BILL ANALYSIS
AB 3076
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Date of Hearing: April 21, 2004
ASSEMBLY COMMITTEE ON PUBLIC EMPLOYEES, RETIREMENT AND SOCIAL
SECURITY
Gloria Negrete McLeod, Chair
AB 3076 (Mullin) - As Amended: April 12, 2004
SUBJECT : State Teachers' Retirement Law: part-time community
college faculty.
SUMMARY : Prohibits part-time community college faculty from
being mandated into the CalSTRS defined benefit program when
they have an occasional full-time assignment.
EXISTING LAW
1)Requires any person who performs creditable service, as
defined, on a part-time basis to become a member of the
Defined Benefit Program of the Teachers' Retirement Plan if
the person is not already a member and is employed to perform
50% or more of the full-time equivalent for the position.
2)Provides that persons who teach adult or community college
classes for not more than 60% of the full-time assignment are
classified as temporary employees.
FISCAL EFFECT : Provisions of this bill should result in reduced
employer costs for those employees who will not be entered into
and removed from the defined benefit plan.
COMMENTS :
Arguments in Support
According to the sponsor, the California State Teachers'
Retirement System (CalSTRS), CalSTRS administers two retirement
programs under the State Teachers' Retirement Plan (Plan). The
Defined Benefit (DB) Program is the primary retirement program
for California's full-time public school educators from
kindergarten through community college. The Cash Balance (CB)
Benefit Program is a qualified alternative retirement program
for part-time public school educators from kindergarten through
community college, which may be offered by an employer in
addition to, or in lieu of, Social Security.
AB 3076
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Membership in the DB Program is mandated by law for those
employed full-time in positions requiring a credential,
certificate or permit (otherwise known as employment to perform
creditable service); however, all California public school
educators have the option to elect membership in the DB Program.
A part-time employee who typically works less than 60% of a
full-time load may be mandated as a member of the DB Program if
his or her workload during one pay period exceeds a certain
threshold; this threshold depends upon whether the employer
offers the CB Benefit Program. If the employer offers the CB
Benefit Program, then the threshold is 50% of a full-time load;
if the employer does not offer the CB Benefit Program, then the
threshold is 60% of a full-time load. These determining criteria
differ from those used to establish participation in the CB
Benefit Program; participation for the CB Benefit Program is
decided by basis of employment and is limited to those employees
who are hired to a basis of employment of no more than 50% of a
full-time load.
Employees of a community college or an adult education program
who are hired on a part-time basis might periodically and
temporarily exceed the threshold for mandatory membership in the
DB Program, which automatically enrolls the employee in the
Program, even though he or she would prefer to remain in an
alternative retirement program or Social Security. While the
part-time employee might temporarily exceed the threshold for
mandatory membership; his or her basis of employment, as defined
by the employer, remains that of a temporary part-time employee.
"Temporary", as defined by Education Code Section 87482.5, means
any person employed for not more than 60 percent of a full-time
workload by a community college or adult education program.
This proposal seeks to change the criteria that determine when
membership in the DB Program becomes mandatory for employees of
community colleges and adult education programs.
The new criterion for mandatory membership in the DB Program:
Establishes mandatory membership in the DB Program by
basis of employment - regardless of whether the employer
offers the CB Benefit Program;
Is consistent with the existing standard for
participation in the CB Benefit Program;
Is consistent with the existing definition of
"temporary", as established by Education Code Section
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87482.5;
Simplifies employer administration of the Plan because
community college and adult education employers currently
classify employees and monitor workloads according to basis
of employment.
REGISTERED SUPPORT / OPPOSITION :
Support
California State Teachers' Retirement System (sponsor)
California Federation of Teachers
Faculty Association of California Community Colleges
Opposition
None on file
Analysis Prepared by : Clem Meredith / P.E., R. & S.S. / (916)
319-3957