BILL ANALYSIS                                                                                                                                                                                                    






SENATE PUBLIC EMPLOYMENT & RETIREMENT    BILL NO: SB 1027
Adam B. Schiff, Chairman     Hearing date: March 31, 1997
SB 1027 (Schiff) as introduced
                                            FISCAL:   yes

  STRS:  MEMBER REDEPOSIT OF NON-MEMBER SPOUSE REFUND  

  HISTORY  :            

    Sponsor: STRS Board of Administration

    Prior legislation: SB 1190 (Lockyer)
                       Ch. 542/Stats. 1988


  SUMMARY  : 

Would permit a STRS member to redeposit retirement  
contributions that have been refunded to the member's  
former spouse from the spouse's separate account that was  
established pursuant to a court order upon legal separation  
or dissolution of marriage.


  BACKGROUND  :
  
  1)  Chapter 542 of 1988 allowed the court, upon the legal  
separation or divorce of a STRS member, to order in the  
judgment that the accumulated retirement contributions and  
service credit attributable to periods of service during  
the marriage be divided into two separate and distinct  
accounts in the name of the member and the nonmember  
spouse, respectively.

2)  The nonmember spouse who is awarded a separate account  
has a right to a service retirement allowance, under  
specified conditions, or may apply for a refund of the  
accumulated retirement contributions in his or her separate  
account.  If a refund is requested and received, the  
nonmember spouse permanently waives all rights and benefits  
pertaining to the service credit represented by the  
accumulated retirement contributions.


  ANALYSIS  : 










1)   Existing STRS law  does not permit a STRS member to  
redeposit the accumulated retirement contributions refunded  
to a former spouse after the account has been segregated.

2)   This bill  would permit a STRS member, who is not yet  
retired for service or disability, to redeposit the total  
amount of the accumulated retirement contributions refunded  
to the former spouse pursuant to a court order in a legal  
separation or divorce.


Consistent with  existing STRS law  , the amount required to  
be redeposited would include regular interest from the date  
of refund, and may be paid in a lump sum, or in monthly  
installments for a period not to exceed 60 months.

  
FISCAL IMPACT  : 

STRS procedures for calculating member billings and  
processing redeposits are already in place and would only  
require minor modification if this proposal were enacted.

STRS does anticipate an increase in the number of member  
billings that will be generated as a result of this  
proposal.  However, staff expects the majority of this  
effort can be automated and no significant increases in  
administrative costs are anticipated.

  
COMMENTS  :

1)  The committee is advised that a similar provision the  
redeposit provided in this bill is already permitted by the  
Public Employeeso Retirement System.

2)  The effect of redeposit would be to make the STRS  
memberos final retirement benefit unaffected by the term of  
the memberos divorce decree.

3)  The committee is advised that STRS has seen a marked  
increase in the number of segregation cases processed in  
recent years.

In fiscal year 1995/96, 218 segregation cases were  
processed, a 55% increase over the 120 cases in 1994/95 and  









114 cases in 1993/94.

4)  STRS receives requests from members who want to  
redeposit contributions refunded by their former spouses  
and have the associated service credit included in the  
calculation of the member's STRS benefits.

STRS anticipates that retirement account segregation will  
continue to be a popular alternative for settling community  
property interests in a legal separation or divorce.

5)   SUPPORT  :

   California Retired Teacherso Association

6)   OPPOSITION  :

   none to date

David Felderstein                                 SB 1027
March 27, 1997