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HomeGovernment CodeDiv. 4Pt. 3Ch. 3Art. 5.5§ 31616 Retirement Fund Contingency Reserve

§ 31616 Retirement Fund Contingency Reserve

Government Code·California
AI Summary·Official Text·Key Terms·Related Statutes·References
AI SummaryVerified

§ 31616 Retirement Fund Contingency Reserve

Key Takeaways

  • •Extra money from the retirement fund is saved in a special account called the Contingency Reserve Account.
  • •This account can't have more than 3% of the total retirement fund money.
  • •If the account has less than 1% of the total money, more must be added to bring it back up.
  • •This saved money can't be used to pay retirement benefits.

Example

Imagine the retirement fund makes extra money from investments.

Instead of giving out the extra money, some of it is saved in a special account. This account can't be used to pay people's retirement benefits. If the account gets too low, more money is added to it.

AI-generated — May contain errors. Not legal advice. Always verify source.

Official Source
View on CA.gov

§ 31616 Retirement Fund Contingency Reserve

After the semiannual application of Section 31615, earnings of the retirement fund in excess of the total interest credited to contributions and reserves shall remain in the fund as a reserve against deficiencies in interest earnings, losses on investments, or payments made pursuant to Section 31588.1 or 31589.1, if applicable. These funds shall be placed in an account known hereafter as the Contingency Reserve Account. The size of this account shall be determined semiannually by the board but shall not exceed 3 percent of the total assets of the retirement fund. If, at the end of any semiannual period, the balance of the Contingency Reserve Account falls below 1 percent of system assets, the board shall, by the end of the subsequent semiannual period, provide funds from earnings of fund assets from the subsequent semiannual period, to bring the level of the Contingency Reserve Account to at least 1 percent of system assets. No funds in the Contingency Reserve Account shall be available for the payment of benefits. Net earnings remaining after the application of this section shall be applied as provided in Sections 31617, 31618, and 31619. (Added by renumbering Section 31510.6 by Stats. 1984, Ch. 193, Sec. 60.)

Last verified: January 22, 2026

Key Terms

retirementcontingency reserve accountbenefitsnetapplicationinvestment

Related Statutes

  • § 31618 Retiree Benefit Reserve Fund
  • § 31619 Retirement Fund Earnings Allocation
  • § 31613 Retirement Fund Earnings Calculation
  • § 31615 Retirement Fund Interest Crediting
  • § 31460 Public Employee Compensation Definition

References

  • Official text at leginfo.legislature.ca.gov
  • California Legislature. Government Code. Section 31616.
View Official Source