BILL ANALYSIS                                                                                                                                                                                                    




                    Appropriations Committee Fiscal Summary
          
                                           3076 (Mullin)
          
          Hearing Date:  6/28/04          Amended: 6/1/04        
          Consultant:  Maureen Ortiz          Policy Vote: P. E. & R.  
          5-0                      
          ____________________________________________________________ 
          ___
          BILL SUMMARY:   AB 3076 excludes community college faculty  
          members who are classified as temporary employees from  
          mandatory membership in the CalSTRS Defined Benefit Program  
          as of July 1, 2005.

                              Fiscal Impact (in thousands)
           
          Major Provisions            2004-05             2005-06              
           2006-07            Fund  
          
          Membership exclusion   -------over $1.5 million annually-----------   
           STRF

          GF contribution            ------------annual savings of   
          $625----------         General
          STAFF COMMENTS:  This bill meets the criteria to be placed  
          on the Suspense file.  The estimated loss of revenue to the  
          Defined Benefit Program is $26 million over a thirty year  
          period.  A corresponding reduction in the state's General  
          Fund contribution is about $14 million.  Additionally, the  
          revenue loss to the Supplemental Benefit Maintenance  
          Account will total $121 million, with partial offsetting  
          savings in GF contributions of $14 million.  It should be  
          noted, however, that payments from the SBMA are only vested  
          to the extent that funds are available.
          
          CalSTRS administers two retirement programs.  The Defined  
          Benefit (DB) Plan is the primary program for full-time  
          educators and provides a monthly allowance upon retirement.  
           The Cash Balance (CB) Plan is a qualified alternative  
          retirement program for part-time educators which may be  
          offered in addition to, or instead of, Social Security.   
          The CB Plan provides a return of the employee and employer  
          contributions, plus interest, upon retirement in lieu of a  
          monthly benefit.

          Membership in the DB Plan is mandated for those employed  










          full-time in teaching positions.  However, under existing  
          law a part-time employee who typically works less than 60%  
          of a full-time load may be mandated to participate in the  
          DB Program if their workload during one pay period exceeds  
          a certain threshold.  AB 3076 is intended to prohibit  
          mandatory membership in the DB Plan for part-time community  
          college faculty when they have an occasional full-time  
          assignment.

          Staff notes that the author will present a technical  
          amendment in committee.