BILL ANALYSIS
AB 1933
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Date of Hearing: April 12, 2000
ASSEMBLY COMMITTEE ON PUBLIC EMPLOYEES, RETIREMENT AND SOCIAL
SECURITY
Lou Correa, Chair
AB 1933 (Strom-Martin and Shelley) - As Introduced: February
15, 2000
SUBJECT : State Teachers' Retirement System: benefits.
SUMMARY : Establishes a "Rule of 85" retirement option and
improves the current career bonus incentive for members of the
State Teachers' Retirement System (CalSTRS), and requires the
Teachers' Retirement Board (TRB) to conduct a study on the
feasibility of moving to a service based retirement formula.
Specifically, this bill :
1)Enacts the "Career Teacher Incentive Act of 2000".
2)Requires the TRB to conduct a study on the feasibility of
basing pensions on years of service and final compensation
with no age factor, except for a minimum retirement age, and
to report its findings to the Legislature on or before July 1,
2001.
3)Increases the career bonus for CalSTRS members retiring on or
after January 1, 2001 by applying it to members with 29 years
of credited service and increasing the bonus after 30 and 31
years of credited service. At 29 years of service credit the
career bonus would be .1%; at 30 years of service credit the
career bonus would be .3%; and, at 31 years the bonus would be
.4%.
4)Increases from 2.4% to 2.5% the maximum age factor a person
can receive when combining their actual age factor with the
career bonus.
5)Permits CalSTRS members who retire on or after July 1, 2001
and who are at least 55 years of age to retire using a 2.4%
age-factor if the sum of the member's age plus years of
credited service equals or exceeds 85.
6)Specifies that the Rule of 85 benefit is available to all
CalSTRS members employed by a school district, community
college district, or county superintendent of schools.
AB 1933
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7)Allows members who qualify for the Rule of 85 benefit to also
receive the career bonus, if eligible.
EXISTING LAW provides that the retirement allowances for CalSTRS
members shall be calculated based upon an age factor (plus a
career bonus of .2% if the member has 30 or more years of
service) multiplied by the years of service multiplied by the
member's final compensation. Additionally, current law allows
CalSTRS members to retire prior to age 60 but the member's age
factor is reduced accordingly. Current law also specifies that
the maximum age factor a CalSTRS member may currently receive is
2.4%.
FISCAL EFFECT : Unknown
COMMENTS : Supporters of the bill contend that "It would
benefit career educators who started teaching soon after college
but are too young under current law to receive a livable
pension". Additionally, supporters state that "AB 1933 would
acknowledge and encourage years of teaching. It de-emphasizes
retirement age as a component in computing retirement."
Supporters of the bill also believe that "The current CalSTRS
retirement program acts as a financial disincentive associated
with teaching - for persons considering entering and/or staying
in the teaching profession. Providing a comfortable retirement
will be a significant factor in the state's ability to attract
the estimated 300,000 new teachers needed over the next decade."
REGISTERED SUPPORT / OPPOSITION :
Support
California Teachers Association (Sponsor)
Faculty Association of California Community Colleges, Inc.
(Co-Sponsor)
Association of California School Administrators
California Federation of Teachers
County Superintendents of Schools
Los Angeles Unified School District
Riverside County Schools Advocacy Association
Small School Districts' Association
Opposition
AB 1933
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None on file.
Analysis Prepared by : Karon Green / P.E., R. & S.S. /
(916)319-3957