BILL ANALYSIS �
AB 611
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Date of Hearing: April 24, 2013
ASSEMBLY COMMITTEE ON PUBLIC EMPLOYEES, RETIREMENT AND SOCIAL
SECURITY
Rob Bonta, Chair
AB 611 (Bonta) - As Introduced: February 20, 2013
SUBJECT : State teachers' retirement.
SUMMARY : Requires, rather than allows, specified employer
contributions to be deposited into the Teachers' Retirement
Program Development Fund.
FISCAL EFFECT : Unknown.
COMMENTS : The Teachers' Retirement Program Development Fund
was established to pay any costs related to the development of
programs authorized by statute to enhance the financial security
of members or beneficiaries of the California State Teachers'
Retirement System (CalSTRS). For example, $245,000 of employer
contributions were deposited into this fund during the fiscal
year ended June 30, 2008, for the development of 403(b)Comply.
The total amount to be transferred cannot exceed 0.01 percent of
the total of the creditable compensation for the fiscal year
ending in the immediately preceding calendar year.
Current law allows, but does not require, the depositing of
contributions into the fund. Although the Teachers' Retirement
Board determines how much can be deposited into the fund, it
isn't clear who decides whether the funds are deposited. AB 611
addresses this situation by requiring the depositing of the
funds in the amount determined by the board.
The Committee is informed that the author intends to use this
bill as a vehicle for addressing the CalSTRS long-term funding
needs once a solution is reached this legislative session.
SCR 105 (Negrete McLeod), Resolution Chapter123, Statutes of
2012, encouraged CalSTRS to develop and submit to the
Legislature by February 15, 2013, at least three options that
would address the long-term funding needs of the Defined Benefit
Program.
CalSTRS submitted its report of possible funding strategies,
"Sustaining Retirement Security for Future Generations: Funding
AB 611
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the California State Teachers' Retirement System," to the
Legislature as requested by the resolution on February 14, 2013.
The report provides an analysis of the issues the Legislature
and Governor need to consider to develop a sustainable funding
strategy that secures the long-term funding needs of the Defined
Benefit Program as directed in the resolution.
The report, developed with input from affected stakeholders,
identifies funding options and illustrates the implications of
gradual, incremental contribution increases necessary to close
the $64 billion funding gap and secure the long-term needs of
the fund. CalSTRS and the affected stakeholders have been
working with the author and Committee staff to develop a funding
strategy utilizing the information provided in the report.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file
Opposition
None on file
Analysis Prepared by : Karon Green / P.E., R. & S.S. / (916)
319-3957