BILL ANALYSIS Ó AB 989 Page 1 Date of Hearing: April 10, 2013 ASSEMBLY COMMITTEE ON PUBLIC EMPLOYEES, RETIREMENT AND SOCIAL SECURITY Rob Bonta, Chair AB 989 (Mullin) - As Introduced: February 22, 2013 SUBJECT : State teachers' retirement: account statements. SUMMARY : Requires the California State Teachers' Retirement System (CalSTRS) to make the annual statement of the member's account information available electronically and allows the Teachers' Retirement Board (TRB) to make the electronic copy the default method by which the members receives the information, as specified. Specifically, this bill : 1)Requires CalSTRS to make an electronic copy of the member's individual Defined Benefit Program and Defined Benefit Supplement accounts statement available to each member. 2)Authorizes the TRB to adopt a resolution making the electronic copy of the account statement the default method by which a member receives the information. However, a member may specifically request to receive the annual statement by mail. 3)Specifies that until the TRB adopts the resolution, a paper copy of the account statement will be mailed to the member, as specified. However, a member may request to receive the annual statement through the CalSTRS Web site in lieu of mailing a paper copy. EXISTING LAW requires the TRB to issue annually, to each active and inactive member, a statement of the member's individual Define Benefit Program and Defined Benefit Supplement accounts provided the employer or member has informed CalSTRS of the member's current mailing address. A member or participant may indicate that he or she prefers to receive the annual statement only through CalSTRS' secure member Web site. FISCAL EFFECT : Unknown. COMMENTS : According to the sponsor of the bill, CalSTRS, "CalSTRS mails various required retirement related communications to the member, nonmember spouse, participant, nonparticipant spouse or beneficiary to whom that communication AB 989 Page 2 is addressed. For example, CalSTRS mails an annual statement or Retirement Progress Report to every active and inactive member of the Defined Benefit Program and all participants of the Cash Balance Program; unless, the member has opted to solely receive an electronic version. "CalSTRS also makes the Retirement Progress Report available to all members electronically through the myCalSTRS secure member website; however, members must have previously registered or go through the registration process to establish a myCalSTRS account in order to view their report through the secure web portal." According to the author, "This proposal would provide CalSTRS the authority to provide the annual Retirement Progress Report along with various other required retirement communication electronically in lieu of mailing them, unless the member, nonmember spouse, participant, nonparticipant spouse or beneficiary to whom that communication is addressed, specifically requests, in a manner specified by the board, to continue receiving the communication by mail. Providing such communication electronically would likely significantly decrease the number of documents that are printed and mailed annually resulting in a potential savings ranging from $500,000 - $700,000 annually to the System and would help to support CalSTRS' ongoing commitment to sustainability." This bill is similar to AB 2663 (PER&SS Committee), Chapter 864, Statutes of 2012, which, in part, allowed CalSTRS to determine the form, including electronic, that county superintendents and other employing agencies must use to furnish any information concerning any member or beneficiary the board may require. This bill is also similar to AB 232 (Hill and Fletcher), Chapter 90, Statutes of 2009, which allowed CalSTRS to (1) prescribe the form of accepting electronically signed applications and documents, and (2) not mail a copy of benefit payment information when payments are made by electronic funds transfer, unless there is a change in the net amount paid. REGISTERED SUPPORT / OPPOSITION : Support California State Teachers' Retirement System (Sponsor) AB 989 Page 3 Opposition None on file Analysis Prepared by : Karon Green / P.E., R. & S.S. / (916) 319-3957