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 1 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 Glenn A. Miles Date: 8/28/12 Page 2 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 ##### Glenn A. Miles Date: 8/28/12 Page 3 Glenn A. Miles Date: 8/28/12 Page 4