BILL ANALYSIS
AB 820
Page 1
ASSEMBLY THIRD READING
AB 820 (PUBLIC EMPLOYEES)
As Amended January 3, 2000
Majority vote
PUBLIC EMPLOYEES 7-0 APPROPRIATIONS 21-0
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|Ayes:|Correa, Thompson, Dutra, |Ayes:|Migden, Campbell, |
| |Firebaugh, Honda, Knox, | |Ackerman, Ashburn, |
| |Pescetti | |Leonard, Cedillo, Davis, |
| | | |Hertzberg, Kuehl, |
| | | |Maldonado, Papan, Romero, |
| | | |Runner, Shelley, |
| | | |Steinberg, Thomson, |
| | | |Wesson, Wiggins, Wright, |
| | | |Zettel, Aroner |
|-----+--------------------------+-----+--------------------------|
| | | | |
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SUMMARY : Makes several changes to the law governing retirement
benefits for teachers. Specifically, this bill authorizes:
1)A member of the State Teachers' Retirement System (CalSTRS) to
redeposit a portion of previously refunded contributions.
2)The Teachers' Retirement Board (Board) to waive specified
option provisions if the waiver would affect fewer than 100
individuals and would not have a material effect on the fund.
EXISTING LAW provides that:
1)If a member terminates CalSTRS covered service, elects a
refund of accumulated retirement contributions and then again
becomes a member, the person may elect to redeposit those
contributions with regular interest from the date of refund to
the date of payment. Redepositing allows a member to receive
the service credit represented by the refunded contributions.
All previously refunded contributions must be repaid and, if
the member fails to redeposit the full amount previously
withdrawn, CalSTRS refunds the partial amount and no service
credit is awarded.
2)A member may elect one of six options at retirement to provide
AB 820
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survivor benefits to his or her designated beneficiary(s).
Once retired, a member can change an option election only if
the beneficiary divorces the member or, in some cases,
predeceases the member or if someone other than a spouse was
named as beneficiary and the member wants to name his or her
current spouse as the beneficiary. Changes in options and
beneficiaries may also be subject to waiting periods and
reductions in allowances.
FISCAL EFFECT : According to CalSTRS, this bill would not
result in any cost to the retirement fund. CalSTRS would,
however incur minor and absorbable one-time administrative costs
associated with implementation of the bill's provisions.
COMMENTS : By allowing members to elect to redeposit a portion
of contributions previously refunded, this bill expands the
population that would be able to take advantage of this benefit.
Often the cost of having to redeposit all previously refunded
contributions is prohibitive. This change would allow someone
to redeposit a portion of those contributions and receive pro
rata service credit.
By giving the Board the authority to waive any of the
requirements contained in provisions of the law governing
options, this bill eliminates the need in future years to make
additional legislative changes simply to address a unique
situation affecting only a few CalSTRS members.
Analysis Prepared by : Karon Green / P.E., R. & S.S. / (916)
319-3957
FN: 0004099