staff members to oversee
affirmative action efforts and the setting up of timetables to carry
out affirmative action principles.
   (c) Whenever feasible and consistent with their fiduciary
responsibility, the Teachers' Retirement Board and the Board of
Administration of the Public Employees' Retirement System,
respectively, shall support shareholder resolutions designed to
encourage domestic and international corporations in which the
Teachers' Retirement Board and the Board of Administration of the
Public Employees' Retirement System, respectively, has invested to
pursue, in compliance with the law applicable in Northern Ireland, a
policy of affirmative action in Northern Ireland in accordance with
the goals listed in subdivision (b).
7514.  (a) Notwithstanding any other provision of law except Chapter
7 (commencing with Section 16649.80) of Part 2 of Division 4 of
Title 2, any state or local public retirement system may invest,
subject to and consistent with the standard for prudent investment
set forth in Section 17 of Article XVI of the California
Constitution, its assets in the bonds or other evidences of
indebtedness unconditionally guaranteed by any foreign government
that has met the payments of similar bonds or other evidences of
indebtedness when due.
   (b) A portion of the assets invested pursuant to this section may
be used to purchase rated or unrated bonds, notes, or other
instruments unconditionally guaranteed by Canada, Israel, Mexico, or
South Africa.
7514.1.  Notwithstanding any other provision of law except Chapter 7
(commencing with Section 16649.80) of Part 2 of Division 4 of Title
2, any state or local public retirement system may invest, subject to
and consistent with the standard for prudent investment set forth in
Section 17 of Article XVI of the California Constitution, and the
state and any political subdivision of the state may, invest its
assets in rated bonds, notes, or other obligations issued, assumed,
or unconditionally guaranteed by the African Development Bank, the
Asian Development Bank, the Caribbean Development Bank, the
Inter-American Development Bank, the International Finance
Corporation, the International Bank for Reconstruction and
Development, the European Bank for Reconstruction and Development,
and any other international financial institution that has met the
payments of similar bonds, notes, or other obligations when due and
in which the United States is a member.
7514.3.  Notwithstanding any other provision of law,  state pension
systems may, subject to and consistent with their fiduciary duties
and the standard for prudent investment set forth in Section 20190 of
this code and Section 17 of Article XVI of the California
Constitution, establish credit enhancement programs to assist
entities of state and local government and other issuers of municipal
and public finance debt to secure more favorable financing terms
through a variety of types of credit enhancement including, but not
limited to, enhancement of the credit of bonds, notes, and other
indebtedness.  Any credit enhancement program shall comply with the
requirements of Section 503 of the Internal Revenue Code.
7514.5.  Notwithstanding any other provision of law, whenever the
rights of a member of the Public Employees' Retirement System, the
State Teachers' Retirement System, or a retirement system established
under the County Employees Retirement Law of 1937, because of
membership in another retirement system, are conditional upon
employment within a specified period of time after termination of
service in another retirement system, that specified period shall be
the period of service in full-time elective office on and after
November 6, 1990, if the member was a full-time elective officer on
or after that date and becomes a member of any of those retirement
systems within 120 days after termination of the full-time elective
office.