Employee contributions, employer contributions, investment earnings, and any other amounts provided under this part shall be deposited into the Teachers’ Retirement Fund. Disbursement of money from the fund shall be made upon claims made pursuant to Section 26209 and duly audited in the manner prescribed for the disbursement of other public funds. Notwithstanding Section 13340 of the Government Code, the Teachers’ Retirement Fund is continuously appropriated for the payment of benefits and investment transactions pursuant to this part. Disbursements may be made to return funds deposited in the fund in error.
Chapter 3Plan Administration
Section § 26200
This section explains that all money related to teacher retirement, such as contributions and investment earnings, goes into a specific fund called the Teachers’ Retirement Fund. The fund is used to pay out benefits and manage investments. Any money taken out must be claimed properly and audited like other public funds, and the fund is continuously available for these operations. Also, if there's an error and money was wrongly added to the fund, it can be withdrawn to correct that mistake.
Teachers’ Retirement Fund employee contributions employer contributions investment earnings payment of benefits investment transactions disbursement claims audited public funds return funds in error continuously appropriated Section 26209 Government Code Section 13340
Section § 26201
This law states that any money earned through investments related to the Cash Balance Benefit Program is to be collected by the Treasurer. These funds must be promptly deposited into the Teachers’ Retirement Fund and reported to the relevant management system.
Investment earnings shall be collected by the Treasurer, and together with any other moneys received in connection with the Cash Balance Benefit Program, shall be immediately deposited to the credit of the Teachers’ Retirement Fund and reported to the system.
Investment earnings Treasurer Cash Balance Benefit Program Teachers’ Retirement Fund fund deposit investment collection retirement fund management financial reporting educator benefits pension contribution retirement system financial administration teacher retirement savings public employee pension educational retirement fund
Section § 26202
This section outlines how the board should manage the Gain and Loss Reserve for the Cash Balance Benefit Program within the Teachers’ Retirement Fund. The board solely controls this reserve to ensure employee and employer accounts receive the minimum interest, even when investment earnings are low. Additionally, the reserve can support monthly annuity payments through the Annuitant Reserve when needed. The board also sets and reviews goals for how much should be in this reserve with help from an actuary. If investment earnings surpass basic requirements, the board decides how much extra should be added to the reserve with the actuary's input. This decision considers the reserve's current sufficiency and established goals.
(a)CA Education Code § 26202(a) The board shall establish a Gain and Loss Reserve within the Teachers’ Retirement Fund for the Cash Balance Benefit Program. The board has sole authority to administer the Gain and Loss Reserve to be drawn upon to the extent necessary to credit interest to employee accounts and employer accounts at the minimum interest rate during years in which the investment earnings of the plan with respect to the Cash Balance Benefit Program are not sufficient for that purpose, and, where necessary, to provide additions to the Annuitant Reserve for monthly annuity payments.
(b)CA Education Code § 26202(b) The board shall establish and periodically review goals regarding the sufficiency of the Gain and Loss Reserve based
on the recommendation of the actuary.
(c)CA Education Code § 26202(c) In the event that the total amount of investment earnings of the plan with respect to the Cash Balance Benefit Program for any plan year exceeds the sum of the total amount required to credit all employee and employer accounts at the minimum interest rate for the plan year plus the administrative costs of the plan with respect to the Cash Balance Benefit Program for the plan year, the board shall determine the amount, if any, that is to be credited to the Gain and Loss Reserve for the plan year. That determination shall be made upon recommendation of the actuary based on the actuarial valuation undertaken following the plan year pursuant to Section 26211 but no later than June 30 following the end of the plan year. In determining whether an amount is to be credited to the Gain and Loss Reserve, the board shall consider the sufficiency of the reserve in light of the goal established for the sufficiency
and the recommendations of the actuary.
Gain and Loss Reserve Teachers’ Retirement Fund Cash Balance Benefit Program interest credit employee accounts employer accounts minimum interest rate annuity payments Annuitant Reserve actuary recommendations investment earnings plan year actuarial valuation administrative costs sufficiency goals
Section § 26203
This law allows the board to spread out payments of any pension fund shortfalls over time, following the rules set by actuarial and governmental accounting standards.
The board may amortize any unfunded actuarial obligation in accordance with standards established by the Actuarial Standards Board and Governmental Accounting Standards Board.
amortize unfunded actuarial obligation pension fund shortfalls Actuarial Standards Board Governmental Accounting Standards Board payment schedule funding standards actuarial rules accounting standards financial management public pensions obligation management board authority fiscal responsibility pension liabilities
Section § 26204
This section explains that a board is responsible for creating and managing a special fund called the Annuitant Reserve, specifically for paying out annuities from the Teachers’ Retirement Fund's Cash Balance Benefit Program. The board can move money from the accounts of employees and employers into this fund when someone chooses to start receiving an annuity.
The board shall establish an Annuitant Reserve within the Teachers’ Retirement Fund for the Cash Balance Benefit Program. The board has sole authority to administer the Annuitant Reserve for the payment of annuities. The board may transfer the credits from a participant’s employee account and employer account to the Annuitant Reserve upon election of an annuity by the participant or beneficiary of the participant.
Annuitant Reserve Teachers’ Retirement Fund Cash Balance Benefit Program payment of annuities employee account credits employer account credits participant election beneficiary annuity administration fund management
Section § 26205
The board can move money between two financial reserves, the Gain and Loss Reserve and the Annuitant Reserve, if the actuary suggests doing so.
The board may transfer amounts between the Gain and Loss Reserve and the Annuitant Reserve upon the recommendation of the actuary.
financial reserves Gain and Loss Reserve Annuitant Reserve money transfer actuary recommendation board authority pension fund management reserve management actuarial advice fund allocation
Section § 26206
This law says that all the costs related to managing and running the Cash Balance Benefit Program are covered by the Teachers’ Retirement Fund.
All administrative costs of the board and system for the plan with respect to the Cash Balance Benefit Program shall be paid from the Teachers’ Retirement Fund.
administrative costs board expenses system funding plan management Cash Balance Benefit Program Teachers’ Retirement Fund program costs retirement fund allocation cost payment pension fund financial management educators' retirement teachers' benefits funding source education retirement system
Section § 26207.5
This law states that the state of California or its General Fund is not responsible for any financial obligations or costs associated with the Cash Balance Benefit Program. In other words, the program must be self-funded and cannot rely on state resources to cover any shortfalls or expenses.
In no event shall the funding of the Cash Balance Benefit Program be a liability of the state or the General Fund, nor shall the General Fund be used to offset or fund any liabilities attributed to the operation of the Cash Balance Benefit Program.
Cash Balance Benefit Program liability state responsibility General Fund financial obligations self-funded program California education funding operational costs financial independence state resources
Section § 26208
The board must keep detailed financial records for the Cash Balance Benefit Program using standard accounting practices.
The board shall establish and maintain records and accounts following recognized accounting principles and controls with respect to the Cash Balance Benefit Program.
board records accounts accounting principles controls Cash Balance Benefit Program financial records recognized practices standard accounting account management establish maintain financial controls
Section § 26209
This law allows specific people in charge, like the chairperson or CEO of the Teachers’ Retirement Board, to authorize moving and spending money from the Teachers’ Retirement Fund to support the Cash Balance Benefit Program.
The board may authorize the transfer and disbursement of funds from the Teachers’ Retirement Fund for the purpose of carrying into effect the Cash Balance Benefit Program upon the signature of its chairperson, vice chairperson, the chief executive officer, or any employee of the system designated by the chief executive officer.
Teachers’ Retirement Fund Cash Balance Benefit Program fund transfer authorization disbursement of funds chairperson vice chairperson chief executive officer designated employee Teachers’ Retirement Board retirement fund management financial oversight pension plan fund administration benefit program implementation
Section § 26210
This law says that the board has the sole authority to manage and invest the funds that are part of the Cash Balance Benefit Program. When doing so, they must follow specific responsibilities and rules about acting in the best interest of those funds, as detailed in other parts of the law.
The board has exclusive control of the investment of the Retirement Fund with respect to assets attributed to the Cash Balance Benefit Program. In investing the fund, the board and its officers and employees shall exercise their fiduciary duties set forth in Chapter 4 (commencing with Section 22250) and Chapter 6 (commencing with Section 22350) of Part 13.
board authority investment control Retirement Fund Cash Balance Benefit Program fiduciary duties asset management exclusive control fund investments financial responsibility pension fund management
Section § 26211
This law requires the board to hire an actuary to help with managing the Cash Balance Benefit Program. The actuary's job is to regularly review and measure the program’s financial health by analyzing past and future trends, and to provide advice on financial assumptions. Each year, the actuary must evaluate the program’s assets and liabilities to ensure it can meet its obligations. They also advise on rates and factors important for running the program, like mortality rates and interest rates. Additionally, they recommend how to maintain financial reserves for future needs and suggest transfers of funds between reserves. Finally, they perform any other necessary actuarial services for the program's administration.
The board shall acquire the services of an actuary to:
(a)CA Education Code § 26211(a) Perform an actuarial investigation of the demographic and economic experience of the Cash Balance Benefit Program at least once every four years and make recommendations to the board for the adoption of actuarial assumptions for the program that are, in the aggregate, reasonably related to the past experience of the program and the actuary’s best estimate of the future experience of the program.
(b)CA Education Code § 26211(b) Perform an annual actuarial valuation of the assets and liabilities of the plan with respect to the Cash Balance Benefit Program, using the actuarial assumptions adopted by the board.
(c)CA Education Code § 26211(c) Recommend to the board all rates and factors necessary to administer the Cash Balance Benefit Program, including, but not limited to, mortality tables, annuity factors, interest rates, additional earnings credits, and employer contribution rates.
(d)CA Education Code § 26211(d) Recommend to the board the goal for maintaining a sufficient Gain and Loss Reserve with respect to the Cash Balance Benefit Program, the amount to be transferred to the Gain and Loss Reserve from investment earnings of the plan each year with respect to the Cash Balance Benefit Program, and a strategy for the amortization of any unfunded actuarial obligation.
(e)CA Education Code § 26211(e) Recommend to the board transfers of amounts between the Gain and Loss Reserve and the Annuitant Reserve with respect to the Cash Balance Benefit Program.
(f)CA Education Code § 26211(f) Perform any other actuarial services that may be required for the administration of the plan with respect to the Cash Balance Benefit Program, as requested by the board.
actuarial investigation demographic experience economic experience Cash Balance Benefit Program actuarial assumptions annual actuarial valuation assets and liabilities mortality tables annuity factors interest rates employer contribution rates Gain and Loss Reserve unfunded actuarial obligation investment earnings Annuitant Reserve
Section § 26212
This section requires the board to keep all the data needed to analyze how the Cash Balance Benefit Program is performing. This includes studying the population and financial experiences related to the program, and evaluating its financial health and obligations.
The board shall maintain all data necessary for the actuarial investigation of the demographic and economic experience of the Cash Balance Benefit Program, and for the actuarial valuation of the assets and liabilities of the plan with respect to the Cash Balance Benefit Program.
actuarial investigation demographic experience economic experience Cash Balance Benefit Program actuarial valuation assets liabilities plan evaluation financial health obligations data maintenance
Section § 26213
The board needs to set up financial guidelines and tools to manage the Cash Balance Benefit Program effectively.
The board shall adopt actuarial assumptions, rates, factors and tables necessary to administer the Cash Balance Benefit Program as an amendment to the plan.
actuarial assumptions rates factors tables administer Cash Balance Benefit Program board responsibilities financial guidelines amendment plan management benefit program administration pension plan financial tools program administration plan amendment
Section § 26214
At the end of each plan year, participants with balances in their employee or employer accounts will receive a statement showing their balance and credited amounts. This statement is typically sent by mail unless the participant prefers to receive it electronically and the right mailing address is provided. However, there could be different rules under Section 22337 that apply to how the statement is issued.
(a)CA Education Code § 26214(a) Except as provided in subdivision (b), the system shall make available, after the end of the plan year, to each participant having a balance in his or her employee account or employer account, a statement setting forth the balance as of the close of the plan year and amounts credited for the
year. The system shall mail a copy of the participant’s statement, provided that the employer or participant has informed the system of the participant’s current mailing address and the participant has not requested to receive that statement
electronically, in lieu of mailing.
(b)CA Education Code § 26214(b) The mode of issuance described in subdivision (a) is subject to Section 22337.
participant statement plan year balance employee account employer account mail statement electronic statement current mailing address Section 22337 credited amounts end of plan year
Section § 26216
This law allows the board to hire a qualified company to manage the Cash Balance Benefit Program. This company can help with things like keeping records and handling the program's money according to the terms of their agreement.
The board may administer the Cash Balance Benefit Program through an agreement with a qualified third-party administrator that shall provide custodial, recordkeeping, or other administrative services specified under the agreement.
third-party administrator Cash Balance Benefit custodial services recordkeeping administrative services agreement qualified company board management program administration benefit management outsourcing services service provider agreement
