BILL ANALYSIS
SB 1137
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Date of Hearing: June 16, 2004
ASSEMBLY COMMITTEE ON PUBLIC EMPLOYEES, RETIREMENT AND SOCIAL
SECURITY
Gloria Negrete McLeod, Chair
SB 1137 (Burton) - As Amended: March 26, 2004
SENATE VOTE : 21-8
SUBJECT : State Teachers Retirement System: retirement board
SUMMARY : Requires that the retiree member of the State
Teachers' Retirement System (STRS) Board, that is currently
appointed by the Governor, be elected by retired and disabled
STRS members to a four-year term, beginning January 1, 2006.
EXISTING LAW:
1)Provides for the election, as of January 1, 2004, of 3 members
of the Teachers' Retirement Board, at elections conducted by
the board.
2)Provides for the appointment to the board of either a retired
member of the Defined Benefit Program or a retired participant
of the Cash Balance Benefit Program of the State Teachers'
Retirement Plan.
FISCAL EFFECT : 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
held STRS K-12 election.
COMMENTS :
BACKGROUND :
The STRS Board - 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.
SB 1137
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STRS Board composition before 2004 - All members except
"ex-officio" members were 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 an 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.
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
- 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.
ARGUMENTS IN SUPPORT :
SB 1137
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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.
REGISTERED SUPPORT / OPPOSITION :
Support
California Federation of Teachers (Co-sponsor)
California Retired Teachers Association (Co-sponsor)
California Teachers Association
Opposition
None on file.
Analysis Prepared by : Clem Meredith / P.E., R. & S.S. / (916)
319-3957