Termination Benefits - Defined Benefit Supplement Program - CA Education

Section § 25024

This section explains that if a member stops working in a job covered by the Defined Benefit Supplement Program (for reasons other than retirement, disability, or death), they can get a termination benefit, which is a lump sum of their account balance. The member has to apply for this benefit using a specific form. If they apply for a refund of their contributions, it automatically counts as applying for the termination benefit too, but canceling the refund also cancels the termination benefit application. The member's employer must confirm the employment has ended, unless it ended over a year ago. No benefits will be available after the lump sum is paid out, and partial distributions aren't allowed except in specific cases.

(a) Upon the termination of all employment to perform creditable service subject to coverage under the plan for a reason other than retirement, disability, or death, a member shall be eligible for a termination benefit under the Defined Benefit Supplement Program.

(b) A member shall submit an application for a termination benefit on a form prescribed by the system. If a member submits an application for a refund of contributions under the Defined Benefit Program, pursuant to Section 23103, that application shall also be deemed an application for a termination benefit. If a member cancels the application for a refund of contributions under the Defined Benefit Program, the application for the termination benefit shall also be deemed to have been canceled.

(c) The member’s employer or employers shall certify in a format prescribed by the system that the member’s employment has been terminated, unless the member’s termination of employment occurred 12 consecutive months or more prior to the date the application for a termination benefit is received by the system’s headquarters office.

(d) The termination benefit shall be a lump-sum payment that is equal to the balance of credits in the member’s Defined Benefit Supplement account.

(e) Upon distribution of the termination benefit, no further benefit shall be payable to the member or the member’s beneficiary under the Defined Benefit Supplement Program.

(f) A partial distribution of the balance of credits in a member’s Defined Benefit Supplement account shall not be made, except as provided in Section 25009, 25015, 25016, or 25022.

termination benefit Defined Benefit Supplement Program lump-sum payment employment termination refund of contributions application cancellation balance of credits employer certification partial distribution restriction creditable service retirement exception disability exception death exception beneficiary ineligibility 12-month rule

(Amended by Stats. 2019, Ch. 96, Sec. 22. (AB 644) Effective January 1, 2020.)

Section § 25024.5

If a member returns to work in a job that qualifies for retirement benefits under the plan, they cannot get a new termination benefit if they were already given that benefit less than five years ago. However, this rule doesn't apply to anyone who has to take out benefits due to age requirements set by federal tax laws.

A member who is reemployed and again performs creditable service subject to coverage under the plan may not receive a termination benefit under this part if less than five years have elapsed following the date the most recent termination benefit was distributed to the member. This section does not apply to a member who has reached the age at which the Internal Revenue Code of 1986 requires a distribution of benefits.

reemployment termination benefit five-year rule creditable service plan coverage Internal Revenue Code mandatory distribution age requirements reemployed members benefit distribution credibility service eligibility distribution rules retirement benefits

(Added by Stats. 2005, Ch. 661, Sec. 2. Effective January 1, 2006.)

Section § 25025

If you're part of the Defined Benefit Supplement Program and stop working, you can receive a termination benefit, but only after waiting 180 days from leaving your job. If you start working again within those 180 days, you can't get the benefit unless you're old enough that federal law requires you to take it. In that case, you would start receiving payments as soon as you meet the federal age requirement or comply with another specific condition.

(a) A termination benefit under the Defined Benefit Supplement Program shall be payable after 180 calendar days have elapsed following the date the member terminated employment as specified in Section 25024.

(b) Except as provided in subdivision (c), the application for the termination benefit shall be automatically canceled if the member performs creditable service within 180 calendar days following the date of termination of employment.

(c) Subdivision (b) does not apply if the member has reached that age at which the Internal Revenue Code of 1986 requires a distribution of benefits. A member who has reached this age shall receive a distribution commencing on the earlier of the date that the member has met the conditions of subdivision (a) or the conditions of subdivision (h) of Section 24600.

Defined Benefit Supplement Program termination benefit 180 calendar days creditable service Internal Revenue Code distribution of benefits employment termination automatic cancellation federal age requirement benefit distribution retirement benefits working after termination Section 25024 Section 24600 retirement age

(Amended by Stats. 2020, Ch. 275, Sec. 15. (AB 2101) Effective January 1, 2021.)