BILL ANALYSIS Ó
AB 989
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 989 (Mullin)
As Amended June 17, 2013
Majority vote
-----------------------------------------------------------------
|ASSEMBLY: |76-0 |(April 25, |SENATE: |37-0 |(August 19, |
| | |2013) | | |2013) |
-----------------------------------------------------------------
Original Committee Reference: P.E.,R.& S.S.
SUMMARY : Authorizes the California State Teachers' Retirement
System (CalSTRS) to provide the annual Retirement Progress
Report along with various other retirement communications
electronically in lieu of mailing them, unless the member,
nonmember spouse, participant, nonparticipant spouse or
beneficiary to whom that communication is addressed specifically
request to continue receiving the communication by mail.
Specifically, 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 Defined Benefit (DB)
Program and Defined Benefit Supplement (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 statement electronically, in lieu of
mailing.
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)Requires, prior to the designation described above, mail to
AB 989
Page 2
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)Requires, 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, 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)Permits, 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, 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.
9)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 of mailing.
The Senate amendments :
1)Permit CalSTRS to designate electronic communication as the
default method of communication or other action for specified
sections, provided that the system notify the parties affected
that they have the right to request delivery by mail.
2)Require the board to notify each party affected by the
resolution that he or she has the right to request delivery by
mail.
3)Permit the board to provide the Retirement Progress Report and
AB 989
Page 3
other retirement-related documents to members, nonmember
spouses, participants, nonparticipant spouses or beneficiaries
electronically in lieu of mailing.
4)Make other minor technical and clarifying changes, including
replacing the word "board" with "system" when the function is
administrative in nature.
EXISTING LAW requires the Teachers' Retirement Board to issue,
via mail, numerous retirement-related communications to members,
nonmember spouses, participants, nonparticipant spouses or
beneficiaries. For example, current law requires that the board
mail an annual statement or Retirement Progress Report to each
active or inactive member of the DB Program or participant of
the Cash Balance Benefit Program, unless the member or
participant has indicated that he or she prefers to receive the
Retirement Progress Report only through CalSTRS' secure member
Web site.
FISCAL EFFECT : According to the Senate Appropriations
Committee, initial costs of approximately $50,000 for changes to
the START and MyCalSTRS programs followed by potential savings
of up to $500,000 annually (Special Fund).
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
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,
AB 989
Page 4
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 (Public Employees, Retirement,
and Social Security 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.
Analysis Prepared by : Karon Green / P.E., R. & S.S. / (916)
319-3957
FN: 0001362