Bill Text: CA AB1028 | 2011-2012 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: State employees' retirement.

Spectrum: Partisan Bill (Democrat 4-0)

Status: (Passed) 2011-10-03 - Chaptered by Secretary of State - Chapter 440, Statutes of 2011. [AB1028 Detail]

Download: California-2011-AB1028-Amended.html

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BILL NUMBER: AB 1028	AMENDED
	BILL TEXT

	AMENDED IN SENATE  JUNE 16, 2011

INTRODUCED BY   Committee on Public Employees, Retirement and Social
Security (Furutani (Chair), Allen, Ma, and Wieckowski)

                        FEBRUARY 18, 2011

   An act to amend Sections 20096.5, 20636.1,  20812, 
20814,  20820, 20969.1, 21130,  21221, 21224, 21228, 21229,
21490, 21493, 21506, and 21507 of, and to add Section 21533.5 to, the
Government Code, relating to state employees' retirement.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1028, as amended, Committee on Public Employees, Retirement and
Social Security. State employees' retirement.
   (1) The Public Employees' Retirement Law (PERL) creates the Public
Employees' Retirement System (PERS), which provides a defined
benefit to its members based on age at retirement, service credit,
and final compensation. PERL vests the Board of Administration of
PERS with management and control of the system. PERL sets forth the
membership of the board, including 6 members elected under the
supervision of the board, as specified. Under PERL, candidates for or
incumbents of those 6 elected seats are required to file campaign
statements with the Secretary of State no later than 2 days before
the beginning of the ballot period, as determined by the board for
the period ending 5 days before the beginning of the ballot period,
and no later than January 10, for the period ending December 31. The
Political Reform Act of 1974 expressly applies to candidates for
elections to the board and to committees that are formed primarily to
support or oppose those candidates. It requires those members to
file semiannual campaign statements each year no later than July 31
for the period ending June 30, and no later than January 31 for the
period ending December 31.
   This bill would clarify that the filing provisions under the
Political Reform Act would apply.
   (2) PERL defines "payrate" for school members as the normal
monthly rate of pay or base pay of the member paid in cash to
similarly situated members of the same group or class of employment
for services rendered on a full-time basis during normal working
hours. For other members, PERL specifically includes the amount
deducted from a member's salary for participation in a deferred
compensation plan, a retirement plan or money purchase pension plan
under a specified provision of federal law, and  a 
participation in a flexible benefits program.
   This bill would modify the definition of "payrate" for school
members to include those amounts deducted from a school member's
salary. 
   (3) PERL permits the Board of Administration of PERS to adopt a
funding period of 30 years to amortize unfunded accrued actuarial
obligations for current and prior service for the purpose of
determining employer contribution rates for contracting agencies and
school employers. Existing law prohibits a contracting agency or a
school employer from requesting a new amortization period more than
once.  
   This bill would delete the prohibition on a contracting agency or
a school employer from requesting a new amortization period more than
once.  
   (3) 
    (4)  PERL requires the state's contribution to be
adjusted from time to time in the annual Budget Act by requiring that
the Governor's proposed budget include the contribution rates
submitted by the actuary of the liability for benefits on account of
employees of the state, and requiring that the Legislature adopt the
actuary's contribution rates and authorize the appropriation in the
Budget Act.
   This bill would instead require the board to adopt the state
contribution rates and then requiring the Legislature to adopt the
board's contribution rates and authorize the appropriation in the
Budget Act. The bill would also authorize the board, in its
discretion, to adopt new quarterly employer contribution rates for
future contributions for the state plans to reflect changes in
employee retirement contributions, benefits, or pension plan design
contained in a memorandum of understanding, or similar changes for
unrepresented employees, when those changes go into effect after the
board has adopted its most recent annual employer contribution rates.

   (5) PERL permits surplus funds credited to the patrol member
category to be used to reduce the state employer obligation to PERS
and to reduce member contributions under the terms of a memorandum of
understanding.  
   This bill would correct an obsolete cross-reference in these
provisions.  
   (6) PERL requires that, for all retirement purposes with regard to
members employed by a trial court who are subject to mandatory
furloughs, credit for service and compensation earnable be based on
the amounts of service earnable that would have been credited had the
employee not been subject to mandatory furloughs, as defined. 

   This bill would specify, with regard to provisions described
above, that credit for service and compensation earnable also be
based on the amount of compensation earnable.  
   (7) PERL requires that patrol members of PERS who are subject to
specified retirement formulas be retired the first day of the
calendar month succeeding the month in which he or she attains the
age of 60 years.  
   This bill would add a cross-reference to a new retirement formula
for patrol members to these provisions.  
   (4) 
    (8)  PERL generally prohibits any person who has been
retired under PERS from being employed in any capacity unless he or
she is first reinstated from retirement, except as authorized. PERL
authorizes a retired person to serve without reinstatement from
retirement or loss or interruption of benefits provided by PERS, upon
appointment by the governing body of a contracting agency to a
position deemed by the governing body to be of a limited duration and
requiring specialized skills or during an emergency to prevent
stoppage of public business. These appointments are prohibited from
exceeding a total for all employers of 960 hours in any fiscal year.
   This bill would require that the appointment be an interim
appointment to a vacant position during recruitment for a permanent
appointment and deemed by the governing body to require specialized
skills or during an emergency to prevent stoppage of public business.
The bill would prohibit the compensation for the interim appointment
from exceeding the maximum published pay schedule for the vacant
position. The bill would prohibit a governing body of a contracting
agency from appointing a retired person under this provision more
than once. 
   (5) 
    (9)  PERL similarly authorizes a retired person to serve
without reinstatement from retirement or loss or interruption of
benefits provided by PERS upon appointment by a school employer, by
the Trustees of the California State University, the appointing power
of a state agency, or public agency employer either during an
emergency to prevent stoppage of public business or because the
retired employee has skills needed in performing work of limited
duration.
   This bill would clarify that those appointments would be temporary
or interim and that the skills must be specialized. 
   (6) 
    (10)  PERL also authorizes a person retired for
disability who has not attained the mandatory age for retirement
applicable to persons in the employment in which he or she will be
employed, and whom the board finds not disabled for that employment,
to be employed by any employer without reinstatement from retirement
in a position other than that from which he or she retired or a
position in the same member classification.
   This bill would prohibit a person employed under that provision
from being concurrently employed under other specified provisions
that allow for employment after retirement. 
   (7) 
    (11)  PERL authorizes a member at any time to designate
a beneficiary to receive the benefits as may be payable to his or her
beneficiary or estate under PERL, by a writing filed with the board.

   This bill would authorize a writing filed with the board to
include a will or trust if the document lists the retirement benefit
as an asset. The bill would also authorize a will or trust to be
accepted as a writing filed with the board if the will or trust
disinherits one or all of either the previously designated
beneficiary or closest survivors, as specified. The bill would deem a
will or trust that is accepted as a writing filed with the board as
designating the estate or trust as a beneficiary. 
   (8) 
    (12)  PERL requires a death benefit to be paid to the
estate of the decedent if the decedent had no effective beneficiary
designation and there are no familial survivors, as specified, who
are entitled to the benefit, if the estate is either probated or
subject to probate. PERL also provides for the payment to a decedent'
s beneficiaries of any accrued and unpaid monthly allowance payable
to a person, any uncashed warrant, any balance of prepaid
complementary health premiums, any prepaid complementary annuitant
health plan premiums, lump-sum benefit, or any uncashed lump-sum
death benefit.
   This bill would authorize those benefits to be paid upon receipt
by PERS of a court order authorizing the Public Administrator to
proceed summarily when the estate is handled by a Public
Administrator or does not require probate  ,   ;
 otherwise the benefit would be paid to the decedent's trust or
other familial survivors, as specified. 
   (9) 
    (13)  The federal Heroes Earnings Assistance and Relief
Tax Act of 2008 requires survivors of a member who dies while
performing qualified military service to be entitled to any benefits
they would have received had the member remained an active employee.
   This bill would make changes to conform California law to that
federal act.
   The bill would also make related technical changes to the
above-described provisions.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 20096.5 of the Government Code is amended to
read:
   20096.5.  Candidates for board seats described in subdivision (g)
of Section 20090, including incumbent board members running for
reelection, shall file campaign statements with the Secretary of
State and the board pursuant to Article 2 (commencing with Section
84200) of Chapter 4 of Title 9.
  SEC. 2.  Section 20636.1 of the Government Code is amended to read:

   20636.1.  (a) Notwithstanding Section 20636, and Section 45102 of
the Education Code, "compensation earnable" by a school member means
the payrate and special compensation of the member, as defined by
subdivisions (b) and (c), and as limited by Section 21752.5.
   (b) (1) "Payrate" means the normal monthly rate of pay or base pay
of the member paid in cash to similarly situated members of the same
group or class of employment for services rendered on a full-time
basis during normal working hours. For purposes of this part, for
classified members, full-time employment is 40 hours per week, and
payments for services rendered, not to exceed 40 hours per week,
shall be reported as compensation earnable for all months of the year
in which work is performed. "Payrate," for a member who is not in a
group or class, means the monthly rate of pay or base pay of the
member, paid in cash and pursuant to publicly available pay
schedules, for services rendered on a full-time basis during normal
working hours, subject to the limitations of paragraph (2) of
subdivision (e).
   (A) "Payrate" shall include an amount deducted from a member's
salary for any of the following:
   (i) Participation in a deferred compensation plan.
   (ii) Payment for participation in a retirement plan that meets the
requirements of Section 401(k) or 403(b) of Title 26 of the United
States Code.
   (iii) Payment into a money purchase pension plan and trust that
meets the requirements of Section 401(a) of Title 26 of the United
States Code.
   (iv) Participation in a flexible benefits program.
   (B) For the purposes of this section, "classified members" shall
mean members who retain membership under this system while employed
with a school employer in positions not subject to coverage under the
Defined Benefit Program under the State Teacher's Retirement System.

   (C) For the purposes of this section, and Sections 20962 and
20966, "certificated members" shall mean members who retain
membership under this system while employed in positions subject to
coverage under the Defined Benefit Program under the State Teacher's
Retirement System.
   (2) The computation for any leave without pay of a member shall be
based on the compensation earnable by him or her at the beginning of
the absence.
   (3) The computation for time prior to entering state service shall
be based on the compensation earnable by him or her in the position
first held by him or her in state service.
   (c) (1) Special compensation of a school member includes any
payment received for special skills, knowledge, abilities, work
assignment, workdays or hours, or other work conditions.
   (2) Special compensation shall be limited to that which is
received by a member pursuant to a labor policy or agreement or as
otherwise required by state or federal law, to similarly situated
members of a group or class of employment that is in addition to
payrate. If an individual is not part of a group or class, special
compensation shall be limited to that which the board determines is
received by similarly situated members in the closest related group
or class that is in addition to payrate, subject to the limitations
of paragraph (2) of subdivision (e).
   (3) Special compensation shall be for services rendered during
normal working hours and, when reported to the board, the employer
shall identify the pay period in which the special compensation was
earned.
   (4) Special compensation may include the full monetary value of
normal contributions paid to the board by the employer, on behalf of
the member and pursuant to Section 20691, provided that the employer'
s labor policy or agreement specifically provides for the inclusion
of the normal contribution payment in compensation earnable.
   (5) The monetary value of any service or noncash advantage
furnished by the employer to the member, except as expressly and
specifically provided in this part, shall not be special compensation
unless regulations promulgated by the board specifically determine
that value to be "special compensation."
   (6) The board shall promulgate regulations that delineate more
specifically and exclusively what constitutes "special compensation"
as used in this section. A uniform allowance, the monetary value of
employer-provided uniforms, holiday pay, and premium pay for hours
worked within the normally scheduled or regular working hours that
are in excess of the statutory maximum workweek or work period
applicable to the employee under Section 201 et seq. of Title 29 of
the United States Code shall be included as special compensation and
appropriately defined in those regulations.
   (7) Special compensation does not include any of the following:
   (A) Final settlement pay.
   (B) Payments made for additional services rendered outside of
normal working hours, whether paid in lump sum or otherwise.
   (C) Any other payments the board has not affirmatively determined
to be special compensation.
   (d) Notwithstanding any other provision of law, payrate and
special compensation schedules, ordinances, or similar documents
shall be public records available for public scrutiny.
   (e) (1) As used in this part, "group or class of employment" means
a number of employees considered together because they share
similarities in job duties, work location, collective bargaining
unit, or other logical work-related grouping. Under no circumstances
shall one employee be considered a group or class.
   (2) Increases in compensation earnable granted to any employee who
is not in a group or class shall be limited during the final
compensation period applicable to the employees, as well as the two
years immediately preceding the final compensation period, to the
average increase in compensation earnable during the same period
reported by the employer for all employees who are in the same
membership classification, except as may otherwise be determined
pursuant to regulations adopted by the board that establish
reasonable standards for granting exceptions.
   (f) As used in this part, "final settlement pay" means any pay or
cash conversions of employee benefits that are in excess of
compensation earnable, that are granted or awarded to a member in
connection with or in anticipation of a separation from employment.
The board shall promulgate regulations that delineate more
specifically what constitutes final settlement pay.
   SEC. 3.    Section 20812 of the   Government
Code   is amended to read: 
   20812.  Notwithstanding any other provision of this part, the
board may adopt a funding period of 30 years to amortize unfunded
accrued actuarial obligations for current and prior service for the
purpose of determining employer contribution rates for contracting
agencies and school employers. The board shall approve new
amortization periods based upon requests from contracting agencies or
school employers that can demonstrate a financial necessity. The
board may deny a request when the request would subject the fund to
an unsound financial risk. This section shall not affect the current
procedure for setting the school employer rate. The board shall
continue to treat the school category as a total experience pool with
no requirement to establish separate rates for a school district
subject to this section.  A contracting agency or school
employer may not request a new amortization period pursuant to this
section more than once. 
   SEC. 3.   SEC. 4.   Section 20814 of the
Government Code is amended to read:
   20814.  (a) Notwithstanding any other provision of law, the state'
s contribution under this chapter shall be adjusted from time to time
in the annual Budget Act. The board shall adopt the state
contribution rates and the Legislature shall adopt the board's
contribution rates and authorize the appropriation in the Budget Act.

   (b) In the event a memorandum of understanding goes into effect
pursuant to the Ralph C. Dills Act (Chapter 10.3 (commencing with
Section 3512) of Division 4 of Title 1) that was not previously
considered by the board in adopting its most recent annual employer
contribution rates and that memorandum of understanding contains a
change in employee retirement contributions, benefits, or pension
plan design, including a change that alters a state employee's
retirement contributions, or there is a change in unrepresented
employees' retirement contributions, benefits, or pension plan design
to be consistent with those of related classifications and groups of
represented employees, the board may, in its discretion, adopt new
quarterly employer contribution rates for future contributions for
the state plans to reflect these changes. If the board adopts new
rates for the state plans to reflect a change in employee retirement
contributions, benefits, or pension plan design, the Director of
Finance shall reduce or increase the percentage levels of the state's
retirement contribution to reflect the new rates. Nothing in this
section shall require the board to take action as described herein
unless the board determines, in good faith, that the action described
herein is consistent with the fiduciary responsibilities of the
board described in Section 17 of Article XVI of the California
Constitution.
   (c) The employer contribution rates for all other public employers
under this system shall be determined on an annual basis by the
actuary and shall be effective on the July 1 following notice of a
change in rate.
   SEC. 5.    Section 20820 of the   Government
Code   is amended to read: 
   20820.  Notwithstanding Section 20816, surplus funds credited to
the patrol member category shall be used to reduce the state employer
contribution to this system. Surplus funds in the patrol member
category may also be used to reduce the member contributions required
by Section  20681   20677.8  , under the
terms of a memorandum of understanding reached pursuant to Section
3517.5.
   SEC. 6.    Section 20969.1 of the  
Government Code   is amended to read: 
   20969.1.  (a) For all retirement purposes, including benefit
eligibility and calculations of retirement allowances for members
employed by a trial court that are subject to mandatory furloughs, as
defined in subdivision (c), credit for service and compensation
earnable shall be based on the  amount   amounts
 of service  and compensation earnable  that would
have been credited had the employee not been subject to mandatory
furloughs.
   (b) A trial court shall notify the board of the terms and
conditions of any mandatory furlough, including, but not limited to,
the amount of mandatory furlough time imposed on employees during a
reporting period, and the date on which the mandatory furlough ends.
A trial court and a county in which the trial court is located that
participates in this system by joint contract pursuant to Section
20460.1 shall provide that additional information as the board may
require to implement this section.
   (c) For the purposes of this section, "mandatory furloughs" is
limited to the time during which a trial court employee is directed
to be absent from work without pay in the 2009-10 fiscal year on the
day designated by the Judicial Council for closure of the courts as
authorized in Section 68106.
   (d) For purposes of this section, "trial court employee" means a
trial court employee, as that term is defined in Section 71601, whose
employer has contracted for its employees to become members of the
California Public Employees' Retirement System.
   SEC. 7.    Section 21130 of the   Government
Code   is amended to read: 
   21130.  Every patrol member subject to Section 21362  or
  ,  21362.2  , or 21363.1  , as
applicable, shall be retired on the first day of the calendar month
succeeding that in which he or she attains the age of 60 years.
   SEC. 4.   SEC. 8.   Section 21221 of the
Government Code is amended to read:
   21221.  A retired person may serve without reinstatement from
retirement or loss or interruption of benefits provided by this
system, as follows:
   (a) As a member of any board, commission, or advisory committee,
upon appointment by the Governor, the Speaker of the Assembly, the
President pro Tempore of the Senate, director of a state department,
or the governing board of the contracting agency. However, the
appointment shall not be deemed employment within the meaning of
Division 4 (commencing with Section 3200) and Division 4.5
(commencing with Section 6100) of the Labor Code, and shall not
provide a basis for the payment of workers' compensation to a retired
state employee or to his or her dependents.
   (b) As a school crossing guard.
   (c) As a juror or election officer.
   (d) As an elective officer on and after September 15, 1961.
However, all rights and immunities which may have accrued under
Section 21229 as it read prior to that section's repeal during the
1969 Regular Session of the Legislature are hereby preserved.
   (e) As an appointive member of the governing body of a contracting
agency. However, the compensation for that office shall not exceed
one hundred dollars ($100) per month.
   (f) Upon appointment by the Legislature, or either house, or a
legislative committee to a position deemed by the appointing power to
be temporary in nature.
   (g) Upon employment by a contracting agency to a position found by
the governing body, by resolution, to be available because of a
leave of absence granted to a person on payroll status for a period
not to exceed one year and found by the governing body to require
specialized skills. The temporary employment shall be terminated at
the end of the leave of absence. Appointments under this section
shall be reported to the board and shall be accompanied by the
resolution adopted by the governing body.
   (h) Upon interim appointment by the governing body of a
contracting agency to a vacant position during recruitment for a
permanent appointment and deemed by the governing body to require
specialized skills or during an emergency to prevent stoppage of
public business. These appointments, including any made pursuant to
Section 21224 or 21229, shall not exceed a total for all employers of
960 hours in any fiscal year. The compensation for the interim
appointment shall not exceed the maximum published pay schedule for
the vacant position. When an appointment is expected to, or will,
exceed 960 hours in any fiscal year, the governing body shall request
approval from the board to extend the temporary employment. The
governing body shall present a resolution to the board requesting
action to allow or disallow the employment extension. The resolution
shall be presented prior to the expiration of the 960-hour maximum
for the fiscal year. The appointment shall continue until
notification of the board's decision is received by the governing
body. The appointment shall be deemed approved if the board fails to
take action within 60 days of receiving the request. Appointments
under this subdivision may not exceed a total of 12 months. The
governing body of a contracting agency shall appoint a retired person
only once under this subdivision. The interim appointment made under
this subdivision shall not continue under Section 21224 or 21229
after the 12 months.
   (i) Upon appointment by the Administrative Director of the Courts
to the position of Court Security Coordinator, a position deemed
temporary in nature and requiring the specialized skills and
experience of a retired professional peace officer.
   SEC. 5.   SEC. 9.   Section 21224 of the
Government Code is amended to read:
   21224.  (a) A retired person may serve without reinstatement from
retirement or loss or interruption of benefits provided by this
system upon temporary appointment by the appointing power of a state
agency or public agency employer either during an emergency to
prevent stoppage of public business or because the retired employee
has specialized skills needed in performing work of limited duration.
These appointments shall not exceed a total for all employers of 960
hours in any fiscal year, and the rate of pay for the employment
shall not be less than the minimum, nor exceed that paid by the
employer to other employees performing comparable duties.
   (b) (1) This section shall not apply to any retired person
otherwise eligible if during the 12-month period prior to an
appointment described in this section the retired person received any
unemployment insurance compensation arising out of prior employment
subject to this section with the same employer.
   (2) A retired person who accepts an appointment after receiving
unemployment insurance compensation as described in this subdivision
shall terminate that employment on the last day of the current pay
period and shall not be eligible for reappointment subject to this
section for a period of 12 months following the last day of
employment. The retired person shall not be subject to Section 21202
or subdivision (b) of Section 21220.
   SEC. 6.   SEC. 10.   Section 21228 of
the Government Code is amended to read:
   21228.  A person retired for disability who has not attained the
mandatory age for retirement applicable to persons in the employment
in which he or she will be employed, and whom the board finds not
disabled for that employment, may be employed by any employer without
reinstatement from retirement in a position other than that from
which he or she retired or a position in the same member
classification. His or her disability retirement pension shall be
reduced during that employment to an amount that, when added to the
compensation received, shall equal the maximum compensation earnable
by a person holding the position that he or she held at the time of
his or her retirement. Any employment shall terminate upon his or her
attainment of the mandatory retirement age for persons in that
employment. A person employed under this section shall not be
concurrently employed under Section 21224, 21225, 21226, 21227, or
21229, or subdivision (h) of Section 21221.
   SEC. 7.   SEC. 11.   Section 21229 of
the Government Code is amended to read:
   21229.  (a) A retired person may serve without reinstatement from
retirement or loss or interruption of benefits provided by this
system upon temporary appointment by a school employer or by the
Trustees of the California State University either during an
emergency to prevent stoppage of public business or because the
retired employee has specialized skills needed in performing work of
limited duration, if that service does not exceed, in a fiscal year,
a total of 960 hours for all employers. The retired person's rate of
pay for this employment shall not be less than the minimum, nor
exceed that paid by the employer to other employees performing
comparable duties.
   (b) (1) This section shall not apply to a retired person otherwise
eligible to serve without reinstatement from retirement, if during
the 12-month period prior to an appointment described in this
section, that retired person receives unemployment insurance
compensation arising out of prior employment subject to this section
with the same employer.
   (2) A retired person who accepts an appointment after receiving
unemployment insurance compensation as described in this subdivision
shall terminate that employment on the last day of the current pay
period and shall not be eligible for reappointment subject to this
section for a period of 12 months following the last day of
employment. The retired person shall not be subject to Section 21202
or subdivision (b) of Section 21220.
   SEC. 8.   SEC. 12.   Section 21490 of
the Government Code is amended to read:
   21490.  (a) Except as provided in subdivision (b), a member may at
any time, including, but not limited to, at any time after reaching
retirement age, designate a beneficiary to receive the benefits as
may be payable to his or her beneficiary or estate under this part,
by a writing filed with the board. A writing filed with the board may
include a will or trust if the document lists the retirement benefit
as an asset. A will or trust may also be accepted as a writing filed
with the board if the will or trust disinherits one or all of either
the previously designated beneficiary or closest survivor as listed
in Section 21493. A will or trust that is accepted as a writing filed
with the board shall be deemed to designate the estate or trust as a
beneficiary.
   (b) (1) No designation may be made in derogation of the community
property share of any nonmember spouse when any benefit is derived,
in whole or in part, from community property contributions or service
credited during the period of marriage, unless the nonmember spouse
has previously obtained an alternative order for division pursuant to
Section 2610 of the Family Code.
   (2) No designation may be made by an unmarried member who has
attained the minimum age for voluntary service retirement applicable
to the member in his or her last employment preceding death if that
designation is in derogation of the rights of the member's unmarried,
dependent children who are under the age of 18 years at the time of
the member's death.
   (c) The designation, subject to conditions imposed by board rule,
may be by class, in which case the members of the class at the time
of the member's death shall be entitled as beneficiaries. The
designation shall also be subject to the board's conclusive
determination, upon evidence satisfactory to it, of the existence,
identity  ,  or other facts relating to entitlement of any
person designated as beneficiary, and payment made by this system in
reliance on any determination made in good faith, notwithstanding
that it may not have discovered a beneficiary otherwise entitled to
share in the benefit, shall constitute a complete discharge and
release of this system for further liability for the benefit.
   SEC. 9.   SEC. 13.   Section 21493 of
the Government Code is amended to read:
   21493.  (a) If a person had no beneficiary designation in effect
on the date of death, any benefit payable shall be paid to the
survivors of the person in the following order:
   (1) The decedent's spouse.
   (2) The decedent's natural or adopted children, including a
natural child adopted by another who meets the following criteria:
   (A) The natural parent and adopted child lived together at any
time as parent and child or the natural parent was married to or was
cohabiting with the other natural parent at the time the child was
conceived and died before the birth of the child; and
   (B) The child was adopted by the spouse of either of the natural
parents or after the death of either of the natural parents or the
child is a natural child adopted by another as that phrase is defined
or construed by the Probate Code.
   (3) The decedent's parents.
   (4) The decedent's brothers and sisters.
   (b) If a deceased person had no effective beneficiary designation
and there are no survivors in the groups specified in subdivision (a)
who are entitled to the benefit under this section, the benefit
shall be paid to the estate of the decedent, if the estate is either
probated or subject to probate. Any benefit payable by this system
may be paid either to the estate or to the duly authorized
representative or representatives of the estate upon receipt by this
system of a court order appointing an executor, administrator, or
personal representative. If the estate is handled by a Public
Administrator, the benefit may be paid upon receipt by this system of
a court order authorizing the Public Administrator to proceed
summarily pursuant to paragraph (1) of subdivision (a) of Section
7660 of the Probate Code.
   (c) If there are no survivors in the groups specified in
subdivision (a) and the estate of the person described in subdivision
(b) does not require probate, irrespective of whether probate is
filed, or is not handled by a Public Administrator pursuant to a
court order authorizing the Public Administrator to proceed summarily
pursuant to paragraph (1) of subdivision (a) of Section 7660 of the
Probate Code, the benefit shall be paid directly to the decedent's
trust.
   (d) If there are no survivors in the groups specified in
subdivision (a) and the estate of the person described by subdivision
(b) does not require probate, irrespective of whether probate is
filed, or is not handled by a Public Administrator pursuant to a
court order authorizing the Public Administrator to proceed summarily
pursuant to paragraph (1) of subdivision (a) of Section 7660 of the
Probate Code and the decedent has not established a trust as
described by subdivision (c), the benefit shall be paid directly to
the surviving next of kin in the following  order. 
 order: 
   (1) Stepchildren.
   (2) Grandchildren, including stepgrandchildren.
   (3) Nieces and nephews.
   (4) Great grandchildren.
   (5) Cousins.
   (e) For purposes of determining the application of subdivisions
(b), (c), and (d)  ,  the amount of the benefit payable from
this system shall not be included in calculating the worth of the
estate.
   (f) For purposes of this section, the term "stepchild" shall mean
a person who had a regular parent-child relationship with the
deceased person.
   SEC. 10.   SEC. 14.   Section 21506 of
the Government Code is amended to read:
   21506.  Any monthly allowance payable to a person, that had
accrued and remained unpaid at the time of his or her death, or any
uncashed warrant issued prior to the date of death of the person that
has been returned to this system, or any balance of prepaid
complementary health premiums received pursuant to Section 21691 or
prepaid complementary annuitant health plan premiums received
pursuant to Section 22802, shall be paid in the following order:
   (a) In the event of the death of a retired person, to one of the
following:
   (1) The beneficiary entitled to payment in accordance with an
optional settlement chosen by the member.
   (2) The survivor entitled to payment of the survivor continuance
benefit provided under Section 21624.
   (3) The beneficiary entitled to receive the lump-sum death benefit
provided upon death of a retired person if the person had not chosen
an optional settlement and there was no survivor who was entitled to
receive the survivor continuance benefit.
                    (b) In the event of the death of a person
receiving a survivor benefit, that benefit shall be paid to the
beneficiary designated by the survivor of a member under Section
21491.
   (c) If there is no beneficiary entitled to receive payment under
either subdivision (a) or (b), the benefit shall be paid to either
the estate of the deceased person or the duly authorized
representative or representatives of the estate upon receipt by this
system of a court order appointing an executor, administrator,
personal representative or Public Administrator pursuant to a court
order authorizing the Public Administrator to proceed summarily
pursuant to paragraph (1) of subdivision (a) of Section 7660 of the
Probate Code. If the estate does not require probate or is not
handled by a Public Administrator pursuant to a court order
authorizing the Public Administrator to proceed summarily pursuant to
paragraph (1) of subdivision (a) of Section 7660 of the Probate Code
and the deceased person had a trust, benefits may, in the judgment
of the board, be paid to the successor trustee as named in the trust.

   (d) If there is no beneficiary entitled to receive payment of
benefits under subdivision (a), (b), or (c), the benefits shall be
paid to the surviving next of kin of the person pursuant to the order
of distribution specified in Section 21493.
   SEC. 11.   SEC. 15.   Section 21507 of
the Government Code is amended to read:
   21507.  Any lump-sum benefit, or any uncashed lump-sum death
benefit warrant, payable by this system to a beneficiary shall be
paid to the estate of the beneficiary if he or she dies prior to
payment of the benefit. The benefit may be paid to a representative
of the deceased beneficiary's estate, upon demonstration by court
documents that the person is authorized to act in that capacity. If
the estate is handled by a Public Administrator, the benefit may be
paid upon receipt by this system of a court order authorizing the
Public Administrator to proceed summarily pursuant to paragraph (1)
of subdivision (a) of Section 7660 of the Probate Code. If the estate
does not require probate or is not handled by a Public Administrator
pursuant to a court order authorizing the Public Administrator to
proceed summarily pursuant to paragraph (1) of subdivision (a) of
Section 7660 of the Probate Code, and the deceased person was the
trustor of a trust, benefits may, in the judgment of the board, be
paid to the trustee as named in the trust. If the estate is not
probated, and the beneficiary was not the trustor of a trust,
benefits shall be paid to the beneficiary's surviving next of kin, in
the order specified in Section 21493.
   SEC. 12.   SEC. 16.   Section 21533.5 is
added to the Government Code, to read:
   21533.5.  (a) To the extent required by Section 401(a) of Title 26
of the United States Code, if a member dies while performing
qualified military services, the survivors of the member shall be
entitled to any additional benefits, as determined under Section 401
(a)(37) of Title 26 of the United States Code, that would have been
provided under the system had the member resumed his or her prior
employment with an employer that maintains the system and then
terminated employment on account of death. Death of a member while
performing qualified military service shall not be treated as a
service-connected death or disability. Service for vesting shall be
credited to a member affected by this section for the period of his
or her qualified military service.
   (b) "Additional benefits" under this section shall not include
benefit accruals relating to the period of qualified military
service.