BILL ANALYSIS Ó
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THIRD READING
Bill No: AB 989
Author: Mullin (D)
Amended: 6/17/13 in Senate
Vote: 21
SENATE PUBLIC EMPLOYMENT & RETIREMENT COMM. : 5-0, 6/10/13
AYES: Beall, Walters, Block, Gaines, Yee
SENATE APPROPRIATIONS COMMITTEE : 7-0, 6/24/13
AYES: De León, Walters, Gaines, Hill, Lara, Padilla, Steinberg
ASSEMBLY FLOOR : 76-0, 4/25/13 (Consent) - See last page for
vote
SUBJECT : State teachers retirement: account statements
SOURCE : California State Teachers Retirement System
DIGEST : This bill permits the Teachers Retirement Board (TRB)
to make an electronic delivery of member account statements,
subject to specified requirements. This bill permits the
California State Teachers' Retirement System (CalSTRS), which is
administrated by the TRB, to designate electronic delivery of
the account statements as the default method by which members
receive the statements. This bill also requires CalSTRS to
notify the affected parties that they have the right to request
delivery by mail, and that unless the affected party elects, in
a manner specified by the TRB, delivery will be provided
electronically.
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ANALYSIS :
Existing law:
1. Requires the TRB to issue annually, to each active and
inactive member, a statement of the member's individual
Defined Benefit (DB) Program and Defined Benefit Supplement
(DBS) accounts provided that 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 Internet Web site.
2. Provides that a nonmember spouse who has been awarded a
separate account arising from a divorce with a CalSTRS member
has a right to a refund of the accumulated contributions of
the separate account and also a return of the nonmember
spouse's DBS account balance. The refund is effective when
CalSTRS deposits a warrant into the U.S. mail addressed to
the nonmember spouse's latest address on file with CalSTRS.
3. With respect to a direct trustee to trustee transfer as
requested by a nonmember spouse, states that CalSTRS has
refunded a nonmember spouse's DB accumulated contributions or
returned DBS account balances to the nonmember spouse when
CalSTRS deposits a notice in the U.S. mail confirming
transfer of those assets to another qualified plan.
4. Authorizes a nonmember spouse to redeposit into the DB
program the accumulated retirement contributions, as
specified, that were previously refunded to the member. The
nonmember spouse must make the election to redeposit within
30 days after CalSTRS mails an election form and billing.
5. Permits a nonmember spouse who was awarded a separate
account the option to purchase additional service credit as
specified. The nonmember spouse must make the election to
purchase additional service credit within 30 days after
CalSTRS mails an election form and billing.
6. Requires a member who wishes to purchase additional service
credit, as specified, to pay all additional contributions for
the additional service prior to the member's retirement date.
If, however, CalSTRS is unable to inform the member of the
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amount required to purchase the additional service before the
member's retirement date, then the member may make the
payment within 30 working days after CalSTRS mails the
statement informing the member of the amount required for the
purchase or by the effective date of the appropriate
allowance, whichever is later.
7. Deems CalSTRS to have returned a member's accumulated
retirement contributions when CalSTRS deposits in the U.S.
mail a notice confirming that CalSTRS has made a direct
trustee to trustee transfer of funds to another qualified
plan pursuant to the member's request.
8. Allows a member to cancel a distribution of the member's
retirement funds that are not direct trustee to trustee
transfers if the member returns the total gross distribution
to CalSTRS' headquarters within 30 days of the mailing date
of the distribution.
9. Allows a member to cancel a distribution of the member's
retirement funds that was done by a direct trustee to trustee
transfer if the member, within 30 days from the warrant's
mailing, returns the warrant that was payable to the other
qualified trustee or the other qualified trustee transfers
the appropriate amount back to CalSTRS.
10.Requires the TRB to issue an annual account statement for
each participant in the Cash Balance plan provided that the
employer or employee has provided CalSTRS with the
participant's current U.S. Postal Service mailing address and
permits participants to indicate their preference to receive
the statement via secured web access.
This bill:
1.Requires CalSTRS to make available to each active and inactive
member, at least annually after the close of the school year,
a statement of the member's individual DB Program and DBS
accounts.
2.Requires CalSTRS to mail a copy of the member's statement,
provided the employer or member has informed CalSTRS of the
member's mailing address and the member has not requested to
receive that annual electronically, in lieu mailing.
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3.Requires CalSTRS to periodically make a good faith effort to
locate inactive members to provide these members with
information concerning any benefit for which they may be
eligible.
4.Permits CalSTRS to designate electronic delivery as the
default method of communication or other action, provided that
CalSTRS notifies the parties affected that they have the right
to request delivery by mail and that, unless the affected
party elects, in a manner specified by the system, to continue
delivery by mail, delivery shall be provided electronically.
5.Prior to the designation described above, requires mail to
continue to be the default method of communication unless the
member, nonmember spouse, participant, nonparticipant spouse,
or beneficiary has requested that he/she receive that
communication electronically, pursuant to a procedure
specified by CalSTRS.
6.If a provision requires that action be taken within a
specified number of days of a mailing date, and electronic
delivery has been substituted for delivery by mail, requires
date of electronic delivery to substitute for date of mailing
for purposes of measuring the number of days within which an
action is to be taken.
7.If CalSTRS determines that contributions are due a retired
member, disabled member, or a person who has died, and the
person is unable to pay the amount due, permits CalSTRS to
withhold all or part of subsequent payments due the retired
member, disabled member, or survivor, until the amounts
withheld equal the contributions due plus regular interest to
the date of payment.
8.Requires CalSTRS make available, after the end of the plan
year, to each participant having a balance in his or her
employee account or employer account, a statement setting
forth the balance as of the close of the plan year and amounts
credited for the year. Requires CalSTRS to mail a copy of the
participant's statement, provided that the employer or
participant has informed the system of the participant's
current mailing address and the participant has not requested
to receive that statement electronically, in lieu mailing.
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FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee, initial costs
of approximately $50,000 for changes to the START database and
MyCalSTRS program followed by potential savings of up to
$500,000 annually (Special Fund).
SUPPORT : (Verified 6/26/13)
California State Teachers' Retirement System (source)
California Federation of Teachers
California Teachers Association
ARGUMENTS IN SUPPORT : According to CalSTRS, this bill
"improves the delivery of benefits and services and provides
more effective and efficient administration of the retirement
plan. [?] This bill would likely significantly decrease the
number of Retirement Progress Reports [i.e., annual statements]
that are printed and mailed annually, which would help to
support CalSTRS' ongoing commitment to sustainability, as well
as create a potential savings to the system."
ASSEMBLY FLOOR : 76-0, 4/25/13
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Bigelow, Bloom,
Blumenfield, Bocanegra, Bonilla, Bonta, Bradford, Brown,
Buchanan, Ian Calderon, Campos, Chau, Chávez, Chesbro, Conway,
Dahle, Daly, Dickinson, Donnelly, Eggman, Fong, Fox, Frazier,
Beth Gaines, Garcia, Gatto, Gomez, Gordon, Gorell, Gray,
Grove, Hagman, Hall, Harkey, Roger Hernández, Holden, Jones,
Jones-Sawyer, Levine, Linder, Logue, Maienschein, Mansoor,
Medina, Melendez, Mitchell, Morrell, Mullin, Muratsuchi,
Nestande, Olsen, Pan, Patterson, Perea, V. Manuel Pérez,
Quirk, Quirk-Silva, Rendon, Salas, Skinner, Stone, Ting,
Torres, Wagner, Waldron, Weber, Wieckowski, Wilk, Williams,
Yamada, John A. Pérez
NO VOTE RECORDED: Cooley, Lowenthal, Nazarian, Vacancy
JL:nl 6/26/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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