BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 2753
                                                                  Page  1

          Date of Hearing:   May 5, 2004

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                   Judy Chu, Chair

                   AB 2753 (Corbett) - As Amended:  April 15, 2004 

          Policy Committee:                              PERSSVote:8-1

          Urgency:     Yes                  State Mandated Local Program:  
          No     Reimbursable:              

           SUMMARY  

          This bill reduces the reemployment restrictions that apply to  
          members of the CalSTRS Defined Benefit (DB) Program who retire  
          under either of two early retirement incentive programs (2 years  
          of service credit, or "2+2" years of service credit and age  
          factor).  Specifically, this bill: 

          1)Reduces from 5 years to 1 year the prohibition on retirees  
            returning to work in the same K-12 school district, County  
            Office of Education or Community College district from which  
            they retired under one of the early retirement incentive  
            programs.  (Under current law, a retiree who returns to the  
            same district within 5 years of retirement forfeits the  
            retirement benefit incentive.) 

          2)Eliminates the 1 year prohibition on retirees returning to  
            work in a different district from which they retired under one  
            of the early retirement incentive programs.

          3)Makes technical, clean-up changes to the early retirement  
            incentive legislation.

           FISCAL EFFECT 

          CalSTRS does not anticipate the bill will result in benefit or  
          administrative costs.  Retired members who return to service  
          within one year would still be subject to the CalSTRS earnings  
          limitation of $25,740 annually.

           COMMENTS  

           1)Background  .  AB 1207 (Corbett), Chapter 313 of 2003  








                                                                  AB 2753
                                                                  Page  2

            reauthorized and made permanent an existing retirement  
            incentive or "Golden Handshake" program that provides an  
            additional two years of service credit for members of the  
            CalSTRS Defined Benefit (DB) Program employed by participating  
            school districts (this program had become inoperative in  
            1999).  In addition, AB 1207 authorized  a new retirement  
            incentive program through 2004 that allows school districts to  
            add two years of service credit and two years of age to the  
            age factor calculation in determining a member's retirement  
            allowance (the "2+2 Program).

            According to the author, the reemployment or return to work  
            prohibitions incorporated in AB 1207 of 5 years (on returning  
            to work in the same district) and one year (on returning to a  
            different district) are discouraging some districts from  
            offering the early retirement incentive programs to their  
            employees.  Districts are concerned that if they experience a  
            large number of early incentive retirements, the return to  
            work prohibitions would keep them from hiring experienced  
            teachers with knowledge of their districts in an emergency, or  
            even from bringing these retired teachers back as substitute  
            teachers when needed. 

           2)Purpose  .  This bill reduces the return to work prohibitions of  
            AB 1207 to make the early retirement incentive programs more  
            attractive to school districts and more available to  
            employees.

           Analysis Prepared by  :    Stephen Shea / APPR. / (916) 319-2081