BILL NUMBER: AB 1102 CHAPTERED
BILL TEXT
CHAPTER 1006
FILED WITH SECRETARY OF STATE SEPTEMBER 30, 1998
APPROVED BY GOVERNOR SEPTEMBER 29, 1998
PASSED THE ASSEMBLY AUGUST 31, 1998
PASSED THE SENATE AUGUST 28, 1998
AMENDED IN SENATE AUGUST 27, 1998
AMENDED IN SENATE AUGUST 17, 1998
AMENDED IN SENATE AUGUST 4, 1998
AMENDED IN SENATE APRIL 13, 1998
AMENDED IN ASSEMBLY JANUARY 28, 1998
AMENDED IN ASSEMBLY APRIL 15, 1997
INTRODUCED BY Assembly Member Knox
(Principal coauthor: Assembly Member Honda)
(Principal coauthors: Senators O'Connell and Solis)
(Coauthors: Assembly Members Baca, Bustamante, Cedillo, Cunneen,
Ducheny, Granlund, Lempert, Ortiz, Prenter, Scott, Strom-Martin, and
Sweeney)
(Coauthors: Senators Hughes, Johnston, Karnette, Rosenthal,
Schiff, and Vasconcellos)
FEBRUARY 27, 1997
An act to amend Sections 22717, 22719, 24209, 24210, 24415, and
24417 of, to add Section 24203.5 to, to repeal and add Section 22954
of, and to repeal Section 24414 of, the Education Code, and to add
Sections 20837 and 20963.5 to the Government Code, relating to public
employers, and making an appropriation therefor.
LEGISLATIVE COUNSEL'S DIGEST
AB 1102, Knox. Public employees retirement: sick leave.
(1) The State Teachers' Retirement Law provides for service credit
at retirement for unused sick leave for persons who were members
prior to July 1, 1980.
This bill would make that benefit applicable to any member who
retires on or after January 1, 1999.
(2) The State Teachers' Retirement Law requires specified amounts
to be annually transferred to the Supplemental Benefit Maintenance
Account in the Teachers' Retirement Fund for the purpose of funding
supplemental benefit payments.
This bill would repeal that provision and instead require a
continuous appropriation to be annually made from the General Fund to
that account in a specified amount for purposes of funding these
supplemental payments. The bill would make a statement of
legislative intent respecting the contractual obligation of those
annual appropriations and would make related changes.
(3) The State Teachers' Retirement Law prescribes a 2% at age 60
service retirement formula.
The bill would provide that members with 30 or more years of
credited service would receive an additional increase.
(4) The Public Employees' Retirement Law provides that state,
school, and school safety members receive, at retirement, service
credit for unused sick leave. The benefit is inapplicable to persons
who became school or school safety members on or after July 1, 1980.
This bill would make that benefit applicable to school members who
retire on or after January 1, 1999. The bill would require their
employers to make additional contributions fixed and determined by
the board of administration.
(5) The bill would provide that the State Teachers' Retirement Law
provisions would become operative only if AB 2804 and AB 1150 are
also enacted and become operative.
Appropriation: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares as follows:
(a) The success of the class size reduction law and the
effectiveness of public education generally requires that students be
taught by competent, effective, credentialed teachers.
(b) Benefits provided members of the State Teachers' Retirement
System are insufficient compared to those of members of the Public
Employees Retirement System and other retirement systems, including
teachers' retirement systems in other western states.
(c) State Teachers' Retirement System benefits are inadequate to
make teaching attractive as a profession, and to encourage the
retention of teachers in teaching.
(d) It is the intent of the Legislature to provide benefit
improvements to members of the State Teachers' Retirement System that
will provide comparability to those of school members of the Public
Employees' Retirement System and encourage qualified people to choose
teaching as a career.
(e) It is the intent of the Legislature that the benefit
improvements enacted by this act be funded pursuant to the amendments
to Section 22955 of the Education Code proposed by Assembly Bill
2804 of the 1997-98 Regular Session unless provided otherwise.
This act shall be known and may be cited as the Ralph Dills
Teacher Recruitment and Retention Act of 1998.
SEC. 2. Section 22717 of the Education Code is amended to read:
22717. (a) A member shall be granted credit at service retirement
for each day of accumulated and unused leave of absence for illness
or injury for which full salary is allowed to which the member was
entitled on the member's final day of employment with the employer by
which the member was last employed to perform creditable service
subject to coverage by the plan.
(b) The amount of service credit to be granted shall be determined
by dividing the number of days of accumulated and unused leave of
absence for illness or injury by the number of days of service the
employer requires the member's class of employees to perform in a
school year during the member's final year of creditable service
subject to coverage by the plan, which shall not be less than the
minimum standard specified in Section 22138.5. In no event shall the
divisor be less than 175.
(c) When the member has made application for service retirement
under this part, the employer shall certify to the board, within 30
days following the effective date of the member's service retirement,
the number of days of accumulated and unused leave of absence for
illness or injury that the member was entitled to on the final day of
employment. The board may assess a penalty on delinquent reports.
(d) This section shall be applicable to any person who retires on
or after January 1, 1999.
SEC. 3. Section 22719 of the Education Code is amended to read:
22719. If the allowance of a retired member is terminated, the
employer shall not restore sick leave days for which service credit
was granted at retirement.
SEC. 4. Section 22954 of the Education Code is repealed.
SEC. 5. Section 22954 is added to the Education Code, to read:
22954. (a) Notwithstanding Section 13340 of the Government Code,
commencing July 1, 1999, a continuous appropriation is hereby
annually made from the General Fund to the Controller, pursuant to
this section, for transfer to the Supplemental Benefit Maintenance
Account in the Teachers' Retirement Fund. The total amount of the
appropriation for each year shall be equal to 2.5 percent of the
total of the creditable compensation of the immediately preceding
calendar year upon which members' contributions are based for
purposes of funding the supplemental payments authorized by Section
24415.
(b) The board may deduct from the annual appropriation made
pursuant to this section an amount necessary for the administrative
expenses of Section 24415.
(c) It is the intent of the Legislature in enacting this section
to establish the supplemental payments pursuant to Section 24415 as
vested benefits pursuant to a contractually enforceable promise to
make annual contributions from the General Fund to the Supplemental
Benefit Maintenance Account in the Teachers' Retirement Fund in order
to provide a continuous annual source of revenue for the purposes of
making the supplemental payments under Section 24415.
SEC. 6. Section 24203.5 is added to the Education Code, to read:
24203.5. The percentage of final compensation used to compute the
allowance pursuant to Section 24202.5 or 24203 of a member retiring
on or after January 1, 1999, who has 30 or more years of credited
service, shall be increased by two-tenths of 1 percentage point,
provided that the sum of the percentage of final compensation used to
compute the allowance in Section 24202.5 or 24203, including any
adjustments for retiring before the normal retirement age, and the
additional percentage provided by this section does not exceed 2.40
percent.
SEC. 7. Section 24209 of the Education Code is amended to read:
24209. Upon retirement for service following termination of a
prior service retirement, the member shall receive a service
retirement allowance equal to the sum of both of the following:
(a) An amount equal to the monthly allowance the member was
receiving immediately preceding the most recent termination of
retirement allowance, exclusive of any amounts payable pursuant to
Section 22714 or 22715, increased by the improvement factor that
would have been applied to the allowance if the member had not
terminated the retirement allowance.
(b) An amount calculated pursuant to Section 24202, 24202.5,
24203, 24203.5, or 24206 on service credited subsequent to the most
recent termination of retirement allowance, the member's age at
retirement, and final compensation.
SEC. 8. Section 24210 of the Education Code is amended to read:
24210. Upon retirement for service following a prior disability
retirement granted pursuant to Chapter 26 (commencing with Section
24100) that was terminated, the member shall receive a service
retirement allowance calculated pursuant to Section 24202, 24202.5,
24203, 24203.5, or 24206 and equal to the sum of both of the
following:
(a) An amount based on service credit accrued prior to the
effective date of the disability retirement, the member's age as of
the effective date of the service retirement, and indexed final
compensation to the effective date of the service retirement.
(b) An amount based on the service credit accrued after
termination of the disability retirement, the member's age as of the
effective date of service retirement, and final compensation.
SEC. 9. Section 24414 of the Education Code is repealed.
SEC. 10. Section 24415 of the Education Code is amended to read:
24415. (a) The proceeds of the Supplemental Benefit Maintenance
Account shall be distributed annually in quarterly supplemental
payments commencing on September 1, 1990, to retired members,
disabled members, and beneficiaries. The amount available for
distribution in any fiscal year shall not exceed the amount necessary
to restore purchasing power up to 75 percent of the purchasing power
of the initial monthly allowance after the application of all
allowance increases authorized by this part, including those
specified in Section 24412.
(b) The net revenues to be distributed shall be allocated among
those retired members, disabled members, and beneficiaries whose
allowances, after sequentially applying the annual improvement factor
as defined in Sections 22140 and 22141, and the annual supplemental
payment as defined in Section 24412, have the lowest purchasing power
percentage. The purchasing power calculation for each individual
shall be based on the change in the All Urban California Consumer
Price Index between June of the calendar year of retirement and June
of the fiscal year preceding the fiscal year of distribution. In any
year in which the purchasing power of the allowances of all retired
members, disabled members, and beneficiaries equals not less than 75
percent and additional funds remain from the allocation authorized by
this section, those funds shall remain in the Supplemental Benefit
Maintenance Account for allocation in future years.
(c) The allowance increase shall not be applicable to annuities
payable from the accumulated annuity deposit contributions or the
accumulated tax-sheltered annuity contributions.
(d) The benefits provided by subdivision (b) are not cumulative,
not part of the base allowance, and will be payable only to the
extent that funds are available from the Supplemental Benefit
Maintenance Account. The board shall inform each recipient of the
contents of this subdivision.
(e) The adjustments authorized by this section are vested only up
to the amount payable as a result of the annual appropriation made
pursuant to Section 22954 and shall not be included in the base
allowance for purposes of calculating the annual improvement defined
by Sections 22140 and 22141.
SEC. 11. Section 24417 of the Education Code is amended to read:
24417. (a) The proceeds of an auxiliary Supplemental Benefit
Maintenance Account shall be distributed annually in quarterly
supplemental payments, commencing when funds in the Supplemental
Benefit Maintenance Account are insufficient to support 75 percent,
to retired members, disabled members, and beneficiaries. The amount
available for distribution in any fiscal year shall not exceed the
amount necessary to restore purchasing power up to 75 percent of the
purchasing power of the initial monthly allowance after the
application of all allowance increases authorized by this part,
including those specified in Section 24412 and Section 24415.
(b) The net revenues to be distributed shall be allocated among
those retired members, disabled members, and beneficiaries whose
allowances, after sequentially applying the annual improvement factor
as defined in Sections 22140 and 22141, and the annual supplemental
payment as defined in Section 24412 and Section 24415, have the
lowest purchasing power percentage. The purchasing power calculation
for each individual shall be based on the change in the All Urban
California Consumer Price Index between June of the calendar year of
benefit effective date and June of the fiscal year preceding the
fiscal year of distribution.
(c) The allowance increase shall not be applicable to annuities
payable from the accumulated annuity deposit contributions or the
accumulated tax-sheltered annuity contributions.
(d) The benefits provided by subdivision (b) are not cumulative,
nor part of the base allowance, and will be payable only to the
extent that funds are available from the Supplemental Benefit
Maintenance Account and the auxiliary Supplemental Benefit
Maintenance Account. The board shall inform each recipient of the
contents of this subdivision.
(e) The distributions authorized by this section are vested only
up to the amount payable as a result of the annual appropriation made
pursuant to Section 22954 and shall not be included in the base
allowance for purposes of calculating the annual improvement defined
by Section 22140 and 22141.
SEC. 12. Section 20837 is added to the Government Code, to read:
20837. Each school employer and each contracting agency that is a
school district, on account of liability for the benefits provided
by Section 20963.5 shall make contributions in addition to those
otherwise specified in this chapter in amounts to be fixed and
determined by the board.
SEC. 13. Section 20963.5 is added to the Government Code, to read:
20963.5. (a) Notwithstanding any other provision of law, Section
20963 shall not apply to school safety members who were employed on
or after July 1, 1980, and who retired prior to January 1, 1999.
(b) Notwithstanding any other provision of law, Section 20963
shall apply to school members who retire on or after January 1, 1999.
SEC. 14. Sections 1 to 11, inclusive, of this act shall only
become operative if Assembly Bill 2804 and Assembly Bill 1150 of the
1997-98 Regular Session of the Legislature are also enacted and
become operative.