Chapter 17Discontinuation of Plan

Section § 28100

Explanation

This law section states that an employer can stop offering the Cash Balance Benefit Program whenever they choose, as long as they follow the rules set by their governing board. The employer must inform the system at least 90 days before they actually stop the program, using a specific form provided by the system.

(a)CA Education Code § 28100(a) The employer may discontinue providing the Cash Balance Benefit Program at anytime in accordance with the terms and conditions of the employer’s governing board’s formal action to provide the program.
(b)CA Education Code § 28100(b) The employer shall notify the system of the decision to discontinue the plan no less than 90 calendar days prior to the effective date of discontinuance. Such notice shall be submitted on a form prescribed by the system.
Cash Balance Benefit Program employer decision program discontinuance governing board formal action 90-day notice notification form effective date discontinuance procedure employer obligations
(Amended by Stats. 1998, Ch. 1048, Sec. 50. Effective January 1, 1999.)

Section § 28101

Explanation

If an employer stops offering the Cash Balance Benefit Program, employees still keep their money, plus any the employer added, including interest. Employees immediately own their entire account balance. The money continues to earn interest at a basic rate as long as it hasn't been paid out.

(a)CA Education Code § 28101(a) Upon discontinuation of the Cash Balance Benefit Program by the employer, the system will hold the employee and employer accounts for the benefit of the participant. The participant is immediately vested in both employee and employer accounts including accrued interest.
(b)CA Education Code § 28101(b) Both employee and employer accounts will continue to be credited with interest at the minimum interest rate so long as there is an undistributed balance in such accounts.
Cash Balance Benefit Program discontinuation employee account employer account vested accrued interest minimum interest rate undistributed balance employee ownership employer contributions interest crediting
(Amended by Stats. 1998, Ch. 1048, Sec. 51. Effective January 1, 1999.)