(a) Notwithstanding Section 20903 or any other provision of this part, for only the 1994–95, 1995–96, 1996–97, 1997–98, and 1998–99 fiscal years, when the governing body of a contracting agency, other than a school employer, determines that because of an impending curtailment of service, or change in the manner of performing service, the best interests of the agency would be served by encouraging the retirement of local members, the governing body may adopt a resolution to grant eligible employees additional service credit if the following conditions exist:

(1) The member meets the age and service requirements of Section 21060, is credited with 10 or more years of service, and retires on service retirement on or before a date determined by the governing body that is within a period that is not more than 120 days after the governing body’s adoption of the resolution.

(2) The governing body agrees to transmit to the retirement fund an amount determined by the board that is equal to the actuarial equivalent of the difference between the allowance the member receives after the receipt of service credit under this section and the amount the member would have received without that service credit and any administrative costs incurred by this system in a manner and time period acceptable to the governing body and the board. However, the payment period shall not exceed five years. If payment in full is not received within 30 days of the invoice, regular interest shall be charged on any unpaid balance.

(b) (1) The resolution shall specify the categories of employees that are eligible to receive the additional service credit and the departments, programs and position classifications in which employee members would be eligible for the additional service credit.

(2) The resolution shall specify the period of eligibility, and the amount of additional service in whole years. The amount of additional service credit shall not be more than four years and shall not be combined with any additional service credit granted under Section 20903.

(c) (1) The governing body shall certify either that sufficient positions have been deleted whose total cost equals or exceeds the lump-sum actuarial cost of the additional service credit granted or that all positions vacated due to the additional service credit granted pursuant to this section shall remain vacant for at least five years and until the lump-sum actuarial cost of the additional service credit granted has been recaptured from position vacancy salary savings.

(2) The governing body shall certify to the board the extent to which savings will exceed necessary payments to the board, the specific measures to be taken to assure that outcome, and that the agency has complied with Section 7507. The board may require the governing body to provide verification of its certification through independent review.

(d) At the time the governing body has achieved savings that are more than adequate to meet necessary payments to the board, or five years after commencement of the retirement period specified in paragraph (1) of subdivision (a), whichever occurs first, the governing body shall certify to the board the amount of actual savings and the measures taken to achieve the savings. The governing body shall maintain records for each worker retiring pursuant to this section. The board may require the governing body to provide verification of its certification through independent review. The board shall report these certifications to the Controller, who shall summarize the cost and savings information therein for inclusion in his or her annual report prepared pursuant to Sections 7501 through 7504. The Controller shall perform a postaudit to verify that the savings equal or exceed the lump-sum actuarial cost of the additional service granted pursuant to this section. The local contracting agency shall pay the cost of the postaudit.

(e) This section shall not be applicable to any member otherwise eligible if the member receives any unemployment insurance payments arising out of employment with an employer subject to this part during a period extending two years beyond the date of issuance of the governing body’s determination or if the member is not eligible to retire without the additional credit available under this section.

(f) Any member who qualifies under this section, upon subsequent reentry into this system or upon any subsequent service under contract or any other basis, shall forfeit the service credit acquired under this section. Any member who qualifies under this section shall not receive temporary reemployment as an annuitant with the public agency from which he or she has received credit under this section for five years following the date of retirement.

(g) No additional service credit shall be granted pursuant to this section on or after July 1, 1999.

(Amended by Stats. 1997, Ch. 458, Sec. 1. Effective September 24, 1997.)