Military Services - State Teachers’ Retirement System Cash Benefit Program - CA Education

Section § 28000

This law ensures that people who leave their jobs to serve in the U.S. military can keep their employment benefits when they return. It aligns with federal rules that protect military service members' reemployment rights. The law explains who qualifies as serving in the military, including active and training duties, and specifies that benefits won't accumulate if the person doesn't return to their previous employer after their military service.

(a) The Legislature hereby finds and declares its intent to preserve and protect the rights of reemployed participants who have been absent from a position of employment covered by the Cash Balance Benefit Program to serve in the uniformed services of the United States in accordance with the Uniformed Services Employment and Reemployment Rights Act of 1994 (Chapter 43 (commencing with Section 4301) of Title 38 of the United States Code).

(b) The plan shall comply with Chapter 43 (commencing with Section 4301) of Title 38 of the United States Code, as that chapter may be amended from time to time.

(c) The term “service in the uniformed services,” for purposes of determining plan vesting, eligibility for membership, and accrual of benefits, means the performance of duty on a voluntary or involuntary basis in a uniformed service under competent authority and includes active duty, active duty for training, initial active duty for training, inactive duty training, a period for which a participant is absent from a position of employment for the purpose of an examination to determine the fitness of the participant to perform any such duty, and the period of time following the actual service in the uniformed service through the last day a member is eligible to report back to work or to apply for reemployment as specified under Section 1002.259 of Title 20 of the Code of Federal Regulations.

(d) The term “uniformed services” means the Armed Forces of the United States of America, the Army National Guard and the Air National Guard when engaged in active duty for training, inactive duty training, or full-time National Guard duty, the commissioned corps of the United States Public Health Service, and any other category of persons designated by the President in time of war or emergency.

(e) No entitlement of the right to contribute toward credits under the Cash Balance Benefit Program pursuant to this chapter by the participant as a result of service in the uniformed services shall accrue if the participant does not return to employment with the same employer or employers which employed the participant immediately prior to the eligible period of service in the uniformed services as prescribed in Chapter 43 (commencing with Section 4301) of Title 38 of the United States Code.

reemployment rights Cash Balance Benefit Program uniformed services USERRA service in the uniformed services military duty vesting benefit accrual reemployment application Armed Forces National Guard Public Health Service preservation of employment rights military service eligibility return to former employer

(Amended by Stats. 2016, Ch. 218, Sec. 46. (SB 1352) Effective January 1, 2017.)

Section § 28001

If you leave your job to serve in the military and then return to the same employer, it won't count as a break in your job service, as long as your service time doesn't surpass five years. When you come back, you can choose to pay the retirement contributions you missed while serving, and these payments must fit within certain limits. Your employer can help set up a repayment schedule, which can last up to three times the length of your military service, but not more than five years. After you pay, your retirement account will be updated as if you never left. However, contributions can't exceed what is allowed by federal tax rules.

(a) The participant who returns to employment with the same employer which had employed the participant immediately prior to the eligible period of service in the uniformed services, in accordance with the requirements of Chapter 43 (commencing with Section 4301) of Title 38 of the United States Code, shall be treated as not having incurred a break in the performance of creditable service by reason of that participant’s period or periods of service in the uniformed services. The length of each period of service in the uniformed services shall not exceed five years unless otherwise permitted pursuant to Section 28004. Each period of service in the uniformed services by the participant shall, upon that participant’s return to employment with the same employer or employers which had employed the participant immediately prior to the eligible period of service in the uniformed services, constitute employment toward the performance of creditable service provided that participant elects to remit the employee contributions that would have been made during the period of service in the uniformed services. The remittance of employee contributions shall be calculated pursuant to Sections 26501 and 28003. In no event shall that remittance exceed the amount the participant would have been required to contribute during that period of performance of creditable service had the participant remained continuously employed by the last employer and not served in the uniformed services throughout that period.

(b) Notwithstanding Section 26506, remittance of employee contributions in accordance with subdivision (a) shall be made by the employer pursuant to Section 26502 upon the employer’s receipt of written consent of the participant specifying a schedule of repayments. That remittance shall commence during the period beginning with the date of return to employment and may continue for three times the period of the participant’s eligible period of service in the uniformed services, not to exceed five years. The plan’s receipt of the remittance payments to the plan with respect to the Cash Balance Benefit Program shall be credited pursuant to Chapter 7 of this part. Contributions, interest, and additional earnings credits the participant would have earned had the participant remained continuously employed during the period of eligible service in the uniformed services shall be credited to employee and employer accounts retroactively upon receipt of the employee contributions. Upon receipt of the remittance payments to the plan, the payments shall be subject to the same terms and conditions under the program as if the payments had been employee contributions made by the participant had the participant not served for a period in the uniformed services. In no event shall the current year contributions and contributions made for purposes of purchasing service exceed the maximum exclusion allowance as set forth in the Internal Revenue Code.

uniformed services return to employment break in service creditable service employee contributions military service service period limit repayment schedule employer contributions internal revenue code Cash Balance Benefit Program retirement account update maximum exclusion allowance retroactive credits

(Amended by Stats. 2016, Ch. 218, Sec. 47. (SB 1352) Effective January 1, 2017.)

Section § 28002

This section specifies the responsibilities of employers when reemploying staff members who have served in the military. If an employer employed someone right before they served, the employer must pay pension contributions like those for other employees. The contributions include both regular contributions and additional costs like interest. Employers must notify the system of reemployment within 30 days. If the employee doesn’t contribute to their pension for their service time, the employer doesn’t have to contribute either. If an employee fails to make their personal contributions, the employer's contributions might be adjusted later.

(a) Except as provided in subdivision (b), an employer reemploying a participant with service subject to the requirements of Chapter 43 (commencing with Section 4301) of Title 38 of the United States Code, shall be liable to remit the employer contributions provided that employer employed the participant immediately prior to the eligible period of service in the uniformed services. The contribution rate by the employer shall be to the same extent as that for contributions to the Cash Balance Benefit Program for other employees during the same period. In addition to contributions due pursuant to this subdivision, the employer shall remit an amount that is the equivalent of the full cost of any interest and additional earnings credits credited pursuant to Section 28001. The employer shall provide information regarding the reemployment of a participant who is subject to Chapter 43 (commencing with Section 4301) of Title 38 of the United States Code on a form prescribed by the system within 30 days of the date of reemployment. Following receipt of that notice, the system shall calculate in accordance with Section 28003 the total amount of employer contributions due for the participant for the full period of service in the uniformed services. Within 60 working days of notification by the plan of amount due, the employer shall remit to the plan all employer contributions.

(b) The employer shall not be liable for employer contributions for the period of service in the uniformed services if the participant elects not to remit the employee contributions for that period through the employer as required under Section 28001. In the event the participant does not remit all of the employee contributions within the prescribed repayment period, the total amount of the employer contributions that were remitted for that period shall be adjusted pursuant to Section 26302.

reemployment employer contributions uniformed services military service pension contributions notification requirements Cash Balance Benefit Program interest and additional earnings employee contributions repayment period adjustment of contributions reemployment notification Title 38 obligations pension system

(Amended by Stats. 2016, Ch. 218, Sec. 48. (SB 1352) Effective January 1, 2017.)

Section § 28003

This law explains how to determine the salary of an employee for calculating liabilities or contributions when they have been in military service. If the salary during service is not clear, it should be based on what the employee made in the last year or the period before their military service if it lasted less than a year.

For purposes of calculating the employer’s liability under Section 28002 or the required employee contributions under Section 28001, the participant’s salary during that period shall be computed as follows:

(a) The salary the participant would have received with the employer for the eligible period of service in the uniformed services.

(b) In the event that salary is not reasonably certain, the contributions shall be based on the participant’s average salary with the employer during the 12-month period immediately preceding the eligible period of service in the uniformed services or, if shorter, the contributions shall be based on the participant’s average salary for the period of employment immediately preceding that period.

employer liability employee contributions uniformed services salary calculation eligible period of service average salary military service 12-month period employment period service in the uniformed services participant's salary salary determination Section 28002 Section 28001

(Added by Stats. 1996, Ch. 680, Sec. 3. Effective January 1, 1997.)

Section § 28004

If you're part of the Cash Balance Benefit Program and you leave your job to serve in the military, generally you can only contribute to your retirement plan for up to five years while you're away. However, there are exceptions. You can go beyond five years if you need more time to finish your initial service commitment, if you couldn't leave the military because of circumstances beyond your control, or if you're fulfilling certain kinds of special duties or training. These might include being called for extra training, being on active duty during a war or emergency, or supporting key military missions.

A participant who is absent from a position of employment subject to the Cash Balance Benefit Program due to that participant’s service in the uniformed services, shall not be entitled to obtain the right to contribute toward credits under the plan in excess of five years of service in the uniformed services, except for the following reasons:

(a) The participant is required to serve beyond five years to complete an initial period of obligated service in the uniformed services;

(b) The participant was unable to obtain orders releasing the participant from a period of service in the uniformed services before the expiration of the five-year period and that inability was through no fault of the participant;

(c) The participant served in the uniformed services as required pursuant to Section 270 of Title 10, under Section 502(a) or 503 of Title 32 of the United States Code, or to fulfill additional training requirements determined and certified in writing by the Secretary of Defense, to be necessary for professional development, or for completion of skill training or retraining; or

(d) The participant is:

(1) Ordered to or retained on active duty under Section 672(a), 672(g), 673, 673b, 673c, or 688 of Title 10 or under Section 331, 332, 359, 360, 367, or 712 of Title 14 of the United States Code.

(2) Ordered to or retained on active duty, other than for training, under any provision of law during a war or during a national emergency declared by the President or the Congress.

(3) Ordered to active duty, other than for training, in support, as determined by the secretary concerned, of an operational mission for which personnel have been ordered to active duty under Section 673b of Title 10 of the United States Code.

(4) Ordered to active duty in support, as determined by the secretary concerned, of a critical mission or requirement of the uniformed services.

(5) Called into federal service as a participant of the National Guard under Chapter 15 of Title 10 or under Section 3500 or 8500 of Title 10 of the United States Code.

Cash Balance Benefit Program uniformed services military service retirement plan contributions five-year limit initial service obligation service extension training requirements active duty national emergency operational mission support critical mission National Guard federal service Title 10 and Title 14 provisions

(Amended by Stats. 1998, Ch. 965, Sec. 317. Effective January 1, 1999.)

Section § 28005

This law explains when a person's right to earn credits in the Cash Balance Benefit Program ends due to their service in the military. Specifically, if they leave with a dishonorable discharge, are separated under negative conditions, are dismissed according to certain military laws, or are removed from service rolls, they lose the right to contribute.

A participant’s entitlement to the right to contribute toward credits under the Cash Balance Benefit Program pursuant to this chapter by reason of the service in the uniformed services terminates upon the occurrence of any of the following events:

(a) A separation of the participant from the uniformed service with a dishonorable or bad conduct discharge.

(b) A separation of the participant from the uniformed service under other than honorable conditions, as characterized pursuant to regulations prescribed by the secretary concerned.

(d) A dropping of the participant from the rolls pursuant to Section 1161(b) of Title 10 of the United States Code.

Cash Balance Benefit Program uniformed services dishonorable discharge bad conduct discharge other than honorable conditions military separation Section 1161(a) Title 10 U.S. Code service credits termination participant rights military dismissal separation conditions military benefits service rolls participant entitlement

(Amended by Stats. 1998, Ch. 965, Sec. 318. Effective January 1, 1999.)

Section § 28006

This law says that nothing in this chapter should force a plan or its members to take any action that would lead to negative tax consequences under federal tax laws.

No provision of this chapter shall apply to the extent it would require any action to be taken that would cause the plan or its members to incur adverse tax consequences under the Internal Revenue Code of 1986 (Title 26 of the United States Code).

adverse tax consequences Internal Revenue Code 1986 plan actions members United States Code tax implications avoidance of penalties Chapter provisions Title 26

(Added by Stats. 1996, Ch. 680, Sec. 3. Effective January 1, 1997.)