(a) There is in the State Treasury the Annuitants’ Health Care Coverage Fund that is a trust fund and a retirement fund, within the meaning of § 17 of Article XVI of the California Constitution. Subject to the limitation provided in subdivision (b), notwithstanding Section 13340, all moneys in the fund are continuously appropriated without regard to fiscal years to the board for expenditure for the prefunding of health care coverage for annuitants pursuant to this part, including administrative costs. The board has sole and exclusive control and power over the administration and investment of the Annuitants’ Health Care Coverage Fund and shall make investments pursuant to Part 3 (commencing with Section 20000).

(b) (1) Moneys accumulated in the designated state subaccounts of the fund, or a successor fund, that are derived from investment income shall not be used to pay benefits for state annuitants and dependents until the earlier of:

(A) With regard to a particular designated state subaccount, the date the funded ratio of the designated state subaccount reaches at least 100 percent as determined in that employer’s postemployment benefits actuarial valuation and then only for the purpose of paying benefits for state annuitants and dependents associated with that subaccount.

(B) July 1, 2046.

(2) For purposes of this subdivision, “designated state subaccount” means a separate account maintained within the fund to identify prefunding contributions and assets attributable to a specified state collective bargaining unit or other state entity for the purpose of providing benefits to state annuitants and dependents associated with a specified collective bargaining unit or other state entity.

(3) This subdivision shall not be construed as prohibiting an alternative funding strategy agreed to in a written memorandum of understanding.

(Amended by Stats. 2015, Ch. 28, Sec. 8. (SB 98) Effective June 24, 2015.)