BILL ANALYSIS Ó
AB 963
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Date of Hearing: April 22, 2015
ASSEMBLY COMMITTEE ON PUBLIC EMPLOYEES, RETIREMENT, AND SOCIAL
SECURITY
Rob Bonta, Chair
AB 963
Bonilla - As Amended March 24, 2015
SUBJECT: Teachers' Retirement Law
SUMMARY: Clarifies the definition of service that can be
reported to the California State Teachers' Retirement System
(CalSTRS) and includes CalSTRS membership for those in partial
certificated positions. This bill also remedies membership
issues for individuals in classified positions who were
erroneously reported to CalSTRS. Specifically, this bill:
1)Reorganizes the definition of "creditable service" for the
Defined Benefit (DB) Program and the Cash Balance (CB) Benefit
Program to clarify the certification qualifications, minimum
standards and other requirements that need to be met in order
to perform creditable service for prekindergarten through
grade 12, community college and charter school employers.
2)Specifies that activities connected with the enforcement of
laws relating to compulsory education and child welfare
activities are creditable.
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3)Specifies that the work of community college presidents and
chancellors is creditable service along with the work of
superintendents currently in statute.
4)Clarifies that outgrowth activities do not require a
credential and are only creditable when they are performed in
addition to other creditable service.
5)Specifies that all activities performed by an employee in a
full-time position are deemed creditable service if more than
50% of the activities performed are creditable service.
Individuals in such positions would remain CalSTRS members
until they become employed in a different position.
6)Specifies that these individuals have the full rights of a
CalSTRS member to elect to retain membership through the
regular 60-day process as specified in current statute if, in
the future, they perform creditable service for 50% or less of
full time in a different position with the same or a new
employer.
7)Requires employers, upon request from CalSTRS, to provide the
percentage of time creditable service is performed in a
position or information regarding the requirements that need
to be met in order to perform creditable service.
8)Provides that the service of individuals whose employers have
erroneously reported their service to CalSTRS is creditable to
the DB Program if the service was performed on or before
December 31, 2015, and reported to CalSTRS as creditable
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service.
9)Allows individuals whose employers have erroneously reported
their service to CalSTRS, whose service is deemed creditable,
including those who retired on or before December 31, 2015, to
elect to have that service covered by a different public
retirement system, as specified.
10)Specifies that if a CalSTRS member elects to have service
moved to a different public retirement system, any member
contributions, credited interest and employer contributions,
less amounts already paid to the individual, shall be returned
to the employer. Any amounts due to CalSTRS shall be
collected from the individual before he or she can be covered
by another public retirement system
11)Allows individuals who had service removed from CalSTRS and
reported to a different public retirement system, at the
direction of CalSTRS, including those receiving a benefit on
or before December 31, 2015, to elect to have that service
covered by the DB Program, as specified. Individuals making
this election become CalSTRS members and have all rights of a
member, including electing to stay in CalSTRS if he or she is
hired into a position that requires membership in a different
public retirement system as specified in current statute.
12)Provides that all individuals who make such an election as
outlined above, maintain their current status pursuant to the
California Public Employees' Pension Reform Act of 2013
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(PEPRA).
13)Specifies that the election made by an individual who
performs service deemed creditable, as specified, is
irrevocable and must be made in writing on a form prescribed
by CalSTRS on or before June 30, 2016, as specified.
14)Specifies that CalSTRS is under no obligation to identify,
locate, or notify individuals who may have had service
erroneously reported by their employers to CalSTRS.
15)Makes other technical and conforming changes.
FISCAL EFFECT: Unknown.
COMMENTS: According to CalSTRS, "Existing law requires that
employers report creditable service performed by employees based
on a list of activities. However, the law is silent on how
employers report partial certificated positions in which a
person performs both creditable service and service not
creditable to CalSTRS. Employees reported to CalSTRS must
adhere to credentialing requirements adopted by the Commission
on Teacher Credentialing, minimum standards adopted by the
California Community Colleges Board of Governors or provisions
required under an approved charter for the operation of a
charter school. If a CalSTRS member is hired in a position that
performs activities not creditable to CalSTRS, he or she can
elect in writing within 60 days from the date of hire to stay in
CalSTRS, as specified."
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According to the author, "Some employers have erroneously
reported service to CalSTRS due to confusion surrounding the
definition of "creditable service" in the Teachers' Retirement
Law. Due to this perceived vagueness, individuals have been
removed from CalSTRS or have had service incorrectly reported to
a different public retirement system."
The sponsor, CalSTRS, concludes, "This bill ensures more
effective and efficient administration of the retirement plan
and helps alleviate confusion among employers on how to
determine what service is creditable to CalSTRS."
REGISTERED SUPPORT / OPPOSITION:
Support
California State Teachers' Retirement System (Sponsor)
Alliance of Schools for Cooperative Insurance Programs
Association of California Community College Administrators
Association of California School Administrators
Association of Chief Business Officials
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Association of Chief Human Resources Officers/Equal Employment
Officers
California Association of School Business Officials
California Teachers Association
California Retired Teachers Association
Community College League of California
Foothill-De Anza Community College District
North Orange County Community College District
Los Angeles Community College District
Los Rios Community College District
Riverside Community College District
Riverside County Superintendent of Schools
Santa Clarita Community College
Shasta-Tehama-Trinity Joint Community College District
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Siskiyou Joint Community College District
South Orange County Community College District
Statewide Association of Community Colleges
West Kern Community College District
2 Individuals
Opposition
None on file
Analysis Prepared by:Karon Green / P.E.,R., & S.S. / (916)
319-3957
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