(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.Cal. Code Regs. Tit. 2, § 599.553
1. New section filed 1-26-2007; operative 1-26-2007 pursuant to Government Code section 11343.4 (Register 2007, No. 4). Note: Authority cited: Sections 22796 and 22922, Government Code. Reference: Sections 22922, 22940 and 22942, Government Code.
1. New section filed 1-26-2007; operative 1-26-2007 pursuant to Government Code section 11343.4 (Register 2007, No. 4).