BILL ANALYSIS
AB 3076
Page 1
Date of Hearing: May 5, 2004
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Judy Chu, Chair
AB 3076 (PERSS Committee) - As Amended: April 12, 2004
Policy Committee: PERSSVote:9-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill excludes community college faculty members from
mandatory membership in the CalSTRS Defined Benefit (DB) Program
as long as they are classified as temporary employees.
FISCAL EFFECT
Negligible net fiscal impact. CalSTRS states that although the
Teachers Retirement Fund (TRF) would lose the employer
contributions of part-time community college instructors who
become mandatory DB members who do not vest, there would be a
corresponding decrease in General Fund contributions to the DB
Program.
COMMENTS
1)Background . Many part-time community college instructors do
not wish to become members of the CalSTRS DB program because
achieving the 5-year vesting requirement while employed
part-time can take 10 years or longer. As an alternative, many
community college districts offer the CalSTRS Cash Balance
(CB) program, which allows part-time employees to vest
immediately and also provides disability and death benefits,
or private retirement plans. Federal law requires only that
employees pay Medicare payroll tax and be offered a public or
private retirement plan.
Under current law, membership in the DB Program becomes
mandatory for part-time community college instructors when
service performed during one pay period exceeds a certain
threshold. For community college districts that offer the CB
program, that threshold is 50 percent of the full-time
equivalent (FTE) for the position. For community college
districts that do not offer the CB program, that threshold is
AB 3076
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60 hours or more in a pay period (if hired on an hourly basis)
or 10 days or more in a pay period (if hired on a daily
basis).
There are many instances when the workload of a part-time
community college instructor might temporarily exceed these
thresholds, which automatically enrolls the instructor in the
DB Program, even though he or she would prefer to remain in
the CB or an alternative retirement program.
2)Purpose . This bill excludes community college faculty members
from mandatory membership in the CalSTRS Defined Benefit (DB)
Program as long as they are classified as temporary employees.
This will allow a part-time instructor to exceed the specified
thresholds in a single pay period without changing their
retirement status.
Analysis Prepared by : Stephen Shea / APPR. / (916) 319-2081