Chapter 13Service Credit
Section § 22700
This section explains how to calculate the service time that counts towards a member's benefits in the Defined Benefit Program. It affects whether a person can get benefits, how much they need to contribute, and how much they receive when they retire.
Section § 22701
This section outlines how teaching service is credited for educators in a defined benefit pension program. First, for service done before July 1, 1972, it's credited according to the laws at that time. For service on or after this date, it's credited based on the ratio of the teacher's salary to their annual pay rate. For service performed after the new rules come into effect, credit is calculated using a specific formula based on salary and supplemental pay, ensuring it doesn't exceed one year per school year. Additionally, the organization managing these benefits will announce when they are ready to implement the changes by posting a date online, no later than July 1, 2027. The law becomes active on this announced date.
Section § 22703
This law is about how certain public school employees' retirement service and contributions are credited in California. It explains that if a teacher works more than the equivalent of a full school year, the extra work isn't credited to their main retirement program but instead goes into a different supplemental program. Contributions related to extra work are adjusted accordingly. For those who worked before July 1, 1956, they are guaranteed certain baseline retirement benefits. Also, the law mentions some changes based on specific financial conditions that would affect when certain amendments to this rule take effect.
Section § 22704
If a teacher or staff member starts working in a school district that operates year-round or continuously, their work is credited to the school year when they began.
Section § 22705
If you're part of the Defined Benefit Program and are already getting a retirement benefit in a lump sum or installments from another public retirement system, or other specified systems like the American Gratuity Act for service in the Philippines or the San Francisco Employees’ Retirement System, you can’t count that service towards your benefits here. If you start getting such a benefit after retiring, your payments here will be reduced based on that service. This rule doesn’t affect retirement benefits you get from certain defined contribution plans like 401(a), 403(b), or 457 plans.
Section § 22705.5
If someone is covered by the San Francisco Employees’ Retirement System, that service time won't count towards their benefits under the Defined Benefit Program. However, they do have the right to get retirement benefits for any service time covered by the Defined Benefit Program, as long as they don't withdraw their retirement contributions for that service.
Section § 22706
If you're already getting a retirement or disability payment from certain pension programs, you can't earn extra service credits under these programs while you receive those payments.
Section § 22708
This law explains how retirement calculations are handled for California state employees involved in personal leave programs or mandatory furloughs. If a state employee was in a personal leave program, their retirement calculation must count the service as if they hadn't taken personal leave, with the employer covering any additional costs. Similarly, if employees were furloughed due to executive orders, their retirement benefits should reflect the pay and contributions they'd have had without the furlough, also at the employer's expense. "Mandatory furloughs" specifically refer to unpaid absences ordered by executives during the 2008-09 and 2009-10 fiscal years.
Section § 22709
This law states that teachers or school employees will receive service credit for the time they couldn't work due to natural disasters or school closures. Additionally, if someone of Japanese ancestry was forced to leave their teaching job during World War II and returned to teaching in California before July 1, 1972, they will be given credit for four years of service.
Section § 22710
This law section explains how a member of the California educational system can receive credit for their service time when they're unable to work due to an injury or illness related to their job. To get this service credit, the member must pay certain contributions, even if they're receiving workers' compensation or money from their employer's insurance. The credit is based on the portion of their usual pay they're receiving during this time, but it won't exceed what they would normally earn if they were working.
Section § 22711
If you're an elected officer of a workers' group and you're on a paid leave, like a union leader, you still get retirement benefits as if you were working normally. But, you must have been working the month before your leave, you need to pay your share into the retirement fund as if you were still at work, and your employer must also pay their share based on your usual earnings during your leave.
Section § 22712
If you're a teacher participant in a specific program, you can get credit for the time you spent teaching as an exchange teacher, no matter where that was.
Section § 22712.5
If a member worked for a school or community college and got credit for work as a community service teacher or in a non-qualified classified position during the year ending in June 1996, they can keep earning credit for that work after June 1996 as long as they keep working without interruption.
Section § 22713
This section allows school districts and community colleges in California to agree with certain older employees to work part-time instead of full-time, without losing their full-time retirement benefits. Employees must be at least 55 years old and have worked full-time for five years in a row before requesting to go part-time. They can make this change for up to 10 years and must pay retirement fund contributions as though they were still working full-time. The agreement might end if the employee stops working, works less than half-time, or fails to make retirement contributions as agreed. If the agreement ends early, that year doesn't count towards the 10-year limit, but the employer must report this to the retirement system.
Section § 22714
This law allows school districts, community college districts, or county education offices to provide an incentive for their teachers to retire early by giving them an additional two years of service credit. To do this, the district or office must show that it will save money by having the employees retire. For a teacher to qualify, they must have at least five years of service and retire within a specified time window set by their employer. The employer must pay into the retirement fund to cover the costs of the extra service credit. Additionally, those who retire under this rule cannot return to work with the same district within five years without losing the added benefits. Also, if they claim unemployment benefits within a year or aren't eligible to retire, they cannot participate in this program.
Section § 22715
This law allows the Governor to offer an early retirement incentive of an extra two years of service credit to certain state employees if it saves the state money and the Governor issues an executive order. Employees eligible for this incentive must have at least five years of service and retire within a specific timeframe. The retiree's department must pay into the retirement fund to cover the additional cost of these benefits, and interest might be charged if payments are made in installments. State employees who take this offer and then return to work must give up the extra service credit. Also, employees receiving unemployment benefits related to their state job can't receive this retirement incentive. Departmental payments must be approved by the Director of Finance and shared with legislative committees before the funds can be transferred.
Section § 22716
This law ensures that if you're part of the Defined Benefit Program, and you do some unpaid work for the trustees, you won't lose any past service credits you earned before July 1993, even though the past rules might have required forfeiting those credits.
Section § 22717
This law explains how teachers and public school employees in California can receive extra retirement credit for their unused sick leave when they retire. Employers must certify the number of unused sick days that are eligible, which will then be converted into service credit days. Specifically, the conversion depends on the number of base days for the position. For certain state positions without set base days, each unused sick day is roughly worth 0.004 years of service. This extra credit only applies if the employee isn't getting credit for the same leave in another retirement system. If employers are late in reporting the sick days, they might face penalties. These rules apply to retirements after January 1, 1999.
Section § 22717.5
This law explains how state employees in certain positions can get extra service credit toward their retirement for unused educational leave days. For each unused day of educational leave, the employee gets a small bump in retirement service credit. When an employee retires, their employer has to submit a report detailing these unused days within 30 days of retirement. If the report is late, a penalty can be applied. This applies to employees part of certain bargaining agreements or approved by the Human Resources Director, and it's relevant to retirements happening after January 1, 2000.
Section § 22718
This law explains how school employers are billed for the retirement benefits related to unused extra sick leave of teachers. First, employers must confirm not only the unused basic sick leave but also any extra sick leave days. If a teacher worked for multiple employers, the final employer is responsible for counting this leave if it was available for use. Employers have to pay the calculated present value for this leave within 30 days of the teacher's retirement notice. If employers delay the payment, interest will be added to the total owed. If an employer fails to pay, the state can deduct the due amount from state funding provided to the school, transferring it to the retirement fund instead.
Section § 22719
If a retired person's benefits are stopped, their employer does not have to give back any sick leave days that the person had converted into service credit when they retired.
Section § 22720
This law states that the service credited through a specific process can't be used to figure out someone's final salary, unless there's an exception mentioned in another related section.
Section § 22721
In California, if you're accumulating sick leave and then switch jobs, retire, or pass away, you don't get extra service credit in the retirement system. You also can't have retirement contributions withheld from these sick leave payments. Instead, you'll receive the payment separately and it won't affect your retirement pay calculations. Plus, you can't extend a leave of absence just to cash in on sick leave benefits.
Section § 22724
This law section describes how an employer should calculate the number of extra sick leave days an employee is entitled to when they retire. The process involves deducting sick leave used by the employee from their total available sick leave, following a specific order: first, from sick leave existing as of July 1, 1986, then from basic sick leave granted after June 30, 1986, and finally from any extra sick leave days granted after that date. Additionally, employers must provide past sick leave records for audit if requested by the board.