BILL ANALYSIS Ó
AB 963
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CONCURRENCE IN SENATE AMENDMENTS
AB
963 (Bonilla)
As Amended August 31, 2015
Majority vote
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|ASSEMBLY: |77-0 |(May 7, 2015) |SENATE: |40-0 |(September 2, |
| | | | | |2015) |
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Original Committee Reference: P.E., R., & S.S.
SUMMARY: Clarifies the definition of service that can be
reported to the California State Teachers' Retirement System
(CalSTRS) and remedies membership issues for individuals in
classified positions who were erroneously reported to CalSTRS.
This bill also revises the definition of "compensation earnable"
for outgrowth activities. Specifically, this bill:
1)Reorganizes the definition of "creditable service" and
creditable service "activities" in the Defined Benefit (DB)
and Cash Balance (CB) Benefit programs 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 colleges, and charter school employers.
2)Specifies that activities connected with the enforcement of
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laws relating to compulsory education and child welfare
activities, and mentoring, including program support advisors
and coaches working in teacher and administrator preparation
programs, as specified, are creditable in CalSTRS.
3)Clarifies that a prekindergarten through grade 12 employer may
include the state.
4)Clarifies 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.
5)Specifies that the work of community college presidents and
chancellors is creditable service along with the work of
superintendents currently in statute if the work is listed as
a creditable activity.
6)Ensures that the work of consulting teachers participating in
the Peer Assistance and Review Program for Teachers is
considered creditable service if that work is listed as a
creditable activity.
7)Allows individuals performing service in a partial
certificated full-time position (e.g., a superintendent who
also acts as a budget director) on a part-time basis to have
their service entirely creditable in CalSTRS.
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
service.
9)Requires employers, upon request from CalSTRS, to provide
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information regarding the requirements that need to be met in
order to perform creditable service.
10)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.
11)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 must be collected
from the individual before he or she can be covered by another
public retirement system.
12)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.
13)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
(PEPRA).
14)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.
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15)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.
16)Makes other technical and conforming changes and mirrors
amendments also included in AB 991(Public Employees,
Retirement and Social Security Committee), Chapter 123,
Statutes of 2015, CalSTRS annual housekeeping bill.
The Senate amendments:
1)Clarify in the definition of "creditable service" that
outgrowth activities are only creditable when performed for
the same employer for which the member is performing
creditable service.
2)Clarify that a prekindergarten through grade 12 employer
includes the state.
3)Make clear that specified work that does not meet Commission
on Teacher Credentialing certification qualifications or
California Community Colleges Board of Governors minimum
standards must be linked to creditable service activities.
4)Ensure the work of consulting teachers participating in the
Peer Assistance and Review Program for Teachers is considered
creditable service.
5)Delete the provision in the definition of "creditable service"
allowing all activities performed in a full-time position to
be deemed creditable service if more than 50% of the
activities performed are creditable service.
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6)Delete provisions allowing CalSTRS to ask employers to provide
the percentage of time creditable service is performed in a
position.
7)Incorporate technical amendments to avoid chaptering out
issues with AB 991.
FISCAL EFFECT: According to the Senate Appropriations
Committee, 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. CalSTRS anticipates
one-time technology costs estimated at below $100,000
(non-General Fund). Other administration costs would be minor
and absorbable.
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."
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."
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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."
Analysis Prepared by:
Karon Green / P.E., R., & S.S. / (916) 319-3957
FN:
0001892