BILL ANALYSIS                                                                                                                                                                                                    



                                                          SB 1027  
                                                         Page 1

Date of Hearing: July 9, 1997

              ASSEMBLY COMMITTEE ON PUBLIC EMPLOYEES,
                  RETIREMENT AND SOCIAL SECURITY
                         Wally Knox, Chair

           SB 1027 (Schiff) - As Amended:  July 7, 1997

  SENATE VOTE  :  38-0

  SUBJECT  :  School Employees Retirement

  SUMMARY  :  Authorizes State Teachers' Retirement System (STRS)  
members to redeposit contributions withdrawn by nonmember spouses  
under specified conditions, and authorizes purchases of additional  
service credit for out-of-state public school service.   
Specifically,  this bill  :  

1) Permits a STRS members who is not yet retired to redeposit the  
   total amount of accumulated retirement contributions refunded  
   to the former spouse pursuant to a court order in a divorce or  
   separation.

2)  Establishes a procedure for an active STRS member to elect to  
purchase out-of-state service credit.  Prohibits such a purchase  
if the member has creditable service under the Cash Balance Plan  
or another public retirement system.  Provides that the election  
to purchase credit may be made,that payment must be made in full,  
prior to the effective date of the allowance.  Limits amount of  
service to the number of years of service in the out-of-state  
system or 10 years, whichever is less. Establishes the payment  
standard for the service credit purchase. Authorizes a payment  
plan of up to 10 years. Requires the member purchasing credit to  
contribute the actuarial cost of the service and to pay interest  
on the monthly unpaid balance if the member makes installment  
payments.

3)  Provides that the out-of-state service credit provisions shall  
not be applied if they could create a conflict with the IRS code. 

  EXISTING LAW  :

1)  Allows a court upon legal separation or divorce of a STRS  
member to order the accumulated retirement contributions and  
credit to be segregated into two separate accounts in the name of  
the member and nonmember spouse. This was enacted in SB 1190  
(Lockyer, Chapter 542, Statutes of 1988).

2)  Authorizes credit for service prior to July 1, 1944, in other  
states.

  FISCAL EFFECT  :  Negligible effect to STRS to process requests for  
redeposit of nonmember spouse contributions and for out-of-state  
service credit. The out-of-state service credit provisions  
specifically require actuarial costs to be covered by the  
purchaser.







                                                          SB 1027  
                                                         Page 2


  COMMENTS  :  
1)   Sponsor and Purpose   The measure is sponsored by STRS. A  
similar provision for redeposit of nonmember spouse contributions  
is already permitted by the Public Employees' Retirement System  
(CalPERS).  The effect of this provision would be to make the STRS  
member's final retirement benefit 
unaffected by the term of the member's divorce decree.  The  
provision authorizing purchase of out-of-state service credit is  
designed to provide a retirement benefit for school employees  
which reflects their entire career of service, not only that  
portion served in this state.

  REGISTERED SUPPORT / OPPOSITION  :

  Support  

State Teachers' Retirement System (Sponsor)
California Federation of Teachers
California Retired Teachers Association
United Teachers Los Angeles

  Opposition  

None on file.

  Analysis prepared by  :  Kate Riley / aper&ss / (916)445-7440