BILL ANALYSIS �
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|SENATE RULES COMMITTEE | SB 349|
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THIRD READING
Bill No: SB 349
Author: Negrete McLeod (D)
Amended: 4/27/11
Vote: 21
SEN. PUB. EMPLOY. & RETIRE. COMMITTEE : 5-0, 5/2/11
AYES: Negrete McLeod, Walters, Gaines, Padilla, Vargas
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SUBJECT : State Teachers Retirement System
SOURCE : California State Teachers Retirement System
DIGEST : This bill makes technical, clarifying and
non-controversial changes to various sections of the
Education Code administered by the California State
Teachers' Retirement System (CalSTRS) to improve, and
continue effective administration of CalSTRS.
ANALYSIS : Existing federal law, known as the Heroes
Earnings Assistance and Relief Tax (HEART) Act of 2008,
requires, among other provisions, that public pension
systems treat participants who die on or after January 1,
2007, while performing qualified military service, as being
reemployed and they dying while employed for purposes of
survivor and death benefits.
Existing State Law
CONTINUED
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1.Allows CalSTRS to designate one or more of its
contracted field counseling offices as an official
recipient of member benefit applications and other
documents from members, spouses and beneficiaries, and
allows CalSTRS members to submit documents to CalSTRS
through benefit counselors.
2.Allows the CalSTRS Board of Administration to establish
a $10 minimum threshold for the processing of benefit
payments or the collection of overpayments to a member.
3.Establishes the Defined Benefit (DB) and Cash 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.
4.Requires CalSTRS to assess penalties and interest on
late remittance of contributions for both the DB Program
and the CB Program in accordance with regulations
established by the CalSTRS Board of Administration.
5.Allows a member to designate a beneficiary to receive
the member's benefits upon death of the member; allows a
member to make a preretirement election, change or
cancellation of an option, as specified, that designated
a beneficiary to receive a lifetime monthly benefit upon
the death of the member, and provides that upon death of
a member, beneficiaries or survivors may receive
specified benefits depending on the coverage that the
member was under, and eligibility of that member.
6.Allows a member to transfer all or a specified portion
of his or her contributions eligible for a direct
trustee-to-trustee transfer to another qualified plan
under Section 402 of the Internal Revenue Code of 1986;
to cancel the transfer, and to refund the system with
the withdrawn funds.
7.Provides that upon proper application, a vested member
can receive disability benefits while the member is
either employed, on compensated leave of absence,
physically or mentally incapacitated, or on leave of
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absence without compensation, as specified, and for
CalSTRS members who become members after October 16,
1992, allows a portion of the benefit to be paid to a
dependent child until the age of 21.
8.Requires a member to provide medical documentation to
substantiate an impairment qualifying the member for a
disability allowance, and allows CalSTRS to order a
medical examination of a member to determine whether the
member is incapacitated for performance of service.
9.Provides that a member may retire, as specified, change,
or modify the effective date of retirement form the
System if the application for retirement is
appropriately filed with the System.
10.Allows a member who retires between the ages of 55 and
60 under the Early Retirement Limited Term Reduction
Program, to elect to receive half of the amount of his
or her monthly retirement benefit for a limited time and
then revert to the full retirement benefit for normal
retirement age.
11.Provides specified postretirement earnings limitations
on members who return to CalSTRS-covered employment
after retirement, including a limited time for members
who retire under normal retirement age; prohibits a
retired member in the DB Program from making
contributions to the program, and provides for different
limitations on retired DB members and DB Program
participants who return to work in CalSTRS-covered
service.
This bill makes several technical, clarifying and
non-controversial changes to various sections of the
Education Code administered by CalSTRS to improve and
continue effective administration of the System.
Specifically, this bill:
1.Amends the Education Code to comply with the requirement
of the federal HEART Act.
2.Provides additional options to CalSTRS members by
allowing them to submit CalSTRS forms and documents to
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designated CalSTRS representatives during counseling
office hours or in the course or receiving counseling
services, regardless of whether the counseling takes
place in a counseling office.
3.Broadens the language in the Education Code to include
"other" payments and collection of overpayments that are
subject to the $10 threshold.
4.Allows a member to terminate a retirement or disability
benefit and be eligible for a refund of the remaining
contributions and interest when properly executed on a
CalSTRS form.
5.Removes the$500 late reporting penalty for the DB and CB
programs, leaving the regular interest penalty, and
makes the penalties consistent for both the DB and CB
programs, among other related changes, as specified.
6.Clarifies that the beneficiary and option beneficiary
designations are invalidated when a member completes a
refund of his or her accumulated retirement
contributions.
7.Clarifies that an amount equal to the refund that is
returned to CalSTRS will be treated the same as if the
actual refund warrant had been returned.
8.Clarifies that the basis for eligibility for Family
Allowance and Survivor benefits lies with the member,
and not with the member's beneficiaries.
9.Clarifies that a member may not apply for a disability
benefit if the basis for the disability is an impairment
that began prior to the member's membership in CalSTRS.
10.Clarifies CalSTRS' authority to order a review of
medical documentation in lieu of a physical examination.
11.Clarifies provisions allowing members to specify when
their retirement benefits start, following termination
of employment.
12.Makes technical, non-controversial changes to provide
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consistency and ease of administration of the Early
Retirement Limited Term Reduction Program.
13.Specifies that retired DB members are not allowed to
make contributions to the CB program, to provide
consistency among the two programs.
14.Specifies that the zero-dollar earnings limit applies to
a member's age at the most recent retirement.
15.Makes conforming changes to reconcile the differences
between the DB and the CB post-retirement employment
limitations; provides consistency in the post-retirement
limitations that are imposed on educators who retire
under CalSTRS, and also removes citations to provisions
related to two obsolete programs.
16.Aligns provisions, as specified, to allow an option
election to be made as part of the retirement
application process, or by the end of the month in which
the retirement takes effect.
17.Allows payment of a portion of disability retirement to
the member's dependent child, as specified.
18.Makes other minor, technical changes to the Teachers'
Retirement Law.
(FOR A COMPLETE DISCUSSION ON THE SPECIFICS OF THIS BILL,
PLEASE SEE THE SENATE PUBLIC EMPLOYEMENT AND RETIREMENT
COMMITTEE ANALYSIS)
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 5/10/11)
California State Teachers' Retirement System (source)
CPM:cm 5/10/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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