SECTIONS 26500-26507 - California Statutes

EDUCATION CODE

SECTION 26500-26507

26500. Acceptance of employment subject to coverage by the Cash
Balance Benefit Program constitutes consent to have contributions
deducted from the employee's salary as required by Section 26501.

26501. Except as provided in Section 26504, the participant shall
contribute an amount equivalent to 4 percent of salary.

26501.5. A person who elects, pursuant to Section 26403, to
participate in the Cash Balance Benefit Program shall make
contributions, as provided in Section 26501, based on his or her
salary or other compensation earned for trustee service.

26502. Notwithstanding Section 26301.5, the employer may pick up,
for the sole purpose of and in accordance with the requirements of
Section 414(h)(2) of Title 26 of the United States Code and Section
17501 of the Revenue and Taxation Code, all of the amounts otherwise
due as employee contributions, which shall be paid by the employer in
lieu of employee contributions and which shall be deducted from the
employee's salary.

26503. Except as provided in Sections 26504 and 26507, the employer
shall contribute an amount equivalent to 4 percent of salary for
each participant employed by the employer.

26503.5. If a person elects, pursuant to Section 26403, to
participate in the Cash Balance Benefit Program, his or her employer
shall make contributions, as provided in Section 26503, based on the
salary or other compensation paid for trustee service.

26504. The employer may enter into a collective bargaining
agreement to pay a different employer contribution rate and a
different employee contribution rate, provided all of the following
conditions are met:
(a) The sum of the employee contributions and employer
contributions for each participant shall equal or exceed 8 percent of
salary.
(b) The employee contribution rate may exceed the employer
contribution rate but in no event shall the employer contribution
rate be less than 4 percent.
(c) The employee contribution rate and employer contribution rate
shall be the same for each participant employed by the employer.
(d) The employee contribution rate and employer contribution rate
shall be in one-quarter percent increments.
(e) The employee contribution rate and employer contribution rate
as determined under the collective bargaining agreement shall become
effective on the first day of the plan year following notification to
the system and shall remain in effect for at least one plan year.
However, the employee contribution rate and the employer contribution
rate as determined under the collective bargaining agreement may
become effective as of the first day of the plan year in which notice
is given if it is so provided in the collective bargaining agreement
and if a lump-sum contribution is made to the plan equal to the
additional employee and employer contributions, if any, that would
have been required if the contribution rates had been in effect on
the first day of the plan year. Interest shall be credited at the
minimum interest rate with respect to the lump-sum contribution
commencing with the first month after the contribution is made.
(f) The employer has filed notice of the employee contribution
rate and the employer contribution rate on a form prescribed by the
system.

26505. If a participant who has retired and is receiving an annuity
under the Cash Balance Benefit Program becomes reemployed prior to
60 years of age or becomes reemployed on or after 60 years of age but
within one year of his or her retirement date, to perform creditable
service subject to coverage by the plan, the annuity shall be
terminated, the employee account and the employer account of the
participant shall be credited with respective balances that reflect
the actuarial equivalent of the participant's retirement benefit as
of the date of the reemployment and the Annuitant Reserve shall be
reduced by the amount of the credits. If a participant who has
retired and is receiving an annuity under the Cash Balance Benefit
Program becomes reemployed on or after age 60 and more than one year
after retirement to perform creditable service under the plan, the
annuity shall continue and employee contributions and employer
contributions for the creditable service shall be made to the plan
and shall be credited to new employee and employer accounts
established on behalf of the participant.

26506. (a) Except as provided in subdivision (b), participants
shall not make voluntary pretax or post-tax contributions into the
Cash Balance Benefit Program, nor shall participants redeposit
amounts previously distributed from employee accounts or employer
accounts.
(b) Pursuant to terms and conditions established by the board,
participants may be permitted to transfer funds from eligible
retirement plans into the Cash Balance Benefit Program to the extent
that the transfers are allowable under and are completed in a manner
prescribed by applicable federal and state laws, and any related
regulations.
(c) Funds deposited with the Cash Balance Benefit Program by a
participant pursuant to subdivision (b) shall be credited to the
participant and identified separately from credits in the participant'
s employee and employer accounts. Funds so deposited shall be
credited with interest pursuant to Section 26604.

26507. (a) The board may adjust the mandatory employer contribution
rate specified under Section 26503 for a fixed period of plan years
when it has determined based upon the recommendation of the actuary,
that increased contributions are required. The adjustment shall not
exceed one-fourth of one percent for any plan year. The mandatory
employer contribution rate as adjusted shall not exceed 4.25 percent
of salary in any plan year for each participant employed by the
employer, except as provided in subdivision (b).
(b) The adjustment to the employer contribution rate specified in
subdivision (a) shall be applied to the employer contribution rate
specified in a collective bargaining agreement pursuant to Section
26504 and in effect on the first day of the plan year in which the
adjustment to the employer contribution rate takes effect.
(c) The adjusted employer contribution rate shall become effective
no earlier than the first day of the plan year immediately following
adoption by the board.