BILL ANALYSIS
SENATE PUBLIC EMPLOYMENT & RETIREMENT BILL NO: SB 1137
Nell Soto, Chair Hearing date: March 22, 2004
SB 1137 (Burton) as introduced FISCAL: YES
STRS: RETIRED MEMBER SEAT OF THE TEACHERS' RETIREMENT BOARD
TO BE ELECTED FROM THE MEMBERSHIP RATHER THAN APPOINTED BY
THE GOVERNOR
HISTORY :
Sponsor: California Retired Teachers Association (CRTA)
Association of Retired Teachers (ART)
California Federation of Teachers (CFT)
Prior legislation: SB 1580 (Burton)
Chapter 1049 of 2002
SUMMARY :
Would require the retired member seat on the STRS Teachers'
Retirement Board (Board), currently appointed by the
Governor , be elected by retired and disabled STRS members to
a 4-year term, beginning January 1, 2006.
BACKGROUND :
1) THE STRS BOARD
The Committee is advised that STRS provides retirement,
disability, and survivor benefit programs for approximately
725,000 active and retired teachers in California's public
schools and community colleges.
The 12-member Board administers the STRS benefits and
oversees the investment of the $117 billion Teachers'
Retirement Fund.
David Felderstein
Date: March 18, 2004 Page 1
2) STRS BOARD COMPOSITION BEFORE 2004 - ALL MEMBERS EXCEPT
"EX-OFFICIO" MEMBERS APPOINTED BY THE GOVERNOR
Prior to January 1, 2004, the following were appointed to the
Board by the Governor for 4 year terms:
- two seats were held by STRS members who were K-12
classroom teachers,
- one seat was held by a STRS member who was a community
college instructor with expertise in business or economics,
- one seat was held by a school board member or community
college trustee,
- one seat was held by a retired STRS member,
- one seat was held by an officer of a life insurance
company (Senate confirmation required),
- one seat was held by officer of a bank or savings and
loan institution (Senate confirmation required),
- one seat was held by a representative of the public
(Senate confirmation required) and
- four remaining seats are held by the Director of the
Department of Finance, the Superintendent of Public
Instruction, the Controller and the Treasurer, by virtue of
their office.
3) STRS BOARD COMPOSITION BEGINNING JANUARY 1, 2004 -
CERTAIN MEMBERS ELECTED BY SPECIFIED SEGMENTS OF THE STRS
MEMBERSHIP
Pursuant to Chapter 1049 of 2002 , on January 1, 2004:
- one of the two existing K-12 seats became occupied by a
K-12 employee who is not an administrator, was elected by
active (not retired) K-12 STRS members,
- the other of two existing K-12 seats became occupied by a
K-12 employee who is an active member (could be an
administrator), was elected by active K-12 members,
David Felderstein
Date: March 18, 2004 Page 2
- the community college seat became occupied by a community
college instructor and an active member, was elected by
active community college members,
- the Banking and Insurance representatives to the Board
were converted into public representative seats appointed
by the Governor and subject to confirmation by the Senate,
- the retired member and employer governing board
representatives continue to be appointed by the Governor,
but are now subject to confirmation by the Senate.
David Felderstein
Date: March 18, 2004 Page 3
ANALYSIS :
This bill would require the retired member seat on the
Teachers' Retirement Board, currently appointed by the
Governor , be elected by retired and disabled STRS members, to
a 4-year term, beginning January 1, 2006.
COMMENTS :
1) ARGUMENTS IN SUPPORT
According to the sponsors, if this bill becomes law,
approximately 170,000 retired and disabled members of the
STRS Defined Benefit Program and the STRS Cash Balance
Benefit Program would be eligible to elect their own
representative to the STRS Board.
2) FISCAL IMPACT
According to STRS, based on the recently held STRS K-12
election, the estimated cost to prepare and distribute the
notice of elections, test and print ballots, print outer
envelopes, print candidate statements and return envelopes,
and counting and tabulating returned ballots, to conduct an
election for one seat in the fall of 2005 would be
approximately $100,000, paid from the Teachers' Retirement
Fund . Comparable costs would be incurred every four years.
3) SUPPORT :
California Seniors Coalition
4) OPPOSITION :
none to date
David Felderstein
Date: March 18, 2004 Page 4
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David Felderstein
Date: March 18, 2004 Page 5