BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
AB 1101 (Eng) - Teachers' Retirement Board
Amended: As Introduced Policy Vote: PE&R 3-2
Urgency: No Mandate: No
Hearing Date: August 6, 2012
Consultant: Maureen Ortiz
This bill does not meet the criteria for referral to the
Suspense File.
Bill Summary: AB 1101 replaces the currently governor-appointed
retiree representative on the Teachers' Retirement Board with a
representative elected by the retirees of the California State
Teachers' Retirement System (CalSTRS) and retired participants
of the Cash Balance Program, effective for the term beginning
January 1, 2016.
Fiscal Impact: One-time costs of about $75,000 in FY 2015-16
and then every four years thereafter (Special).
The election for this board member will be held when ballots are
mailed out the fall of 2015 which coincides with a currently
scheduled election for other elected board positions. The
increase in costs associated with the election of the retired
member seat for staff and vendor expenses will be approximately
$75,000 every four years.
Background: The CalSTRS board of directors consists of the
following twelve members:
a) Three member-elected positions representing current
educators;
b) One retired CalSTRS member appointed by the Governor and
confirmed by the Senate;
c) Three public representatives appointed by the Governor and
confirmed by the Senate;
d) One school board representative appointed by the Governor
and confirmed by the Senate;
e) Four board members who serve in an ex-officio capacity by
virtue of their office: the director of the Department of
Finance, the State Controller, the State Superintendent of
AB 1101 (Eng)
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Public Instruction, and the State Treasurer.
Proposed Law: AB 1101 replaces the Teachers' Retirement Board
member who is either a retired Defined Benefit (DB) member or a
retired Cash Balance (CB) participant, and who is appointed by
the Governor, with one who is elected by the retired members of
the DB Program and the retired participants of the CB Benefit
Program. The term for this member is four years, beginning
January 1, 2016.
Related Legislation: This bill is identical to AB 1862 (Eng)
which was vetoed by Governor Schwarzenegger in 2010 saying
"There is no documented problem that demonstrates the need to
change current law with this bill".
Staff Comments: SB 1580 (Chapter 1049, Statutes of 2002)
required three of the then Governor-appointed Teachers
Retirement Board members be instead elected by the active
membership. Since the enactment of that legislation, CalSTRS
has held three elections which were in 2003, 2007, and 2011.
To conduct the election, CalSTRS contracts with an election
vendor who prepares the ballots and prints the candidate
statements. The vendor carries out the election as set forth by
regulations adopted by the Board, including mailing and
tabulating the ballots.
AB 1101 is intended to provide retirees with a larger voice on
retirement issues as is the case with other retirement boards.
For instance, the Board of Administration of the California
Public Employees' Retirement System has six members out of
thirteen who are elected by their peers.