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AB-1293 Judges’ Retirement System II: federal law limits: adjustments.(2021-2022)

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Date Published: 09/03/2021 09:00 PM
AB1293:v94#DOCUMENT

Enrolled  September 03, 2021
Passed  IN  Senate  August 30, 2021
Passed  IN  Assembly  September 01, 2021
Amended  IN  Senate  July 06, 2021
Amended  IN  Assembly  April 13, 2021
Amended  IN  Assembly  April 07, 2021
Amended  IN  Assembly  March 18, 2021

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Assembly Bill
No. 1293


Introduced by Assembly Member Cooley
(Coauthor: Assembly Member Cooper)

February 19, 2021


An act to add Sections 9359.06, 75075.03, and 75527.5 to the Government Code, relating to retirement.


LEGISLATIVE COUNSEL'S DIGEST


AB 1293, Cooley. Judges’ Retirement System II: federal law limits: adjustments.
Existing law establishes the Judges’ Retirement System and the Judges’ Retirement System II, both of which are administered by the Board of Administration of the Public Employees’ Retirement System, which provide pension and other benefits to judges who are members. Existing law establishes the Legislators’ Retirement System, also administered by the Board of Administration of the Public Employees’ Retirement System, which provides pension and other benefits to those members of the Legislature and specified state and statutory officers who have elected to become members. Existing California constitutional provisions prohibit the provision of retirement benefits to members of the Legislature and, on and after January 1, 2013, the Legislators’ Retirement System was closed generally to new members.
Existing federal law limits the amount that a public employee defined benefit plan may pay a participant annually and requires that this limitation be adjusted by regulation to account for increases in the cost of living. Existing law incorporates federal limits into the law that defines and regulates the above-described retirement systems.
This bill would prohibit the amount payable to a member or a judge under the Legislators’ Retirement System, the Judges’ Retirement System, and the Judges’ Retirement System II, including specified adjustments, from exceeding the federal limits on annual defined benefit plan payments and would incorporate specified provisions of federal law by reference. The bill would also require the retirement allowance of a judge who is a member of the Judges’ Retirement System or the Judges Retirement System II, or a person who is a member of the Legislators’ Retirement System, to be increased to reflect adjustments to payment limits prescribed by federal law, provided that the member’s allowance determined without regard to that law equals or exceeds the applicable limit as indexed. The bill, for judges in the Judges Retirement System II, would also apply this requirement to a monetary payments annuity that is payable to a judge.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 9359.06 is added to the Government Code, to read:

9359.06.
 (a) The cost-of-living adjustments under Section 415(d) of the Internal Revenue Code to the limits described in Section 415(b) of the Internal Revenue Code, as prescribed by the regulations of the Department of the Treasury of the United States, are hereby incorporated by reference and shall continue to apply after a member’s severance from employment or annuity starting date. The amount payable to a member in any limitation year, including cost-of-living adjustments provided under this chapter, shall not exceed the limit applicable under Section 415(b) of the Internal Revenue Code at the annuity starting date, as increased in subsequent years pursuant to Section 415(d) of the Internal Revenue Code and the associated regulations.
(b) Notwithstanding any other law, and except as provided in subdivision (a), the retirement allowance of a member shall be increased to reflect cost-of-living adjustments to the limits contained in Section 415 of Title 26 of the United States Code as provided in Section 415(d) of that code, provided that the member’s allowance determined without regard to Section 415 equals or exceeds the applicable limit as indexed. Nothing in this section is intended to, nor shall be construed to, entitle a retired member to an adjustment to their allowance in excess of that provided pursuant to this chapter.
(c) Nothing in this section shall change the formula used to calculate benefits under this chapter.

SEC. 2.

 Section 75075.03 is added to the Government Code, to read:

75075.03.
 (a) The cost-of-living adjustments under Section 415(d) of the Internal Revenue Code to the limits described in Section 415(b) of the Internal Revenue Code, as prescribed by the regulations of the Department of the Treasury of the United States, are hereby incorporated by reference and shall continue to apply after a judge’s severance from employment or annuity starting date. The amount payable to a judge in any limitation year, including cost-of-living adjustments provided under this chapter, shall not exceed the limit applicable under Section 415(b) of the Internal Revenue Code at the annuity starting date, as increased in subsequent years pursuant to Section 415(d) of the Internal Revenue Code and the associated regulations.
(b) Notwithstanding any other law, and except as provided in subdivision (a), the retirement allowance of a judge shall be increased to reflect cost-of-living adjustments to the limits contained in Section 415 of Title 26 of the United States Code as provided in Section 415(d) of that code, provided that the judge’s allowance determined without regard to Section 415 equals or exceeds the applicable limit as indexed. Nothing in this section is intended to, nor shall be construed to, entitle a retired judge to an adjustment to their allowance in excess of that provided pursuant to this chapter.
(c) Nothing in this section shall change the formula used to calculate benefits under this chapter.

SEC. 3.

 Section 75527.5 is added to the Government Code, to read:

75527.5.
 (a) The cost-of-living adjustments under Section 415(d) of the Internal Revenue Code to the limits described in Section 415(b) of the Internal Revenue Code, as prescribed by the regulations of the Department of the Treasury of the United States, are hereby incorporated by reference and shall continue to apply after a judge’s severance from employment or annuity starting date. The amount payable to a judge in any limitation year, including any cost-of-living adjustments provided under this chapter, shall not exceed the limit applicable under Section 415(b) of the Internal Revenue Code at the annuity starting date, as increased in subsequent years pursuant to Section 415(d) of the Internal Revenue Code and the associated regulations.
(b) Notwithstanding any other law, and except as provided in subdivision (a), the retirement allowance of a judge, or the monetary credits annuity payable to a judge, shall be increased to reflect the cost-of-living adjustments to the limits contained in Section 415 of Title 26 of the United States Code as provided in Section 415(d) of that code, provided that the judge’s allowance or monetary credits annuity determined without regard to Section 415 equals or exceeds the applicable limit as indexed. Nothing in this section is intended to, nor shall be construed to, entitle a retired judge to an adjustment to their allowance or monetary credits annuity in excess of that provided pursuant to this chapter.
(c) Nothing in this section shall change the formula used to calculate benefits under this chapter.