BILL ANALYSIS
Appropriations Committee Fiscal Summary
SB 39 (Baca)
Hearing Date:5/10/99 Amended:4/19/99
Consultant: Maureen Brooks Policy Vote:P.E. & R.
3-0
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BILL SUMMARY: SB 39 enacts the Career Teacher Incentive
Act of 1999 which provides an additional retirement
allowance for members of the State Teachers' Retirement
System. The bill provides members who have 29 or 30 years
of service credit with an additional .1%. Members with 31
or more years of service credit will receive an additional
.2%.
Fiscal Impact (in thousands)
Major Provisions 1999-2000 2000-01 2001-02 Fund
Benefit increase ---$69.3 million----------------------------STRF
STAFF COMMENTS: This bill meets the criteria to be placed
on the Suspense file.
Increasing the career bonus as provided in SB 39 will
result in an increase in the employer contribution rate of
.407% of payroll resulting in first year costs of $69.3
million, and a present value of total long term costs of
$1.157 billion.
AB 1102 (Knox) Chapter 1006, provided teachers with 30 or
more years of credited service with a "career bonus" of .2%
of final compensation up to a maximum retirement allowance
of 2.4%. This bill expands the career bonus by applying it
to members with 29 years of credited service and increases
the bonus after 30 and 31 years of credited service.
The following chart shows the changes in percentage that
this bill provides.
Years of Service Credit Current Percentage SB 39
Percentage
29 0
.1%
30 .2%
.3%
31
.2% .4%
According to STRS, this bill will affect 11,500 members.
SB 39 limits the combined age factor and career bonus to
2.4% of final compensation.