Chapter 14.2Out-of-State Service Credit

Section § 22820

Explanation

If you're a member, but not retired, you can buy service credits for work done in educational jobs outside California, such as at schools in other states, U.S. government education jobs, or certain foreign educational institutions. However, you cannot buy credits for work if you're already getting credit for that same work in another retirement system, other than social security. The maximum credits you can buy are limited to the actual years you worked in those jobs. You can purchase these credits by making payments in various ways, as outlined in the law. Also, you can't use the pay from these out-of-state jobs to calculate your final retirement salary, and these credits can't be used to qualify for certain benefits.

(a)CA Education Code § 22820(a) A member, other than a retired member, may request to purchase out-of-state service credit for any of the following:
(1)CA Education Code § 22820(a)(1)  Service performed in a position while employed by a public educational institution located in another state or territory of the United States.
(2)CA Education Code § 22820(a)(2)  Educational service performed as an employee of the United States.
(3)CA Education Code § 22820(a)(3)  Service performed as an employee of an educational institution located outside of the United States and its territories that receives a portion of its funding from any foreign or domestic public sources and provides a level of education comparable to kindergarten and grades 1 to 12, inclusive, as determined by the applicable law of the jurisdiction in which the educational institution is located.
(4)CA Education Code § 22820(a)(4) As an employee of an educational institution that receives funds under Section 2701 of Title 22 of the United States Code.
(b)CA Education Code § 22820(b) The member may not receive credit for this service if the member retains or is eligible to receive credit for the same service in the Cash Balance Benefit Program under Part 14 (commencing with Section 26000) or another public retirement system, excluding social security.
(c)CA Education Code § 22820(c) The amount of out-of-state service credit a member may purchase may not exceed the number of years of service performed by the member in a position described in subdivision (a).
(d)CA Education Code § 22820(d) Out-of-state service credit may be purchased under this section by means of any of the following actions:
(1)CA Education Code § 22820(d)(1) Paying an amount equal to the amount refunded from the other public retirement system and receiving service credit under the Defined Benefit Program pursuant to subdivision (a) of Section 22823.
(2)CA Education Code § 22820(d)(2) Paying the contributions required under the Defined Benefit Program pursuant to subdivision (a) of Section 22823 for the service credited in the other public retirement system.
(3)CA Education Code § 22820(d)(3) Paying an amount equal to the amount refunded from the other public retirement system and an additional amount in accordance with subdivision (a) of Section 22823 for the service credited in the other public retirement system.
(4)CA Education Code § 22820(d)(4) Paying the contributions required under the Defined Benefit Program pursuant to subdivision (a) of Section 22823 for the service not credited to a public retirement system.
(e)CA Education Code § 22820(e) Compensation for out-of-state service may not be used in determining the highest average annual compensation earnable when calculating final compensation.
(f)CA Education Code § 22820(f) The service credit purchased under this section may not be used to meet the eligibility requirements for benefits provided under Sections 24001 and 24101.
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(Amended by Stats. 2009, Ch. 304, Sec. 10. (SB 634) Effective January 1, 2010.)

Section § 22821

Explanation

If a member wants to buy service credits for work done outside of the state, they need to submit a written request with the details demanded by the board.

A member’s request to purchase out-of-state service credit pursuant to this chapter shall be submitted in writing and shall include information as required by the board.
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(Amended by Stats. 2009, Ch. 304, Sec. 11. (SB 634) Effective January 1, 2010.)

Section § 22822

Explanation

If you're a member planning to buy credit for work done outside of California, you need to make that request before your retirement or other benefits, like family or disability allowances, kick in.

A request pursuant to Section 22820 to purchase out-of-state service credit may be made by a member any time prior to the effective date of a family, survivor, disability, or retirement allowance.
out-of-state service credit purchase request retirement allowance family allowance survivor allowance disability allowance effective date member request deadline benefits commencement Service credit purchase timing
(Amended by Stats. 2009, Ch. 304, Sec. 12. (SB 634) Effective January 1, 2010.)

Section § 22823

Explanation
If you're a member wanting to buy service credit for time worked out-of-state, you need to pay all the required contributions before you retire. The cost is based on a rate set by the board that's effective when you make the request.
A member who requests to purchase out-of-state service credit pursuant to Section 22820 shall pay, prior to retirement, all contributions with respect to that service at the contribution rate for additional service credit adopted by the board as a plan amendment, in effect on the date of the request, in accordance with subdivisions (a), (f), (g), and (h) of Section 22801.
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(Amended by Stats. 2009, Ch. 304, Sec. 13. (SB 634) Effective January 1, 2010.)

Section § 22824

Explanation

This law states that if any part of the chapter conflicts with Section 415 of the Internal Revenue Code from 1968, then the conflicting part does not need to be followed. In other words, avoiding a conflict with that federal tax code section takes priority.

No provision of this chapter shall apply to the extent it would require any action to be taken that would create a conflict with Section 415 of the Internal Revenue Code of 1968 (Title 26 of the United States Code).
conflict with federal tax code Section 415 Internal Revenue Code avoid conflict 1968 tax law federal law precedence Chapter restrictions Title 26 United States Code tax compliance action requirement legal conflict resolution priority of federal law tax law conflict
(Added by Stats. 1997, Ch. 569, Sec. 2. Effective January 1, 1998. Section operative January 1, 1999, pursuant to Section 22825.)

Section § 22825

Explanation
This part of the law became active and enforceable on January 1, 1999.
This chapter shall become operative on January 1, 1999.
operative date January 1 1999 effective date active statute enforceable law 1999 law implementation law start date chapter activation California education code statute commencement date
(Added by Stats. 1997, Ch. 569, Sec. 2. Effective January 1, 1998. Note: This section prescribes a delayed operative date (January 1, 1999) for Chapter 14.2, commencing with Section 22820.)

Section § 22826

Explanation

This law allows members of a retirement program, excluding retirees, to buy up to five years of service credit that doesn’t come from their actual work. To be eligible, you must be vested, meaning you’ve met certain service requirements, in the program. There’s a cost to buy this credit, based on financial evaluations by the board, and it includes interest. However, you could only apply under this section if you submitted your properly filled request form before January 1, 2013, and it was approved.

(a)CA Education Code § 22826(a) A member, other than a retired member, may request to purchase up to five years of nonqualified service credit provided the member is vested in the Defined Benefit Program as provided in Section 22156.
(b)CA Education Code § 22826(b) A member who requests to purchase nonqualified service credit as provided in this chapter shall contribute to the retirement fund the actuarial cost of the service, including interest as appropriate, as determined by the board based on the most recent valuation of the plan with respect to the Defined Benefit Program in effect on the date of the request, in accordance with subdivisions (a), (f), (g), and (h) of Section 22801.
(c)CA Education Code § 22826(c) This section shall apply only to an application to purchase nonqualified service credit on a properly executed form provided by the system and received at the system’s headquarters office prior to January 1, 2013, that is subsequently approved by the system.
nonqualified service credit vested member Defined Benefit Program actuarial cost retirement fund contribution interest board valuation purchase service credit application approval January 1 2013 deadline
(Amended by Stats. 2014, Ch. 755, Sec. 21. (SB 1220) Effective January 1, 2015.)

Section § 22827

Explanation

This law allows certain retired members who stopped working between June 1, 2007, and December 31, 2007, to buy credit for work done in educational institutions outside the U.S. The work must be in institutions that receive public funding and offer K-12 level education, or receive funding under a specific U.S. Code. However, you can't get credit for this service if you're eligible for a similar credit in another retirement program. You also can't buy more credit than the actual time worked before retiring, and these out-of-state earnings won't affect your final retirement pay calculations. Additionally, this credit doesn't help meet eligibility for specific retirement benefits.

(a)CA Education Code § 22827(a) A member who retired for service between June 1, 2007, and December 31, 2007, inclusive, may elect to purchase credit for out-of-state service for either of the following:
(1)CA Education Code § 22827(a)(1) Service performed as an employee of an educational institution located outside of the United States and its territories that receives a portion of its funding from any foreign or domestic public sources and provides a level of education comparable to kindergarten and grades 1 to 12, inclusive, as determined by the applicable law of the jurisdiction in which the educational institution is located.
(2)CA Education Code § 22827(a)(2) As an employee of an educational institution that receives funds under Section 2701 of Title 22 of the United States Code.
(b)CA Education Code § 22827(b) The member may not receive credit for service pursuant to this section if the member retains or is eligible to receive credit for the same service in the Cash Benefit Program under Part 14 (commencing with Section 26000) or another public retirement system, excluding social security.
(c)CA Education Code § 22827(c) The amount of service for which a member may purchase credit may not exceed the number of years of service performed by the member in a position described in subdivision (a) prior to that member’s effective retirement date.
(d)CA Education Code § 22827(d) Compensation for out-of-state service may not be used in determining the highest average annual compensation earnable when calculating final compensation.
(e)CA Education Code § 22827(e) The service credit purchased pursuant to this section may not be used to meet the eligibility requirements for benefits provided pursuant to Sections 24001 and 24101.
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(Added by Stats. 2008, Ch. 494, Sec. 2. Effective January 1, 2009.)

Section § 22828

Explanation

If you wanted to buy service credit for work you did outside of California's state system, you needed to put in your request by June 30, 2009.

A request to purchase out-of-state service credit pursuant to Section 22827 must be received no later than June 30, 2009.
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(Amended by Stats. 2014, Ch. 755, Sec. 22. (SB 1220) Effective January 1, 2015.)

Section § 22829

Explanation

This law is about how a member of a retirement system can get credit for work done outside the state. To do this, they must pay according to a specific contribution rate set by the retirement board. The amount depends on their age and their highest salary from the last three years. Payments must be completed before any retirement benefits are adjusted, and they must pay in one lump sum. If they don’t complete the payment process within 30 days of getting the bill, their request is canceled, but they have until June 30, 2009, to try again.

(a)CA Education Code § 22829(a) This section applies only to a member who elects to receive out-of-state service credit pursuant to Section 22827.
(b)CA Education Code § 22829(b) The member shall pay all contributions with respect to that service at the contribution rate for additional service credit adopted by the board as a plan amendment in effect at the time of election.
(c)CA Education Code § 22829(c) Contributions shall be based upon the member’s age at the date of the election and upon compensation earnable in the last school year of credited service or either of the two immediately preceding school years, whichever is highest.
(d)CA Education Code § 22829(d) Any payment that a member may make to the system to obtain credit for out-of-state service shall be paid in full before a member or beneficiary may receive any adjustment in the appropriate allowance due date because of that payment.
(e)CA Education Code § 22829(e) The system shall make any appropriate adjustments to the member’s benefit allowance to reflect the purchase of additional service retroactive to the effective date of retirement.
(f)CA Education Code § 22829(f) Contributions for out-of-state service credit shall be made in a lump sum.
(g)CA Education Code § 22829(g) If the payment election described in subdivision (b) is not received at the system’s headquarters office within 30 days of receiving a bill for this purchase from the system, the election shall be canceled.
(h)CA Education Code § 22829(h) If the election to purchase out-of-state service is canceled as described in subdivision (g), the member may, prior to June 30, 2009, make a new election to purchase out-of-state service pursuant to this section.
out-of-state service credit retirement system contributions board adopted plan amendment age-based contribution rate highest salary determination lump sum payment benefit allowance adjustment 30-day payment deadline cancellation of election June 30 2009 deadline
(Amended by Stats. 2013, Ch. 558, Sec. 14. (AB 1379) Effective January 1, 2014.)