BILL ANALYSIS                                                                                                                                                                                                    




                    Appropriations Committee Fiscal Summary
          
                                          AB429  (Correa)
          
          Hearing Date:8/23/2000          Amended:8/14/2000      
          Consultant: Maureen Brooks          Policy Vote:P. E. & R.   
          3-0                      
          ____________________________________________________________ 
          ___
          BILL SUMMARY: 
          
          AB 429 provides an ad hoc increase to members of the State  
          Teachers' Retirement System (STRS) of between 1% and 6%.

                              Fiscal Impact (in thousands)
           
          Major Provisions            2000-01             2001-02              
           2002-03            Fund  
          
          Ad hoc increase              $52,000           $104,000          
          $99,500          STRF

          Administrative costs            $100            STRF
          
          STAFF COMMENTS:  SUSPENSE FILE.  The total present value  
          cost is $889 million.  Administrative costs to CalSTRS  
          result from computer system modifications and other  
          procedural changes.
          
          The increase will be between 1% and 6% depending on the  
          date of retirement with members who retired (or  
          beneficiaries) during 1997 will receive a 1% increase and  
          incrementally increasing up to 6% for members who retired  
          (or beneficiaries) before December 31, 1974.   The increase  
          will be added to the base salary which is subject to the  
          annual two per cent cost-of-living adjustment and quarterly  
          purchasing power protection payments.

          SB 713 (Burton), Chapter 632 of 1999 provided a minimum  
          guaranteed allowance payable to specified retired members  
          of STRS, their option beneficiaries and surviving spouses.   
          The annual minimum allowance ranged from $15,000 to $20,000  
          depending on the number of years of credited service (20-30  
          years).

          The ad hoc increase proposed by this bill will not be based  










          upon any adjustments provided to retirees resulting from  
          the enactment of SB 713.

          Staff notes that the provisions of this bill are identical  
          to the ad hoc increase benefit provided to retired PERS  
          state and school members.