BILL ANALYSIS �
SENATE PUBLIC EMPLOYMENT & RETIREMENT BILL NO: AB 1101
Gloria Negrete McLeod, Chair Hearing date: June 13, 2011
AB 1101 (Eng) as introduced 2/18/11 FISCAL: YES
STATE TEACHERS' RETIREMENT BOARD: CHANGE IN COMPOSITION
HISTORY :
Sponsor: California Federation of Teachers (CFT)
Prior legislation: AB 1862 (Eng), 2010
Vetoed
SB 1580 (Burton)
Chapter 1049, Statutes of 2002
ASSEMBLY VOTES :
PER & SS 4-2 3/30/11
Appropriations 12-3 4/13/11
Assembly Floor 52-22 5/05/11
SUMMARY :
This bill would replace the retiree representative on the
Teachers' Retirement Board (TRB) appointed by the Governor
with a representative elected by the retirees of the
California State Teachers' Retirement System (CalSTRS).
BACKGROUND AND ANALYSIS :
1) Existing law :
a) provides that CalSTRS' TRB consists of the following:
i) three member-elected positions representing
current educators.
ii) a retired CalSTRS member appointed by the
Governor and confirmed by the Senate.
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iii) three public representatives appointed by the
Governor and confirmed by the Senate.
iv) a school board representative appointed by the
Governor and confirmed by the Senate.
v) four board members who serve in an ex-officio
capacity by virtue of their office: Director of
Finance, State Controller, State Superintendent of
Public Instruction, and State Treasurer.
b) establishes the Defined Benefit (DB) and Cash Balance
Benefit (CB) programs administered by CalSTRS as
separate benefit programs for full-time public school
administrators and instructors, and part-time or
seasonal instructors who are not eligible for the DB
program, respectively;
c) defines an "active member" under the DB Program as a
member who is not retired or disabled and who earns
creditable compensation during the school year;
d) defines a "retired member" as a member who has
terminated employment and to whom a service retirement
or disability retirement benefit is payable;
e) defines a "disabled member" as a member to whom a
disability allowance is payable, and
f) defines a "participant" under the CB Program as a
person who has contributions credited under the program
or who is receiving an annuity under the program by
reason of creditable service.
2) This bill :
a) replaces the TRB member who is either a retired
CalSTRS DB member or a retired CB Program participant
and appointed by the Governor with one who is elected by
the retired members of the DB Program and the retired
participants of the CB Program, and
b) specifies the term for this new Board member is four
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Date: 6/07/11 Page 2
years, starting January 1, 2016.
FISCAL:
According to the Assembly Appropriations Committee:
CalSTRS indicates that additional election costs for the
seat (which would occur every four years) would be about
$75,000 for staff and vendor expenses, would coincide
with the election for the other seats, and would have
unknown impacts on CalSTRS' investments and earnings.
COMMENTS :
1) Arguments in Support
Most other public retirement boards in California have
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,
and each of the 20 retirement systems under the County
Employees' Retirement Law of 1937 has four members elected
by the active and retired members of the system.
According to the author:
"Current law allows for a retiree representative to
serve on the board of CalSTRS; however, the retiree is
appointed by the Governor. The enactment of SB 1580
(Burton/2002), 'changed three of the CalSTRS Board
members from being appointed to being elected by the
members.' However, all three of the elected board
members are voted on by active members only. This
leaves about 30 percent of CalSTRS members - retirees -
without a voice. This bill would allow the retiree
representative to be elected by their retired peers."
According to the sponsor:
"Currently, only three of �CalSTRS' board members] are
elected participants; however, none of these elected
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members are voted on by the retirees. This bill will
not change or eliminate the members who serve due to
their external positions such as the Director of
Finance, State Controller, State Superintendent of
Public Instruction, and State Treasurer. Electing a
retired STRS member to represent other retirees will
provide a direct voice for the unique perspective of
those CalSTRS members who have already retired, �and]
will allow retirees to have a united voice on retirement
issues."
2) SUPPORT :
California Federation of Teachers (CFT), Sponsor
California Retired Teachers Association (CalRTA)
California Teachers Association (CTA)
Faculty Association of California Community Colleges
(FACCC)
Los Angeles College Faculty Guild, AFT Local 152
3) OPPOSITION :
None to date
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Michael Bolden
Date: 6/07/11 Page 4