§ 20514 Federal Contribution Transfers

Key Takeaways

•If your job starts covering you under the federal system before they take money from your paycheck for it, and you get a smaller benefit because of this, some of your contributions will be moved to pay for the missing federal part.
•The amount moved from your contributions can't be more than the difference between what you actually paid and what you would have paid if the lower rate was used from the start.
•If the money moved isn't enough to cover what you owe, your employer will pay the rest, and you'll owe them that money. They can take it from your paycheck if needed.
•If your contract is updated to handle these retroactive payments, any extra money you paid (because of the higher rate) will be given back to you.

Example

Imagine you start a new job, and the company says they will cover you under a federal plan starting January 1st. But they forget to take the federal money from your paycheck until March. Because of this mistake, your benefit is smaller than it should be.

The law says the company has to fix this. They will take some of the money you already paid into your retirement and use it to pay the federal part they missed. If that’s not enough, the company will cover the rest, and you’ll owe them that money. Later, if they update the rules, any extra money you paid because of the mistake will be given back to you.

If the effective date of coverage under the federal system of members who are employees of a contracting agency under this system is prior to the time employee federal contributions are first deducted from the salaries and wages of the employees and a reduced benefit is provided with respect to service from and after the effective date of coverage, member contributions shall be transferred in the manner and to the extent provided in this section to the Old Age and Survivors’ Insurance Revolving Fund and applied to payment of employee federal contributions for the period prior to the deductions. There shall be transferred from the member’s accumulated contributions an amount equal to employee federal contributions due for the member. The amount so transferred shall not exceed the difference between the total normal contributions of the member and the normal contributions that would have been credited to his or her account had the reduced rate of contribution provided in the amended contract with the public agency been in effect from and after the effective date of coverage, assuming that contributions in any year were made in equal monthly installments. The amount by which the retroactive employee contributions due for a member exceeds the amount transferred from the employee account shall be transmitted to the fund by the contracting agency and constitute an indebtedness of the member to the employer and a lien on any salary or wages payable to the employee or on his or her account. If the contract is or has been amended to provide for the transfer of retroactive employee contributions in the manner provided in this section, the amount by which the total normal contributions of each member for the period subsequent to the effective date of coverage under the federal system less the total normal contributions that would have been credited to the account of the member had the reduced rate of contribution provided in the amended contract with the public agency been in effect from and after that date of coverage exceed the employee federal contributions for the member for the period after the date of coverage, shall be paid to the member. (Added by Stats. 1995, Ch. 379, Sec. 2. Effective January 1, 1996.)

Key Takeaways

•If your job starts covering you under the federal system before they take money from your paycheck for it, and you get a smaller benefit because of this, some of your contributions will be moved to pay for the missing federal part.
•The amount moved from your contributions can't be more than the difference between what you actually paid and what you would have paid if the lower rate was used from the start.
•If the money moved isn't enough to cover what you owe, your employer will pay the rest, and you'll owe them that money. They can take it from your paycheck if needed.
•If your contract is updated to handle these retroactive payments, any extra money you paid (because of the higher rate) will be given back to you.

Key Takeaways

Example

Key Terms

References

§ 20514 Federal Contribution Transfers

Key Takeaways

Example

Key Terms

References

Key Takeaways

Example

Key Terms

Related Statutes

References

Key Takeaways

Example

Key Terms

Related Statutes

References