The Legislature hereby finds and declares that the State Teachers’ Retirement System Cash Balance Plan was created and established on July 1, 1996, to provide a retirement plan for persons employed to perform creditable service for less than 50 percent of the full-time equivalent for the position. The persons eligible for the Cash Balance Plan were excluded from mandatory membership in the State Teachers’ Retirement System Defined Benefit Plan. Both plans are administered by the Teachers’ Retirement Board. Because both plans were intended to provide for the retirement of teachers and other persons employed in connection with the public schools of this state and schools supported by this state, a merger of these two plans is now hereby made for the purpose of establishing a single retirement plan that shall be known and may be cited as the State Teachers’ Retirement Plan consisting of the different benefit programs set forth in this part and Part 13 (commencing with Section 22000). The plan shall be administered by the Teachers’ Retirement Board as set forth in this part and Part 13 (commencing with Section 22000).

(a)As a result of the merger described in Section 26000, the Cash Balance Benefit Program shall be provided under the State Teachers’ Retirement Plan to provide a retirement plan for persons employed to perform creditable service who are excluded from mandatory membership in the Defined Benefit Program and persons employed by community college district, school district, county superintendent of schools or other employing agency, who are excluded from mandatory membership in the Public Employees’ Retirement System. That program is set forth in this part.

(b)The governing board of a school district, community college district, or county superintendent of schools or other employing agency, may, by formal action, elect to provide the benefits of the Cash Balance Benefit Program for their eligible employees.

“Creditable service,” for purposes of this part only, also means any service not described in Section 26113 that is performed for a community college district, school district, county superintendent of schools or other employing agency by a person who is excluded from mandatory membership in the Public Employees’ Retirement System because he or she is serving on a less than full-time basis.

(a)Within 10 working days following the latest of the first day of employment, the date of the employer’s governing board’s action to provide the Cash Balance Benefit Program, or the effective date of the employer’s governing board’s action to provide the Cash Balance Benefit Program, the employer shall make available to the employee the following information:

(1)The employee’s rights and responsibilities as a participant in the program, the employer’s responsibilities under the program, and the benefits payable under the program.

(2)The employee’s right to elect membership in the Defined Benefit Program in lieu of participation in the Cash Balance Benefit Program, the rights and responsibilities of a member and the employer under the Defined Benefit Program, and benefits payable under the Defined Benefit Program. This paragraph does not apply to an employee employed to perform creditable service described in Section 26113.5.

(b)Written acknowledgment by the employee that he or she has received the information specified in subdivision (a) shall be retained in the employer’s files on a form prescribed by the system.

(c)If an employer’s governing board’s action to provide the Cash Balance Benefit Program gives employees the right to elect other coverage in lieu of the Cash Balance Benefit Program pursuant to Section 26400, the employer shall, within 10 working days following the latest of the first day on which creditable service is performed, the date of the employer’s governing board’s action to provide the program or the effective date of the employer’s governing board’s action to provide the program, notify existing employees of the following:

(1)The employee’s right to elect other coverage if offered by the employer in lieu of participation in the Cash Balance Benefit Program.

(2)The rights and responsibilities of the employer and a participant in an alternative retirement plan if offered by the employer.

(3)The benefits payable under an alternative retirement plan if offered by the employer.

(a)A person employed to perform creditable service for less than 50 percent of the full-time equivalent for the position shall become a participant on the later of the first day on which creditable service is performed for an employer that provides the Cash Balance Benefit Program or the effective date of the employer’s governing board’s action to provide the Cash Balance Benefit Program, provided the person is not subject to mandatory membership in the Defined Benefit Program.

(b)If the employer’s governing board’s action to provide the Cash Balance Benefit Program gives employees the right to elect coverage under social security or an alternative retirement plan offered by the employer in addition to the Cash Balance Benefit Program, the employee may elect within 60 calendar days of the later of the first day on which creditable service is performed, the date of the employer’s governing board’s action to provide the Cash Balance Benefit Program, or the effective date of the employer’s governing board’s action to provide the Cash Balance Benefit Program to be covered by social security or to participate in the alternative retirement plan in lieu of participating in the Cash Balance Benefit Program. Any election may not preclude an employee from participating in the Cash Balance Benefit Program at a later date so long as the Cash Balance Benefit Program is provided by the employer and the employee is eligible to participate in the Cash Balance Benefit Program.

(c)If subdivision (b) is applicable, the employer shall inform employees pursuant to subdivision (c) of Section 26300 of their right to make an election and the election shall be made on a form prescribed by the system and filed with the employer. The election shall become effective on the later of the first day on which creditable service is performed or the effective date of the employer’s governing board’s action to provide the Cash Balance Benefit Program.

(d)If, on July 1, 2004, an employer is offering the Cash Balance Benefit Program pursuant to subdivision (a), the governing board may take action to provide an election period to offer the Cash Balance Benefit Program to its employees who are employed to perform creditable service described in Section 26113.5.

(e)If the participant’s basis of employment with an employer that provides the Cash Balance Benefit Program changes to employment to perform creditable service, as defined in Section 26113, for 50 percent or more of the full-time equivalent for the position, contributions to the Cash Balance Benefit Program on behalf of the participant shall no longer be made and creditable service performed for that employer shall be subject to coverage by the Defined Benefit Program as of the first day of the pay period in which the change in the participant’s basis of employment occurred.

(f)If the participant’s basis of employment with an employer that provides the Cash Balance Benefit Program changes to employment to perform service that is subject to mandatory membership in the Public Employees’ Retirement System, contributions to the Cash Balance Benefit Program on behalf of the participant may no longer be made and that service performed for the community college district shall be subject to coverage by the Public Employees’ Retirement System as of the first day of the pay period in which the change in the participant’s basis of employment occurred.