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Presentation Slides

1) Teachers’ Retirement Law Volume I January 1, 2015 Lake Tahoe, CA Volume II of Teachers’ Retirement Law is available online only at CalSTRS.com/information-about-CalSTRS

2) TEACHERS’ RETIREMENT LAW As of January 1, 2015 Volume 1

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4) TEACHERS’ RETIREMENT LAW As of January 1, 2015 FOREWORD The Legislature, at the special session of June 1944, revised the State Teachers’ Retirement Act. Benefits and contributions were increased and the System was placed on a better financial basis. Amendments to the law were made in 1945, 1947, 1951, 1953, 1954, 1955, 1956, 1957, 1958, 1959, 1961, 1963, 1965 and annually starting in 1967. The 1959 session renumbered the sections of the code. The 1969 and 1994 sessions recodified the law. In 1995, the Legislature established the Cash Balance Benefit Program, which is contained in Part 14. In 1999, the Legislature added Part 13.5, which provides for a Health Benefits Program. Volume 1 of the Teachers’ Retirement Law contains all of the provisions set forth in Parts 13, 13.5 and 14 of Division 1 of the California Education Code along with the rules and regulations of the Teachers’ Retirement Board, which are in the California Code of Regulations. Volume 2, which is available online only at www.calstrs.com/information-about-calstrs, contains pertinent code sections from California statute and from the United States Code. The Teachers’ Retirement Law is issued for the convenience of all persons interested in the California State Teachers’ Retirement System who have a need to reference or work with the up-to-date provisions of the law. It is intended particularly to assist school administrators and public officials who have duties to perform in connection with the System. In the event that this publication conflicts with actual statute, the statute takes precedence. TEACHERS’ RETIREMENT BOARD

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6) VOLUME 1 TABLE OF CONTENTS PART 13. STATE TEACHERS’ RETIREMENT SYSTEM CHAPTER 1. GENERAL PROVISIONS ................................................................................ 1 § 22000. § 22001. § 22001.5. § 22002. § 22002.5. § 22003. § 22004. § 22005. § 22006. § 22007. § 22007.5. § 22008. § 22009. § 22010. § 22011. Citation of part (Barnes Act; Teachers’ Retirement Law) ............................................ 1 Establishment of State Teachers’ Retirement System ................................................... 1 Findings as to Cash Balance Plan ................................................................................. 1 Declaration of financing policies .................................................................................. 2 Legislative findings and declarations regarding funding of Defined Benefit Program ......................................................................................................................... 2 Effect of revision of State Teachers’ Retirement Law (Conflicts in law) ..................... 3 Controlling effect of memorandum of understanding ................................................... 4 Tax exemption ............................................................................................................... 4 Exemption from execution ............................................................................................ 4 Duration of obligation ................................................................................................... 4 Registered domestic partner .......................................................................................... 5 Limitation of actions (Adjustments of errors and omissions) ....................................... 5 Severance for invalidity ................................................................................................ 6 Violations; Penalties; Restitution .................................................................................. 6 Signature; Valid document ............................................................................................ 7 CHAPTER 2. DEFINITIONS .................................................................................................. 8 § 22100. § 22101. § 22101.5. § 22101.5. § 22102. § 22103. § 22104. § 22104.5. § 22104.7. § 22104.9. § 22105. § 22105.5. § 22106. § 22106.1. § 22106.2. § 22106.3. § 22106.5. § 22107. § 22108. § 22109. § 22109.5. § 22109.8. § 22110. § 22110.1. § 22110.2. Definitions to govern construction of part .................................................................... 8 “Accumulated annuity deposit contributions” .............................................................. 8 “Accumulated Defined Benefit Supplement account balance” (First of two)............... 8 “Accumulated Defined Benefit Supplement account balance” (Second of two) 8 “Accumulated retirement contributions”....................................................................... 8 “Accumulated tax–sheltered annuity contributions” ..................................................... 9 “Actuarial equivalent” ................................................................................................... 9 “Actuary” ...................................................................................................................... 9 “Additional earnings credit”.......................................................................................... 9 “Annuitant Reserve” ................................................................................................... 10 “Annuity” .................................................................................................................... 10 “Annuity beneficiary” ................................................................................................. 10 “Annuity deposit contributions”.................................................................................. 10 “Base allowance” ........................................................................................................ 11 “Base days” ................................................................................................................. 11 “Base hours”................................................................................................................ 11 “Basis of employment”; “Full–time basis”; “Part–time basis” ................................... 11 “Beneficiary”............................................................................................................... 11 “Benefit or benefits”.................................................................................................... 12 “Board” ....................................................................................................................... 12 “Break in service” ....................................................................................................... 13 “California Public Employees’ Pension Reform Act of 2013” ................................... 13 “California service” ..................................................................................................... 14 “Cash Balance Benefit Program” ................................................................................ 14 “Credential,” “credentials,” and “certificate”.............................................................. 14 iii

7) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM § 22110.5. § 22111. § 22112.5. § 22112.6. § 22113. § 22115. § 22115.2. § 22115.5. § 22117. § 22118. § 22119. § 22119.2. § 22119.3. § 22119.5. § 22120. § 22121. § 22122. § 22122.4. § 22122.5. § 22122.7. § 22123. § 22123.5. § 22124. § 22126. § 22127. § 22127.2. § 22128. § 22129. § 22130. § 22131. § 22132. § 22133. § 22133.5. § 22134. § 22134.5. § 22135. § 22136. § 22137. § 22138. § 22138.5. § 22138.5. § 22138.6. § 22139.5. § 22140. § 22141. § 22142. iv “Certificated” .............................................................................................................. 14 “Child’s portion” or “children’s portion”.................................................................... 14 “Class of employees” .................................................................................................. 15 Days of service for classes of employees .................................................................... 15 “Comparable level position” ....................................................................................... 16 “Compensation earnable” ............................................................................................ 16 “Concurrent membership” (Other retirement systems, membership) ......................... 18 “Concurrent retirement” (Other retirement systems, retirement) ................................ 18 “Contribution rate for additional service credit” ......................................................... 19 “County”; “City and county” ...................................................................................... 19 “County superintendent” ............................................................................................. 19 “Creditable compensation” (2% at 60)........................................................................ 20 “Creditable compensation” (2% at 62)........................................................................ 23 “Creditable service” .................................................................................................... 25 “Credited interest” ....................................................................................................... 26 “Credited service” ....................................................................................................... 26 “Custodian” ................................................................................................................. 27 “Death payment” ......................................................................................................... 27 “Defined Benefit Program” ......................................................................................... 27 “Defined Benefit Supplement contributions”.............................................................. 27 “Dependent child” under disability allowance and family allowance programs ...................................................................................................................... 27 “Dependent child” under disability retirement and survivor benefit allowance programs ...................................................................................................................... 28 “Dependent parent” ..................................................................................................... 29 “Disability” or “disabled” ........................................................................................... 29 “Disability allowance” ................................................................................................ 30 “Disability benefit” ..................................................................................................... 31 “Early retirement” and “early retirement age” ............................................................ 31 “Educational institution” ............................................................................................. 32 “Effective date” ........................................................................................................... 32 “Employer” or “employing agency” ........................................................................... 32 “Employed”; “Employment”....................................................................................... 33 “Family allowance” ..................................................................................................... 33 “Final benefit” ............................................................................................................. 34 “Final compensation” (Three-year) ............................................................................. 34 Determination of final compensation (One-year)........................................................ 35 “Final compensation” by classroom teacher ............................................................... 37 “Final compensation” when salary has been reduced ................................................. 39 “Final compensation” of managerial or supervisory employee .................................. 40 “Final vesting” ............................................................................................................ 40 “Full time”; Minimum standard for prekindergarten through grade 12; Minimum standard for community colleges ............................................................... 40 “Full-time”; Minimum standard for kindergarten through grade 12; Minimum standard for community colleges (Second of two; Operative July 1, 2013) ....................................................................................................................... 42 “Full–time equivalent” ................................................................................................ 43 “Gain and Loss Reserve” ............................................................................................ 43 “Improvement factor” (2% increase) .......................................................................... 43 “Improvement factor” as increase of minimum unmodified allowance ...................... 45 “Indexed final compensation” ..................................................................................... 45

8) TABLE OF CONTENTS § 22143. § 22144. § 22144.5. § 22145. § 22146. “Investment manager” and “investment adviser”........................................................ 46 “Investment transactions” ........................................................................................... 46 “Liability gains and losses” ......................................................................................... 47 “Local system” ............................................................................................................ 47 “Member”; Active member; Inactive member; Disabled member; Retired member ........................................................................................................................ 47 § 22146.2. “Member subject to the California Public Employees’ Pension Reform Act of 2013” ........................................................................................................................... 48 § 22146.5. “Membership” ............................................................................................................. 48 § 22146.7. “Minimum interest rate”.............................................................................................. 49 § 22147. “Month”....................................................................................................................... 49 § 22147.5. “Nonqualified service” ................................................................................................ 49 § 22148. “Normal retirement” and “normal retirement age” ..................................................... 49 § 22149. “Option beneficiary” ................................................................................................... 50 § 22150. “Other public systems”................................................................................................ 50 § 22151. “Overtime” .................................................................................................................. 51 § 22152. “Parent” ....................................................................................................................... 51 § 22154. “Pay period” ................................................................................................................ 52 § 22155. “Payroll” ...................................................................................................................... 52 § 22155.5. “Plan” .......................................................................................................................... 52 § 22156. “Plan vesting”.............................................................................................................. 53 § 22156.05. “Plan year” .................................................................................................................. 53 § 22156.1. “Present value” ............................................................................................................ 53 § 22156.2. “Present value factor”.................................................................................................. 53 § 22156.5. “Prior year’s compensation earnable” ......................................................................... 54 § 22157. “Projected final compensation” ................................................................................... 54 § 22158. “Projected service” ...................................................................................................... 54 § 22159. “Proof of death” .......................................................................................................... 54 § 22160. “Provisional vesting”................................................................................................... 55 § 22160.5. “Public employer” ....................................................................................................... 55 § 22161. “Public school”............................................................................................................ 55 § 22161.3. “Qualified military service” ........................................................................................ 56 § 22161.5. “Refund” ..................................................................................................................... 56 § 22162. “Regular interest” ........................................................................................................ 56 § 22162.5. “Regular meeting” ....................................................................................................... 56 § 22163. “Reinstatement” .......................................................................................................... 57 § 22164. “Replacement benefits program” ................................................................................ 57 § 22164.5. “Retired member activities” ........................................................................................ 57 § 22165. “Retirement” ............................................................................................................... 58 § 22166. “Retirement allowance” .............................................................................................. 58 § 22166.5. “Retirement benefit” ................................................................................................... 59 § 22167. “Retirement fund” ....................................................................................................... 59 § 22168. “Return on investments” ............................................................................................. 59 § 22169. “School year” .............................................................................................................. 59 § 22170. “Service” ..................................................................................................................... 59 § 22170.5. “Sick leave days” and related phrases ......................................................................... 60 § 22171. “Spouse” and “Registered domestic partner” .............................................................. 60 § 22172. “Survivor allowance” .................................................................................................. 61 § 22173. “Survivor benefit allowance” ...................................................................................... 61 § 22174. “System” ..................................................................................................................... 61 § 22175. “System’s headquarters office” ................................................................................... 61 v

9) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM § 22176. § 22177. “Termination benefit” ................................................................................................. 61 “Unfunded actuarial obligation” ................................................................................. 62 CHAPTER 3. RETIREMENT BOARD ................................................................................. 63 § 22200. § 22200.5. § 22201. § 22201.2. § 22201.3. § 22202. § 22203. § 22203.5. § 22204. § 22205. § 22206. § 22207. § 22208. § 22209. § 22210. § 22212. § 22212.5. § 22213. § 22214. § 22215. § 22216. § 22217. § 22218. § 22218.5. § 22219. § 22220. § 22221. § 22222. § 22223. § 22224. § 22225. § 22226. § 22227. § 22228. Composition and appointment (Composition of the Board) ....................................... 63 Election of members by board; Special election to fill vacancies ............................... 64 Powers of board; Meetings .......................................................................................... 64 Quorum ....................................................................................................................... 65 Secretary ...................................................................................................................... 65 Board’s control of funds.............................................................................................. 65 Investment authority.................................................................................................... 65 Rollcall vote and public meeting on investment transaction ....................................... 66 Oaths and affirmations ................................................................................................ 66 Board’s authority to enter into agreements with retirement systems of other states ............................................................................................................................ 66 Audit power ................................................................................................................. 66 Other acts .................................................................................................................... 67 Power of board to delegate .......................................................................................... 67 Chief executive officer ................................................................................................ 68 Review by board of acts of committee or chief executive officer ............................... 68 Employees ................................................................................................................... 68 Compensation for specified investment officers and portfolio managers; Principles; Civil service appointments; Limits on taking specified actions for two years after leaving such positions in certain circumstances ................................. 68 Regulation of employing agencies and other public authorities ................................. 69 Action to ensure rights to allowances.......................................................................... 70 Fixing and modifying allowances ............................................................................... 70 Credit of contribution; Rate of interest........................................................................ 70 Annual audit by accountant ......................................................................................... 71 Records and accounts .................................................................................................. 71 Report on return on investments and payroll subject to system [Repealed] ............... 71 Hearings and procedure............................................................................................... 71 Subpoena for witnesses ............................................................................................... 72 Adoption of recommendation of actuary of system to permit valuation of assets and liabilities ..................................................................................................... 72 Adjustment of death benefits....................................................................................... 72 Compensation; Travel expenses .................................................................................. 73 Release time to serve on board, committee, subcommittee, or panel.......................... 73 Compensation of system members and replacement members ................................... 74 Requirement of study on provision of health insurance benefits; Appropriation for study ............................................................................................... 75 Board candidates to file campaign statements ............................................................ 75 Board must provide five-year strategic plan; Report plan to Legislature; Define “emerging investment manager”; Limitations (Repealed January 1, 2018) ........................................................................................................................... 75 CHAPTER 4. FIDUCIARY DUTIES ..................................................................................... 77 § 22250. § 22251. § 22252. vi Fiduciary duties regarding interests of members and beneficiaries ............................ 77 Purposes for which assets may be held ....................................................................... 77 Prohibited transactions ................................................................................................ 78

10) TABLE OF CONTENTS § 22253. § 22254. § 22255. § 22256. § 22257. § 22258. § 22259. § 22260. § 22261. Conflicts of interest ..................................................................................................... 79 Personal liability of board members and officers for breach of fiduciary duties ........................................................................................................................... 79 Scope of personal liability; Breach of fiduciary duties ............................................... 80 Additional bases of liability for breach of fiduciary duties ......................................... 80 Investment managers ................................................................................................... 80 Appropriations; Liability insurance for fiduciaries ..................................................... 81 Fidelity bond; Liability insurance for fiduciaries ........................................................ 81 Credit enhancement ..................................................................................................... 81 Investment in surplus property .................................................................................... 81 CHAPTER 5. ADMINISTRATION........................................................................................ 82 § 22300. § 22301. § 22302. § 22302.5. § 22303. § 22303.5. § 22304. § 22305. § 22306. § 22307. § 22307.5. § 22307.6. § 22308. § 22309. § 22310. § 22311. § 22311.5. § 22311.7. § 22311.9. § 22313. § 22314. § 22317.5. § 22318. § 22319. § 22320. § 22321. § 22322. § 22323. § 22324. § 22327. § 22328. Chief executive officer ................................................................................................ 82 Power of chief executive officer ................................................................................. 82 Ombudsman ................................................................................................................ 82 Contract with third party ............................................................................................. 83 Retirement counseling services; Employment of retired public employees; Receipt of documents .................................................................................................. 83 Midcareer retirement information program................................................................. 84 Administrative costs .................................................................................................... 84 Effect of rules and regulations..................................................................................... 85 Confidentiality............................................................................................................. 85 Authorization for transfer and disbursement of funds................................................. 86 Teachers’ Retirement Program Development Fund created ....................................... 87 Transfer of funds from Teachers’ Retirement Program Development Fund into designated fund .................................................................................................... 87 Correction of errors or omissions ................................................................................ 87 Individual account statements (Annual statement) ..................................................... 89 Unclaimed refund or benefit ....................................................................................... 89 Actuarial investigations ............................................................................................... 90 Actuary’s services ....................................................................................................... 90 Actuarial plan amendments ......................................................................................... 91 Report to Legislature on fiscal health of Defined Benefit Program and unfunded actuarial obligation for service credited before July 1, 2014 (Inoperative July 1, 2046; Repealed January 1, 2047) ................................................ 91 Retroactive adjustment of rates ................................................................................... 91 Advisement of possible tax liabilities ......................................................................... 92 Amount of compensation considered in computing benefits for members on or after July 1, 1996..................................................................................................... 92 Payment of checks to disabled member or member retired for disability; Retroactive checks....................................................................................................... 92 Payment of checks to member retired for service; Retroactive checks ....................... 93 Payment of death benefits ........................................................................................... 93 Penalty for late payments (Interest penalty) ................................................................ 94 Report of late payments to board ................................................................................ 94 Monthly report of outstanding death benefits ............................................................. 94 Annual report .............................................................................................................. 94 Disclosure of earnings of recipient (Disability allowance and disability retirement) ................................................................................................................... 95 Credits on cancellation of allowances accrued after July 1, 1972 ............................... 96 vii

11) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM § 22329. § 22330. § 22335. § 22337. Toll–free telephone assistance .................................................................................... 97 Analysis of asset and liability implications of bills affecting investment strategy, funding, or benefit structure; Appropriation ................................................. 97 Disbursement of moneys in Teachers Tax–Sheltered Annuity Fund (Operative term contingent) ........................................................................................ 98 Mode of notice, issuance, and time limitations for specific system communications .......................................................................................................... 98 CHAPTER 6. INVESTMENTS ............................................................................................. 99 § 22350. § 22351. § 22352. § 22353. § 22354. § 22355. § 22356. § 22359. § 22360. § 22360.5. § 22361. § 22362. § 22363. § 22364. Legislative declaration; Investment expertise ............................................................. 99 Legislative intent; Expertise of investment advisers ................................................... 99 Contract for investment services ................................................................................. 99 Requirement of separate individual investment advisers ............................................ 99 Duties of investment managers ................................................................................. 100 Employment of investment personnel also serving as investment staff .................... 100 Reduction of book value of securities ....................................................................... 100 Custodian services ..................................................................................................... 101 State Teachers’ Retirement System Home Loan Program Act; Authority to enter correspondent agreements with private lending institutions to assist retirement fund to invest in residential mortgages .................................................... 101 State Teachers’ Retirement System Home Loan Program Act; Procedure for member to obtain 100 percent residential financing ................................................. 103 Loans from retirement fund for repair or rebuilding of homes damaged by natural disaster........................................................................................................... 104 Investment guidelines................................................................................................ 104 Closed session on vendor or contractor (Campaign contributions of gifts) .............. 106 Communication with interested party ....................................................................... 106 CHAPTER 7. SYSTEM HEADQUARTERS ....................................................................... 107 § 22375. § 22376. § 22377. § 22378. § 22379. § 22380. Acquisition of real property to establish permanent facility ..................................... 107 Excess building space................................................................................................ 107 Contract for state agency assistance .......................................................................... 107 Condemnation; Purchase of selected property .......................................................... 107 Award of contract to lowest responsible bidder ........................................................ 108 Building account; Insurance; Accounting procedures............................................... 108 CHAPTER 8. ESTABLISHMENT AND CONTROL OF FUNDS ........................................ 109 § 22400. § 22401. § 22402. § 22403. § 22404. Establishment of Teachers’ Retirement Fund ........................................................... 109 Collection and deposit of return on investments and other receipts .......................... 109 Use of earned interest not credited ............................................................................ 109 Findings as to Cash Balance transfer of funds .......................................................... 110 Benefit adjustments (Threshold for payments and collections) ................................ 110 CHAPTER 9. MEMBER AND EMPLOYER DUTIES ......................................................... 111 § 22450. § 22451. § 22451.5. § 22451.7. § 22453. viii Information affecting status of member or beneficiary ............................................. 111 Information required ................................................................................................. 111 Proof of date of birth ................................................................................................. 112 Withholding of benefit payments until receipt of proof of birth ............................... 112 Signature of spouse on application............................................................................ 112

12) TABLE OF CONTENTS § 22454. § 22455. § 22455.5. § 22456. § 22457. § 22458. § 22459. § 22460. § 22461. Refusal of spouse to sign application ........................................................................ 113 County superintendent required to furnish information ............................................ 114 Requirement that public employers provide employees with coverage by social security or in qualified retirement plan (Right to elect Defined Benefit membership) .............................................................................................................. 114 Information to be furnished by employer .................................................................. 115 Notice of employment, death, resignation, or discharge ........................................... 115 Provision of documents regarding compensation ..................................................... 115 Withholding of salary on failure to file information or pay amount due .................. 116 Notification to terminating employee of benefits...................................................... 116 Obligation to advise reemployed retired member of earnings limitation and to report earnings ........................................................................................................... 117 CHAPTER 10. MEMBERSHIP .......................................................................................... 118 § 22500. § 22501. § 22502. § 22503. § 22504. § 22508. § 22508.5. § 22508.6. § 22509. § 22510. § 22511. § 22512. § 22513. § 22514. § 22515. § 22516. Status of members (June 30, 1996) ........................................................................... 118 Employees as members ............................................................................................. 118 Part–time employees ................................................................................................. 118 Substitute employees ................................................................................................. 119 Part–time employees on hourly or daily basis........................................................... 119 Effect of change of employment (Right of election) ................................................. 120 Election of retirement system .................................................................................... 122 Subsequent employment of members (Right to elect Defined Benefit membership) .............................................................................................................. 122 Notice of right to election of membership; Procedure for election ........................... 123 Election to transfer membership to Public Employees’ Retirement System ............. 123 Certain members who elect to remain in plan; Limitation on benefits ..................... 124 Effect of election of membership in Public Employees’ Retirement System ........... 124 Retention of survivor and disability benefits; Plan vesting ....................................... 124 Qualification when plan vesting not achieved .......................................................... 125 Election to join plan by substitute teachers and part–time employees ...................... 125 Persons not excluded from membership ................................................................... 126 CHAPTER 11. EXCLUSIONS FROM MEMBERSHIP ....................................................... 127 § 22601. § 22601.5. § 22602. § 22604. Exchange or sojourn teachers .................................................................................... 127 Exclusion of part–time employees from mandatory membership............................. 127 Substitute teachers ..................................................................................................... 127 Part–time employees working on hourly or daily basis ............................................ 128 CHAPTER 12. COMMUNITY PROPERTY ........................................................................ 130 § 22650. § 22651. § 22652. § 22653. § 22655. § 22656. § 22657. § 22658. Power of court; Rights of nonmember spouses ......................................................... 130 “Nonmember spouse” and “Nonmember registered domestic partner” for community property purposes ................................................................................... 130 Judgment or court order (Court ordered deduction) .................................................. 131 Entitlement of nonmember spouse ............................................................................ 132 Determination of community property rights in retirement allowance of retired member .......................................................................................................... 133 Joinder of plan as party to action and service of judgment or court order ................ 135 Application of other provisions to nonmember spouse ............................................. 135 Separate administration of accounts of nonmember spouse...................................... 136 ix

13) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM § 22659. § 22660. § 22661. § 22662. § 22663. § 22664. § 22665. § 22666. Requisite information from nonmember spouse ....................................................... 137 Designation of beneficiaries ...................................................................................... 137 Refund of accumulated retirement contributions ...................................................... 138 Redeposit of accumulated retirement contributions previously refunded to member ...................................................................................................................... 139 Purchase of additional service credit by nonmember spouse .................................... 141 Right to service retirement allowance ....................................................................... 142 Determination of eligibility of member for retirement or disability allowance (Service credit awarded to nonmember spouse)........................................................ 145 Legislative intent (Terminable interest doctrine abolishment).................................. 146 CHAPTER 13. SERVICE CREDIT ..................................................................................... 147 § 22700. § 22701. § 22703. § 22704. § 22705. § 22705.5. § 22706. § 22708. § 22709. § 22710. § 22711. § 22712. § 22712.5. § 22713. § 22714. § 22715. § 22716. § 22717. § 22717.5. § 22718. § 22719. § 22720. § 22721. § 22724. Provisions governing inclusion of time ..................................................................... 147 Computation of service to be credited....................................................................... 147 Computation of service (Defined Benefit and Defined Benefit Supplement Program) .................................................................................................................... 147 Computation of year–round or continuous school programs .................................... 148 Exclusion of service covered by other public retirement program............................ 149 Exclusion of service covered under San Francisco City and County Retirement System .................................................................................................... 149 Exclusion of service while covered by retirement or disability ................................ 150 Credit for leave under personal leave program or due to mandatory furlough ......... 150 Credit when member prevented from performing service ........................................ 151 Credit for service performed on payment of prescribed contributions (Credit for job related injury or illness) ................................................................................. 151 Service as elected officer of employee organization ................................................. 152 Service as exchange teacher ...................................................................................... 152 Service performed that does not qualify (Community service teacher) .................... 153 Regulations allowing reduction in workload to part time duties; Contributions; Termination of agreement ................................................................. 153 Credit for additional years to encourage retirement of certificated or academic employees (Retirement incentive; certificated or academic employees) ................................................................................................................ 156 Credit for additional years to encourage retirement (Retirement incentive; state employees) ........................................................................................................ 158 Effect of subsequent service on service credit granted under statute (Retirement incentive; CSU employees) ................................................................... 160 Computation of service credit for accumulated and unused leave ............................ 160 Crediting of service retirement .................................................................................. 161 Billing of school employers for service credit awarded for sick leave (Excess sick leave).................................................................................................................. 162 Prohibition on restoring sick leave upon reinstatement ............................................ 163 Exclusion from final compensation (Exclusion of sick leave service benefits from final compensation) .......................................................................................... 164 Payment for accumulated sick leave ......................................................................... 164 Determination of excess sick leave days at time of retirement ................................. 165 CHAPTER 14. PERMISSIVE AND ADDITIONAL SERVICE CREDIT ............................... 166 § 22800. x Claims for creditable service; Corroboration; Affidavit ........................................... 166

14) TABLE OF CONTENTS § 22801. § 22801.5. § 22802. § 22803. § 22804. § 22805. § 22806. § 22807. § 22808. § 22809. § 22810. § 22811. Purchase of additional service credits; Computation of contributions; Cancellation of purchase (Permissive service) .......................................................... 166 Election of coverage by Defined Benefit Program; Contributions (State educational employees; 7/1/91 through 9/11/00) ...................................................... 168 Purchase of service credit by member previously excluded from membership in plan (Consolidation of benefits) ............................................................................ 169 Services for which member may elect to purchase credit ......................................... 170 When war with foreign power exists......................................................................... 172 Credit for military or Red Cross services .................................................................. 172 Credit for military or Merchant Marine service ........................................................ 173 Credit for time served during extension of military service ...................................... 173 Contributions exemption (Military service) .............................................................. 174 Credit for service performed in war relocation center............................................... 175 Election to receive credit for services performed prior to July 1, 1944 in certain locations other than California ...................................................................... 175 Transfer of funds from eligible retirement plans into Teachers’Retirement Fund 176 CHAPTER 14.2. OUT-OF-STATE SERVICE CREDIT ...................................................... 177 § 22820. § 22821. § 22822. § 22823. § 22824. § 22825. § 22826. § 22827. § 22828. § 22829. Right to purchase out-of-state service credit; Procedure; Limits on use of service purchased ...................................................................................................... 177 Submission of request to purchase (Out-of-state service credit) ............................... 178 Time for request of purchase ..................................................................................... 178 Time and manner of payment of contributions for out-of-state service credits ........ 179 Conflict with Internal Revenue Code (Internal Revenue Code Section 415)............ 180 Operative date of chapter .......................................................................................... 180 Purchase of credit for nonqualified service; Payment of contributions..................... 180 Purchase credit for out-of-state service ..................................................................... 181 Time and manner of request to purchase out-of-state service credit ......................... 181 Time and manner of payment of contributions for out-of-state service credits requested pursuant to § 22827; Cancellation ............................................................ 182 CHAPTER 14.5. MILITARY SERVICE .............................................................................. 183 § 22850. § 22851. § 22852. § 22853. § 22853.5. § 22854. § 22855. § 22856. Legislative intent; Definitions ................................................................................... 183 Calculation of benefits for member returning to same employer; Payment of member contributions................................................................................................ 183 Employer’s liability for contributions ....................................................................... 184 Computation of employee’s compensation earnable................................................. 185 Computation of service credit of deceased member.................................................. 186 Rights of reemployed member absent for more than five years................................ 186 Factors triggering disqualification for benefits ......................................................... 187 Effect of adverse tax consequences ........................................................................... 187 CHAPTER 15. EMPLOYEE CONTRIBUTIONS ................................................................ 188 § 22900. § 22901. § 22901.3. § 22901.5. § 22901.7. Consent for deductions .............................................................................................. 188 Contributions to retirement fund ............................................................................... 188 Normal rate of contribution for state employees ....................................................... 189 Crediting to account [Repealed] ................................................................................ 190 Increases in required contributions (Operative term contingent) .............................. 190 xi

15) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM § 22902. § 22903. § 22904. § 22905. § 22906. § 22907. § 22908. § 22909. Computation of members’ accumulated contributions.............................................. 190 Pick–up of employee contributions towards retirement ............................................ 190 Pick–up of member contributions by state through salary reduction program.......... 191 Contributions to be credited to Defined Benefit and Defined Benefit Supplement accounts; Pretax and posttax contributions (Operative date contingent)................................................................................................................. 192 Contributions for service for which no credit may be granted; Refund .................... 193 Adjustments due to change in recorded birth date .................................................... 193 Annuity deposit contributions for additional benefits ............................................... 194 Payment of contributions by employer ..................................................................... 194 CHAPTER 16. EMPLOYER AND STATE CONTRIBUTIONS ........................................... 196 § 22950. § 22950.5. § 22951. § 22951.5. § 22954. § 22954.1. § 22954.5. § 22955. § 22955.1. § 22955.5. § 22956. § 22957. § 22958. Monthly contributions ............................................................................................... 196 Increases in required contributions; Rate adjustment to eliminate unfunded actuarial obligation for service credited before July 1, 2014 (Operative term contingent; Repeal contingent).................................................................................. 197 Contribution of percentage of members’ monthly salary (Sick leave service credit) ........................................................................................................................ 198 Increase in contribution rate (Supplemental Benefit Maintenance Account)............ 198 Continuous appropriation .......................................................................................... 198 Quadrennial evaluation; Report to Legislature on system’s ability to provide purchasing power protection; Appropriation (Inoperative July 1, 2036; Repealed January 1, 2037) (Supplemental Benefit Maintenance Account) .............. 200 Additional appropriations for Supplemental Benefit Maintenance Account in the Teachers’ Retirement Fund ................................................................................. 202 Transfer to retirement fund (Continuous appropriation) ........................................... 202 Continuous appropriation for transfer to Teachers’ Retirement Fund; Increases to appropriation (Operative term contingent; Repeal contingent) ............. 204 “Creditable compensation” ....................................................................................... 205 Allocation of employer and state contributions ........................................................ 205 Legislative findings and declarations regarding Section 22950.5; Challenge to findings; Annual determinations by Director of Finance; Notification of determinations ........................................................................................................... 206 Action challenging validity of matter authorized by act ........................................... 207 CHAPTER 17. EMPLOYER COLLECTION AND REPORTING PROCEDURES .............. 208 § 23000. § 23001. § 23002. § 23002.5. § 23003. § 23004. § 23005. § 23006. § 23007. § 23008. § 23009. § 23010. xii Mandatory deductions and payments ........................................................................ 208 Requisitions for contributions ................................................................................... 208 When contributions are due and payable and delinquent .......................................... 209 Contributions for year–round or continuous school programs .................................. 209 Assessment of penalties; Interest charges ................................................................. 209 Monthly reports ......................................................................................................... 210 When monthly reports are due and delinquent.......................................................... 210 Assessment of penalties for late or unacceptable reports .......................................... 210 Failure of county superintendent to make payment of assessments .......................... 211 Adjustment for incorrect contributions; Penalty ....................................................... 211 Adjustment with interest ........................................................................................... 212 Appeal of assessed penalties or interest .................................................................... 212

16) TABLE OF CONTENTS CHAPTER 18. REFUND OF CONTRIBUTIONS ............................................................... 213 § 23100. § 23101. § 23102. § 23103. § 23104. § 23106. § 23107. Payment on certain terminations (Contributions to be refunded) ............................. 213 Forfeiture of rights to service credit benefit .............................................................. 213 Certification of termination of employment .............................................................. 214 Request for refund ..................................................................................................... 214 Mailing and cancellation of warrant refunding contributions ................................... 214 Refund or crediting of service in another system ...................................................... 216 Refund of accumulated annuity deposits................................................................... 216 CHAPTER 19. REDEPOSIT OF CONTRIBUTIONS.......................................................... 217 § 23200. § 23201. § 23202. § 23203. Redeposit of contributions ........................................................................................ 217 Receipt of other retirement allowance (Right to redeposit) ...................................... 217 Time of election to redeposit; Consideration as election to repay; Cancellation when not received; Election after cancellation .................................... 218 Redeposit of refunded accumulated retirement contributions ................................... 219 CHAPTER 20. BENEFICIARY DESIGNATION ................................................................. 220 § 23300. § 23301. § 23302. § 23303. § 23304. Designation of beneficiary ........................................................................................ 220 Designation of other beneficiaries............................................................................. 221 Full discharge of liability .......................................................................................... 221 Payment of funeral expenses ..................................................................................... 221 Payment to estate in absence of beneficiary designation .......................................... 222 CHAPTER 21. PRE-1972 BENEFITS................................................................................ 223 § 23400. § 23401. § 23402. § 23403. § 23404. Reduction of disability retirement allowance (Earnings limitation) ......................... 223 Medical Examinations (Continuing qualification) .................................................... 223 Continuation of certain death benefits....................................................................... 224 Continuation of certain survivor benefits .................................................................. 224 Credits on termination of retirement allowance ........................................................ 224 CHAPTER 21.5. ELECTION OF DISABILITY AND DEATH BENEFIT COVERAGE ........ 226 § 23700. § 23701. § 23702. § 23703. § 23704. § 23705. § 23706. Effective date of new survivor benefit and disability retirement programs; Purpose of chapter ..................................................................................................... 226 Time for election of disability and death benefit programs ...................................... 226 Eligibility to make irrevocable election .................................................................... 226 Requirements of election of coverage ....................................................................... 227 Refusal of spouse to sign election document ............................................................ 228 Acknowledgment notice............................................................................................ 228 Failure to file election ............................................................................................... 228 CHAPTER 22. ACTIVE DEATH BENEFITS: FAMILY ALLOWANCE............................... 229 § 23800. § 23801. § 23802. § 23803. § 23804. § 23805. Application of chapter; “Members” .......................................................................... 229 Payment of benefits ................................................................................................... 229 Components of payment (Refund upon death of member) ....................................... 230 Time of payment (Exception to Probate Code) ......................................................... 231 Payment of family allowance; Conditions ................................................................ 231 Priority of payment of family allowance................................................................... 232 xiii

17) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM § 23805.5. § 23806. § 23809. § 23810. § 23811. § 23812. Indicia of dependency for parents claiming benefits................................................. 234 Payment of family allowance to children .................................................................. 234 Reduction in family allowance for unmodified benefits payable from other systems ...................................................................................................................... 235 Termination of family allowance .............................................................................. 235 Lump sum payment on termination of family allowance.......................................... 235 Resumption of benefits for deceased member’s surviving spouse who had lost benefits due to remarriage .................................................................................. 236 CHAPTER 23. ACTIVE DEATH BENEFITS: SURVIVOR BENEFITS ............................... 237 § 23850. § 23851. § 23852. § 23853. § 23854. § 23855. § 23856. § 23858. § 23859. Application of chapter; “Member” ............................................................................ 237 Payment on death to beneficiary ............................................................................... 237 Election of surviving spouse; Dependent child; Beneficiary (Refund of benefits upon death of member) ................................................................................ 238 Request for death payments and return of contributions (Exception to Probate Code) ......................................................................................................................... 239 Survivor benefit allowance (Payment conditions) .................................................... 239 Computation of survivor benefit allowance .............................................................. 240 Eligible dependent children....................................................................................... 241 Termination of allowance on death of beneficiary.................................................... 242 Remaining balance paid to estate of spouse on termination of allowance ................ 242 CHAPTER 24. RETIRED DEATH BENEFITS ................................................................... 243 § 23880. § 23881. § 23882. Payment to beneficiary (Death benefit)..................................................................... 243 Payment to beneficiary or option beneficiary (Return of contributions and interest) ...................................................................................................................... 243 Request for death payments and return of contributions (Exception to Probate Code) ......................................................................................................................... 244 CHAPTER 25. DISABILITY ALLOWANCE ....................................................................... 245 § 24001. § 24001.5. § 24002. § 24003. § 24004. § 24005. § 24006. § 24007. § 24009. § 24010. § 24011. § 24012. § 24013. § 24014. § 24015. § 24016. xiv Application for disability allowance (Eligibility requirements)................................ 245 Eligibility of officers of employee organizations ...................................................... 246 Time and conditions for application for disability allowance ................................... 247 Medical documentation of impairment; Examination; Request for reasonable accommodation; Administrative appeal .................................................................... 248 Limitation of disability allowance in certain areas (Limited-term disability benefit coverage A) ................................................................................................... 249 Effective date of disability allowance; Notification of last day of service................ 250 Amount of disability allowance ................................................................................ 251 Calculation of allowance on credited service ............................................................ 251 Reduction when eligible dependent children become ineligible ............................... 252 Reduction for benefits paid or payable under other public systems .......................... 252 Treatment program for impairment amenable to treatment ...................................... 252 Participation in rehabilitation program; Effect of willful failure to participate; Costs .......................................................................................................................... 253 Medical examinations (Continuing qualification) ..................................................... 253 Employment of disabled member to perform creditable service............................... 254 Effect of employment on disability allowance (Earnings limitation) ....................... 254 Effect of excessive earnings on allowance ................................................................ 255

18) TABLE OF CONTENTS § 24017. § 24018. Effect of excessive earnings on allowance of person enrolled in approved rehabilitation program ............................................................................................... 255 Recurrence of original disability within six months of return................................... 255 CHAPTER 26. DISABILITY RETIREMENT ....................................................................... 257 § 24100. § 24101. § 24101.5. § 24102. § 24103. § 24104. § 24105. § 24106. § 24107. § 24108. § 24109. § 24110. § 24111. § 24112. § 24113. § 24114. § 24116. § 24117. § 24118. § 24119. Applicability of chapter............................................................................................. 257 Application for disability retirement (Eligibility requirements) ............................... 257 Eligibility for disability while officer of organization .............................................. 259 Time for application for disability retirement allowance (Conditions for application) ................................................................................................................ 259 Medical documentation of impairment; Examination; Request for reasonable accommodation; Administrative appeal .................................................................... 260 Limitation of disability retirement period in certain cases (Limited-term disability benefit coverage B) ................................................................................... 262 Effective date of disability retirement allowance; Notification of last day of service ....................................................................................................................... 263 Components of retirement allowance ........................................................................ 264 Options modifying allowance ................................................................................... 264 Reduction when eligible dependent children become ineligible ............................... 265 Reduction for workers’ compensation benefits paid or payable ............................... 265 Program for impairment amenable to treatment........................................................ 265 Participation in rehabilitation program; Effect of willful failure to participate; Costs .......................................................................................................................... 266 Medical examinations (Continuing qualification) ..................................................... 266 Employment of member retired for disability ........................................................... 267 Employment or self–employment of retired member; Earnings limitation............... 268 Service by certain retired teachers of California State University (Postretirement earnings limitations) ................................................................................ 269 Termination of disability retirement allowance ........................................................ 269 Credit to member’s account on termination of disability retirement allowance ....... 270 Recurrence of original disability within six months of return................................... 270 CHAPTER 27. SERVICE RETIREMENT ........................................................................... 271 § 24201. § 24201.5. § 24202. § 24202.5. § 24202.6. § 24202.7. § 24202.8. § 24203. § 24203.5. § 24203.6. § 24204. § 24205. Application for retirement; Conditions ..................................................................... 271 Service retirement during an evaluation of a disability application .......................... 272 Retirement allowance for member retiring after June 30, 1972 ................................ 274 Retirement allowance for member retiring on or after January 1, 1999 ................... 275 Retirement allowance for member subject to the California Public Employees’ Pension Reform Act of 2013 ................................................................. 277 Minimum retirement age for member subject to the California Public Employees’ Pension Reform Act of 2013 ................................................................. 278 Implementation of changes established in Sections 24202.6 and 24202.7 ............... 278 Retirement allowance; Early retirement versus normal retirement (“30 and out”)........................................................................................................................... 278 Percentage of final compensation to be increased (“Career factor”)......................... 279 Increase in monthly allowance (“Longevity bonus”) ................................................ 280 Service retirement allowance; Conditions (Benefit effective date) ........................... 281 Option to receive partial allowance upon early retirement and revert to full allowance for normal retirement age (Early Retirement Limited Term Reduction Program) .................................................................................................. 283 xv

19) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM § 24206. § 24207. § 24208. § 24209. § 24209.3. § 24210. § 24211. § 24212. § 24213. § 24214. § 24214. § 24214.5. § 24215. § 24216. § 24216.5. § 24216.6. § 24217. § 24218. § 24219. § 24221. Minimum unmodified allowance .............................................................................. 284 Minimum allowance for retired member terminating service retirement allowance and retiring under part .............................................................................. 285 Termination of retirement allowance (Reinstatement) .............................................. 286 Retirement for service following reinstatement ........................................................ 286 Service retirement benefits for member who perform creditable service for two or more years following reinstatement ............................................................... 288 Retirement following prior disability retirement that was terminated ...................... 290 Allowance of member granted disability allowance who returns to employment subject to coverage under program ...................................................... 291 Termination before retirement of allowance to member who does not return to employment ........................................................................................................... 292 Termination of disability allowance on retirement (Disability allowance to service retirement) ..................................................................................................... 293 Activities of retired member; Compensation; Limitations; Applicability of limitations; Documentation to substantiate exemption; Contents of documentation (First of two; Inoperative July 1, 2017; Repealed January 1, 2018) ......................................................................................................................... 295 Activities of retired member; Compensation; Limitations; Applicability of limitations; Employee of third party (Second of two; Operative July 1, 2017) ........ 299 Postretirement compensation limitation; Exemption from limitation; Contents of resolution; Documentation; Reduction of retirement allowance ........... 302 Service by certain retired teachers of California State University ............................ 304 Exemption from limits on compensation for retirees hired in connection with certain emergency situations [Repealed]................................................................... 304 Exemption from limits on compensation for retirees needed for class size reduction program [Repealed] ................................................................................... 305 Conditions for exemption of compensation of member retired for service from certain provisions of § 24214; Records [Repealed] .......................................... 305 Annuity retirement allowance; Option (Savings clause) ........................................... 305 Calculation of part–time service credit (7/1/1956 through 6/30/1968) ..................... 305 Local teachers’ retirement system retirees; Permanent fund benefit computations ............................................................................................................. 306 Election of lump-sum payment and actuarially reduced monthly allowance (Partial lump-sum)..................................................................................................... 306 CHAPTER 27.1. RETIREMENT OPTION PROGRAM ...................................................... 308 CHAPTER 27.5. REPLACEMENT BENEFITS PROGRAM ............................................... 309 § 24250. § 24252. § 24255. § 24260. § 24270. § 24275. Legislative intent ....................................................................................................... 309 Chapter not applicable to a member subject to the California Public Employees’ Pension Reform Act of 2013 ................................................................. 309 Teachers’ Replacement Benefits Program Fund; Deposits and disbursements of money.................................................................................................................... 309 Establishment of program; Annual benefits (Replacement Benefits Program) ........ 310 Reduced annual benefits............................................................................................ 311 Benefits subject to limitation (Internal Revenue Code Section 415) ........................ 311 CHAPTER 28. OPTIONS .................................................................................................. 312 § 24300. xvi Election of options .................................................................................................... 312

20) TABLE OF CONTENTS § 24300.1. § 24300.2. § 24300.5. § 24300.6. § 24301. § 24302. § 24303. § 24304. § 24305. § 24305.3. § 24305.5. § 24306. § 24306.5. § 24306.7. § 24307. § 24307.5. § 24308. § 24309. § 24310. § 24311. § 24312. § 24312.1. § 24313. § 24320. § 24321. § 24322. § 24323. § 24324. § 24330. § 24331. § 24332. § 24333. § 24340. § 24341. § 24342. § 24343. § 24344. § 24345. § 24346. § 24347. § 24348. Election of option beneficiary; Revocation or change; Death of option beneficiary before member; Community property interest; Plan amendment .......... 315 [Section renumbered 2015.] ...................................................................................... 317 [Section renumbered 2015.] ...................................................................................... 317 [Section renumbered 2015.] ...................................................................................... 317 [Section renumbered 2015.] ...................................................................................... 317 [Section renumbered 2015.] ...................................................................................... 317 [Section renumbered 2015.] ...................................................................................... 317 [Section renumbered 2015.] ...................................................................................... 317 [Section renumbered 2015.] ...................................................................................... 317 [Section renumbered 2015.] ...................................................................................... 318 [Section renumbered 2015.] ...................................................................................... 318 [Section renumbered 2015.] ...................................................................................... 318 [Section renumbered 2015.] ...................................................................................... 318 [Section renumbered 2015.] ...................................................................................... 318 Preretirement election of option; Death of member prior to retirement; Subsequent retirement for service without canceling elected option ........................ 318 Modification of allowance (Preretirement election of an option) ............................. 320 [Section renumbered 2015.] ...................................................................................... 320 Changes or cancellation of Option Elected Preretirement ........................................ 320 Right of reelection following cancellation ................................................................ 322 Effect on reinstatement of option elected at time of retirement ................................ 322 Effect on reinstatement on specified options elected ................................................ 323 [Section renumbered 2015.] ...................................................................................... 323 [Section renumbered 2015.] ...................................................................................... 323 Designation of spouse as new option beneficiary by retired member ....................... 324 Unmarried retirees (Election of an option; New spouse) .......................................... 324 Cancellation of elected option in event of dissolution of marriage or order of separation .................................................................................................................. 326 Designation of new option beneficiary or different joint and survivor option when option beneficiary predeceases retired member............................................... 327 Joint and survivor annuity ......................................................................................... 329 Effect of election on other benefits ........................................................................... 330 Death of option beneficiary ....................................................................................... 330 Election of actuarially modified disability retirement allowance; Death prior to election .................................................................................................................. 330 Elected option voided on reinstatement to membership; Further election ................ 331 Change of preretirement option election ................................................................... 332 Election to Change Options 2 and 3 (1994) .............................................................. 333 Election to Change Options 4 and 5 (1999) .............................................................. 334 Retirement allowance without modification for Option 2, 3, 4 and 5 (1999) ........... 334 Change without reduction (2000) .............................................................................. 335 Change of option; Window period; January 1, 2007 through June 30, 2007 ............ 336 Preretirement election under Section 24300.1; Conditions ....................................... 337 Retiree’s change of option designated for same-sex spouse or former spouse ......... 338 Preretirement change of option designated for same-sex spouse or former spouse ........................................................................................................................ 339 CHAPTER 29. BENEFIT MAINTENANCE ........................................................................ 341 § 24400. Legislative intent (Report on erosion of purchasing power) ..................................... 341 xvii

21) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM § 24401. § 24402. § 24403. § 24404. § 24405. § 24406. § 24407. § 24408. § 24409. § 24410. § 24410.5. § 24410.6. § 24410.7. § 24411. § 24412. § 24413. § 24415. § 24415.5. § 24416. § 24417. Exclusion ................................................................................................................... 341 Application of benefit improvement factor ............................................................... 341 Increase procedure (Pre-7/1/72 allowances) ............................................................. 342 Increase of certain benefits ........................................................................................ 342 Scheduled increases................................................................................................... 343 Prescribed amounts for member with less than specified years of credited service (Ad hoc increase; Less than 20 years service) .............................................. 343 Monthly allowances to retirants, disabilitants, and beneficiaries (Purchasing power ad hoc increase) .............................................................................................. 343 Minimum unmodified allowance of retired person after increase............................. 344 Minimum unmodified allowance; Reduction ............................................................ 345 Base date for applicable postretirement increases ..................................................... 345 Annual allowance payable to retired member, option beneficiary, or surviving spouse ........................................................................................................ 346 Allowance payable to retired member, option beneficiary, or surviving spouse (Minimum guarantee) .................................................................................... 347 Monthly allowance increases .................................................................................... 349 [Repealed] ................................................................................................................. 350 Appropriation and distribution of revenues (School lands income) .......................... 350 Revenues from lands within Elk Hills Naval Petroleum Reserve ............................. 351 Supplemental Benefit Maintenance Account; Distribution and allocation of proceeds..................................................................................................................... 351 Adjustment of purchasing power protection benefits payable to the Supplemental Benefit Maintenance Account ............................................................ 353 Board’s authority upon certain findings (Supplemental Benefit Maintenance Account; Insufficient funding) .................................................................................. 354 Distributions authorized (Auxiliary Supplemental Benefit Maintenance Account) .................................................................................................................... 355 CHAPTER 30. SUBROGATION ........................................................................................ 357 § 24500. § 24501. § 24502. § 24503. § 24504. § 24505. Right of recovery from third person or entity on behalf of plan ............................... 357 Recovery by board under contract (Authorization to contract with State Fund or Attorney General for recovery from third persons) .............................................. 357 Permissible actions by board or agents under contract ............................................. 357 Authority to compromise claims ............................................................................... 358 Application of amount recovered .............................................................................. 358 Limitation of actions; Time of fixing liability........................................................... 358 CHAPTER 31. PROCEDURES CONCERNING PAYMENT .............................................. 359 § 24600. § 24601. § 24602. § 24603. § 24604. § 24605. § 24606. § 24607. § 24608. § 24609. xviii Accrual and termination dates of allowances and payments; Compliance with federal law in making distributions ........................................................................... 359 Authorization for payment of estimated allowances ................................................. 361 Special account and procedures for emergency payments ........................................ 362 Adjustment of incorrect estimated allowances.......................................................... 362 Monthly disbursements; Copy of benefit payment information; Discharge ............. 362 Issuance of duplicate warrant on proof of loss .......................................................... 364 Unclaimed warrants................................................................................................... 364 Warrant paid for month in which retired or disabled member dies........................... 365 Authorized deductions from allowances ................................................................... 365 Payment of accrued retirement allowance................................................................. 366

22) TABLE OF CONTENTS § 24610. § 24611. § 24612. § 24613. § 24614. § 24615. § 24616. § 24616.5. § 24617. § 24618. § 24619. § 24620. Payment of accrued allowance on death of disabled member ................................... 366 Applicable provisions in simultaneous death and similar situations ......................... 367 Payment to person entitled to custody of minor ........................................................ 367 Discharge and release from liability.......................................................................... 367 Continued payments to persons who retired prior to discontinuance of retirement plan of certain district .............................................................................. 368 Collection of contributions that are due from retired member, disabled member or person who has died ................................................................................ 369 Authority to collect overpayments from any subsequent benefit .............................. 369 Report of erroneous information by employer .......................................................... 370 Collection of overpayments ...................................................................................... 370 Overpayments or underpayments; Debiting or crediting appropriate reserve in retirement fund (Write-off) ................................................................................... 371 Report on underpayments or overpayments .............................................................. 371 Continuance of special reserve resulting from discontinuance of district retirement plan........................................................................................................... 371 CHAPTER 32. SAN FRANCISCO LOCAL SYSTEM ........................................................ 373 § 24700. § 24701. § 24702. § 24703. § 24704. § 24705. § 24706. Membership in plan; Exclusion from federal coverage ............................................ 373 Other concurrent certificated service ........................................................................ 373 Persons on retirement roll on June 30, 1972; Retired death benefit .......................... 373 Classified or other noncertificated service ................................................................ 374 Concurrent retirement benefits .................................................................................. 374 Concurrent retirement and credit for services performed in other states, etc. ........... 375 Subvention payments ................................................................................................ 375 CHAPTER 33. LOS ANGELES UNIFIED SCHOOL DISTRICT PLAN .............................. 376 § 24750. § 24751. Members who took refund and who have permanent fund contributions ................. 376 Members who took refund but did not redeposit (Local service credit) ................... 376 CHAPTER 34. ADMINISTRATION OF THE DISTRICT RETIREMENT SALARY PLAN................................................................................................................................. 378 §§ 24800 – 24813 apply only to the Los Angeles Unified School District. ................................... 378 CHAPTER 35. JOINT DISTRICT SALARY RETIREMENT PLAN ..................................... 379 §§ 24900 – 24944 apply only to the Los Angeles Unified School District. ................................... 379 CHAPTER 36. ANNUITY CONTRACT AND CUSTODIAL ACCOUNTS ........................... 380 § 24950. § 24950.5. § 24951. § 24952. § 24953. Requirement that account be offered; Investment options; Contributions ................ 380 System may administer Roth IRA for purpose of accepting a rollover as specified .................................................................................................................... 381 Election to terminate offering of annuity contract and custodial account ................. 381 Provision for recovery of costs and expenses of administration ............................... 381 Contract for services regarding annuity contract and custodial account ................... 382 CHAPTER 37. DEFERRED COMPENSATION PLANS .................................................... 384 § 24975. Development of deferred compensation plans .......................................................... 384 xix

23) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM § 24976. § 24977. Teachers’ Deferred Compensation Fund................................................................... 385 Contract for services regarding deferred compensation plan .................................... 386 CHAPTER 38. DEFINED BENEFIT SUPPLEMENT PROGRAM ...................................... 389 § 25000. § 25000.5. § 25000.7. § 25000.9. § 25001. § 25002. § 25003. § 25004. § 25005. § 25006. § 25007. § 25008. § 25008.5. § 25009. § 25010. § 25011. § 25011.1. § 25011.5. § 25011.6. § 25012. § 25013. § 25014. § 25015. § 25016. § 25017. § 25018. § 25018.1. § 25018.2. § 25018.5. § 25018.6. § 25019. § 25020. § 25021. § 25022. § 25022.5. § 25023. § 25024. § 25024.5. § 25025. xx Establishment of program ......................................................................................... 389 Amendment of plan (Compliance with federal and state tax codes) ......................... 389 Vested rights; Rollovers ............................................................................................ 389 “Nonmember spouse” and “Nonmember registered domestic partner” for Defined Benefit Supplement Program purposes ....................................................... 390 Segregated account; Excess earnings (Gain and loss reserve) .................................. 390 Annuitant Reserve ..................................................................................................... 391 Transfers of funds...................................................................................................... 391 Member accounts ...................................................................................................... 391 Interest rates .............................................................................................................. 392 Additional earnings credit ......................................................................................... 392 Additional annuity credit........................................................................................... 392 Member’s right to balance of credits; Distributions .................................................. 393 Distribution of balance of credits from Defined Benefit Supplement account ......... 393 Retirement benefits ................................................................................................... 393 Eligibility requirements ............................................................................................. 394 Elections as to receipt of benefits .............................................................................. 394 Election to receive the retirement benefit as an annuity payable in monthly installments ............................................................................................................... 396 Change of annuities ................................................................................................... 398 Retiree’s change of annuity designated for same-sex spouse or former spouse ....... 399 Determination of annuity .......................................................................................... 400 Balance of credits to be transferred ........................................................................... 401 Reinstatement; Termination of annuity ..................................................................... 401 Joint and survivor annuity ......................................................................................... 401 Disability benefits ..................................................................................................... 402 Date of receipt of disability benefits; Application form............................................ 403 Form of disability benefit; Elections ......................................................................... 403 Election to receive the disability benefit as an annuity payable in monthly installments ............................................................................................................... 405 Change of annuities ................................................................................................... 406 Recurrence of original disability within six months of return to work ..................... 407 Disability retirement allowance recipient’s change of annuity designated for same-sex spouse or former spouse ............................................................................ 408 Termination of allowance.......................................................................................... 409 Member’s death (Final benefit) ................................................................................. 410 Elections as to final benefit payment ........................................................................ 410 Death of member during receipt of specified annuities............................................. 411 Death of nonmember spouse during receipt of specified annuities........................... 411 Payments following death under specified annuities ................................................ 412 Application for termination benefits; Termination of application ............................ 412 Elapsed time since previous termination benefit ....................................................... 413 Elapse of specified time (Payment of termination benefit) ....................................... 413

24) TABLE OF CONTENTS CHAPTER 39. SCHOOL EMPLOYER RETIREMENT INVESTMENT PRODUCT VENDOR REGISTRATION PROCESS AND INFORMATION BANK................................ 414 § 25100. § 25101. § 25102. § 25103. § 25104. § 25105. § 25106. § 25107. § 25108. § 25109. § 25110. § 25111. § 25112. § 25113. § 25114. § 25115. Vendor registration process to make information about § 403(b) tax–deferred retirement investment products available .................................................................. 414 Registration of 403(b) products and prospective vendors ......................................... 415 Annual registration; Renewal .................................................................................... 416 Removal from registry .............................................................................................. 416 Impartial investment information bank on web site .................................................. 417 Notice of information bank to members.................................................................... 417 Design of web site and preface to vendor information ............................................. 417 Vendor fees ............................................................................................................... 418 Cost of establishing and maintaining registration and information bank; Administrative fees ................................................................................................... 418 Liability of board and system .................................................................................... 419 Completion date ........................................................................................................ 419 Employee awareness of and access to system ........................................................... 419 Consideration from vendor for promotion of products is prohibited ........................ 419 Unregistered 403(b) products .................................................................................... 419 Continuation of contributions to unregistered product.............................................. 420 Applicability (Insurance Code Section 770.3) .......................................................... 420 Part 13.5. Health Care Benefits Program CHAPTER 1. GENERAL PROVISIONS ............................................................................ 421 § 25900. Costs of programs; Authorization by Legislature ..................................................... 421 CHAPTER 2. DEFINITIONS .............................................................................................. 422 § 25901. § 25910. § 25915. § 25920. § 25921. § 25923. § 25925. § 25926. Governing definitions................................................................................................ 422 “Beneficiary” or “beneficiaries” ............................................................................... 422 “Dependent child” or “dependent children”; “Offspring”; “Financially dependent”................................................................................................................. 422 “Dependent parent” or “dependent parents” ............................................................. 422 “Employer” ............................................................................................................... 423 “Fund” ....................................................................................................................... 423 “Member” .................................................................................................................. 423 “School year” ............................................................................................................ 423 CHAPTER 3. ESTABLISHMENT AND CONTROL OF FUND........................................... 424 § 25930. § 25931. § 25932. § 25933. Establishment of fund; Deposits; Appropriation of proceeds (Teachers’ Health Benefits Fund) ............................................................................................... 424 Control of fund by board ........................................................................................... 424 Collection and deposits of return on investments ..................................................... 424 “Plan”; Actuarial investigation and data ................................................................... 424 CHAPTER 4. MEDICARE PREMIUM PAYMENT PROGRAM .......................................... 426 § 25940. § 25950. Payment of Medicare Part A premiums for retired or disabled members; Eligibility; Amounts; Part B surcharges.................................................................... 426 Report on drug program ............................................................................................ 427 xxi

25) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM § 25955. Recovery of amount overpaid ................................................................................... 428 PART 14. STATE TEACHERS’ RETIREMENT SYSTEM CASH BENEFIT PROGRAM CHAPTER 1. GENERAL PROVISIONS ............................................................................ 429 § 26000. § 26000.5. § 26000.6. § 26001. § 26002. § 26002.5. § 26003. § 26004. Creation of Cash Balance Plan .................................................................................. 429 Agreement with retirement system ........................................................................... 429 Election to provide Cash Balance benefits ................................................................ 430 Compliance with federal and state tax provisions ..................................................... 430 Administration of plan .............................................................................................. 430 Reference to “spouse” and “registered domestic partner” for Cash Balance Plan purposes ............................................................................................................ 430 Severability of provisions.......................................................................................... 431 Limitations on benefits; Distribution ........................................................................ 431 CHAPTER 2. DEFINITIONS .............................................................................................. 433 § 26100. § 26101. § 26102. § 26103. § 26104. § 26105. § 26106. § 26107. § 26108. § 26109. § 26112. § 26112.5. § 26113. § 26114. § 26115. § 26116. § 26117. § 26118. § 26119. § 26120. § 26121. § 26122. § 26123. § 26124. § 26125. § 26126. § 26127. § 26128. § 26129. § 26130. § 26131. § 26132. xxii Definitions to govern construction ............................................................................ 433 “Actuarial equivalent” ............................................................................................... 433 “Actuary” .................................................................................................................. 433 “Additional earnings credit”...................................................................................... 433 “Administrative costs” .............................................................................................. 433 “Annuitant Reserve” ................................................................................................. 433 “Annuity” .................................................................................................................. 434 “Basis of employment” ............................................................................................. 434 “Beneficiary”............................................................................................................. 434 “Board” ..................................................................................................................... 434 “Cash Balance Plan” ................................................................................................. 434 “Class of employees” ................................................................................................ 434 “Creditable Service”.................................................................................................. 435 “Death benefit”.......................................................................................................... 436 “Defined Benefit Program” ....................................................................................... 436 “Disability benefit” ................................................................................................... 436 “Disability date” ........................................................................................................ 436 “Employee” ............................................................................................................... 436 “Employee account”.................................................................................................. 437 “Employee contribution rate”.................................................................................... 437 “Employee contribution”........................................................................................... 437 “Employer” ............................................................................................................... 437 “Employer account” .................................................................................................. 437 “Employer contribution rate” .................................................................................... 438 “Employer contribution” ........................................................................................... 438 “Employed”; “Employment”..................................................................................... 438 “Full time equivalent” ............................................................................................... 438 “Fund” ....................................................................................................................... 438 “Gain and Loss Reserve” .......................................................................................... 439 “Investment earnings” ............................................................................................... 439 “Minimum interest rate”............................................................................................ 439 “Participant” .............................................................................................................. 439

26) TABLE OF CONTENTS § 26132.5. § 26133. § 26134. § 26135. § 26135.5. § 26135.7. § 26136. § 26137. § 26138. § 26139. § 26139.5. § 26140. § 26142. § 26143. § 26144. § 26144.5. § 26145. “Participant subject to the California Public Employees’ Pension Reform Act of 2013” ..................................................................................................................... 440 “Pay period” .............................................................................................................. 440 “Plan” ........................................................................................................................ 440 “Plan year” ................................................................................................................ 440 “Public employer” ..................................................................................................... 441 “Retired participant activities” .................................................................................. 441 “Retirement” ............................................................................................................. 441 “Retirement benefit” ................................................................................................. 442 “Retirement date” ...................................................................................................... 442 “Salary” ..................................................................................................................... 442 “Salary” for participants subject to the California Public Employees’ Pension Reform Act of 2013................................................................................................... 445 “Spouse” .................................................................................................................... 446 “System” ................................................................................................................... 446 “Termination benefit” ............................................................................................... 447 “Total and permanent disability” .............................................................................. 447 “Trustee service” ....................................................................................................... 447 “Unfunded actuarial obligation” ............................................................................... 447 CHAPTER 3. PLAN ADMINISTRATION ........................................................................... 448 § 26200. § 26201. § 26202. § 26203. § 26204. § 26205. § 26206. § 26207.5. § 26208. § 26209. § 26210. § 26211. § 26212. § 26213. § 26214. § 26215. § 26216. Deposits into Teachers’ Retirement .......................................................................... 448 Collection and deposit of investment earnings.......................................................... 448 Establishment of Gain and Loss Reserve .................................................................. 448 Amortization of unfunded actuarial obligation ......................................................... 449 Establishment of Annuitant Reserve ......................................................................... 449 Transfer between reserves ......................................................................................... 449 Administrative costs .................................................................................................. 449 Sources for funding ................................................................................................... 450 Records and accounts ................................................................................................ 450 Authorization of transfer and disbursement of funds ................................................ 450 Control of investing fund .......................................................................................... 450 Duties of actuary ....................................................................................................... 451 Database for actuarial investigation .......................................................................... 451 Adoption of actuarial techniques............................................................................... 451 Annual statement to participants ............................................................................... 452 Confidential records .................................................................................................. 452 Administration by third party .................................................................................... 453 CHAPTER 4. EMPLOYER AND PARTICIPANT RESPONSIBILITIES ............................. 454 § 26300. § 26301. § 26301.5. § 26302. § 26303. § 26303.5. § 26304. § 26305. § 26306. Available information ............................................................................................... 454 Reports by employers; Penalty .................................................................................. 454 Employer’s duty to deduct and remit contributions .................................................. 455 Adjustments in contributions; Assessment of penalties for late or improper adjustments ................................................................................................................ 455 Deadline to transmit contributions; Delinquency of payments ................................. 456 Appeal of assessed penalty or interest....................................................................... 456 Notice of changed status of employee ....................................................................... 457 Documents from employer to be provided upon request .......................................... 457 Information from participant or beneficiary.............................................................. 457 xxiii

27) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM CHAPTER 5. ELIGIBILITY ................................................................................................ 458 § 26400. § 26401. § 26403. Employees with less than 50 percent creditable service; Community college district temporary employees; Changes in employment; Election for social security coverage ....................................................................................................... 458 Election to become participant for creditable service ............................................... 460 Trustee service........................................................................................................... 461 CHAPTER 6. CONTRIBUTIONS ....................................................................................... 462 § 26500. § 26501. § 26501.5. § 26502. § 26503. § 26503.5. § 26504. § 26505. § 26506. § 26507. Requirement of consent to deductions ...................................................................... 462 Amount of contribution ............................................................................................. 462 Effect of election ....................................................................................................... 462 Employer to pay for contributions and make deductions from salaries (Employer pick-up of employee contributions) ........................................................ 462 Contribution by employer ......................................................................................... 462 Employer contributions ............................................................................................. 463 Collective bargaining agreement to pay different contribution rate.......................... 463 [Section repealed 2012]............................................................................................. 464 Voluntary contributions, rollovers, or redeposits not permitted................................ 464 Adjustment of employer contribution rate ................................................................ 465 CHAPTER 7. EMPLOYEE AND EMPLOYER ACCOUNTS .............................................. 466 § 26600. § 26601. § 26602. § 26603. § 26604. § 26605. § 26606. § 26607. Contributions based on salary ................................................................................... 466 Employee contributions and interest ......................................................................... 466 Employer contributions and interest.......................................................................... 466 Date to credit accounts .............................................................................................. 466 Minimum interest rate for accounts........................................................................... 466 Surplus of investment earnings; Additional earnings credit...................................... 467 Determination of additional earnings credit .............................................................. 467 Additional annuity credit........................................................................................... 468 CHAPTER 8. RIGHTS TO BENEFITS............................................................................... 469 § 26700. § 26701. § 26702. § 26703. § 26704. Vested right to benefit ............................................................................................... 469 Right to benefit not subject to execution or assignment............................................ 469 Limitations period to adjust errors or omissions ....................................................... 469 Spousal signature requirement .................................................................................. 470 Refusal of spouse to sign ........................................................................................... 470 CHAPTER 9. RETIREMENT BENEFIT ............................................................................. 471 § 26800. § 26801. § 26802. § 26803. § 26804. § 26805. § 26806. § 26807. § 26807.5. xxiv Normal retirement age ............................................................................................... 471 Retirement date ......................................................................................................... 471 Commencement of distribution of benefit................................................................. 471 Termination of creditable service .............................................................................. 471 Application for benefit .............................................................................................. 472 Amount of benefit ..................................................................................................... 472 Form of benefit .......................................................................................................... 472 Election to receive annuity ........................................................................................ 472 Election to receive the retirement benefit as an annuity payable in monthly installments ............................................................................................................... 475

28) TABLE OF CONTENTS § 26807.6. § 26807.7. § 26808. § 26809. § 26810. § 26811. § 26812. § 26813. Change of annuities ................................................................................................... 476 Retiree’s change of annuity designated for same-sex spouse or former spouse ....... 477 Determination of amount of annuity ......................................................................... 478 Transfer of credits upon election of annuity ............................................................. 478 Termination of annuity .............................................................................................. 478 Changed beneficiary.................................................................................................. 479 Activities of retired participant; Rate of pay; Reinstatement not required; Reduction of annuity ................................................................................................. 479 Activities of retired member; Limitations; Records .................................................. 482 CHAPTER 10. DISABILITY BENEFIT............................................................................... 483 § 26900. § 26901. § 26902. § 26903. § 26904. § 26905. § 26906. § 26906.5. § 26906.6. § 26907. § 26908. § 26910. § 26911. Application to receive disability benefit ................................................................... 483 Person to make application ....................................................................................... 483 Determination of disability........................................................................................ 483 Termination of creditable service .............................................................................. 483 Benefit amount .......................................................................................................... 484 Normal distribution of disability benefit (Lump–sum payment) .............................. 484 Annuity...................................................................................................................... 484 Payment of the disability benefit as an annuity; Election of option .......................... 486 Change of annuities ................................................................................................... 487 Annuity value ............................................................................................................ 488 Annuitant Reserve ..................................................................................................... 489 Changed beneficiary.................................................................................................. 489 Reemployment .......................................................................................................... 489 CHAPTER 11. DEATH BENEFIT ...................................................................................... 490 § 27000. § 27001. § 27002. § 27003. § 27004. § 27005. § 27006. § 27007. § 27008. Proof of death ............................................................................................................ 490 Time that benefit is to be paid (Exception to Probate Code) .................................... 490 Death of participant prior to commencement of annuity........................................... 490 Normal form of benefit ............................................................................................. 490 Election by certain beneficiaries to receive final benefit as annuity payable in monthly installments; Form of payment ................................................................... 491 Determination of amount of annuity ......................................................................... 491 Transfer of credits upon election of annuity ............................................................. 491 Death of participant receiving annuity ...................................................................... 492 Death of beneficiary receiving annuity ..................................................................... 492 CHAPTER 12. BENEFICIARY .......................................................................................... 493 § 27100. § 27101. § 27102. Designation of beneficiary ........................................................................................ 493 Lack of valid beneficiary designation ....................................................................... 493 Simultaneous death provisions to govern distribution .............................................. 493 CHAPTER 13. TERMINATION BENEFIT .......................................................................... 494 § 27200. § 27201. § 27202. § 27203. § 27204. § 27205. Application for benefit .............................................................................................. 494 Termination of creditable service .............................................................................. 494 Application for benefit .............................................................................................. 494 Restriction on application (Five-year rule) ............................................................... 495 Limitation on payment of benefit (Cancellation of benefit)...................................... 495 Cancellation of application........................................................................................ 495 xxv

29) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM § 27206. § 27207. Partial distribution of benefit..................................................................................... 495 Payment of lump–sum benefit to preclude further benefits ...................................... 496 CHAPTER 14. DISTRIBUTION OF BENEFITS ................................................................. 497 § 27300. § 27301. § 27302. § 27303. § 27303.5. Discharge of plan’s obligations upon distribution of lump-sum benefit ................... 497 Discharge of plan’s obligations upon final payment of annuity................................ 497 Forfeiture of benefit upon failure to locate participant or beneficiary; Reinstatement ............................................................................................................ 497 Deduction of overpayment ........................................................................................ 498 Report of erroneous information by employer .......................................................... 498 CHAPTER 15. COMMUNITY PROPERTY ........................................................................ 499 § 27400. § 27401. § 27402. § 27403. § 27404. § 27405. § 27406. § 27407. § 27408. § 27409. § 27410. § 27411. § 27412. § 27413. Purpose of chapter ..................................................................................................... 499 “Nonparticipant spouse” and “Nonparticipant registered domestic partner” ............ 499 Division of credits upon legal separation or divorce................................................. 500 Status of nonparticipant spouse (Exclusion from participation in the Cash Balance Benefit Program) ......................................................................................... 500 Rights of nonparticipant spouse in separate nominal account................................... 500 Determination of community property rights in annuity upon separation or dissolution of marriage of participant ....................................................................... 500 Right of nonparticipant spouse to lump–sum distribution ........................................ 501 Required joinder of plan............................................................................................ 502 Provisions applicable to nonparticipant spouse......................................................... 502 Information required from nonparticipant spouse ..................................................... 502 Designation of beneficiary by nonparticipant spouse ............................................... 503 Eligibility of nonparticipant spouse to elect annuity ................................................. 503 Information on credits of contribution and earnings in judgment or court order .......................................................................................................................... 504 Legislative intent regarding terminable interest doctrine .......................................... 504 CHAPTER 16. MILITARY SERVICES ............................................................................... 505 § 28000. § 28001. § 28002. § 28003. § 28004. § 28005. § 28006. Findings ..................................................................................................................... 505 Break in service ......................................................................................................... 505 Employer contributions ............................................................................................. 506 Salary computation (Employee and employer contributions) ................................... 506 Excess of five years ................................................................................................... 507 Termination of rights (Denial of benefits) ................................................................ 507 Taxes ......................................................................................................................... 508 CHAPTER 17. DISCONTINUATION OF PLAN ................................................................. 509 § 28100. § 28101. xxvi Employer’s right to discontinue plan; Notice............................................................ 509 Accounts .................................................................................................................... 509

30) TABLE OF CONTENTS CALIFORNIA CODE OF REGULATIONS TITLE 5. EDUCATION DIVISION 3. TEACHERS’ RETIREMENT SYSTEM CHAPTER 1. TEACHERS’ RETIREMENT SYSTEM ARTICLE 1. DEFINITIONS................................................................................................ 511 § 20500. Definitions ................................................................................................................. 511 ARTICLE 2. RULES OF PROCEDURE............................................................................. 512 § 20510. § 20511. § 20512. § 20512.5. § 20513. § 20514. Meetings .................................................................................................................... 512 Notice of Regular and Special Meetings ................................................................... 512 Emergency Meetings ................................................................................................. 512 Special Meetings ....................................................................................................... 512 Quorum; Required Vote ............................................................................................ 512 Secretary; Duties ....................................................................................................... 512 ARTICLE 3. GENERAL PROVISIONS OF ADMINISTRATION ........................................ 513 § 20520. § 20521. § 20522. § 20523. § 20524. § 20525. § 20526. § 20527. § 20528. § 20529. § 20530. § 20531. § 20532. § 20533. § 20534. § 20535. § 20536. § 20537. § 20538. § 20539. § 20540. § 20541. § 20542. § 20543. § 20543.5. § 20544. Authority of Chief Executive Officer........................................................................ 513 Time Required for Credit .......................................................................................... 513 Funds Disbursed According to Claims...................................................................... 514 Proof of Death ........................................................................................................... 514 Statement of Service and Claims .............................................................................. 514 Statement of Account ................................................................................................ 514 Required Days of Service for Sick Leave Credit ...................................................... 514 Deductions; Local Retirement Systems .................................................................... 514 Deposit of Contributions ........................................................................................... 514 Remitting Contributions and Report ......................................................................... 514 Termination of Employment ..................................................................................... 514 Application for Retirement........................................................................................ 514 Repayment of Withdrawn Contributions .................................................................. 514 Option to Repay Withdrawn Contributions............................................................... 514 Deposit of Retirement Annuity Fund Contributions ................................................. 514 Election to Pay Contributions ................................................................................... 514 Election to Redeposit ................................................................................................ 515 Part-Time Employee -Disability Retirement ............................................................. 515 Adjustment of Final Compensation........................................................................... 515 Full-Time Employment to Qualify for Reduced Workload ...................................... 515 Definitions of “Full-Time Student” and “Educational Institution.” .......................... 515 “Family or Disability Benefits.”................................................................................ 515 Verification of Date of Birth ..................................................................................... 515 Permissive Payments to System to Obtain Additional Service Credit ...................... 515 Mandatory Payments to System by Member, Beneficiary or Retirant ...................... 515 Determination of Member’s Final Compensation ..................................................... 515 ARTICLE 4. TAX SHELTERED ANNUITY CONTRIBUTIONS [REPEALED] ................... 515 § 20547. § 20548. § 20549. Tax Sheltered Annuity .............................................................................................. 515 Tax Sheltered Annuity Contributions........................................................................ 515 Resolution ................................................................................................................. 515 xxvii

31) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM § 20550. § 20551. § 20552. § 20553. § 20554. § 20554.1. § 20555. § 20556. § 20557. § 20558. § 20558.1. Amendment of Employment Contract ...................................................................... 516 Limit on Tax Sheltered Contributions ....................................................................... 516 Transmittal and Report of Tax Sheltered Annuity Contributions ............................. 516 Withdrawal ................................................................................................................ 516 Tax Sheltered Annuity Program ................................................................................ 516 Discontinuance of Former Tax Sheltered Annuity Program ..................................... 516 Investment of Tax Sheltered Annuity Funds ............................................................. 516 Resolution by Contracting Employer ........................................................................ 516 Transmittal and Report of Tax Sheltered Annuity Contributions ............................. 516 Withdrawal for Emergencies ..................................................................................... 516 Community Property Interest .................................................................................... 516 ARTICLE 5. RETIRED MEMBERS EMPLOYED AS SUBSTITUTE TEACHERS [REPEALED]..................................................................................................................... 516 § 20559. § 20560. Monthly Reports by Governing Board ...................................................................... 516 Amount of Contribution ............................................................................................ 516 ARTICLE 6. NOMINATION OF BENEFICIARIES [REPEALED] ....................................... 517 § 20570. § 20571. Nomination of Beneficiaries ..................................................................................... 517 Beneficiary Under Trust ............................................................................................ 517 ARTICLE 7. ELECTION OF OPTIONS [REPEALED] ....................................................... 517 § 20580. § 20581. Optional Elections in Advance of Retirement ........................................................... 517 Early Retirement Limited Term Reduction Program ................................................ 517 ARTICLE 8. RATES [REPEALED] ................................................................................... 517 § 20600. § 20601. § 20602. § 20603. § 21000. § 21001. § 21002. Regular Interest Rate ................................................................................................. 517 Credited Interest Rate ................................................................................................ 517 When Interest Is Not Chargeable .............................................................................. 517 Present Value Factor ................................................................................................. 517 Penalty Rate on Late Employer and Employee Contributions .................................. 517 Employer Contribution Rate for Reduced Workload Program ................................. 517 Actuarial Normal Cost Rate for Additional Service Credit....................................... 517 ARTICLE 10. DEPENDENTS ............................................................................................ 518 § 21020. § 21021. § 21022. § 21023. Dependent Husband .................................................................................................. 518 Dependent Parent ...................................................................................................... 518 Step-Child—When Qualified for Benefit.................................................................. 518 Providing Information to the Teachers’ Retirement Board ....................................... 518 ARTICLE 11. STATE TEACHERS’ RETIREMENT SYSTEM—CONFLICT OF INTEREST CODE.............................................................................................................. 518 § 22000. General Provisions .................................................................................................... 518 Appendix A....................................................................................................................... 519 xxviii

32) TABLE OF CONTENTS ARTICLE 12. UNUSED EXCESS SICK LEAVE ................................................................ 523 § 23000. § 23001. § 23002. § 23003. § 23004. § 23005. Definitions ................................................................................................................. 523 Certification............................................................................................................... 523 Billing........................................................................................................................ 523 Payment ..................................................................................................................... 523 Determination of Excess Sick Leave Days ............................................................... 523 Delegation of Authority of Board to Chief Executive Officer .................................. 523 ARTICLE 13. ELECTION OF MEMBERS TO THE TEACHERS’ RETIREMENT BOARD ............................................................................................................................. 523 § 24000. § 24001. § 24002. § 24003. § 24004. § 24005. § 24006. § 24007. § 24008. § 24009. Board Member Elections........................................................................................... 523 Notice of Election...................................................................................................... 524 Nomination of Candidates......................................................................................... 524 Candidate Statements. ............................................................................................... 525 Ballot Distribution ..................................................................................................... 526 Ballot Counting. ........................................................................................................ 527 Notice of Election Results ......................................................................................... 527 Recount of an Election .............................................................................................. 528 Protest of an Election ................................................................................................ 528 Elections for Vacant Elected Seats............................................................................ 529 ARTICLE 14. INVESTMENT RELATIONSHIPS AND CAMPAIGN CONTRIBUTIONS ............................................................................................................. 530 § 24010. § 24011. § 24012. § 24013. Prohibitions on Campaign Contributions .................................................................. 530 Disclosure and Recusal Requirement for Campaign Contributions .......................... 531 Remedies, Enforcement and Safe Harbors ................................................................ 531 Definitions ................................................................................................................. 532 ARTICLE 15. SUPPLEMENTAL BENEFIT MAINTENANCE ACCOUNT ......................... 532 § 26000. Supplemental Benefit Maintenance Account Purchasing Power Protection ............. 532 ARTICLE 15.5. PENALTIES AND INTEREST FOR LATE REMITTANCES AND LATE AND UNACCEPTABLE REPORTING BY EMPLOYERS ....................................... 533 § 27000. § 27001. § 27002. § 27003. § 27004. § 27005. § 27006. § 27007. § 27008. § 27009. Format for Monthly Reports ..................................................................................... 533 Acceptable Report—Defined Benefit Program......................................................... 534 Acceptable Report—Cash Balance Benefit Program ................................................ 534 Assessment of Penalties for Late Reports—Defined Benefit Program ..................... 534 Assessment of Penalties for Late Reports—Cash Balance Benefit Program ............ 536 Late Contributions—Defined Benefit Program ........................................................ 537 Late Contributions—Cash Balance Benefit Program ............................................... 537 Assessment of Penalties for Late Contributions—Defined Benefit Program ........... 538 Assessment of Interest on Late Contributions—Cash Balance Benefit Program ..................................................................................................................... 539 Right to an Administrative Hearing .......................................................................... 540 xxix

33) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM ARTICLE 16. MEMBER’S RIGHT TO INTERNAL INFORMAL APPEAL OF A DETERMINATION BY CALSTRS STAFF OF A RIGHT TO A BENEFIT OR OBLIGATION .................................................................................................................... 540 § 27100. § 27101. § 27102. § 27103. Definitions ................................................................................................................. 540 Administrative Remedy for Benefits & Services and Financial Services ................. 541 Administrative Remedy for Audits ........................................................................... 542 Administrative Hearing ............................................................................................. 542 CHAPTER 2. COMPENSATION ARTICLE 1. GENERAL PROVISIONS .............................................................................. 543 § 27200. § 27201. Members Affected by This Chapter .......................................................................... 543 Effective Date............................................................................................................ 543 ARTICLE 2. CLASS OF EMPLOYEES ............................................................................. 543 § 27300. § 27301. Basis of Establishment of a Class of Employees ...................................................... 543 Prohibited Classes of Employees .............................................................................. 544 ARTICLE 3. CREDITABLE COMPENSATION ................................................................. 544 § 27400. § 27401. Salary......................................................................................................................... 544 Remuneration That is Paid in Addition to Salary...................................................... 545 ARTICLE 4. NONCREDITABLE COMPENSATION.......................................................... 546 § 27500. § 27501. § 27502. Amounts Not Deducted from a Member’s Salary ..................................................... 546 Fringe Benefit............................................................................................................ 546 Expenses Paid or Reimbursed by an Employer......................................................... 546 ARTICLE 5. APPROPRIATE CREDITING OF CONTRIBUTIONS .................................... 547 § 27600. § 27601. § 27602. Consistent Treatment of Compensation .................................................................... 547 Appropriate Crediting of Contributions .................................................................... 548 Compensation That is Paid a Limited Number of Times .......................................... 549 __________ INDEX ............................................................................................................................... 551 CROSS-REFERENCE OF LEGISLATION ............................................................................. I xxx

34) PART 13. STATE TEACHERS’ RETIREMENT SYSTEM CHAPTER 1. GENERAL PROVISIONS § 22000. Citation of part (Barnes Act; Teachers’ Retirement Law) This part may be known and cited as the E. Richard Barnes Act and together with Part 14 (commencing with Section 26000) shall be known as the Teachers’ Retirement Law. Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1999 ch 939 § 1 (SB 1074). Former Sections: Former § 22000, similar to the present section, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1993 ch 893 § 1. Amendments 1999 Amendment: (1) Deleted “shall be known and may be cited as the State Teachers’ Retirement Law and” after “This part”; and (2) added “and together with Part 14 (commencing with Section 26000) shall be known as the Teachers’ Retirement Law”. § 22001. Establishment of State Teachers’ Retirement System In order to provide a financially sound plan for the retirement, with adequate retirement allowances, of teachers in the public schools of this state, teachers in schools supported by this state, and other persons employed in connection with the schools, the State Teachers’ Retirement System is established. The system is a unit of the Government Operations Agency. Added by Stats 1993 ch 893 § 2 (AB 1796). See this section as modified in Governor’s Reorganization Plan No. 2 § 42 of 2012. Amended Stats 2013 ch 352 § 68 (AB 1317), effective September 26, 2013, operative July 1, 2013. Editor’s Notes—2012 Governor’s Reorganization Plan No. 2 was submitted to the Legislature on May 3, 2012, and became effective July 3, 2012, pursuant to Gov C § 12080.5, and substantively operative July 1, 2013. The text as modified by § 42, reads: “In order to provide a financially sound plan for the retirement, with adequate retirement allowances, of teachers in the public schools of this state, teachers in schools supported by this state, and other persons employed in connection with the schools, the State Teachers’ Retirement System is established. The system is a unit of the Government Operations Agency.” Stats 2013 ch 352 (AB 1317) enacts the statutory changes necessary to reflect the changes made by the Governor’s Reorganization Plan No. 2 of 2012. Former Sections: Former § 22001, similar to the present section, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, amended Stats 1979 ch 520 § 1, and repealed Stats 1993 ch 893 § 1. Amendments 2013 Amendment: Substituted “Government Operations Agency” for “State and Consumer Services Agency” in the second sentence. § 22001.5. Findings as to Cash Balance Plan The Legislature hereby finds and declares that on July 1, 1996, the State Teachers’ Retirement System Cash Balance Plan was created and established to provide a retirement plan for persons employed to perform creditable service for less than 50 percent of the full–time equivalent for the position. The persons eligible for the Cash Balance Plan were excluded from mandatory membership in the State Teachers’ Retirement System Defined Benefit Plan. Both plans are administered by the Teachers’ Retirement Board. Prior to the creation and establishment of the Cash Balance Plan, the State Teachers’ Retirement System Defined Benefit Plan had been identified simply as the State Teachers’ Retirement System. As a result, the system was identified as both the administrative body and the retirement plan. 1

35) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM The State Teachers’ Retirement Law was amended to identify the retirement plan as the State Teachers’ Retirement System Defined Benefit Plan in order to distinguish that plan from the Cash Balance Plan. Because both plans were intended to provide for the retirement of teachers and other persons employed in connection with public schools of this state and schools supported by this state, a merger of these two plans is now hereby made for the purpose of establishing a single retirement plan that shall be known and may be cited as the State Teachers’ Retirement Plan consisting of the different benefit programs set forth in this part and Part 14 (commencing with Section 26000). This plan shall be administered by the Teachers’ Retirement Board as set forth in this part and Part 14 (commencing with Section 26000). This part, together with Part 14 (commencing with Section 26000) shall be known and may be cited as the Teachers’ Retirement Law. Added by Stats 1998 ch 1048 § 1 (SB 2085). § 22002. Declaration of financing policies The Legislature recognizes that the assets of the State Teachers’ Retirement Plan with respect to the Defined Benefit Program are insufficient to meet the obligations of that program already accrued or to accrue in the future with respect to service credited to members of that program prior to July 1, 1972. Therefore, the Legislature declares the following policies with respect to the financing of the Defined Benefit Program of the State Teachers’ Retirement Plan: (a) Members shall contribute a percentage of creditable compensation, unless otherwise specified in this part. (b) Employers shall contribute a percentage of the total creditable compensation on which member contributions are based. (c) The state shall contribute a sum certain for a given number of years for the purpose of payment of benefits under this part. Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1996 ch 634 § 1 (SB 2041); Stats 1997 ch 482 § 1 (SB 471); Stats 1998 ch 965 § 1 (AB 2765). Former Sections: Former § 22002, similar to the present section, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1993 ch 893 § 1. Amendments 1996 Amendment: Substituted (1) subd (a) for former subd (a) which read: “(a) Members shall be required to contribute a percentage of salaries earned.”; and (2) “Employers” for “The employing agencies” in subd (b). 1997 Amendment: Substituted (1) “creditable compensation” for “salaries earned” in subd (a); and (2) “the total creditable compensation” for “total salaries” in subd (b). 1998 Amendment: (1) Amended the introductory paragraph by (a) substituting “State Teachers’ Retirement Plan” for “State Teachers’ Retirement System” both times it appears; (b) adding “with respect to the Defined Benefit Program” in the first sentence; (c) substituting “program” for “system” both times is appears in the first sentence; (d) substituting “with” for “in” before “respect” both times it appears; and (e) adding “Defined Benefit Program of the” in the second sentence; and (2) added “under this part” at the end of subd (c). § 22002.5. Legislative findings and declarations regarding funding of Defined Benefit Program The Legislature finds and declares all of the following: (a) The current and projected assets of the State Teachers’ Retirement Plan administered by the State Teachers’ Retirement System with respect to the Defined Benefit Program are insufficient to meet the obligations of that program already accrued or projected to be accrued in the future with respect to service credited to members of that program before July 1, 2014. 2

36) PART 13, CHAPTER 1 (b) Various legal rulings have determined that vested contractual rights of existing members generally cannot be changed without providing a comparable new advantage. (c) The improvement factor currently provided under the Defined Benefit Program pursuant to Sections 22140 and 22141, as those sections read before July 1, 2014, is not a contractually enforceable promise. (d) The Legislature hereby increases the contributions of active members by an amount not to exceed the normal cost of the improvement factor, providing a comparable new advantage by removing the statutory right to adjust the improvement factor, and thereby establishing the improvement factor as a contractually enforceable promise. (e) The statutory changes adopted by the act that added this section address the long-term funding needs of the Defined Benefit Program in a manner that allocates increased contributions among members of the system and school employers, consistent with the contractual rights of existing members. (f) The provisions of the act that added this section were based on various legal understandings and would not have been adopted without those understandings. The new obligations and benefits provided in Sections 7 and 9 of the act adding this section are contingent on those legal understandings being accurate. Thus if there is a final unappealable judicial decision that holds that the increased contributions in Section 22950.5 constitute a new functional responsibility for schools and community colleges pursuant to subdivision (c) of Section 41204, and correspondingly require an adjustment pursuant to subdivision (b) of Section 8 of Article XVI of the California Constitution, or a final unappealable administrative or judicial decision that holds that the increased contributions in Section 22950.5 constitutes a reimbursable mandate pursuant to Article XIII B of the California Constitution, then it is the intent of the Legislature that the provisions added by the act adding this section shall cease to be effective. (g) It is in the public interest and a matter of urgency to authorize, and to implement as soon as possible, a remedy to the funding problem of the system. This remedy is necessary to ensure that funds will be available to support a pension system upon which hundreds of thousands of teachers rely and for which the current funding structure raises significant fiscal policy concerns. (h) It is of great importance to the state, the system, and school districts that there not be long term doubt about the feasibility of the solutions provided in the act that added this section. In order to fulfill the important objective of facilitating the system’s and school districts’ financial transactions the legality of the act that added this section must be quickly affirmed. The system, school districts, and teachers need to settle promptly all questions about the validity of each other’s duties and obligations under this statute. (i) It is well-established that the terms and conditions of public retirement plans generally are established by statute or other comparable enactment rather than by contract. Statutes governing the terms of compensation and deferred compensation of public employees are thus significant financial obligations contemplated and covered by Chapter 9 (commencing with Section 860) of Title 10 of Part 2 of the Code of Civil Procedure. Added Stats 2014 ch 47 § 1 (AB 1469), effective June 24, 2014. § 22003. Effect of revision of State Teachers’ Retirement Law (Conflicts in law) The revision of the State Teachers’ Retirement Law, enacted at the 1971 and 1972 Regular Sessions of the Legislature, shall not be construed to affect benefits of persons retired prior to July 1, 1972, or their beneficiaries, except as specifically provided. Added by Stats 1993 ch 893 § 2 (AB 1796). Former Sections: Former § 22003, similar to present § 22304, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1993 ch 893 § 1. Historical Derivation: Former § 22009, as enacted Stats 1976 ch 1010 § 2. 3

37) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM § 22004. Controlling effect of memorandum of understanding If the provisions of this part are in conflict with the provisions of a memorandum of understanding reached pursuant to Chapter 12 (commencing with Section 3560) of Division 4 of Title 1 of the Government Code, the memorandum of understanding shall be controlling without further legislative action, except that if the provisions of a memorandum of understanding require the expenditure of funds, the provisions shall not become effective unless approved by the Legislature in the annual Budget Act. Added by Stats 1993 ch 893 § 2 (AB 1796). Former Sections: Former § 22004, similar to the present § 22005, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1993 ch 893 § 1. Historical Derivation: Former § 22013, as added Stats 1979 ch 1072 § 1. § 22005. Tax exemption The right of a person to a pension, retirement allowance, return of contributions, any optional benefit, or any other right accrued or accruing to any person under this part is exempt from taxation, including any inheritance tax, whether state, county, municipal, or district. Added by Stats 1993 ch 893 § 2 (AB 1796). Former Sections: Former § 22005, similar to present Ed C § 22006, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, amended Stats 1980 ch 173 § 3, effective June 13, 1980, Stats 1981 ch 528 § 2, effective September 16, 1981, Stats 1982 ch 497 § 86, operative July 1, 1983, and repealed Stats 1993 ch 893 § 1. Historical Derivation: Former Ed C § 22004, as enacted 1976 ch 1010 § 2. § 22006. Exemption from execution The right of a person to an annuity or a retirement allowance, to the return of contributions, the annuity, or retirement allowance itself, any optional benefit, any other right or benefit accrued or accruing to any person under this part, and the moneys in the fund created under this part are not subject to execution or any other process whatsoever, except to the extent permitted by Section 704.110 of the Code of Civil Procedure, and are unassignable except as specifically provided in this part. Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1996 ch 634 § 2 (SB 2041). Former Sections: Former § 22006, similar to present Ed C § 22007, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, amended Stats 1977 ch 659 § 1, Stats 1982 ch 5 § 1, and repealed Stats 1993 ch 893 § 1. Historical Derivation: Former Ed C § 22005, as enacted Stats 1976 ch 1010 § 2, amended Stats 1980 ch 173 § 3, Stats 1981 ch 528 § 2, Stats 1982 ch 497 § 86. Amendments 1996 Amendment: Substituted “or a retirement allowance, to the return of contributions, the annuity” for “, a retirement salary, or a retirement allowance, to the return of contributions, the annuity, retirement salary” after “person to an annuity”. § 22007. Duration of obligation The obligations of any member, or the member’s beneficiaries, to this system and the Defined Benefit Program continue throughout membership, and thereafter until all of the obligations of this system and the Defined Benefit Program to or in respect to the member or the member’s beneficiaries have been discharged. 4

38) PART 13, CHAPTER 1 Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1996 ch 634 § 3 (SB 2041); Stats 1999 ch 939 § 2 (SB 1074). Former Sections: Former § 22007, similar to present Ed C § 22008, was added Stats 1982 ch 5 § 3, amended Stats 1988 ch 739 § 1, Stats 1989 ch 118 § 1, and repealed Stats 1993 ch 893 § 1. Former § 22007, similar to the present Ed C § 22008, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, amended Stats 1977 ch 659 § 2, and repealed Stats 1982 ch 5 § 3. Historical Derivation: Former Ed C § 22006, as enacted Stats 1976 ch 1010 § 2, amended Stats 1977 ch 659 § 1, Stats 1982 ch 5 § 1. Amendments 1996 Amendment: (1) Deleted “of this system” after “of any member”; and (2) added “and the plan” after “this system” wherever it appears. 1999 Amendment: Substituted “Defined Benefit Program” for “plan” both times it appears. § 22007.5. Registered domestic partner Except as excluded by subdivision (d) of Sections 22661 and 23812, subdivision (e) of Section 24300.1, subdivision (d) of Section 25011.1, subdivision (c) of Section 25018.1, subdivision (d) of Section 26807.5, and subdivision (c) of Section 26906.5, a person who is the registered domestic partner of a member, as established pursuant to Section 297 or 299.2 of the Family Code, shall be treated in the same manner as a “spouse,” as defined in Section 22171. Added by Stats 2004 ch 912 § 1 (AB 2233); Stats 2005 ch 418 § 2 (SB 973), effective January 1, 2006. Amended by Stats 2006 ch 655 § 1 (SB 1466), effective January 1, 2007; Stats 2013 ch 558 § 1 (AB 1379), effective January 1, 2014. Amendments 2005 Amendment: Deleted “any reference to a ‘spouse’ in this part includes” after “Sections 22661 and 23812,”; and substituted “Code, shall be treated in the same manner as a ‘spouse,’ as defined in Section 22171.” for “Code.” 2006 Amendment: (1) Added “subdivision (d) of” after “as excluded by”; (2) substituted “subdivision (c) of Section 24300.1, and subdivision (d) of Sections 25011.1, 25018.1, and 26807.5,” for “any reference to a ‘spouse’ in this part includes” after “Sections 22661 and 23812,”; and (3) added “, shall be treated in the same manner as a ‘spouse,’ as defined in Section 22171” at the end. 2013 Amendment: Substituted “subdivision (e) of Section 24300.1, subdivision (d) of Section 25011.1, subdivision (c) of Section 25018.1, subdivision (d) of Section 26807.5, and subdivision (c) of Section 26906.5,” for “subdivision (c) of Section 24300.1, and subdivision (d) of Sections 25011.1, 25018.1, and Section 26807.5,”. § 22008. Limitation of actions (Adjustments of errors and omissions) For the purposes of payments into or out of the retirement fund for adjustments of errors or omissions with respect to the Defined Benefit Program or the Defined Benefit Supplement Program, the period of limitation of actions shall be applied, except as provided in Sections 23302 and 24613, as follows: (a) No action may be commenced by or against the board, the system, or the plan more than three years after all obligations to or on behalf of the member, former member, beneficiary, or annuity beneficiary have been discharged. (b) If the system makes an error that results in incorrect payment to a member, former member, beneficiary, or annuity beneficiary, the system’s right to commence recovery shall expire three years from the date the incorrect payment was made. (c) If an incorrect payment is made due to lack of information or inaccurate information regarding the eligibility of a member, former member, beneficiary, or annuity beneficiary to receive benefits un5

39) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM der the Defined Benefit Program or Defined Benefit Supplement Program, the period of limitation shall commence with the discovery of the incorrect payment. (d) Notwithstanding any other provision of this section, if an incorrect payment has been made on the basis of fraud or intentional misrepresentation by a member, beneficiary, annuity beneficiary, or other party in relation to or on behalf of a member, beneficiary, or annuity beneficiary, the three–year period of limitation shall not be deemed to commence or to have commenced until the system discovers the incorrect payment. (e) The collection of overpayments under subdivisions (b), (c), and (d) shall be made pursuant to Section 24617. Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1996 ch 1165 § 1 (AB 3032); Stats 1999 ch 939 § 3 (SB 1074); Stats 2000 ch 74 § 1 (AB 1509). Former Sections: Former § 22008, relating to exclusion of overtime from compensation, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1981 ch 124 § 1. Historical Derivation: (a) Former Ed C § 22007, as enacted Stats 1976 ch 1010 § 2, amended Stats 1977 ch 659 § 2. (b) Former Ed C § 22007, as added Stats 1982 ch 5 § 3, amended Stats 1988 ch 739 § 1, Stats 1989 ch 118 § 1. Amendments 1996 Amendment: (1) Amended subd (a) by (a) substituting “, the system, or plan more than” for “or the system”; and (b) deleting “disabilitant, retirant,” after “former member,”; (2) substituted subds (b) and (c) for former subds (b) and (c) which read: “(b) In cases where the system makes an error resulting in incorrect payment to a member, disabilitant, retirant, beneficiary, child, or dependent parent, the system’s right to commence recovery shall expire three years from the date of payment. “(c) In cases where payment is erroneous due to lack of information or inaccurate information regarding the eligibility of a member, disabilitant, retirant, beneficiary, child, or dependent parent to receive benefits under this part, the period of limitation shall commerce with the discovery of the erroneous payment.”; and (3) amended subd (d) by (a) substituting “if an incorrect” for “where any erroneous”; (b) substituting “on” for “or” after “has been made”; (c) deleting “disabilitant, retirant,” after “by a member,” and after “behalf of a member,”; and (d) substituting “system discovers the incorrect payment” for “discovery of the error or omissions”. 2000 Amendment: (1) Added “or the Defined Benefit Supplement Program” in the introductory clause; (2) substituted “beneficiary, or annuity” for “or” wherever it appears; (3) substituted “Defined Benefit Program or Defined Benefit Supplement Program” for “plan” in subd (c); and (4) added “annuity beneficiary,” in subd (d). § 22009. Severance for invalidity If any provision of this part or the application thereof to any person or circumstance is held invalid, that invalidity shall not affect other provisions or applications of this part that can be given effect without the invalid provision or application, and to this end the provisions of this part are severable. Added by Stats 1993 ch 893 § 2 (AB 1796). Former Sections: Former § 22009, similar to present § 22003, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1993 ch 893 § 1. Historical Derivation: Former § 22011, as enacted Stats 1976 ch 1010 § 2. § 22010. Violations; Penalties; Restitution (a) It is unlawful for a person to do any of the following: 6

40) PART 13, CHAPTER 1 (1) Make, or cause to be made, any knowingly false material statement or material representation, to knowingly fail to disclose a material fact, or to otherwise provide false information with the intent to use it, or allow it to be used, to obtain, receive, continue, increase, deny, or reduce any benefit administered by this system. (2) Present, or cause to be presented, any knowingly false material statement or material representation for the purpose of supporting or opposing an application for any benefit administered by this system. (3) Knowingly accept or obtain payment from this system with knowledge that the recipient is not entitled to the payment under the provisions of this part or Part 14 (commencing with Section 2600) and with the intent to retain the payment for personal use or benefit. (4) Knowingly aid, abet, solicit, or conspire with any person to do an act prohibited by this section. (b) For purposes of this section, “statement” includes, but is not limited to, any oral or written application for benefits, report of family relationship, report of injury or physical or mental limitation, hospital records, test results, physician reports, or other medical records, employment records, duty statements, reports of compensation, or any other evidence material to the determination of a person’s initial or continued eligibility for a benefit or the amount of a benefit administered by this system. (c) A person who violates any provision of this section is punishable by imprisonment in a county jail not to exceed one year, or by a fine of not more than five thousand dollars ($5,000), or by both that imprisonment and fine. (d) A person violating any provision of this section may be required by the court in a criminal action to make restitution to this system, or to any other person determined by the court, for the amount of the benefit unlawfully obtained, unless the court finds that restitution, or a portion of it, is not in the interests of justice. Any restitution order imposed pursuant to this section shall be satisfied before any criminal fine imposed under this section may be collected. (e) The provisions provided by this section are cumulative and shall not be construed as restricting the application of any other law. Added Stats 2008 ch 369 § 2 (AB 1844), effective January 1, 2009. Former Sections: Former § 22010, relating to dependency of surviving spouse, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1981 ch 124 § 2. § 22011. Signature; Valid document For an application or document requiring a signature, that signature shall be in a form prescribed by the system, including, but not limited to, on paper or made by electronic means. Notwithstanding any other law, an application or document made under this part that is signed and submitted by the person authorized to do so using technology and security measures prescribed by the system shall be deemed to be a signed and valid original document. Added Stats 2009 ch 90 § 2 (AB 232), effective January 1, 2010. Former Sections: Former § 22011 as enacted by Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed by Stats 1993 ch 893 § 1. See § 22009. 7

41) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM CHAPTER 2. DEFINITIONS § 22100. Definitions to govern construction of part Unless the context otherwise requires, the definitions set forth in this chapter govern the construction of this part. Added by Stats 1994 ch 933 § 3 (AB 3171), effective September 27, 1994. Former Sections: Former § 22100, similar to the present section, was added Stats 1993 ch 893 § 2 and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Former § 22100, similar to the present section, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1993 ch 893 § 1. § 22101. “Accumulated annuity deposit contributions” “Accumulated annuity deposit contributions” means the sum of all the annuity deposits standing to the credit of the member’s account, together with credited interest. Added by Stats 1994 ch 933 § 3 (AB 3171), effective September 27, 1994. Former Sections: Former § 22101, similar to the present section, was added Stats 1993 ch 893 § 2, and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Former § 22101, similar to present § 22102, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, amended Stats 1986 ch 717 § 1, and repealed Stats 1993 ch 893 § 1. Historical Derivation: (a) Former § 22101, as added Stats 1993 ch 893 § 2. (b) Former § 22102, as enacted Stats 1976 § 1010 § 2. § 22101.5. “Accumulated Defined Benefit Supplement account balance” (First of two) “Accumulated Defined Benefit Supplement account balance” means an amount equal to the sum of member contributions, the member contributions picked up by an employer, employer contributions, and interest credited on those contributions pursuant to Section 25005, that are credited by the system to the member’s Defined Benefit Supplement account. Added by Stats 2000 ch 74 § 3 (AB 1509). § 22101.5. “Accumulated Defined Benefit Supplement account balance” (Second of two) “Accumulated Defined Benefit Supplement account balance” means credits equal to the sum of member contributions, the member contributions picked up by an employer, employer contributions, interest credited pursuant to Section 25005 and additional earnings credited pursuant to Section 25006. Added by Stats 2000 ch 1021 § 1 (AB 2700). § 22102. “Accumulated retirement contributions” “Accumulated retirement contributions” means the sum of the member contributions, the member contributions picked up by an employer pursuant to Sections 22903 and 22904, and credited interest on those contributions. Accumulated retirement contributions shall not include accumulated annuity deposit contributions, accumulated tax–sheltered annuity contributions, accumulated Defined Benefit Supplement account balance, or additional earnings credit. Added by Stats 1994 ch 933 § 3 (AB 3171), effective September 27, 1994. Amended by Stats 2000 ch 74 § 2 (AB 1509), ch 1021 § 2 (AB 2700). 8

42) PART 13, CHAPTER 2 Former Sections: Former § 22102, similar to the present section, was added Stats 1993 ch 893 § 2 and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Former § 22102, similar to present § 22101, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1993 ch 893 § 1. Historical Derivation: (a) Former § 22101, enacted Stats 1976 ch 1010 § 2, amended Stats 1986 ch 717 § 1. (b) Former § 22102, as added Stats 1993 ch 893 § 2. Amendments 2000 Amendment: Substituted the section for the former section which read: “ ‘Accumulated retirement contributions’ means the sum of all member contributions and all member contributions paid by the employer pursuant to Sections 22903 and 22904 with credited interest and does not include accumulated annuity deposit contributions and accumulated tax–sheltered annuity contributions.” § 22103. “Accumulated tax–sheltered annuity contributions” “Accumulated tax–sheltered annuity contributions” means the tax–sheltered contributions made by a member and standing to the credit of the member’s account, together with credited interest. Added by Stats 1994 ch 933 § 3 (AB 3171), effective September 27, 1994. Former Sections: Former § 22103, similar to the present section, was added Stats 1993 ch 893 § 2 and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Former § 22103, similar to the present section, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1993 ch 893 § 1. § 22104. “Actuarial equivalent” “Actuarial equivalent” means an allowance of equal value when computed upon the basis of such tables and interest rates that are adopted by the board. Added by Stats 1994 ch 933 § 3 (AB 3171), effective September 27, 1994. Former Sections: Former § 22104, similar to the present section, was added Stats 1993 ch 893 § 2 and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Former § 22104, similar to the present section, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, amended Stats 1982 ch 5 § 4, and repealed Stats 1993 ch 893 § 1. § 22104.5. “Actuary” “Actuary” means a person professionally trained in the technical and mathematical aspects of insurance, pensions, and related fields who has been appointed by the board for the purpose of actuarial services required under this part. Added by Stats 1999 ch 939 § 4 (SB 1074). § 22104.7. “Additional earnings credit” “Additional earnings credit” means an amount derived from investment income for the plan year as determined by the board by plan amendment and added to members’ Defined Benefit Supplement accounts in addition to the amount credited at the minimum interest rate for that plan year. Added by Stats 2000 ch 74 § 4 (AB 1509). 9

43) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM § 22104.9. “Annuitant Reserve” “Annuitant Reserve” means a segregated account within the retirement fund established and maintained for expenditure on annuities payable under the Defined Benefit Supplement Program. Added by Stats 2000 ch 74 § 5 (AB 1509). § 22105. “Annuity” (a) “Annuity,” with respect to the Defined Benefit Program, means payments for life derived from the “accumulated annuity deposit contributions” of a member. (b) “Annuity,” with respect to the Defined Benefit Supplement Program, means an alternative payment arrangement wherein a benefit based on the balance of credits in a member’s Defined Benefit Supplement account is paid monthly rather than in a lump–sum. Added by Stats 1994 ch 933 § 3 (AB 3171), effective September 27, 1994. Amended by Stats 2000 ch 74 § 6 (AB 1509). Former Sections: Former § 22105, similar to the present section, was added Stats 1993 ch 893 § 2 and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Former § 22105, relating to annual salary, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1981 ch 124 § 3. Historical Derivation: (a) Former § 22105, as added Stats 1993 ch 893 § 2. (b) Former § 22106, as enacted Stats 1976 ch 1010 § 2, amended Stats 1978 ch 870 § 1. Amendments 2000 Amendment: (1) Designated the former section to be subd (a); (2) amended subd (a) by adding (a) the comma after “Annuity”; and (b) “with respect to the Defined Benefit Program,”; and (3) added subd (b). § 22105.5. “Annuity beneficiary” “Annuity beneficiary” means the person or persons designated by a member pursuant to Section 25011, 25011.1, 25018, or 25018.1 to receive an annuity under the Defined Benefit Supplement Program upon the member’s death. Added by Stats 2000 ch 74 § 7 (AB 1509). Amended by Stats 2006 ch 655 § 2 (SB 1466), effective January 1, 2007. Amendments 2006 Amendment: Substituted “Section, 25011.1, 25018, or 25018.1” for “or” after “pursuant to Section 25011”. § 22106. “Annuity deposit contributions” “Annuity deposit contributions” means additional contributions made by a member prior to July 1, 1972, above those required for credited service for the purpose of providing additional retirement income. Added by Stats 1994 ch 933 § 3 (AB 3171), effective September 27, 1994. Amended by Stats 2000 ch 1025 § 1 (AB 816). Former Sections: Former § 22106, similar to the present section, was added Stats 1993 ch 893 § 2 and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. 10

44) PART 13, CHAPTER 2 Former § 22106, similar to present § 22105, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, amended Stats 1978 ch 870 § 1, operative July 1, 1979, and repealed Stats 1993 ch 893 § 1. Historical Derivation: (a) Former § 22106, as added Stats 1993 ch 893 § 2. (b) Former § 22107, as enacted Stats 1976 ch 1010 § 2. Amendments 2000 Amendment: Added “prior to July 1, 1972,”. § 22106.1. “Base allowance” For the purposes of determining supplemental benefits pursuant to Sections 24412 and 24415, “base allowance” means a monthly allowance under the Defined Benefit Program prior to all allowance increases by this part and after modification for an option, if applicable. Added Stats 2014 ch 755 § 2 (SB 1220), effective January 1, 2015. Former Sections: Former Ed C § 22106.1, relating to the definition of “base days” under the state teachers’ retirement system, was added Stats 1999 ch 939 § 5 and renumbered Ed C § 22106.2 by Stats 2014 ch 755 § 1 (SB 1220), effective January 1, 2015. § 22106.2. “Base days” “Base days” means the number of days of creditable service required to earn one year of service credit. Added Stats 1999 ch 939 § 6 (SB 1074), as Ed C § 22106.1. Renumbered by Stats 2014 ch 755 § 1 (SB 1220), effective January 1, 2015. Former Sections: Former Ed C § 22106.2, defining “base hours” under the state teachers’ retirement system, was added Stats 1999 ch 939 § 6 and renumbered Ed C § 22106.3 by Stats 2014 ch 755 § 3 (SB 1220), effective January 1, 2015. § 22106.3. “Base hours” “Base hours” means the number of hours of creditable service required to earn one year of service credit. Added Stats 1999 ch 939 § 6 (SB 1074), as Ed C § 22106.2. Renumbered by Stats 2014 ch 755 § 3 (1220), effective January 1, 2015. § 22106.5. “Basis of employment”; “Full–time basis”; “Part–time basis” “Basis of employment” means the standard of time over which the employer expects service to be performed by an employee in the position during the school year. (a) “Full–time basis” means a basis of employment that is full time. (b) “Part–time basis” means a basis of employment that is less than full time. Added by Stats 1995 ch 390 § 1 (AB 1122), operative July 1, 1996. § 22107. “Beneficiary” (a) “Beneficiary,” with respect to the Defined Benefit Program, means any person or entity receiving or entitled to receive an allowance or lump–sum payment under the Defined Benefit Program because of the disability or death of a member. 11

45) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM (b) “Beneficiary,” with respect to the Defined Benefit Supplement Program, means any person or entity receiving or entitled to receive a final benefit under the Defined Benefit Supplement Program upon the death of a member. Added by Stats 1994 ch 933 § 3 (AB 3171), effective September 27, 1994. Amended by Stats 1996 ch 634 § 4 (SB 2041); Stats 2000 ch 74 § 8 (AB 1509). Former Sections: Former § 22107, similar to the present section, was added Stats 1993 ch 893 § 2 and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Former § 22107, similar to present Ed C § 22106, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1993 ch 893 § 1. Historical Derivation: (a) Former Ed C § 22107, as added Stats 1993 ch 893 § 2. (b) Former Ed C § 22108, enacted Stats 1976 ch 1010 § 2, amended Stats 1981 ch 124 § 4. Amendments 1996 Amendment: Substituted the section for the former section which read: “ ’Beneficiary’ means any person or entity receiving or entitled to receive allowances and payments pursuant to this part because of the death of a member, disabilitant, or retirant.” 2000 Amendment: Substituted the section for the former section which read: “ ’Beneficiary’ means any person or entity receiving or entitled to receive an allowance and payment pursuant to this part because of the disability or death of a member.” § 22108. “Benefit or benefits” (a) “Benefit” or “benefits,” with respect to the Defined Benefit Program, means any monthly payment due a retired member, disabled member, or beneficiary, and includes lump–sum payments due on account of death. (b) “Benefit” and “benefits,” with respect to the Defined Benefit Supplement Program, means an amount equal to the balance of credits in a member’s Defined Benefit Supplement account. Added by Stats 1994 ch 933 § 3 (AB 3171), effective September 27, 1994. Amended by Stats 1996 ch 634 § 5 (SB 2041); Stats 2000 ch 74 § 9 (AB 1509). Former Sections: Former § 22108, similar to the present section, was added Stats 1993 ch 893 § 2 and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Former § 22108, similar to present Ed C § 22107, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, amended Stats 1981 ch 124 § 4, and repealed Stats 1993 ch 893 § 1. Historical Derivation: (a) Former Ed C § 22108, as added Stats 1993 ch 893 § 2. (b) Former Ed C § 22109, enacted Stats 1976 ch 1010 § 2. Amendments 1996 Amendment: (1) Added “ ‘Benefit’ or” at the beginning; and (2) substituted “retired member, disabled member, or” for “retirant, disabilitant, or other”. 2000 Amendment: (1) Designated the former section to be subd (a); (2) amended subd (a) by adding (a) the comma after “benefits”; and (b) “with respect to the Defined Benefit Program,”; and (3) added subd (b). § 22109. “Board” “Board” means the Teachers’ Retirement Board. Added by Stats 1994 ch 933 § 3 (AB 3171), effective September 27, 1994. Former Sections: Former § 22109, similar to the present section, was added Stats 1993 ch 893 § 2 and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. 12

46) PART 13, CHAPTER 2 Former § 22109, similar to present § 22108, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1993 ch 893 § 1. Historical Derivation: (a) Former § 22109, as added Stats 1993 ch 893 § 2. (b) Former § 22110, enacted Stats 1976 ch 1010 § 2. § 22109.5. “Break in service” “Break in service,” for purposes of determining a member’s final compensation, means: (a) With respect to service of a member employed as a full-time employee and service performed by a member employed as a part-time employee, any period of time covering a pay period during which a member is on an unpaid leave of absence or a pay period in which a member has not performed any creditable service. (b) For a member who has been employed in a substitute position: (1) And has a change in assignment during a school year to a full-time or part-time position, a break in service is determined on the same basis as for the full-time or part-time employment during the same school year. (2) For less than 50 percent of their teaching career for which service is credited, a break in service is determined on the same basis as full-time employment. (3) For more than 50 percent of their teaching career for which service is credited, a break in service is any period of time within a school year for which compensation is not paid and service is not credited. (c) If a member commenced performing service at the beginning of a school term, the months not recognized as part of the school term are not a break in service; however, if the member commenced performing service after the school term began, or did not complete the school term, the months not recognized as part of the school term are a break in service. The school term shall be no less than the days or hours specified as full time in Section 22138.5. (d) Earnable salaries for a full pay period, but not beyond the effective date of retirement, shall be used in determining final compensation when the member performed service within that pay period. Added Stats 1999 ch 939 § 7 (SB 1074). Amended Stats 2003 ch 859 § 1 (SB 627); Stats 2014 ch 755 § 4 (SB 1220), effective January 1, 2015. Amendments 2003 Amendment: Substituted “leave of absence” for “leave or absence” in subd (a). 2014 Amendment: Substituted subd (c) for former subd (c) which read: “(c) If a member commenced performing service at the beginning of a school term, July and August of the school year are not a break in service; however, if the member commenced performing service after the school term begins, the previous July and August are a break in service.” § 22109.8. “California Public Employees’ Pension Reform Act of 2013” “California Public Employees’ Pension Reform Act of 2013” means the California Public Employees’ Pension Reform Act of 2013 (Article 4 (commencing with Section 7522) of Chapter 21 of Division 7 of Title 1 of the Government Code). Added by Stats 2013 ch 559 § 2 (AB 1381), effective January 1, 2014. Note—Stats 2013 ch 559, as amended by Stats 2014 ch 755 § 81, provides: SECTION 1. The Legislature finds and declares that this act, as it applies to the State Teachers’ Retirement Plan, clarifies the California Public Employees’ Pension Reform Act of 2013, is declaratory of existing law, and is intended to apply concurrently with the initial operation of that act. The amendments made by this act, excluding those amendments made in Sections 4, 12, 28, 29, 30, and 36 shall be deemed to be operative January 1, 2013, unless otherwise stated. 13

47) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM § 22110. “California service” “California service” means service performed in California for which credit may be given. Added by Stats 1994 ch 933 § 3 (AB 3171), effective September 27, 1994. Former Sections: Former § 22110, similar to the present section, was added Stats 1993 ch 893 § 2 and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Former § 22110, similar to present § 22109, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1993 ch 893 § 1. Historical Derivation: (a) Former § 22110, as added Stats 1993 ch 893 § 2. (b) Former § 22111, enacted Stats 1976 ch 1010 § 2. § 22110.1. “Cash Balance Benefit Program” “Cash Balance Benefit Program “means the benefit program of the State Teachers’ Retirement Plan as set forth in Part 14 (commencing with Section 26000). Added by Stats 1996 ch 634 § 6 (SB 2041). Amended by Stats 1998 ch 1048 § 2 (SB 2085). Amendments 1998 Amendment: Substituted (1) “Cash Balance Benefit Program” for “Cash Balance Plan”; and (2) “benefit program of the State Teachers’ Retirement Plan” for “State Teachers’ Retirement System Cash Balance Plan”. § 22110.2. “Credential,” “credentials,” and “certificate” “Credential,” “credentials,” and “certificate” mean any life diploma, credential, certificate, or other document provided for, by, and issued pursuant to the laws of the state that authorize service in the public school system of this state. Added by Stats 1996 ch 634 § 6.5 (SB 2041). § 22110.5. “Certificated” “Certificated” means the holding by a person of a credential that is required by the laws of the state to be held as a condition to valid employment in the position in which the person is employed. Added by Stats 1996 ch 634 § 7 (SB 2041). § 22111. “Child’s portion” or “children’s portion” “Child’s portion” or “children’s portion” means the amount of a disability allowance, disability retirement allowance, family allowance, or survivor benefit allowance payable for a dependent child or dependent children. Added by Stats 1996 ch 1165 § 3 (AB 3032). Former Sections: Former § 22111, relating to age and circumstances of “child” or “children” under disability and family allowance programs, was added Stats 1994 ch 933 § 3, effective September 27, 1994, and repealed Stats 1996 ch 1165 § 2. Former § 22111, similar to the present section, was added Stats 1993 ch 893 § 2 and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Former § 22111, similar to present § 22110, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1993 ch 893 § 1. Historical Derivation: (a) Former Ed C § 22111, as added Stats 1994 ch 933 § 3. 14

48) PART 13, CHAPTER 2 (b) Former § 22111, as added Stats 1993 ch 893 § 2. (c) Former § 22112, enacted Stats 1976 ch 1010 § 2, amended Stats 1977 ch 36 § 93, Stats 1986 ch 717 § 2. § 22112.5. “Class of employees” (a) “Class of employees” means a number of employees considered as a group because they are employed to perform similar duties, are employed in the same type of program, or share other similarities related to the nature of the work being performed. (b) A class of employees may be comprised of one person if no other person employed by the employer performs similar duties, is employed in the same type of program, or shares other similarities related to the nature of the work being performed and that same class is in common use among other employers. (c) The board shall have the right to override the determination by an employer as to whether or not a group or an individual constitutes a “class of employees” within the meaning of this section. (d) The amendments to this section during the 1995–96 Regular Session of the Legislature shall be deemed to have become operative on July 1, 1996. Added by Stats 1995 ch 390 § 2 (AB 1122), operative July 1, 1996. Amended by Stats 1996 ch 1165 § 5 (AB 3032), operative July 1, 1996. Former Sections: Former § 22112.5, relating to age and characteristics of “child” or “children” under disability retirement or survivor benefit programs, was added Stats 1992 ch 1166 § 15, effective September 29, 1992, and repealed Stats 1993 ch 893 § 1. Amendments 1996 Amendment: Substituted the section for the former section which read: “ ‘Class of employees’ means a number of employees considered as a group because they are employed to perform similar duties, are employed in the same type of program, or share other similarities related to the nature of the work being performed. In no event shall one employee be considered a class or group.” § 22112.6. Days of service for classes of employees Notwithstanding Section 22112.5, any county office of education that, prior to January 1, 1997, operated a special education program for up to 225 days, and changes that program to a regular school year of not less than 180 school days with an extended year of not more than 45 days effective July 1, 1998, may consider days of service in defining not more than two classes of employees, subject to the following: (a) Members employed in the 225–day program prior to October 1, 1997, may remain in a class of employees for whom full–time service is 216 days per year. (b) Any of those members may elect to belong to a second class of employees for whom full–time service is fewer than 216 days per year, but not less than the minimum standard specified in paragraph (1) of subdivision (b) of Section 22138.5, if both of the following conditions exist: (1) The election is made on or before June 30, 1998, and is effective July 1, 1998. (2) The election is nonrevocable. (c) All certificated employees hired on or after October 1, 1997, shall belong to the class of employees specified in subdivision (b). (d) This section shall not apply to certificated employees whose base year is determined pursuant to subparagraph (A) or (B) of paragraph (2) of subdivision (b) of Section 22138.5. Added by Stats 1997 ch 572 § 1 (AB 686). 15

49) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM § 22113. “Comparable level position” “Comparable level position” means any job in which the member can earn 66â…” percent or more of indexed final compensation. Added by Stats 1994 ch 933 § 3 (AB 3171), effective September 27, 1994. Former Sections: Former § 22113, similar to the present section, was added Stats 1993 ch 893 § 2 and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Former § 22113, similar to present § 22115, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, amended Stats 1979 ch 430 § 1, Stats 1987 ch 76 § 1, and repealed Stats 1993 ch 893 § 1. Historical Derivation: (a) Former § 22113, as added Stats 1993 ch 893 § 2. (b) Former § 22112.8, as added Stats 1992 ch 1167 § 3. § 22115. “Compensation earnable” (a) “Compensation earnable” means the creditable compensation a person could earn in a school year for creditable service performed on a full-time basis, excluding service for which contributions are credited by the system to the Defined Benefit Supplement Program. (b) The board may determine compensation earnable for persons employed on a part-time basis. (c) If service credit for a school year is less than 1.000, compensation earnable shall be the quotient obtained when creditable compensation paid in that year is divided by the service credit for that year, except as provided in subdivision (d). (d) If a member earns creditable compensation at multiple pay rates during a school year and service credit at the highest pay rate is at least 0.900 of a year, compensation earnable shall be determined as if all service credit for that year had been earned at the highest pay rate. This subdivision shall be applicable only for purposes of determining final compensation. If a member earns creditable compensation at multiple pay rates during a school year and service credit at the highest pay rate is less than 0.900 of a year, compensation earnable shall be determined pursuant to subdivision (c). (e) If creditable service is not performed on a full-time basis because a member is performing those activities pursuant to paragraph (6) of subdivision (a) of Section 22119.5, compensation earnable for those activities shall be determined as if the creditable compensation had been earned at the lowest pay rate for other creditable service activities performed by the member for the same employer during the same school year. (f) (1) Except as provided in subdivision (g), for purposes of determining compensation earnable for a member employed by a community college prior to July 1, 1996, full time shall be defined pursuant to Section 22138.5 and pursuant to Section 20521 of Title 5 of the California Code of Regulations, as those provisions read on June 30, 1996, if application of that definition will increase the compensation earnable or otherwise enhance the benefits of the member. (2) For purposes of administering this subdivision, the board shall have the authority to do both of the following: (A) Establish and implement factors and assumptions necessary to calculate and compare the benefits payable under the definition of compensation earnable described in this subdivision. Those factors and assumptions may be based on information reported by the employer, including, but not limited to, all of the following: (i) Base hours. (ii) Actual earnings. (iii) Compensation earnable. (B) Review member benefit calculations that were performed using the factors and assumptions described in subparagraph (A). If the board determines that an employer failed to identify part-time service performed, the board shall consider that part-time service to be performed in a part-time lecture assignment as defined by the employer. If the board determines by the review of the member benefit calculations that the required information reported by the employer is inaccurate, incomplete, or the 16

50) PART 13, CHAPTER 2 factors and assumptions were applied incorrectly, the board may recalculate member benefits using additional factors and assumptions that may include, but are not limited to, all of the following: (i) Base hours. (ii) Actual earnings. (iii) Compensation earnable. (3) This subdivision shall apply to a member employed by a community college prior to July 1, 1996, if the community college subsequently acts to reduce the minimum standard for full time as described in subdivision (c) of Section 22138.5 for the class of employees, and that community college provides written notice to the system of the act of the community college to reduce that minimum standard. (4) This subdivision shall not apply to a member employed by a community college that has not reduced the minimum standard as described in subdivision (c) of Section 22138.5. (g) Subdivision (f) shall not apply to a member subject to the California Public Employees’ Pension Reform Act of 2013. Added Stats 1994 ch 933 § 5 (AB 3171), effective September 27, 1994, operative until January 1, 1995, ch 933 § 5.5 (AB 3171), effective September 27, 1994, operative January 1, 1995. Amended Stats 1995 ch 390 § 3 (AB 1122), operative July 1, 1996; Stats 1996 ch 634 § 8 (SB 2041); Stats 1997 ch 482 § 2 (SB 471); Stats 2000 ch 1021 § 3 (AB 2700), operative July 1, 2002; Stats 2004 ch 442 § 1 (AB 1586); Stats 2005 ch 22 § 32 (SB 1108), effective January 1, 2006; Stats 2006 ch 654 § 1 (SB 1465), effective January 1, 2007; Stats 2009 ch 304 § 1 (SB 634), effective January 1, 2010; Stats 2013 ch 559 § 3 (AB 1381), effective January 1, 2014; Stats 2014 ch 755 § 5 (SB 1220), effective January 1, 2015. Note—Stats 2013 ch 559, as amended by Stats 2014 ch 755 § 81, provides: SECTION 1. The Legislature finds and declares that this act, as it applies to the State Teachers’ Retirement Plan, clarifies the California Public Employees’ Pension Reform Act of 2013, is declaratory of existing law, and is intended to apply concurrently with the initial operation of that act. The amendments made by this act, excluding those amendments made in Sections 4, 12, 28, 29, 30, and 36 shall be deemed to be operative January 1, 2013, unless otherwise stated. Former Sections: Former § 22115, similar to the present section, was added Stats 1993 ch 893 § 2, amended Stats 1994 ch 193 § 1, and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Former § 22115, similar to present Ed C § 22118, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1993 ch 893 § 1. Historical Derivation: (a) Former Ed C § 22113, as enacted Stats 1976 ch 1010 § 2, amended Stats 1979 ch 430 § 1, Stats 1987 ch 76 § 1. (b) Former Ed C § 22115, as added Stats 1993 ch 893 § 2, amended Stats 1994 ch 193 § 1. Amendments 1995 Amendment: Substituted the section for the former section which read: “(a) ‘Compensation earnable’ by a member means the compensation as determined by the board that would have been earned by the member if he or she were engaged in his or her duties on a full–time basis.”(b) For part–time service, ‘compensation earnable’ means the compensation that would be earnable if the employment were on a full–time basis and the member worked full time.” 1996 Amendment: Added “if that person” after “full–time basis and” in subd (a). 1997 Amendment: Added (1) “creditable” after “annual” in subd (a), and in subd (c) after “dividing the”; and (2) “in a school year” after “would earn” in subd (a). 2000 Amendment: Substituted the section for the former section which read: “(a) ‘Compensation earnable’ means the annual creditable compensation that a person would earn in a school year if he or she were employed on a full–time basis and if that person worked full time in that position.”(b) The board may determine compensation earnable for persons employed on a part–time basis.”(c) For purposes of determining final compensation for persons employed on a part–time basis, compensation earnable shall be determined by dividing the creditable compensation earned by the service credit.” 17

51) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM 2004 Amendment: (1) Substituted “0.900” for “.900” twice in subd (d); (2) added present subd (e); and (3) redesignated former subd (e) as present subd (f). 2005 Amendment: Substituted “quotient” for “product” in subd (c). 2006 Amendment: (1) Substituted present subd (e) for the former which read: “(e) For purposes of determining compensation earnable for a member employed by a community college prior to July 1, 1996, full time shall be defined pursuant to Section 22138.5 and pursuant to Section 20521 of Title 5 of the California Code of Regulations, as those provisions read on June 30, 1996, if application of that definition will increase the compensation earnable or otherwise enhance the benefits of the member.”; and (2) deleted former subd (f), which read: “(f) The amendments to this section made during the second year of the 1999-2000 Regular Session shall become operative on July 1, 2002, if the revenue limit cost-of-living adjustment computed by the Superintendent of Public Instruction for the 2001-02 fiscal year is equal to or greater than 3.5 percent. Otherwise the amendments to this section made during the second year of the 1999-2000 Regular Session shall become operative on July 1, 2003.” 2009 Amendment: (1) Substituted “If service” for “When service” in subd (c); (2) substituted “If a member” for “When a member” in the first and third sentences of subd (d); and (3) added “for the class of employees,” in subd (e)(3). 2013 Amendment: Added (1) “Except as provided in subdivision (f)” in subd (e)(1); and (2) subd (f). 2014 Amendment: (1) Added subd (e); (2) redesignated former subds (e) and (f) to be subds (f) and (g); (3) substituted “subdivision (g)” for “subdivision (f)” in subd (f)(1); and (4) substituted “Subdivision (f)” for “Subdivision (e)” in subd (g). § 22115.2. “Concurrent membership” (Other retirement systems, membership) “Concurrent membership” means membership in the Defined Benefit Program by an individual who is credited with service that is not used as a basis for benefits under any other public retirement system and is also a member of the California Public Employees’ Retirement System, the Legislators’ Retirement System, the University of California Retirement System, county retirement systems established under Chapter 3 (commencing with Section 31450) of Part 3 of Division 4 of Title 3 of the Government Code, or the San Francisco Employees’ Retirement System. A member with concurrent membership shall have the right to the following: (a) Have final compensation determined pursuant to subdivision (c) of Section 22134 or subdivision (c) of Section 22134.5. (b) Redeposit accumulated retirement contributions pursuant to Section 23201. (c) Apply for retirement pursuant to paragraph (2) of subdivision (a) of Section 24201. Added by Stats 1999 ch 939 § 8 (SB 1074). Amended by Stats 2005 ch 351 § 1 (AB 224), effective January 1, 2006; Stats 2006 ch 655 § 3 (SB 1466), effective January 1, 2007. Amendments 2005 Amendment: Deleted “City and County” before “Employees’ “ in the introductory paragraph. 2006 Amendment: Added “or subdivision (c) of Section 22134.5” after “subdivision (c) of Section 22134” in subd (a). § 22115.5. “Concurrent retirement” (Other retirement systems, retirement) (a) “Concurrent retirement” entitles a member of the Defined Benefit Program to retire for service from the State Teachers’ Retirement System and from at least one of the retirement systems with which the member has concurrent membership, as defined in Section 22115.2, on the same date or on different dates provided that the member does not perform creditable service subject to coverage under the other system or the Defined Benefit Program between the two retirement dates. (b) A retired member who is subsequently employed in a position subject to membership in a public retirement system, specified in Section 22115.2, shall not be eligible for concurrent retirement. Added by Stats 1999 ch 939 § 9 (SB 1074). 18

52) PART 13, CHAPTER 2 § 22117. “Contribution rate for additional service credit” “Contribution rate for additional service credit” means the contribution rate adopted by the board as a plan amendment with respect to the Defined Benefit Program for the purchase of service credit. This rate shall be based upon the most recent valuation of the plan with respect to the Defined Benefit Program and increased to include any subsequently required contribution rates designated for funding subsequent allowance increases. Added by Stats 1994 ch 933 § 3 (AB 3171), effective September 27, 1994. Amended by Stats 1996 ch 634 § 9 (SB 2041); Stats 1998 ch 965 § 2 (AB 2765). Former Sections: Former § 22117, similar to the present section, was added Stats 1993 ch 893 § 2 and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Former § 22117, similar to present Ed C § 22121, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, amended Stats 1981 ch 124 § 6, and repealed Stats 1993 ch 893 § 1. Historical Derivation: (a) Former Ed C § 22114.5, as added Stats 1982 ch 279 § 1. (b) Former Ed C § 22117, as added Stats 1993 ch 893 § 2. Amendments 1996 Amendment: Substituted “for the purchase of” for “to purchase” after “adopted by the board” in the first sentence. 1998 Amendment: (1) Added “as a plan amendment with respect to the Defined Benefit Program” in the first sentence; and (2) substituted “plan with respect to the Defined Benefit Program” for “system” in the second sentence. § 22118. “County”; “City and county” “County” includes “city and county.” Added by Stats 1994 ch 933 § 3 (AB 3171), effective September 27, 1994. Former Sections: Former § 22118, similar to the present section, was added Stats 1993 ch 893 § 2 and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Former § 22118, relating to death payment, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, amended Stats 1981 ch 124 § 7, and repealed Stats 1992 ch 1166 § 2, effective September 29, 1992. Historical Derivation: (a) Former § 22115, enacted Stats 1976 ch 1010 § 2. (b) Former § 22118, as added Stats 1993 ch 893 § 2. § 22119. “County superintendent” “County superintendent” means the county superintendent of schools. Added by Stats 1994 ch 933 § 3 (AB 3171), effective September 27, 1994. Former Sections: Former § 22119, similar to the present section, was added Stats 1993 ch 893 § 2 and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Former § 22119, similar to present § 22124, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1993 ch 893 § 1. Historical Derivation: (a) Former § 22116, enacted Stats 1976 ch 1010 § 2. (b) Former § 22119, as added Stats 1993 ch 893 § 2. 19

53) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM § 22119.2. “Creditable compensation” (2% at 60) (a) “Creditable compensation” means remuneration that is paid in cash by an employer to all persons in the same class of employees for performing creditable service in that position. Creditable compensation shall include: (1) Salary or wages paid in accordance with a publicly available written contractual agreement, including, but not limited to, a salary schedule or employment agreement. (2) Remuneration that is paid in addition to salary or wages, provided it is paid to all persons who are in the same class of employees in the same dollar amount, the same percentage of salary or wages, or the same percentage of the amount being distributed. (3) Remuneration that is paid for the use of sick leave, vacation, and other employer-approved leave, except as provided in paragraph (4) of subdivision (c). (4) Member contributions that are picked up by an employer pursuant to Section 22903 or 22904. (5) Amounts that are deducted from a member’s remuneration, including, but not limited to, deductions for participation in a deferred compensation plan; deductions to purchase an annuity contract, tax-deferred retirement plan, or insurance program; and contributions to a plan that meets the requirements of Section 125, 401(a), 401(k), 403(b), 457(b), or 457(f) of Title 26 of the United States Code. (6) Any other payments the board determines to be “creditable compensation.” (b) Any creditable compensation determined by the system to have been paid to enhance a member’s benefits shall not be credited under the Defined Benefit Program. Contributions on that compensation shall be credited to the Defined Benefit Supplement Program. A presumption by the system that creditable compensation was paid to enhance a member’s benefits may be rebutted by the member or by the employer on behalf of the member. Upon receipt of sufficient evidence to the contrary, a presumption by the system that creditable compensation was paid to enhance the member’s benefits may be reversed. (c) “Creditable compensation” does not mean and shall not include: (1) Remuneration that is not paid in cash or is not paid to all persons who are in the same class of employees. (2) Remuneration that is paid for service that is not creditable service pursuant to Section 22119.5. (3) Remuneration that is paid in addition to salary or wages if it is not paid to all persons in the same class of employees in the same dollar amount, the same percentage of salary or wages, or the same percentage of the amount being distributed pursuant to paragraph (2) of subdivision (a). (4) Remuneration that is paid in exchange for the relinquishment of unused accumulated leave. (5) Payments, including, but not limited to, those for participation in a deferred compensation plan; to purchase an annuity contract, tax-deferred retirement plan, or insurance program; and for contributions to a plan that meets the requirements of Section 125, 401(a), 401(k), 403(b), 457(b), or 457(f) of Title 26 of the United States Code when the cost is covered by an employer and is not deducted from the member’s salary. (6) Fringe benefits provided by an employer. (7) Expenses paid or reimbursed by an employer. (8) Severance pay, including lump-sum and installment payments, or money paid in excess of salary or wages to a member as compensatory damages or as a compromise settlement. (9) Any other payments the board determines not to be “creditable compensation.” (d) An employer or individual who knowingly or willfully reports compensation in a manner inconsistent with subdivision (a) or (c) may be subject to prosecution for fraud, theft, or embezzlement in accordance with the Penal Code. The system may establish procedures to ensure that compensation reported by an employer is in compliance with this section. (e) For purposes of this section, remuneration shall be considered paid if distributed to any person in the same class of employees who meets the qualifications or requirements specified in a publicly available written contractual agreement, including, but not limited to, a collective bargaining agreement or an employment agreement, as a condition of receiving the remuneration. 20

54) PART 13, CHAPTER 2 (f) This definition of “creditable compensation” reflects sound principles that support the integrity of the retirement fund. Those principles include, but are not limited to, consistent treatment of compensation throughout a member’s career, consistent treatment of compensation among an entire class of employees, consistent treatment of compensation for the position, preventing adverse selection, and excluding from compensation earnable remuneration that is paid to enhance a member’s benefits. The system shall determine the appropriate crediting of contributions between the Defined Benefit Program and the Defined Benefit Supplement Program according to these principles, to the extent not otherwise specified pursuant to this part. (g) The section shall become operative on July 1, 2002. (h) This section shall not apply to a member subject to the California Public Employees’ Pension Reform Act of 2013. Added Stats 2000 ch 1021 § 5 (AB 2700), operative date contingent. Amended Stats 2010 ch 207 § 1 (AB 2260), effective January 1, 2011; Stats 2012 ch 864 § 1 (AB 2663), effective January 1, 2013; Stats 2013 ch 559 § 4 (AB 1381), effective January 1, 2014. Note—Stats 2013 ch 559, as amended by Stats 2014 ch 755 § 81, provides: SECTION 1. The Legislature finds and declares that this act, as it applies to the State Teachers’ Retirement Plan, clarifies the California Public Employees’ Pension Reform Act of 2013, is declaratory of existing law, and is intended to apply concurrently with the initial operation of that act. The amendments made by this act, excluding those amendments made in Sections 4, 12, 28, 29, 30, and 36 shall be deemed to be operative January 1, 2013, unless otherwise stated. Former Sections: There was another section of this number, similar to the present section, which was added Stats 1996 ch 1165 § 7, operative July 1, 1996, amended Stats 1997 ch 482 § 3, Stats 1999 ch 939 § 10, Stats 2000 ch 1021 § 4, Stats 2001 ch 803 § 1, operative term contingent, and repealed, operative January 1, 2004, by its own terms. Historical Derivation: Former Ed C § 22114, as added Stats 1994 ch 933 § 3. Amendments 2010 Amendment: Deleted “shall reimburse the plan for benefit overpayments that occur because of that inconsistent reporting and” after “subdivision (a) or (c)” in the first sentence of subd (d). 2012 Amendment: Substituted (1) “provided” for “providing” in subd (a)(2); and (2) “creditable compensation” for “salary or other remuneration” wherever it appears in subd (b). 2013 Amendment: Substituted the section for the former section which read: “(a) ‘Creditable compensation’ means remuneration that is payable in cash by an employer to all persons in the same class of employees and is paid to an employee for performing creditable service. Creditable compensation shall include: “(1) Salary paid in accordance with a salary schedule or employment agreement. “(2) Remuneration that is paid in addition to salary, provided it is payable to all persons who are in the same class of employees in the same dollar amount, the same percentage of salary, or the same percentage of the amount being distributed. “(3) Remuneration that is paid for the use of sick leave, vacation, and other employer-approved leave, except as provided in paragraph (4) of subdivision (c). “(4) Member contributions that are picked up by an employer pursuant to Section 22903 or 22904. “(5) Amounts that are deducted from a member’s compensation, including, but not limited to, salary deductions for participation in a deferred compensation plan; deductions to purchase an annuity contract, tax-deferred retirement plan, or insurance program; and contributions to a plan that meets the requirements of Section 125, 401(k), or 403(b) of Title 26 of the United States Code. “(6) Any other payments the board determines to be ‘creditable compensation.’ “(b) Any creditable compensation determined by the board to have been paid for the principal purpose of enhancing a member’s benefits under the plan shall not be credited under the Defined Benefit Program. Contributions on that compensation shall be credited to the Defined Benefit Supplement Program. A presumption by the board that creditable compensation was paid for the principal purpose of enhancing the member’s benefits under the plan may be rebutted by the member or by the employer on behalf of the member. Upon receipt of sufficient evidence to the contrary, a presumption by the board that creditable compensation was paid for the principal 21

55) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM purpose of enhancing the member’s benefits under the plan may be reversed. (c) ‘Creditable compensation’ does not mean and shall not include: “(1) Remuneration that is not payable in cash or is not payable to all persons who are in the same class of employees. “(2) Remuneration that is paid for service that is not creditable service pursuant to Section 22119.5. “(3) Remuneration that is paid in addition to salary if it is not payable to all persons in the same class of employees in the same dollar amount, the same percentage of salary, or the same percentage of the amount being distributed pursuant to paragraph (2) of subdivision (a). “(4) Remuneration that is paid for unused accumulated leave. “(5) Annuity contracts, tax-deferred retirement plans, or insurance programs and contributions to plans that meet the requirements of Section 125, 401(k), or 403(b) of Title 26 of the United States Code when the cost is covered by an employer and is not deducted from the member’s salary. “(6) Fringe benefits provided by an employer. “(7) Job-related expenses paid or reimbursed by an employer. “(8) Severance pay or compensatory damages or money paid to a member in excess of salary as a compromise settlement. “(9) Any other payments the board determines not to be ‘creditable compensation.’ “(d) An employer or individual who knowingly or willfully reports compensation in a manner inconsistent with subdivision (a) or (c) may be subject to prosecution for fraud, theft, or embezzlement in accordance with the Penal Code. The system may establish procedures to ensure that compensation reported by an employer is in compliance with this section. “(e) For purposes of this section, remuneration shall be considered payable if it would be paid to any person who meets the qualifications or requirements specified in a collective bargaining agreement or an employment agreement as a condition of receiving the remuneration. “(f) This definition of ‘creditable compensation’ reflects sound principles that support the integrity of the retirement fund. Those principles include, but are not limited to, consistent treatment of compensation throughout a member’s career, consistent treatment of compensation among an entire class of employees, preventing adverse selection, and excluding from compensation earnable remuneration that is paid for the principal purpose of enhancing a member’s benefits under the plan. The board shall determine the appropriate crediting of contributions between the Defined Benefit Program and the Defined Benefit Supplement Program according to these principles, to the extent not otherwise specified pursuant to this part. “(g) The section shall become operative on July 1, 2002, if the revenue limit cost-of-living adjustment computed by the Superintendent of Public Instruction for the 2001-02 fiscal year is equal to or greater than 3.5 percent. Otherwise this section shall become operative on July 1, 2003.” Notes of Decisions Decisions Under Former Ed C § 22114 In separate actions involving calculation of retirement allowances for two members of the State Teachers’ Retirement System (STRS) who each held two full-time teaching positions simultaneously, the employees were not entitled to allowances under the State Teachers’ Retirement Law (Ed. Code, § 22000 et seq.) based on both fulltime jobs. The allowances had to be based on the aggregate of their salaries up to the equivalent of a single, fulltime job carrying the highest compensation. The State Teachers’ Retirement Law limits the total service credit a member may earn by using one full-time position as the yardstick. Excess earnings are “overtime” (Ed. Code, § 22151) and are not included in the definition of compensation (Ed. Code, § 22114, subd. (b)(2)). The logic of this construction is supported by the fact that contributions in excess of what is creditable to retirement must be reimbursed at retirement (Ed. Code, § 22906). Such an interpretation did not deny one employee due process and equal protection, notwithstanding that he worked for a school district that allowed fewer credited hours in a week and year than other districts. The same calculation was employed for all teachers in the same category. Basing benefits on the aggregate of the salaries up to the equivalent of a single, full-time job not only comports with the language of the State Teachers’ Retirement Law, the application of that law by STRS, and Ed. Code, former § 23402 (a measure to make the retirement fund solvent), but achieves the ends to which the law is aimed—to provide a substantial or reasonable pension while assuring adequate funding. O’Connor v. State Teachers’ Retirement System (1996, Cal App 2d Dist) 43 Cal App 4th 1610, 51 Cal Rptr 2d 540, 1996 Cal App LEXIS 273, review denied L. Edmund Kellogg v. State Teachers’ Retirement Sys. (1996, Cal) 1996 Cal LEXIS 3711. 22

56) PART 13, CHAPTER 2 § 22119.3. “Creditable compensation” (2% at 62) (a) “Creditable compensation” for members who are subject to the California Public Employees’ Pension Reform Act of 2013 means remuneration that is paid each pay period in which creditable service is performed for that position. Creditable compensation shall be paid in cash by an employer to all persons in the same class of employees in accordance with a publicly available written contractual agreement, including, but not limited to, a salary schedule or employment agreement. Creditable compensation shall include: (1) Remuneration that is paid for the use of sick leave, vacation, and other employer-approved leave, except as provided in paragraph (4) of subdivision (b). (2) Member contributions that are picked up by an employer pursuant to Section 22903 or 22904. (3) Amounts that are deducted from a member’s remuneration, including, but not limited to, deductions for participation in a deferred compensation plan; deductions to purchase an annuity contract, tax-deferred retirement plan, or insurance program; and contributions to a plan that meets the requirements of Section 125, 401(a), 401(k), 403(b), 457(b), or 457(f) of Title 26 of the United States Code. (4) Notwithstanding paragraphs (6) and (8) of subdivision (c) of Section 7522.34 of the Government Code, remuneration that is paid for creditable service that exceeds one year in a school year. (b) “Creditable compensation” does not mean and shall not include: (1) Remuneration that is not paid in cash or is not paid to all persons who are in the same class of employees. (2) Remuneration that is paid for service that is not creditable service pursuant to Section 22119.5. (3) Remuneration that is not paid each pay period in which creditable service is performed for that position. (4) Remuneration that is paid in exchange for the relinquishment of unused accumulated leave. (5) Payments, including, but not limited to, those for participation in a deferred compensation plan; to purchase an annuity contract, tax-deferred retirement plan, or insurance program; and for contributions to a plan that meets the requirements of Section 125, 401(a), 401(k), 403(b), 457(b), or 457(f) of Title 26 of the United States Code when the cost is covered by an employer. (6) Fringe benefits provided by an employer. (7) Expenses paid or reimbursed by an employer. (8) Severance pay, including lump sum and installment payments, or money paid in excess of salary or wages to a member as compensatory damages or as a compromise settlement. (9) Creditable compensation determined by the system to have been paid to enhance a member’s benefit. (10) Compensation paid to the member in lieu of benefits provided to the member by the employer or paid directly by the employer to a third party other than the system for the benefit of the member. (11) Any one-time or ad hoc payments made to a member. (12) Any employer-provided allowance, reimbursement, or payment, including, but not limited to, one made for housing, vehicle, or uniform. (13) Any bonus paid in addition to compensation described in subdivision (a). (14) Any other payments the board determines not to be “creditable compensation.” (c) (1) Except for purposes of calculating credited service in the Defined Benefit Program and for reporting compensation earnable on or after January 1, 2013, creditable compensation in any fiscal year shall not exceed: (A) One hundred twenty percent of the “contribution and benefit base,” as determined under Section 430(b) of the Social Security Act (42 U.S.C. Sec. 430(b)), on January 1, 2013, for a member whose service is not included in the federal system. (B) One hundred percent of the “contribution and benefit base,” as determined under Section 430(b) of the Social Security Act (42 U.S.C. Sec. 430(b)), on January 1, 2013, for a member whose service is included in the federal system pursuant to any changes in state or federal law enacted on or after January 1, 2013. 23

57) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM (2) The system shall adjust the limit based on the annual changes to the Consumer Price Index for All Urban Consumers: U.S. City Average, calculated by dividing the Consumer Price Index for All Urban Consumers: U.S. City Average for the month of February in the fiscal year preceding the adjustment by the Consumer Price Index for All Urban Consumers: U.S. City Average for the month of February of the previous year rounded to the nearest thousandth. Notwithstanding paragraph (1) of subdivision (d) of Section 7522.10 of the Government Code, the adjustment shall be effective annually on July 1, beginning July 1, 2014. (3) The Legislature reserves the right to modify the requirements of this subdivision with regard to all members subject to this subdivision, except that the Legislature may not modify these provisions in a manner that would result in a decrease in benefits accrued prior to the effective date of the modification. (4) This subdivision shall apply to compensation paid during the 2013–14 fiscal year and each fiscal year thereafter. (d) An employer or individual who knowingly or willfully reports compensation in a manner inconsistent with subdivision (a) or (b) may be subject to prosecution for fraud, theft, or embezzlement in accordance with the Penal Code. The system may establish procedures to ensure that compensation reported by an employer is in compliance with this section. (e) For purposes of this section, remuneration shall be considered paid if distributed to any person in the same class of employees who meets the qualifications or requirements specified in a publicly available written contractual agreement, including, but not limited to, a collective bargaining agreement or an employment agreement, as a condition of receiving the remuneration. (f) This definition of “creditable compensation” reflects sound principles that support the integrity of the retirement fund. Those principles include, but are not limited to, consistent treatment of compensation throughout a member’s career, consistent treatment of compensation among an entire class of employees, consistent treatment of compensation for the position, preventing adverse selection, and excluding from creditable compensation remuneration that is paid to enhance a member’s benefits. The system shall determine the appropriate crediting of contributions according to these principles, to the extent not otherwise specified pursuant to this part. A presumption by the system that creditable compensation was paid to enhance the member’s benefits may be rebutted by the member or by the employer on behalf of the member. Upon receipt of sufficient evidence to the contrary, a presumption by the system that creditable compensation was paid to enhance the member’s benefits may be reversed. Added Stats 2013 ch 559 § 6 (AB 1381), effective January 1, 2014. Amended Stats 2014 ch 755 § 6 (SB 1220), effective January 1, 2015. Note—Stats 2013 ch 559, as amended by Stats 2014 ch 755 § 81, provides: SECTION 1. The Legislature finds and declares that this act, as it applies to the State Teachers’ Retirement Plan, clarifies the California Public Employees’ Pension Reform Act of 2013, is declaratory of existing law, and is intended to apply concurrently with the initial operation of that act. The amendments made by this act, excluding those amendments made in Sections 4, 12, 28, 29, 30, and 36 shall be deemed to be operative January 1, 2013, unless otherwise stated. Former Sections: Former Ed C § 22119.3, similar to the present section, was added Stats 2012 ch 296 § 1 (AB 340), effective January 1, 2013, and repealed Stats 2013 ch 559 § 5, effective January 1, 2014. Amendments 2014 Amendment: (1) Substituted “lump sum” for “lump-sum” in subd (b)(8); and (2) amended the first sentence of subd (c)(2) by (a) deleting “in paragraph (1)” after “adjust the limit”; and (b) substituting “U.S. City Average” for “City Average” wherever it appears. 24

58) PART 13, CHAPTER 2 § 22119.5. “Creditable service” (a) “Creditable service” means any of the following activities performed for an employer in a position requiring a credential, certificate, or permit pursuant to this code, or under the appropriate minimum standards adopted by the Board of Governors of the California Community Colleges, or under the provisions of an approved charter for the operation of a charter school for which the charter school is eligible to receive state apportionment, or pursuant to a contract between a community college district and the United States Department of Defense to provide vocational training: (1) The work of teachers, instructors, district interns, and academic employees employed in the instructional program for pupils, including special programs such as adult education, regional occupation programs, child care centers, and prekindergarten programs pursuant to Section 22161. (2) Education or vocational counseling, guidance, and placement services. (3) The work of directors, coordinators, and assistant administrators who plan courses of study to be used in California public schools, or research connected with the evaluation or efficiency of the instructional program. (4) The selection, collection, preparation, classification, demonstration, or evaluation of instructional materials of any course of study for use in the development of the instructional program in California public schools, or other services related to school curriculum. (5) The examination, selection, in-service training, or assignment of teachers, principals, or other similar personnel involved in the instructional program. (6) School activities related to, and an outgrowth of, the instructional and guidance program of the school when performed in addition to other activities described in this section. (7) The work of nurses, physicians, speech therapists, psychologists, audiometrists, audiologists, and other school health professionals. (8) Services as a school librarian. (9) The work of employees who are responsible for the supervision of persons or administration of the duties described in this section. (b) “Creditable service” also means the work of superintendents of California public schools. (c) The board shall have final authority for determining creditable service to cover any activities not already specified. Added Stats 1995 ch 394 § 1 (AB 948), effective August 11, 1995, ch 592 § 1 (AB 1298). Amended Stats 1996 ch 608 § 1 (AB 2673), effective September 19, 1996, operative July 1, 1996; Stats 2002 ch 375 § 1 (AB 2982); Stats 2014 ch 755 § 7(SB 1220), effective January 1, 2015. Former Sections: Former Ed C § 22119.5, defining creditable service, was added Stats 1995 ch 394 § 1, effective August 11, 1995, inoperative January 1, 1996, and repealed Stats 2014 ch 755 § 8, effective January 1, 2015. Amendments 1996 Amendment: (1) Added “or pursuant to a contract between a community college district and the United States Department of Defense to provide vocational training” at the end of the introductory clause of subd (a); (2) substituted “school health professionals” for “supervised employees in the school health program” in subd (a)(7); (3) deleted “county and district superintendents and other” after “work of” in subd (a)(9); (4) added subd (b); (5) redesignated former subd (b) to be subd (c); and (6) added “already” in subd (c). 2002 Amendment: Deleted “within the hours considered normal on a full–time basis for full–time employees of the employer” at the end of subd (a)(6). 2014 Amendment: Amended the introductory clause of subd (a) by (1) adding the commas after “pursuant to this code”, “California Community Colleges”, and after “receive state apportionment”; and (2) substituting “charter school” for “employer”. 25

59) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM § 22120. “Credited interest” “Credited interest” means interest that is credited to active members’ and inactive members’, accumulated retirement contributions, and accumulated annuity deposit contributions at a rate set annually by the board as a plan amendment with respect to the Defined Benefit Program. Added by Stats 1994 ch 933 § 3 (AB 3171), effective September 27, 1994. Amended by Stats 1996 ch 634 § 10 (SB 2041); Stats 1998 ch 965 § 3 (AB 2765). Former Sections: Former § 22120, similar to present Ed C § 22121, was added Stats 1993 ch 893 § 2, and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Former § 22120, relating to definition of disabilitant, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, amended Stats 1981 ch 124 § 10, and repealed Stats 1993 ch 893 § 1. Historical Derivation: (a) Former Ed C § 22141, as added Stats 1993 ch 893 § 2. (b) Former Ed C § 22141.5, as added Stats 1977 ch 36 § 411, amended and renumbered by Stats 1977 ch 37 § 5. (c) Former Ed C § 22146, as enacted Stats 1976 ch 1010 § 2. Amendments 1996 Amendment: Substituted “means” for “is”. 1998 Amendment: (1) Added “active” after “credited to”; (2) substituted “and inactive members’, accumulated retirement contributions, and accumulated annuity deposit contributions” for “accounts”; and (3) added “as a plan amendment with respect to the Defined Benefit Program”. § 22121. “Credited service” (a) “Credited service” means service for which the required contributions have been paid. (b) “Credited service” for members who are subject to the California Public Employees’ Pension Reform Act of 2013 means service for which required contributions have been paid and service for which required contributions would have been paid in absence of the limit established by subdivision (c) of Section 22119.3. (c) “Credited service” for the limited purpose of determining eligibility for benefits pursuant to Section 22134.5, 24203.5, or 24203.6 also includes up to two-tenths of one year of service granted pursuant to Section 22717. Added Stats 1994 ch 933 § 3 (AB 3171), effective September 27, 1994. Amended Stats 1998 ch 965 § 4 (AB 2765); Stats 2004 ch 911 § 1 (SB 102); Stats 2006 ch 538 § 97 (SB 1852), effective January 1, 2007; Stats 2014 ch 755 § 9 (SB 1220), effective January 1, 2015. Former Sections: Former § 22121, similar to present Ed C § 22122, was added Stats 1993 ch 893 § 2 and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Former § 22121, similar to present Ed C § 22127, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, amended Stats 1981 ch 124 § 11, and repealed Stats 1993 ch 893 § 1. Historical Derivation: (a) Former Ed C § 22117, as enacted Stats 1976 ch 1010 § 2, amended Stats 1981 ch 124 § 6. (b) Former Ed C § 22120, as added Stats 1993 ch 893 § 2. Amendments 1998 Amendment: Deleted “and shall be used in determining a member’s eligibility for any allowance provided by this part” at the end. 2004 Amendment: (1) Designated the former section to be subd (a); and (2) added subd (b). 2006 Amendment: Substituted “eligibility” for “eligibilty” after “purpose of determining” in subd (b). 2014 Amendment: (1) Added subd (b); and (2) redesignated former subd (b) to be subd (c). 26

60) PART 13, CHAPTER 2 § 22122. “Custodian” “Custodian” as used in Section 22359, means any bank or trust company that serves as custodian for safekeeping, delivery, securities valuation, investment performance reporting, and other services in connection with investment of the fund. Added by Stats 1994 ch 933 § 3 (AB 3171), effective September 27, 1994. Amended by Stats 1996 ch 634 § 11 (SB 2041). Former Sections: Former § 22122, similar to present Ed C § 22123, was added Stats 1993 ch 893 § 2 and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Former § 22122, similar to present Ed C § 22126, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, amended Stats 1977 ch 36 § 95, effective April 29, 1977, operative April 30, 1977, Stats 1978 ch 502 § 1, Stats 1980 ch 757 § 1, Stats 1992 ch 1167 § 4, and repealed Stats 1993 ch 893 § 1. Historical Derivation: (a) Former Ed C § 22117.5, as added Stats 1987 ch 330 § 3 as Ed C § 22132.7, renumbered by Stats 1988 ch 382 § 2. (b) Former Ed C § 22121, as added Stats 1993 ch 893 § 2. Amendments 1996 Amendment: Substituted “means” for “is” after “Section 22359,”. § 22122.4. “Death payment” “Death payment” means the amount payable upon the death of a member pursuant to Section 23801, 23851, or 23880. Added by Stats 1996 ch 634 § 12 (SB 2041). § 22122.5. “Defined Benefit Program” “Defined Benefit Program “means the Defined Benefit Program provided in the State Teachers’ Retirement Plan as set forth in this part. Added by Stats 1996 ch 634 § 13 (SB 2041). Amended by Stats 1998 ch 1048 § 3 (SB 2085). Amendments 1998 Amendment: Substituted (1) “Program” for “Plan” the first time it appears; and (2) “Defined Benefit Program provided in the State Teachers’ Retirement Plan” for “State Teachers’ Retirement System Defined Benefit Plan”. § 22122.7. “Defined Benefit Supplement contributions” “Defined Benefit Supplement contributions” means member contributions and employer contributions that are credited by the system to the member’s Defined Benefit Supplement account pursuant to Section 25004. Added by Stats 2000 ch 74 § 10 (AB 1509). § 22123. “Dependent child” under disability allowance and family allowance programs (a) “Dependent child” or “dependent children” under the disability allowance and family allowance programs means a member’s unmarried offspring or stepchild who is under 22 years of age and who is financially dependent upon the member on the effective date of the member’s disability allowance or the date of the member’s death. 27

61) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM (b) “Offspring” shall include the member’s child who is born within the 10-month period commencing on the earlier of the member’s disability allowance effective date or the date of the member’s death. (c) “Offspring” shall include a child adopted by the member. (d) “Dependent child” shall not include the member’s offspring or stepchild who is adopted by a person other than the member’s spouse. (e) “Dependent child” under the family allowance program shall not include: (1) The member’s offspring or stepchild who was financially dependent on the member on the date of the member’s death if a disability allowance was payable to the member prior to his or her death and the disability allowance did not include an amount payable for that offspring or stepchild. (2) A stepchild or adopted child acquired subsequent to the death of the member. (f) “Financially dependent” for purposes of this section means that at least one-half of the child’s support was being provided by the member on the member’s disability allowance effective date or the date of the member’s death. The system may require that income tax records or other data be submitted to substantiate the child’s financial dependence. In the absence of substantiating documentation, the system may determine that the child was not dependent on the effective date of the member’s disability allowance or the date of the member’s death. (g) “Member” as used in this section shall have the same meaning specified in Section 23800. Added by Stats 1996 ch 1165 § 9 (AB 3032). Amended by Stats 2001 ch 802 § 1 (SB 499); Stats 2006 ch 655 § 4 (SB 1466), effective January 1, 2007. Former Sections: Former § 22123, defining “dependent child”, was added Stats 1994 ch 933 § 3, effective September 27, 1994, and repealed Stats 1996 ch 1165 § 8. Former § 22123, similar to present § 22124, was added Stats 1993 ch 893 § 2 and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Former § 22123, similar to present § 22130, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1993 ch 893 § 1. Historical Derivation: (a) Former § 22118.5, as added Stats 1992 ch 1167 § 3. (b) Former § 22122, as added Stats 1993 ch 893 § 2. (c) Former Ed C § 22123, as added Stats 1994 ch 933 § 3. (d) Former Ed C § 23806, as enacted Stats 1976 ch 1010 § 2. (e) Former Ed C § 23808, as added Stats 1993 ch 893 § 2. Amendments 2001 Amendment: Deleted former subd (h) which read: “(h) This section shall remain in effect only until January 1, 2002, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2002, deletes or extends that date.” 2006 Amendment: Substituted “under” for “not older than” after “stepchild who is” in subd (a). § 22123.5. “Dependent child” under disability retirement and survivor benefit allowance programs (a) “Dependent child” or “dependent children” under the disability retirement and survivor benefit allowance programs means a member’s offspring or stepchild who is under 21 years of age and who is financially dependent upon the member on the effective date of the member’s disability retirement or the date of the member’s death. (b) “Offspring” shall include the member’s child who is born within the 10-month period commencing on the earlier of the member’s disability retirement effective date or the date of the member’s death. (c) “Offspring” shall include a child adopted by the member. 28

62) PART 13, CHAPTER 2 (d) “Dependent child” shall not include the member’s offspring or stepchild who is adopted by a person other than the member’s spouse. (e) “Dependent child” under the survivor benefit allowance program shall not include a stepchild or adopted child acquired subsequent to the death of the member. (f) “Financially dependent” for purposes of this section means that at least one-half of the child’s support was being provided by the member on the member’s disability retirement effective date or the date of the member’s death. The system may require that income tax records or other data be submitted to substantiate the child’s financial dependence. In the absence of substantiating documentation, the system may determine that the child was not dependent on the effective date of the member’s disability retirement or the date of the member’s death. (g) “Member” as used in this section shall have the same meaning specified in Section 23850. Added by Stats 1996 ch 1165 § 10 (AB 3032). Amended by Stats 2006 ch 655 § 5 (SB 1466), effective January 1, 2007. Amendments 2006 Amendment: Substituted “under” for “not older than” after “stepchild who is” in subd (a). § 22124. “Dependent parent” “Dependent parent” means a natural parent of a member, or a parent who adopted the member prior to the earlier of the occurrence of the member’s marriage or his or her attaining 18 years of age, and who was receiving one–half or more of his or her support from the member at the time of the member’s death. Added by Stats 1994 ch 933 § 3 (AB 3171), effective September 27, 1994. Amended by Stats 1996 ch 634 § 14 (SB 2041). Former Sections: Former § 22124, similar to present Ed C § 22125, was added Stats 1993 ch 893 § 2 and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Former § 22124, similar to present Ed C § 22131, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1993 ch 893 § 1. Historical Derivation: (a) Former Ed C § 22119, enacted Stats 1976 ch 1010 § 2. (b) Former Ed C § 22123, as added Stats 1993 ch 893 § 2. Amendments 1996 Amendment: Added “or more” after “receiving one–half”. § 22126. “Disability” or “disabled” “Disability” or “disabled” means any medically determinable physical or mental impairment that is permanent or that can be expected to last continuously for at least 12 months, measured from the onset of the disability, but no earlier than the day following the last day of actual performance of service that prevents a member from performing the member’s usual duties for the member’s employer, the member’s usual duties for the member’s employer with reasonable modifications, or the duties of a comparable level position for which the member is qualified or can become qualified within a reasonable period of time by education, training, or experience. Any impairment from a willful self-inflicted injury shall not constitute a disability. Added Stats 1994 ch 933 § 3 (AB 3171), effective September 27, 1994. Amended Stats 1996 ch 634 § 16 (SB 2041); Stats 2010 ch 207 § 2 (AB 2260), effective January 1, 2011. 29

63) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM Former Sections: Former § 22126, similar to present Ed C § 22127, was added Stats 1993 ch 893 § 2 and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Former § 22126, similar to present Ed C § 22133, was enacted Stats 1976 ch 1010 § 2, amended Stats 1981 ch 124 § 12, Stats 1992 ch 1166 § 3, effective September 29, 1992, and repealed Stats 1993 ch 893 § 1. Historical Derivation: (a) Former Ed C § 22122, enacted Stats 1976 ch 1010 § 2, amended Stats 1977 ch 36 § 95, Stats 1978 ch 502 § 1, Stats 1980 ch 757 § 1, Stats 1992 ch 1167 § 4. (b) Former Ed C § 22125, as added Stats 1993 ch 893 § 2. Amendments 1996 Amendment: Substituted “service” for “on–the–job performance” after “following the last day of” in the first sentence. 2010 Amendment: Added “actual performance of” in the first sentence. Notes of Decisions Decisions Under Current Law 1. Generally Where a representative of the California State Teachers’ Retirement Board (CalSTRS) misled a teacher about the eligibility requirements for disability retirement benefits, the teacher’s 2005 application for disability benefits, arising from a 1998 attack by students, should have been remanded to CalSTRS to decide whether to exercise its power to relieve the teacher from the consequences of the late-filed application, including her inability to prove that she was disabled within the meaning of Ed C § 22126. Welch v. California State Teachers’ Retirement Bd. (2012, 3d Dist) 2012 Cal App LEXIS 85. Decisions Under Former Ed C § 22122 An elementary school teacher who suffered from severe asthma and chronic bronchitis was disabled within the meaning of Ed. Code, § 22122 (State Teachers’ Retirement Law), which provides that “disability” or “disabled” means any medically determinable physical or mental impairment which is permanent and prevents a member from performing his usual duties for his employer, where the teacher’s usual and customary duties exposed her to the rampant infectious agents harbored by small children. Although the teacher was physically capable to perform her duties, it would have been medically unwise and would have exposed her to a serious health risk. Wolfman v. Board of Trustees (1983, Cal App 4th Dist) 148 Cal App 3d 787, 196 Cal Rptr 395, 1983 Cal App LEXIS 2353. Under Ed. Code, § 22122, providing an individual is considered “disabled” if he or she suffers from a physical or mental impairment, the term “impairment” is no different from the term “incapacity” as used in Gov. Code, § 21022, which has been defined as a substantial inability of the applicant to perform his or her usual duties. Swehla v. Teachers’ Retirement Bd. (1987, Cal App 5th Dist) 192 Cal App 3d 1088, 237 Cal Rptr 789, 1987 Cal App LEXIS 1839. On a petition for writ of mandate by a permanently injured physical education teacher, to compel the Teachers’ Retirement Board to grant her a disability allowance, the trial court properly ordered the board to either grant disability benefits or require the teacher to participate in a rehabilitation program to enable her to perform teaching duties, under former Ed C § 23905, allowing for rehabilitation of disabled teachers, where the teacher was disabled within the meaning of Ed C § 22122, allowing a disability allowance for permanently disabled teachers. Abshear v. Teachers’ Retirement Board (1991, Cal App 2d Dist) 231 Cal App 3d 1629, 282 Cal Rptr 833, 1991 Cal App LEXIS 769. § 22127. “Disability allowance” “Disability allowance” means the amount payable to a disabled member on a monthly basis. Added by Stats 1994 ch 933 § 3 (AB 3171), effective September 27, 1994. Amended by Stats 1996 ch 634 § 17 (SB 2041). 30

64) PART 13, CHAPTER 2 Former Sections: Former § 22127, similar to present Ed C § 22128, was added Stats 1993 ch 893 § 2 and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Former § 22127, similar to present Ed C § 22134, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, amended Stats 1977 ch 36 § 96, effective April 29, 1977, operative April 30, 1977, Stats 1979 ch 430 § 3, Stats 1982 ch 782 § 1, Stats 1992 ch 1166 § 4, effective September 29, 1992, and repealed Stats 1993 ch 893 § 1. Historical Derivation: (a) Former Ed C § 22121, enacted Stats 1976 ch 1010 § 2, amended Stats 1981 ch 124 § 11. (b) Former Ed C § 22126, as added Stats 1993 ch 893 § 2. Amendments 1996 Amendment: Substituted the section for the former section which read: “‘Disability allowance’ means monthly amounts payable to a disabilitant.” Notes of Decisions Teacher retirement unmodified allowance of former Ed C § 24000, and average monthly compensation under Ed C § 22127, and the fixed allowance for the combined lives of the retiree and his beneficiary under former Ed C § 24200(a), violated Title VII of the Civil Rights Act of 1964 on the basis of sex. Under the plan men could not be paid lower monthly benefits simply because men as a class lived shorter lives than women. Probe v. State Teachers’ Retirement System (1986, 9th Cir Cal) 780 F2d 776, 1986 US App LEXIS 21239, cert den (1986) 476 US 1170, 90 L Ed 2, 106 S Ct 2891, 1986 US LEXIS 1638. § 22127.2. “Disability benefit” “Disability benefit” means the amount payable under the Defined Benefit Supplement Program based on the balance of credits in a member’s Defined Benefit Supplement account to either a disabled member pursuant to Section 24005 or to a member who retired for disability pursuant to Section 24105. Added by Stats 2000 ch 74 § 11 (AB 1509). § 22128. “Early retirement” and “early retirement age” “Early retirement” and “early retirement age” mean the age of 55 years, which is the age upon attainment of which the member becomes eligible under the Defined Benefit Program for a service retirement allowance with reduction because of age and without special qualifications. Added by Stats 1994 ch 933 § 3 (AB 3171), effective September 27, 1994. Amended by Stats 1996 ch 634 § 18 (SB 2041); Stats 1999 ch 939 § 11 (SB 1074); Stats 2000 ch 1025 § 2 (AB 816). Former Sections: Former § 22128, similar to present Ed C § 22129, was added Stats 1993 ch 893 § 2 and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Former § 22128, relating to definition of full time student, was added Stats 1977 ch 199 § 2 and repealed Stats 1993 ch 893 § 1. Former § 22128, relating to definition of full time student, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1977 ch 199 § 1. Historical Derivation: (a) Former Ed C § 22127, as added Stats 1993 ch 893 § 2. (b) Former Ed C § 22134.6, as added Stats 1987 ch 330 § 5. Amendments 1996 Amendment: Substituted “mean age 55 years which” for “means 55 years and”. 2000 Amendment: Added “under the Defined Benefit Program”. 31

65) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM § 22129. “Educational institution” “Educational institution” means any accredited public or private institution whose primary purpose is to provide classroom teaching and includes a high school, trade or vocational school or college, community college, or other college or university. Added by Stats 1994 ch 933 § 3 (AB 3171), effective September 27, 1994. Amended by Stats 1996 ch 634 § 19 (SB 2041). Former Sections: Former § 22129, similar to present Ed C § 22136, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, repealed and added Stats 1993 ch 893 §§ 1, 2 (ch 860 prevails), amended Stats 1993 ch 860 § 1, and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Historical Derivation: (a) Former Ed C § 22128, as added Stats 1993 ch 893 § 2. (b) Former Ed C § 22130, as enacted Stats 1976 ch 1010 § 2. Amendments 1996 Amendment: Substituted “means” for “is” after “ ‘Educational institution’ “. § 22130. “Effective date” “Effective date” means the date upon which the benefit becomes payable. Added by Stats 1994 ch 933 § 3 (AB 3171), effective September 27, 1994. Amended by Stats 1996 ch 634 § 20 (SB 2041). Former Sections: Former § 22130, similar to present Ed C § 22131, was added Stats 1993 ch 893 § 2 and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Former § 22130, similar to present Ed C § 22129, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1993 ch 893 § 1. Historical Derivation: Former Ed C § 22123, as enacted Stats 1976 ch 1010 § 2. Amendments 1996 Amendment: Substituted the section for the former section which read: “ ‘Effective date’ means the date stated in the application upon and continuously after which, should death occur, the member is considered a retirant or disabilitant.” § 22131. “Employer” or “employing agency” (a) (1) “Employer” or “employing agency” means the state or any agency or political subdivision thereof, including, but not limited to, a joint powers authority, for which creditable service subject to coverage by the plan is performed. (2) In the case of a joint powers authority, all of the following criteria shall be met: (A) The joint powers authority shall be formed pursuant to the Joint Exercise of Powers Act (Chapter 5 (commencing with Section 6500) of Division 7 of Title 1 of the Government Code). (B) All entities included in the joint powers authority shall be entities at which creditable service subject to coverage by the plan is performed. (C) The joint powers authority shall report through a single county office of education, with that county superintendent having responsibility for activities specified under this part, including but not limited to, reporting and remitting contributions. (b) This section shall be administered in compliance with the requirements defining a governmental plan set forth in Section 414(d) of the Internal Revenue Code of 1986 (26 U.S.C. Sec. 414(d)). 32

66) PART 13, CHAPTER 2 Added Stats 1994 ch 933 § 3 (AB 3171), effective September 27, 1994. Amended Stats 1996 ch 634 § 21 (SB 2041); Stats 2014 ch 755 § 10 (SB 1220), effective January 1, 2015. Former Sections: Former § 22131, similar to present Ed C § 22132, was added Stats 1993 ch 893 § 2 and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Former § 22131, similar to present Ed C § 22140, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1993 ch 893 § 1. Historical Derivation: (a) Former Ed C § 22124, enacted Stats 1976 ch 1010 § 2. (b) Former Ed C § 22130, as added Stats 1993 ch 893 § 2. Amendments 1996 Amendment: Substituted “for which creditable service subject to coverage by the plan is performed” for “by whom a member is paid”. 2014 Amendment: Added (1) subdivision designation (a)(1); (2) “, including, but not limited to, a joint powers authority,” in subd (a)(1); and (3) subds (a)(2) and (b). § 22132. “Employed”; “Employment” “Employed” or “employment” means employment to perform creditable service subject to coverage under the Defined Benefit Program or the Defined Benefit Supplement Program, except as otherwise specifically provided under this part. Added by Stats 1994 ch 933 § 3 (AB 3171), effective September 27, 1994. Amended by Stats 1996 ch 634 § 21.5 (SB 2041); Stats 1998 ch 965 § 5 (AB 2765); Stats 2000 ch 74 § 12 (AB 1509). Former Sections: Former § 22132, similar to present Ed C § 22134, was added Stats 1993 ch 893 § 2 and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Former § 22132, similar to present Ed C § 22145, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1993 ch 893 § 1. Historical Derivation: (a) Former Ed C § 22125, enacted Stats 1976 ch 1010 § 2. (b) Former Ed C § 22131, as added Stats 1993 ch 893 § 2. Amendments 1996 Amendment: Substituted the section for the former section which read: “ ‘Employment’ means employment in a position requiring membership in the system.” 2000 Amendment: Substituted “under the Defined Benefit Program or the Defined Benefit Supplement Program” for “by the State Teachers’ Retirement Defined Benefit Program”. § 22133. “Family allowance” “Family allowance” means amounts payable to eligible survivors provided pursuant to Chapter 22 (commencing with Section 23800) after June 30, 1972. Added by Stats 1994 ch 933 § 3 (AB 3171), effective September 27, 1994. Former Sections: Former § 22133, similar to present § 22134, was added Stats 1993 ch 893 § 2 and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Former § 22133, similar to present § 22146, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1993 ch 893 § 1. Historical Derivation: (a) Former § 22126, as enacted Stats 1976 ch 1010 § 2, amended Stats 1981 ch 124 § 12, Stats 1992 ch 1166 § 3. (b) Former § 22132, as added Stats 1993 ch 893 § 2. 33

67) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM § 22133.5. “Final benefit” “Final benefit” means the amount payable to a beneficiary under the Defined Benefit Supplement Program upon the death of the member. Added by Stats 2000 ch 74 § 13 (AB 1509). § 22134. “Final compensation” (Three-year) (a) “Final compensation” means the highest average annual compensation earnable, as defined by Section 22115, by a member during any period of 36 consecutive months while an active member of the Defined Benefit Program or time during which he or she was not a member but for which the member has received credit under the Defined Benefit Program, except time that was so credited for service performed outside this state prior to July 1, 1944. (b) For purposes of this section, periods of service separated by breaks in service may be aggregated, if the periods of service are consecutive except for the breaks. (c) The determination of final compensation of a member who is eligible for concurrent retirement as defined in Section 22115.5 shall take into consideration the compensation earnable while a member of any other system, provided that both of the following exist: (1) Service under any other system was not performed during the same pay period with service under the Defined Benefit Program. (2) Retirement under the Defined Benefit Program is concurrent with the member’s retirement under any other system pursuant to Section 22115.5. (d) The compensation earnable for the first position in which California service was credited shall be used when additional compensation earnable is required for the purpose of determining final compensation under Section 23805. (e) If a member has received service credit for part-time service performed prior to July 1, 1956, the member’s final compensation shall be adjusted for that service in excess of one year by the ratio that part-time service bears to full-time service. (f) The board may specify a different final compensation with respect to disability allowances, disability retirement allowances, family allowances, and children’s portions of survivor benefit allowances payable on and after January 1, 1978. The compensation earnable for periods of part-time service shall be adjusted by the ratio that part-time service bears to full-time service. (g) The amendment of former Section 22127 made by Chapter 782 of the Statutes of 1982 does not constitute a change in, but is declaratory of, the existing law. Added Stats 1994 ch 933 § 3 (AB 3171), effective September 27, 1994. Amended Stats 1996 ch 1165 § 11 (AB 3032); Stats 1997 ch 482 § 4 (SB 471); Stats 1998 ch 1077 § 1 (SB 610); Stats 1999 ch 939 § 12 (SB 1074); Stats 2004 ch 912 § 2 (AB 2233); Stats 2005 ch 351 § 2 (AB 224), effective January 1, 2006; Stats 2006 ch 655 § 6 (SB 1466), effective January 1, 2007; Stats 2014 ch 755 § 11 (SB 1220), effective January 1, 2015. Former Sections: Former § 22134, similar to present Ed C § 22142, was added Stats 1993 ch 893 § 2, and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Former § 22134, similar to present Ed C § 22147, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1993 ch 893 § 1. Historical Derivation: (a) Former Ed C § 22127, as enacted Stats 1976 ch 1010 § 2, amended Stats 1977 ch 36 § 96, Stats 1979 ch 430 § 3, Stats 1982 ch 782 § 1, Stats 1992 ch 1166 § 4. (b) Former Ed C § 22133, as added Stats 1993 ch 893 § 2. Amendments 1996 Amendment: (1) Substituted “plan” for “system” wherever it appears; (2) substituted “while an active member of the plan” for “during his or her membership in the system” in subd (a); (3) deleted “the” before “pur34

68) PART 13, CHAPTER 2 poses of this section” in subd (b); and (4) substituted “children’s portions of” for “the children’s increment of the”. 1997 Amendment: (1) Added “school” after “consecutive” in subd (a); and (2) substituted “compensation earnable” for “earnable salaries” in subd (f). 1998 Amendment: (1) Substituted “Defined Benefit Program” for “plan” both times it appears in the first sentence of subd (a); and (2) added “county retirement systems established under Chapter 3 (commencing with Section 31450) of Part 3 of Division 4 of Title 3 of the Government Code,” in the introductory clause of subd (c). 1999 Amendment: (1) Substituted “has concurrent membership in another retirement system pursuant to Section 22115.2” for “is also a member of the Public Employees’ Retirement System, the Legislators’ Retirement System, the University of California Retirement System, county retirement systems established under Chapter 3 (commencing with Section 31450) of Part 3 of Division 4 of Title 3 of the Government Code, or the San Francisco City and County Employees’ Retirement System” in subd (c); (2) deleted “of” after “district or” in subd (c)(1); (3) substituted “the Defined Benefit Program” for “this plan” in subds (c)(2) and (c)(3); (4) amended subd (d) by substituting (a) “was” for “is” after “California service”; and (b) “Section 23805” for “Section 23804” at the end; and (5) substituted “bears” for “has” in the second sentence of subd (f). 2004 Amendment: Substituted “during the same pay period” for “concurrently” in subd (c)(2). 2005 Amendment: Deleted the last sentence of subd (a) which read: “The last three consecutive years of employment shall be used by the system in determining final compensation unless designated to the contrary in writing by the member.”. 2006 Amendment: (1) Amended the introductory clause of subd (c) by substituting (a) “any other” for “another” after “concurrent membership in”; and (b) “any other system, provided that both” for “the other system, provided that all”; (2) deleted former subd (c)(1) which read: “(1) The member was in state service or in the employment of a local school district or a county superintendent of schools.”; (3) redesignated former subds (c)(2) and (c)(3) to be subds (c)(1) and (c)(2); and (4) substituted “any” for “the” after “Service under” in subd (c)(1), and after “member’s retirement under” in subd (c)(2). 2014 Amendment: (1) Amended subd (a) by (a) adding “, as defined by Section 22115,”; and (b) substituting “36 consecutive months” for “three consecutive school years”; (2) deleted “to constitute a period of three consecutive years” after “may be aggregated” in subd (b); (3) substituted “is eligible for concurrent retirement as defined in Section 22115.5” for “has concurrent membership in any other retirement system pursuant to Section 22115.2” in the introductory clause of subd (c); (4) added “pursuant to Section 22115.5” in subd (c)(2); and (5) deleted “to accumulate three consecutive years” after “earnable is required” in subd (d). § 22134.5. Determination of final compensation (One-year) (a) Notwithstanding Section 22134, “final compensation” means the highest average annual compensation earnable, as defined in Section 22115, by a member during any period of 12 consecutive months while an active member of the Defined Benefit Program or time during which he or she was not a member but for which the member has received credit under the Defined Benefit Program, except time that was so credited for service performed outside this state prior to July 1, 1944. (b) For purposes of this section, periods of service separated by breaks in service may be aggregated, if the periods of service are consecutive except for the breaks. (c) The determination of final compensation of a member who is eligible for concurrent retirement as defined in Section 22115.5 shall take into consideration the compensation earnable while a member of any other system, provided that both of the following exist: (1) Service under any other system was not performed during the same pay period with service under the Defined Benefit Program. (2) Retirement under the Defined Benefit Program is concurrent with the member’s retirement under any other system pursuant to Section 22115.5. (d) If a member has received service credit for part-time service performed prior to July 1, 1956, the member’s final compensation shall be adjusted for that service in excess of one year by the ratio that part-time service bears to full-time service. (e) The board may specify a different final compensation with respect to disability allowances, disability retirement allowances, family allowances, and children’s portions of survivor benefit allowanc35

69) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM es payable on and after January 1, 1978. The compensation earnable for periods of part-time service shall be adjusted by the ratio that part-time service bears to full-time service. (f) This section shall apply to the following: (1) A member who has 25 or more years of credited service, excluding service credited pursuant to the following: (A) Section 22714. (B) Section 22715. (C) Section 22717, except as provided in subdivision (c) of Section 22121. (D) Section 22826. (2) A nonmember spouse, if the member had 25 or more years of credited service, as calculated in paragraph (1), on the date the parties separated, as established in the judgment or court order pursuant to Section 22652. (3) This section shall not apply to a member subject to the California Public Employees’ Pension Reform Act of 2013. Added Stats 2000 ch 1028 § 1 (AB 821). Amended Stats 2003 ch 313 § 3 (AB 1207); Stats 2004 ch 911 § 2 (SB 102) (ch 911 prevails), ch 912 § 3 (AB 2233); Stats 2005 ch 351 § 3 (AB 224), effective January 1, 2006; Stats 2006 ch 655 § 7 (SB 1466), effective January 1, 2007; Stats 2013 ch 558 § 2 (AB 1379), effective January 1, 2014, ch 559 § 7 (AB 1381) (ch 559 prevails), effective January 1, 2014; Stats 2014 ch 755 § 12 (SB 1220), effective January 1, 2015. Note—Stats 2013 ch 559, as amended by Stats 2014 ch 755 § 81, provides: SECTION 1. The Legislature finds and declares that this act, as it applies to the State Teachers’ Retirement Plan, clarifies the California Public Employees’ Pension Reform Act of 2013, is declaratory of existing law, and is intended to apply concurrently with the initial operation of that act. The amendments made by this act, excluding those amendments made in Sections 4, 12, 28, 29, 30, and 36 shall be deemed to be operative January 1, 2013, unless otherwise stated. Former Sections: Former § 22135.5, similar to present Ed C § 22148, was added Stats 1977 ch 659 § 3, amended Stats 1987 ch 330 § 4, and repealed Stats 1993 ch 893 § 1. Amendments 2003 Amendment: Added “22714.5,” in both sentences of subd (g). 2004 Amendment: (1) Substituted “during the same pay period” for “concurrently” in (c)(2); (2) deleted former subd (d) which read: “The compensation earnable for the first position in which California service was credited shall be used when additional compensation earnable is required to accumulate three consecutive years for the purpose of determining final compensation under Section 23805.”; (3) redesigned former subds (d) through (f) as subd (c) through (g); (4) substituted “shall apply to the following:” for “shall only apply to:”; (5) added the subdivision designations (f)(1), (f)(1)(A) through (f)(1)(E); (6) added the designation of subdivision (f)(2); and (7) amended (f)(2) by (a) deleting “Section 22714, 22714.5, 22715, 22717, or 22826, but including any credited service that a court has ordered be awarded to a nonmember spouse pursuant to Section 22652. This section also shall apply to”; (b) adding “25 or more”; (c) deleting “at least 25” before “years”; and (d) substituting “as calculated in paragraph (1),” for “excluding service credited pursuant to Section 22714, 22714.5, 22715, 22717, or 22826,”. 2005 Amendment: Deleted the last sentence of subd (a) which read: “The last consecutive 12-month period of employment shall be used by the system in determining final compensation unless designated to the contrary in writing by the member.”. 2006 Amendment: (1) Amended the introductory clause of subd (c) by substituting (a) “any other” for “another” after “concurrent membership in”; and (b) “any other system, provided that both” for “the other system, provided that all”; (2) deleted former subd (c)(1) which read: “(1) The member was in state service or in the employment of a local school district or a county superintendent of schools.”; (3) redesignated former subds (c)(2) and (c)(3) to be subds (c)(1) and (c)(2); and (4) substituted “any” for “the” after “Service under” in subd (c)(1), and after “member’s retirement under” in subd (c)(2). 36

70) PART 13, CHAPTER 2 2013 Amendment: (1) Deleted former subd (f)(1)(B) which read: “(B) Section 22714.5.”; (2) redesignated former subds (f)(1)(C)-(f)(1)(E) to be subds (f)(1)(B)-(f)(1)(D); and (3) added subd (f)(3). 2014 Amendment: (1) Added “, as defined in Section 22115,” in subd (a); (2) deleted “to constitute a period of 12 consecutive months” after “may be aggregated” in subd (b); (3) substituted “is eligible for concurrent retirement as defined in Section 22115.5” for “has concurrent membership in any other retirement system pursuant to Section 22115.2” in the introductory clause of subd (c); (4) added “pursuant to Section 22115.5” in subd (c)(2); and (5) substituted “subdivision (c)” for “subdivision (b)” in subd (f)(1)(C). § 22135. “Final compensation” by classroom teacher (a) Notwithstanding subdivision (a) of Section 22134, “final compensation” means the highest average annual compensation earnable, as defined by Section 22115, by an active member who is a classroom teacher not subject to the California Public Employees’ Pension Reform Act of 2013 and who retires, becomes disabled, or dies, after June 30, 1990, during any period of 12 consecutive months while an active member of the Defined Benefit Program. (b) Section 22134, except subdivision (a) of that section, shall apply to classroom teachers who retire after June 30, 1990, and any statutory reference to Section 22134 or “final compensation” with respect to a classroom teacher who retires, becomes disabled, or dies, after June 30, 1990, shall be deemed to be a reference to this section. (c) As used in this section, “classroom teacher” means any of the following: (1) All teachers and substitute teachers in positions requiring certification qualifications who spend, during the last 10 years of their employment with the same employer which immediately precedes their retirement, 60 percent or more of their contract time each year providing direct instruction. For the purpose of determining continuity of employment within the meaning of this subdivision, an authorized leave of absence for sabbatical or illness or other collectively bargained or employerapproved leaves shall not constitute a break in service. (2) Other certificated personnel who spend, during the last 10 years of their employment with the same employer that immediately precedes their retirement, 60 percent or more of their contract time each year providing direct services to pupils, including, but not limited to, librarians, counselors, nurses, speech therapists, resource specialists, audiologists, audiometrists, hygienists, optometrists, psychologists, driver safety instructors, and personnel on special assignment to perform school attendance and adjustment services. (d) As used in this section, “classroom teacher” does not include any of the following: (1) Certificated employees whose job descriptions require an administrative credential. (2) Certificated employees whose job descriptions include responsibility for supervision of certificated staff. (3) Certificated employees who serve as advisers, coordinators, consultants, or developers or planners of curricula, instructional materials, or programs, who spend, during the last 10 years of their employment with the same employer that immediately precedes their retirement, less than 60 percent of their contract time in direct instruction. (4) Certificated employees whose job descriptions require provision of direct instruction or services, but who are functioning in nonteaching assignments. (5) Classified employees. (e) This section shall apply only to teachers employed by an employer that has, pursuant to Chapter 10.7 (commencing with Section 3540) of Division 4 of Title 1 of the Government Code, entered into, extended, renewed, or amended a written agreement with an exclusive representative, prior to January 1, 2014, that makes this section applicable to all of its classroom teachers, as defined in subdivision (c). (f) The written agreement shall include a mechanism to pay for all increases in allowances provided for by this section through employer contributions or employee contributions or both, which shall be collected and retained by the employer in a trust fund to be used solely and exclusively to pay the system for all increases in allowances provided by this section and related administrative costs; and a 37

71) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM mechanism for disposition of the employee’s contributions if employment is terminated before retirement, and for the establishment of a trust fund board. The trust fund board shall administer the trust fund and shall be composed of an equal number of members representing classroom teachers chosen by the bargaining agent and the employer. If the employer agrees to pay the total cost of increases in allowances, the establishment of a trust fund and a trust fund board shall be optional to the employer. The employer, within 30 days of receiving an invoice from the system, shall reimburse the retirement fund the amount determined by the Teachers’ Retirement Board to be the actuarial equivalent of the difference between the allowance the member or beneficiary receives pursuant to this section and the allowance the member or beneficiary would have received if the member’s final compensation had been computed under Section 22134 and the proportionate share of the cost to the plan’s Defined Benefit Program, as determined by the Teachers’ Retirement Board, of administering this section. The payment shall include the cost of all increases in allowances provided for by this section for all years of service credited to the member as of the benefit effective date. Interest shall be charged at the regular interest rate for any payment not received within 30 days of receipt of the invoice. Payments not received within 30 days after receipt of the invoice may be collected pursuant to Section 23007. (g) Upon the execution of the agreement, the employer shall notify all certificated employees of the agreement and any certificated employee of the employer, who is a member of the Public Employees’ Retirement System pursuant to Section 22508, that he or she may, within 60 days following the date of notification, elect to terminate his or her membership in the Public Employees’ Retirement System and become a member of this plan’s Defined Benefit Program. However, only service credited under the Defined Benefit Program subsequent to the date of that election shall be subject to this section. (h) An employer that agrees to become subject to this section, shall, on a form and within the timeframes prescribed by the system, certify the applicability of this section to a member pursuant to the criteria set forth in this section when a retirement, disability, or family allowance becomes payable. (i) For a nonmember spouse, final compensation shall be determined pursuant to paragraph (5) of subdivision (c) of Section 22664. The employer, within 30 days of receiving an invoice from the system, shall reimburse the retirement fund pursuant to subdivision (f). Interest shall be charged at the regular interest rate for payments not received within the prescribed timeframe. Payments not received within 30 days of invoicing may be collected pursuant to Section 23007. Added Stats 1994 ch 933 § 3 (AB 3171), effective September 27, 1994. Amended Stats 1996 ch 383 § 1 (AB 3221); Stats 1999 ch 939 § 13 (SB 1074); Stats 2004 ch 912 § 4 (AB 2233); Stats 2005 ch 351 § 4 (AB 224), effective January 1, 2006; Stats 2013 ch 558 § 3 (AB 1379), effective January 1, 2014, ch 559 § 8 (AB 1381) (ch 559 prevails), effective January 1, 2014; Stats 2014 ch 755 § 13 (SB 1220), effective January 1, 2015. Note—Stats 2013 ch 559, as amended by Stats 2014 ch 755 § 81, provides: SECTION 1. The Legislature finds and declares that this act, as it applies to the State Teachers’ Retirement Plan, clarifies the California Public Employees’ Pension Reform Act of 2013, is declaratory of existing law, and is intended to apply concurrently with the initial operation of that act. The amendments made by this act, excluding those amendments made in Sections 4, 12, 28, 29, 30, and 36 shall be deemed to be operative January 1, 2013, unless otherwise stated. Former Sections: Former § 22135, similar to the present section, was added Stats 1993 ch 893 § 2 and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Former § 22135, similar to present § 22151, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1993 ch 893 § 1. Historical Derivation: (a) Former § 22127.1, as added Stats 1989 ch 1184 § 1, amended Stats 1990 ch 83 § 1, and amended Stats 1991 ch 543 § 3. (b) Former § 22135, as added Stats 1993 ch 893 § 2. 38

72) PART 13, CHAPTER 2 Amendments 1996 Amendment: (1) Substituted “an active” for “a” after “compensation earnable by” in subd (a); (2) substituted “plan” for “system” after “membership in the” in subd (a) and after “cost to the” in the fourth sentence of subd (f); (3) added “collectively” in the last sentence of subd (b)(1); (4) amended subd (f) by (a) deleting “benefits and” before “allowances” in the first and fifth sentences; (b) substituting “allowances” for “benefits and “allowance” in the first sentence; (c) substituting “increass in allowances” for “the benefit improvement” in the third sentence; (d) substituting “retirement fund” for “system” in the fourth sentence; (e) deleting “equal to” after “Board to be” in the fourth sentence; and (f) deleting “the” after “30 days of” in the 6th sentence; (5) amended subd (g) by substituting (a) “a member” for “in” after “employers, who is”; (b) “Section 22508” for “Section 22509”; (c) “60 days” for “90 days”; and (d) “plan” for “system” in the last sentence; (6) substituted “applicability of this section to a member pursuant to the criteria set forth in this section when a retirement, disability, or family allowance becomes payable” for “eligibility of an employee, upon retirement or eligibility for a disability or family allowance, pursuant to the criteria set forth in this section” in subd (h); and (7) substituted “retirement fund” for “system” after “shall reimburse the” in subd (i). 1999 Amendment: (1) Substituted “plan’s Defined Benefit Program” for “plan” at the end of the first sentence of subd (a), in the fourth sentence of subd (f), and at the end of the first sentence of subd (g); (2) amended the second sentence of subd (c)(1) by (a) deleting the comma after “illness”; and (b) substituting “service” for “employment” at the end; (3) substituted “; and” for the comma after “administrative costs” in the first sentence of subd (f); (4) substituted “the Defined Benefit Program” for “this plan” in the second sentence of subd (g); and (5) substituted “payments” for “payments” in the third sentence of subd (i). 2004 Amendment: Substituted “highest average annual compensation” for “highest annual compensation” in the first sentence of subd (a). 2005 Amendment: Deleted the last sentence of subd (a) which read: “The last 12 consecutive months of employment shall be used by the system in determining final compensation unless designated to the contrary in writing by the member.”. 2013 Amendment: (1) Added “not subject to the California Public Employees’ Pension Reform Act of 2013 and” in subd (a); (2) amended subd (e) by adding (a) “, extended, renewed, or amended”; and (b) “prior to January 1, 2014,”; and (3) substituted “paragraph (5)” for “paragraph (2)” in the first sentence of subd (i). 2014 Amendment: Amended subd (a) by (1) substituting “subdivision (a)” for “subdivisions (a) and (b)”; (2) adding “, as defined by Section 22115,”; and (3) substituting “while an active member of the” for “during his or her membership in the plan’s”. § 22136. “Final compensation” when salary has been reduced (a) “Final compensation” with respect to a member whose salary while an active member was reduced because of a reduction in school funds as certified by the employer means the highest average annual compensation earnable, as defined by Section 22115, by the member during any 36 months while employed to perform creditable service subject to coverage by the Defined Benefit Program. (b) For the purposes of this section, periods of service separated by breaks in service or periods in which a member’s salary was reduced may be aggregated, if the periods of service are consecutive except for the breaks or periods of the salary reduction. Added Stats 1994 ch 933 § 3 (AB 3171), effective September 27, 1994. Amended Stats 1996 ch 634 § 22 (SB 2041); Stats 1999 ch 939 § 14 (SB 1074); Stats 2014 ch 755 § 14 (SB 1220), effective January 1, 2015. Former Sections: Former § 22136, similar to the present section, was added Stats 1993 ch 893 § 2 and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Former § 22136, similar to present Ed C § 22150, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, amended Stats 1978 ch 502 § 2, Stats 1981 ch 124 § 14, and repealed Stats 1993 ch 893 § 1. Historical Derivation: (a) Former Ed C § 22129, as enacted Stats 1976 ch 1010 § 2, repealed and added Stats 1993 ch 893 §§ 1, 2, amended Stats 1993 ch 860 § 1. (b) Former Ed C § 22136, as added Stats 1993 ch 893 § 2. 39

73) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM Amendments 1996 Amendment: Amended subd (a) by substituting (1) “while an active member was” for “has been” after “member whose salary”; and (2) “while employed to perform creditable service subject to coverage by the plan” for “during his or her membership in the system” after “any three years”. 1999 Amendment: Substituted “Defined Benefit Program” for “plan” in subd (a). 2014 Amendment: (1) Amended subd (a) by (a) adding “as certified by the employer”; (b) adding “, as defined by Section 22115,”; (c) substituting “36 months” for “three years”; and (d) deleting “if the member elects to be subject to this section” at the end; and (2) substituted subd (b) for former subd (b) which read: “(b) For the purposes of this section, a year shall be considered to be a period of 12 consecutive months.” § 22137. “Final compensation” of managerial or supervisory employee With respect to a state employee member who dies or retires on or after July 1, 1991, and who was a managerial or supervisory employee, as defined by subdivisions (e) and (g) of Section 3513 of the Government Code, whose monthly salary range was administratively reduced by 5 percent because of the salary range reductions administratively imposed upon managers and supervisors during the 1991– 92 fiscal year, “final compensation” means the highest annual compensation the state employee member would have earned had his or her salary range not been reduced by the 5–percent reduction. This section shall only apply if the period during which the state member’s salary was reduced would have otherwise been included in determining his or her final compensation for retirement purposes. The costs, if any, that may result from the use of the higher final compensation shall be paid for by the employer at the time of retirement in a manner prescribed by the system. Added by Stats 1994 ch 933 § 3 (AB 3171), effective September 27, 1994. Former Sections: Former § 22137, similar to the present section, was added Stats 1993 ch 893 § 2 and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Former § 22137, similar to present § 22152, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1993 ch 893 § 1. Historical Derivation: Former § 22127.3, as added Stats 1992 ch 1372 § 6. § 22138. “Final vesting” “Final vesting” means the right of a member or a beneficiary to receive a monthly retirement allowance, disability allowance, a family benefit, or survivor benefits when the member has completed the minimum number of years of credited service, has attained the minimum specified age, has formally terminated his or her active service, has made application for retirement, or has been formally retired in accordance with Section 24201, after which the kind and amount of the retirement allowance is fixed and cannot thereafter be changed except as provided in this part. Added by Stats 1994 ch 933 § 3 (AB 3171), effective September 27, 1994. Former Sections: Former § 22138, relating to definition of “full–time student”, was added Stats 1993 ch 893 § 2 and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Former § 22138, relating to definition of “part–time basis with respect to service”, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1993 ch 893 § 1. Historical Derivation: (a) Former § 22159, enacted Stats 1976 ch 1010 § 2. (b) Former § 22172, as added Stats 1993 ch 893 § 2. § 22138.5. “Full time”; Minimum standard for prekindergarten through grade 12; Minimum standard for community colleges (a) (1) “Full time” means the days or hours of creditable service the employer requires to be performed by a class of employees in a school year in order to earn the compensation earnable as defined 40

74) PART 13, CHAPTER 2 in Section 22115 and specified under the terms of a collective bargaining agreement or employment agreement. For the purpose of crediting service under this part, “full time” may not be less than the minimum standard specified in this section. Each collective bargaining agreement or employment agreement that applies to a member subject to the minimum standard specified in either paragraph (5) or (6) of subdivision (c) shall specify the number of hours of creditable service that equals “full time” pursuant to this section for each class of employee subject to either paragraph and make specific reference to this section, and the district shall submit a copy of the agreement to the system. (2) The copies of each agreement shall be submitted electronically in a format determined by the system that ensures the security of the transmitted member data. (3) The copies shall be electronically submitted annually to the system on or before July 1, or on or before the effective date of the agreement, whichever is later. (b) The minimum standard for full time in prekindergarten through grade 12 is as follows: (1) One hundred seventy-five days per year or 1,050 hours per year, except as provided in paragraphs (2) and (3). (2) (A) One hundred ninety days per year or 1,520 hours per year for all principals and program managers, including advisers, coordinators, consultants, and developers or planners of curricula, instructional materials, or programs, and for administrators, except as provided in subparagraph (B). (B) Two hundred fifteen days per year or 1,720 hours per year including school and legal holidays pursuant to the policy adopted by the employer’s governing board for administrators at a county office of education. (3) One thousand fifty hours per year for teachers in adult education programs. (c) The minimum standard for full time in community colleges is as follows: (1) One hundred seventy-five days per year or 1,050 hours per year, except as provided in paragraphs (2), (3), (4), (5), and (6). Full time includes time for duties the employer requires to be performed as part of the full-time assignment for a particular class of employees. (2) One hundred ninety days per year or 1,520 hours per year for all program managers and for administrators, except as provided in paragraph (3). (3) Two hundred fifteen days per year or 1,720 hours per year including school and legal holidays pursuant to the policy adopted by the employer’s governing board for administrators at a district office. (4) One hundred seventy-five days per year or 1,050 hours per year for all counselors and librarians. (5) Five hundred twenty-five instructional hours per school year for all instructors employed on a part-time basis, except instructors specified in paragraph (6). If an instructor receives compensation for office hours pursuant to Article 10 (commencing with Section 87880) of Chapter 3 of Part 51 of Division 7 of Title 3, the minimum standard shall be increased appropriately by the number of office hours required annually for the class of employees. (6) Eight hundred seventy-five instructional hours per school year for all instructors employed in adult education programs. If an instructor receives compensation for office hours pursuant to Article 10 (commencing with Section 87880) of Chapter 3 of Part 51 of Division 7 of Title 3, the minimum standard shall be increased appropriately by the number of office hours required annually for the class of employees. (d) The board has final authority to determine full time for purposes of crediting service under this part if full time is not otherwise specified in this section. (e) This section shall become operative on July 1, 2013. Added Stats 2012 ch 829 § 2 (SB 114), effective January 1, 2013, operative July 1, 2013. Amended Stats 2013 ch 76 § 31 (AB 383), effective January 1, 2014, operative July 1, 2013. Former Sections: Former Ed C § 22138.5, similar to the present section, was added Stats 1995 ch 390 § 6 (AB 1122), operative July 1, 1996, amended Stats 1996 ch 634 § 23 (SB 2041); Stats 1998 ch 678 § 1 (AB 1166); Stats 1999 ch 939 § 15 (SB 1074); Stats 2000 ch 1025 § 3 (AB 816); Stats 2002 ch 375 § 2 (AB 2982); Stats 2003 ch 62 § 37 (SB 600) (ch 62 prevails), ch 859 § 2 (SB 627); Stats 2007 ch 323 § 1 (AB 757), effective 41

75) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM January 1, 2008; Stats 2012 ch 38 § 39 (SB 1016), effective June 27, 2012, ch 829 § 1 (SB 114), effective January 1, 2013, inoperative July 1, 2013, repealed January 1, 2014. Amendments 2013 Amendment: (1) Amended the last sentence of subd (a)(1) by substituting (a) “equals” for “equal”; and (b) “and make” for “, shall make”; and (2) deleted former subd (b)(4) which read: “(4) Notwithstanding any other provision of this subdivision, if a school district, county office of education, or charter school reduces the number of days of instruction pursuant to Section 46201.4 for the 2012–13 or 2013–14 fiscal years, the minimum standard for full time specified in paragraph (1) shall be reduced to the number of days of instruction provided by that school district, county office of education, or charter school and the number of hours of instruction equal to the number of days of instruction times six. The minimum standard for full time specified in paragraphs (2) and (3) for that school district, county office of education, or charter school shall be reduced by the same percentage of days and hours the standard specified in paragraph (1) was reduced pursuant to this paragraph.” § 22138.5. “Full-time”; Minimum standard for kindergarten through grade 12; Minimum standard for community colleges (Second of two; Operative July 1, 2013) (a) (1) “Full time” means the days or hours of creditable service the employer requires to be performed by a class of employees in a school year in order to earn the compensation earnable as defined in Section 22115 and specified under the terms of a collective bargaining agreement or employment agreement. For the purpose of crediting service under this part, “full time” may not be less than the minimum standard specified in this section. Each collective bargaining agreement or employment agreement that applies to a member subject to the minimum standard specified in either paragraph (5) or (6) of subdivision (c) shall specify the number of hours of creditable service that equal “full time” pursuant to this section for each class of employee subject to either paragraph, shall make specific reference to this section, and the district shall submit a copy of the agreement to the system. (2) The copies of each agreement shall be submitted electronically in a format determined by the system that ensures the security of the transmitted member data. (3) The copies shall be electronically submitted annually to the system on or before July 1, or on or before the effective date of the agreement, whichever is later. (b) The minimum standard for full time in prekindergarten through grade 12 is as follows: (1) One hundred seventy-five days per year or 1,050 hours per year, except as provided in paragraphs (2) and (3). (2) (A) One hundred ninety days per year or 1,520 hours per year for all principals and program managers, including advisers, coordinators, consultants, and developers or planners of curricula, instructional materials, or programs, and for administrators, except as provided in subparagraph (B). (B) Two hundred fifteen days per year or 1,720 hours per year including school and legal holidays pursuant to the policy adopted by the employer’s governing board for administrators at a county office of education. (3) One thousand fifty hours per year for teachers in adult education programs. (4) Notwithstanding any other provision of this subdivision, if a school district, county office of education, or charter school reduces the number of days of instruction pursuant to Section 46201.4 for the 2012–13 or 2013–14 fiscal years, the minimum standard for full time specified in paragraph (1) shall be reduced to the number of days of instruction provided by that school district, county office of education, or charter school and the number of hours of instruction equal to the number of days of instruction times six. The minimum standard for full time specified in paragraphs (2) and (3) for that school district, county office of education, or charter school shall be reduced by the same percentage of days and hours the standard specified in paragraph (1) was reduced pursuant to this paragraph. (c) The minimum standard for full time in community colleges is as follows: (1) One hundred seventy-five days per year or 1,050 hours per year, except as provided in paragraphs (2), (3), (4), (5), and (6). Full time includes time for duties the employer requires to be performed as part of the full-time assignment for a particular class of employees. 42

76) PART 13, CHAPTER 2 (2) One hundred ninety days per year or 1,520 hours per year for all program managers and for administrators, except as provided in paragraph (3). (3) Two hundred fifteen days per year or 1,720 hours per year including school and legal holidays pursuant to the policy adopted by the employer’s governing board for administrators at a district office. (4) One hundred seventy-five days per year or 1,050 hours per year for all counselors and librarians. (5) Five hundred twenty-five instructional hours per school year for all instructors employed on a part-time basis, except instructors specified in paragraph (6). If an instructor receives compensation for office hours pursuant to Article 10 (commencing with Section 87880) of Chapter 3 of Part 51 of Division 7 of Title 3, the minimum standard shall be increased appropriately by the number of office hours required annually for the class of employees. (6) Eight hundred seventy-five instructional hours per school year for all instructors employed in adult education programs. If an instructor receives compensation for office hours pursuant to Article 10 (commencing with Section 87880) of Chapter 3 of Part 51 of Division 7 of Title 3, the minimum standard shall be increased appropriately by the number of office hours required annually for the class of employees. (d) The board has final authority to determine full time for purposes of crediting service under this part if full time is not otherwise specified in this section. (e) This section shall become operative on July 1, 2013. Added Stats 2012 ch 829 § 2 (SB 114), effective January 1, 2013, operative July 1, 2013. § 22138.6. “Full–time equivalent” “Full–time equivalent” means the days or hours of creditable service that a person who is employed on a part–time basis would be required to perform in a school year if he or she were employed full time in that part–time position. Added by Stats 1995 ch 390 § 7 (AB 1122), operative July 1, 1996. Amended by Stats 1998 ch 965 § 6 (AB 2765); Stats 2001 ch 803 § 3 (SB 501). Amendments 1998 Amendment: Substituted (1) “days or hours of creditable service” for “time”; and (2) “perform” for “serve” after “required to”. 2001 Amendment: Added “part–time” before “position” at the end. § 22139.5. “Gain and Loss Reserve” “Gain and Loss Reserve” means a segregated account within the retirement fund that is established and maintained to do either of the following: (a) Credit interest to members’ Defined Benefit Supplement accounts at the minimum interest rate for plan years in which the board determines that the obligation cannot be met from the plan’s investment earnings with respect to the Defined Benefit Supplement Program. (b) Provide additions to the Annuitant Reserve to meet the plan’s obligation for annuities payable under the Defined Benefit Supplement Program. Added by Stats 2000 ch 74 § 14 (AB 1509). § 22140. “Improvement factor” (2% increase) (a) “Improvement factor,” with respect to the Defined Benefit Program, means an increase of 2 percent in monthly allowances. The improvement factor shall be added to a monthly allowance each year on September 1, commencing on September 1 following the first anniversary of the effective date of 43

77) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM retirement, or the date on which the monthly allowance commenced to accrue to any beneficiary, or other periods specifically stated in this part. (b) The improvement factor may not be compounded nor shall it be applicable to annuities payable from the accumulated annuity deposit contributions or the accumulated tax-sheltered annuity contributions. (c) Beginning July 1, 2014, the improvement factor shall vest for an active member in any calendar year in which active members paid increased member contributions pursuant to Section 22901.7. (d) If, for any reason, the increased employee contribution referenced in subdivision (c), and as required by subdivisions (a) and (b) of Section 22901.7, ceases to be legally required to be made pursuant to the act that added this subdivision, then the Legislature reserves the right to adjust the amount of the improvement factor up or down as the economic conditions dictate for all members who retire on or after January 1, 2014. No adjustments of the improvement factor shall reduce the monthly retirement allowance or benefit below that which would be payable to the recipient under this part had this section not been enacted. (e) For members who retired before the calendar year in which Section 22901.7 was added the Legislature reserves the right to adjust the amount of the improvement factor up or down as economic conditions dictate. Any adjustment of the improvement factor may not reduce the monthly retirement allowance or annuity below that which would be payable to the recipient under this part had this section not been enacted. Added Stats 1994 ch 933 § 3 (AB 3171), effective September 27, 1994. Amended Stats 1996 ch 634 § 23.5 (SB 2041); Stats 2000 ch 74 § 15 (AB 1509); Stats 2002 ch 375 § 3 (AB 2982); Stats 2014 ch 47 § 2 (AB 1469), effective June 24, 2014. Former Sections: Former § 22140, similar to present Ed C § 22141, was added Stats 1993 ch 893 § 2 and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Former § 22140, similar to present Ed C § 22155, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1993 ch 893 § 1. Historical Derivation: (a) Former Ed C § 22131, enacted Stats 1976 ch 1010 § 2. (b) Former Ed C § 22139, as added Stats 1993 ch 893 § 2. Amendments 1996 Amendment: Amended the first sentence by substituting (1) “date of retirement, or the date on which the” for “retirement date, or the date on which”; and (2) “retired member” for “retirant” after “other than a”. 2000 Amendment: (1) Substituted subd (a) for the former first sentence which read: “ ‘Improvement factor’ means an increase of 2 percent in benefits for each year commencing on September 1, following the first anniversary of the effective date of retirement, or the date on which the monthly benefits commenced to accrue to any beneficiary other than a retired member or other periods specifically stated in this part.”; (2) added subd (b); (3) designated the former second, third, and fourth sentences to be subd (c); and (4) amended subd (c) by (a) adding “improvement” in the first sentence; and (b) substituting “annuity” for “benefit” after “allowance or” in the last sentence. 2002 Amendment: (1) Deleted former subd (b) which read: “(b) ‘Improvement factor,’ with respect to the Defined Benefit Supplement Program, means an increase of 2 percent in monthly annuities. The improvement factor shall be added to a monthly annuity each year on September 1, commencing on the September 1 following the first anniversary of the date the annuity first became payable.”; (2) redesignated former subd (c) to be subd (b); and (3) amended subd (b) by substituting (a) “may” for “shall” after “The improvement factor” in the first sentence; and (b) “Any adjustment of the improvement factor may not” for “No adjustment of the improvement factor shall” in the last sentence. 2014 Amendment: (1) Deleted the former last two sentences of subd (b) which read: “The Legislature reserves the right to adjust the amount of the improvement factor up or down as economic conditions dictate. Any adjustment of the improvement factor may not reduce the monthly retirement allowance or annuity below that which would be payable to the recipient under this part had this section not been enacted.”; and (2) added subds (c)–(e). 44

78) PART 13, CHAPTER 2 § 22141. “Improvement factor” as increase of minimum unmodified allowance (a) Notwithstanding Section 22140, “improvement factor” means an increase of 2 percent in benefits provided under Sections 24408 and 24409 for each year commencing on September 1, 1981, and under Section 24410.5 for each year commencing September 1, 2001, and under Sections 24410.6 and 24110.7 for each year commencing September 1, 2002. The factor shall not be compounded nor shall it be applicable to annuities payable from the accumulated annuity deposit contributions or the accumulated tax-sheltered annuity contributions. The Legislature reserves the right to adjust the amount of the improvement factor up or down as the economic conditions dictate. No adjustments of the improvement factor shall reduce the monthly retirement allowance or benefit below that which would be payable to the recipient under this part had this section not been enacted. (b) Beginning July 1, 2014, the improvement factor shall vest for an active member in any calendar year in which active members paid increased member contributions pursuant to Section 22901.7. (c) If, for any reason, the increased employee contribution referenced in subdivision (b), and as required by subdivisions (a) and (b) of Section 22901.7, ceases to be legally required to be made pursuant to the act that added this subdivision, then the Legislature reserves the right to adjust the amount of the improvement factor up or down as the economic conditions dictate for all members who retire on or after January 1, 2014. No adjustments of the improvement factor shall reduce the monthly retirement allowance or benefit below that which would be payable to the recipient under this part had this section not been enacted. (d) For members who retired before the calendar year in which Section 22901.7 was added, the Legislature reserves the right to adjust the amount of the improvement factor up or down as the economic conditions dictate. No adjustments of the improvement factor shall reduce the monthly retirement allowance or benefit below that which would be payable to the recipient under this part had this section not been enacted. Added Stats 1994 ch 933 § 3 (AB 3171), effective September 27, 1994. Amended Stats 2000 ch 1025 § 4 (AB 816), ch 1026 § 1 (SB 1505), ch 1027 § 1 (AB 429); Stats 2014 ch 47 § 3 (AB 1469), effective June 24, 2014. Former Sections: Former § 22141, similar to present § 22120, was added Stats 1993 ch 893 § 2 and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Former § 22141, similar to present § 22157, was added Stats 1977 ch 36 § 411, effective April 29, 1977, operative April 30, 1977, as § 22141.5, amended and renumbered by Stats 1977 ch 37 § 5, effective April 29, 1977, operative April 30, 1977, Stats 1981 ch 124 § 15, and repealed Stats 1993 ch 893 § 1. Former § 22141, similar to present § 22157, was added Stats 1977 ch 36 § 410.5, effective April 29, 1977, operative April 30, 1977, and repealed Stats 1977 ch 37 § 4, effective April 29, 1977, operative April 30, 1977. Former § 22141, similar to present § 22157, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1977 ch 36, effective April 29, 1977, operative April 30, 1977. Historical Derivation: (a) Former § 22131.1, as added Stats 1982 ch 1314 § 1. (b) Former § 22140, as added Stats 1993 ch 893 § 2. Amendments 2000 Amendment: Added “, and under Section 24410.5 for each year commencing September 1, 2001, and under Sections 24410.6 and 24110.7 for each year commencing September 1, 2002” at the end of the first sentence. 2014 Amendment: Added (1) subdivision designation (a); and (2) subds (b)–(d). § 22142. “Indexed final compensation” “Indexed final compensation” means final compensation upon which a disability allowance or disability retirement allowance was based, adjusted annually from the school year in which an allowance 45

79) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM begins to accrue by the rate of change in the average compensation earnable as determined by the board. Added by Stats 1994 ch 933 § 3 (AB 3171), effective September 27, 1994. Former Sections: Former § 22142, similar to present § 22162, was added Stats 1993 ch 893 § 2 and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Former § 22142, similar to present § 22157, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, amended Stats 1977 ch 36 § 97, effective April 29, 1977, operative April 30, 1977, Stats 1981 ch 124 § 16, Stats 1992 ch 1167 § 4.5, and repealed Stats 1993 ch 893 § 1. Historical Derivation: (a) Former § 22131.5, as added Stats 1982 ch 1314 § 1, amended Stats 1992 ch 1166 § 4.5. (b) Former § 22134, as added Stats 1993 ch 893 § 2. § 22143. “Investment manager” and “investment adviser” “Investment manager” and “investment adviser” mean any person, firm, or custodian referred to in Section 22359, either appointed by or under contract with the board to engage in investment transactions or to manage or advise in the management of the assets of the Teachers’ Retirement Fund with respect to the Defined Benefit Program under this part and the Cash Balance Benefit Program under Part 14 (commencing with Section 26000). Added by Stats 1994 ch 933 § 3 (AB 3171), effective September 27, 1994. Amended by Stats 1996 ch 634 § 24 (SB 2041); Stats 1998 ch 965 § 6.5 (AB 2765). Former Sections: Former § 22143, similar to present Ed C § 22159, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, repealed and added Stats 1993 ch 893 §§ 1, 2 (ch 920 prevails), amended Stats 1993 ch 920 § 1, and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Historical Derivation: Former Ed C § 22131.7, as added Stats 1987 ch 330 § 1. Amendments 1996 Amendment: Added “and the Cash Balance Fund under Part 14 (commencing with Section 26000)”. 1998 Amendment: (1) Added “with respect to the Defined Benefit Program under this part”; and (2) substituted “Cash Balance Benefit Program” for “Cash Balance Fund”. § 22144. “Investment transactions” “Investment transactions” means investment services of an asset management or investment advisory nature and may include advisory services, research material, trading assistance, trading expenses, discretionary management of funds of the plan upon approval by the board, acquisition of equipment to be used as part of the investment function, services that provide a recommended course of action or personal expertise, investment–related legal expenses, investment–related contracting expenses, or custodian services referred to in Section 22359. Added by Stats 1994 ch 933 § 3 (AB 3171), effective September 27, 1994. Amended by Stats 1996 ch 634 § 25 (SB 2041). Former Sections: Former § 22144, similar to the present section, was added Stats 1993 ch 893 § 2 and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Former § 22144, similar to present Ed C § 22161, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1993 ch 893 § 1. Historical Derivation: Former Ed C § 22131.8, as added Stats 1987 ch 330 § 2. 46

80) PART 13, CHAPTER 2 Amendments 1996 Amendment: Substituted “plan” for “system” after “of funds of the”. § 22144.5. “Liability gains and losses” “Liability gains and losses” means the difference between actual noninvestment related experience and the experience expected based upon a set of noninvestment related actuarial assumptions during the period between two actuarial valuation dates, as determined in accordance with assumptions adopted by the board pursuant to Section 22311.5. Added by Stats 2000 ch 1021 § 6 (AB 2700). § 22145. “Local system” “Local system” means any retirement system, exclusive of this system, in which public school teachers are members, operated by a city, county, or other political subdivision of the state. Added by Stats 1994 ch 933 § 3 (AB 3171), effective September 27, 1994. Former Sections: Former § 22145, similar to the present section, was added Stats 1993 ch 893 § 2 and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Former § 22145, similar to present § 22162, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, amended Stats 1982 ch 279 § 2, and repealed Stats 1993 ch 893 § 1. Historical Derivation: (a) Former § 22132, enacted Stats 1976 ch 1010 § 2. (b) Former § 22145, as added Stats 1993 ch 893 § 2. § 22146. “Member”; Active member; Inactive member; Disabled member; Retired member “Member” means any person, unless excluded under other provisions of this part, who has performed creditable service as defined in Section 22119.5 and has earned creditable compensation for that service and has not received a refund for that service and, as a result, is subject to the Defined Benefit Program. A member’s rights and obligations under this part with respect to the Defined Benefit Program shall be determined by the applicability of subdivision (a), (b), (c), or (d), and subject to any applicable exceptions under other provisions of this part. (a) An active member is a member who is not retired or disabled and who earns creditable compensation during the school year. (b) An inactive member is a member who is not retired or disabled and who has not earned creditable compensation during the current or preceding school year. (c) A disabled member is a member to whom a disability allowance is payable under Chapter 25 (commencing with Section 24001). (d) A retired member is a member who has terminated employment and has retired for service under the provisions of Chapter 27 (commencing with Section 24201), or has retired for disability under the provisions of Chapter 26 (commencing with Section 24100) or retired for service or disability under the provisions of Chapter 21 (commencing with Section 23400), and to whom a retirement allowance is therefore payable. Added by Stats 1995 ch 592 § 3 (AB 1298). Amended by Stats 1996 ch 634 § 26 (SB 2041); 1998 ch 965 § 7 (AB 2765); Stats 2000 ch 1025 § 5 (AB 816); Stats 2003 ch 859 § 3 (SB 627). Former Sections: Former § 22146, similar to the present section, was added Stats 1994 ch 933 § 3, effective September 27, 1994, and repealed Stats 1995 ch 592 § 2. 47

81) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM Former § 22146, similar to the present section, was added Stats 1993 ch 893 § 2 and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Former § 22146, similar to present Ed C § 22120, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1993 ch 893 § 1. Historical Derivation: Former Ed C § 22133, enacted Stats 1976 ch 1010 § 2. Amendments 1996 Amendment: (1) Amended the first paragraph by deleting (a) subdivision designation (a); (b) “for an employer” after “Section 22119.5” in the first sentence; and (c) “to the member during a school year” after “subdivision (a), (b), (c), or (d)” in the second sentence; (2) redesignated former subds (b)–(e) to be subds (a)–(d); and (3) added “is not retired or disabled and who” in subds (a) and (b). 2000 Amendment: Amended subd (b) by (1) deleting “, by the pay period ending June 30,” after “and who”; and (2) adding “immediately prior to and the school year during which the member retires for service”. 2003 Amendment: Substituted “current or preceding school year” for “school year immediately prior to and the school year during which the member retires for service” in subd (b). § 22146.2. “Member subject to the California Public Employees’ Pension Reform Act of 2013” (a) Notwithstanding subdivision (f) of Section 7522.04 of the Government Code, “member subject to the California Public Employees’ Pension Reform Act of 2013” means a person who first becomes employed to perform creditable service subject to coverage under the Defined Benefit Program on or after January 1, 2013. (b) A member as defined in subdivision (a) does not include a person who was a member on or before December 31, 2012, of the California Public Employees’ Retirement System, the Legislators’ Retirement System, the University of California Retirement System, a county retirement system established under Chapter 3 (commencing with Section 31450) of Part 3 of Division 4 of Title 3 of the Government Code, or the San Francisco Employees’ Retirement System, and the person performed service in the other retirement system within the six months prior to the commencement of creditable service under the Defined Benefit Program. (c) This section shall be deemed to have become operative on January 1, 2013. Added Stats 2013 ch 559 § 9 (AB 1381), effective January 1, 2014. Note—Stats 2013 ch 559, as amended by Stats 2014 ch 755 § 81, provides: SECTION 1. The Legislature finds and declares that this act, as it applies to the State Teachers’ Retirement Plan, clarifies the California Public Employees’ Pension Reform Act of 2013, is declaratory of existing law, and is intended to apply concurrently with the initial operation of that act. The amendments made by this act, excluding those amendments made in Sections 4, 12, 28, 29, 30, and 36 shall be deemed to be operative January 1, 2013, unless otherwise stated. § 22146.5. “Membership” “Membership” means membership in the Defined Benefit Program, except as otherwise specifically provided in this part. Added by Stats 1996 ch 634 § 27 (SB 2041). Amended by Stats 1998 ch 965 § 8 (AB 2765). Amendments 1998 Amendment: Substituted “Defined Benefit Program” for “Defined Benefit Plan”. 48

82) PART 13, CHAPTER 2 § 22146.7. “Minimum interest rate” “Minimum interest rate” means the annual interest rate determined by the board by plan amendment at which interest shall be credited to Defined Benefit Supplement accounts for a plan year. Added by Stats 2000 ch 74 § 16 (AB 1509), ch 1021 § 7 (AB 2700). § 22147. “Month” (a) “Month” means 20 working days or four weeks of five working days each, including legal holidays, with respect to the computation and crediting of service. (b) “Month,” for all other purposes, means a period commencing on any day of a calendar month and extending through the day preceding the corresponding day of the succeeding calendar month, if there is any such corresponding day, and if not, through the last day of the succeeding calendar month. Added by Stats 1994 ch 933 § 3 (AB 3171), effective September 27, 1994. Amended by Stats 1998 ch 965 § 9 (AB 2765). Former Sections: Former § 22147, similar to the present section, was added Stats 1993 ch 893 § 2 and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Former § 22147, similar to present § 22168, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, amended Stats 1981 ch 124 § 17, and repealed Stats 1993 ch 893 § 1. Historical Derivation: Former § 22134, enacted Stats 1976 ch 1010 § 2. Amendments 1998 Amendment: Added “working” both times it appears in subd (a). § 22147.5. “Nonqualified service” “Nonqualified service” means any time during which a member did not perform creditable service subject to coverage by the plan. Nonqualified service shall not include time for which the member is eligible to purchase credit pursuant to Chapter 14 (commencing with Section 22800), Chapter 14.2 (commencing with Section 22820), or Chapter 14.5 (commencing with Section 22850). Added by Stats 1998 ch 1076 § 3 (SB 2126). Amended by Stats 1999 ch 939 § 16 (SB 1074); Stats 2000 ch 1025 § 6 (AB 816). Amendments 2000 Amendment: Substituted the section for the former section which read: “ ‘Nonqualified service’ means time during which creditable service subject to coverage by the Defined Benefit Program is not performed, excluding time a member is eligible to purchase as permissive or additional service credit pursuant to Chapter 14 (commencing with Section 22800), Chapter 14.2 (commencing with Section 22820), and Chapter 14.5 (commencing with Section 22850).” § 22148. “Normal retirement” and “normal retirement age” “Normal retirement” and “normal retirement age” mean 60 years of age, or 62 years of age for a member subject to the California Public Employees’ Pension Reform Act of 2013, which is the age upon attainment of which the member becomes eligible under the Defined Benefit Program for a service retirement allowance without reduction because of age and without special qualifications. Added by Stats 1994 ch 933 § 3 (AB 3171), effective September 27, 1994. Amended by Stats 1996 ch 634 § 28 (SB 2041); Stats 1999 ch 939 § 17 (SB 1074); Stats 2000 ch 1025 § 7 (AB 816); Stats 2013 ch 559 § 10 (AB 1381), effective January 1, 2014. 49

83) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM Note—Stats 2013 ch 559, as amended by Stats 2014 ch 755 § 81, provides: SECTION 1. The Legislature finds and declares that this act, as it applies to the State Teachers’ Retirement Plan, clarifies the California Public Employees’ Pension Reform Act of 2013, is declaratory of existing law, and is intended to apply concurrently with the initial operation of that act. The amendments made by this act, excluding those amendments made in Sections 4, 12, 28, 29, 30, and 36 shall be deemed to be operative January 1, 2013, unless otherwise stated. Former Sections: Former § 22148, similar to the present section, was added Stats 1993 ch 893 § 2 and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Former § 22148, similar to present Ed C § 22165, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, amended Stats 1977 ch 659 § 3.5, Stats 1978 ch 502 § 3, Stats 1981 ch 124 § 18, and repealed Stats 1993 ch 893 § 1. Historical Derivation: Former Ed C § 22134.5, as added Stats 1977 ch 659 § 3, amended Stats 1987 ch 330 § 4. Amendments 1996 Amendment: Substituted “which is” for “and are” after “60 years”. 2000 Amendment: Added “under the Defined Benefit Program”. 2013 Amendment: Substituted “60 years of age, or 62 years of age for a member subject to the California Public Employees’ Pension Reform Act of 2013” for “the age of 60 years”. § 22149. “Option beneficiary” “Option beneficiary” means the person designated by a member to receive a retirement allowance under the Defined Benefit Program upon the member’s death. Added by Stats 1994 ch 933 § 3 (AB 3171), effective September 27, 1994. Amended by Stats 1996 ch 634 § 29 (SB 2041); Stats 2000 ch 1025 § 8 (AB 816). Former Sections: Former § 22149, similar to the present section, was added Stats 1993 ch 893 § 2 and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Former § 22149, similar to present Ed C § 22164, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1993 ch 893 § 1. Historical Derivation: Former Ed C § 22134.7, as added Stats 1981 ch 124 § 13. Amendments 1996 Amendment: Deleted “retirant’s or a” after “allowance upon a”. 2000 Amendment: Substituted the section for the former section which read: “ ‘Option beneficiary’ means a person designated to receive an actuarially reduced retirement allowance upon a member’s death.” § 22150. “Other public systems” “Other public systems” means any of the following: (a) Old age, survivors, disability, and health insurance program, other than the lump–sum death payment, provided by the Social Security Act (42 U.S.C.A. Sec. 300 and following). (b) The federal civil service retirement program. (c) Federal military disability. (d) Railroad retirement. (e) A workers’ compensation program. (f) Federal railroad retirement. (g) Any other public retirement system, including, but not limited to, any disability programs financed from public funds. Added by Stats 1994 ch 933 § 3 (AB 3171), effective September 27, 1994. 50

84) PART 13, CHAPTER 2 Former Sections: Former § 22150, similar to the present section, was added Stats 1993 ch 893 § 2 and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Former § 22150, similar to the present § 22166, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, amended Stats 1981 ch 124 § 19, and repealed Stats 1993 ch 893 § 1. Historical Derivation: (a) Former § 22136, as enacted Stats 1976 ch 1010 § 2, amended Stats 1978 ch 502 § 2, Stats 1981 ch 124 § 14. (b) Former § 22150, as added Stats 1993 ch 893 § 2. Notes of Decisions Decisions Under Former § 22136 In an action by a private insurance company which had issued a group disability policy to a school district against the State Teachers’ Retirement System, seeking reimbursement from the system to the extent of permissible integration or offset of its benefits with those of defendant, the trial court erred in determining that the group disability policy issued to the school district by plaintiff was not a disability program financed from the public funds within the meaning of Ed. Code, §§ 24102 and 22136, providing that the State Teachers’ Retirement System benefits shall be reduced by an amount equal to the unmodified benefits payable under other disability programs financed from public funds. The record indicated the funds to pay the premiums under the policy offered by plaintiff were appropriated by the school district as an additional benefit provided to its employees in lieu of a salary increase, and that no deductions from the employees’ pay checks were made to cover the cost of the premiums. Also, the premium payments were not included in the computations of the gross salaries of the covered employees, and no federal or state income taxes were paid by the employees on the premium payments. Industrial Indem. Co. v. Teachers’ Retirement Board (1978, Cal App 1st Dist) 86 Cal App 3d 92, 150 Cal Rptr 47, 1978 Cal App LEXIS 2052. § 22151. “Overtime” “Overtime” means the aggregate creditable service in excess of one year (1.000) of creditable service that is performed by a member in a school year. Added by Stats 1994 ch 933 § 3 (AB 3171), effective September 27, 1994. Amended by Stats 1998 ch 965 § 10 (AB 2765); Stats 2000 ch 1025 § 9 (AB 816); Stats 2001 ch 803 § 4 (SB 501). Former Sections: Former § 22151, similar to the present section, was added Stats 1993 ch 893 § 2 and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Former § 22151, similar to present § 22170, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, amended Stats 1980 ch 244 § 1, and repealed Stats 1993 ch 893 § 1. Historical Derivation: (a) Former § 22135, enacted Stats 1976 ch 1010 § 2. (b) Former § 22151, as added Stats 1993 ch 893 § 2. Amendments 1998 Amendment: Substituted “Defined Benefit Program” for “system”. 2000 Amendment: Substituted the section for the former section which read: “ ‘Overtime’ means the aggregate service performed as a member of the Defined Benefit Program in excess of the hours of work considered normal for employees on a full–time basis.” 2001 Amendment: Substituted “member” for “person”. § 22152. “Parent” “Parent” means a natural parent of a member or a parent who adopted the member prior to his or her attainment of 18 years of age or to the member’s marriage, whichever occurs earlier. Added by Stats 1994 ch 933 § 3 (AB 3171), effective September 27, 1994. 51

85) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM Former Sections: Former § 22152, similar to the present section, was added Stats 1993 ch 893 § 2 and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Former § 22152, similar to present § 22171, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1993 ch 893 § 1. Historical Derivation: (a) Former § 22137, as enacted Stats 1976 ch 1010 § 2. (b) Former § 22152, as added Stats 1993 ch 893 § 2. § 22154. “Pay period” “Pay period” means a payroll period of not less than four weeks or more than one calendar month. Added by Stats 1994 ch 933 § 3 (AB 3171), effective September 27, 1994. Amended by Stats 1998 ch 965 § 11 (AB 2765). Former Sections: Former § 22154, similar to the present section, was added Stats 1993 ch 893 § 2, and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Former § 22154, relating to tax–sheltered annuity contributions, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1978 ch 870 § 2, operative July 1, 1979. Historical Derivation: (a) Former § 22139, enacted Stats 1976 ch 1010 § 2. (b) Former § 22607, enacted Stats 1976 ch 1010 § 2. § 22155. “Payroll” “Payroll” includes registers, warrants, and any other documents upon which the employer identifies persons to whom compensation is paid. Added by Stats 1994 ch 933 § 3 (AB 3171), effective September 27, 1994. Amended by Stats 1997 ch 482 § 5 (SB 471). Former Sections: Former § 22155, similar to the present section, was added Stats 1993 ch 893 § 2 and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Former § 22155, similar to present § 22172, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1993 ch 893 § 1. Historical Derivation: (a) Former § 22140, enacted Stats 1976 ch 1010 § 2. (b) Former § 22155, as added Stats 1993 ch 893 § 2. Amendments 1997 Amendment: Substituted “the employer identifies persons to whom compensation is paid” for “all persons receiving salary payments are listed” § 22155.5. “Plan” “Plan” means the State Teachers’ Retirement Plan. Added by Stats 1996 ch 634 § 18 (SB 2041). Amended by Stats 1998 ch 1048 § 4 (SB 2085). Former Sections: Former § 22155.5, similar to present Ed C § 22173, was added Stats 1992 ch 1166 § 6, effective September 29, 1992, and repealed Stats 1993 ch 893 § 1. Amendments 1998 Amendment: Substituted “State Teachers’ Retirement Plan” for “State Teachers’ Retirement System Defined Benefit Plan as set forth in this part”. 52

86) PART 13, CHAPTER 2 § 22156. “Plan vesting” “Plan vesting,” with respect to benefits payable under the Defined Benefit Program, means the member has met the credited service requirement for receipt of a benefit, and has a right to receive the benefit at a future date provided all other conditions required to receive the benefit are also met. Added by Stats 1994 ch 933 § 3 (AB 3171), effective September 27, 1994. Amended by Stats 1996 ch 634 § 32 (SB 2041); Stats 1998 ch 965 § 12 (AB 2765); Stats 2000 ch 1025 § 10 (AB 816). Former Sections: Former § 22156, similar to present Ed C § 22157, was added Stats 1993 ch 893 § 2 and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Former § 22156, similar to present Ed C § 22174, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1993 ch 893 § 1. Historical Derivation: (a) Former Ed C § 22157, as enacted Stats 1976 ch 1010 § 2. (b) Former Ed C § 22173, as added Stats 1993 ch 893 § 2. Amendments 1996 Amendment: Added “retirement” after “his or her accumulated”. 2000 Amendment: Substituted the section for the former section which read: “ ‘Plan vesting’ means the right of the member upon completion of the minimum number of required years of credited service provided in the Defined Benefit Program to entitle the member or his or her beneficiary to a monthly retirement allowance, disability allowance, survivor benefit allowance, family allowance, or death benefit at a future date, prior to the completion of which the member upon resignation from service is entitled only to a refund of his or her accumulated retirement contributions as provided in this part.” § 22156.05. “Plan year” “Plan year” means the period of time beginning on July 1 of one calendar year and ending on June 30 of the following calendar year. For purposes of the Defined Benefit Supplement Program, the board shall designate by plan amendment the initial plan year. Added by Stats 2000 ch 74 § 17 (AB 1509). § 22156.1. “Present value” “Present value,” for purposes of Section 22718, means the amount of money needed on the effective date of retirement to reimburse the system for the actuarially determined cost of the portion of a member’s retirement allowance attributable to unused excess sick leave days. The present value on the effective date of retirement shall equal the number of unused excess sick leave days divided by the number of base days, multiplied by the prior year’s compensation earnable multiplied by the present value factor. Added by Stats 1999 ch 939 § 18 (SB 1074). Amended by Stats 2000 ch 1025 § 11 (AB 816). Amendments 2000 Amendment: Substituted “Section 22718” for “Section 22723” in the first sentence. § 22156.2. “Present value factor” “Present value factor,” for purposes of Section 22156.1, means an overall average rate based upon the demographics of members who recently retired under the Defined Benefit Program and regular interest that shall determine present value on the effective date of retirement. Added by Stats 1999 ch 939 § 19 (SB 1074). 53

87) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM § 22156.5. “Prior year’s compensation earnable” “Prior year’s compensation earnable” means the compensation earnable for the most recent school year in which the member earned service credit that precedes the last school year in which the member earned service credit. Added by Stats 1999 ch 939 § 20 (SB 1074). § 22157. “Projected final compensation” “Projected final compensation” means the final compensation used in computing the disability or family allowance increased by 2 percent, compounded annually to the earlier of normal retirement age or the date the disability allowance is terminated. Added by Stats 1994 ch 933 § 3 (AB 3171), effective September 27, 1994. Former Sections: Former § 22157, similar to present § 22158, was added Stats 1993 ch 893 § 2 and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Former § 22157, similar to present § 22156, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1993 ch 893 § 1. Historical Derivation: (a) Former § 22141, as enacted Stats 1976 ch 1010 § 2. (b) Former § 22141, as added Stats 1977 ch 36 § 410.5. (c) Former § 22141, as added Stats 1977 ch 36 § 411 as § 22141.5, amended and renumbered by Stats 1977 ch 37 § 5, amended Stats 1981 ch 124 § 15, Stats 1992 ch 1166 § 5, Stats 1992 ch 1167 § 4.4. (d) Former § 22156, as added Stats 1993 ch 893 § 2. § 22158. “Projected service” (a) “Projected service” means the sum of credited service plus the credited service that would have been earned for the school years during which a disability allowance was payable if the member had performed creditable service during that time. (b) Projected service for a school year shall be determined on the basis of the highest credited service earned by the member during any one of the three school years immediately preceding the member’s death or the date the disability allowance began to accrue. (c) Projected service shall not include credited service for which contributions have been credited to the Defined Benefit Supplement Program. Added by Stats 2000 ch 1021 § 9 (AB 2700). Former Sections: Former § 22158, similar to the present section, was added Stats 1994 ch 933 § 3, effective September 27, 1994, amended Stats 1996 ch 634 § 33, and repealed Stats 2000 ch 1021 § 8. Former § 22158, similar to present Ed C § 22159, was added Stats 1993 ch 893 § 2 and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Former § 22158, similar to present Ed C § 22160, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1993 ch 893 § 1. Historical Derivation: (a) Former Ed C § 22142, as enacted Stats 1976 ch 1010 § 2, amended Stats 1977 ch 36 § 97, Stats 1981 ch 124 § 16, Stats 1992 ch 1167 § 4.5. (b) Former Ed C § 22157, as added Stats 1993 ch 893 § 2. § 22159. “Proof of death” “Proof of death” means providing to the system any evidence of death required by the system. Added by Stats 1994 ch 933 § 3 (AB 3171), effective September 27, 1994. 54

88) PART 13, CHAPTER 2 Former Sections: Former § 22159, similar to present § 22161, was added Stats 1993 ch 893 § 2 and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Former § 22159, similar to present § 22138, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1993 ch 893 § 1. Historical Derivation: (a) Former § 22143, as enacted Stats 1976 ch 1010 § 2. (b) Former § 22143, as added Stats 1993 ch 893 § 2. (c) Former § 22158, as added Stats 1993 ch 893 § 2. § 22160. “Provisional vesting” “Provisional vesting” means the member has reached the minimum age requirement and has attained the credited service required under the Defined Benefit Program for eligibility to receive a retirement allowance, and the member is entitled to terminate employment and retire at any time to receive a retirement allowance. Added by Stats 1994 ch 933 § 3 (AB 3171), effective September 27, 1994. Amended by Stats 2000 ch 1025 § 12 (AB 816). Historical Derivation: (a) Former § 22158, as enacted Stats 1976 ch 1010 § 2. (b) Former § 22174, as added Stats 1993 ch 893 § 2. Amendments 2000 Amendment: Substituted the section for the former section which read: “ ‘Provisional vesting’ means the right of the member upon the completion of the minimum number of years of credited service and attainment of the minimum specified age after which the member may retire at any time and be entitled to receive a monthly retirement allowance.” § 22160.5. “Public employer” “Public employer” means a public employer as defined in subdivision (i) of Section 7522.04 of the Government Code. Added Stats 2013 ch 559 § 11 (AB 1381), effective January 1, 2014. Note—Stats 2013 ch 559, as amended by Stats 2014 ch 755 § 81, provides: SECTION 1. The Legislature finds and declares that this act, as it applies to the State Teachers’ Retirement Plan, clarifies the California Public Employees’ Pension Reform Act of 2013, is declaratory of existing law, and is intended to apply concurrently with the initial operation of that act. The amendments made by this act, excluding those amendments made in Sections 4, 12, 28, 29, 30, and 36 shall be deemed to be operative January 1, 2013, unless otherwise stated. § 22161. “Public school” “Public school” means any day or evening elementary school, any day or evening secondary school, community college, technical school, kindergarten school, and prekindergarten school established by the Legislature, or by municipal or district authority. Added by Stats 1994 ch 933 § 3 (AB 3171), effective September 27, 1994. Amended by Stats 1998 ch 965 § 13 (AB 2765); Stats 1999 ch 939 § 21 (SB 1074). Former Sections: Former § 22161, similar to present § 22164, was added Stats 1993 ch 893 § 2 and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Historical Derivation: (a) Former § 22144, as enacted Stats 1976 ch 1010 § 2. (b) Former § 22159, as added Stats 1993 ch 893 § 2. 55

89) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM Amendments 1998 Amendment: Substituted “school” for “schools” the second through sixth times it appears. 1999 Amendment: Substituted “any day or” for “and any day and” after “school,”. § 22161.3. “Qualified military service” Qualified military service is military service as defined in Section 414(u) of Title 26 of the United States Code. Added Stats 2011 ch 703 § 1 (SB 349), effective January 1, 2012. § 22161.5. “Refund” “Refund” means the lump–sum return of a member’s accumulated retirement contributions under the Defined Benefit Program and does not include the balance of credits in the member’s Defined Benefit Supplement account. Added by Stats 1996 ch 634 § 34 (SB 2041). Amended by Stats 2000 ch 74 § 18 (AB 1509), ch 1021 § 10 (AB 2700). Amendments 2000 Amendment: (1) Substituted “the lump–sum return of a” for “a lump–sum return of the”; and (2) added “under the Defined Benefit Program and does not include the balance of credits in the member’s Defined Benefit Supplement account” at the end. (As amended Stats 2000 ch 1021, compared to the section as it read prior to 2000. This section was also amended by an earlier chapter, ch 74. See Gov C § 9605.) § 22162. “Regular interest” “Regular interest” means interest that is equal to the actuarially assumed rate of return on investments on assets of the Defined Benefit Program. The regular interest rate shall be adopted annually by the board as a plan amendment with respect to the Defined Benefit Program. This section shall become operative on July 1, 2010. Added Stats 2009 ch 249 § 2 (AB 654), effective January 1, 2010, operative July 1, 2010. Former Sections: Former 22162, similar to the present section, was added Stats 2000 ch 74 § 20 (AB 1509), amended Stats 2009 ch 249 § 1 (AB 654), effective January 1, 2010, inoperative June 30, 2010, repealed January 1, 2011 by its own terms. Former § 22162, similar to the present section, was added Stats 1994 ch 933 § 3, effective September 27, 1994, amended Stats 1998 ch 965 § 14, and repealed Stats 2000 ch 74 § 19. Former § 22162, similar to present § 22165, was added Stats 1993 ch 893 § 2 and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Historical Derivation: (a) Former § 22142, as added Stats 1993 ch 893 § 2. (b) Former § 22145, as enacted Stats 1976 ch 1010 § 2, amended Stats 1982 ch 279 § 2. § 22162.5. “Regular meeting” “Regular meeting” means a meeting of the board held in accordance with a schedule of meetings that states the dates and places of the meetings and that is adopted by the board. Added by Stats 1996 ch 634 § 35 (SB 2041). 56

90) PART 13, CHAPTER 2 § 22163. “Reinstatement” “Reinstatement” means the change in status with respect to the Defined Benefit Program under this part from a disabled or retired member to an active or inactive member and termination of one of the following: (a) A service retirement allowance pursuant to Section 24208. (b) A disability retirement allowance pursuant to Section 24117. (c) A disability allowance pursuant to Section 24004, 24006, or 24015. (d) A service retirement allowance or disability retirement allowance pursuant to Section 23404. Added by Stats 1996 ch 634 § 37 (SB 2041). Amended by Stats 1998 ch 965 § 15 (AB 2765); Stats 1999 ch 939 § 22 (SB 1074); Stats 2000 ch 1025 § 13 (AB 816). Former Sections: Former § 22163, similar to the present section, was added Stats 1994 ch 933 § 3, effective September 27, 1994, and repealed Stats 1996 ch 634 § 36. Former § 22163, similar to present § 22166, was added Stats 1993 ch 893 § 2 and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Historical Derivation: Former § 22145.5, as added Stats 1993 ch 861 § 1. Former Ed C § 22163 as added Stats 1994 ch 933 § 3. Amendments 1998 Amendment: Substituted (1) “terminating” for “termination”; and (2) “the changing of status from a retired member to an inactive member or an active member” for “establishing status as an inactive member if service is not subsequently performed or establishing status as an active member if service is subsequently performed”. 1999 Amendment: Substituted the section for the former section which read: “ ‘Reinstatement’ means the terminating of a service or disability retirement allowance and the changing of status from a retired member to an inactive member or an active member.” 2000 Amendment: Added “, 24006,”. § 22164. “Replacement benefits program” “Replacement benefits program” means the program established pursuant to Chapter 27.5 (commencing with Section 24250) in compliance with the provisions of Section 415(m) of the Internal Revenue Code of 1986 (26 U.S.C. Sec. 415(m)) as applicable to a governmental plan, as defined in Section 414(d) of the Internal Revenue Code of 1986 (26 U.S.C. Sec. 414(d)). Added by Stats 1999 ch 465 § 1 (AB 819). Former Sections: Former § 22164, relating to section defined retirant, was added Stats 1994 ch 933 § 3, effective September 27, 1994 and repealed Stats 1996 ch 634 § 38 (SB 2041). Former § 22164, similar to present Ed C § 22167, was added Stats 1993 ch 893 § 2 and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Historical Derivation: (a) Former § 22149, as enacted Stats 1976 ch 1010 § 2. (b) Former § 22161, as added Stats 1993 ch 893 § 2. § 22164.5. “Retired member activities” (a) “Retired member activities” means one or more activities identified in subdivision (a) or (b) of Section 22119.5 or subdivision (a) or (b) of Section 26113 within the California public school system and performed by a member retired for service under this part as one of the following: (1) An employee of an employer. (2) An employee of a third party, except as specified in subdivision (b). (3) An independent contractor. 57

91) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM (b) The activities of an employee of a third party shall not be included in the definition of “retired member activities” if all of the following conditions apply: (1) The employee performs an assignment of 24 months or less. (2) The third-party employer does not participate in a California public pension system. (3) The activities performed by the individual are not normally performed by employees of an employer, as defined in Section 22131. Added Stats 2012 ch 296 § 2 (AB 340), effective January 1, 2013. Amended Stats 2013 ch 558 § 4 (AB 1379), effective January 1, 2014. Amendments 2013 Amendment: Substituted “an assignment of 24 months or less” for “a limited-term assignment” in subd (b)(1). § 22165. “Retirement” “Retirement” means termination of employment subject to coverage by the plan and a change in status from an inactive member, an active member, or a disabled member to a retired member. Added by Stats 1994 ch 933 § 3 (AB 3171), effective September 27, 1994. Amended by Stats 1996 ch 634 § 39 (SB 2041); Stats 1998 ch 965 § 16 (AB 2765); Stats 2000 ch 1025 § 14 (AB 816). Former Sections: Former § 22165, similar to present Ed C § 22168, was added Stats 1993 ch 893 § 2 and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Historical Derivation: (a) Former Ed C § 22148, as enacted Stats 1976 ch 1010 § 2, amended Stats 1977 ch 659 § 3.5, Stats 1978 ch 502 § 3, Stats 1981 ch 124 § 18. (b) Former Ed C § 22162, as added Stats 1993 ch 893 § 2. Amendments 1996 Amendment: Substituted the section for the former section which read: “ ‘Retirement’ means withdrawal from membership with a retirement allowance.” 1998 Amendment: Substituted (1) “a change in status from” for “termination of status as”; and (2) “a retired member” for “receive a retirement allowance”. 2000 Amendment: (1) Added “termination of employment subject to coverage by the plan and”; (2) substituted the comma for “or” after “inactive member”; and (3) added “, or a disabled member”. § 22166. “Retirement allowance” “Retirement allowance” means the amount payable to a retired member or an option beneficiary on a monthly basis. Added by Stats 1994 ch 933 § 3 (AB 3171), effective September 27, 1994. Amended by Stats 1996 ch 634 § 40 (SB 2041). Former Sections: Former § 22166, similar to present Ed C § 22169, was added Stats 1993 ch 893 § 2 and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Historical Derivation: (a) Former Ed C § 22150, as enacted Stats 1976 ch 1010 § 2, amended Stats 1981 ch 124 § 19. (b) Former Ed C § 22163, as added Stats 1993 ch 893 § 2. Amendments 1996 Amendment: Substituted the section for the former section which read: “ ’Retirement allowance’ means the monthly amounts payable to a retirant or the option beneficiary.” 58

92) PART 13, CHAPTER 2 § 22166.5. “Retirement benefit” “Retirement benefit” means the amount payable under the Defined Benefit Supplement Program, based on the balance of credits in the member’s Defined Benefit Supplement account, to a member who has retired for service under the Defined Benefit Program. Added by Stats 2000 ch 74 § 21 (AB 1509). § 22167. “Retirement fund” “Retirement fund” means the Teachers’ Retirement Fund. Added by Stats 1994 ch 933 § 3 (AB 3171), effective September 27, 1994. Former Sections: Former § 22167, similar to present § 22170, was added Stats 1993 ch 893 § 2 and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Historical Derivation: (a) Former § 22150.5, as added Stats 1981 ch 124 § 19.5. (b) Former § 22164, as added Stats 1993 ch 893 § 2. § 22168. “Return on investments” “Return on investments” means income received or receivable from the system’s investments. Added by Stats 1994 ch 933 § 3 (AB 3171), effective September 27, 1994. Former Sections: Former § 22168, similar to present § 22171, was added Stats 1993 ch 893 § 2 and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Historical Derivation: (a) Former § 22147, as enacted Stats 1976 ch 1010 § 2, amended Stats 1981 ch 124 § 17. § 22169. “School year” “School year” means the fiscal year or the academic year. Added by Stats 1994 ch 933 § 3 (AB 3171), effective September 27, 1994. Former Sections: Former § 22169, similar to present § 22172, was added Stats 1993 ch 893 § 2 and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Historical Derivation: (a) Former § 22150.7, as added Stats 1993 ch 560 § 1. (b) Former § 22166, as added Stats 1993 ch 893 § 2. § 22170. “Service” “Service” means work performed for compensation in a position subject to coverage under the Defined Benefit Program, except as otherwise specifically provided in this part, providing the contributions on compensation for that work are not credited to the Defined Benefit Supplement Program. Added by Stats 1994 ch 933 § 3 (AB 3171), effective September 27, 1994. Amended by Stats 1998 ch 965 § 17 (AB 2765); Stats 2000 ch 1021 § 11 (AB 2700). Former Sections: Former § 22170, similar to present § 22173, was added Stats 1993 ch 893 § 2 and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Historical Derivation: (a) Former § 22151, as enacted Stats 1976 ch 1010 § 2, amended Stats 1980 ch 244 § 1. (b) Former § 22167, as added Stats 1993 ch 893 § 2. 59

93) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM Amendments 1998 Amendment: Substituted “subject to coverage under the Defined Benefit Program” for “position requiring membership in the system”. 2000 Amendment: Added “, providing the contributions on compensation for that work are not credited to the Defined Benefit Supplement Program”. § 22170.5. “Sick leave days” and related phrases (a) “Sick leave days” means the number of days of accumulated and unused leave of absence for illness or injury. (b) “Basic sick leave day” means the equivalent of one day’s paid leave of absence per pay period due to illness or injury. (c) “Excess sick leave days” means the day or total number of days, granted by an employer in a pay period as defined in Section 22154 after June 30, 1986, for paid leave of absence due to illness or injury, in excess of a basic sick leave day. Added by Stats 1999 ch 939 § 23 (SB 1074). § 22171. “Spouse” and “Registered domestic partner” (a) “Spouse” means a person who was continuously married to the member for the period beginning at least 12 months prior to the death of the member, unless a child is born to the member and his or her spouse within the 12-month period or unless the spouse is carrying the member’s unborn child. (b) “Spouse” also means a person who was married to the member for less than 12 months, if the member’s death was either accidental, or due to an illness, and the marriage took place prior to the occurrence of the injury or diagnosis of the illness that resulted in death. (1) A member’s death is defined as accidental only if he or she received bodily injuries through violent, external, or accidental means and died as a direct result of the bodily injuries and independent of all other causes. (2) This subdivision does not apply if, at the time of the marriage, the member could not have reasonably been expected to live for 12 months. (c) Except as excluded by Sections 22661 and 23812, a person who is the registered domestic partner of a member, as established pursuant to Section 297 or 299.2 of the Family Code, shall be treated in the same manner as a spouse. Added by Stats 1994 ch 933 § 3 (AB 3171), effective September 27, 1994. Amended by Stats 1996 ch 634 § 41 (SB 2041); Stats 2003 ch 548 § 1 (AB 106); Stats 2004 ch 912 § 5 (AB 2233); Stats 2005 ch 418 §3 (SB 973), effective January 1, 2006. Former Sections: Former § 22171, similar to present Ed C § 22174, was added Stats 1993 ch 893 § 2 and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Historical Derivation: (a) Former Ed C § 22152, as enacted Stats 1976 ch 1010 § 2. (b) Former Ed C § 22168, as added Stats 1993 ch 893 § 2. Amendments 1996 Amendment: (1) Added “for a continuous period beginning”; and (2) substituted “member and his or her spouse within the 12–month period or unless” for “union within the 12–month period or”. 2003 Amendment: (1) Designated the former section to be subd (a); (2) amended subd (a) by (a) adding “continuously”; and (b) substituting “the period beginning” for “a continuous period beginning”; and (3) added subd (b). 2004 Amendment: (1) Substituted “either accidental, or due to an illness, and the marriage took place” for “accidental, or for the period beginning” in subd (b); (2) deleted “, due to a known illness” at the end of subd (b)(2); and (3) added subd (c). 60

94) PART 13, CHAPTER 2 2005 Amendment: Amended subd (c) by (1) deleting “ ‘spouse’ shall also include” after “Sections 22661 and 23812,”; and (2) adding “, shall be treated in the same manner as a spouse” at the end. § 22172. “Survivor allowance” “Survivor allowance” means the allowance provided for in Section 23804 as it read under the law in effect on June 30, 1972. Added by Stats 1994 ch 933 § 3 (AB 3171), effective September 27, 1994. Former Sections: Former § 22172, similar to present § 22138, was added Stats 1993 ch 893 § 2 and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Historical Derivation: (a) Former § 22155, as enacted Stats 1976 ch 1010 § 2. (b) Former § 22169, as added Stats 1993 ch 893 § 2. § 22173. “Survivor benefit allowance” “Survivor benefit allowance” means the monthly allowance that a surviving spouse may elect to receive pursuant to Chapter 23 (commencing with Section 23850). Added by Stats 1994 ch 933 § 3 (AB 3171), effective September 27, 1994. Former Sections: Former § 22173, similar to present § 22156, was added Stats 1993 ch 893 § 2 and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Historical Derivation: (a) Former § 22155.5, as added Stats 1992 ch 1166 § 6. (b) Former § 22170, as added Stats 1993 ch 893 § 2. § 22174. “System” “System” means the State Teachers’ Retirement System. Added by Stats 1994 ch 933 § 3 (AB 3171), effective September 27, 1994. Former Sections: Former § 22174, similar to present § 22160, was added Stats 1993 ch 893 § 2 and repealed Stats 1994 ch 933 § 2, effective September 27, 1994. Historical Derivation: (a) Former § 22156, as enacted Stats 1976 ch 1010 § 2. (b) Former § 22171, as added Stats 1993 ch 893 § 2. § 22175. “System’s headquarters office” “System’s headquarters office” means the office building established as the permanent headquarters facility for the system, pursuant to Section 22375. Added Stats 2013 ch 558 § 5 (AB 1379), effective January 1, 2014. Former Sections: Former § 22175, relating to definition of “teaching units”, was added Stats 1995 ch 390 § 9, operative July 1, 1996, and repealed Stats 1998 ch 678 § 2 (AB 1166), ch 965 § 18 (AB 2765). § 22176. “Termination benefit” “Termination benefit” means a benefit equal in amount to the balance of credits in the member’s Defined Benefit Supplement account that is payable to the member in a lump–sum when the member has terminated all employment to perform creditable service subject to coverage by the plan. Added by Stats 2000 ch 74 § 22 (AB 1509). 61

95) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM § 22177. “Unfunded actuarial obligation” (a) “Unfunded actuarial obligation,” with respect to the Defined Benefit Program, means that portion of the actuarial present value of benefits that is not provided for by future, normal costs or covered by the actuarial value of assets attributable to the Defined Benefit Program, based on assumptions adopted by the board pursuant to Section 22311.5. (b) “Unfunded actuarial obligation,” with respect to the Defined Benefit Supplement Program, means that portion of the actuarial present value of benefits that is not provided for by future, normal costs or covered by the actuarial value of assets attributable to the Defined Benefit Supplement Program, based on assumptions adopted by the board pursuant to Section 22311.5. Added by Stats 2000 ch 1021 § 12 (AB 2700). 62

96) PART 13, CHAPTER 3 CHAPTER 3. RETIREMENT BOARD § 22200. Composition and appointment (Composition of the Board) (a) The plan and the system are administered by the Teachers’ Retirement Board. On and after January 1, 2004, the members of the board are as follows: (1) The Superintendent of Public Instruction. (2) The Controller. (3) The Treasurer. (4) The Director of Finance. (5) Three persons who are either members of the Defined Benefit Program or participants in the Cash Balance Benefit Program, as follows: (A) One person who, at the time of election, is an active member of the Defined Benefit Program or an active participant of the Cash Balance Benefit Program employed by a school district that provides instruction for prekindergarten, kindergarten, or grades 1 to 12, inclusive, or a county office of education, in a position other than a school administrator that requires a services credential with a specialization in administrative services. This member shall be elected by the active members of the Defined Benefit Program and active participants of the Cash Balance Benefit Program who are employed by a school district that provides instruction for prekindergarten, kindergarten, or grades 1 to 12, inclusive, or county office of education, pursuant to regulations adopted by the board, for a four-year term commencing on January 1, 2004. (B) One person who, at the time of election, is an active member of the Defined Benefit Program or an active participant of the Cash Balance Benefit Program employed by a school district that provides instruction for prekindergarten, kindergarten, or grades 1 to 12, inclusive, or a county office of education. This member shall be elected by the active members of the Defined Benefit Program and active participants of the Cash Balance Benefit Program who are employed by a school district that provides instruction for prekindergarten, kindergarten, or grades 1 to 12, inclusive, or a county office of education, pursuant to regulations adopted by the board, for a four-year term commencing on January 1, 2004. (C) One person who, at the time of election, is a community college instructor and an active member of the Defined Benefit Program or an active participant of the Cash Balance Benefit Program employed by a community college district, who shall be elected by the active community college members of the Defined Benefit Program and the active community college participants of the Cash Balance Benefit Program, pursuant to regulations adopted by the board, for a four-year term commencing on January 1, 2004. (6) Five persons appointed by the Governor for a term of four years, subject to confirmation by the Senate, as follows: (A) One person who, at the time of appointment, is a member of the governing board of a school district or a community college district. (B) One person who is either a retired member under this part or a retired participant under Part 14 (commencing with Section 26000). (C) Three persons representing the public, whose terms shall be staggered by varying the first terms of these members, as follows: (i) One person to a term expiring December 31, 2005. (ii) One person to a term expiring December 31, 2006. (iii) One person to a term expiring December 31, 2007. (b) A person who is employed to perform creditable service by a community college district and either a school district that provides instruction for prekindergarten, kindergarten, or grades 1 to 12, inclusive, or a county office of education, may only be elected to the position on the board that corresponds to the position in which he or she accrued the most service credit during the prior school year. (c) The members of the board shall annually elect a chairperson and vice chairperson. 63

97) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM Added by Stats 2002 ch 1049 § 2 (SB 1580), operative January 1, 2004. Amended by Stats 2004 ch 11 § 1 (AB 419), effective January 28, 2004; Stats 2005 ch 22 § 33 (SB 1108), effective January 1, 2006; Stats 2007 ch 323 § 2 (AB 757), effective January 1, 2008. Former Sections: Former § 22200, similar to the present section, was added Stats 1993 ch 893 § 2, amended Stats 1994 ch 933 § 7.5, effective September 27, 1994, Stats 1996 ch 634 § 42, Stats 1998 ch 1048 § 5, and repealed Stats 2002 ch 1049 § 1, operative January 1, 2004. Former § 22200, similar to the present section, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977 ch 26 § 1, Stats 1981 ch 124 § 20, ch 868, Stats 1st Ex Sess 1983–84 ch 5 § 1, Stats 1983 ch 588 § 1, Stats 1986 ch 56 § 1, Stats 1990 ch 1372 § 174, and repealed Stats 1993 ch 893 § 1. Historical Derivation: (a) Former Ed C § 22200, as added Stats 1993 ch 893 § 2, amended Stats 1994 ch 933 § 7.5, effective September 27, 1994, Stats 1996 ch 634 § 42, Stats 1998 ch 1048 § 5. (b) Former Ed C § 22200, as enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, ch 26 § 1, Stats 1981 ch 124 § 20, ch 868, Stats 1st Ex Sess 1983–84 ch 5 § 1, Stats 1983 ch 588 § 1, Stats 1986 ch 56 § 1, Stats 1990 ch 1372 § 174. Amendments 2004 Amendment: (1) Amended subd (a) by (a) adding “On and after January 1, 2004,” at the beginning of the introductory clause; (b) adding “and active participants of the Cash Balance Benefit Program” following “Defined Benefit Program” in the second sentence of subd (a)(5)(B); (c) redesignating former subd (a)(6)(C) to be the introductory clause of subd (a)(6)(C) by substituting “members, as follows:” for “members.”; and (d) adding subds (a)(6)(C)(i)–(a)(6)(C)(iii); (2) added subd (b); and (3) redesignated former subd (b) to be subd (c). 2005 Amendment: (1) Amended subd (a)(5) by (a) substituting “kindergarten and grades 1” for “grades K” wherever it appears in subds (a)(5)(A) and (a)(5)(B); and (b) “of” for “or” after “a county office” in the first sentence of subd (a)(5)(B); and (2) amended subd (b) by substituting (a) “and grades 1 to 12, inclusive,” for “through grade 12”; and (b) substituting “he or she” for “they” after “position in which”. 2007 Amendment: (1) Substituted “for prekindergarten, kindergarten, or grades 1 to 12” for “for kindergarten and grades 1 to 12” each time it appears in subds (a)(5)(A) and (a)(5)(B); and (2) amended subd (b) by (a) substituting “for prekindergarten, kindergarten, or grades 1 to 12” for “for kindergarten and grades 1 to 12”; and (b) adding the comma after “office of education”. § 22200.5. Election of members by board; Special election to fill vacancies (a) The board shall conduct the elections of members described in Section 22200 pursuant to regulations adopted by the board. (b) The board shall hold special elections to fill vacancies that occur during the term of the elected members of the board. If, at the time a vacancy occurs, the unexpired term is less than two years, the new member elected to fill the vacancy shall hold office for a period equal to the remainder of the term of the vacated office plus four years. (c) The regulations adopted by the board pursuant to this section and Section 22200 shall not be subject to Article 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code. (d) The regulations adopted by the board shall provide that the elections be conducted in the most cost–effective manner deemed feasible. The board, where practicable, shall consolidate election mailings with other mailings and shall address any other feasible cost–saving measures. Added by Stats 2002 ch 1049 § 3 (SB 1580). § 22201. Powers of board; Meetings (a) The board shall set policy and shall have the sole power and authority to hear and determine all facts pertaining to application for benefits under the plan or any matters pertaining to administration of the plan and the system. 64

98) PART 13, CHAPTER 3 (b) The board shall meet at least once every calendar quarter at such times as it may determine. The meetings shall be presided over by the chairperson. In the event of the chairperson’s absence from a meeting the vice chairperson shall act as presiding officer and perform all other duties of the chairperson. Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1996 ch 634 § 43 (SB 2041); Stats 1998 ch 965 § 19 (AB 2765). Former Sections: Former § 22201, similar to present Ed C §§ 22209, 22300 was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1993 ch 893 § 1. Historical Derivation: Former Ed C § 22202, enacted 1976 ch 1010 § 2. Amendments 1996 Amendment: (1) Amended subd (a) by substituting (a) “shall have” for “make rules and it has” after “set policy and”; and (b) “plan” for “system” after “benefits under the”; and (2) amended subd (b) by adding (a) “at such times as it may determine” at the end of the first sentence; and (b) the second and third sentences. 1998 Amendment: Added “plan and the” near the end of subd (a). § 22201.2. Quorum A quorum of the board shall consist of the majority of the board members. In determining whether or not a quorum is present, vacant positions on the board shall not be considered. The concurrence of the majority of the board members present shall be necessary to the validity of any action taken by the board. Added by Stats 1996 ch 634 § 44 (SB 2041). § 22201.3. Secretary The chief executive officer of the system shall act as secretary of the board and shall have charge of all board correspondence and shall keep a record of board proceedings. Added by Stats 1996 ch 634 § 45 (SB 2041). § 22202. Board’s control of funds The board has exclusive control of the administration of the funds. No transfers or disbursements of any amount from the funds shall be made except upon the authorization of the board for the purpose of carrying into effect the provisions of this part and Part 14 (commencing with Section 26000). Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1998 ch 1048 § 6 (SB 2085). Former Sections: Former § 22202, similar to present § 22201, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1993 ch 893 § 1. Historical Derivation: Former § 22224, as enacted Stats 1976 ch 1010 § 2. Amendments 1998 Amendment: Added “and Part 14 (commencing with Section 26000)”. § 22203. Investment authority The board has exclusive control of the investment of the Teachers’ Retirement Fund. Except as otherwise restricted by the California Constitution and by law, the board may in its discretion invest the assets of the fund through the purchase, holding, or sale thereof of any investment, financial instru65

99) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM ment, or financial transaction when the investment, financial instrument, or financial transaction is prudent in the informed opinion of the board. Added by Stats 1993 ch 893 § 2 (AB 1796). Former Sections: Former § 22203, similar to present § 22208, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1993 ch 893 § 1. Historical Derivation: Former § 22222, as enacted Stats 1976, ch 1010 § 2, amended Stats 1983 ch 1043 § 1. § 22203.5. Rollcall vote and public meeting on investment transaction (a) All investment transaction decisions made during a closed session, pursuant to paragraph (16) of subdivision (c) of Section 11126 of the Government Code, shall be by rollcall vote entered into the minutes of that meeting. (b) The board, within 12 months of the close of an investment transaction or the transfer of system assets for an investment transaction, whichever occurs first, shall disclose and report the investment at a public meeting. Added by Stats 1998 ch 923 § 1 (SB 1753). Amended by Stats 2003 ch 859 § 4 (SB 627). Amendments 2003 Amendment: Added the commas after “closed session” and “Government Code”. § 22204. Oaths and affirmations Each member of the board may administer oaths and affirmations to witnesses and others transacting the business of the system. Added by Stats 1993 ch 893 § 2 (AB 1796). Former Sections: Former § 22204, similar to present § 22301, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1993 ch 893 § 1. Historical Derivation: Former § 22207, as enacted Stats 1976 ch 1010 § 2. § 22205. Board’s authority to enter into agreements with retirement systems of other states The board has the authority to negotiate, and enter into agreements with other states of the United States on the subject of the transfer of members’ contributions and regular interest between the retirement systems of California and other states. Added by Stats 1993 ch 893 § 2 (AB 1796). Former Sections: Former § 22205, similar to present § 22212, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1993 ch 893 § 1. Historical Derivation: Former § 22012, as enacted Stats 1976 ch 1010 § 2. § 22206. Audit power (a) As often as the board determines necessary, it may audit or cause to be audited the records of any public agency. (b) The board may excuse any audit finding provided all of the following conditions are met: (1) The audit finding relates to a period of time prior to July 1, 2002. (2) The audit finding identifies an issue that is not in compliance with the provisions of this part with respect to creditable service or creditable compensation. 66

100) PART 13, CHAPTER 3 (3) The noncompliance would not have existed if the service and compensation crediting changes that shall become operative on July 1, 2002, as a result of legislation enacted during the second year of the 1999–2000 Regular Session, had been operative during the period of time investigated in the audit. (4) The audit finding was included in an audit report issued on or after January 1, 2001. (5) Excusing the audit finding will not have an adverse effect on the integrity of the retirement fund. (c) The board’s authority pursuant to subdivision (b) shall extend to service and compensation issues identified through activities outside the audit function that address compliance with the provisions of this part. Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 2000 ch 1021 § 13 (AB 2700). Former Sections: Former § 22206, similar to present § 22307, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, amended Stats 1981 ch 124 § 21, Stats 1983 ch 603 § 1, effective August 31, 1983, and repealed Stats 1993 ch 893 § 1. Historical Derivation: Former § 22208, as enacted Stats 1976 ch 1010 § 2. Amendments 2000 Amendment: (1) Designated the former section to be subd (a); and (2) added subds (b) and (c). § 22207. Other acts The board shall perform any other acts necessary for the administration of the system and the plan in carrying into effect the provisions of this part and Part 14 (commencing with Section 26000), which may include, but shall not be limited to, requesting the following information from a member, participant, or beneficiary: (a) Financial statements, certified copies of state and federal income tax records, or evidence of financial status. (b) Employment, legal, or medical documentation. Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1996 ch 634 § 46 (SB 2041); Stats 1998 ch 965 § 20 (AB 2765); Stats 2007 ch 323 § 3 (AB 757), effective January 1, 2008. Former Sections: Former § 22207, similar to present Ed C § 22204, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1993 ch 893 § 1. Historical Derivation: Former Ed C § 22209, as enacted Stats 1976 ch 1010 § 2. Amendments 1996 Amendment: Added “and the plan” after “of the system”. 1998 Amendment: Added “and Part 14 (commencing with Section 26000)”. 2007 Amendment: (1) Substituted “, which may include, but shall not be limited to, requesting the following information from a member, participant, or beneficiary:” for the period in the introductory clause; and (2) added subds (a) and (b). § 22208. Power of board to delegate The board may appoint a committee of two or more of its members to perform any act within the power of the board itself to perform. The board may also delegate authority to the chief executive officer to perform any such act. Except where the board, in delegating that authority, provides that the committee or the chief executive officer may act finally, all acts of the committee or the chief executive officer shall be reported to the board at its next regular meeting and shall be subject to review, ratification, or reversal by the board. Added by Stats 1993 ch 893 § 2 (AB 1796). 67

101) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM Former Sections: Former § 22208, similar to present § 22206, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1993 ch 893 § 1. Historical Derivation: Former § 22203, as enacted Stats 1976 ch 1010 § 2. § 22209. Chief executive officer The office of chief executive officer shall be filled by appointment by the board and the appointee shall serve at the pleasure of the board. Added by Stats 1993 ch 893 § 2 (AB 1796). Former Sections: Former § 22209, similar to present § 22207, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1993 ch 893 § 1. Historical Derivation: Former § 22201, enacted Stats 1976 ch 1010 § 2. § 22210. Review by board of acts of committee or chief executive officer (a) Reversal by the board of any act of the committee or the chief executive officer shall be effective on the date fixed by the board. (b) Payment of benefits prior to the board’s action of reversal may not be affected by such an action, except for the recovery of the amounts paid, from the beneficiary receiving the amounts, as the board may direct. Added by Stats 1993 ch 893 § 2 (AB 1796). Former Sections: Former § 22210, similar to present § 22305, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1993 ch 893 § 1. Historical Derivation: Former § 22212, as enacted Stats 1976 ch 1010 § 2. § 22212. Employees The board shall appoint such employees as are necessary to administer the plan and the system. Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1998 ch 965 § 21 (AB 2765). Former Sections: Former § 22212, similar to present Ed C § 22210, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1993 ch 893 § 1. Historical Derivation: Former § 22205, as added enacted Stats 1976 ch 1010 § 2. Amendments 1998 Amendment: Added “plan and the”. § 22212.5. Compensation for specified investment officers and portfolio managers; Principles; Civil service appointments; Limits on taking specified actions for two years after leaving such positions in certain circumstances (a) Except as otherwise provided in subdivision (d), this section shall apply to the following positions in the system: chief executive officer, system actuary, general counsel, chief investment officer, and other investment officers and portfolio managers whose positions are designated managerial pursuant to Section 18801.1 of the Government Code. (b) Notwithstanding Sections 19816, 19825, 19826, 19829, and 19832 of the Government Code, the board shall fix the compensation for the positions specified in subdivision (a). In so doing, the board shall be guided by the principles contained in Sections 19826 and 19829 of the Government Code, 68

102) PART 13, CHAPTER 3 consistent with its fiduciary responsibility to its members to recruit and retain highly qualified and effective employees for these positions. (c) When a position specified in subdivision (a) is filled through a general civil service appointment, it shall be filled from an eligible list based on an examination that was held on an open basis, and tenure in those positions shall be subject to the provisions of Article 2 (commencing with Section 19590) of Chapter 7 of Part 2 of Division 5 of Title 2 of the Government Code. In addition to the causes for action specified in that article, the board may take action under the article for causes related to its fiduciary responsibility to its members, including the employee’s failure to meet specified performance objectives. (d) An individual who held a position designated in subdivision (a), or was a member of the board, a chief of staff, a deputy chief executive officer, chief financial officer, or was in an equivalent senior management position, shall not, for a period of two years after leaving that position, for compensation, act as agent or attorney for, or otherwise represent, any other person, except the state, by making any formal or informal appearance before or by making any oral or written communication to the board, or any officer or employee thereof, if the appearance or communication is made for the purpose of influencing administrative or legislative action or any action or proceeding involving the issuance, amendment, awarding, or revocation of a permit, license, grant, contract, or sale or purchase of goods or property. Added Stats 2003 ch 856 § 2 (SB 269). Amended Stats 2005 ch 351 § 5 (AB 224), effective January 1, 2006; Stats 2007 ch 333 § 1 (AB 1317), effective January 1, 2008; Stats 2009 ch 301 § 1 (AB 1584), effective October 11, 2009; Stats 2010 ch 207 § 3 (AB 2260), effective January 1, 2011. Amendments 2005 Amendment: (1) Substituted “19826, 19829, and 19832” for “and 19826” in the first sentence of subd (b); and (2) substituted “board,” for “Teachers’ Retirement Board,” in subd (d). 2007 Amendment: Added “general counsel,” after “system actuary,” in subd (a). 2009 Amendment: (1) Added “Except as otherwise provided in subdivision (d),” in subd (a); and (2) substituted “, or was a member of the board, a deputy executive officer, or an assistant executive officer, shall not” for “for less than five years may not” in subd (d). 2010 Amendment: Substituted “chief of staff, a deputy chief executive officer, chief financial officer, or was in an equivalent senior management position” for “deputy executive officer, or an assistant executive officer” in subd (d). § 22213. Regulation of employing agencies and other public authorities The board shall regulate the duties of employers, employing agencies, and other public authorities, imposed upon them by this part, and shall require reports from employers, employing agencies, and other public authorities, as it deems advisable in connection with the performance of its duties. Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1996 ch 634 § 47 (SB 2041); Stats 2003 ch 859 § 5 (SB 627). Former Sections: Former § 22213, similar to present Ed C § 22220, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1993 ch 893 § 1. Historical Derivation: Former § 22211, as enacted Stats 1976 ch 1010 § 2. Amendments 1996 Amendment: (1) Added “employers and” after “the duties of”; and (2) substituted “employers, employing agencies and other public” for “the employing agencies and” after “require reports from”. 69

103) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM 2003 Amendment: Substituted (1) “employers, employing agencies,” for “employers and employing agencies” the first time it appears; and (2) “agencies, and other public authorities,” for “agencies and other public authorities” the second time it appears. § 22214. Action to ensure rights to allowances The board may take any action it deems necessary to ensure the continued right of members or beneficiaries to receive monthly payments. Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1996 ch 634 § 48 (SB 2041). Former Sections: Former § 22214, similar to present Ed C § 22215, was enacted Stats 1976 ch Historical Derivation: Former Ed C § 22216, as enacted Stats 1976 ch 1010 § 2. Amendments 1996 Amendment: Substituted “members or beneficiaries” for “retirants, disabilitants, or beneficiaries of members or retirants,”. 1010 § 2, operative April 30, 1977, and repealed Stats 1993 ch 893 § 1. § 22215. Fixing and modifying allowances The board shall determine the service performed by members to be credited toward qualification for retirement, and shall fix and modify allowances provided under this part. Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1996 ch 634 § 49 (SB 2041). Former Sections: Former § 22215, similar to present Ed C § 22221, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1993 ch 893 § 1. Historical Derivation: Former Ed C § 22214, as enacted Stats 1976 ch 1010 § 2. Amendments 1996 Amendment: Substituted “and modify allowances provided under this part” for “retirement allowances and modify the allowances”. § 22216. Credit of contribution; Rate of interest (a) The board shall annually adopt as a plan amendment with respect to the Defined Benefit Program the rate of credited interest to be credited to members’ accumulated retirement contributions for service performed after June 30, 1935, and the accumulated annuity deposit contributions excluding all accumulated contributions while being paid as disability allowances, family allowances, and retirement allowances. (b) The board shall credit interest to all other accumulated reserves at the actuarially assumed interest rate. Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1998 ch 965 § 22 (AB 2765). Former Sections: Former § 22216, similar to present Ed C § 22214, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1993 ch 893 § 1. Historical Derivation: Former § 22302, as enacted Stats 1976 ch 1010 § 2, amended Stats 1978 ch 870 § 5. Amendments 1998 Amendment: Amended subd (a) by substituting (1) “annually adopt as a plan amendment with respect to the Defined Benefit Program” for “determine annually”; and (2) “disability allowances, family allowances, and retirement allowances” for “allowances under Sections 23804, 24006, and 24007”. 70

104) PART 13, CHAPTER 3 § 22217. Annual audit by accountant (a) The board shall employ a certified public accountant or public accountant, who is not in public employment, to audit the financial statements of the system. The costs of the audit shall be paid from the income of the retirement fund. The audit shall be made annually and the audit report shall be incorporated into the annual report filed with the Governor and the Legislature pursuant to Section 22324. (b) These audits shall not be duplicated by the Department of Finance or the State Auditor. The system shall be exempt from a pro rata general administrative charge for auditing. Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 2003 ch 107 § 3 (AB 569); Stats 2006 ch 654 § 2 (SB 1465), effective January 1, 2007. Former Sections: Former § 22217, similar to present § 22219, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1993 ch 893 § 1. Historical Derivation: Former § 22220, as enacted Stats 1976 ch 1010 § 2. Amendments 2003 Amendment: Substituted “State Auditor” for “Auditor General” in the first sentence of subd (b). 2006 Amendment: Amended subd (a) by substituting “and the audit report shall be incorporated into the annual report filed with the Governor and the Legislature pursuant to Section 22324” for “commencing with the fiscal year ending June 30, 1974. The board shall file a copy of the audit report with the Governor, the Secretary of the Senate, and the Chief Clerk of the Assembly”. § 22218. Records and accounts The board shall establish and maintain records and accounts following recognized accounting principles and controls. Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1996 ch 634 § 50 (SB 2041). Former Sections: Former § 22218, similar to present Ed C § 22324, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1993 ch 893 § 1. Historical Derivation: Former Ed C § 22219, as enacted Stats 1976 ch 1010 § 2. Amendments 1996 Amendment: Deleted “an adequate system of” after “establish and maintain”. § 22218.5. Report on return on investments and payroll subject to system [Repealed] Added Stats 1994 ch 858 § 1 (SB 586). Amended Stats 1995 ch 91 § 26 (SB 975). Repealed Stats 2012 ch 728 § 29 (SB 71), effective January 1, 2013. The repealed section related to a report on the return on investments and actual payroll subject to the system for the prior fiscal year. Former Sections: Former § 22218.5, relating to inclusion of summary of costs and savings in annual report, was added Stats 1982 ch 1314 § 1.5 and repealed Stats 1993 ch 893 § 1. § 22219. Hearings and procedure (a) The board may in its discretion hold a hearing for the purpose of determining any question presented to it involving any right, benefit, or obligation of a person under this part. (b) When a hearing is held, the proceedings shall be conducted in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, relating 71

105) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM to administrative adjudication, and the board shall have all of the powers granted in that chapter. However, the provisions of Section 11508 of the Government Code relating to the location of the hearing shall not apply, and the hearing shall be held at the time and place determined by the board. Added by Stats 1993 ch 893 § 2 (AB 1796). Former Sections: Former § 22219, similar to present § 22218, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1993 ch 893 § 1. Historical Derivation: Former § 22217, as enacted Stats 1976 ch 1010 § 2. § 22220. Subpoena for witnesses In addition to the authority granted pursuant to Section 11181 of the Government Code, the board may subpoena witnesses and compel their attendance to testify before it. Added Stats 1993 ch 893 § 2 (AB 1796). Amended Stats 1996 ch 634 § 51 (SB 2041); Stats 2012 ch 864 § 3 (AB 2663), effective January 1, 2013. Former Sections: Former § 22220, similar to present Ed C § 22217, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1993 ch 893 § 1. Historical Derivation: Former Ed C § 22213, as enacted Stats 1976 ch 1010 § 2. Amendments 1996 Amendment: Substituted “may” for “shall”. 2012 Amendment: Added “In addition to the authority granted pursuant to Section 11181 of the Government Code,”. § 22221. Adoption of recommendation of actuary of system to permit valuation of assets and liabilities The board shall adopt, upon the recommendation of the actuary of the system, any mortality and other tables and interest rates necessary to do the following: (a) Permit valuation of the assets and liabilities of the system. (b) Make any determination or calculation necessary to carry out this part. Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1994 ch 933 § 9 (AB 3171), effective September 27, 1994; Stats 1996 ch 634 § 52 (SB 2041). Former Sections: Former § 22221, similar to present Ed C § 22306, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, repealed Stats 1993 ch 893 § 1 (ch 920 prevails), amended Stats 1993 ch 920 § 2, and repealed Stats 1994 ch 933 § 10. Historical Derivation: Former Ed C § 22215, as enacted Stats 1976 ch 1010 § 2. Amendments 1994 Amendment: Substituted “either” for “any” near the end of the introductory clause. 1996 Amendment: Deleted “either of” after “necessary to do” in the introductory clause. § 22222. Adjustment of death benefits The board may adjust the amounts of the death payments based on changes in the All Urban California Consumer Price Index, and shall adopt as a plan amendment with respect to the Defined Benefit Program any adjusted amount, provided that the most recent actuarial valuation report indicates that the adjustment would not increase the normal cost. 72

106) PART 13, CHAPTER 3 Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1996 ch 634 § 53 (SB 2041); Stats 1998 ch 965 § 23 (AB 2765). Former Sections: Former § 22222, similar to present Ed C § 22203, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, amended Stats 1983 ch 1043 § 1, and repealed Stats 1993 ch 893 § 1. Historical Derivation: Former Ed C § 22256, as added Stats 1992 ch 1166 § 7. Amendments 1996 Amendment: Substituted “payments” for “benefits” after “amounts of the death”. 1998 Amendment: Added “and shall adopt as a plan amendment with respect to the Defined Benefit Program any adjusted amount,”. § 22223. Compensation; Travel expenses The members of the board who are not active members of the Defined Benefit Program or active participants of the Cash Balance Benefit Program and who are appointed by the Governor pursuant to Section 22200 shall receive one hundred dollars ($100) for every day of actual attendance at meetings of the board or any meeting of any committee of the board of which the person is a member, and that is conducted for the purpose of carrying out the powers and duties of the board, together with their necessary traveling expenses incurred in connection with performance of their official duties. Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1996 ch 634 § 53.5 (SB 2041); 1998 ch 965 § 24 (AB 2765); Stats 2005 ch 351 § 6 (AB 224), effective January 1, 2006. Former Sections: Former § 22223, similar to present Ed C § 22362, was added Stats 1987 ch 416 § 1, amended Stats 1992 ch 540 § 2, effective August 20, 1992, and repealed Stats 1993 ch 893 § 1. Former § 22223, relating to investment in bonds pursuant to the Improvement Bond Act of 1915, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1983 ch 1043 § 2, operative June 5, 1984. Historical Derivation: Former Ed C § 22229, as added Stats 1977 ch 36 § 412, amended Stats 1982 ch 701 § 1. Amendments 1996 Amendment: Substituted “Defined Benefit Plan or participants of the Cash Balance Plan” for “system”. 1998 Amendment: Substituted (1) “Defined Benefit Program” for “Defined Benefit Plan”; and (2) “Cash Balance Benefit Program” for “Cash Balance Plan”. 2005 Amendment: Added “active” before “members of the”, and before “participants of the”. § 22224. Release time to serve on board, committee, subcommittee, or panel Members of the Defined Benefit Program and participants of the Cash Balance Benefit Program, who are either elected to the board or appointed to the board by the Governor pursuant to Section 22200, or who are appointed by the board to serve on a committee or subcommittee of the board or a panel of the system, shall be granted, by his or her employer, sufficient time away from regular duties, without loss of compensation or other benefits to which the person is entitled by reason of employment, to attend meetings of the board or any of its committees or subcommittees of which the person is a member, or to serve as a member of a panel of the system, and to attend to the duties expected to be performed by the person. Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1996 ch 634 § 54 (SB 2041); Stats 1998 ch 965 § 25 (AB 2765); Stats 2004 ch 11 § 2 (AB 419), effective January 28, 2004. Former Sections: Former § 22224, similar to present Ed C § 22202, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1993 ch 893 § 1. 73

107) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM Historical Derivation: Former Ed C § 22229.1, as added Stats 1979 ch 287 § 1. Amendments 1996 Amendment: Substituted (1) “Defined Benefit Plan and participants of the Cash Balance Plan” for “system”; (2) “subcommittee of the board or a panel of the system, shall be granted, by his or her” for “or panel of the system, shall be granted, by that member’s”; (3) “compensation or other benefits to which the person” for “income or other benefits to which the member”; and (4) “or any of its committees or subcommittees of which the person is a member, or to serve as a member of a panel of the system, and to attend to the duties expected to be performed by the person” for “, or any meetings of any committee or subcommittee of the board of which the member is a member, or to serve as a member of a panel of the system, and to attend to the duties imposed on the member”. 1998 Amendment: Substituted (1) “Defined Benefit Program” for “Defined Benefit Plan”; and (2) “Cash Balance Benefit Program” for “Cash Balance Plan”. 2004 Amendment: Added “elected to the board or”. § 22225. Compensation of system members and replacement members (a) The compensation of the members of the Defined Benefit Program and participants of the Cash Balance Benefit Program who are either elected to the board or appointed to the board by the Governor pursuant to Section 22200, or who are appointed by the board to a committee or subcommittee, or to a panel of the system, may not be reduced by his or her employer for any absence from service occasioned by attendance upon the business of the board, pursuant to Section 22224. (b) Each employer that employs either a member of the Defined Benefit Program or a participant of the Cash Balance Benefit Program elected or appointed pursuant to Section 22224 and that employs a person to replace the member or participant during attendance at meetings of the board, its committees or subcommittees, or when serving as a member of a panel of the system, or when carrying out other duties approved by the board, shall be reimbursed from the retirement fund for the cost incurred by employing a replacement. Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1996 ch 634 § 55 (SB 2041); Stats 1998 ch 965 § 26 (AB 2765); Stats 2004 ch 11 § 3 (AB 419), effective January 28, 2004. Former Sections: Former § 22225, relating to membership in the national council on teacher retirement, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1977 ch 659 § 4. Historical Derivation: Former Ed C § 22229.2, as added Stats ch 287 § 2, amended Stats 1985 ch 1532 § 1, Stats 1987 ch 1395 § 1. Amendments 1996 Amendment: (1) Amended subd (a) by substituting (a) “Defined Benefit Plan and participants of the Cash Balance Plan” for “system”; and (b) “his or her employer” for “the employing agency by which the members are regularly employed”; and (2) amended subd (b) by substituting (a) “employer that employs a member of the Defined Benefit Plan or a participant of the Cash Balance Plan” for “employing agency that employs a member”; and (b) “or participant during attendance at meetings of the board, its committees or subcommittees, or when serving as a member of a panel of the system” for “during attendance at meetings of the board, or meetings of committees or subcommittees of the board”. 1998 Amendment: (1) Substituted “Defined Benefit Program” for “Defined Benefit Plan” in subds (a) and (b); (2) substituted “Cash Balance Benefit Program” for “Cash Balance Plan” in subds (a) and (b); and (3) added “either” after “that employs” near the beginning of subd (b). 2004 Amendment: (1) Amended subd (a) by substituting (a) “either elected to the board or appointed to the board by the Governor pursuant to Section 22200, or who are appointed by the board” for “appointed to the board, or by the board”; and (b) “may” for “shall” after “of the system,”; and (2) added “elected or” in subd (b). 74

108) PART 13, CHAPTER 3 § 22226. Requirement of study on provision of health insurance benefits; Appropriation for study (a) The board shall conduct a study on providing health insurance benefits, including vision and dental care benefits, for active, disabled, and retired members, beneficiaries, children, and dependent parents. The health insurance may include vision and dental care. (b) The study shall include, but not be limited to, assessing the lack of access of health insurance benefits for retired teachers and shall evaluate the following: (1) The demand for health insurance benefits. (2) The integration of health insurance benefits and Medicare coverage. (3) The manner in which health insurance benefits would be administered and provided. (c) There is hereby appropriated from the Teachers’ Retirement Fund to the State Teachers’ Retirement Board the sum of two hundred thousand dollars ($200,000) conduct a study for the purposes identified in this section. If this study results in the implementation of health insurance benefits as described in subdivision (a), the State Teachers’ Retirement Board shall reimburse the sum of two hundred thousand dollars ($200,000) to the Teachers’ Retirement Fund from administrative fees charged to recipients of the health insurance benefits. Added by Stats 1998 ch 968 § 1 (SB 1528). Former Sections: Former § 22226, similar to present Ed C § 22311, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, amended Stats 1987 ch 416 § 2, and repealed Stats 1993 ch 893 § 1. § 22227. Board candidates to file campaign statements It is the intent of the Legislature that candidates for board seats described in paragraph (5) of subdivision (a) of Section 22200, including incumbent board members running for reelection, shall file campaign statements with the Secretary of State according to campaign reporting, contribution limits, and conflict of interest provisions of the Political Reform Act, adapted for the unique characteristics of elected member seats on state retirement system boards. Added by Stats 2004 ch 11 § 4 (AB 419), effective January 28, 2004. Former Sections: Former § 22227, similar to present Ed C § 22313, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1993 ch 893 § 1 (AB 1796). § 22228. Board must provide five-year strategic plan; Report plan to Legislature; Define “emerging investment manager”; Limitations (Repealed January 1, 2018) (a) Commencing August 1, 2012, the board shall provide a five-year strategic plan for emerging investment manager participation across all asset classes. (b) The board shall submit a report to the Legislature, commencing March 1, 2014, and each March 1 thereafter, regarding the progress of the strategic plan. The report shall be submitted in compliance with Section 9795 of the Government Code. (c) The board shall define the term “emerging investment manager” for purposes of this section. (d) Nothing in this section shall require the board to take action that is not consistent with the fiduciary responsibilities of the board as described in Section 17 of Article XVI of the California Constitution. (e) This section shall remain in effect only until January 1, 2018, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2018, deletes or extends that date. Added Stats 2011 ch 701 § 1 (SB 294), effective January 1, 2012, repealed January 1, 2018. 75

109) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM Former Sections: Former section 22228 was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, repealed and added Stats 1993 ch 893 §§ 1, 2 (AB 1796), amended Stats 1993 ch 861 § 2 (AB 447), and repealed Stats 1994 ch 933 § 11 (AB 3171), effective September 27, 1994. 76

110) PART 13, CHAPTER 4 CHAPTER 4. FIDUCIARY DUTIES § 22250. Fiduciary duties regarding interests of members and beneficiaries The board and its officers and employees of the system shall discharge their duties with respect to the system and the plan solely in the interest of the members and beneficiaries of the Defined Benefit Program as well as the participants and beneficiaries of the Cash Balance Benefit Program as follows: (a) For the exclusive purpose of the following: (1) Providing benefits to members and beneficiaries of the Defined Benefit Program as well as the participants and beneficiaries of the Cash Balance Benefit Program. (2) Defraying reasonable expenses of administering the plan. (b) With the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with those matters would use in the conduct of an enterprise of a like character and with like aims. (c) By diversifying the investments of the plan so as to minimize the risk of large losses, unless under the circumstances it is clearly prudent not to do so. (d) In accordance with the documents and instruments governing the plan and the system insofar as those documents and instruments are consistent with this part and Part 14 (commencing with Section 26000). Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1996 ch 634 § 56 (SB 2041); Stats 1998 ch 965 § 27 (AB 2765). Former Sections: Former § 22250, similar to present Ed C § 23700, was added Stats 1992 ch 1166 § 7, effective September 29, 1992, and repealed Stats 1993 ch 893 § 1. Historical Derivation: Former Ed C § 22225.5, as added Stats 1982 ch 1200 § 2, amended Stats 1989 ch 542 § 2. Amendments 1996 Amendment: (1) Amended the introductory clause by (a) adding “of the system” after “officers and employees”; (b) adding “and the plan” after “to the system”; and (c) deleting “, retirants,” after “the members”; and (2) substituted “and” for “, retirants, and their” in subd (a)(1). 1998 Amendment: (1) Added “of the Defined Benefit Program as well as the participants and beneficiaries of the Cash Balance Benefit Program” in the introductory clause; (2) added “of the Defined Benefit Program as well as the participants and beneficiaries of the Cash Balance Benefit Program” in subd (a)(1); (3) substituted “plan” for “system” in subd (c); and (4) amended subd (d) by adding (a) “the plan and”; and (b) “and Part 14 (commencing with Section 26000)”. § 22251. Purposes for which assets may be held (a) Except as provided in subdivision (b), the assets of the plan shall never inure to the benefit of an employer and shall be held for the exclusive purposes of providing benefits to members and beneficiaries of the Defined Benefit Program as well as the participants and beneficiaries of the Cash Balance Benefit Program and defraying reasonable expenses of administering the plan and the system. (b) In the case of a contribution that is made by an employer by a mistake of fact, subdivision (a) shall not prohibit the return of that contribution within one year after the system knows, or should know in the ordinary course of business, that the contribution was made by a mistake of fact. Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1996 ch 634 § 57 (SB 2041); Stats 1998 ch 965 § 28 (AB 2765). 77

111) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM Former Sections: Former § 22251, similar to present Ed C § 23701, was added Stats 1992 ch 1166 § 7, effective September 29, 1992, and repealed Stats 1993 ch 893 § 1. Historical Derivation: Former Ed C § 22225.51, as added Stats 1989 ch 542 § 3. Amendments 1996 Amendment: (1) Amended subd (a) by (a) substituting “plan shall never inure to the benefit of an employer” for “system shall never inure to the benefit of a school district or other employing agency”; and (b) deleting “, retirants,” after “benefits to members”; and (2) substituted “an employer” for “a school district or other employing agency” after “is made by” in subd (b). 1998 Amendment: Amended subd (a) by adding (1) “of the Defined Benefit Program as well as the participants and beneficiaries of the Cash Balance Benefit Program”; and (2) “the plan and” before “the system” at the end. § 22252. Prohibited transactions Except as otherwise provided by law, the board and its officers and employees of the system shall not cause the system to engage in a transaction if they know or should know that the transaction constitutes a direct or indirect: (a) Sale or exchange, or leasing, of any property from the system to a member or beneficiary of the Defined Benefit Program, as well as a participant or beneficiary of the Cash Balance Benefit Program, for less than adequate consideration, or from a member or beneficiary of the Defined Benefit Program, as well as a participant or beneficiary of the Cash Balance Benefit Program, to the system for more than adequate consideration. (b) Lending of money or other extension of credit from the system to a member or beneficiary of the Defined Benefit Program, as well as a participant or beneficiary of the Cash Balance Benefit Program, without the receipt of adequate security and a reasonable rate of interest, or from a member or beneficiary of the Defined Benefit Program, as well as a participant or beneficiary of the Cash Balance Benefit Program, with the provision of excessive security or an unreasonably high rate of interest. (c) Furnishing of goods, services, or facilities from the system to a member or beneficiary of the Defined Benefit Program, as well as a participant or beneficiary of the Cash Balance Benefit Program, for less than adequate consideration, or from a member, or beneficiary of the Defined Benefit Program, as well as a participant or beneficiary of the Cash Balance Benefit Program, to the system for more than adequate consideration. (d) Transfer to, or use by or for the benefit of, a member or beneficiary of the Defined Benefit Program, as well as a participant or beneficiary of the Cash Balance Benefit Program, of any assets of the plan for less than adequate consideration. (e) Acquisition, on behalf of the system, of any employer security, real property, or loan. Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1996 ch 634 § 58 (SB 2041); Stats 1998 ch 965 § 29 (AB 2765). Former Sections: Former § 22252, similar to present Ed C § 23702, was added Stats 1992 ch 1166 § 7, effective September 29, 1992, repealed Stats 1993 ch 893 § 1 (ch 1144 prevails), amended Stats 1993 ch 1144 § 1, and repealed Stats 1994 ch 933 § 12, effective September 27, 1994. Historical Derivation: Former Ed C § 22225.52, as added Stats 1989 ch 542 § 4. Amendments 1996 Amendment: Substituted (1) “the offices and employees of the system” for “officers and employees” in the introductory clause; (2) “member or beneficiary” for “member, retirant, or beneficiary” wherever it appears; (3) “plan” for “system” after “assets of the” in subd (d); and (4) “employer” for “school district or other employing agency” in subd (e). 78

112) PART 13, CHAPTER 4 1998 Amendment: (1) Added “of the Defined Benefit Program, as well as a participant or beneficiary of the Cash Balance Benefit Program,” in subds (a)–(d); (2) added “of the Defined Benefit Program, as well as a participant or beneficiary of the Cash Balance Benefit Program,” in subds (a)–(c); and (3) deleted “retirant,” after “from a member,” in subd (c). § 22253. Conflicts of interest The board and its officers and employees of the system shall not do any of the following: (a) Deal with the assets of the plan and the system in their own interest or for their own account. (b) In their individual or in any other capacity, act in any transaction involving the system on behalf of a party, or represent a party, whose interests are adverse to the interests of the plan or the interests of the members and beneficiaries of the Defined Benefit Program, as well as participants and beneficiaries of the Cash Balance Benefit Program. (c) Receive any consideration for their personal account from any party conducting business with the system in connection with a transaction involving the assets of the plan. Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1996 ch 634 § 59 (SB 2041); Stats 1998 ch 965 § 30 (AB 2765). Former Sections: Former § 22253, similar to present Ed C § 23703, was added Stats 1992 ch 1166 § 7, effective September 29, 1992, amended Stats 1993 ch 219 § 72 (ch 219 prevails), repealed Stats 1993 ch 893 § 2, and repealed Stats 1994 ch 933 § 13, effective September 27, 1994. Historical Derivation: Former Ed C § 22225.53, as added Stats 1989 ch 542 § 2. Amendments 1996 Amendment: (1) Added “of the system” in the introductory clause; (2) substituted “plan or the interests of the members” for “system or the interests of its members, retirants,” after “to the interests of the” in subd (b); and (3) amended subd (c) by substituting (a) “conducting business” for “dealing”; and (b) “plan” for “system” at the end. 1998 Amendment: Added (1) “the plan and” in subd (a); and (2) “of the Defined Benefit Program, as well as participants and beneficiaries of the Cash Balance Benefit Program” in subd (b). § 22254. Personal liability of board members and officers for breach of fiduciary duties (a) Any board member or officer who breaches any of the responsibilities, obligations, or duties imposed upon them by Section 22251, 22252, or 22253 shall be personally liable to make restitution to the retirement fund for any losses to it resulting from each breach, and to restore any profits that have been made through use of assets of the fund and shall be subject to any other equitable or remedial relief the court may deem appropriate, including removal from the board. (b) No board member or officer shall be liable with respect to a breach of fiduciary duty under this part if the breach was committed before the board member or officer became one, or ceased to be one. Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1996 ch 634 § 60 (SB 2041). Former Sections: Former § 22254, similar to the present Ed C § 23705, was added Stats 1992 ch 1166 § 7, effective September 29, 1992, and repealed Stats 1993 ch 893 § 1. Historical Derivation: Former Ed C § 22225.6, as added Stats 1982 § 3, amended Stats 1989 ch 542 § 6. Amendments 1996 Amendment: Amended subd (a) by substituting (1) “board member or officer” for “member of the board or its officers” near the beginning; (2) “restitution” for “good” after “liable to make”; and (3) “from the board” for “of the board member or officer” at the end. 79

113) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM § 22255. Scope of personal liability; Breach of fiduciary duties (a) No board member or officer shall be personally liable for the breach of a fiduciary duty except as set forth in Section 22254 or 22256. This subdivision shall apply only to causes of actions arising on or after January 1, 1990. (b) Nothing in this section shall be interpreted to lessen the scope of liability of board members or employees of the system for gross negligence or fraud in the investment of the retirement fund assets, nor to lessen the scope of liability of the board or system for breach of fiduciary duty pertaining to the administration of the plan. Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1996 ch 634 § 61 (SB 2041). Former Sections: Former § 22255, similar to present Ed C § 23706, was added Stats 1992 ch 1166 § 7, effective September 29, 1992, and repealed Stats 1993 ch 893 § 1. Historical Derivation: Former Ed C § 22225.65, as added Stats 1989 ch 542 § 7. Amendments 1996 Amendment: Amended subd (b) by (1) substituting “board members” for “members of the board” after “of liability of”; (2) adding “board or” after “of liability of the”; and (3) substituting “the plan” for “retirement benefits, including the granting, denial, or withdrawal of benefits” at the end. § 22256. Additional bases of liability for breach of fiduciary duties A board member or officer shall be liable for a breach of fiduciary responsibility of another board member or officer with respect to the system in the following circumstances: (a) If the board member or officer knowingly participates in, or knowingly undertakes to conceal an act or omission of the other board member or officer knowing that the act or omission is a breach. (b) If the board member’s or officer’s failure to comply with his or her responsibilities as set forth in Section 22251, 22252, or 22253 has enabled another board member or officer to commit a breach. (c) If the board member or officer has knowledge of a breach unless the board member or officer makes reasonable efforts under the circumstances to remedy the breach. Added by Stats 1993 ch 893 § 2 (AB 1796). Former Sections: Former § 22256, similar to present § 22222, was added Stats 1992 ch 1166 § 7, effective September 29, 1992, and repealed Stats 1993 ch 893 § 1. Historical Derivation: Former § 22225.7, as added Stats 1982 ch 1200 § 4, amended Stats 1989 ch 542 § 8. § 22257. Investment managers (a) Notwithstanding Section 22203, the board may contract with or appoint one or more investment managers to manage the assets of the retirement fund. If the board has acted with care, skill, prudence, and diligence in meeting the requirements of Sections 22252 and 22253 in selecting and monitoring the investment managers, then, notwithstanding Sections 22250, 22252, 22253, 22254, and 22256, no board member shall be liable for the acts or omissions of the investment managers or be under any obligation to invest or otherwise manage any assets of the retirement fund that are subject to the management of the investment managers. (b) Incorporation of the fiduciary duty set forth in Section 22250 into the terms of a contract between the system and an investment manager shall be admissible as evidence that the board has acted with care, skill, prudence, and diligence in the selection of the investment manager. Added by Stats 1993 ch 893 § 2 (AB 1796). 80

114) PART 13, CHAPTER 4 Former Sections: Former § 22257, relating to periodic actuarial valuation reports, was added Stats 1992 ch 1166 § 7, effective September 29, 1992, operative until January 1, 1997 and repealed Stats 1993 ch 893 § 1. Historical Derivation: Former § 22225.8, as added Stats 1983 ch 104 § 3, amended Stats 1989 ch 542 § 9. § 22258. Appropriations; Liability insurance for fiduciaries Notwithstanding Section 13340 of the Government Code, there is hereby continuously appropriated, without regard to fiscal years, from the retirement fund to the board, the amount necessary to pay for any insurance obtained pursuant to Section 7511 of the Government Code. These payments shall be made upon warrants drawn by the Controller upon demands made by the board. Added by Stats 1993 ch 893 § 2 (AB 1796). Historical Derivation: Former § 22225.75, as added Stats 1984 ch 1503 § 3. § 22259. Fidelity bond; Liability insurance for fiduciaries (a) All board members and officers and employees of the system shall execute a fidelity bond, in an amount determined by the board to be prudent, conditioned upon the faithful performance of the duties of the board member or employee. (b) All board members and officers and all staff of the investment division who are authorized to invest funds shall be covered with fiduciary liability insurance in an amount determined by the board to be prudent. Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1996 ch 634 § 62 (SB 2041). Historical Derivation: Former Ed C § 22225.9, as added Stats 1984 ch 1504 § 1. Amendments 1996 Amendment: (1) Substituted “board members and officers and employees of the system” for “members of the board and its officers and employees” in subd (a); (2) added “board” before “member or employee” at the end of subd (a); and (3) substituted “board members and” for “members of the board and its” in subd (b). § 22260. Credit enhancement Notwithstanding any other provision of law, the system may provide credit enhancement for bonds, notes, certificates of participation, or other evidences of indebtedness of an employer, provided that any credit enhancement transaction satisfies the requirement of Section 22250 and does not constitute a prohibited transaction for purposes of Section 503 of the United States Internal Revenue Code. Added by Stats 1998 ch 1076 § 4 (SB 2126). § 22261. Investment in surplus property Notwithstanding any other provision of law, the board may make investments related to the planning, development, or acquisition of surplus real property owned by an employer, if the investment satisfies the requirements of Section 22250 and does not constitute a prohibited transaction for purposes of Section 503 of the Internal Revenue Code. Added by Stats 2002 ch 903 § 1 (SB 1983). 81

115) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM CHAPTER 5. ADMINISTRATION § 22300. Chief executive officer The chief executive officer is the chief administrative officer of the system. The chief executive officer may administer oaths. Added by Stats 1993 ch 893 § 2 (AB 1796). Former Sections: Former § 22300, similar to present § 22400, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, amended Stats 1977 ch 659 § 5, Stats 1989 ch 115 § 2, and repealed Stats 1993 ch 893 § 1. Historical Derivation: Former § 22201, enacted Stats 1976 ch 1010 § 2. § 22301. Power of chief executive officer The chief executive officer has the authority and responsibility for the administration of the system and the plan pursuant to the policies and rules adopted by the board. The chief executive officer may delegate to his or her subordinates any act or duty unless the board by motion or resolution recorded in its minutes has required the chief executive officer to act personally. Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1996 ch 634 § 63 (SB 2041). Former Sections: Former § 22301, similar to present Ed C § 22401, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1993 ch 893 § 1. Historical Derivation: Former Ed C § 22204, as enacted Stats 1976 ch 1010 § 2. Amendments 1996 Amendment: (1) Added “and the plan” after “of the system” in the first sentence; and (2) amended the second sentence by substituting (a) “The chief executive officer” for “He or she” at the beginning; and (b) “the chief executive officer” for “him or her” after “minutes has required”. § 22302. Ombudsman (a) The board shall establish an ombudsman position to serve as an advocate for the members of the Defined Benefit Program and participants of the Cash Balance Benefit Program. The duties of the ombudsman position shall include reviewing and making recommendations to the chief executive officer regarding complaints by school employees, members, employee organizations, the Legislature, or the public regarding actions of the employees of the system. (b) It is the intent of the Legislature that the salary of the position of ombudsman be offset, as much as possible, through savings realized from a reduction in interest payments on delinquent benefits to members, and through a more efficient and improved public relations program. Added by Stats 1993 ch 893 § 2 (AB 2765). Amended by Stats 1994 ch 933 § 15, effective September 27, 1994; Stats 1996 ch 634 § 64; Stats 1998 ch 965 § 31. Former Sections: Former § 22302, similar to present Ed C § 22216, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, amended Stats 1978 ch 870 § 5, operative July 1, 1979, Stats 1984 ch 53 § 1, and repealed Stats 1993 ch 893 § 1. Historical Derivation: (a) Former Ed C § 22204.5, as added Stats 1984 ch 88 § 1. (b) Former Ed C § 22211, as added Stats 1993 ch 893 § 2. 82

116) PART 13, CHAPTER 5 Amendments 1994 Amendment: Amended subd (a) by (1) adding the first sentence; (2) deleting “established pursuant to Section 22211” after “ombudsman position”; and (3) adding “to the chief executive officer”. 1996 Amendment: (1) Amended subd (a) by substituting (a) “plan” for “system” after “members of the” at the end of the first sentence; and (b) employee organizations, the Legislature, or the public regarding actions of the employees” for “retirants, employee organizations, Members of the Legislature, or members of the public regarding actions of the staff” in the second sentence; and (2) substituted “from a” for “in” after “through savings realized” in subd (b). 1998 Amendment: Substituted “Defined Benefit Program and participants of the Cash Balance Benefit Program” for “plan” in the first sentence of subd (a). § 22302.5. Contract with third party The board may contract with a qualified third–party administrator for custodial, record keeping, or other administrative services necessary to carry into effect the provisions of Chapter 38 (commencing with Section 25000) of this part or Part 14. Added by Stats 2000 ch 74 § 23 (AB 1509), as Ed C § 22302. Renumbered by Stats 2000 ch 1021 § 13.5. § 22303. Retirement counseling services; Employment of retired public employees; Receipt of documents (a) Due to an increase in the demand for retirement counseling services, the system, notwithstanding any other provision of law, may contract with a county superintendent or other employer to provide retirement counseling. Retired public employees may be employed on a part-time basis for that purpose, unless and until the study required by subdivision (b) of Section 7 of Chapter 1532 of the Statutes of 1985 recommends against the employment of retired public employees for these purposes. This authorization is subject to the availability of funds appropriated for that purpose in the annual Budget Act. (b) The board may, by resolution, designate one or more official representatives who provide retirement counseling pursuant to subdivision (a), or as an employee of the system, to receive documents submitted pursuant to this part, Part 13.5 (commencing with Section 25900), or Part 14 (commencing with Section 26000). Notwithstanding any other provision of law, any document received by a designated system representative during regular counseling office business hours or in the course of performing counseling services pursuant to this subdivision shall be deemed to have been received by the system’s headquarters office on the date received by the officially designated system representative. Added Stats 1993 ch 893 § 2 (AB 1796). Amended Stats 1996 ch 634 § 65 (SB 2041); Stats 2006 ch 655 § 7.5 (SB 1466), effective January 1, 2007; Stats 2010 ch 207 § 4 (AB 2260), effective January 1, 2011; Stats 2011 ch 703 § 2 (SB 349), effective January 1, 2012; Stats 2013 ch 558 § 6 (AB 1379), effective January 1, 2014. Former Sections: Former § 22303, similar to present Ed C § 22402, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1993 ch 893 § 1. Historical Derivation: Former Ed C § 22204.6, as added Stats 1986 ch 369 § 1. Amendments 1996 Amendment: (1) Substituted “employer” for “employing agency” after “superintendent or other” in the first sentence; (2) divided the former first sentence into the present first and second sentences by substituting a period for “, employing”; and (3) added “may be employed” after “Retired public employees” at the beginning of the second sentence. 2006 Amendment: (1) Added subd designation (a); and (2) added subd (b). 83

117) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM 2010 Amendment: (1) Amended the first sentence of subd (b) by adding (a) “or benefits counselors”; and (b) the comma after “Section 25900)”; and (2) amended the second sentence of subd (b) by adding (a) “or a benefits counselor”; (b) “or any benefits counseling activity”; and (c) “or benefits counselor”. 2011 Amendment: (1) Amended the first sentence of subd (b) by (a) substituting “representatives who” for “contracted offices or benefits counselors that”; and (b) adding “, or as an employee of the system,”; and (2) amended the second sentence of subd (b) by substituting (a) “a designated system representative during regular counseling office” for “an official contracted office or a benefits counselor designated by the board pursuant to this subdivision during the office’s regular”; (b) “in the course of performing counseling services pursuant to this subdivision” for “any benefits counseling activity”; and (c) “officially designated system representative” for “designated official contracted office or benefits counselor”. 2013 Amendment: Deleted “, as established pursuant to Section 22375,” after “headquarters office” in the second sentence of subd (b). § 22303.5. Midcareer retirement information program (a) Notwithstanding any other provision of law, the board shall offer a midcareer retirement information program for the benefit of all members. (b) In implementing this section, the board shall develop plans for the development and delivery of information to enhance awareness of the features and benefits of the Defined Benefit Program, and services of the system, federal Social Security Act programs and benefits as they apply to members, and awareness of personal planning responsibilities. This information shall be provided to assist members in understanding the importance of financial, legal, estate, and personal planning, and how choices and options offered by the system may impact retirement. (c) The board, at a public meeting, may assess a participation fee for the recovery of all startup and ongoing expenses of the midcareer information program. (d) The board shall provide both active and retired members with notice pertaining to paragraph (1) of subdivision (c) of Section 44830 and pertaining to Section 44252.5, making all members aware of the time constraints and possible requirement for passing the state basic skills proficiency test if an individual wants to return to the classroom after 39 months. The methods for providing the notice may include, but are not limited to, any of the following: (1) Inclusion in annual member publications. (2) Inclusion within packets of information provided to members upon or prior to retirement. (3) Inclusion as an attachment to any warrants issued to members. Added by Stats 1994 ch 656 § 1 (AB 3407). Amended by Stats 1996 ch 634 § 66 (SB 2041); Stats 1998 ch 965 § 32 (AB 2765); Stats 2001 ch 734 § 14 (AB 804), effective October 11, 2001. Amendments 1996 Amendment: (1) Deleted the former paragraph following subd (b) which read: “The sum of one hundred thousand dollars ($100,000) is hereby appropriated from the Teachers’ Retirement Fund to the board, in augmentation of Item 1920–001–835 of the Budget Act of 1994, to pay the startup expenses of the midcareer retirement information program required by this section.”; (2) redesignated former subd (d) to be subd (c); and (3) substituted “may” for “shall” in subd (c). 1998 Amendment: Substituted “and benefits of the Defined Benefit Program” for “, benefits”. 2001 Amendment: Added subd (d). § 22304. Administrative costs (a) The costs of administration of the plan shall be paid from the retirement fund and those costs may not exceed the amount made available by law during any fiscal period. (b) The administrative costs of the plan shall be divided proportionately in accordance with the assets of the Defined Benefit Program, the Defined Benefit Supplement Program, and the Cash Balance Benefit Program. 84

118) PART 13, CHAPTER 5 Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1996 ch 634 § 67 (SB 2041); Stats 1998 ch 1048 § 7.5 (SB 2085); Stats 2000 ch 74 § 24 (AB 1509). Former Sections: Former § 22304, similar to present Ed C § 22356, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1993 ch 893 § 1. Historical Derivation: Former Ed C § 22003, as enacted Stats 1976 ch 1010 § 2. Amendments 1996 Amendment: Substituted “plan” for “system” after “administration of the”. 1998 Amendment: (1) Designated the former section to be subd (a); and (2) added subd (b). 2000 Amendment: Added “, the Defined Benefit Supplement Program,” in subd (b). § 22305. Effect of rules and regulations Any rules and regulations adopted by the board for the purpose of the administration of this part and Part 14 (commencing with Section 26000), and not inconsistent with this part and Part 14 (commencing with Section 26000), have the force and effect of law. Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1994 ch 933 § 16 (AB 3171), effective September 27, 1994; Stats 1998 ch 965 § 33 (AB 2765). Former Sections: Former § 22305, relating to additional authorized investments, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1983 ch 1043 § 5, operative June 5, 1984. Historical Derivation: Former § 22210, as enacted Stats 1976 § 2. Amendments 1994 Amendment: Added “of this part”. 1998 Amendment: Added “and Part 14 (commencing with Section 26000),” both times it appears. § 22306. Confidentiality (a) Information filed with the system by a member, participant, or beneficiary of the plan is confidential and shall be used by the system for the sole purpose of carrying into effect the provisions of this part. No official or employee of the system who has access to the individual records of a member, participant, or beneficiary shall divulge any confidential information concerning those records to any person except in the following instances: (1) To the member, participant, or beneficiary to whom the information relates. (2) To the authorized representative of the member, participant, or beneficiary. (3) To the governing board of the member’s or participant’s current or former employer. (4) To any department, agency, or political subdivision of this state. (5) To other individuals as necessary to locate a person to whom a benefit may be payable. (6) Pursuant to subpoena. (7) To an agent or a physician authorized by the board in the performance of duties pursuant to Section 24003, 24012, 24103, or 24111. (8) To a physician or psychologist authorized by the member to receive medical information, if the system determines that the information may be detrimental to the member, as provided under Section 1798.40 of the Civil Code. (b) Information filed with the system in a beneficiary designation form may be released after the death of the member or participant to those persons who may provide information necessary for the distribution of benefits. (c) The information is not open to inspection by anyone except the board and its officers and employees of the system, and any person authorized by the Legislature to make inspections. 85

119) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM Added by Stats 1996 ch 634 § 69 (SB 2041). Amended by Stats 1998 ch 965 § 34 (AB 2765); Stats 1999 ch 939 § 24 (SB 1074); Stats 2007 ch 323 § 4 (AB 757), effective January 1, 2008. Former Sections: Former § 22306, similar to the present section, was added Stats 1993 ch 893 § 2, amended Stats 1994 ch 933 § 17, effective September 27, 1994, and repealed Stats 1996 ch 634 § 68. Former § 22306, relating to additional authorized investments in stocks or shares, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1983 ch 1043 § 6, operative June 5, 1984. Amendments 1998 Amendment: (1) Amended subd (a) by adding (a) “, participant,” both times it appears; and (b) “of the plan” in the first sentence; (2) added “, participant” in subds (a)(1) and (a)(2); (3) added “or participant’s” in subd (a)(3); and (4) added “or participant” in subd (b). 1999 Amendment: Added (1) the commas after “participant” in subds (a)(1) and (a)(2); and (2) subd (a)(6). 2007 Amendment: Added subds (a)(7) and (a)(8). § 22307. Authorization for transfer and disbursement of funds (a) The board may authorize the transfer and disbursement of funds from the retirement fund for the purpose of carrying into effect this part and Part 14 (commencing with Section 26000). That action shall require signatures of either the board chairperson and vice chairperson, or the signatures of the board chairperson or vice chairperson and the chief executive officer or any employee of the system designated by the chief executive officer. (b) Notwithstanding Section 13340 of the Government Code, the board may disburse funds for benefits payable under this part and Part 14 (commencing with Section 26000), for the payment of refunds and for investment transactions. Funds for these purposes shall not require appropriation by the annual Budget Act. (c) Funds for the payment of administrative expenses are not continuously appropriated, and funds for that purpose shall be appropriated by the annual Budget Act. Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1996 ch 634 § 70 (SB 2041); Stats 1998 ch 1048 § 7 (SB 2085); Stats 2000 ch 1025 § 15 (AB 816). Former Sections: Former § 22307, relating to retaining investment counsel, trust companies, or trust departments of banks to advise the board, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, amended Stats 1979 ch 327 § 1, and repealed Stats 1982 ch 1434 § 2. Historical Derivation: Former Ed C § 22206, as enacted Stats 1976 ch 1010 § 2. Amendments 1996 Amendment: Substituted “members” for “retirants, disabilitants” after “payment of benefits to” in subd (b). 1998 Amendment: Added (1) “and Part 14 (commencing with Section 26000)” in subd (a); and (2) “of the Defined Benefit Program as well as to participants and beneficiaries of the Cash Balance Benefit Program” in subd (b). 2000 Amendment: (1) Substituted “. That action shall require signatures of either the board chairperson and vice chairperson, or the signatures of the board chairperson or vice chairperson and” for “upon the signature of either or both of its chairperson and vice chairperson or” in subd (a); (2) substituted the first and second sentences of subd (b) for the former first sentence of subd (b) which read: “Notwithstanding Section 13340 of the Government Code, the board may disburse funds for the payment of benefits to members and beneficiaries of the Defined Benefit Program as well as to participants and beneficiaries of the Cash Balance Benefit Program, for the payment of refunds and for investment transactions and these funds shall not be required to be appropriated through the annual Budget Act.”; (3) designated the former second sentence of subd (b) to be subd (c); and (4) added “funds for that purpose” in subd (c). 86

120) PART 13, CHAPTER 5 § 22307.5. Teachers’ Retirement Program Development Fund created (a) There is in the State Treasury a trust fund to be known as the Teachers’ Retirement Program Development Fund. There shall be deposited directly in that fund, and not transferred from the Teachers’ Retirement Fund, that portion of employer contributions determined by the board as necessary to fund the expenditures authorized by this section. (b) Notwithstanding Section 13340 of the Government Code, moneys in the Teachers’ Retirement Program Development Fund are continuously appropriated without regard to fiscal years to pay any costs determined by the board to be related to the development of programs authorized by statute that the board determines directly or indirectly enhance the financial security of members, participants, or beneficiaries of the State Teachers’ Retirement Plan, if the board determines, by resolution, the proposed program is to have a reasonable expectation to generate sufficient revenue to carry out the ongoing responsibilities of the programs under development and permit the subsequent deposit of funds, pursuant to subdivision (e), into the Teachers’ Retirement Fund. (c) The board may authorize the transfer and disbursement of funds from the Teachers’ Retirement Program Development Fund for the purpose of carrying into effect this section upon the signature of either or both of its chairperson and vice chairperson or the chief executive officer or any employee of the system designated by the chief executive officer. (d) Disbursements of moneys from the Teachers’ Retirement Program Development Fund of whatever nature shall be made upon claims duly audited in the manner prescribed for the disbursement of other public funds. (e) An amount equal to employer contributions deposited in the Teachers’ Retirement Program Development Fund pursuant to subdivision (a), together with interest calculated based on the actuarially assumed rate of investment return for the Defined Benefit Program for the period beginning with the deposit of employer contributions into the Teachers’ Retirement Program Development Fund and ending with the transfer to the Teachers’ Retirement Fund, on terms and conditions established by the board pursuant to subdivision (b), shall be deposited in the Teachers’ Retirement Fund, from funds generated from the programs receiving development funds pursuant to this section. Added by Stats 2006 ch 780 § 1 (AB 2462), effective January 1, 2007. § 22307.6. Transfer of funds from Teachers’ Retirement Program Development Fund into designated fund The board may, by resolution, direct the Controller to transfer all or a portion of the assets in the Teachers’ Retirement Program Development Fund, established pursuant to Section 22307.5, into the designated fund or account that is authorized to expend funds for the same program for which the assets in the Teachers’ Retirement Program Development Fund were credited, if the board finds that the transfer of the assets of the Teachers’ Retirement Program Development Fund into the designated fund or account would facilitate the efficient administration of the program for which the fund or account was established. Added Stats 2010 ch 207 § 5 (AB 2260), effective January 1, 2011. § 22308. Correction of errors or omissions (a) Subject to subdivision (d), the board may, in its discretion and upon any terms it deems just, correct the errors or omissions of any member or beneficiary of the Defined Benefit Program, and of any participant or beneficiary of the Cash Balance Benefit Program, if all of the following facts exist: (1) The error or omission was the result of mistake, inadvertence, surprise, or excusable neglect, as each of those terms is used in Section 473 of the Code of Civil Procedure. (2) The correction will not provide the party seeking correction with a status, right, or obligation not otherwise available under this part. 87

121) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM (b) Failure by a member, participant or beneficiary to make the inquiry that would be made by a reasonable person in like or similar circumstances does not constitute an “error or omission” correctable under this section. (c) Subject to subdivision (d), the board may correct all actions taken as a result of errors or omissions of the employer or this system. (d) The duty and power of the board to correct errors and omissions, as provided in this section, shall terminate upon the expiration of obligations of the board, system, and plan to the party seeking correction of the error or omission, as those obligations are defined by Section 22008. (e) Corrections of errors or omissions pursuant to this section shall be such that the status, rights, and obligations of all parties described in subdivisions (a), (b), and (c) are adjusted to be the same that they would have been if the act that was taken or would have been taken, but for the error or omission, was taken at the proper time. However, notwithstanding any of the other provisions of this section, corrections made pursuant to this section shall adjust the status, rights, and obligations of all parties described in subdivisions (a), (b), and (c) as of the time that the correction actually takes place if the board finds any of the following: (1) That the correction cannot be performed in a retroactive manner. (2) That even if the correction can be performed in a retroactive manner, the status, rights, and obligations of all of the parties described in subdivisions (a), (b), and (c) cannot be adjusted to be the same as they would have been if the error or omission had not occurred. Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1996 ch 634 § 71 (SB 2041); Stats 1998 ch 965 § 35 (AB 2765). Former Sections: Former § 22308, similar to present Ed C § 22324, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, amended Stats 1988 ch 902 § 1, and repealed Stats 1993 ch 893 § 1. Historical Derivation: (a) Former Ed C § 22233, as added Stats 1987 ch 376 § 1. (b) Former Ed C § 22233, as added Stats 1988 ch 1089 § 2. Amendments 1996 Amendment: (1) Substituted “or beneficiary” for “, retirant, or any beneficiary of any member or retirant” after “of any member” in the introductory clause of subd (a); (2) deleted “, retirant,” after “by a member” in subd (b); (3) substituted “the board, system, and plan” for “this system” after “of obligations of” in subd (d); and (4) added “was taken or” after “if the act that” in the first sentence of subd (e). 1998 Amendment: (1) Substituted “of the Defined Benefit Program, and of any participant or beneficiary of the Cash Balance Benefit Program, if” for “, provided that” in the introductory clause of subd (a); and (2) added “, participant” in subd (b). Notes of Decisions In construing the correction provision applicable to the teachers’ retirement system under Ed C § 22308, the court declined to look to the correction provision applicable to the Public Employees’ Retirement System, Gov C § 20160, which used “shall” correct rather than “may” correct. Welch v. California State Teachers’ Retirement Bd. (2012, 3d Dist) 2012 Cal App LEXIS 85. Where a representative of the California State Teachers’ Retirement Board (CalSTRS) misled a teacher about the eligibility requirements for disability retirement benefits in 1999, the teacher’s 2005 application for disability benefits, arising from a 1998 attack by students, should have been remanded to CalSTRS to decide whether to exercise its power under Ed C § 22308 to relieve the teacher from the consequences of the late-filed application, including her inability to prove with contemporaneous medical evidence that she was disabled in 1999. Welch v. California State Teachers’ Retirement Bd. (2012, 3d Dist) 2012 Cal App LEXIS 85. 88

122) PART 13, CHAPTER 5 § 22309. Individual account statements (Annual statement) (a) Except as provided in subdivision (c), the system shall make available to each active and inactive member, at least annually after the close of the school year, a statement of the member’s individual Defined Benefit Program and Defined Benefit Supplement accounts. The system shall mail a copy of the member’s statement, provided the employer or member has informed the system of the member’s current mailing address and the member has not requested to receive that annual statement electronically, in lieu of mailing. (b) The system shall periodically make a good faith effort to locate inactive members to provide these members with information concerning any benefit for which they may be eligible. (c) The mode of issuance described in subdivision (a) is subject to Section 22337. Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1994 ch 933 § 18 (AB 3171), effective September 27, 1994; Stats 1996 ch 634 § 72 (SB 2041); Stats 2000 ch 74 § 25 (AB 1509); Stats 2006 ch 655 § 8 (SB 1466), effective January 1, 2007; Stats 2013 ch 459 § 1 (AB 989), effective January 1, 2014. Former Sections: Former § 22309, similar to present Ed C § 22359, was added Stats 1986 ch 900 § 1 and repealed Stats 1993 ch 893 § 1. Historical Derivation: Former Ed C § 22228, as enacted Stats 1976 ch 1010 § 2, amended Stats 1993 ch 861 § 2. Amendments 1994 Amendment: (1) Added subdivision designation (a); (2) added “, provided the employer or member has informed the system of the member’s current mailing address” in subd (a); and (3) added subd (b). 1996 Amendment: (1) Added “active and inactive” after “issue to each” in subd (a); (2) redesignated former subd (b)(1) to be subd (b); and (3) deleted former subd (b)(2) which read: “(2) For purposes of this subdivision, ‘inactive member’ means a member who, by the report period ending June 30 of a school year, has performed no service during that school year.” 2000 Amendment: Amended subd (a) by (1) adding “no less frequently than annually”; (2) substituting “the member’s” for “his or her”; and (3) substituting “Defined Benefit Program and Defined Benefit Supplement accounts” for “account”. 2006 Amendment: (1) Added “United States Postal Service” after “the member’s current”; and (2) added the last sentence. 2013 Amendment: (1) Substituted subd (a) for former subd (a) which read: “(a) The board shall issue to each active and inactive member, no less frequently than annually after the close of the school year, a statement of the member’s individual Defined Benefit Program and Defined Benefit Supplement accounts, provided the employer or member has informed the system of the member’s current United States Postal Service mailing address. If the member indicates that he or she prefers to receive that annual statement through the Web site of the system, the board may, in lieu of mailing, issue the annual statement by secured access through the Web site of the system.”; (2) substituted “system” for “board” in subd (b); and (3) added subd (c). § 22310. Unclaimed refund or benefit (a) If a benefit or refund cannot be paid because, after a good faith effort, the member or beneficiary cannot be located, the amount payable shall be returned to the retirement fund until the time the party entitled to payment is located. (b) Interest shall continue to accrue on the accumulated contributions pursuant to this part. Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1994 ch 933 § 19 (AB 3171), effective September 27, 1994; Stats 1996 ch 634 § 73 (SB 2041). Former Sections: Former § 22310, relating to teacher tax–sheltered annuity fund, was added Stats 1978 ch 870 § 6 amended Stats 1990 ch 831 § 3, and repealed Stats 1993 ch 893 § 1. 89

123) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM Historical Derivation: Former Ed C § 24609, as enacted Stats 1976 § 1010 § 2, amended Stats 1980 ch 244 § 13. Amendments 1994 Amendment: Substituted the section for the former section which read: “(a) Whenever a refund cannot be made under Section 23103, or a benefit cannot be paid because the member cannot be found, all accumulated contributions credited to the member’s account shall be transferred to the retirement fund. “(b) If a member whose entire accumulated contributions were transferred to the retirement fund returns to a position requiring membership is located, or applies for a benefit or a refund of contributions, the system shall return all his or her contributions to the member’s account with interest that would have been credited to the account had the accumulated contributions not been transferred.” 1996 Amendment: Amended subd (a) by (1) deleting “of contributions” after “benefit or refund”; and (2) substituting “returned to the retirement fund” for “retained in the Teachers’ Retirement Fund”. § 22311. Actuarial investigations The board shall maintain all data necessary to perform an actuarial investigation of the demographic and economic experience of the plan and for the actuarial valuation of the assets and liabilities of the plan. Added by Stats 2000 ch 74 § 27 (AB 1509). Former Sections: Former § 22311, similar to the present section, was added Stats 1993 ch 893 § 2, amended Stats 1994 ch 933 § 20, effective September 27, 1994, Stats 1996 ch 634 § 74, Stats 1998 ch 1048 § 8, and repealed Stats 2000 ch 74 § 26. Historical Derivation: Former Ed C § 22226, as enacted Stats 1976 ch 1010 § 2, amended Stats 1987 ch 416 § 2. § 22311.5. Actuary’s services The board shall acquire the services of an actuary to do all of the following: (a) Make recommendations to the board for the adoption of actuarial assumptions that, in the aggregate, are reasonably related to the past experience of the plan and reflect the actuary’s informed estimate of the future experience. (b) Make an actuarial investigation of the demographic and economic experience, including the mortality, service, and other experience, of the plan with respect to members and beneficiaries of the Defined Benefit Program; members, beneficiaries, and annuity beneficiaries of the Defined Benefit Supplement Program; and participants and beneficiaries of the Cash Balance Benefit Program. (c) Make an annual actuarial review of the goals regarding the sufficiency of the Gain and Loss Reserves with respect to the Defined Benefit Supplement Program and the Cash Balance Benefit Program and make recommendations to the board for maintaining a sufficient Gain and Loss Reserves for the Defined Benefit Supplement Program and the Cash Balance Benefit Program. (d) Recommend to the board the amount, if any, to be transferred to the separate Gain and Loss Reserves from the investment earnings of the plan with respect to the Defined Benefit Supplement Program and the Cash Balance Benefit Program. (e) At least once every six years with respect to the Defined Benefit Program and annually with respect to the Defined Benefit Supplement Program and the Cash Balance Benefit Program, using actuarial assumptions adopted by the board, perform an actuarial valuation of each program that identifies the assets and liabilities, and report the findings to the board. The report of the actuary on the results of each actuarial valuation shall identify and include the components of normal cost, if applicable, and adequate information to determine the effects of changes in actuarial assumptions. Copies of the report on each actuarial valuation shall be transmitted to the Governor and the Legislature. 90

124) PART 13, CHAPTER 5 (f) Recommend to the board all rates and factors necessary to administer the plan, including, but not limited to, mortality tables, annuity factors, interest rates, and additional earnings credits. (g) Recommend to the board a strategy for amortizing any unfunded actuarial obligation. (h) As requested by the board, perform any other actuarial services that may be required for administration of the plan. Added by Stats 2000 ch 74 § 28 (AB 1509), ch 1021 § 14 (AB 2700). § 22311.7. Actuarial plan amendments Upon the basis of the actuarial investigation and actuarial valuation pursuant to Section 22311.5, or any part thereof, the board shall adopt by plan amendment actuarial assumptions, rates, factors, and tables as the board determines are necessary for administration of the plan and its programs. Added by Stats 2000 ch 74 § 29 (AB 1509). § 22311.9. Report to Legislature on fiscal health of Defined Benefit Program and unfunded actuarial obligation for service credited before July 1, 2014 (Inoperative July 1, 2046; Repealed January 1, 2047) (a) The board shall report to the Legislature on or before July 1, 2019, and every five years thereafter, on the fiscal health of the Defined Benefit Program and the unfunded actuarial obligation with respect to service credited to members of that program before July 1, 2014. The first report shall include the unfunded actuarial obligation and funded ratio as of the date of enactment of this section and compare that with the unfunded actuarial obligation and funded ratio as of June 30, 2018, and the projected unfunded actuarial obligation and funded ratio as of June 30, 2046, based on contributions, and economic and demographic assumptions identified in the June 30, 2018, actuarial valuation. The report shall also identify adjustments required in contribution rates in order to eliminate by June 30, 2046, the unfunded actuarial obligation of the Defined Benefit Program with respect to service credited to members of that program before July 1, 2014. Subsequent reports shall include the unfunded actuarial obligation and the funded ratio of the Defined Benefit Program based on the actuarial valuation of the preceding year, and shall identify adjustments required in contribution rates in order to eliminate by June 30, 2046, the unfunded actuarial obligation of the Defined Benefit Program with respect to service credited to members of that program before July 1, 2014. These reports shall be provided consistent with the requirements of Section 9795 of the Government Code. (b) This section shall become inoperative on July 1, 2046, and as of January 1, 2047, is repealed. Added Stats 2014 ch 47 § 4 (AB 1469), effective June 24, 2014, inoperative July 1, 2046, repealed January 1, 2047. § 22313. Retroactive adjustment of rates (a) No adjustment shall be included in new rates of contribution adopted by the board on the basis of an investigation, valuation, and determination or because of amendment to the Teachers’ Retirement Law with respect to the Defined Benefit Program, for time prior to the effective date of the adoption or amendment, as the case may be. (b) No action of the board, other than correction of errors in calculating the allowance or annuity at the time of retirement, disability or death of a member shall change the allowance or annuity payable to a retired member or beneficiary prior to the date the action is taken. Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1996 ch 634 § 75 (SB 2041); Stats 1998 ch 965 § 36 (AB 2765). 91

125) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM Former Sections: Former § 22313, relating to authority of retirement board to invest in real property, was added Stats 1982 ch 24 § 1 and repealed Stats 1985 ch 54 § 2. Historical Derivation: Former Ed C § 22227, as enacted Stats 1976 ch 1010 § 2. Amendments 1996 Amendment: (1) Deleted “annuity” after “new rates of” in subd (a); and (2) substituted “allowance or annuity at the time of retirement, disability or death of a member shall change the allowance or annuity payable to a retired member or beneficiary” for “annuity at the time of retirement, shall change the annuity payable to a retirant retired” in subd (b). 1998 Amendment: Added “with respect to the Defined Benefit Program” in subd (a). § 22314. Advisement of possible tax liabilities The system shall inform a member, upon retirement, that future tax liabilities may occur as the result of the pending retirement allowance. Added by Stats 1993 ch 893 § 2 (AB 1796). Former Sections: Former § 22314, relating to definitions and requirements for secutity loan agreements, was added Stats 1982 ch 72 § 1, effective March 1, 1982, and repealed Stats 1985 ch 54 § 3. Historical Derivation: Former § 22004.1, as added Stats 1984 ch 683 § 1, amended Stats 1988 ch 382 § 1. § 22317.5. Amount of compensation considered in computing benefits for members on or after July 1, 1996 The amount of compensation that is taken into account in computing benefits payable under this part to any person who first becomes a member of the Defined Benefit Program on or after July 1, 1996, shall not exceed the annual compensation limitations prescribed by Section 401(a)(17) of Title 26 of the United States Code upon public retirement systems, as that section may be amended from time to time and as that limit may be adjusted by the Commissioner of Internal Revenue for increases in cost of living. The determination of compensation for each 12–month period shall be subject to the annual compensation limit in effect for the calendar year in which the 12–month period begins. In a determination of average annual compensation over more than one 12–month period, the amount of compensation taken into account for each 12–month period, shall be subject to the annual compensation limit applicable to that period. Notwithstanding any other provision of this part, no member contribution shall be paid upon any compensation in excess of the annual compensation limitations prescribed by Section 401(a)(17) of Title 26 of the United States Code. Added by Stats 1995 ch 829 § 1 (SB 791). Amended by Stats 1998 ch 965 § 40 (AB 2765). Amendments 1998 Amendment: Amended the first sentence by (1) adding “under this part” after “benefits payable”; and (2) substituting “the Defined Benefit Program” for “this system”. § 22318. Payment of checks to disabled member or member retired for disability; Retroactive checks (a) The initial payment to a disabled member or member retired for disability shall be paid within 45 days following the date the disability is approved, the effective date of the disability retirement or disability allowance, or receipt of all necessary information, whichever occurs last. Monthly payments shall continue thereafter. Initial payments may be based on a good faith estimated amount pending receipt by the system of all necessary employment, dependent, and other public benefit information. 92

126) PART 13, CHAPTER 5 (b) The allowance payable to a disabled member or member retired for disability shall be finalized and a retroactive payment, if one is due, shall be issued within 45 days of receipt by the system of all necessary information. Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1996 ch 634 § 79 (SB 2041). Amendments 1996 Amendment: Substituted (1) “disabled member or member retired for disability” for “disabilitant or a disability retirant” in the first sentence of subd (a); and (2) subd (b) for former subd (b) which read: “(b) The disabilitant or disability retirant shall be placed on the final roll and issued a retroactive payment, if one is due, within 45 days of receipt by the system of all necessary information.” § 22319. Payment of checks to member retired for service; Retroactive checks (a) The initial payment to a member retired for service shall be issued within 45 days of either the effective date of retirement or receipt by the system of a completed application for retirement, whichever is later. The initial payment to an option beneficiary shall be issued within 45 days following receipt by the system of a completed application for death benefits and proof of death of the member. Monthly payments shall continue thereafter. Payments may be based on a good faith estimate pending receipt by the system of all necessary employment information. (b) The allowance payable to a member retired for service or option beneficiary shall be finalized and a retroactive payment, if one is due, shall be issued within 45 days of receipt by the system of all necessary information. Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1994 ch 933 § 22 (AB 3171), effective September 27, 1994; Stats 1996 ch 634 § 80 (SB 2041). Amendments 1994 Amendment: Substituted “proof of death of the member or retirant” for “a certified death certificate” at the end of the second sentence of subd (a). 1996 Amendment: (1) Amended subd (a) by (a) substituting “member retired for service” for “retirant” after “The initial payment to a” at the beginning of the first sentence; (b) deleting “or retirant” after “death of the member” at the end of the second sentence; and (c) substituting “estimate” for “estimated amount” after “on a good faith” in the fourth sentence; and (2) substituted subd (b) for former subd (b) which read: “(b) The retirant or option beneficiary shall be placed on the final roll and issued a retroactive payment, if one is due, within 45 days of receipt by the system of all necessary information.” § 22320. Payment of death benefits The death benefits provided pursuant to Chapter 22 (commencing with Section 23800), Chapter 23 (commencing with Section 23850), and Chapter 24 (commencing with Section 23880) shall be paid to the beneficiary or estate within 45 days of receipt by the system of all necessary information. Added by Stats 1993 ch 893 § 2 (AB 1796). Former Sections: Former § 22320, similar to present § 22375, was added Stats 1982 ch 1429 § 1, effective September 27, 1982, and repealed Stats 1993 ch 893 § 1. Historical Derivation: Former § 24612.2, as added Stats 1992 ch 1167 § 16. Former § 24612.2, as added Stats 1982 ch 1428 § 3, amended Stats 1987 ch 330 § 19, Stats 1990 ch 560 § 13. 93

127) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM § 22321. Penalty for late payments (Interest penalty) The system shall pay interest for delays in excess of the allowable days specified in Sections 22318 to 22320, inclusive. The interest rate for late payments shall be the regular interest rate. Interest payments shall be deemed to be interest earned in the calendar year in which paid. All interest payments under this section shall be paid in addition to any credited interest that is paid. Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1996 ch 634 § 81 (1st) (SB 2041). Former Sections: Former § 22321, similar to present Ed C § 22376, was added Stats 1982 ch 1429 § 1, effective September 27, 1982, and repealed Stats 1993 ch 893 § 1. Historical Derivation: Former Ed C § 24612.5, as added Stats 1982 ch 1428 § 4, amended 1989 ch 327 § 2, Stats 1990 ch 560 § 14. Amendments 1996 Amendment: Deleted “the retirant, option beneficiary, disabilitant, beneficiary, or estate” after “The system shall pay” at the beginning of the first sentence. § 22322. Report of late payments to board The system shall report monthly to the board on all late payments. Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1996 ch 634 § 81 (2nd) (SB 2041). Former Sections: Former § 22322, similar to present Ed C § 22377, was added Stats 1982 ch 1429 § 1, effective September 27, 1982, and repealed Stats 1993 ch 893 § 1. Historical Derivation: Former Ed C § 24613, as added Stats 1982 ch 1428 § 5. Amendments 1996 Amendment: Substituted the section for the former section which read: “The system shall make a report to the board of all late payments at each regularly scheduled meeting.” § 22323. Monthly report of outstanding death benefits The system shall report monthly to the board concerning outstanding death benefits payable that have not been paid within six months of the notification of the death of the member. Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1996 ch 634 § 82 (SB 2041). Former Sections: Former § 22323, similar to present Ed C § 22378, was added Stats 1982 ch 1429 § 1, effective September 27, 1982, and repealed Stats 1993 ch 893 § 1. Historical Derivation: Former Ed C § 24618, as added Stats 1986 ch 1006 § 3. Amendments 1996 Amendment: Added “payable” after “outstanding death benefits”. § 22324. Annual report The board shall file an annual report with the Governor and the Legislature by March 1 of each year on all phases of its work that could affect the need for public contributions for costs of administration of the system, including the subjects of benefits, programs, practices, procedures, comments on trends and developments in the field of retirement, and the following information on the assets of the plan: (a) A copy of the annual audit performed pursuant to Section 22217. 94

128) PART 13, CHAPTER 5 (b) A certification letter from the system’s consulting actuary concerning the findings of the most recent actuarial valuation, accompanied by analysis of funding progress and summaries of the actuarial cost method, assumptions, and demographic data, including actual payroll subject to the system. (c) A review of the system’s asset mix strategy, a market review or the economic and financial environment in which investments were made, and a summary of the system’s general investment strategy. (d) A description of the investments of the system at cost and market value, and a summary of major changes that occurred since the previous year. (e) The annual return on investments and the following information regarding the rate of return of the system by asset type: (1) Time-weighted market value rate of return on a five-year, three-year, and one-year basis. (2) Time-weighted book value rate of return on a five-year, three-year, and one-year basis. (3) Portfolio return comparisons that compare investment returns with universes and indexes. (f) A report on the use of outside investment advisers and managers. (g) A report on the nature and cost of investment contract services used, including either the start date of an existing contract or, if there are multiple existing contracts with the same contractor or vendor, the earliest start date. (h) A report on shareholder voting. (i) A report for the prior fiscal year on the following information: (1) The percentage of purchasing power protection and any changes adopted by the board. (2) The extent to which inflation has eroded the purchasing power of benefits provided under the Defined Benefit Program. (3) The amount of supplementary increases in retirement allowances required to preserve the purchasing power of benefits provided by the Defined Benefit Program. Added by Stats 1995 ch 829 § 3 (SB 791). Amended by Stats 1996 ch 634 § 83 (SB 2041); Stats 2012 ch 864 § 4 (AB 2663), effective January 1, 2013. Former Sections: Former § 22324, similar to the present section, was added Stats 1993 ch 893 § 2, and repealed Stats 1995 ch 829 § 2. Former § 22324, similar to present Ed C § 22379, was added Stats 1982 ch 1429 § 1, effective September 27, 1982, and repealed Stats 1993 ch 893 § 1. Historical Derivation: (a) Former Ed C § 22218, as enacted Stats 1976 ch 1010 § 2. (b) Former Ed C § 22308, as enacted Stats 1976 ch 1010 § 2, amended Stats 1988 ch 902 § 1. (c) Former Ed C § 22325, as added Stats 1993 ch 893 § 2. Amendments 1996 Amendment: Substituted “plan” for “system” after “the assets of the” at the end of the introductory clause. 2012 Amendment: (1) Amended subd (b) by (a) adding “analysis of funding progress and”; and (b) substituting “, including actual payroll subject to the system” for “and analysis of funding progress”; (2) added “The annual return on investments and” in the introductory clause of subd (e); (3) added subds (g) and (i); and (4) redesignated former subd (g) to be subd (h). § 22327. Disclosure of earnings of recipient (Disability allowance and disability retirement) Notwithstanding any other provision of law, the Employment Development Department shall disclose to the system information in its possession relating to the earnings of any person who is a member of the Defined Benefit Program, if the member is receiving a disability benefit or performing retired member activities. The earnings information shall be released to the system only upon written request from the system specifying that the person is a member of the Defined Benefit Program and is receiving a disability benefit or performing retired member activities. The system shall use the infor95

129) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM mation obtained pursuant to this section only for purposes of Chapter 25 (commencing with Section 24001), Chapter 26 (commencing with the Section 24100), Section 24214, or Section 24214.5. The request may be made by the chief executive officer of the system or by an employee of the system so authorized and identified by name and title by the chief executive officer in writing. The system shall notify members receiving a disability benefit or performing retired member activities that earnings information shall be obtained from the Employment Development Department upon request by the system. The system shall not release any earnings information received from the Employment Development Department to any person, agency, or other entity. The system shall reimburse the Employment Development Department for all reasonable administrative expenses incurred pursuant to this section. Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1996 ch 634 § 84 (SB 2041); Stats 1998 ch 965 § 41 (AB 2765); Stats 1999 ch 939 § 25 (SB 1074); Stats 2013 ch 559 § 12 (AB 1381), effective January 1, 2014. Note—Stats 2013 ch 559, as amended by Stats 2014 ch 755 § 81, provides: SECTION 1. The Legislature finds and declares that this act, as it applies to the State Teachers’ Retirement Plan, clarifies the California Public Employees’ Pension Reform Act of 2013, is declaratory of existing law, and is intended to apply concurrently with the initial operation of that act. The amendments made by this act, excluding those amendments made in Sections 4, 12, 28, 29, 30, and 36 shall be deemed to be operative January 1, 2013, unless otherwise stated. Historical Derivation: Former Ed C § 22242, as added Stats 1985 ch 543 § 1 as Ed C § 23910.3, amended and renumbered by Stats 1992 ch 1167 § 12. Amendments 1996 Amendment: Substituted (1) “benefit from the plan” for “allowance or disability retirement allowance from the system” at the end of the first sentence; (2) “disability benefits from the plan” for “benefits for a disability allowance or disability retirement allowance from the system” at the end of the second sentence; and (3) “benefits that earnings information from shall be obtained from the Employment Development Department’s” for “allowances and disability retirement allowances that earnings information from the Employment Development Department’s records will be released” in the fourth sentence. 1998 Amendment: Amended the fourth sentence by (1) deleting “from” after “earnings information”; and (2) substituting “Department” for “Department’s”. 1999 Amendment: Substituted “under the Defined Benefit Program” for “from the plan” at the end of the first and second sentences. 2013 Amendment: Substituted the section for the former section which read: “Notwithstanding any other provision of law, the Employment Development Department shall disclose to the board information in its possession relating to the earnings of any person who is receiving a disability benefit under the Defined Benefit Program. The earnings information shall be released to the board only upon written request from the board specifying that the person is receiving disability benefits under the Defined Benefit Program. The request may be made by the chief executive officer of the system or by an employee of the system so authorized and identified by name and title by the chief executive officer in writing. The board shall notify recipients of disability benefits that earnings information shall be obtained from the Employment Development Department upon request by the board. The board shall not release any earnings information received from the Employment Development Department to any person, agency, or other entity. The system shall reimburse the Employment Development Department for all reasonable administrative expenses incurred pursuant to this section.” § 22328. Credits on cancellation of allowances accrued after July 1, 1972 (a) Upon termination of a retirement allowance or disability allowance that began to accrue on or after July 1, 1972, the person’s individual account shall be credited with the amount of his or her accumulated retirement contributions as they were on the effective date of retirement or disability, less the sum of all payments made under paragraph (1) of subdivision (a) of Section 24202, and under Sec- 96

130) PART 13, CHAPTER 5 tions 24006 and 24007. The reduction shall not be greater than the total of the accumulated retirement contributions. (b) Upon the termination of a retirement allowance, the person’s accumulated annuity deposit contribution accounts shall be credited with the amounts of the contributions as they were on the date the annuity became payable because of the retirement less the sum of all payments made under paragraph (2) of subdivision (a) of Section 24202. Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1996 ch 634 § 85 (SB 2041). Historical Derivation: Former Ed C § 23914, as enacted Stats 1976 ch 1010 § 2, amended Stats 1978 ch 870 § 15, Stats 1984 ch 53 § 4. Amendments 1996 Amendment: Amended the first sentence of subd (a) by (1) adding “allowance” after “of a retirement” near the beginning; and (2) deleting “allowance” after “date of retirement or disability”. § 22329. Toll–free telephone assistance In order to provide equitable telephone assistance to all members and beneficiaries, regardless of their location in California, the system shall install a toll–free, “800” prefix, line. Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1996 ch 634 § 86 (SB 2041). Historical Derivation: Former Ed C § 22235, as added Stats 1984 ch 683 § 2. Amendments 1996 Amendment: Substituted “and beneficiaries” for “, beneficiaries, and retirants” after “to all members”. § 22330. Analysis of asset and liability implications of bills affecting investment strategy, funding, or benefit structure; Appropriation (a) The board shall provide the Legislature with an analysis of the asset and liability implications of each bill that would affect the investment strategy of the system, the funding of the plan, or the benefit structure of the plan. The analysis shall include an explanation of the methodology employed and the assumptions used in its preparation. Neither fiscal committee of the Legislature shall hear any such bill until the analysis has been provided to the committee. (b) There is hereby continuously appropriated, without regard to fiscal years, from the retirement fund, an amount sufficient to pay all costs arising from subdivision (a), but not to exceed fifty thousand dollars ($50,000) in any one fiscal year. Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1996 ch 634 § 87 (SB 2041). Historical Derivation: Former Ed C § 22236, as added Stats 1984 ch 1502 § 1. Amendments 1996 Amendment: Substituted “plan, or the benefit structure of the plan” for “system, or the benefit structure of the system” at the end of the first sentence in subd (a). 97

131) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM § 22335. Disbursement of moneys in Teachers Tax–Sheltered Annuity Fund (Operative term contingent) (a) All moneys in the Teachers Tax–Sheltered Annuity Fund are continuously appropriated to the board for disbursement for the purposes of the tax–sheltered annuity plan previously provided under this part. (b) The board may provide by board rule for optional forms of payment from the Teachers Tax– Sheltered Annuity Fund. (c) The Teachers Tax–Sheltered Annuity Fund as it existed on December 31, 1994, shall continue to exist for purposes of this section. (d) This section shall cease to be operative 180 days after the date that an annuity contract and custodial account established pursuant to Chapter 36 (commencing with Section 24950) becomes operative. On the date this section ceases to be operative this section is repealed unless a statute that is enacted before that date deletes or extends that date. Added by Stats 1994 ch 489 § 1 (AB 3705). Amended by Stats 1996 ch 634 § 89 (SB 2041). Amendments 1996 Amendment: Substituted “Teachers Tax–Sheltered Annuity Fund” for “Teacher Tax–Sheltered Annuity Fund” wherever it appears. § 22337. Mode of notice, issuance, and time limitations for specific system communications (a) The requirements and procedures described in this section shall apply, to the extent that they are applicable, to the following sections: (1) Section 22309. (2) Section 22661. (3) Section 22662. (4) Section 22663. (5) Section 22801. (6) Section 23104. (7) Section 23203. (8) Section 24615. (9) Section 26214. (b) A communication or other action described in a section listed in subdivision (a) may be made by electronic delivery pursuant to the requirements of this section. The system may designate electronic delivery the default method of communication or other action with regard to these sections, provided that the system notifies the parties affected that they have the right to request delivery by mail and that, unless the affected party elects, in a manner specified by the system, to continue delivery by mail, delivery shall be provided electronically. (c) Prior to the designation described in subdivision (b), mail shall continue to be the default method of communication unless the member, nonmember spouse, participant, nonparticipant spouse, or beneficiary has requested that he or she receive that communication electronically, pursuant to a procedure specified by the system. (d) If a provision in a section listed in subdivision (a) requires that action be taken within a specified number of days of a mailing date, and electronic delivery has been substituted for delivery by mail, date of electronic delivery shall substitute for date of mailing for purposes of measuring the number of days within which an action is to be taken. Added Stats 2013 ch 459 § 2 (AB 989), effective January 1, 2014. 98

132) PART 13, CHAPTER 6 CHAPTER 6. INVESTMENTS § 22350. Legislative declaration; Investment expertise The Legislature finds and declares that changing economic conditions and increasing complexity in the investment market make it necessary and desirable that the system obtain the best possible investment expertise. Added by Stats 1993 ch 893 § 2 (AB 1796). Historical Derivation: Former § 22205.1, as added Stats 1982 ch 1433 § 1, amended Stats 1986 ch 230 § 1. § 22351. Legislative intent; Expertise of investment advisers It is the intent of the Legislature that the board secure investment advisors with the composite expertise necessary for the investment of the retirement fund portfolio. Added by Stats 1993 ch 893 § 2 (AB 1796). Historical Derivation: Former § 22312, as added Stats 1982 ch 1432 § 1. § 22352. Contract for investment services Upon a finding by the board that necessary investment expertise is not available within existing civil service classifications, and with the approval of the State Personnel Board, the board may contract with qualified investment managers having demonstrated expertise in the management of large and diverse investment portfolios to render service in connection with the investment program of the board. Added Stats 1993 ch 893 § 2 (AB 1796). Amended Stats 2001 ch 803 § 5 (SB 501); Stats 2012 ch 728 § 30 (SB 71), effective January 1, 2013 (ch 728 prevails), ch 864 § 5 (AB 2663), effective January 1, 2013. Historical Derivation: Former § 22205.2, as added Stats 1982 ch 1433 § 2, amended Stats 1986 ch 230 § 2, Stats 1987 ch 330 § 6. Amendments 2001 Amendment: Amended the first sentence of subd (b) by (1) adding “and” after “Legislature,”; (2) deleting “, and the Joint Public Pension Fund Investments Committee” after “Committee”; and (3) deleting “the” after “duration, and”. 2012 Amendment: Deleted (1) subdivision designation (a); and (2) former subd (a) which read: “(b) The board shall report to the Governor, the Legislature, and the Joint Legislative Budget Committee on the nature, duration, and cost of investment contract services used. The report shall first be submitted in April 1987, and annually in April of every year thereafter.” § 22353. Requirement of separate individual investment advisers (a) Notwithstanding any other provision of law, the board shall by contract retain not less than two separate individual investment advisers. (b) Notwithstanding Section 13340 of the Government Code, there is hereby continuously appropriated without regard to fiscal years, from the retirement fund, an amount sufficient to pay all costs arising from this section. (c) No costs arising from this section shall be paid from the General Fund. 99

133) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM Added by Stats 1993 ch 893 § 2 (AB 1796). Historical Derivation: Former § 22312.5, as added Stats 1982 ch 1432 § 2. § 22354. Duties of investment managers (a) The board shall, pursuant to the state civil service statutes, either contract with, or establish and fill full–time positions for, investment managers who are experienced and knowledgeable in corporate management issues to monitor each corporation any of whose shares are owned by the plan and to advise the board on the voting of the shares owned by the plan and on the responses of the system to merger proposals and tender offers and all other matters pertaining to corporate governance. (b) Notwithstanding Section 13340 of the Government Code, there is hereby continuously appropriated, without regard to fiscal years, from the retirement fund, an amount sufficient to pay all costs arising from this section. Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1994 ch 933 § 23 (AB 3171), effective September 27, 1994; Stats 1998 ch 965 § 42 (AB 2765). Historical Derivation: Former § 22239, as added Stats 1984 ch 1105 § 1, amended Stats 1987 ch 330 § 8, Stats 1988 ch 382 § 3. Amendments 1994 Amendment: Added “retirement” in subd (b). 1998 Amendment: Substituted “plan” for “system” after “owned by the” both times it appears in subd (a). § 22355. Employment of investment personnel also serving as investment staff In no event shall the board employ through interagency agreement any investment personnel who would also serve during the term of the agreement as investment staff to the Board of Administration of the Public Employees’ Retirement System. Added by Stats 1993 ch 893 § 2 (AB 1796). Historical Derivation: Former § 22205.5, as added Stats 1982 ch 1434 § 1, amended Stats 1983 ch 426 § 1, Stats 1987 ch 330 § 7. § 22356. Reduction of book value of securities The board may apply to reduce the book value of securities purchased, all or part of the excess of the proceeds of the sale or redemption prior to maturity of securities over the book value of the securities sold or redeemed provided the purchase of securities is made with those proceeds and provided that the terms of both securities from the date of sale, redemption, or purchase, as the case may be, to the respective dates of maturity, do not differ by more than five years. All applications of excess of sales or redemption proceeds, even with greater difference in terms, made by the board before October 1, 1949, are hereby validated and confirmed. Added by Stats 1993 ch 893 § 2 (AB 1796). Historical Derivation: Former § 22304, as enacted Stats 1976 ch 1010 § 2. 100

134) PART 13, CHAPTER 6 § 22359. Custodian services 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. Added by Stats 1993 ch 893 § 2 (AB 1796). Historical Derivation: Former § 22309, as added Stats 1986 ch 900 § 1. § 22360. State Teachers’ Retirement System Home Loan Program Act; Authority to enter correspondent agreements with private lending institutions to assist retirement fund to invest in residential mortgages (a) Notwithstanding any other provision of law, the board may pursuant to Section 22203 and in conformance with its fiduciary duty set forth in Section 22250, enter into correspondent agreements with private lending institutions in this state to utilize the retirement fund to invest in residential mortgages, including assisting borrowers, through financing, to obtain homes in this state. (b) The program shall, among other things, provide: (1) That home loans be made available to borrowers for the purchase of single–family dwellings, two–family dwellings, three–family dwellings, four–family dwellings, single–family cooperative apartments, and single–family condominiums. (2) That the recipients of the loans occupy the homes as their principal residences in accordance with policies established by the board. (3) That the home loans shall be available only for the purchase or refinance of homes in this state. (4) That the amount and length of the loans shall be pursuant to a schedule periodically established by the board that shall provide a loan of up to 100 percent of the appraised value. In no event shall the loan amount exceed 200 percent of the conforming loan limit set by the Federal National Mortgage Association (FNMA) or 200 percent of the conforming loan limit set by the Federal Home Loan Mortgage Corporation (FHLMC), whichever is greater. The portion of any loan exceeding 80 percent of value shall be insured by an admitted mortgage guaranty insurer conforming to Chapter 2A (commencing with Section 12640.01) of Part 6 of Division 2 of the Insurance Code, in an amount so that the unguaranteed portion of the loan does not exceed 75 percent of the market value of the property together with improvements thereon. (5) That there may be prepayment penalties assessed on the loans in accordance with policies established by the board. (6) That the criteria and terms for its loans shall be consistent with the financial integrity of the program and the sound investment of the retirement fund. (7) Any other terms and conditions as the board shall deem appropriate. (c) It is the intent of the Legislature that the provisions of this section be used to establish an investment program for residential mortgages, including assisting borrowers in purchasing homes in this state, or refinancing a mortgage loan. The Legislature intends that home loans made pursuant to this section shall be secured primarily by the property purchased or refinanced and shall not exceed the appraised value of that property. (d) Appropriate administrative costs of implementing this section and Section 22360.5 shall be paid by the participating borrowers. Those costs may be included in the loan amount. (e) Appropriate interest rates shall be periodically reviewed and adjusted to provide loans to borrowers consistent with the financial integrity of the home loan program and the sound and prudent investment of the retirement fund. Under no circumstances, however, shall the interest rates offered to borrowers be below current market rate. (f) The board shall administer this section and Section 22360.5 under other terms and conditions it deems appropriate and in keeping with the investment standard. The board may adopt policies as nec101

135) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM essary for its administration of this section and Section 22360.5 and to assure compliance with applicable state and federal laws. (g) This section and Section 22360.5 shall be known as, and may be cited as, the Dave Elder State Teachers’ Retirement System Home Loan Program Act. Added by Stats 1998 ch 419 § 2 (SB 1945). Amended by Stats 1999 ch 939 § 26 (SB 1074); Stats 2001 ch 802 § 4 (SB 499). Former Sections: Former § 22360, similar to the present section, was added Stats 1993 ch 893 § 2, amended Stats 1994 ch 933 § 25, effective September 27, 1994, Stats 1996 ch 634 § 91, and repealed Stats 1998 ch 419 § 1. Historical Derivation: Former Ed C § 22238, as added Stats 1984 ch 392 § 1, amended Stats 1986 ch 69 § 1, ch 369 § 2, Stats 1988 ch 408 § 1, Stats 1990 ch 11 § 1, Stats 1991 ch 543 § 4. Amendments 1999 Amendment: (1) Substituted “borrowers” for “members” in subd (a); (2) deleted former subd (b) which read: “(b) For the purpose of this section, the term ‘member’ means any person who is receiving, or is entitled to receive, a retirement allowance funded by this system, notwithstanding any vesting requirement and without regard to present eligibility to retire.”; (3) redesignated former subds (c) and (d) to be subds (b) and (c); (4) amended subd (b) by substituting (a) “The program” for “The board shall adopt regulations governing the program that” in the introductory clause; (b) “accordance with policies” for “accord with rules and regulations” in subd (b)(2); (c) “of up to 100 percent of the appraised value. In no event shall the loan amount exceed three hundred fifty thousand dollars ($350,000)” for “loan–to–value ratio of: (A) for the first loan, except for three–family dwellings and four–family dwellings, a maximum of 95 percent of the first loan; (B) for the first loan on three– family dwellings and four–family dwellings, a maximum of 90 percent of the first loan; and (C) for each additional loan, a maximum of 95 percent of each additional loan” in subd (b)(4); and (d) “policies” for “rules and regulations” in subd (b)(5); (5) amended subd (c) by (a) substituting “borrowers in purchasing” for “members in obtaining” in the first sentence; (b) adding “, or refinancing a mortgage loan” at the end of the first sentence; and (c) substituting “purchased or refinanced and shall not exceed the appraised value of that property” for “acquired and shall not exceed the fair market value of the property acquired” at the end; (6) deleted former subds (e)–(i) which read: “(e) The board shall include in any investment program established pursuant to this section a procedure whereby a borrower may obtain 100–percent financing for the purchase of a single–family dwelling unit in accordance with the following criteria: “(1) The member shall obtain one loan with a loan–to–value ratio not to exceed 95 percent secured by the purchased home and a second personal loan with a loan–to–value ratio not to exceed 5 percent secured by a portion of the accumulated contributions and vested accrued benefits in the member’s individual account. The 5 percent personal loan shall only be used for the purchase of the member’s principal residence and not for a loan to refinance. “(2) The loan secured by the purchased home shall be consistent with the loan–to–value ratios specified in the schedules established pursuant to this section. “(3) In no event shall the loan amount exceed three hundred fifty thousand dollars ($350,000). “(4) In no event may the personal loan secured by the accumulated contributions and vested accrued benefits in the member’s individual account exceed the lesser of 50 percent of the current value amount of the accumulated contributions, or fifty thousand dollars ($50,000). “(5) The pledge of security under this section shall remain in effect until the loan is paid in full. “(f) In the event of a default on the personal loan secured by the member’s contributions as authorized by this section, the board may deduct an amount from the member’s contributions on deposit and adjust the member’s accrued benefit, up to the amount pledged as security, prior to making any disbursement of retirement benefits. “(g) The secured personal loan permitted under this section shall be made available only to currently employed members who meet eligibility criteria the board deems advisable. “(h) If the member is married at the time the home is purchased with a personal loan secured by the member’s contributions as authorized by this section, then the member’s spouse shall agree in writing to the pledge of secu- 102

136) PART 13, CHAPTER 6 rity, as to his or her community interest in the amount pledged regardless of whether title to the home is in joint tenancy. “(i) The pledge of security under this section shall take binding effect. In the event of default, the accumulated contributions in the member’s account shall be reduced as necessary to recover any outstanding loan balance, not to exceed the pledge amount.”; (7) redesignated former subds (j)–(m) to be subds (d)–(g); (8) amended subd (d) by (a) adding “and Section 22360.5”; and (b) substituting “participating borrowers” for “members utilizing this section”; (9) amended subd (f) by (a) adding “and Section 22360.5” both times it appears; and (b) substituting “policies’ for “procedural guidelines” in the second sentence; and (10) added “and Section 22360.5” in subd (g). 2001 Amendment: Substituted “200 percent of the conforming loan limit set by the Federal National Mortgage Association (FNMA) or 200 percent of the conforming loan limit set by the Federal Home Loan Mortgage Corporation (FHLMC), whichever is greater” for “three hundred fifty thousand dollars ($350,000)” in subd 9b)(4). § 22360.5. State Teachers’ Retirement System Home Loan Program Act; Procedure for member to obtain 100 percent residential financing (a) The board may include in any investment program established pursuant to Section 22360 a procedure whereby a member may obtain 100 percent financing for the purchase for a single–family dwelling unit in accordance with the following criteria: (1) The member shall obtain one loan secured by the purchased home, pursuant to Section 22360, and a second personal loan secured by a portion of the accumulated retirement contributions in the member’s individual account. The personal loan shall only be used for the purchase of the member’s principal residence and not for a loan to refinance the member’s existing mortgage. (2) The loan secured by the purchased home shall be consistent with the requirements imposed by Section 22360. (3) In no event may the personal loan secured by the accumulated retirement contributions in the member’s individual account exceed the lesser of 50 percent of the current value amount of the accumulated retirement contributions or fifty thousand dollars ($50,000). (4) If two members are married, the personal loan secured by the sum total of accumulated retirement contributions in both members’ accounts shall not exceed 5 percent of the loan. (5) The pledge of security under this section shall remain in effect until the personal loan is paid in full. (b) The pledge of security under this section shall take binding effect. In the event of a default on the personal loan secured by the member’s retirement contributions as authorized by this section, the board shall deduct an amount from the member’s accumulated retirement contributions on deposit and adjust the member’s accumulated retirement contributions as necessary to recover any outstanding loan balance prior to making any disbursement of a refund or a lump–sum distribution. (c) In the event of a default on the personal loan by a member, the board shall deduct the monthly principal plus appropriate interest from the member’s benefit, when the member begins receiving a benefit, until the loan is paid in full. (d) In the event of a default on the personal loan by a member receiving a benefit, the board shall deduct the monthly principal and interest from the member’s benefit until the personal loan is paid in full. (e) The secured personal loan permitted under this section shall be made available only to members who meet eligibility criteria as determined by the board. (f) In the event of a refund or lump–sum distribution of the accumulated retirement contributions, the member’s account shall be adjusted as necessary to recover any outstanding loan balance. (g) If the member is married at the time the home is purchased with a personal loan secured by the member’s accumulated retirement contributions as authorized by this section, then the member’s spouse shall agree in writing to the pledge of security, as to his or her community interest in the amount pledged, regardless of whether title to the home is held in joint tenancy. 103

137) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM (h) For purposes of the section only, “member” means any person who is entitled to receive an allowance funded by the system pursuant to this part or Part 14, notwithstanding any vesting requirement and without regard to present eligibility to retire, and who is not retired or disabled. Added by Stats 1999 ch 939 § 27 (SB 1074). § 22361. Loans from retirement fund for repair or rebuilding of homes damaged by natural disaster (a) The board may, subject to and consistent with its fiduciary duty, establish a program utilizing the retirement fund to assist currently employed members and retired members who are victims of a natural disaster to obtain loans from the retirement fund for the sole purpose of repairing or rebuilding their homes that have been damaged by a natural disaster. In order to qualify for such a loan, the home of the currently employed member or retired member shall have been damaged by a natural disaster and the home shall have been in an area that has been declared a disaster area in a proclamation of the Governor of a state of emergency affecting the area in which the currently employed member or retired member resides. (b) The board may loan any amount of money, up to and including 100 percent of the current appraised value of a home of a currently employed member or retired member. However, 5 percent of the loan may, at the discretion of the board, be secured by the contributions of the member who requests the loan. (c) The board may, under such conditions as it may deem prudent, require that a currently employed member or retired member pledge other assets as collateral for a loan. (d) The board shall establish terms for the termination of loans made pursuant to this section upon the separation of members from service, to ensure, in the case of any default, that the fund shall not suffer any loss and to provide, as a condition of retirement, for alternative security. The board may impose any other terms and conditions the board may determine appropriate. (e) The Legislature hereby reserves full power and authority to change, revise, limit, expand, or repeal the loan program authorized by this section. Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1996 ch 634 § 92 (SB 2041). Historical Derivation: Former Ed C § 22238.1, as added Stats 1st Ex Sess 1989–90 ch 35 § 1. Amendments 1996 Amendment: Substituted (1) “retired members” for “retirants” after “currently employed members and” in the first sentence of subd (a); (2) “currently employed members and retired members” for “member or retirant” wherever it appears; and (3) “fund” for “system” after “default, that the” in the first sentence in subd (d). § 22362. Investment guidelines (a) Notwithstanding any other provision of law, the board shall give first priority to investing not less than 25 percent of all funds of the plan that become available in a fiscal year for new investments, in any of the following: (1) Obligations secured by a lien or charge solely on residential realty, including rental housing, located in the state and on the security of which, commercial banks are permitted to make loans pursuant to Article 2 (commencing with Section 1220) of Chapter 10 of Division 1 of the Financial Code. (2) Securities representing a beneficial interest in a pool of obligations secured by a lien or charge solely on residential realty located in the state. (3) Certificates of deposit issued by savings and loan associations, if the savings and loan associations agree to make loans, or to fund tax-exempt notes or bonds issued by housing authorities, cities, 104

138) PART 13, CHAPTER 6 or counties, on residential realty located in the state, including rental housing, in an amount equal to the amount of the deposit. (b) Funds subject to investment pursuant to this section include all moneys received as employer and member contributions, investment income, and the proceeds from all net gains and losses from securities, reduced by the amount of benefit payments and withdrawals occurring during the fiscal year. In computing the amount of investment pursuant to this section, a dollar-for-dollar credit shall be given for residential realty investments described in this section that are contractually agreed to be made by a financial institution from which the board, in consideration thereof, purchases other such investments. In computing the amount of investment pursuant to this section, the board may elect to include the dollar amount of commitments to purchase mortgages from public revenue bond programs in the year the commitment is given. However, that election may not exceed one-fifth of the total guideline amount. (c) Nothing in this section shall be construed to require the acquisition of any instrument or security at less than the market rate. (d) If the board determines during any fiscal year that compliance with this section will result in lower overall earnings for the retirement fund than obtainable from alternative investment opportunities that would provide equal or superior security, including guarantee of yield, the board may substitute those higher yielding investments, to the extent actually available for acquisition, for the investments otherwise specified by this section. Additionally, if, and to the extent that, adherence to the diversification guideline specified in this section would conflict with its fiduciary obligations in violation of Section 9 of Article I of the California Constitution or Section 10 of Article I of the United States Constitution, or would conflict with the standard for prudent investment of the fund as set forth in Section 17 of Article XVI of the California Constitution, the board may substitute alternative investments. (e) The board, upon determining the final amount of funds available for investment in substitute alternative investments and the estimated amount of funds invested pursuant to subdivision (a), shall submit that information to the Governor and the Joint Legislative Audit Committee. Thereafter, the Joint Legislative Audit Committee shall transmit the report of the State Auditor to the Speaker of the Assembly and the Senate Committee on Rules for transmittal to the affected policy committees. Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1996 ch 634 § 92.5 (SB 2041); Stats 2003 ch 107 § 4 (AB 569); Stats 2006 ch 654 § 3 (SB 1465), effective January 1, 2007. Historical Derivation: Former Ed C § 22223, as added Stats 1987 ch 416 § 1, amended Stats 1992 ch 540 § 2. Amendments 1996 Amendment: Added (1) “of the plan” after “percent of all funds” in the introductory clause of subd (a); and (2) ”retirement” after “overall earnings for the” in the first sentence of subd (d). 2003 Amendment: (1) Substituted “State Auditor’s” for “Auditor General’s” in the last sentence of subd (d); and (2) substituted “State Auditor” for “Auditor General” in the last sentence of subd (e). 2006 Amendment: Deleted the former last two sentences of subd (d) which read: “In that case, the board shall estimate the amount of funds available in substitute alternative investments and the amount of funds invested pursuant to subdivision (a) and shall submit its resolution of findings and determinations, together with a description of the type, quantity, and yield of the investments substituted, to the Governor and to the Joint Legislative Audit Committee within 20 days following the conclusion of the fiscal year. Within 30 days thereafter, the Joint Legislative Audit Committee shall transmit the State Auditor’s report to the Speaker of the Assembly and to the Senate Committee on Rules for transmittal to affected policy committees.” 105

139) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM § 22363. Closed session on vendor or contractor (Campaign contributions of gifts) No matter involving any vendor or contractor, in their individual or any other capacity, shall be considered during a closed session on any transaction involving the system unless, prior to the closed session, a written disclosure has been submitted by the vendor or contractor of any campaign contributions aggregating two hundred fifty dollars ($250) or more and any gifts aggregating fifty dollars ($50) or more in value that the vendor or contractor has made during the preceding calendar year to any member of the board or any officer or employee of the system. Failure to disclose the campaign contributions and gifts shall provide the basis for disqualification of the contractor or the vendor. Added by Stats 1998 ch 923 § 2 (SB 1753). § 22364. Communication with interested party (a) During the process leading to an award of any contract by the system, no member of the board or its staff shall knowingly communicate concerning any matter relating to the contract or selection process with any party financially interested in the contract, or an officer or employee of that party, unless the communication is (1) part of the process expressly described in the request for proposal or other solicitation invitation, or (2) part of a noticed board meeting, or (3) as provided in subdivision (c). Any applicant or bidder who knowingly participates in a communication that is prohibited by this paragraph shall be disqualified from the contract award. (b) During the evaluation of any prospective investment transaction, no party who is financially interested in the transaction, or an officer or employee of that party, may knowingly communicate with any board member concerning any matter relating to the transaction or its evaluation, unless the financially interested party discloses the content of the communication in a writing addressed and submitted to the executive officer and the board prior to the board’s action on the prospective transaction. This subdivision shall not apply to communications that are part of a noticed board meeting, or as provided in subdivision (c). (1) The writing shall disclose the date and location of the communication, and the substance of the matters discussed. The board shall prescribe other procedures concerning this disclosure. (2) Any board member who participates in a communication subject to this subdivision shall also have the obligation to disclose the communication to the executive officer and board, prior to the board’s action on the prospective transaction. The board shall prescribe procedures for this disclosure, including procedures to apply to board members who fail to disclose communications as required by this subdivision. (3) Consistent with its fiduciary duties, the board shall determine the appropriate remedy for any knowing failure of a financially interested party to comply with this subdivision including, but not limited to, outright rejection of the prospective investment transaction, reduction in fee income, or any other sanction. (4) The communications disclosed under this subdivision shall be made public, either at the open meeting of the board in which the transaction is considered, or if in closed session, upon public disclosure of any closed session votes concerning the investment transaction. (c) The procedures and prohibitions prescribed by this section shall not apply to: (1) Communications that are incidental, exclusively social, and do not involve the system or its business, or the board or staff member’s role as a system official. (2) Communications that do not involve the system or its business and that are within the scope of the board or staff member’s private business or public office wholly unrelated to the system. Added by Stats 1998 ch 923 § 3 (SB 1753). 106

140) PART 13, CHAPTER 7 CHAPTER 7. SYSTEM HEADQUARTERS § 22375. Acquisition of real property to establish permanent facility Notwithstanding Part 11 (commencing with Section 15850) of Division 3 of Title 2 of the Government Code, the board may select, purchase, or acquire in the name of the plan, the fee or any lesser interest in real property, improved or unimproved, and may remodel and equip, or construct an office building in the greater metropolitan Sacramento area, including the City of Sacramento, the County of Sacramento, and the eastern part of Yolo County, for the purposes of establishing a permanent headquarters facility for the system. Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1996 ch 634 § 93 (SB 2041); Stats 2004 ch 378 § 1 (AB 2680). Historical Derivation: Former Ed C § 22320, as added Stats 1982 ch 1429 § 1. Amendments 1996 Amendment: Substituted “plan” for “system” after “in the name of the”. 2004 Amendment: (1) Deleted “Section 20205.9 or”; and (2) substituted “greater metropolitan Sacramento area, including the City of Sacramento, the County of Sacramento, and the eastern part of Yolo County,” for “County of Sacramento”. § 22376. Excess building space All buildings acquired or improvements constructed by the board under the provisions of this chapter may contain space in excess of immediate requirements. The board may contract with the Department of General Services to handle the rentals of any excess space over and above that required by the board and to furnish general supervision and maintenance of buildings and improvements constructed under the provisions of this chapter. Added by Stats 1993 ch 893 § 2 (AB 1796). Historical Derivation: Former § 22321, as added Stats 1982 ch 1429 § 1. § 22377. Contract for state agency assistance The board may contract with the Department of General Services or any other state agency for assistance in the acquisition of real property and any construction thereon of buildings or improvements authorized by this chapter. Added by Stats 1993 ch 893 § 2 (AB 1796). Historical Derivation: Former § 22322, as added Stats 1982 ch 1429 § 1. § 22378. Condemnation; Purchase of selected property In the event that condemnation of the property selected is necessary, the board may elect to deposit with the treasurer funds it deems necessary, and that are appropriated, for purchase of the selected property subject to the Property Acquisition Law (Part 11 (commencing with Section 15850) of Division 3 of Title 2 of the Government Code). Added by Stats 1993 ch 893 § 2 (AB 1796). 107

141) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM Historical Derivation: Former § 22323, as added Stats 1982 ch 1429 § 1. § 22379. Award of contract to lowest responsible bidder Work on all projects shall be done under contract awarded to the lowest responsible bidder pursuant to bidding procedures set forth in the State Contract Act (Chapter 1 (commencing with Section 10100) of Division 2 of the Public Contract Code). Added by Stats 1993 ch 893 § 2 (AB 1796). Historical Derivation: Former § 22324, as added Stats 1982 ch 1429 § 1. § 22380. Building account; Insurance; Accounting procedures (a) The board shall establish a building account for the transfer of money appropriated for that purpose from the retirement fund for the construction or remodeling of buildings and improvements thereon, maintenance, repair, and improvement thereof. (b) The board may contract with the Department of General Services for the purchase of insurance against loss of, or damage to, the property or the loss of use or occupancy of the building, liability insurance, and other insurance that is customarily carried on state office buildings. Premiums for this insurance shall be paid from the building account. (c) The land, building, equipment, and improvements thereon, shall constitute an investment of the system and shall be carried on the books thereof in accordance with generally accepted accounting principles. Added Stats 1993 ch 893 § 2 (AB 1796). Amended Stats 2010 ch 207 § 6 (AB 2260), effective January 1, 2011. Historical Derivation: Former § 22325, as added Stats 1982 ch 1429 § 1. Amendments 2010 Amendment: (1) Deleted the former second sentence of subd (a) which read: “For accounting purposes, the board shall pay rental to the building account in an amount sufficient to repay all costs of acquisition, construction, and maintenance of space used by the board plus interest to the retirement fund.”; and (2) amended subd (c) by (a) substituting “of the system” for “, in lieu of facilities operations cost, in the retirement fund”; (b) deleting “as such” after “books thereof”; and (c) substituting “principles” for “practices”. 108

142) PART 13, CHAPTER 8 CHAPTER 8. ESTABLISHMENT AND CONTROL OF FUNDS § 22400. Establishment of Teachers’ Retirement Fund (a) There is in the State Treasury a special trust fund to be known as the Teachers’ Retirement Fund. There shall be deposited in that fund the assets of the plan and its predecessors, consisting of employee contributions, employer contributions, state contributions, appropriations made to it by the Legislature, income on investments, other interest income, income from fees and penalties, donations, legacies, bequests made to it and accepted by the board, and any other amounts provided by this part and Part 14. General Fund transfers pursuant to Section 22954 shall be placed in a segregated account known as the Supplemental Benefit Maintenance Account within the retirement fund, which is continuously appropriated without regard to fiscal years, notwithstanding Section 13340 of the Government Code, for expenditure for the purposes of Section 24415. (b) Disbursement of money from the retirement fund of whatever nature shall be made upon claims duly audited in the manner prescribed for the disbursement of other public funds except that notwithstanding the foregoing disbursements may be made to return funds deposited in the fund in error. Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1996 ch 634 § 94 (SB 2041); Stats 1999 ch 939 § 28 (SB 1074). Former Sections: Former § 22400, similar to present Ed C § 22450, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1997, amended Stats 1993 ch 861 § 3 (ch 861 prevails), repealed Stats 1993 ch 893 § 1, and repealed Stats 1994 ch 933 § 26, effective September 27, 1994. Historical Derivation: Former Ed C § 22300, as enacted Stats 1976 ch 1010 § 2, amended Stats 1977 ch 659 § 5, Stats 1989 ch 115 § 2. Amendments 1996 Amendment: Substituted “plan” for “system” after “the assets of the” in the second sentence in subd (a). 1999 Amendment: Amended subd (a) by (1) adding “and Part 14” at the end of the first sentence; and (2) deleting “and subdivisions (a) and (b) of Section 24414” at the end of the second sentence. § 22401. Collection and deposit of return on investments and other receipts Return on investments shall be collected by the Treasurer, and together with any other moneys received for the retirement fund shall be immediately deposited to the credit of that fund and reported immediately to the system. Money in whatever form received directly by the system shall be deposited immediately in the State Treasury to the credit of that fund. Added by Stats 1993 ch 893 § 3 (AB 1796). Former Sections: Former § 22401, similar to present § 22451, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, amended Stats 1977 ch 36 § 98, effective April 29, 1977, operative April 30, 1977, Stats 1982 ch 1314 § 2, and repealed Stats 1993 ch 893 § 2. Historical Derivation: Former § 22301, as enacted Stats 1976 ch 1010 § 2, amended Stats 1977 ch 659 § 5. § 22402. Use of earned interest not credited Earned interest on plan assets with respect to the Defined Benefit Program that is not credited to member accounts under the Defined Benefit Program and the plan’s other income with respect to the Defined Benefit Program shall be allocated to provide benefits payable under the Defined Benefit Program. 109

143) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1998 ch 1048 § 9 (SB 2085); Stats 2000 ch 1025 § 16 (AB 816). Former Sections: Former § 22402, similar to present § 22457, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1993 ch 893 § 1. Historical Derivation: Former § 22303, as enacted Stats 1976 ch 1010 § 2. Amendments 1998 Amendment: Substituted the section for the former section which read: “Earned interest not credited to accounts and other income shall be used to provide the benefits under this part.” 2000 Amendment: (1) Added “on plan assets”; (2) substituted “member accounts under the Defined Benefit Program and the plan’s” for “accounts maintained pursuant to either this part of Part 14 (commencing with Section 26000) and”; and (3) substituted “payable under the Defined Benefit Program” for “under this part”. § 22403. Findings as to Cash Balance transfer of funds The Legislature hereby finds and declares that pursuant to the authorizing legislation creating and establishing the Cash Balance Plan, the board transferred one million dollars ($1,000,000) in the form of a loan from the retirement fund holding assets at that time exclusively for the State Teachers’ Retirement System Defined Benefit Plan to the newly created Cash Balance Plan. That loan represented an asset receivable to the State Teachers’ Retirement System Defined Benefit Plan and a liability obligation to the State Teachers’ Retirement System Cash Balance Plan. As a result of the merger of these two plans authorized under this part, the assets held in the retirement fund shall hereby reflect the combined assets of the State Teachers’ Retirement Plan. That loan shall be discharged by the creation and establishment of the State Teachers’ Retirement Plan pursuant to the merger. Added by Stats 1998 ch 1048 § 10 (SB 2085). Former Sections: Former § 22403, similar to present Ed C § 22455, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1993 ch 893 § 1. § 22404. Benefit adjustments (Threshold for payments and collections) (a) Notwithstanding any other provision of this part or Part 14 (commencing with Section 26000) to the contrary, the board may establish by plan amendment a specified amount or amounts, not to exceed ten dollars ($10), below which the system may dispense with the processing of benefit or other payments or collection of benefit or other overpayments that result from adjustments made to the benefit or other amount paid to a member, participant, or beneficiary. (b) When the cumulative dollar amount associated with one or more benefit or other adjustments equals or exceeds the amount described in subdivision (a), that amount shall be paid to, or collected from, the member, participant, or beneficiary. That cumulative amount paid or collected shall not be credited with interest. Added Stats 2006 ch 654 § 4 (SB 1465), effective January 1, 2007. Amended Stats 2011 ch 703 § 3 (SB 349), effective January 1, 2012. Amendments 2011 Amendment: (1) Amended subd (a) by adding (a) “(commencing with Section 26000)”; (b) “or other” after “of benefit” both times it appears; and (c) “or other amount”; and (2) added “or other” in the first sentence of subd (b). 110

144) PART 13, CHAPTER 9 CHAPTER 9. MEMBER AND EMPLOYER DUTIES § 22450. Information affecting status of member or beneficiary (a) Each member and beneficiary shall furnish to the board any information affecting his or her status as a member or beneficiary of the Defined Benefit Program as the board requires, which may include, but shall not be limited to, the following: (1) Financial statements, certified copies of state and federal income tax records, or evidence of financial status. (2) Employment, legal, or medical documentation. (b) A member who has not had any creditable service reported during the prior school year shall provide the system with his or her current mailing address and beneficiary information. Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1994 ch 933 § 31 (AB 3171), effective September 27, 1994; Stats 1996 ch 634 § 95 (SB 2041); Stats 1998 ch 965 § 44 (AB 2765); Stats 2007 ch 323 § 5 (AB 757), effective January 1, 2008. Historical Derivation: Former Ed C § 22400, as enacted Stats 1976 ch 1010 § 2, amended Stats 1993 ch 861 § 3. Amendments 1994 Amendment: (1) Designated the former section to be subd (a); and (2) added subd (b). 1996 Amendment: Substituted “plan as” for “system” after “or beneficiary of the” in subd (a). 1998 Amendment: (1) Substituted “Defined Benefit Program” for “plan” in subd (a); and (2) added “creditable” in subd (b). 2007 Amendment: (1) Substituted “, which may include, but shall not be limited to, the following:” for the period at the end of the introductory clause of subd (a); and (2) added subds (a)(1) and (a)(2). § 22451. Information required (a) Each member shall file a statement with the board, at the option of, and upon the form furnished by, the system, giving the following information: (1) Date of birth. (2) All service previously performed subject to coverage by the plan or its predecessors. (b) Each person becoming a member on or after January 1, 1983, shall include in the health resume required by the teacher preparation and licensing agency all information that shall verify any and all handicaps and disabling conditions at the time of application. Upon request by the system this information shall be made available when an application for disability benefits is received. Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1996 ch 634 § 96 (SB 2041). Historical Derivation: Former Ed C § 22401, as enacted Stats 1976 ch 1010 § 2, amended Stats 1977 ch 36 § 98, Stats 1982 ch 1314 § 2. Amendments 1996 Amendment: (1) Amended subd (a) by (a) substituting “system” for “board” after “furnished by, the” in the introductory clause; (b) deleting “His or her” in subd (1); and (c) substituting “subject to coverage by the plan” for “by him or her in a position requiring membership in the system” in subd (2); and (2) substituted “an application for disability benefits is received” for “a person applies for a disability allowance” at the end of the second sentence in subd (b). 111

145) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM § 22451.5. Proof of date of birth (a) Upon request by the system, a member shall provide proof of his or her date of birth to resolve any discrepancy between the member’s date of birth as originally documented on the records of the system and the member’s date of birth as subsequently submitted. (b) A member shall provide proof of the date of birth of a person designated by the member as beneficiary under an option selected pursuant to Chapter 28 (commencing with Section 24300) if the beneficiary is not also a member of the plan. (c) Documentation substantiating the date of birth of a member’s dependent child shall be provided if an allowance payable under this part will include an amount for that dependent child. (d) At the time application is made for payment of a family allowance or survivor benefit allowance to a surviving spouse or dependent parent, a member’s surviving spouse or dependent parent shall provide proof of his or her date of birth. (e) At the discretion of the board, an original document, a certified copy of the original, or a photocopy shall be acceptable to establish proof of the date of birth. Added by Stats 1993 ch 920 § 3 (AB 1631) as § 22401.1. Amended and renumbered by Stats 1994 ch 933 § 27 (AB 3171), effective September 27, 1994. Amended by Stats 1996 ch 1165 § 13 (AB 3032). Historical Derivation: (a) Former Ed C § 22452, as added Stats 1993 ch 893 § 2. (b) Former Ed C § 22801, as enacted Stats 1976 ch 1010 § 2. Amendments 1994 Amendment: Substituted “Chapter 28 (commencing with Section 24300)” for “Chapter 23 (commencing with Section 24200)” in subd (b). 1996 Amendment: (1) Substituted “date of birth” for “birthdate” in subds (a) and (c); (2) substituted “plan” for “system” in subd (b); and (3) amended subd (c) by (a) adding “dependent” both times it appears; and (b) substituting “an” for “a disability allowance, a disability retirement allowance, a family allowance, or a survivor benefit”. § 22451.7. Withholding of benefit payments until receipt of proof of birth The system may withhold benefit payments until proof of the date of birth of a member, beneficiary under an option selected pursuant to Chapter 28 (commencing with Section 24300), surviving spouse, dependent child or dependent parent has been received and accepted by the system. Added by Stats 1993 ch 920 § 4 (AB 1631) as § 22401.2. Amended and renumbered by Stats 1994 ch 933 § 28 (AB 3171), effective September 27, 1994. Amended by Stats 1996 ch 1165 § 14 (AB 3032). Amendments 1994 Amendment: Substituted “Chapter 28 (commencing with Section 24300)” for “Chapter 23 (commencing with Section 24200)” in subd (b). 1996 Amendment: (1) Deleted “child,” before “surviving spouse,”; and (2) added “dependent child”. § 22453. Signature of spouse on application (a) Except as provided in Section 22454, the signature of the spouse of a member shall be required under the Defined Benefit Program on any application for, or cancellation of, an unmodified allowance; the election, change, or cancellation of an option; or any request for a refund of the member’s accumulated retirement contributions or accumulated annuity deposit contributions; and under the Defined Benefit Supplement Program on any application for, or cancellation of, a retirement benefit, disability benefit, or termination benefit; and under either the Defined Benefit Program or the Defined Benefit Supplement Program on any other requests related to the selection of benefits by a member in 112

146) PART 13, CHAPTER 9 which a spousal interest may be present, unless the member declares, in writing, under penalty of perjury, that one of the following conditions exists: (1) The member is not married. (2) The current spouse has no identifiable community property interest in the benefit. (3) The member and spouse have executed a marriage settlement agreement pursuant to Part 5 (commencing with Section 1500) of Division 4 of the Family Code that makes the community property law inapplicable to the marriage. (4) The spouse is incapable of executing the acknowledgment because of an incapacitating mental or physical condition. (5) The member does not know, and has taken all reasonable steps to determine, the whereabouts of the spouse. (b) This section shall not be applicable to an application for a disability allowance under the Defined Benefit Program. (c) The sole purpose of this section is to provide for spousal protection in the selection of specified benefits made by a member. Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1994 ch 933 § 33 (AB 3171), effective September 27, 1994; Stats 1996 ch 634 § 96.5 (SB 2041); Stats 2000 ch 74 § 30 (AB 1509), ch 1021 § 15 (AB 2700). Historical Derivation: (a) Former Ed C § 22401.6, as added Stats 1990 ch 1390 § 1, amended Stats 1991 ch 543 § 6. (b) Former Ed C § 22401.6, as added Stats 1992 ch 1166 § 8.4, amended Stats 1993 ch 219 § 17. Amendments 1994 Amendment: Substituted “Part 5 (commencing with Section 1500)” for “Chapter 2 (commencing with Section 1600) of Part 5)” in subd (a)(3). 1996 Amendment: (1) Deleted “or retirant” after “member” wherever it appears; and (2) added “, change,” after “allowance, the election” in the introductory clause of subd (a). 2000 Amendment: (1) Amended the introductory paragraph of subd (a) by (a) adding “under the Defined Benefit Program” the first time it appears; (b) substituting the semicolon for the comma after “unmodified allowance”; (c) substituting “; or any” for the comma after “cancellation of an option”; and (d) substituting “; and under the Defined Benefit Supplement Program on any application for, or cancellation of, a retirement benefit, disability benefit, or termination benefit; and under either the Defined Benefit Program or the Defined Benefit Supplement Program on any” for “or”; (2) redesignated former subds (a)(1), (a)(2), (a)(4), and (a)(5) to be subds (a)(5), (a)(4), (a)(1), and (a)(2); and (3) amended subd (b) by (a) substituting “shall not be” for “is not”; and (b) adding “under the Defined Benefit Program”. (As amended Stats 2000 ch 1021, compared to the section as it read prior to 2000. This section was also amended by an earlier chapter, ch 74. See Gov C § 9605.) § 22454. Refusal of spouse to sign application If a spouse refuses to sign an application, as set forth in Section 22453, the member may bring an action in court to enforce the spousal signature requirement or to waive the spousal signature requirement. Either party may bring an action pursuant to Section 1101 of the Family Code to determine the rights of the party. Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1994 ch 933 § 34 (AB 3171), effective September 27, 1994, ch 1269 § 4 (AB 2208); Stats 1996 ch 634 § 97 (SB 2041). Historical Derivation: Former Ed C § 22401.7, as added Stats 1992 ch 1166 § 8.5, amended Stats 1993 ch 219 § 75. 113

147) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM Amendments 1994 Amendment (ch 933): Substituted “Section 1101” for “Section 11101”. 1994 Amendment (ch 1269): The amendment made no further change. 1996 Amendment: Deleted “or retirant” after “Section 22453, the member” in the first sentence. § 22455. County superintendent required to furnish information (a) The county superintendent and other employing agencies shall furnish any further information concerning any member or beneficiary the board may require. (b) Any information or reports required to be submitted to the system by an employer pursuant to this part or Part 14 (commencing with Section 26000) shall be submitted in a form, including, but not limited to, electronic transmission, as directed by the system. Added by Stats 1993 ch 893 § 2 (AB 1796). Amended Stats 2012 ch 864 § 6 (AB 2663), effective January 1, 2013. Amendments 2012 Amendment: Added (1) subdivision designation (a); and (2) subd (b). § 22455.5. Requirement that public employers provide employees with coverage by social security or in qualified retirement plan (Right to elect Defined Benefit membership) (a) The Legislature finds and declares that the federal Omnibus Budget Reconciliation Act of 1990 (P.L. 101–508) requires all public employers to provide their employees with either social security coverage or membership in a qualified retirement plan. (b) Employers shall make available criteria for membership, including optional membership, in a timely manner to all persons employed to perform creditable service subject to coverage by the Defined Benefit Program, and shall inform part–time and substitute employees, within 30 days of the date of hire, or by March 1, 1995, whichever is later, that they may elect membership in the plan’s Defined Benefit Program at any time while employed. Written acknowledgment by the employee shall be maintained in employer files on a form provided by this system. (c) Employers shall be liable to the plan for employee and employer contributions and interest with respect to the Defined Benefit Program from the date of hire, or March 1, 1995, whichever is later, in addition to system administrative and audit costs, if an audit or a member’s complaint reveals noncompliance. However, no employer shall be liable for employee contributions for service performed prior to January 1, 1995. Added by Stats 1994 ch 603 § 1 (AB 2554). Amended by Stats 1996 ch 634 § 98 (SB 2041); Stats 1999 ch 939 § 29 (SB 1074). Amendments 1996 Amendment: (1) Substituted “Employers” for “Employing agencies” at the beginning of the first sentences in subds (b) and (c); (2) amended the first sentence of subd (b) by substituting (a) “persons employed to perform creditable service subject to coverage by the plan, and shall inform part–time and substitute” for “certificated employees and shall inform part–time and substitute certificated”; and (b) “plan” for “system” after “membership in the”; and (3) substituted “plan” for “system” after “liable to the” in the first sentence of subd (c). 1999 Amendment: (1) Amended the first sentence of subd (b) by substituting (a) “Defined Benefit Program” for “plan” the first time it appears; and (b) “plan’s Defined Benefit Program” for “plan” the second time it appears; and (2) added “with respect to the Defined Benefit Program” in the first sentence of subd (c). 114

148) PART 13, CHAPTER 9 § 22456. Information to be furnished by employer At any time upon the request of the system, the employer shall furnish a statement of the amount of contributions deducted from the compensation of any member, the service performed and the compensation earned by the member since the end of the period covered by the last report of the employer. The system may use the information shown in the statement in determining contributions to be paid by or to the member or to a beneficiary, or use it in determining the member’s status upon retirement, even though the member’s and employer’ s contributions will not be received by the board until after the payment or determination. Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1996 ch 634 § 99 (SB 2041); Stats 1997 ch 482 § 6 (SB 471). Historical Derivation: Former Ed C § 23012, added Stats 1976 ch 1010 § 2. Amendments 1996 Amendment: Amended the first sentence by (1) substituting “employer” for “employing agency” after “the system, the”; (2) substituting “the salary of any member, the service performed and the salary earned by the member” for “salary payments of any member, the services performed and the salary earned by him or her”; and (3) deleting “superintendent or” after “report of the”. 1997 Amendment: Substituted “compensation” for “salary” both times it appears in the first sentence. § 22457. Notice of employment, death, resignation, or discharge (a) Each county superintendent shall give immediate notice in writing to the board of the employment, death, resignation, or discharge of any person employed by the county or by a school district or community college district in the county to perform creditable service subject to coverage by the Defined Benefit Program. (b) Every other employing agency shall give similar notice with respect to each person it employs to perform creditable service subject to coverage by the Defined Benefit Program. Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1996 ch 634 § 100 (SB 2041); Stats 1999 ch 939 § 30 (SB 1074). Historical Derivation: Former Ed C § 22402, as enacted Stats 1976 ch 1010 § 2. Amendments 1996 Amendment: Substituted (1) “by the county or by a school district or community college district in the county to perform creditable service subject to coverage by the plan” for “in a position requiring membership in the system, by the county or by a school district in the county” at the end of subd (a); and (2) “it employs to perform creditable service subject to coverage by the plan” for “employed by it in a position requiring membership in the system” at the end of subd (b). 1999 Amendment: Substituted “Defined Benefit Program” for “plan” at the end of subds (a) and (b). § 22458. Provision of documents regarding compensation Each employer shall provide the system with information regarding the compensation to be paid to employees subject to the Defined Benefit Program in that school year. The information shall be submitted annually as determined by the board and may include, but shall not be limited to, employment contracts, salary schedules, and local board minutes. Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1996 ch 634 § 101 (SB 2041); Stats 1999 ch 939 § 31 (SB 1074). 115

149) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM Historical Derivation: Former Ed C § 22403.1, as added Stats 1991 ch 543 § 7. Amendments 1996 Amendment: (1) Amended the first sentence by (a) substituting “employer shall provide the system with information regarding” for “employing agency shall provide the system with copies of documents respecting”; and (b) adding “subject to the plan”; and (2) substituted “information” for “documents”. 1999 Amendment: Substituted “Defined Benefit Program” for “plan” in the first sentence. § 22459. Withholding of salary on failure to file information or pay amount due (a) The county superintendent or other employing agency shall withhold the salary of any member who fails to file information required by the board in the administration of the Defined Benefit Program, or to pay amounts due from the members to the fund with respect to the Defined Benefit Program. (b) The salary shall be withheld by the county superintendent or employing agency upon his or her own knowledge, if any, of the failure or upon notice from the board of the failure of the member to file or pay. (c) The salary shall be withheld and not released until notice is given by the board to the county superintendent or employing agency, or until the county superintendent or agency knows otherwise, that the information has been filed or the payment has been made. Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1996 ch 634 § 102 (SB 2041); Stats 1999 ch 939 § 32 (SB 1074). Historical Derivation: Former Ed C § 22404, as enacted Stats 1976 ch 1010 § 2. Amendments 1996 Amendment: Substituted (1) “plan” for “system” wherever it appears in subd (a); and (2) “member” for “teacher” after “the failure of the” in subd (b). 1999 Amendment: Amended subd (a) by substituting (1) “Defined Benefit Program” for “plan” the first time it appears; and (2) “fund with respect to the Defined Benefit Program” for “plan”. § 22460. Notification to terminating employee of benefits (a) If a member terminates employment with less than five years of credited service, the employer shall notify the member of the following: (1) That unless the member is eligible, or becomes eligible in the future, for concurrent retirement pursuant to paragraph (2) of subdivision (a) of Section 24201, the member is eligible only for a refund of accumulated retirement contributions under the Defined Benefit Program and the return of the member’s accumulated Defined Benefit Supplement account balance. (2) The current rate of interest that shall be earned on accumulated retirement contributions that are not refunded and the current minimum interest rate that shall be applied to the member’s Defined Benefit Supplement account. (3) Actions that may be taken by the board if accumulated retirement contributions are not refunded under the Defined Benefit Program and the member’s Defined Benefit Supplement account balance is not returned. (b) Employers shall transmit to a member who terminates employment with less than five years of credited service the information specified in subdivision (a) as part of the usual separation documents. Added by Stats 2000 ch 1021 § 17 (AB 2700). 116

150) PART 13, CHAPTER 9 Former Sections: Former § 22460, similar to the present section, was added Stats 1993 ch 893 § 2, amended Stats 1996 ch 634 § 103, and repealed Stats 2000 ch 74 § 31, ch 1021 § 16. Historical Derivation: Former Ed C § 23108, as added Stats 1976 ch 1010 § 2, amended Stats 1977 ch 36 § 104. § 22461. Obligation to advise reemployed retired member of earnings limitation and to report earnings (a) Upon retaining the services of a retired member under Section 24114, 24116, 24214, 24214.5, or 24215, the school district, community college district, county superintendent of schools, California State University, or other employing agency shall do both of the following regardless of whether the retired member performs the services as an employee of the employer, an employee of a third party, or an independent contractor: (1) Advise the retired member of the earnings limitation or employment restriction set forth in Sections 22714, 24114, 24116, 24214, 24214.5, and 24215. (2) Maintain accurate records of the retired member’s earnings and report those earnings monthly to the system and the retired member regardless of the method of payment or the fund from which the payments were made. (b) This section shall not be construed to make any school district, community college district, county superintendent of schools, the California State University, or other employing agency liable for any amount paid to the retired member in excess of the earnings limitation under any circumstance, including the failure to inform the retired member that continuation of service would exceed the limitations. Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1996 ch 634 § 104 (SB 2041); Stats 2012 ch 864 § 7 (AB 2663), effective January 1, 2013; Stats 2013 ch 558 § 7 (AB 1379), effective January 1, 2014. Historical Derivation: Former Ed C § 23921, as added Stats 1979 ch 796 § 12, amended Stats 1983 ch 143 § 15. Amendments 1996 Amendment: (1) Amended the introductory clause of subd (a) by (a) substituting “retired member” for “retirant as an employee” after “the services of a”; and (b) adding “regardless of whether the retired member performs the services as an employee of the employer, an employee of a third party, or an independent contractor” at the end; (2) substituted “retired member” for “retirant” wherever it appears; and (3) substituted “retired member’s” for “retirant’s” after “records of the” in subd (a)(2). 2012 Amendment: Substituted (1) “Section 24114, 24116, 24214, 24214.5, or 24215” for “Section 24116, 24214, or 24215” in the introductory clause of subd (a); and (2) “Sections 24114, 24116, 24214, 24214.5, and 24215” for “Sections 24116, 24214, and 24215” in subd (a)(1). 2013 Amendment: Amended subd (a)(1) by adding (1) “or employment restriction”; and (2) “22714” to the sections list. 117

151) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM CHAPTER 10. MEMBERSHIP § 22500. Status of members (June 30, 1996) All persons who were members of the California State Teachers’ Retirement System on June 30, 1996, are members of the Defined Benefit Program under the plan, in accordance with Section 401(a) of the Internal Revenue Code of 1986, as amended. Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1996 ch 634 § 105 (SB 2041); Stats 1998 ch 965 § 45 (AB 2765); Stats 2000 ch 1025 § 17 (AB 816). Former Sections: Former § 22500, similar to the present section, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1993 ch 873 § 1. Amendments 1996 Amendment: Substituted “June 30, 1996, are members of the Defined Benefit Plan” for “June 30, 1944, are members of the system”. 1998 Amendment: Substituted “Defined Benefit Program under the plan” for “Defined Benefit Plan” at the end. 2000 Amendment: Added “, in accordance with Section 401(a) of the Internal Revenue Code of 1986, as amended” at the end. § 22501. Employees as members (a) Any person employed to perform creditable service on a full–time basis who is not already a member of the Defined Benefit Program under the plan shall become a member as of the first day of employment, unless excluded from membership pursuant to Section 22601. (b) Creditable service in more than one position shall not be aggregated for the purpose of determining mandatory membership under this section. (c) This section shall be deemed to have become operative on July 1, 1996. Added by Stats 1996 ch 634 § 107 (SB 2041), operative July 1, 1996. Amended by Stats 1998 ch 965 § 46 (AB 2765). Former Sections: Former § 22501, similar to the present section, was added Stats 1993 ch 893 § 2, and repealed Stats 1996 ch 634 § 106. Former § 22501, similar to the present section, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1993 ch 873 § 1. Amendments 1998 Amendment: (1) Added subdivision designations; (2) amended subd (a) by substituting (a) “Any person” for “All persons” at the beginning; (b) “on a full–time basis who is not already a member of the Defined Benefit Program under the plan shall become a member” for “as defined in Section 22119.5 are members of the plan”; and (c) “Section 22601” for “Chapter 11 (commencing with Section 22600)” at the end; and (3) substituted “under this section” for “in the plan” at the end of subd (b). § 22502. Part–time employees (a) Any person employed by a school district or county office of education to perform creditable service on a part–time basis, who is not already a member of the Defined Benefit Program, shall become a member as of the first day of the pay period following his or her employment to perform cred- 118

152) PART 13, CHAPTER 10 itable service for 50 percent or more of the full–time position, unless excluded from membership pursuant to Section 22601. (b) Any person employed by a community college district to perform creditable service on a part– time basis, who is not already a member of the Defined Benefit Program, shall become a member as of the first day of the pay period following his or her employment to perform creditable service that is not subject to Section 87474, 87480, 87481, 87482, or 87482.5, unless excluded from membership pursuant to Section 22601. (c) This section shall apply to persons who perform service subject to coverage under this part and to persons who are employed by employers who provide benefits for their employees under Part 14 (commencing with Section 26000). Added by Stats 1998 ch 965 § 47 (AB 2765), operative July 1, 1996. Amended by Stats 1999 ch 939 § 33 (SB 1074); Stats 2004 ch 474 § 1 (AB 3076), operative July 1, 2005. Amendments 1999 Amendment: Added “subsequent” after “first day of” in subd (a). 2004 Amendment: (1) In subd (a), (a) added “by a school district or county office of education”; (b) added the comma after “basis”; (c) added the comma after “Program”; (d) substituted “the pay period following his or her” for “subsequent”; and (e) deleted “equivalent for the”; (2) added present subd (b); (3) redesignated former subd (b) as present subd (c); and (4) deleted former subd (c) which read: “This section shall be deemed to become operative on July 1, 1996.” § 22503. Substitute employees (a) Any person employed to perform creditable service as a substitute employee who is not already a member of the Defined Benefit Program is a member as of the first day of the pay period following the pay period in which the person performed 100 or more complete days of creditable service during the school year in one school district, community college district, or county superintendent’s office, unless excluded from membership pursuant to Section 22601. (b) This section does not apply to persons who are employed by employers who provide benefits for their employees under Part 14 (commencing with Section 26000). (c) This section is deemed to have become operative on July 1, 1996. Added by Stats 1998 ch 965 § 48 (AB 2765), operative July 1, 1996. Amended by Stats 1999 ch 939 § 34 (SB 1074); Stats 2003 ch 859 § 6 (SB 627). Former Sections: Former § 22503, was added Stats 1993 ch 893 § 2, and repealed Stats 1995 ch 592 § 5. The repealed section related to other employees of public schools as members Amendments 1999 Amendment: Added “who are” in subd (b). 2003 Amendment: (1) Amended subd (a) by substituting (a) “employee” for “teacher”; and (b) “is a member” for “shall become a member”; (2) substituted “does not apply” for “shall not apply” in subd (b); and (3) substituted “is deemed” for “shall be deemed” in subd (c). § 22504. Part–time employees on hourly or daily basis (a) Any person employed by a school district or county office of education to perform creditable service on a part–time basis, who is not already a member of the Defined Benefit Program, shall become a member as of the first day of the pay period following the pay period in which the person performed at least 60 hours of creditable service, if employed on an hourly basis, or 10 days of creditable 119

153) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM service, if employed on a daily basis, during the school year, in one school district or county office of education, unless excluded from membership pursuant to Section 22601. (b) Any person employed by a community college district to perform creditable service on a part– time basis, who is not already a member of the Defined Benefit Program, shall become a member as of the first day of the pay period following his or her employment to perform creditable service that is not subject to Section 87474, 87480, 87481, 87482, or 87482.5, unless excluded from membership pursuant to Section 22601. (c) Subdivision (a) does not apply to persons who perform service subject to coverage under this part and who are employed by employers who provide benefits for their employees under Part 14 (commencing with Section 26000). (d) Subdivision (b) shall apply to persons who perform service subject to coverage under this part and to persons who are employed by employers who provide benefits for their employees under Part 14 (commencing with Section 26000). Added by Stats 1998 ch 965 § 49 (AB 2765), operative July 1, 1996. Amended by Stats 1999 ch 939 § 35 (SB 1074); Stats 2004 ch 474 § 2 (AB 3076), operative July 1, 2005. Amendments 1999 Amendment: (1) Amended subd (a) by (a) adding “to perform creditable service” near the beginning; (b) substituting “as of” for “on” after “become a member”; and (c) adding “during the school year,” after “on a daily basis,”; and (2) substituted “who are employed” for “employed on a part-time basis” in subd (b). 2004 Amendment: (1) In subd (a), (a) added “by a school district or county office of education”; (b) added the comma after “basis”; (c) added the comma after “Program”; and (d) substituted “district or county office of education, “for “district, community college district, or county superintendent’s office,”; (2) added designation of subd (b); (3) substituted “Any person employed by a community college district to perform creditable service on a part–time basis, who is not already a member of the Defined Benefit Program shall become a member as of the first day of the pay period following his or her employment to perform creditable service that is not subject to Section 87474, 87480, 87481, 87482, or 87482.5, unless excluded from membership pursuant to Section 22601” for “This section shall”; (4) added present subd (c); (5) added the designation of subdivision (d), and added “Subdivision (b) shall apply to persons who perform service subject to coverage under this part and”; and (6) deleted former “subd (c) which read: “This section shall be deemed to have become operative on July 1, 1996”. § 22508. Effect of change of employment (Right of election) (a) A member who becomes employed by the same or a different school district or community college district, or a county superintendent, or who becomes employed by the state in a position described in subdivision (b), to perform service that requires membership in a different public retirement system, and who is not excluded from membership in that public retirement system, may elect to have that service subject to coverage by the Defined Benefit Program of this plan and excluded from coverage by the other public retirement system. The election shall be made in writing on a form prescribed by this system within 60 days from the date of hire in the position requiring membership in the other public retirement system. If that election is made, the service performed for the employer after the date of hire shall be considered creditable service for purposes of this part. (b) Subdivision (a) shall apply to a member who becomes employed by the state only if the member is also one of the following: (1) Represented by a state bargaining unit that represents educational consultants, professional educators, or librarians employed by the state. (2) Excluded from the definition of “state employee” in subdivision (c) of Section 3513 of the Government Code, but performing, supervising, or managing work similar to work performed by employees described in paragraph (1). 120

154) PART 13, CHAPTER 10 (3) In a position not covered by civil service and in the executive branch of government, but performing, supervising, or managing work similar to work performed by employees described in paragraph (1). (c) (1) A member of the Public Employees’ Retirement System described in paragraph (2) who is subsequently employed to perform creditable service requiring coverage by the Defined Benefit Program of this plan may elect to have that subsequent service subject to coverage by the Public Employees’ Retirement System and excluded from coverage by the Defined Benefit Program pursuant to Section 20309 of the Government Code. If the election is made, creditable service performed for the employer after the date of hire shall be subject to coverage by the Public Employees’ Retirement System. (2) This subdivision shall apply to a member of the Public Employees’ Retirement System who either (A) is employed by a school district, community college district, a county superintendent, or the State Department of Education or (B) has at least five years of credited service under the system. (d) An election made by a member pursuant to this section shall be irrevocable. Added Stats 1996 ch 383 § 3 (AB 3221). Amended Stats 1998 ch 965 § 50 (AB 2765); Stats 1999 ch 939 § 36 (SB 1074); Stats 2000 ch 880 § 1 (SB 1694) (ch 880 prevails), ch 1025 § 18 (AB 816); Stats 2001 ch 77 § 1 (SB 165); Stats 2009 ch 304 § 2 (SB 634), effective January 1, 2010. Former Sections: Former § 22508, similar to the present section, was added Stats 1993 ch 893 § 2, and repealed Stats 1996 ch 383 § 2. Former § 22508, relating to termination of membership and mailing of warrants, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1981 ch 124 § 23. Historical Derivation: (a) Former Ed C § 22504, as added Stats 1977 ch 36 § 413, amended Stats 1990 ch 1372 § 176. (b) Former Ed C § 22508, as added Stats 1993 ch 893 § 2. (c) Former Ed C § 22509, as added Stats 1993 ch 893 § 2. (d) Former Ed C § 22608, as added Stats 1977 ch 36 § 414. Amendments 1998 Amendment: Substituted the section for the former section which read: “(a) A member who becomes employed by a school district, community college district, or a county superintendent to perform duties that require membership in a different public retirement system, shall be excluded from membership in this plan, unless the member elects in writing within 60 days from the date of hire in the position requiring membership in a different public retirement system to continue as a member of this plan. If that election is made, the subsequent service performed up to the full–time equivalent for the position shall be considered creditable service for purposes of this part. (b) A member of the Public Employees’ Retirement System employed by a school district, community college district, or a county superintendent who is subsequently employed to perform creditable service subject to coverage by this plan shall become a member of this plan unless the person elects within 60 days from the date of hire to continue as a member of the Public Employees’ Retirement System.” 1999 Amendment: (1) Substituted “this plan” for “the State Teachers’ Retirement Plan” in the first sentence of subd (b); and (2) added subd (c). 2000 Amendment: (1) Amended the first sentence of subd (a) by (a) substituting “district or” for the comma after “different school”; (b) adding “, or who becomes employed by the state in a position described in subdivision (b),”; and (c) adding “and who is not excluded from membership in that public retirement system,”; (2) added subd (b); (3) redesignated former subds (b) and (c) to be subds (c) and (d); (4) amended the first sentence of subd (c) by (a) deleting “or” after “college district,”; (b) adding “, or the State Department of Education”; (c) adding “subsequent” after “elect to have that”; and (d) adding “pursuant to Section 20309 of the Government Code” at the end; (5) deleted the former second sentence of subd (b) which read: “The election shall be made in writing on a form prescribed by this system within 60 days from the date of hire to perform creditable service.”; and (6) substituted “the” for “that” after “If” at the beginning of the second sentence of subd (c). 2001 Amendment: (1) Designated former subd (c) to be subd (c)(1); (2) substituted “described in paragraph (2)” for “who is employed by a school district, community college district, a county superintendent, or the State Department of Education and” in the first sentence of subd (c)(1); and (3) added subd (c)(2). 2009 Amendment: Substituted “requiring” for “subject to” in the first sentence of subd (c)(1). 121

155) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM § 22508.5. Election of retirement system (a) Any person who is a member of the Defined Benefit Program of the State Teachers’ Retirement Plan employed by a community college district who subsequently is employed by the Board of Governors of the California Community Colleges to perform duties that are subject to membership in a different public retirement system, shall be excluded from membership in that different system if he or she elects, in writing, and files that election in the office of the State Teachers’ Retirement System within 60 days after the person’s entry into the new position, to continue as a member of the Defined Benefit Program. Only a person who has achieved plan vesting is eligible to elect to continue as a member of the program. (b) A member of the Public Employees’ Retirement System who is employed by the Board of Governors of the California Community Colleges who subsequently is employed by a community college district to perform creditable service subject to coverage under the Defined Benefit Program, may elect to have that service subject to coverage by the Public Employees’ Retirement System and excluded from coverage under the Defined Benefit Program pursuant to Section 20309 of the Government Code. (c) This section shall apply to changes in employment effective on or after January 1, 1998. Added by Stats 1997 ch 838 § 1 (SB 227). Amended by Stats 1998 ch 965 § 51 (AB 2765); Stats 1999 ch 939 § 37 (SB 1074). Amendments 1998 Amendment: Amended subd (a) by substituting (1) “Defined Benefit Program of the State Teachers’ Retirement plan” for “State Teachers’ Retirement System” near the beginning; (2) “Defined Benefit Program” for “State Teachers’ Retirement System” at the end of the first sentence; and (3) “program” for “State Teachers’ Retirement System” at the end of the second sentence. 1999 Amendment: (1) Amended the first sentence of subd (a) by substituting (a) “State Teacher’s Retirement Plan” for “State Teacher’s Retirement plan”; and (b) “are subject to” for “require” after “perform duties that”; and (2) substituted “under the Defined Benefit Program” for “by this plan” both times it appears in subd (b). § 22508.6. Subsequent employment of members (Right to elect Defined Benefit membership) (a) Any person who is a member of the Defined Benefit Program and who subsequently became employed and continues to be employed by the state to perform service that requires membership in the Public Employees’ Retirement System and who meets the requirements of subdivision (b) may elect to have that state service subject to coverage by the Defined Benefit Program and excluded from coverage by the Public Employees’ Retirement System. (b)(1) Only a person who has achieved program vesting shall be eligible to make the election under this section. (2) A person is eligible to make the election if he or she left employment with a school district, county superintendent of schools, or community college district and began employment with the state within 30 days without any intervening employment and that change in employment occurred on or after July 1, 1991, and prior to the effective date of this section. (3) A person is eligible to make the election if, at the time of the election, he or she is a member of the Public Employees’ Retirement System subject to Second Tier benefits and is one of the following: (A) Represented by a State Bargaining Unit that has agreed by a memorandum of understanding to become subject to Section 20309.5 of the Government Code. (B) Excluded from the definition of “state employee” in subdivision (c) of Section 3513 of the Government Code, but performing, supervising, or managing work similar to work performed by employees described in subparagraph (A). 122

156) PART 13, CHAPTER 10 (C) In a position not covered by civil service and in the executive branch of government, but performing, supervising, or managing work similar to work performed by employees described in subparagraph (A). (c) The election under this section shall be made in writing to each system within 90 days after the effective date of this section or within 60 days after the eligible member is notified by the system of his or her right to make the election, whichever is later. The member’s election shall be effective on the day following the date on which the election is received by the Public Employees’ Retirement System. (d) If the election is made, the state service performed from and after the date of the election shall be considered creditable service for purposes of this part and the provisions of Section 22801.5 shall be applicable with respect to service performed prior to that date. Added by Stats 2000 ch 402 § 2 (AB 649), effective September 11, 2000. § 22509. Notice of right to election of membership; Procedure for election (a) Within 10 working days of the date of hire of an employee who has the right to make an election pursuant to Section 22508 or 22508.5, the employer shall inform the employee of the right to make an election and shall make available to the employee written information provided by each retirement system concerning the benefits provided under that retirement system to assist the employee in making an election. (b) Any election made pursuant to subdivision (a) of Section 22508 or subdivision (a) of Section 22508.5 shall be filed with the office of the State Teachers’ Retirement System and a copy of the election shall be filed with the other public retirement system. Any election made pursuant to subdivision (b) of Section 22508 or subdivision (b) of Section 22508.5 shall be filed with the office of the Public Employees’ Retirement System and a copy of the election shall be filed with the office of this system. (c) Any election made pursuant to Section 22508 or Section 22508.5 shall become effective as of the first day of employment in the position that qualified the employee to make an election. Added by Stats 1996 ch 383 § 5 (AB 3221). Amended by Stats 1997 ch 838 § 2 (SB 227). Former Sections: Former § 22509, similar to present Ed C § 22508, was added Stats 1993 ch 893 § 2, and repealed Stats 1996 ch 383 § 4. Former § 22509, similar to present § 22510, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, amended Stats 1981 ch 714 § 80, Stats 1983 ch 143 § 13, and repealed Stats 1993 ch 893 § 1. Amendments 1997 Amendment: (1) Amended subd (a) by (a) adding “of an employee who has the right to make an election pursuant to Section 22508 or 22508.5”; (b) deleting “pursuant to Section 22508” after “an election”; and (c) substituting “each retirement system concerning the benefits provided under that retirement system” for “the retirement systems”; (2) substituted subd (b) for former subd (b) which read: “(b) The election shall be made on a form prescribed by the retirement systems.”; and (3) amended subd (c) by substituting (a) “or Section 22508.5 shall become effective as of the first day of employment in the position that qualified the employee to make an election” for “shall be filed with the office of the State Teachers’ Retirement System and the other public retirement system”; and (b) deleting the last sentence which read: “Once received and accepted by the system, the election shall become effective as of the first day of employment in the position that qualified the member to make an election.”. § 22510. Election to transfer membership to Public Employees’ Retirement System Members who on January 1, 1976, are in state service positions according to former Section 13948 as it read on December 31, 1975, or who are employees of the Trustees of the California State University, may elect in writing prior to July 1, 1976, not to continue as members of this system and to trans123

157) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM fer membership to the Public Employees’ Retirement System. Failure to execute and file the election, which shall be received in the office of this system by the close of business on June 30, 1976, shall be deemed a decision to remain a member of the plan. Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1996 ch 634 § 108 (SB 2041). Former Sections: Former § 22510, similar to present Ed C § 22511, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1993 ch 893 § 1. Historical Derivation: Former Ed C § 22509, as enacted Stats 1976 ch 1010 § 2, amended Stats 1981 ch 714 § 80, Stats 1983 ch 143 § 13. Amendments 1996 Amendment: Substituted “a member of the plan” for “as a member of this system” at the end of the second sentence. § 22511. Certain members who elect to remain in plan; Limitation on benefits Members eligible to elect under Section 22510 and who elect to retain membership in the plan shall be eligible only for those benefits available for all other members and shall not be eligible for the benefits of the Berryhill Total Compensation Act, as amended, except for the reduced hospitalization insurance premiums. These members shall not be considered eligible for any additional benefits that may accrue to other state employees. Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1996 ch 634 § 109 (SB 2041). Former Sections: Former § 22511, similar to present Ed C § 22512, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1993 ch 893 § 1. Historical Derivation: Former Ed C § 22510, as enacted Stats 1976 ch 1010 § 2. Amendments 1996 Amendment: Amended the first sentence by substituting (1) “the plan” for “this system” after “retain membership in”; and (2) “and shall” for “of this system, and” after “all other members”. § 22512. Effect of election of membership in Public Employees’ Retirement System If a member elects membership in the Public Employees’ Retirement System under Section 22510, this election shall not be counted as a break in service if employment is continuous. Added by Stats 1993 ch 893 § 2 (AB 1796). Former Sections: Former § 22512, similar to present § 22513, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, amended Stats 1988 ch 382 § 4, and repealed Stats 1993 ch 893 § 1. Historical Derivation: Former § 22511, as enacted Stats 1976 ch 1010 § 2. § 22513. Retention of survivor and disability benefits; Plan vesting Members of the Defined Benefit Program who elect membership in the Public Employees’ Retirement System and have achieved plan vesting according to Section 22156 shall retain the vested rights to survivor and disability benefits under this part until they qualify for the similar benefits in the Public Employees’ Retirement System. Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1996 ch 634 § 110 (SB 2041); Stats 1998 ch 965 § 52 (AB 2765). 124

158) PART 13, CHAPTER 10 Historical Derivation: Former Ed C § 22512, as enacted Stats 1976 ch 1010 § 2, amended Stats 1988 ch 382 § 2. Amendments 1996 Amendment: Substituted “plan” for “system” after “benefits under this”. 1998 Amendment: (1) Added “of the Defined Benefit Program”; (2) substituted “Section 22156” for “Section 22173”; and (3) substituted “part” for “plan” after “benefits under this”. § 22514. Qualification when plan vesting not achieved Members who have not achieved plan vesting shall become eligible for benefits under the Defined Benefit Program when total service under the Defined Benefit Program and the Public Employees’ Retirement System equals the minimum required under Sections 23801 and 23804. These members shall retain vested rights to survivor and disability benefits under this plan until they qualify for the similar benefits under the Public Employees’ Retirement System. Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1994 ch 933 § 36 (AB 3171), effective September 27, 1994; Stats 1996 ch 634 § 111 (SB 2041); Stats 1999 ch 939 § 38 (SB 1074). Former Sections: Former § 22514, similar to present Ed C § 22315, was added Stats 1989 ch 1004 § 1 and repealed Stats 1993 ch 893 § 2. Amendments 1994 Amendment: Substituted “Sections 23801 and 23804” for “Sections 23800 and 23804”. 1996 Amendment: (1) Substituted the first sentence for the former first sentence which read: “Persons who have not achieved plan vesting shall qualify for eligibility for benefits under this system when total service under both systems equals the minimum required under Sections 23801 and 23804.”; and (2) amended the second sentence by (a) substituting “members” for “persons” after “These”; and (b) adding “under this plan” after “disability benefits”. 1999 Amendment: Substituted (1) “the Defined Benefit Program” for “this plan” both times it appears; and (2) ”under” for “in” after “similar benefits” in the second sentence. § 22515. Election to join plan by substitute teachers and part–time employees Persons excluded from membership pursuant to Sections 22601.5, 22602, and 22604 may elect membership in the Defined Benefit Program at any time while employed to perform creditable service subject to coverage under that program. The election shall be in writing on a form prescribed by this system and shall be filed in the office of this system prior to submission of contributions. The election is irrevocable and shall remain in effect until the member terminates employment. The amendments to this section enacted during the 1995-96 Regular Session shall be deemed to have become operative on July 1, 1996. Added Stats 1993 ch 893 § 2 (AB 1796). Amended Stats 1994 ch 507 § 2 (AB 2647); Stats 1996 ch 634 § 112 (SB 2041), operative July 1, 1996; Stats 1998 ch 965 § 53 (AB 2765); Stats 2002 ch 375 § 4 (AB 2982); Stats 2009 ch 304 § 3 (SB 634), effective January 1, 2010. Former Sections: Former § 22515, similar to present Ed C § 24275, was added Stats 1989 ch 1004 § 2 and repealed Stats 1993 ch 893 § 2. Historical Derivation: Former Ed C § 22603.1, as enacted Stats 1976 ch 1010 § 2. Amendments 1994 Amendment: Substituted “Sections 22602, 22603, and 22604” for “Sections 22602 and 22604”. 125

159) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM 1996 Amendment: (1) Substituted the first sentence for the former first sentence which read: “Persons excluded from membership in Sections 22602, 22603, and 22604 may elect membership in the system at any time while employed in a substitute or part–time position that does not qualify for membership in this system.”; and (2) added the third sentence. 1998 Amendment: (1) Amended the first sentence by (a) substituting “Defined Benefit Program” for “plan”; and (b) adding “subject to coverage under that program” at the end; (2) amended the second sentence by (a) deleting “is irrevocable,” after “The election”; and (b) adding “on a form prescribed by this system”; and (3) added the third sentence. 2002 Amendment: Deleted (1) the comma after “prescribed by this system” in the second sentence; and (2) the former third sentence which read: “The election is irrevocable, and shall remain in effect until the member terminates employment and receives a refund of accumulated retirement contributions.” 2009 Amendment: Added the third sentence. § 22516. Persons not excluded from membership (a) Nothing in this chapter shall be construed or applied to exclude from membership in the Defined Benefit Program any person employed to perform creditable service at a level that requires mandatory membership in the program for which he or she has the right to elect membership in the program or another retirement system and who elects membership in the other retirement system, or who is employed to perform creditable service at a level that does not require mandatory membership in the Defined Benefit Program. (b) Service performed after becoming a member of another retirement system shall not be credited to the member under this part, nor shall contributions or benefits under this part be based upon that service or the compensation received by the member during that period of service, except as provided in the definition of “final compensation” contained in Section 22134 or 22134.5. Added Stats 1993 ch 893 § 2 (AB 1796). Amended Stats 1996 ch 634 § 113 (SB 2041); Stats 1998 ch 965 § 54 (AB 2765); Stats 1999 ch 939 § 39 (SB 1074); Stats 2014 ch 755 § 15 (SB 1220), effective January 1, 2015. Historical Derivation: Former Ed C § 22610, as enacted Stats 1976 ch 1010 § 2. Amendments 1996 Amendment: Substituted the section for the former section which read: “(a) Nothing in this chapter shall be construed or applied to exclude from membership in this system any member who accepts a position requiring membership in this system in which he or she has the right to elect membership in this or another retirement system and who elects membership in the other retirement system, or who enters a position that does not require membership in this system, but in which time served is included in this part. “(b) Time served after becoming a member of the other system shall not be credited to the member under this system, nor shall contributions or benefits under this system be based upon that time or the salary received by the member during that time, except as provided in the definition of ‘final compensation’ contained in Section 22133.” 1998 Amendment: Substituted (1) “the Defined Benefit Program” for “this plan” both times it appears in subd (a); (2) ”the program” for “this plan” both times it appears in subd (a); and (3) “part” for “plan” after “under this” both times it appears in subd (b). 1999 Amendment: Substituted “Section 22134” for “Section 22133” at the end of subd (b). 2014 Amendment: Substituted “Section 22134 or 22134.5” for “Section 22134” in subd (b). 126

160) PART 13, CHAPTER 11 CHAPTER 11. EXCLUSIONS FROM MEMBERSHIP § 22601. Exchange or sojourn teachers Persons serving as exchange teachers or sojourn teachers from outside of this state are excluded from membership in the plan. Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1996 ch 634 § 114 (SB 2041). Former Sections: Former § 22601, similar to the present section, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, and repealed Stats 1993 ch 893 § 1. Amendments 1996 Amendment: Substituted “plan” for “system” at the end. § 22601.5. Exclusion of part–time employees from mandatory membership (a) Any person employed by a school district or county office of education to perform creditable service who is not already a member in the Defined Benefit Program and whose basis of employment is less than 50 percent of the time an employer requires for the full–time position is excluded from mandatory membership in the Defined Benefit Program. (b) Any person employed by a community college district to perform creditable service pursuant to Section 87474, 87480, 87481, 87482, or 87482.5 who is not already a member of the Defined Benefit Program is excluded from mandatory membership in the Defined Benefit Program. (c) This section shall apply to persons who perform service subject to coverage under this part and to persons who are employed by employers who provide benefits for their employees under Part 14 (commencing with Section 26000). Added by Stats 1996 ch 634 § 115 (SB 2041), operative July 1, 1996. Amended by Stats 1998 ch 965 § 56 (AB 2765); Stats 1999 ch 939 § 40 (SB 1074); Stats 2004 ch 474 § 3 (AB 3076), operative July 1, 2005. Amendments 1998 Amendment: (1) Substituted “Any person who is not already a member of the plan who is” for “Persons who are not already members of the plan who are” in subd (a); (2) deleted former subd (b) which read: “(b) Persons whose basis of employment to perform creditable service changes to 50 percent or more of the full–time equivalent for the position shall become members of the plan on the first day of the pay period in which the change in the basis of employment occurred.”; (3) redesignated former subds (c) and (d) to be subds (b) and (c); and (4) added “who perform service subject to coverage under this part and to persons who are” in subd (b). 1999 Amendment: Amended subd (a) by (1) adding “employed to perform creditable service”; (2) substituting “in the Defined Benefit Program” for “of the plan who is employed to perform creditable service” the first time it appears; and (3) substituting “Defined Benefit Program” for “plan” at the end. 2004 Amendment: (1) Amended subd (a) by (a) adding “by a school district or county office of education”; and (b) substituting “time an employer requires for the full–time equivalent for the” for “equivalent for the”; (2) added subd (b); (3) redesignated former subd (b) to be subd (c); and (4) deleted former subd (c) which read: “This section shall be deemed to have become operative on July 1, 1996.” § 22602. Substitute teachers (a) Any person employed to perform creditable service as a substitute teacher who is not already a member in the Defined Benefit Program and who performs less than 100 complete days of creditable 127

161) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM service in one school district, community college district, or county superintendent’s office during the school year is excluded from mandatory membership in the Defined Benefit Program. (b) This section shall not apply to persons who perform service for employers who provide benefits for their employees under Part 14 (commencing with Section 26000). (c) The amendments to this section enacted during the 1995–96 Regular Session shall be deemed to have become operative on July 1, 1996. Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1995 ch 592 § 9 (AB 1298); Stats 1996 ch 634 § 116 (SB 2041), operative July 1, 1996; Stats 1998 ch 965 § 57 (AB 2765); Stats 1999 ch 939 § 41 (SB 1074). Former Sections: Former § 22602, similar to the present section, was enacted Stats 1976 ch 1010 § 2, operative April 30, 1977, amended Stats 1988 ch 497 § 1, and repealed Stats 1993 ch 893 § 1. Amendments 1995 Amendment: Added subd (c). 1996 Amendment: (1) Substituted subds (a) and (b) for former subds (a) and (b) which read: “(a) Persons employed on a substitute basis, who are not already members when they become employed and who perform less than 100 complete days of service during the school year are excluded from membership in the system. “(b) Persons employed on a substitute basis who have performed 100 or more complete days of substitute service in one school district or county superintendent’s office in that school year shall become members on the first day of the following pay period during which the additional service was performed.”; (2) substituted “not apply to employers who” for “apply to employers who do not” in subd (c); and (3) added subd (d). 1998 Amendment: (1) Amended subd (a) by (a) substituting “Any person who is not already a member of the plan who is employed as a substituted and who performs” for “Persons who are not already members of the plan who are employed as substitutes and who perform”; (b) adding “in one school district, community college district, or county superintendent’s office”; and (c) substituting “is” for “are” after “during the school year”; (2) deleted former subd (b) which read: “(b) Persons employed as substitutes who have performed 100 or more complete days of creditable service in one school district, community college district, or county superintendent’s office in that school year shall become members on the first day of the pay period following the pay period in which the creditable service in excess of 100 days was performed.”; and (3) redesignated former subds (c) and (d) to be subds (b) and (c). 1999 Amendment: (1) Amended subd (a) by (a) adding “employed to perform creditable service as a substitute teacher”; (b) substituting “in the Defined Benefit Program” for “of the plan” the first time it appears; and (c) substituting “Defined Benefit Program” for “plan” at the end; and (2) added “persons who perform service for” in subd (b). § 22604. Part–time employees working on hourly or daily basis (a) Any person employed to perform creditable service on a part–time basis, who is not already a member of the Defined Benefit Program and who performs less than 60 hours of creditable service in a pay period if employed on an hourly basis, or less than 10 days of creditable service in a pay period if employed on a daily basis, during the school year in one school district or county office of education, is excluded from mandatory membership in the Defined Benefit Program. (b) Any person employed by a community college district to perform creditable service pursuant to Section 87474, 87480, 87481, 87482, or 87482.5, who is not already a member of the Defined Benefit Program, is excluded from mandatory membership in the Defined Benefit Program. (c) Subdivision (a) does not apply to persons who perform service subject to coverage under this part and who are employed by employers who provide benefits for their employees under Part 14 (commencing with Section 26000). 128

162) PART 13, CHAPTER 11 (d) Subdivision (b) shall apply to persons who perform service subject to coverage under this part and to persons who are employed by employers who provide benefits for their employees under Part 14 (commencing with Section 26000). Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1995 ch 592 § 11 (AB 1298); Stats 1996 ch 634 § 117 (SB 2041), operative July 1, 1996; Stats 1998 ch 965 § 58 (AB 2765); Stats 1999 ch 939 § 42 (SB 1074); Stats 2004 ch 474 § 4 (AB 3076), operative July 1, 2005. Historical Derivation: Former Ed C § 22603, as enacted Stats 1976 ch 1010 § 2, amended Stats 1988 ch 497 § 2. Amendments 1995 Amendment: Added subd (c). 1996 Amendment: (1) Substituted subds (a) and (b) for former subds (a) and (b) which read: “(a) Persons employed on a part–time basis who are not already members when they become employed, and who perform less than 60 hours of service per pay period or less than 10 days of service in a pay period on a daily basis, are excluded from membership in the system. “(b) Persons employed on a part–time basis who have performed 60 or more hours of service in a pay period, or 10 days or more of service in a pay period on a daily basis in one school district or county superintendent’s office shall become members on the first day of the following pay period during which the additional service was performed.”; (2) substituted “not apply to employers who” for “apply to employers who do not” in subd (c); and (3) added subd (d). 1998 Amendment: (1) Amended subd (a) by substituting (a) “Any person who is not already a member of the plan who is employed on a part–time basis, and who performs” for “Persons who are not already members of the plan who are employed on a part–time basis, and who perform”; (b) “in a” for “per” after “creditable service” the first time it appears; and (c) “in one school district, community college district, or county superintendent’s office is” for “are”; (2) deleted former subd (b) which read: “(b) Persons employed on a part–time basis who have performed 60 or more hours of creditable service in a pay period, or 10 or more days of creditable service in a pay period in one school district, community college district, or county superintendent’s office shall become members on the first day of the pay period following the pay period in which the creditable service in excess of 60 hours or 10 days was performed.”; and (3) redesignated former subds (c) and (d) to be subds (b) and (c). 1999 Amendment: (1) Amended subd (a) by (a) adding “employed to perform creditable service on a part– time basis”; (b) substituting “in the Defined Benefit Program” for “of the plan” the first time appears; (c) adding “during the school year”; and (d) substituting “Defined Benefit Program” for “plan” the end; and (2) added “persons who are employed by” in subd (b). 2004 Amendment: (1) In subd (a), (a) added “by a school district or county office of education”; (b) added the comma after “basis”; (c) added the comma after “Program”; and (d) substituted “district or county office of education, “ for “district, community college district, or county superintendent’s office,”; (2) added designation of subd (b); (3) substituted “Any person employed by a community college district to perform creditable service on a part-time basis, who is not already a member of the Defined Benefit Program shall become a member as of the first day of the pay period following his or her employment to perform creditable service that is not subject to Section 87474, 87480, 87481, 87482, or 87482.5, unless excluded from membership pursuant to Section 22601” for “This section shall”; (4) added present subd (c); (5) added the designation of subdivision (d), and added “Subdivision (b) shall apply to persons who perform service subject to coverage under this part and”; and (6) deleted former “subd (c) which read: “This section shall be deemed to have become operative on July 1, 1996”. 129

163) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM CHAPTER 12. COMMUNITY PROPERTY § 22650. Power of court; Rights of nonmember spouses (a) This chapter establishes the power of a court in a dissolution of marriage or legal separation action with respect to community property rights in accounts with the plan under this part and establishes and defines the rights of nonmember spouses and nonmember registered domestic partners in the plan under this part. (b) For purposes of this chapter, the termination, dissolution, or nullity of a registered domestic partnership, or the legal separation of partners in a registered domestic partnership, as provided in Section 299 of the Family Code, shall be treated in the same manner as a dissolution of marriage or legal separation of a member and his or her spouse. Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1996 ch 634 § 118 (SB 2041); Stats 1998 ch 965 § 59 (AB 2765); Stats 2004 ch 912 § 6 (AB 2233); Stats 2005 ch 418 § 4 (SB 973), effective January 1, 2006. Former Sections: Former § 22650, similar to the present section, was added Stats 1988 ch 542 § 2, effective August 23, 1988, and repealed Stats 1993 ch 893 § 1. Amendments 1996 Amendment: Substituted “plan” for “system” wherever it appears. 1998 Amendment: Added “under this part” both times it appears. 2004 Amendment: (1) Redesignated the former section to be subd (a); (2) added “and nonmember registered domestic partners” in subd (a); and (3) added subd (b). 2005 Amendment: Amended subd (b) by substituting “the termination, dissolution, or” for “any reference to ‘dissolution of marriage or legal separation’ includes the termination or dissolution of a domestic partnership,”; adding “registered” in two places; and substituting “Code, shall be treated in the same manner as a dissolution of marriage or legal separation of a member and his or her spouse.” for “Code.” § 22651. “Nonmember spouse” and “Nonmember registered domestic partner” for community property purposes (a) For purposes of this chapter and Section 23300, “nonmember spouse” means a member’s spouse or former spouse, and also includes a member’s registered domestic partner or former registered domestic partner, who is being or has been awarded a community property interest in the service credit, accumulated retirement contributions, accumulated Defined Benefit Supplement account balance, or benefits of the member under this part. (b) For purposes of this chapter and Section 23300, a member’s registered domestic partner or former registered domestic partner who is being or has been awarded a community property interest in the service credit, accumulated retirement contributions, accumulated Defined Benefit Supplement account balance, or benefits of the member under this part shall be treated in the same manner as a nonmember spouse. (c) A nonmember spouse shall not be considered a member based upon his or her receipt of any of the following being awarded to the nonmember spouse as a result of legal separation or dissolution of marriage: (1) A separate account of service credit and accumulated retirement contributions, a retirement allowance, or an interest in the member’s retirement allowance under the Defined Benefit Program. (2) A separate account based on the member’s Defined Benefit Supplement account balance, a retirement benefit, or an interest in the member’s retirement benefit under the Defined Benefit Supplement Program. 130

164) PART 13, CHAPTER 12 Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1996 ch 634 § 119 (SB 2041); Stats 1998 ch 965 § 60 (AB 2765); Stats 2000 ch 74 § 33 (AB 1509), ch 1021 § 18 (AB 2700); Stats 2004 ch 912 § 7 (AB 2233); Stats 2005 ch 418 § 5 (SB 973), effective January 1, 2006. Former Sections: Former § 22651, similar to the present section, was added Stats 1988 ch 542 § 2, effective August 23, 1988, and repealed Stats 1993 ch 893 § 1. Historical Derivation: Former Ed C § 22651.5, as added Stats 1990 ch 1390 § 2. Amendments 1996 Amendment: (1) Substituted “or the benefits of a member” for “of the member or the benefits of a retirant” at the end of the first sentence; (2) substituted “or who receives a retirement allowance, or who is awarded an interest in a member’s retirement allowance is not a member” for “is not a member of the system” at the end of the second sentence; and (3) deleted the former third sentence which read: “A nonmember spouse who receives a retirement allowance or is awarded an interest in a retirement allowance of a retirant is not a retirant of the system.” 1998 Amendment: Added “under this part” wherever it appears. 2000 Amendment: (1) Amended the first sentence by (a) substituting “a member’s” for “the” after “means”; (b) adding the comma after “service credit”; and (c) substituting “, accumulated Defined Benefit Supplement account balance, or benefits of the” for “or the benefits of a”; and (2) substituted the second sentence for the former second sentence which read: “A nonmember spouse who is awarded a separate account of service credit and accumulated retirement contributions or who receives a retirement allowance under this part, or who is awarded an interest in a member’s retirement allowance under this part is not a member.” 2004 Amendment: Added (1) the subdivision designations; and (2) “, and also includes a member’s registered domestic partner or former registered domestic partner,” in subd (a). 2005 Amendment: (1) Added subd (b); (2) redesignated former subd (b) to be subd (c); and (3) amended subd (c) by (a) adding subdivision designations (c)(1) and (c)(2); and (b) substituting the period after “Defined Benefit Program” at the end of subd (c)(1) for “; or”. § 22652. Judgment or court order (Court ordered deduction) (a) Upon the legal separation or dissolution of marriage of a member, other than a retired member, the court shall include in the judgment or a court order the date on which the parties separated. (b) The court may order in the judgment or court order that the member’s accumulated retirement contributions and service credit under the Defined Benefit Program, or the member’s Defined Benefit Supplement account balance, or both, under this part that are attributable to periods of service during the marriage be divided into two separate and distinct accounts in the name of the member and the nonmember spouse, respectively. Any service credit and accumulated retirement contributions under the Defined Benefit Program and any accumulated Defined Benefit Supplement account balance under this part that are not explicitly awarded by the judgment or court order shall be deemed the exclusive property of the member under the Defined Benefit Program or the Defined Benefit Supplement Program, as applicable. (c) The determination of the court of community property rights pursuant to this section shall be consistent with this chapter and shall address the rights of the nonmember spouse under this part, including, but not limited to, the following: (1) The right to a retirement allowance under the Defined Benefit Program and, if applicable, a retirement benefit under the Defined Benefit Supplement Program. (2) The right to a refund of accumulated retirement contributions under the Defined Benefit Program and the return of the accumulated Defined Benefit Supplement account balance that were awarded to the nonmember spouse. (3) The right to redeposit all or a portion of accumulated retirement contributions previously refunded to the member which the member is eligible to redeposit pursuant to Sections 23200 to 23203, inclusive, and shall specify the shares of the redeposit amount awarded to the member and the nonmember spouse. 131

165) CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM (4) The right to purchase additional service credit that the member is eligible to purchase pursuant to Sections 22800 to 22810, inclusive, and shall specify the shares of the additional service credit awarded to the member and the nonmember spouse. Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1998 ch 965 § 61 (AB 2765); Stats 2000 ch 74 § 34 (AB 1509), ch 1020 § 1 (AB 820), ch 1021 § 19.5 (AB 2700). Former Sections: Former § 22652, similar to the present section, was added Stats 1988 ch 542 § 2, effective August 23, 1988, and repealed Stats 1993 ch 893 § 1. Amendments 1998 Amendment: (1) Amended subd (b) by adding (a) “under this part that are” in the first sentence; (b) “under this part” after “contributions” in the second sentence; and (c) “in the Defined Benefit Program” at the end; and (2) added “under this part” wherever it appears in subds (c)(1)–(c)(4). 2000 Amendment: (1) Added “other than a retired member,” in subd (a); (2) amended subd (b) by (a) adding “member’s” after “court order that the” in the first sentence; (b) adding “the Defined Benefit Program, or the member’s Defined Benefit Supplement account balance, or both, under”; (c) substituting “and” for “or” after “Any service credit” in the second sentence; (d) adding “under the Defined Benefit Program and any accumulated Defined Benefit Supplement account balance”; (e) substituting “under” for “in” after “property of the member” in the second sentence; and (f) adding “or the Defined Benefit Supplement Program, as applicable” at the end; (3) added “under this part” in subd (c); (4) substituted “the Defined Benefit Program and, if applicable, a retirement benefit under the Defined Benefit Supplement Program” for “this part” in subd (c)(1); (5) substituted “the Defined Benefit Program and the return of the accumulated Defined Benefit Supplement account balance that were awarded to the nonmember spouse” for “this part” in subd (c)(2); and (6) substituted subds (c)(3) and (c)(4) for former subds (c)(3) and (c)(4) which read: “(3) The right to redeposit accumulated retirement contributions which are eligible for redeposit under this part by the member under Sections 23200 to 23203, inclusive, and the shares of the member and the nonmember spouse of the eligible redeposit amount. “(4) The right to purchase additional service credit under this part which is eligible for purchase by the member under Sections 22800 to 22810, inclusive, and the shares of the member and the nonmember spouse of the service credit eligible for purchase.” (As amended Stats 2000 ch 1021, compared to the section as it read prior to 2000. This section was also amended by two earlier chapters, chs 74, 1020. See Gov C § 9605.) § 22653. Entitlement of nonmember spouse (a) The nonmember spouse who is awarded a separate account under this part pursuant to Section 22652 is not a member of the Defined Benefit Program based on that award. The nonmember spouse is entitled only to rights and benefits based on that award explicitly established by this chapter. (b) This section shall not be construed to limit any right arising from the account of a nonmember spouse under this part that exists because the nonmember spouse is or was employed to perform creditable service subject to coverage by the Defined Benefit Program. Added by Stats 1993 ch 893 § 2 (AB 1796). Amended by Stats 1996 ch 634 § 120 (SB 2041); Stats 1998 ch 965 § 62 (AB 2765). Former Sections: Former § 22653, similar to the present section, was added Stats 1988 ch 542 § 2, effective August 23, 1988, and repealed Stats 1993 ch 893 § 1. Amendments 1996 Amendment: (1) Amended the first paragraph by (a) substituting “plan based on that award” for “system” at the end of the first sentence; and (b) adding “based on that award” in the second sentence; and (2) added subd (b). 132

166) PART 13, CHAPTER 12 1998 Amendment: (1) Added subdivision designation (