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
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          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
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           Opposition 
           
          None on file
           
          Analysis Prepared by  :    Karon Green / P.E., R. & S.S. / (916)  
          319-3957