BILL ANALYSIS                                                                                                                                                                                                    Ó






          SENATE PUBLIC EMPLOYMENT & RETIREMENT    BILL NO:  SB 114
          Gloria Negrete McLeod, Chair                             
          HEARING DATE:  August 29, 2012
          SB 114 (Yee)    as amended  8/22/12          FISCAL:  YES

           TEACHERS' RETIREMENT
           

           HISTORY  :

            Sponsor:  California Federation of Teachers

            Other legislation:  SB 1016 (Budget and Fiscal Review 
            Committee)
                         Chapter 38, Statues of 2012


           ASSEMBLY VOTES  :

            PER & SS                 6-0  7/03/12
            Appropriations           17-0 8/08/12
            Assembly Floor           68-128/27/12
           
          SUMMARY  :

          Beginning July 1, 2013, SB 114 would require community 
          college districts to submit collective bargaining agreements 
          or employment agreements for part-time instructors and adult 
          education instructors to the California State Teachers' 
          Retirement System (CalSTRS) in order to facilitate the 
          accurate reporting of creditable hours worked by CalSTRS 
          covered employees working on a part-time basis.

           BACKGROUND AND ANALYSIS  :
          
          1)   Existing Law  :  
           
            To be eligible for mandatory coverage in the CalSTRS 
            Defined Benefit (DB) Program, community college and adult 
            education instructors must do creditable service work equal 
            to at least 50 percent of the Full-Time Equivalent (FTE) of 
            a full time position as referenced by the employer in its 
            collective bargaining agreement.  FTE is subject to the 
          Glenn A. Miles
          Date:  8/28/12                                          Page 
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            bargaining agreement but the education code sets a minimum 
            standard for FTE of 525 hours per school year for community 
            college instructors and 875 hours per school year for adult 
            education instructors.  The actual standard could be 
            greater, but not be less, depending on the FTE hours 
            determined in the bargaining agreement.  Current law 
            requires the employee bargaining agreement to state the 
            applicable FTE within the agreement.  Part-time instructors 
            covered under the DB Program are credited with CalSTRS 
            service on a pro rata basis as defined.  Part-time 
            instructors who work less than 50 percent of the FTE are 
            excluded from the DB program but may be eligible for the 
            Cash Balance Benefit Program (CBBP) or other alternative 
            retirement program.

            Under existing law, districts are not required to provide 
            copies of collective bargaining or employment contract 
            agreements to CalSTRS except upon request on a case by case 
            basis.

          2)   This bill  :  
           
            SB 114 requires community college districts to submit 
            copies of each collective bargaining agreement or 
            employment agreement that applies to a part-time community 
            college or adult education instructor subject to the FTE 
            minimum.  The copies shall be provided electronically in a 
            format determined by CalSTRS to ensure the security of the 
            transmitted member data and are to be submitted annually on 
            or before July 1, 2013, or on or before the effective date 
            of the collective bargaining agreement, whichever is later.

           FISCAL  :

          According to the Assembly Appropriations Committee, SB 114 
          would result in minor and absorbable costs for CalSTRS.

           COMMENTS  :

          1)   Argument in Support  

          According to the Sponsor, SB 114 "will help part-time faculty 
          attain the retirement credits they deserve by clarifying the 
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          Date:  8/28/12                                          Page 
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          method that districts will use in reporting their salaries to 
          CalSTRS".

          According to CalSTRS, a significant issue in the 
          participation of part-time employees in the CalSTRS DB plan 
          has been the difficulty in reporting compensation in order to 
          establish appropriate levels of service credit.  Some 
          districts are uniformly applying the statutory minimum FTE to 
          all part-time employees to calculate their part-time 
          employees' compensation earnable even though their bargaining 
          agreements may specify a different FTE for different classes 
          of employees.  In effect, the districts' reporting method 
          results in some part-time employees receiving less service 
          credit in CalSTRS than they are due under the bargaining 
          agreement.  If CalSTRS can obtain copies of the bargaining 
          agreement, it can apply the correct compensation earnable for 
          the part-time employees.

          2)  Arguments in Opposition  

          According to the Department of Finance, SB 114 could increase 
          reimbursable state mandated costs by thousands to tens of 
          thousands of dollars in Proposition 98 General Fund by 
          requiring community college districts to submit bargaining 
          agreements to CalSTRS.

          3)   SUPPORT  :
          
            California Federation of Teachers (CFT), Sponsor
            California State Teachers' Retirement System (CalSTRS)
            Community College League of California
            California Teachers Association (CTA)
            California Labor Federation (CLF)
          4)   OPPOSITION  :
          
            Department of Finance




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          Date:  8/28/12                                          Page 
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          Date:  8/28/12                                          Page 
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