CHAPTER 19. California Employers’ Pension Prefunding Trust Program [21710. - 21716.]

Cal. Government Code - GOV 19.

in effect

Cal. Government Code - GOV § 21710. Section 21710.

For purposes of this chapter, the following definitions shall apply: (a) “Participating employer” means an employer that is authorized and has elected to participate in the prefunding plan. (b) “Prefunding plan” means the California Employers’ Pension Prefunding Trust Fund, a trust fund administered by the board, for the purpose of investing employer payments toward their required pension contributions to a defined benefit pension plan and that is intended to meet the requirements of Section 115 of the Internal Revenue Code. (c) “Required pension contributions” means future contributions to a defined benefit pension plan required to fund the present value of plan benefits, calculated in compliance with Actuarial Standards of Practice of the American Academy of Actuaries.

Cal. Government Code - GOV § 21711. Section 21711.

(a) The California Employers’ Pension Prefunding Trust Fund is hereby established as a special trust fund in the State Treasury for the purpose of allowing state and local public agency employers that provide a defined benefit pension plan to their employees to prefund their required pension contributions. Notwithstanding Section 13340, all moneys in the California Employers’ Pension Prefunding Trust Fund are continuously appropriated to the board without regard to fiscal years to carry out the purpose of this chapter, consistent with the board’s fiduciary duty. (b) The board shall have the sole and exclusive control of the administration and investment of the California Employers’ Pension Prefunding Trust Fund and shall have the authority to make investments pursuant to Part 3 (commencing with Section 20000). (c) Income, of whatever nature, earned on the California Employers’ Pension Prefunding Trust Fund, shall be credited to the fund. (d) Notwithstanding subdivision (b), the board shall offer participating employers investment options for funds in the California Employers’ Pension Prefunding Trust Fund consisting of cost-effective, diversified investment portfolios that do not exceed the risk and return profiles of the investment options available for the investment of funds in the Annuitants’ Health Care Coverage Fund, administratively referred to as the California Employers’ Retiree Benefit Trust Fund, established pursuant to Section 22940.

Cal. Government Code - GOV § 21712. Section 21712.

Each participating employer shall pay an amount, not to exceed the reasonable administrative costs, as determined by the board, for administrative and asset management of the prefunding plan established by this chapter. The board shall deposit to the credit of the California Employers’ Pension Prefunding Trust Fund all amounts received by the board for those administrative and asset management costs.

Cal. Government Code - GOV § 21713. Section 21713.

An employer authorized by the board may elect to participate in the prefunding plan established by this chapter.

Cal. Government Code - GOV § 21714. Section 21714.

The board may, in its discretion and upon terms and conditions set by the board, authorize an employer to participate in the prefunding plan established by this chapter. The governing body of a participating employer shall enter into a contract with the board, setting forth the terms and conditions of that employer’s participation in the prefunding plan, including, but not limited to, funding, expenditures, and actuarial, accounting, reporting, and investment considerations.

Cal. Government Code - GOV § 21714.5. Section 21714.5.

Pursuant to terms and conditions established by the board, an employer may request a disbursement of funds from its account in the California Employers’ Pension Prefunding Trust Fund, as set forth in Section 21711, and transfer those funds directly into the Public Employees’ Retirement Fund, as set forth in Section 20170. The board shall certify to the Controller the total amount to be transferred and the Controller shall transfer that amount from the California Employers’ Pension Prefunding Trust Fund to the Public Employees’ Retirement Fund.

Cal. Government Code - GOV § 21715. Section 21715.

(a) The board may terminate the participation of an employer in the prefunding plan if any of the following apply: (1) An employer elects to cease to participate in the prefunding plan. (2) The board finds that the participating employer has failed to satisfy the terms and conditions required by this chapter, by board rules or regulations, or by the contract between the governing body of that participating employer and the board. (3) The board terminates the prefunding plan. (b) The board may, in its discretion, authorize an employer to transfer assets into or out of the prefunding plan. That transfer of assets shall comply with all of the following: (1) The transfer shall satisfy the terms of the contract between the governing body of that participating employer and the board. (2) The transfer shall satisfy the requirements under the applicable rules of the Governmental Accounting Standards Board. (3) The transfer shall satisfy the requirements of a trust established under Section 115 of the Internal Revenue Code. (c) If the board terminates the participation of an employer in the prefunding plan as described in paragraph (1) or (2) of subdivision (a), the assets attributable to the contributions by that employer shall remain in the prefunding plan, for the continued payment of required pension contributions and the costs of administration, pursuant to the terms and conditions of participation established by the board and as agreed to by the employer.

Cal. Government Code - GOV § 21716. Section 21716.

The board may adopt regulations, including emergency regulations pursuant to the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code), to implement this chapter. For purposes of Sections 11346.1 and 11349.6, the adoption of any emergency regulations that are filed with the Office of Administrative Law shall be deemed to be an emergency and necessary for the immediate preservation of the public peace, health and safety, or general welfare.

Source: CA Legislative Counsel Bulk DataURL: https://downloads.leginfo.legislature.ca.gov/pubinfo_2025.zipFetched: 6/27/2026