BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
AB 963 (Bonilla) - Teachers' Retirement Law
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|Version: July 16, 2015 |Policy Vote: P.E. & R. 5 - 0 |
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|Urgency: No |Mandate: No |
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|Hearing Date: August 17, 2015 |Consultant: Robert Ingenito |
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This bill does not meet the criteria for referral to the
Suspense File.
Bill
Summary: AB 963 would (1) clarify the definition of service that
can be reported to CalSTRS, (2) remedy membership issues for
individuals in classified positions who were erroneously
reported to CalSTRS, and (3) revise the definition of
"compensation earnable" for outgrowth activities.
Fiscal
Impact:
CalSTRS indicates that there would likely be a de
minimis impact to the retirement fund because the full
contributions for service were paid even though the service
could not be credited under current law.
AB 963 (Bonilla) Page 1 of
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CalSTRS anticipates one-time technology costs estimated
at below $100,000 (non General fund). Other administration
costs would be minor and absorbable.
Background: Current law requires that employers, including the State,
report creditable service performed by employees based on
specified activities. The State may have individuals performing
creditable service at entities such as the School for the Deaf,
the School for the Blind or the Department of Corrections and
Rehabilitation. Among the activities listed as creditable
service are school activities related to the instructional and
guidance program of the school when they are performed.
Compensation earnable for these activities is determined as if
the creditable compensation is earned at the lowest pay rate for
other creditable service activities that the member performs for
the same employer during the same year.
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. The work of
superintendents is excluded from these requirements. In
addition, if a CalSTRS member is hired in a position to perform
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.
Proposed Law:
This bill would, among other things, do the following:
Clarify and add criteria to the definition of
"creditable service" to help with those who may have been
erroneously reported to CalSTRS. Additionally, the bill
would provide guidance for making an election for those who
have been misreported.
AB 963 (Bonilla) Page 2 of
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Clarify that outgrowth activities do not require a
credential and are only creditable when they are performed
for the same employer for which the member is performing
creditable service. The bill also revises the definition of
"compensation earnable" for outgrowth activities to be an
amount calculated annually by CalSTRS, as specified.
Specify that the work of community college presidents
and chancellors is creditable service along with the work
of superintendents currently in statute. Because
certification qualifications are not established by the
Commission on Teacher Credentialing, the work of consulting
teachers participating in the Peer Assistance and Review
Program for Teachers is also specifically included. The
bill would clarify that these types of work, without
commission- or board-specified certification qualifications
or minimum standards, must be linked to creditable service
activities.
Staff
Comments: Some employers have erroneously reported service to
CalSTRS due to confusion surrounding the definition of
"creditable service" in the Teachers' Retirement Law.
Consequently, individuals have been removed from CalSTRS or have
had service incorrectly reported to a different public
retirement system.
CalSTRS anticipates one-time technology costs estimated at below
$100,000 with an effort that may take up to six months related
to returning any contributions to the employer and assuming
standard processes for reversing contribution lines. Allowing
individuals erroneously reported to CalSTRS the option to stay
in the system avoids the need to process re-reporting of service
that was not creditable. Other administrative costs and
anticipated increase in workload are absorbable.
AB 963 (Bonilla) Page 3 of
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