BILL ANALYSIS
AB 1733
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 1733 (Wildman)
As Amended August 31, 2000
Majority vote
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|ASSEMBLY: |73-4 |(May 31, 2000) |SENATE: |40-0 |(August 31, |
| | | | | |2000) |
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Original Committee Reference: P.E.,R. & S.S.
SUMMARY : Eliminates the current postretirement earnings
limitation for members of the State Teachers' Retirement System
(CalSTRS) who first return to work more than one year after
retirement and increases the current $19,650 limit to $22,000
for other retired members.
The Senate amendments :
1)Sunset, as of January 1, 2008, the provisions of the bill
eliminating the earnings limitation for retired members who
return to work more than one year after retirement.
2)Reduce the proposed increase in the earnings limitation from
$36,000 to $22,000.
EXISTING LAW allows retired members of CalSTRS to earn up to
$19,050 in 1999-2000 for public school employment. The earnings
limitation is adjusted annually to reflect changes in the
Consumer Price Index. Any creditable earnings in excess of this
amount result in a dollar-for-dollar reduction in the member's
retirement allowance.
Existing law also provides an exemption from this limit if the
member retired prior to July 1, 1998, and is employed by a
school district to provide direct classroom instruction in any
statutorily authorized class size reduction program or to
temporarily fill a position vacated by a teacher who transferred
to a classroom in the same district because of the Class Size
Reduction program. This exemption sunsets on July 1, 2002.
An additional exemption exists for a CalSTRS member who retired
for service and who is appointed as a trustee or administrator
or who is employed on an emergency basis to fill an
AB 1733
Page 2
administrative position. This exemption sunsets on July 1,
2003.
AS PASSED BY THE ASSEMBLY , this bill eliminated the current
postretirement earnings limitation for members of CalSTRS who
first return to work more than one year after the date they
retired and increased the current $19,650 earnings limitation to
$36,000 for other retired members.
FISCAL EFFECT : CalSTRS indicates that the Teachers' Retirement
Fund (TRF) would lose $1.2 million in revenues annually in
benefit deductions from retirees who presently exceed the
earnings limitation. Additionally, the cost to the TRF of
funding the CalSTRS defined benefit program would increase by an
unknown amount to the extent that the elimination of the
earnings limitation for members returning to work after a
one-year waiting period induces members to retire earlier than
they would otherwise.
COMMENTS : Supporters point out that "California has begun to
increasingly rely on emergency credentialed teachers to instruct
our children. Last year, over 22,000 emergency teaching
credential permits were issued; tens of thousands of
California's children are being taught by emergency credentialed
teachers. Many times, these teachers are minimally qualified
and are often inexperienced."
Supporters believe that by eliminating the postretirement
earnings limitation for members returning to work after a
one-year waiting period, experienced and credentialed retired
teachers will be encouraged to return to the classroom.
Analysis Prepared by : Karon Green / P.E., R. & S.S. / (916)
319-3957
FN:
0007218