BILL ANALYSIS �
AB 2275
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Date of Hearing: April 26, 2012
ASSEMBLY COMMITTEE ON PUBLIC EMPLOYEES, RETIREMENT AND SOCIAL
SECURITY
Warren T. Furutani, Chair
AB 2275 (Achadjian) - As Introduced: February 24, 2012
SUBJECT : State teachers' retirement.
SUMMARY : Extends the sunset date of the existing California
State Teachers' Retirement System (CalSTRS) post-retirement
earnings limit exemptions from June 30, 2012 to June 30, 2014,
and expands eligibility, where applicable, to members who
retired on or before January 1, 2011. Specifically, this bill :
1)Extends the sunset dates of the existing CalSTRS
post-retirement earnings limit exemptions by two years, to
June 30, 2014, and moves forward the eligibility date for some
exemptions to encompass those members retired for service as
of January 1, 2011.
2)Deletes a reference to the Pre-Internship Teaching Program
which is now obsolete.
EXISTING LAW limits the amount of post-retirement income that
may be earned in teaching employment by a retired CalSTRS
member. The amount of compensation that can be earned from the
post-retirement employment during the 2011-12 school year
without affecting a member's benefit is $31,020.
Currently, members who exceed the earnings limitation have their
monthly benefits reduced for each dollar of compensation earned
in excess of the limit. Retired members who are under age 60
have their benefits reduced by any amount earned in
CalSTRS-covered service during the first six months of
retirement, or until the member reaches age 60, whichever occurs
first. There are no exemptions from this requirement.
Retired members who are over age 60, or have been retired for at
least six months, may be exempted from the limitation if they
meet one of the following criteria:
1)Have not performed creditable service for 12 consecutive
months after the member's most recent retirement.
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2)Are appointed as a trustee or administrator to economically
distressed school districts (this exemption can be granted for
up to two years).
3)Are hired to perform creditable service in an emergency
situation by filling a vacant administrative position
requiring highly specialized skills, if the vacancy was beyond
the control of the employer (this exemption is for half of the
annual salary and the recruitment to fill the vacant position
on a permanent basis is expected to take several months, for
up to 24 consecutive months).
4)Retired on or before January 1, 2009, and are hired to provide
direct K-12 classroom instruction, special education, English
language learner program, teacher support for new educators or
remedial instruction.
These exemptions are set to sunset on June 30, 2012, unless
legislation is enacted to extend them.
FISCAL EFFECT : Unknown.
COMMENTS : According to the author, "The exemption provision in
the State Teachers' Retirement Law will sunset on June 30, 2012.
If this sunset date is not extended to allow for an exemption
on the CalSTRS compensation cap, schools will no longer be able
to hire retired educators for specialized positions that require
experience, such as Interim Superintendents and English language
learner instruction. Smaller school districts, especially those
in rural areas, often have difficulty finding and hiring highly
qualified educators. By allowing retired employ9ees to be hired
by schools, AB 2275 provides these school districts a larger
pool of qualified educators who can temporarily step in to fill
a critical need while the school searches for a long-term hire.
AB 2275 would also provide relief for many school districts that
are managing very tight budgets, but need to attract experienced
educators."
In 2011, the Legislature established the Conference Committee on
Public Employee Pensions under the provisions of AB 340
(Furutani) and SB 827 (Simitian). The Conference Committee is
tasked with crafting "?responsible, comprehensive legislation to
reform state and local pension systems in a manner that reflects
both the legitimate needs of public employees and the fiscal
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circumstances of state and local governments." Since that time,
the Conference Committee has met five times and anticipates
releasing its report in the next several months. The
Legislature will then have the opportunity to vote on the
Conference Committee report in both houses.
The subject matter of this bill is under the purview of the
Conference Committee. It is, therefore, the recommendation of
this Committee that this bill be referred to interim study.
This bill is similar to AB 758 (Wieckowski) from last year which
would have extended the post-retirement earnings limit
exemptions to June 30, 2014. This bill was not heard in this
Committee at the request of the author.
AB 506 (Furutani), Chapter 306, Statutes of 2009, extended the
sunset date of the CalSTRS post-retirement earnings limitation
exemption from June 30, 2010 to June 30, 2012.
AB 2390 (Karnette), Chapter 494, Statutes of 2008, extended the
sunset date of the existing post-retirement earnings limit
exemptions by one year to June 30, 2010, and expanded
eligibility for the exemptions, where applicable, by one year to
members who retired on or before January 1, 2007.
SB 901 (Padilla), Chapter 353, Statutes of 2007, extended the
sunset date of the post-retirement earnings limit exemptions by
18 months to June 30, 2009, and made conforming eligibility
changes.
AB 2554 (Pavley), Chapter 934, Statutes of 2004, extended the
sunset date on the existing K-12 service-specific exemption to
January 1, 2008, and extended the date a member must retire by
to qualify for this exemption to January 1, 2004; expanded the
K-12 exemption to include members providing instruction in
special education and English language learner programs; and
provided a two-year limit on the emergency administrator or
trustee exemption.
REGISTERED SUPPORT / OPPOSITION :
Support
Association of California School Administrators
California Association of School Business Officials
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California County Superintendents Educational Services
Association
California School Boards Association
California Speech-Language Hearing Association
Cerritos College
College of Marin
Riverside County School Superintendents' Association
Shasta-Tehama-Trinity Joint Community College District
Small School Districts' Association
Numerous Citizens
Opposition
None on file
Analysis Prepared by : Karon Green / P.E., R. & S.S. / (916)
319-3957