BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 611
                                                                  Page  1

          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