BILL ANALYSIS
AB 820
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CONCURRENCE IN SENATE AMENDMENTS
AB 820 (Public Employees)
As Amended August 21, 2000
Majority vote
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|ASSEMBLY: |74-1 |(January 24, |SENATE: |29-0 |(August 25, |
| | |2000) | | |2000) |
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Original Committee Reference: P.E.,R. & S.S.
SUMMARY : Makes several non-controversial changes to the
Teachers' Retirement Law.
The Senate amendments :
1)Delete the provision that would have allowed the Teachers'
Retirement Board to waive specified option provisions if the
waiver would affect fewer than 100 individuals and would not
have a material effect on the Teachers' Retirement Fund.
2)Allow a nonmember spouse of a member of the State Teachers'
Retirement System (CalSTRS) to redeposit a portion of
previously refunded member contributions.
3)Allow a CalSTRS member to purchase of a portion of creditable
service that was previously excluded from CalSTRS coverage.
4)Permit a retired CalSTRS member receiving an unmodified
allowance to name a spouse as an option beneficiary.
5)Permit a person to participate in the CalSTRS Cash Balance
(CB) Benefit Program, even if the person also works for an
employer that does not offer that program.
6)Permit a person who performs trustee service for a school
district or community college district to elect to participate
in the CB Benefit Program, if the district is a CB Benefit
Program employer.
AS PASSED BY THE ASSEMBLY , this bill:
1)Authorized a CalSTRS member to redeposit a portion of
previously refunded contributions.
AB 820
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2)Authorized the Teachers' Retirement 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.
FISCAL EFFECT : According to CalSTRS, the 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 :
1)By allowing members and non-member spouses 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.
2)Existing law allows a member who was previously excluded from
membership to elect to receive credit for that service. AB
820 clarifies that a member may purchase a portion of that
previously excluded service rather than requiring that all
previously excluded service be purchased.
3)Under existing law a retired member who selected an option
beneficiary prior to or at retirement may change that option
beneficiary upon the death of the beneficiary or the divorce
of a spouse who is the designated option beneficiary. In
contrast, however, a member who retired with an unmodified
allowance cannot name a spouse as an option beneficiary after
retirement. AB 820 would address this inequity by allowing a
member who retired with an unmodified allowance to name a
spouse as an option beneficiary.
4)Existing law prohibits a member who works for more than one
employer from participating in the CB Benefit Program unless
all of his or her employers offer the CB Benefit Program.
This bill would remove that restriction.
AB 820
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Analysis Prepared by : Karon Green / P.E., R. & S.S. / (916)
319-3957
FN: 0006403