BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 1862
                                                                  Page  1

          Date of Hearing:   May 5, 2010

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

                  AB 1862 (Eng) - As Introduced:  February 12, 2010 

          Policy Committee:                              P.E.R. &  
          S.S.Vote:    4-2

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:              

           SUMMARY  

          This bill replaces the currently governor-appointed retiree  
          representative on the Teachers' Retirement Board (TRB) with a  
          representative elected by the retirees of the California State  
          Teachers' Retirement System (CalSTRS), effective for the term  
          beginning January 1, 2012.

           FISCAL EFFECT
           
          1)CalSTRS indicates that election costs for an extra seat (which  
            would occur every four years beginning in 2011-12) would be  
            about $75,000 for staff and vendor expenses (Teachers'  
            Retirement Fund).  

           2)Unknown impacts on the STRS investments and earnings.  

           COMMENTS

          1)Background  . The CalSTRs board of directors consists of three  
            member-elected positions representing current educators; a  
            retired CalSTRS member appointed by the governor and confirmed  
            by the Senate; three public representatives appointed by the  
            governor and confirmed by the Senate; a school board  
            representative appointed by the governor and confirmed by the  
            Senate; and four board members who serve in an ex-officio  
            capacity by virtue of their office - the director of director  
            of finance, state controller, state superintendent of public  
            instruction, and state treasurer.

           2)Purpose.  This bill, cosponsored by the Association of Retired  
            Teachers, California Federation of Teachers, and the  








                                                                  AB 1862
                                                                  Page  2

            California Retired Teachers Association, is intended to  
            provide retirees with a larger voice on retirement issues.  
            Supporters point out that other public retirement boards in  
            California have relatively greater representation of elected  
            members. For example, the Board of Administration of the  
            California Public Employees' Retirement System has six members  
            out of thirteen who are elected by their peers. 
           
          Analysis Prepared by  :    Brad Williams / APPR. / (916) 319-2081