BILL ANALYSIS �
AB 178
Page 1
( Without Reference to File )
CONCURRENCE IN SENATE AMENDMENTS
AB 178 (Gorell and Ma)
As Amended June 19, 2012
2/3 vote. Urgency
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|ASSEMBLY: | |(June 1, 2011) |SENATE: |34-0 |(July 5, 2012) |
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(vote not relevant)
Original Committee Reference: PUB. S.
SUMMARY : Changes and clarifies conditions under which retired
members of the California State Teachers' Retirement System
(CalSTRS) can return to employment without being subject to the
earnings limitation.
The Senate amendments delete the Assembly version of this bill,
and instead:
1)Change the basis of the earnings limitation to one-half of the
median final compensation earnable in CalSTRS, as determined
annually. (That amount is currently slightly over $40,000,
according to CalSTRS.)
2)Specify that a trustee, administrator, or fiscal advisor
appointed to address academic or financial weaknesses in a
school district, pursuant to specified requirements, is exempt
from the earnings limitation under the following conditions:
a) The appointing authority advertised the position and
attempted to fill the position with a non-retired
individual and was unable to do so;
b) The appointing authority next tried to fill the position
with a retired worker who would reinstate from retirement
at the same salary as offered originally and was unable to
do so;
c) The appointing authority, unable to fill the position
with a non-retired or reinstated worker, then filled the
job with the retired worker at a salary no greater than the
salary offered to current active members for the appointed
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position;
d) The appointment will end no later than June 30, 2013;
and,
e) The Superintendent of Public Instruction, Board of
Governors of the Community Colleges, or county
superintendent of schools certifies, prior to the
appointment, certifies to CalSTRS that it is in compliance
with these requirements.
3)Clarify that a retired worker is not considered to be an
employee of a third party, for purposes of the earnings
limitation, if the following is true:
a) The worker does not fill a position that would normally
be filled by a school or district employee;
b) The worker performs work of a limited duration; and,
c) The third-party employer does not participate in a
public retirement system.
4)Allow a retiree to reinstate from retirement after being
retired for less than a full year, but specify that he or she
may not select a different option beneficiary upon
re-retiring.
EXISTING LAW :
1)Limits the amount of compensation that can be earned as a
retired member in employment with a CalSTRS-covered employer
to approximately $31,020 annually. The earnings limitation
may increase each year based on the percentage increase to the
average compensation of active members of the system.
2)Requires that once a retired worker has earned up to the
earnings limitation amount, the retired worker will have his
or her retirement reduced, dollar for dollar, by the amount of
earnings in excess of the earnings limitation that the retired
worker earned in that fiscal year.
3)Defines the types of employment performed by a retired worker
that will be subject to the earnings limitation, including
work for a CalSTRS-covered employer as an employee, a
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contractor, or an employee of a third party.
4)Has exempted, for approximately the past 12 years, certain
retired educators and administrators from the earnings
limitation until June 30, 2012, allowing them to earn a full
salary and a full retirement allowance without limitation.
5)Provides that the Superintendent of Public Instruction, Board
of Governors of the Community Colleges, or a county
superintendent of schools may appoint a trustee,
administrator, or fiscal advisor to address academic or
financial weaknesses in a school district, pursuant to
specified requirements.
6)Requires that a retiree must wait 12 months before he or she
may reinstate to active employment with a CalSTRS-covered
employer.
AS PASSED BY THE ASSEMBLY , this bill modified existing law to
apply the same sanctions for failures to appear in criminal
proceedings to individuals released pursuant to a federal court
order mandating the release of inmates.
FISCAL EFFECT: Unknown
COMMENTS : The Conference Committee on Public Employee Pensions,
consistent with the Governor's recommendations for pension
reform in his 12-point plan, has worked with the author to
ensure that provisions of the bill are consistent with
recommendations to limit post-retirement employment in public
jobs and to not conflict with the Conference Committee report.
This bill forms a bridge until the Conference Report could
become effective on January 1, 2013.
For approximately 12 years, a number of exemptions from the
earnings limitation have allowed many retirees to work full-time
without a reduction in benefits. The exemptions sunset on
June 30, 2012.
According to the author, "Due to the urgency of the upcoming
sunset date, AB 178 will extend the sunset for one year with the
expectation that the Pension Conference Committee will address
this issue in their report and will go into effect next year.
To be as consistent as possible with the pending conference
committee report and the desires of the Governor, AB 178 will
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narrow the scope of this exemption so that only school districts
that are either financially and/or academically distressed will
qualify."
Supporters state, "Allowing retired employees to work for school
districts experiencing fiscal or academic distress without
financial penalty offers a larger pool of qualified educators
who can temporarily step in to fill critical needs while the
school searches for a long-time hire."
Analyses Prepared by : Karon Green / P.E.,R. & S.S. / (916)
319-3957
FN: 0004329