BILL ANALYSIS
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THIRD READING
Bill No: AB 2700
Author: Lempert (D), et al
Amended: 8/31/00 in Senate
Vote: 21
SENATE PUBLIC EMP. & RET. COMMITTEE : 5-0, 6/26/00
AYES: Ortiz, Haynes, Karnette, Lewis, Soto
SENATE APPROPRIATIONS COMMITTEE : 10-0, 8/31/00
(ROLL CALL NOT AVAILABLE)
ASSEMBLY FLOOR : 75-1, 6/1/00 - See last page for vote
SUBJECT : State teachers' retirement: Defined Benefit
Supplement
Program
SOURCE : Author
DIGEST : This bill makes all compensation received by a
member of the State Teachers' Retirement System creditable
beginning July 1, 2-002, and makes technical changes to the
State Teachers' Retirement System Defined Benefit
Supplement Program.
ANALYSIS : Existing law establishes the Defined Benefit
Program in the State Teachers' Retirement Plan that
provides retirement and disability benefits to members of
the program. If Chapter 74 of the Statutes of 2000 becomes
effective, it will establish the Defined Benefit Supplement
Program for members of the Defined Benefit Program,
CONTINUED
AB 2700
Page
2
pursuant to which members and employers will receive
supplemental retirement, disability, final, or termination
benefits, payable in a lump-sum or annuity, as specified.
This bill makes technical and conforming changes relating
to the Defined Benefit Supplement program and makes an
appropriation of $600,000 from the Teachers' Retirement
Fund to the Teacher's Retirement Board for the
administration costs of implementing the program. These
provisions will become operative only if Chapter 74 of the
Statutes of 2000 becomes effective on January 1, 2001.
Existing law authorizes the Teachers' Retirement Board to
audit the records of any public agency as the board
determines necessary.
The bill authorizes the board to excuse certain adverse
audit findings occurring prior to January 1, 2002, and
relating to changes in the law that will become operative
on that date. The bill makes other technical changes and
becomes operative on specified dates subject to certain
increases in school funding.
This bill incorporates additional changes to Sections 22652
and 22662 of the Education Code proposed by AB 820 to take
effect if this bill and that bill are enacted and become
effective on or before January 1, 2001, and this bill is
enacted last.
This bill reappropriates to the board, for specified
administrative costs, unexpended funds previously
appropriated to the board in 1999.
Under existing law, "creditable service" excludes service
performed in excess of the full-time equivalent and money
paid for overtime and summer school service. Under this
bill, all compensation will be creditable and all
contributions for service in excess of one year of service
credit shall be placed into the Defined Benefit Supplement
Program. The member will be able to access the balance in
the supplemental account upon retirement or separation.
FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes
Local: No
AB 2700
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3
There will be an increase in the General Fund contribution
to the Defined Benefit Program of approximately $15 million
annually beginning in 2003-04 due to the increase in the
amount of creditable compensation. The General Fund
contribution, based on the amount of creditable service, is
equal to 3.102 percent for the Defined Benefit Plan and 2.5
percent of the Purchasing Power.
ASSEMBLY FLOOR :
AYES: Aanestad, Ackerman, Alquist, Aroner, Ashburn, Bates,
Battin, Bock, Briggs, Calderon, Campbell, Cardenas,
Cardoza, Cedillo, Corbett, Correa, Cox, Cunneen, Davis,
Dickerson, Ducheny, Dutra, Firebaugh, Florez, Floyd,
Frusetta, Gallegos, Granlund, Havice, Honda, House,
Jackson, Kaloogian, Keeley, Knox, Kuehl, Leach, Lempert,
Leonard, Longville, Lowenthal, Machado, Maddox,
Maldonado, Margett, Mazzoni, Migden, Nakano, Olberg,
Oller, Robert Pacheco, Rod Pacheco, Papan, Pescetti,
Reyes, Romero, Runner, Scott, Shelley, Steinberg,
Strickland, Strom-Martin, Thompson, Thomson, Torlakson,
Villaraigosa, Vincent, Washington, Wayne, Wesson,
Wiggins, Wildman, Wright, Zettel, Hertzberg
NOES: McClintock
DLW:sl 9/19/00 Senate Floor Analyses
SUPPORT/OPPOSITION: NONE RECEIVED
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