BILL ANALYSIS                                                                                                                                                                                                    



                                                                    AB 2700
                                                                    Page  1

          Date of Hearing:   May 3, 2000

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS 
                              Carole Migden, Chairwoman

                AB 2700 (Lempert) - As Introduced: February 25, 2000 

          Policy Committee:                               
          P.E.R.&S.S.Vote:7-0

          Urgency:     No                   State Mandated Local  
          Program:NoReimbursable:           

           SUMMARY  :

          This bill makes all compensation received by a member of the  
          California State Teachers' Retirement System (CalSTRS),  
          including overtime, summer school and intersession work,  
          creditable toward the member's retirement allowance. 

           FISCAL EFFECT  :

          CalSTRS indicates that by making additional work eligible for  
          retirement service credit, the bill would:

          1)Increase state General Fund contributions to the CalSTRS  
            defined benefit program and supplemental benefit account by  
            $5-$15 million annually, beginning in 2002-03.

          2)Increase school employer contributions to CalSTRS by $185  
            million annually.

           COMMENTS  :

           Background  . CalSTRS is sponsoring this bill to improve  
          retirement benefits for teachers and streamline administration  
          of its defined benefit program.  The current process of  
          excluding certain types of service and compensation from what is  
          creditable for retirement requires CalSTRS to spend considerable  
          resources monitoring employer payroll practices.  Often, CalSTRS  
          must rebate funds to employees that were incorrectly withheld by  
          the employer and remitted to CalSTRS.  By making all employee  
          compensation eligible for service credit, this bill would ease  
          administration of the defined benefit program.









                                                                    AB 2700
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           Analysis Prepared by  :    Stephen Shea / APPR. / (916) 319-2081