SECTIONS 31610-31619 - California Statutes

GOVERNMENT CODE

SECTION 31610-31619

31610. This article shall not become operative in any county unless
and until it is adopted by resolution of the county board of
retirement and the county board of supervisors, whereupon, the
following sections shall not be operative as to that county: Sections
31453, 31529.5, 31591, 31592, 31592.2, 31592.3, and 31871.

31611. An actuarial valuation shall be made within one year after
the date on which any system established under this chapter becomes
effective, and thereafter at intervals not to exceed three years. The
valuation shall be conducted under the supervision of an enrolled
actuary and shall cover the mortality, service, and compensation
experience of the members and beneficiaries, and shall evaluate the
assets and liabilities of the retirement fund. Upon the basis of the
investigation, valuation, and recommendation of the actuary, the
board shall, at least 60 days prior to the beginning of the
succeeding fiscal year, recommend to the board of supervisors such
changes in the rates of interest, in the rates of contributions of
members, in county and district appropriations as are necessary, and
appropriate mortality tables. In making recommendations to the board
of supervisors, the board shall act with the care, skill, prudence
and diligence under the circumstances then prevailing that a prudent
person acting in a like capacity and familiar with such matters would
use in the conduct of an enterprise of a like character and with
like aims. No adjustment shall be included in the new rates for time
prior to the effective date of the revision. The cost of actuarial
valuations and investigations may, in the sound discretion of the
board, be charged against the earnings of the retirement fund.

31612. "Actuarial rate" means the interest assumption rate
established by the most recent actuarial survey recommended by the
board of retirement and adopted by the board of supervisors.

31613. "Net earnings" means the earnings of the retirement fund
after accounting for any direct investment losses recognized during
the year, less the amounts taken from the earnings as specified in
subdivisions (a) and (b):
(a) The amounts specified in Sections 31580.2, 31580.3, if
applicable, subdivisions (b) and (d) of Section 31596, if applicable
and Section 31611 and 31614.
(b) Any reductions from earnings required by Sections 31588.1 and
31589.1, if applicable. Part or all of any amounts required by
Sections 31588.1 and 31589.1 may be deducted, at the discretion of
the board of retirement, from the Contingency Reserve Account as
described in Section 31616.

31614. Notwithstanding Section 31529, the board may contract for
the legal services of an attorney in private practice when the board
determines, after consultation with the county counsel, that the
county counsel cannot provide the board with legal services due to a
conflict of interest or other compelling reason. The compensation of
the attorney shall be charged against the earnings of the retirement
fund or paid from the county general fund.
This section shall not be operative in any county until such time
as the board of supervisors shall, by resolution adopted by majority
vote, make the provisions of this section applicable in such county.

31615. Regular interest at the actuarial rate, or at the highest
rate possible if net earnings, as defined in Section 31613 are not
sufficient to credit the full actuarial rate, shall be credited
semiannually on June 30 and December 31 to all contributions,
reserves, and accounts in the retirement fund, except the Contingency
Reserve Account, which have been on deposit for six months
immediately prior to those dates.
Interest at the actuarial rate, compounded semiannually, shall be
used in the calculation of benefits under any mortality table adopted
by the board of supervisors. No interest shall be credited to a
member's account after the termination of the member's county
service, unless the member has elected, in writing, to leave his or
her accumulated contributions in the retirement fund and be granted a
deferred retirement allowance, or the surviving spouse of a deceased
member or the legally appointed guardian of the member's unmarried
children under age 18 has elected to leave a death benefit on deposit
as provided for in Section 31781.2.

31616. After the semiannual application of Section 31615, earnings
of the retirement fund in excess of the total interest credited to
contributions and reserves shall remain in the fund as a reserve
against deficiencies in interest earnings, losses on investments, or
payments made pursuant to Section 31588.1 or 31589.1, if applicable.
These funds shall be placed in an account known hereafter as the
Contingency Reserve Account. The size of this account shall be
determined semiannually by the board but shall not exceed 3 percent
of the total assets of the retirement fund.
If, at the end of any semiannual period, the balance of the
Contingency Reserve Account falls below 1 percent of system assets,
the board shall, by the end of the subsequent semiannual period,
provide funds from earnings of fund assets from the subsequent
semiannual period, to bring the level of the Contingency Reserve
Account to at least 1 percent of system assets.
No funds in the Contingency Reserve Account shall be available for
the payment of benefits.
Net earnings remaining after the application of this section shall
be applied as provided in Sections 31617, 31618, and 31619.

31617. In each county having an agreement prior to January 1, 1983,
that a fixed part of the required Article 16.5 (commencing with
Section 31870) cost-of-living contributions shall come from excess
interest earnings on the fund, after the semiannual application of
Sections 31615 and 31616, the balance of the net earnings, as defined
in Section 31613, shall be used to pay those contributions.

31618. The board shall establish a Supplemental Retiree Benefit
Reserve in the retirement system consisting of any amount previously
in the reserve against deficiencies, which on the date of adoption of
this article, exceeds 3 percent of the assets of the retirement
fund, or any lesser amount, as determined by the board. In no event,
however, shall the balance of the Contingency Reserve Account be
reduced below 1 percent of system assets for this purpose. The
Supplemental Retiree Benefit Reserve shall be used only for the
benefit of retired members and beneficiaries.
Commencing on the date of adoption of this article, there shall be
a semiannual transfer into this reserve of 50 percent of the balance
of net earnings, as defined in Section 31613, after crediting all
accounts pursuant to Section 31615, rebuilding the Contingency
Reserve Account pursuant to Section 31616 and paying the part of the
cost-of-living contributions pursuant to Section 31617, if
applicable.
The distribution of the Supplemental Retiree Benefits Reserve
shall be determined by the board.

31618.5. (a) The board shall annually transfer, from the
administrative budget established pursuant to Article 5 (commencing
with Section 31580), an amount sufficient to fund the administrative
costs of the programs reimbursed by the Supplemental Retiree Benefits
Reserve.
(b) This section shall only apply to a county of the fourth class
as described in Section 28020.

31619. Remaining net earnings, after the sequential application of
Sections 31615 and 31616 and Section 31617, if applicable, and
Section 31618 shall be credited to all contributions, reserves, and
accounts in the retirement fund, except the Contingency Reserve
Account, in the manner prescribed in Section 31615, except that no
further interest shall be credited to the Supplemental Retiree
Benefit Reserve, established pursuant to Section 31618.