AB 1875 — State teachers' retirement: option beneficiaries: trusts.

Summary

Existing law, the Teachers' Retirement Law, establishes the State Teachers' Retirement System (STRS) and creates the Defined Benefit Program of the State Teachers' Retirement Plan, which provides a defined benefit to members of the program, based on final compensation, credited service, and age at retirement, subject to certain variations. STRS is governed by the Teachers' Retirement Board. Existing law establishes the Cash Balance Benefit Program, administered by the Teachers' Retirement Board, as a separate benefit program within the State Teachers' Retirement Plan in order to provide a retirement plan for persons employed to perform creditable service for less than 50% of full-time service. Existing law permits members of STRS to select option beneficiaries and participants in the Cash Balance Benefit Program to select annuity beneficiaries for the purpose of receiving a retirement allowance or an annuity, respectively, upon the member's or the participant's death. Existing law specifically prohibits a trust from being an option beneficiary under STRS. This bill would permit irrevocable trusts, with specified characteristics, that are established for individuals who are disabled to be an option beneficiary or annuity beneficiary, as described above, for the defined benefit program and the Cash Balance Benefit Program. The bill would require the trust to be for the sole benefit of a single beneficiary and that any other beneficiaries be limited to successor beneficiaries. The bill would require, with respect to the trust's interest in the member's or in the participant's benefits, that the beneficiary of the trust be considered the designated beneficiary for the purpose of determining eligibility for, and the amount and determination of, benefits. The bill would require a member or participant to provide specified documentation if a trust is to be designated an option beneficiary, including a certification that the trust meets relevant requirements, to be signed by the member or participant and acting trustees. The bill would require trustees acting at the time of the death of the member or participant to provide a similar, signed certification and additionally certify that the trust has not been revoked, modified, or amended, in a manner that would cause the certification to be incorrect. The bill would allow a member or participant to change a beneficiary designation without penalty for the purpose of designating a trust as a beneficiary if certain requirements are met. The bill would require, if the trust becomes invalid or terminates, that the benefit or annuity be paid to the beneficiary, if eligible, with associated rights and responsibilities also accruing to that person. The bill would provide that the board is not required to determine the powers of a trustee or the validity of a trust in the context, that such a determination shall not be inferred and, provided the board acts in good faith, as specified, would immunize the board, system, and plan from liability. The bill would make conforming changes and, with respect to the Cash Balance Benefit Program, revise the circumstances under which a participant may change an option beneficiary after retirement changes.

Bill Text

• Chaptered 09/24/16 - Chaptered Current pdf September 24, 2016
• Enrolled 08/22/16 - Enrolled pdf August 22, 2016
• Amended 04/11/16 - Amended Assembly pdf April 11, 2016
• Introduced 02/10/16 - Introduced pdf February 10, 2016
• AB1875 View text html

Action History

1. September 24, 2016

   Chaptered by Secretary of State - Chapter 559, Statutes of 2016.

2. September 24, 2016

   Approved by the Governor.

3. August 25, 2016

   Enrolled and presented to the Governor at 5 p.m.

4. August 19, 2016

   In Assembly. Ordered to Engrossing and Enrolling.

5. August 19, 2016

   Read third time. Passed. Ordered to the Assembly. (Ayes 37. Noes 0. Page 5159.).

6. August 15, 2016

   Read second time. Ordered to third reading.

7. August 11, 2016

   From committee: Do pass. (Ayes 7. Noes 0.) (August 11).

8. August 11, 2016

   In committee: Referred to APPR. suspense file.

9. August 08, 2016

   In committee: Hearing postponed by committee.

10. June 22, 2016

    In committee: Hearing postponed by committee.

11. June 13, 2016

    From committee: Do pass and re-refer to Com. on APPR. with recommendation: To Consent Calendar. (Ayes 5. Noes 0.) (June 13). Re-referred to Com. on APPR.

12. May 12, 2016

    Referred to Com. on P.E. & R.

13. May 05, 2016

    In Senate. Read first time. To Com. on RLS. for assignment.

14. May 05, 2016

    Read third time. Passed. Ordered to the Senate. (Ayes 79. Noes 0. Page 4684.)

15. April 28, 2016

    Read second time. Ordered to Consent Calendar.

16. April 27, 2016

    From committee: Do pass. To Consent Calendar. (Ayes 19. Noes 0.) (April 27).

17. April 20, 2016

    From committee: Do pass and re-refer to Com. on APPR. with recommendation: To Consent Calendar. (Ayes 7. Noes 0.) (April 20). Re-referred to Com. on APPR.

18. April 12, 2016

    Re-referred to Com. on P.E., R., & S.S.

19. April 11, 2016

    From committee chair, with author's amendments: Amend, and re-refer to Com. on P.E., R., & S.S. Read second time and amended.

20. February 25, 2016

    Referred to Com. on P.E., R., & S.S.

21. February 11, 2016

    From printer. May be heard in committee March 12.

22. February 10, 2016

    Read first time. To print.

Sponsors

• Chávez · Primary

Votes

Subjects