SECTIONS 20170-20178 - California Statutes

GOVERNMENT CODE

SECTION 20170-20178

20170. The Public Employees' Retirement Fund in the State Treasury
is continued in existence.
The Public Employees' Retirement Fund is a trust fund created, and
administered in accordance with this part, solely for the benefit of
the members and retired members of this system and their survivors
and beneficiaries.

20171. The board has the exclusive control of the administration
and investment of the retirement fund.

20172. Notwithstanding any other provision of law, the board may
retain a bank or trust company to serve as custodian for safekeeping,
delivery, securities valuation, investment performance reporting,
and other services in connection with investment of the retirement
fund. Notwithstanding Section 13340, all moneys in the fund are
continuously appropriated, without regard to fiscal years, for
payments which shall be made upon warrants drawn by the Controller
upon demands made by the board. Upon demand of the board, warrants
shall be drawn for the purpose of making payments by electronic fund
transfers.

20173. Costs of administration of this system shall be paid from
funds appropriated for interest income from the retirement fund.

20174. Interest earned on any cash deposit in a bank by the
Treasurer and income on other assets constituting a part of the fund
shall be credited to the fund as received. Income, of whatever
nature, earned on the retirement fund during any fiscal year, in
excess of the interest credited to contributions during that year
shall be retained in the fund as a reserve against deficiencies in
interest earned in other years, losses under investments,
court-mandated costs, and actuarial losses resulting from
terminations, mergers, and dissolutions of contracting agencies.
Unless specifically authorized by this part, no funds in the
reserve against deficiencies shall be available for the payment of
benefits. The board, however, may apply to reduce the book value of
securities purchased all or part of the excess of the proceeds of the
sale or the redemption prior to maturity of securities over the book
value of the securities sold (a) if the purchase of securities is
made with those proceeds and (b) if the terms of both securities from
the date of sale, redemption prior to maturity, or purchase, as the
case may be, to the respective dates of maturity do not differ by
more than five years. All applications of these excess proceeds, even
with greater differences in terms, heretofore made by the board are
hereby validated and confirmed.
At the end of each fiscal year, the amount in the reserve against
deficiencies that exceeds 0.20 percent of the total assets of this
system shall be credited to other accounts as prescribed by this
part.

20175. Notwithstanding any other provision of law, funds in the
reserve against deficiencies shall not be used to pay any employers'
contribution required by this chapter to be paid by the state, any
school employer, or any contracting agency.

20176. Notwithstanding any other provision of law, no funds in the
retirement fund shall be expended for any purpose other than the cost
of administration of this system, investments for the benefit of
this system, the reduction of employer contributions, and the
provision of benefits to the members and retired members of this
system and their survivors and beneficiaries.

20177. The board shall deposit monthly in the State Treasury to the
credit of the retirement fund all amounts received by it under this
part.

20178. (a) The board shall credit all contributions of members in
the retirement fund with interest at an interest crediting rate of 6
percent compounded at each June 30. The retired member reserves in
the retirement fund shall be credited with the lesser of the current
actuarial interest rate or the current annual interest rate
compounded at each June 30. The interest amount that would have been
credited to the member's account on and after June 30, 1991, had the
account been credited with the lesser of the current actuarial
interest rate or the current annual interest rate, rather than at the
6-percent interest crediting rate, shall be credited to retired
member reserves.
(b) Notwithstanding subdivision (a), the difference between the
interest amount that was credited to the account of any state or
school member of this system who was paid his or her accumulated
contributions on or after June 30, 1991, and the lesser of the
current actuarial interest rate or the current annual interest rate,
shall be transferred to the state or school account, as appropriate,
established by the board under Section 21337 to fund the purchasing
power protection allowance for retirees, survivors, or beneficiaries
of state or school employers.
(c) Notwithstanding subdivisions (a) and (b), if the current net
earnings rate for state or school members exceeds the interest rate
used to credit the retired member accounts of state or school
employers, in addition to the amounts transferred to the separate
accounts established for state and school employers under Section
21337, the remaining amounts shall be credited to employer accounts.
(d) The current annual interest rate may be lower than the current
actuarial interest rate.