BILL ANALYSIS
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THIRD READING
Bill No: AB 1852
Author: Mullin (D)
Amended: 8/23/04 in Senate
Vote: 21
SENATE PUBLIC EMP. & RET. COMMITTEE : 3-2, 6/14/04
AYES: Soto, Escutia, Karnette
NOES: Ashburn, Oller
SENATE APPROPRIATIONS COMMITTEE : 12-0, 8/12/04
AYES: Alpert, Battin, Aanestad, Ashburn, Bowen, Escutia,
Johnson, Karnette, Machado, Murray, Poochigian, Speier
NO VOTE RECORDED: Burton
ASSEMBLY FLOOR : 70-6, 5/25/04 - See last page for vote
SUBJECT : State teachers retirement
SOURCE : California Teachers Association
DIGEST : This bill eliminates the minimum age requirement
for qualified members of the State Teachers Retirement
System (STRS) to receive an earned longevity bonus as a
lump sum payment. Appropriates $53,000 from the Teachers'
Retirement fund for administrative expenses. The bill also
reduced the reemployment restrictions that apply to members
of the STRS Defined Benefit Program who retire under either
of two early retirement incentive programs.
Senate Floor Amendments of 8/23/04:
CONTINUED
AB 1852
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1.Eliminate the one-year prohibition on employment with any
California public school employer for K-12 members who
receive an additional retirement benefit under the STRS
Retirement Incentive Program.
2.Incorporate into this bill the provisions of AB 2753
(Corbett),which failed passage in the Senate
Appropriations Committee recently, but with changes in
the AB 2753 required by Senator Battin.
ANALYSIS :
Expansion of Eligibility for Lump Sum Payment of the STRS
"Longevity Bonuses."
Existing STRS law (1) provides most STRs members with a
"longevity bonus" ($200, $300 or $400 per month for
teaching to 30, 31, or 32 years, respectively) added to
their monthly STRS allowance, and (2) authorizes these STRS
members who are 60 years and three months old at the time
of retirement to receive a specified lump-sump payment upon
retirement and an actuarially reduced monthly allowance if
they retire before July 1, 2011.
This bill removes the age 60 years and three months age
requirement for choosing the lump-sum payment option and
authorizes most STRS members who retire with 30 or more
years of service, in lieu of a monthly "longevity bonus,"
to receive a lump-sump payment at retirement of the lesser
of the actuarial value of the "longevity bonus" or 15
percent of the actuarial value of the benefit.
AB 1207 (Corbett), Chapter 313, Statutes of 2003,
re-authorized a golden handshake program that provides an
additional two years of service credit for teachers. That
bill also authorized a two plus two program. AB1207
provided limitations on teachers who take the early
retirement incentive and later return to work, but the
language was not consistent between those in K-12
districts, and the County Office of Education or Community
College districts. It provided that teachers were not
allowed to return to work in the same district that they
retired from for five years, and were not allowed to work
for another district for one year without forgoing the
AB 1852
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increase in their benefit. However, teachers who retired
from a county office of education or community college
district did not have any restrictions placed on them for
returning to work. Districts claim that the inconsistent,
strict limitations preclude them from hiring qualified
retirees in emergency situations.
The bill reduces the five-year limitation to one-year for
teachers who retire with the golden handshake and return to
work in the same school district, community college
district, or county office of education. It eliminates the
one-year restriction on teachers that go back to work, but
in another district. And, it places a one-year restriction
on those who retire from a school district, county office
of education or community college district and return to
the same.
Existing law places an earnings limitation on teachers who
retire. Currently, teachers who retire can earn up to
$25,740 annually before having their retirement benefit
decreased dollar for dollar.
FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes
Local: No
Fiscal Impact (in thousands)
Major Provisions 2004-05 2005-06
2006-07 Fund
Admin costs $53* $0
$0 TRF
*Appropriated in bill.
SUPPORT : (Verified 8/12/04)
California Teachers Association (source)
California Federation of Teachers
Faculty Association of California Community Colleges
ASSEMBLY FLOOR :
AYES: Aghazarian, Bates, Berg, Bermudez, Bogh, Calderon,
AB 1852
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Campbell, Canciamilla, Chan, Chavez, Chu, Cohn, Corbett,
Correa, Cox, Daucher, Diaz, Dutra, Dutton, Dymally,
Firebaugh, Frommer, Goldberg, Hancock, Jerome Horton,
Shirley Horton, Jackson, Keene, Kehoe, Koretz, La Malfa,
Laird, Leno, Levine, Lieber, Liu, Longville, Lowenthal,
Maddox, Maldonado, Matthews, McCarthy, Montanez,
Mountjoy, Mullin, Nakanishi, Nakano, Nation, Negrete
McLeod, Oropeza, Parra, Pavley, Plescia, Reyes, Richman,
Ridley-Thomas, Runner, Salinas, Samuelian, Simitian,
Spitzer, Steinberg, Strickland, Vargas, Wesson, Wiggins,
Wolk, Wyland, Yee, Nunez
NOES: Garcia, Harman, Haynes, Houston, La Suer, Maze
NO VOTE RECORDED: Benoit, Cogdill, Leslie, Pacheco
TSM:cm 8/22/04 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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