Cal. Code Regs. Tit. 2, § 599.553
(a) The terms and
conditions of the contract or resolution for participation in the prefunding
plan shall include, but not be limited to, the following:
(1) Disbursements from the prefunding
plan;
(2) The methodology and
assumptions used to calculate the actuarial accrued liability for health care
coverage for annuitants;
(3) The
method of payments to and disbursements from the prefunding plan;
(4) The frequency and content of reports from
the participating employer to the prefunding plan;
(5) The frequency and content of reports from
the prefunding plan to the participating employer;
(6) The allocation of prefunding plan
investment income to the participating employer;
(7) The allocation of administrative costs
and expenses of the prefunding plan to the participating employer;
(8) The circumstances and requirements for
transfer of assets into or out of the prefunding plan, provided that any such
transfers:
(A) must be in accordance with the
terms of the contract or resolution, and
(B) must satisfy the requirements of Section
115 of the Internal Revenue
Code.
(9) The board may
terminate the participation of a participating employer in the prefunding plan
if:
(A) a participating employer elects to
terminate participation in the prefunding plan;
(B) the board finds that the participating
employer has failed to satisfy the terms and conditions required by this
article, by board rules or regulations, or by the contract or resolution
approved by the governing body of the participating employer and filed with the
board; or
(C) the board terminates
the prefunding plan.
(b) If participation in the prefunding plan
terminates for a reason described in subdivision (a)(9)(A) or (B), then the
assets attributable to the contributions by that employer shall remain in the
prefunding plan for the continued payment of postemployment health care
coverage for annuitants and the costs of administration, pursuant to the terms
and conditions of participation established by the board and as agreed to by
the employer.
(c) If participation
in the prefunding plan is terminated by the board as described in subdivision
(a)(9)(C), then the assets attributable to the contributions by participating
employers shall be paid in the following order:
(1) The board shall retain for disbursement
to annuitants an amount sufficient to pay the health care benefits to
annuitants for current and future annuitants.
(2) The board shall retain for payment an
amount sufficient to pay reasonable administrative costs.
(3) After the amounts described in paragraphs
(1) and (2) have been retained or disbursed, the board shall pay to each
participating employer in the prefunding plan on the date of termination, a pro
rata share of the remaining assets in the prefunding plan. The board shall
determine that pro rata share based on the ratio that the participating
employer's accumulated contributions bear to the accumulated contributions of
all participating employers.
Notes
Note: Authority cited: Sections 22796 and 22922, Government Code. Reference: Sections 22922, 22940 and 22942, Government Code.
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