BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 1137|
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THIRD READING
Bill No: SB 1137
Author: Burton (D)
Amended: 3/26/04
Vote: 21
SENATE PUBLIC EMP. & RET. COMMITTEE : 3-2, 3/22/04
AYES: Soto, Escutia, Karnette
NOES: Ashburn, Oller
SENATE APPROPRIATIONS COMMITTEE : 7-2, 4/19/04
AYES: Alpert, Bowen, Burton, Escutia, Johnson, Machado,
Speier
NOES: Battin, Ashburn
NO VOTE RECORDED: Aanestad, Karnette, Murray, Poochigian
SUBJECT : State Teachers Retirement System: retirement
board
SOURCE : California Retired Teachers Association
Association of Retired Teachers
California Federation of Teachers
DIGEST : This bill requires the retired member seat on
the State Teachers' Retirement System (STRS) Board,
currently appointed by the Governor, be elected by retired
and disabled STRS members to a four-year term, beginning
January 1, 2006.
ANALYSIS : STRS provides retirement, disability, and
survivor benefit programs for approximately 725,000 active
and retired teachers in California's public schools and
CONTINUED
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community colleges.
The 12-member Board administers the STRS benefits and
oversees the investment of the $117 billion Teachers'
Retirement Fund.
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 a four-year term:
1.Two seats were held by STRS members who were K-12
classroom teachers.
2.One seat was held by a STRS member who was a community
college instructor with expertise in business or
economics.
3.One seat was held by a school board member or community
college trustee.
4.One seat was held by a retired STRS member.
5.One seat was held by an officer of a life insurance
company (Senate confirmation required).
6.One seat was held by an officer of a bank or savings and
loan institution (Senate confirmation required).
7.One seat was held by a representative of the public
(Senate confirmation required).
8.Four seats were held by the Director of the State
Department of Finance, the Superintendent of Public
Instruction, the State Controller and the State
Treasurer, by virtue of their office.
STRS Board Composition Beginning January 1, 2004 - Certain
Members Elected by Specified Segments of the STRS
Membership
Pursuant to SB 1580 (Burton), Chapter 1049, Statutes of
2002, on January 1, 2004:
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1.One of the two existing K-12 seats became occupied by a
K-12 employee who is not an administrator and was elected
by active (not retired) K-12 STRS members.
2.The other of the two existing K-12 seats became occupied
by a K-12 employee who is an active member (could be an
administrator) and was elected by active K-12 members.
3.The community college seat became occupied by a community
college instructor and an active member and was elected
by active community college members.
4.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.
5.The retired member and employer governing board
representatives continue to be appointed by the Governor,
but are now subject to confirmation by the Senate.
This bill requires the retired member seat on the Board,
currently appointed by the Governor, to be elected by
retired and disabled STRS members to a four-year term,
beginning January 1, 2006.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
Fiscal Impact (in thousands)
Major Provisions 2004-05 2005-06
2006-07 Fund
Election costs $0 $104
$0 STRF
According to the Senate Appropriations Committee analysis,
costs to prepare and distribute the notice of elections,
test and print ballots, print outer envelopes, candidate
statements and return envelopes, and to count and tabulate
returned ballots will be approximately $104,700 every four
years. These estimates are based on costs from a recently
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held STRS K-12 election.
SUPPORT : (Verified 4/21/04)
California Retired Teachers Association (co-source)
Association of Retired Teachers (co-source)
California Federation of Teachers (co-source)
California Seniors Coalition
OPPOSITION : (Verified 4/21/04)
State Department of Finance
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 will be eligible to
elect their own representative to the Board.
ARGUMENTS IN OPPOSITION : The State Department of Finance
contends that this reduction diminishes the
Administration's ability to ensure the continued viability
of the State Teacher's Retirement Fund. Reducing the
Administration's presence on the Board to less than half
the membership will be fiscally imprudent with the current
funding arrangement for STRS.
TSM:cm 4/21/04 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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