SECTIONS 26600-26607 - California Statutes

EDUCATION CODE

SECTION 26600-26607

26600. All contributions based on salary earned by a participant,
together with amounts credited under the minimum interest rate and
additional earnings credit amounts, shall be treated as credits to
individual accounts in the name of the participant. These accounts
shall be nominal accounts used to determine the amount of retirement
benefit, disability benefit, death benefit, or termination benefit of
the participant or beneficiary. The participant shall have no actual
individual account and shall have no claim to any particular assets
of the plan or the fund.

26601. All employee contributions and interest credited under the
minimum interest rate and additional earnings credits in respect of
those contributions shall be treated as credits to the participant's
employee account.

26602. All employer contributions on behalf of the participant and
interest credited under the minimum interest rate and additional
earnings credits in respect of those contributions shall be treated
as credits to the participant's employer account.

26603. All employee contributions shall be credited to employee
accounts and all employer contributions shall be credited to employer
accounts as of the first working day following the date all
contributions to fully satisfy the contribution report as submitted
by the employer are received by the system.

26604. (a) Beginning June 1, 1996, prior to the Cash Balance Plan
becoming effective, and prior to the beginning of each plan year
thereafter, the board, by plan amendment with respect to the Cash
Balance Benefit Program, shall declare the minimum interest rate for
crediting employee accounts and employer accounts with respect to the
Cash Balance Benefit Program during the following plan year.
(b) All interest shall be computed at the minimum interest rate on
the balance of the employee account and the employer account and
shall be compounded daily.
(c) Interest for contributions credited during that month to the
respective account shall accrue at the minimum interest rate from the
first working day following the date contributions are received in
full by the system pursuant to Section 26603.
(d) Interest shall not be credited to employee accounts and
employer accounts that have been transferred to the Annuitant Reserve
for payment of an annuity.

26605. In the event that the total amount of investment earnings of
the plan for any plan year exceeds the sum of the total amount
required to credit all employee and employer accounts at the minimum
interest rate for the plan year plus the administrative costs of the
plan for the plan year, then following the determination by the board
with respect to additions to the Gain and Loss Reserve described in
subdivision (c) of Section 26202 the board may declare by means of
plan amendment an additional earnings credit for the plan year with
respect to the employee and employer accounts of the plan
participants.

26606. Any additional earnings credit declared shall be determined
as a specified percentage increase in the closing balance of each
employee account and employer account with respect to the Cash
Balance Benefit Program measured as of the last day of the plan year.
The additional earnings credit shall be credited to employee account
and employer account balances as of the date the board declares the
additional earnings credit is to be applied. The additional earnings
credit shall not be credited to employee accounts and employer
accounts that have been transferred to the Annuitant Reserve for
payment of an annuity under the Cash Balance Benefit Program.

26607. (a) The board may declare by means of plan amendment with
respect to the Cash Balance Benefit Program an additional annuity
credit applicable to annuities being paid under the Cash Balance
Benefit Program.
(b) The declaration authorized by subdivision (a) may be made only
when the board by plan amendment with respect to the Cash Balance
Benefit Program declares an additional earnings credit as provided in
Section 26605 and if the total amount of investment earnings of the
plan with respect to the Cash Balance Benefit Program for the plan
year exceeds the sum of the total amount required to credit all
employee and employer accounts at the minimum interest rate, the
administrative costs of the plan with respect to the Cash Balance
Benefit Program for the plan year, any addition to be made to the
Gain and Loss Reserve under subdivision (c) of Section 26202, the
total amount required to credit all employee and employer accounts in
respect of the additional earnings credit so declared, and any other
obligations incurred by the plan with respect to the Cash Balance
Benefit Program.
(c) Any additional annuity credit with respect to the Cash Balance
Benefit Program shall be based upon the annuity of the participant
or beneficiary for the plan year and shall be paid as a lump sum to
the participant or beneficiary on the date specified by the board.