BILL ANALYSIS
AB 1267
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Date of Hearing: April 22, 2009
ASSEMBLY COMMITTEE ON PUBLIC EMPLOYEES, RETIREMENT AND SOCIAL
SECURITY
Ed Hernandez, Chair
AB 1267 (Eng) - As Introduced: February 27, 2009
SUBJECT : State teachers' retirement system.
SUMMARY : Specifically, this bill eliminates the December 31,
2010, sunset date for eligibility for the California State
Teachers' Retirement System's (CalSTRS) longevity bonus, thereby
extending the eligibility for the bonus indefinitely.
EXISTING LAW establishes in the Teachers' Retirement Law a
longevity bonus which is a benefit enhancement that adds $200,
$300, or $400 to the monthly Defined Benefit retirement
allowance for CalSTRS members who reach 30, 31, or 32+ years of
service credit, respectively, by December 31, 2010. Members do
not have to retire by this date. Any CalSTRS member with 30 or
more years of credited service as of December 31, 2010, will
receive the corresponding longevity bonus upon retirement.
FISCAL EFFECT : According to CalSTRS, extending the longevity
bonus indefinitely would cost $4.1 billion over 30 years.
COMMENTS : According to CalSTRS, the longevity bonus was
created by AB 1933 (Strom-Martin), Chapter 1029, Statutes of
2000, to encourage educators to provide additional service in
the profession, in order to qualify for the bonus. The
Teachers' Retirement Board supported the legislation as a means
to enhance the benefits of members who worked full careers as
educators. Limiting the eligibility for this bonus to a 10-year
period was intended to provide the state with the opportunity to
reevaluate the need for continuing this benefit into the future.
According to the sponsor, the California Federation of Teachers,
the CalSTRS longevity bonus is, "?scheduled to end on December
31, 2010, which may encourage mid-year retirement. Mid-year
retirements are administratively difficult for CalSTRS in its
calculation of benefits. It is confusing to members and
burdensome for employer who must fill vacant positions in the
middle of the school year."
The sponsor concludes, eliminating the eligibility sunset date,
AB 1267
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"?offers a continued benefit to those members who will have
served an extraordinary number of years at the point of
retirement. With this bill, between 1,655 and 2,235 additional
members will reach eligibility and qualify for a longevity
incentive by June 2011, alone."
The Committee is informed that the author will be offering
amendments in Committee that extend the current eligibility
sunset date from January 1, 2011 to July 1, 2016, rather than
eliminating the sunset date entirely.
REGISTERED SUPPORT / OPPOSITION :
Support
California Federation of Teachers (Sponsor)
Faculty Association of California Community Colleges
Opposition
None on file
Analysis Prepared by : Karon Green / P.E., R. & S.S. / (916)
319-3957