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<ns0:Id>20250SB__093999INT</ns0:Id>
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<ns0:ActionText>INTRODUCED</ns0:ActionText>
<ns0:ActionDate>2026-01-29</ns0:ActionDate>
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<ns0:SessionYear>2025</ns0:SessionYear>
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<ns0:AuthorText authorType="LEAD_AUTHOR">Introduced by Senator Laird</ns0:AuthorText>
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<ns0:House>SENATE</ns0:House>
<ns0:Name>Laird</ns0:Name>
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<ns0:Title> An act to amend Section 20776 of the Government Code, relating to public employees’ retirement. </ns0:Title>
<ns0:RelatingClause>public employees’ retirement</ns0:RelatingClause>
<ns0:GeneralSubject>
<ns0:Subject>Public employees’ retirement: death benefits.</ns0:Subject>
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<ns0:DigestText>
<html:p>The Public Employees’ Retirement Law (PERL) creates the Public Employees’ Retirement System (PERS), which provides a defined benefit to members of the system based on final compensation, credited service, and age at retirement, subject to certain variations. PERL vests management and control of PERS in the Board of Administration. </html:p>
<html:p>Under that law, members may make certain elections, including elections to purchase service credit for various types of public service, upon payment of additional contributions. Existing law establishes procedures governing the treatment of unpaid balances under an election when a basic death benefit becomes payable before a member has completed making the total payment. Existing law establishes other procedures governing unpaid balances when a special death benefit is payable or a member retires for
industrial disability. </html:p>
<html:p>Existing law provides that any unpaid balance at a member’s retirement for service or ordinary disability or at death, with respect to certain preretirement death benefits, may be subject to specified provisions governing service credit, when payment of the balance would not increase the allowance payable. </html:p>
<html:p>This bill would specify that the above-described provision does not apply to industrial disability payments. The bill would make various other technical and nonsubstantive changes to the above provisions. </html:p>
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<ns0:Preamble>The people of the State of California do enact as follows:</ns0:Preamble>
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<ns0:Num>SECTION 1.</ns0:Num>
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Section 20776 of the
<ns0:DocName>Government Code</ns0:DocName>
is amended to read:
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(a)
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If a basic death benefit becomes payable before the payment of the total amount the member elected to pay under any election with respect to normal contributions, arrears contributions, absences, or public service credit permitted under this part, the member’s entire compensation, or the service upon which that total amount was based, shall be included in the computation of the portion of the death benefit that is provided in subdivision (b) of Section 21532, and the unpaid balance of the total amount may not be paid to this system, nor may it be included in the member’s accumulated contributions that constitute a part of the basic death benefit.
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(b)
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Any
balance of any total amount remaining unpaid at the death of the member on account of whom a special death benefit is payable or at the retirement of a member for industrial disability may be subject to Section 21037 when payment of the balance would not increase the allowance payable. When the balance of the amount remaining unpaid would increase the allowance payable, the balance shall become due and payable immediately, except that the survivor of a member who died under circumstances under which a special death benefit is payable and who had authorized payroll deductions may elect to continue those deductions from the survivor allowance in lieu of the lump-sum payment. If the balance is not paid, the portion of the unpaid amount representing contributions on compensation earned in the
membership applicable to the member at the time of injury resulting in death or disability shall be deducted from the benefit otherwise payable and this system shall be discharged from any liability for any annuity or benefit with respect to any remainder of the unpaid contribution.
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(c)
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Any balance of the total amount remaining unpaid at the time of retirement for service or disability, or at death, with respect to which a benefit is payable under Section 21546, may be subject to Section 21037 when payment of the balance would not increase the allowance payable. When the balance of the amount remaining unpaid would increase the allowance payable, the balance shall become due and payable immediately, except that the survivor of a member who died under circumstances under which a benefit under Section 21546 is payable and who had authorized payroll
deductions may elect to continue those deductions from the survivor allowance in lieu of a lump-sum payment of the balance due. If the balance is not paid, the service credit included in the election shall be reduced proportionately and any service credit dependent on completion of payments eliminated for purposes of computing the allowance but not for purposes of determining entitlement to an allowance. This provision shall not apply to industrial disability payments.
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(d)
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Notwithstanding any provision of subdivision (b) or (c), a member who retires before payment of the total amount which the member elected to pay, may elect to pay the
balance due, or the total amount if no payroll deductions had been made prior to retirement, by deductions from
the member’s retirement allowance equal to those which the member authorized as payroll deductions. In that case, service credit included in the election may not be reduced, nor may any prior service dependent on completion of payments be eliminated for purposes of computing the allowance. Any balance of the total amount remaining unpaid upon the death of the member shall be treated in the same manner as unpaid balances are treated if a special death benefit is payable, except that the survivor of a retired member who had authorized deductions from their retirement allowance in accordance with this subdivision, and who is eligible for a monthly allowance, may elect to continue those deductions from the survivor’s allowance in lieu of the lump-sum payment otherwise
required. Alternatively, on or after January 1, 2020, the member, survivor, or beneficiary may elect to receive an allowance that is reduced by the actuarial equivalent of any balance remaining unpaid by the member.
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(e)
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Notwithstanding any other provision of this section, all elections with an effective date on or after January 1, 2020, including elections for normal contributions, arrears contributions, absences, or public service, shall become due and payable at the time of retirement or preretirement death. The member, survivor, or beneficiary shall have their allowance reduced by the actuarial equivalent of any balance remaining unpaid by the member. This subdivision does not apply to elections made under Section 21027 or 21029 for retired
members.
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(f)
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Interest paid with respect to normal contributions, arrears contributions, absences, or public service credit permitted under this part, prior to date of retirement or death of the member, shall be credited to the member’s individual account. Interest paid after the date of retirement or death of the member shall be credited to the retirement fund pursuant to Section 20174.
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