BILL ANALYSIS
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|SENATE PUBLIC EMPLOYMENT & RETIREMENT | BILL NO: SB 473 |
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|Deborah V. Ortiz, | Hearing date: March 22, 1999|
|Chair | |
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|SB 473 (Ortiz) as introduced2/17/99 | FISCAL: Yes|
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|David Felderstein | SB 473 |
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|Date: March 18, 1999 | Page 1|
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STRS: "AIR-TIME" ADDITIONAL SERVICE CREDIT: DISTRICT OPTION
HISTORY :
Sponsor: STRS Board of Administration
Prior legislation: see below
SUMMARY :
Would:
a) authorize a school district, community college
district, or county office of education to pay all or a
portion of the costs for additional STRS service credit
on behalf of a STRS member,
b) require a participating district to establish criteria
to determine eligibility,
c) require that these eligibility criteria be broad
enough to apply to at least 20 employees, or 3% of the
employees who are members (whichever is greater), unless
the STRS Board authorizes a lesser number,
d) require that the opportunity to have employer paid
STRS credit be equally available to all employees through
the eligibility criteria, and
e) prohibit school districts from providing this benefit
only to administrators and superintendents.
BACKGROUND :
1) LEGISLATIVE HISTORY:
a) SB 1027 (Schiff), Chapter 569 of 1997, authorized
STRS members to redeposit contributions withdrawn by an
ex-spouse, as well as purchase additional service credit
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|David Felderstein | SB 473 |
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|Date: March 18, 1999 | Page 2|
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for out-of-state public school employment without any
date restriction, effective 1/01/99, and
b) SB 2126 (Schiff), Chapter 1076 of 1998, increased the
maximum window period from 60 to 120 months to purchase
additional service credit, and permitted STRS members
with at least 5 years of STRS service credit to purchase
up to 5 years of service credit from another retirement
system (such as out-of-state previous employment).
ANALYSIS :
1) Existing STRS law :
a) provides that, if a former STRS member whose
retirement contributions have been withdrawn again
becomes a STRS member, the person may redeposit (with
interest), and
b) allows a member to purchase up to 5 years
"permissive" service credit. No link is necessary to any
type of prior public service.
2) This bill provides that:
a) a school district, community college district, or a
county office of education (employer) may pay all, or a
portion, of the cost for service credit purchased by a
STRS member, or authorized to a returning STRS member who
redeposits,
b) the employer must establish criteria to determine
eligibility,
c) the eligibility criteria must be broad enough to
apply to at least 20 employees, or 3% percent of the
employees who are STRS members, whichever is greater,
d) the STRS Board may, however, open eligibility to a
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|David Felderstein | SB 473 |
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|Date: March 18, 1999 | Page 3|
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lesser number or percentage of employees,
e) the opportunity to have the cost of credit for
service paid must be made equally available to any
employee, and not just to administrators and
superintendents,
f) a participating employer must pay the same dollar
amount toward the purchase of service credit or purchase
an equal amount of credit for service for each employed
member who meets the criteria ,
g) payments by an employer must be made to the STRS Fund
annually, not to exceed four years, or a period
acceptable to the Board, and cannot be made directly to
the account of the STRS member,
h) an employer may make such purchases to encourage
members to remain with the current employer, or to
encourage early retirements to facilitate a change in
workforce requirements,
i) the employer must inform the Board of the eligibility
criteria and the estimated number of eligible members,
and
j) prior to authorizing the payment of funds, the STRS
Board must determine whether
the criteria submitted by the employer are consistent
with established objectives.
COMMENTS :
1) SPONSOR'S INTENT :
This bill does not require the member to retire; if a
district needs to reduce its workforce, a teacher can take
the offered service credit leave to teach elsewhere. STRS
intends that this bill also be used to encourage teachers
to come to a district that is offering the benefit
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|David Felderstein | SB 473 |
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|Date: March 18, 1999 | Page 4|
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enhancement, or stay at a particular district longer
because they offer the benefit to teachers who reach
certain longevity thresholds.
2) FISCAL :
The provisions of this bill are permissive; it is not
possible to estimate participation.
Because the costs are paid by the employer there would be
no cost to the STRS Fund.
3) OPPOSITION :
None to date.
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|David Felderstein | SB 473 |
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|Date: March 18, 1999 | Page 5|
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