Public Employees' Retirement System: preretirement death benefits.

The Public Employees' Retirement Law provides preretirement death benefits for the surviving spouse or children, or both, as specified, of state members and specified school members not covered by the federal Social Security Act. That law prescribes various allowances for preretirement death benefits, as specified. That law specifies certain benefits known as the 1959 survivor allowance. Existing law requires, on and after the date determined by the board, all assets and liabilities of all contracting agencies subject to the 1959 survivor allowance, and their employees, on account of benefits provided, to be pooled into a single account, and a single employer rate to be established to provide benefits under that provision on account of members employed by a contracting agency that is subject to those provisions. This bill would require assets and liabilities of contracting agencies subject to those provisions to be pooled, as specified, after June 30, 2012. The bill would also provide that on and after July 1, 2012, certain members employed by a contracting agency entitled to receive benefits under the 1959 survivor allowance provisions instead receive increased benefits, as specified. Existing law specifies that if a contracting agency has a surplus in its 1959 survivor benefit account as of the date the contracting agency becomes subject to certain provisions of law, the surplus shall be applied to reduce its rate of contribution. Existing law also specifies that if a contracting agency that is subject to those provisions has a deficit in its 1959 survivor benefit account as of the date the contracting agency becomes subject to these provisions, its rate of contribution shall be increased until the deficit is paid. This bill would delete those provisions. Existing law requires the rate of contribution of a member subject to the above-described provisions to include, in addition to his or her normal rate, $2 per month or fraction thereof, or $0.93 for each biweekly payroll period or fraction thereof, where salaries are paid on that basis. Existing law requires that those contributions not become a part of a member's accumulated contributions or be treated or administered as normal contributions and not be refundable to a member under any circumstances. Existing law provides that those contributions are available only for payment of 1959 survivor allowances. Notwithstanding those provisions, with respect to the combined assets and liabilities that are pooled, as described above, this bill would provide, if the board determines that there exists a reasonable actuarial amortization of surplus funds that will fully pay for total annual premiums for benefits and the surplus exceeds 200% of the total liabilities of the pool, that the rate of contribution of a member shall be his or her normal rate with no additional contribution, as specified. The bill would also make related changes to reflect that these provisions may apply to nonstate employees, including school members, as well as contracting agencies.