BILL ANALYSIS Ó Senate Appropriations Committee Fiscal Summary Senator Christine Kehoe, Chair AB 2663 (Furutani) - California State Teachers' Retirement System Amended: June 20, 2012 Policy Vote: PE&R 4-0 Urgency: No Mandate: No Hearing Date: August 6, 2012 Consultant: Maureen Ortiz This bill does not meet the criteria for referral to the Suspense File. Bill Summary: AB 2663 makes numerous technical, conforming and compliance changes to the Teachers Retirement Law to enhance effective administration of the California State Teachers' Retirement System. Fiscal Impact: One-time costs of $85,000 potentially offset by future savings (Special) CalSTRS indicates one-time IT costs to make changes to the member database, and the "myCalSTRS" Website. Savings will result from consolidation of numerous reports and from the reduction in the number of mailings to members. Proposed Law: AB 2663 does the following: 1) Consolidates the following three separately mandated reports into a single financial report: a) The return on investments and actual payroll subject to the system for the prior fiscal year, b) The nature, duration, and cost of investment contract services used, c) The extent to which inflation has eroded the purchasing power of defined benefits and the amount of supplementary increases in retirement allowances required to preserve the purchasing power of DB benefits. AB 2663 (Furutani) Page 1 2) Removes reference to a qualifying condition of a member for survivor benefits under Coverage B that does not currently exist. 3) Makes conforming changes relating to disability retirement benefits and workers' compensation benefits. 4) Corrects incorrect code references relating to disability benefit annuity provisions of law. 5) Allows CalSTRS to withhold mailing certain benefit statements when the member indicates he or she does not want to receive them by mail. 6) Clarifies the information that employers must give to reemployed retired members relating to earnings limitations. 7) Allows a retiring member to report service credit for unused sick leave from more than one employer, instead of transferring the service credit from one employer to another and then receiving the full service credit. 8) Makes several clarifications in regards to the earnings limitations. 9) Clarifies that employers such as district superintendent, chancellor of a community college district or other employing agencies that report directly to CalSTRS are subject to penalty payments provisions. 10) Clarifies that CalSTRS has existing authority to subpoena witnesses to compel attendance at a board hearing in addition to the authority to subpoena the productions of documents relating to an investigation. 11) Makes other technical changes in regards to credit compensation, the 403bCompare website, and fixes incorrect code references to the Teachers' Retirement Law in the Public Resources Code. Staff Comments: AB 2663 is an Assembly Committee on Public Employees, Retirement and Social Security bill that makes necessary conforming and technical changes in order to continue AB 2663 (Furutani) Page 2 effective administration of the California State Teachers' Retirement System.