BILL ANALYSIS Ó
AB 611
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Date of Hearing: May 8, 2013
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 611 (Bonta) - As Introduced: February 20, 2013
Policy Committee: PERSSVote:7-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill requires specified employer contributions to be
deposited into the Teachers' Retirement Program Development
Fund.
FISCAL EFFECT
Negligible fiscal impact
COMMENTS
1)Purpose . The author notes current law allows, but does not
require, the depositing of contributions into the fund and
although the Teachers' Retirement Board determines how much
can be deposited into the fund, it is not clear who decides
whether the funds are deposited. The author argues AB 611
addresses this situation by requiring the depositing of the
funds in the amount determined by the board.
The author intends to use this bill as a vehicle for
addressing the California State Teachers' Retirement System
(CalSTRS) long-term funding needs should a solution be reached
this legislative session.
2)Background. 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
the 403(b) plan. The total amount to be transferred cannot
AB 611
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exceed 0.01 percent of the total of the creditable
compensation for the fiscal year ending in the immediately
preceding calendar year.
3)CalSTRS Funding . CalSTRS submitted its report of possible
funding strategies, "Sustaining Retirement Security for Future
Generations: Funding the California State Teachers' Retirement
System," to the Legislature. The report notes the Legislature
and Governor need to develop a sustainable funding strategy
that secures the long-term funding needs of the Defined
Benefit Program. 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 to develop a funding strategy using the information
provided in the report.
4)Previous legislation. SCR 105 (Negrete McLeod), Resolution
Chapter 123, 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 CalSTRS defined benefit program.
5)There is no registered opposition to this bill.
Analysis Prepared by : Roger Dunstan / APPR. / (916) 319-2081