BILL NUMBER: AB 996 INTRODUCED
BILL TEXT
INTRODUCED BY Assembly Member Medina
FEBRUARY 26, 2015
An act to amend Section 25104 of, and to add Section 25111.5 to,
the Education Code, relating to retirement.
LEGISLATIVE COUNSEL'S DIGEST
AB 996, as introduced, Medina. State Teachers' Retirement System:
investment products.
Existing law requires the Teachers' Retirement Board to establish
a vendor registration process through which information about
tax-deferred retirement investment products shall be made available
for consideration by public employees of all local school districts,
community college districts, and county offices of education, among
others. Existing law requires the board to maintain an impartial
investment information bank, via an Internet Web site, with specified
information about the retirement investment products offered and
objective comparisons of vendors. Existing law also prohibits
specified personnel from receiving consideration for promoting a
particular vendor's products.
The bill would require the investment information bank to include
a side-by-side comparison of each registered vendor. The bill would
also require all local school districts, community college districts,
and county offices of education to adopt a policy addressing the
solicitation of 403(b) products, as defined, by vendors on school
campuses. Because the bill would require local agencies to perform
additional duties it would impose a state-mandated local program.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that, if the Commission on State Mandates
determines that the bill contains costs mandated by the state,
reimbursement for those costs shall be made pursuant to these
statutory provisions.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 25104 of the Education Code is amended to read:
25104. (a) The board shall maintain an impartial investment
information bank, via an Internet Web site, containing the
information required by Section 25101 about the retirement investment
products offered by each registered vendor and objective comparisons
of vendors and types of products.
(b) The information bank shall include information on investment
performance based upon the investment's average annual total return,
as measured by a nationally recognized rating service selected by the
board for standard periods of time of not less than one year.
(c) The Web site shall include a table showing, for each
registered fund, the total fee cost in dollars incurred by a
shareholder who initially invested ten thousand dollars ($10,000),
earned a 5 percent rate of return for one, five, 10, 15, and 20 year
time periods. This table shall be accompanied by a disclaimer that
the rate of return is for purposes of illustrating the respective
impacts of different fee amounts on each investment, and is not to
predict future investment returns.
(d) The board shall have the authority to organize data, but may
not subjectively rank or give preference to a vendor or product.
(e) The information bank shall include a side-by-side comparison
of each registered vendor.
SEC. 2. Section 25111.5 is added to the Education Code, to read:
25111.5. (a) All local school districts, community college
districts, and county offices of education shall adopt a policy
addressing the solicitation of 403(b) products by vendors on school
campuses.
(b) The motion to adopt a policy pursuant to subdivision (a) shall
not be part of a consent agenda.
SEC. 3. If the Commission on State Mandates determines that this
act contains costs mandated by the state, reimbursement to local
agencies and school districts for those costs shall be made pursuant
to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of
the Government Code.