BILL ANALYSIS
SB 1692
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Date of Hearing: July 5, 2000
ASSEMBLY COMMITTEE ON PUBLIC EMPLOYEES, RETIREMENT AND SOCIAL
SECURITY
Lou Correa, Chair
SB 1692 (Ortiz) - As Amended: May 3, 2000
SENATE VOTE : 36-1
SUBJECT : State teachers' retirement: reinstatement.
SUMMARY : Provides enhanced retirement benefits to members of
the State Teachers' Retirement System (CalSTRS) who retired
prior to January 1, 1999 and reinstate and perform at least one
additional year of service before retiring again. Specifically,
this bill :
1)Makes various legislative findings and declarations regarding
the shortage of teachers in California and the need to provide
an incentive for currently retired teachers to reinstate,
thereby helping to remedy current teacher shortages.
2)Provides that a CalSTRS member who retired for service prior
to January 1, 1999 and who reinstates to active service and
performs at least one year of creditable service before
retiring again will receive retirement benefits recalculated
to include the career bonus if they have 30 or more years of
service credit. Those members over age 60 would also receive
benefits recalculated to include the augmented age factor,
subtracting from their actual age the amount of time they were
previously retired.
3)Specifies that the provisions of this bill will only remain in
effect until January 1, 2005.
4)Specifies that this is an urgency measure to take effect
immediately.
EXISTING LAW provides that a CalSTRS member who has reinstated
from retirement to active teaching may, after one year,
subsequently retire a second time. Upon the subsequent
retirement, the member will receive the sum of:
1)The original CalSTRS allowance the member was receiving at the
time of reinstatement; and,
SB 1692
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2)The allowance for the second period of service, using the age
factor at the time of the second retirement and the
compensation received during the second period of service.
FISCAL EFFECT : According to CalSTRS, this bill would result in a
present value benefit cost of approximately $9 million. This is
based on the assumption that 500 members will return to service
and work for one year.
COMMENTS : AB 1150 (Prenter), Chapter 966, Statutes of 1998,
increased the maximum benefit factor of 2% at age 60 to 2.4% at
age 63 for CalSTRS members who retire after January 1, 1999.
Additionally, AB 1102 (Knox), Chapter 1006, Statutes of 1998,
provided a "career bonus" enhancement of .2% for CalSTRS members
with 30 or more years of service credit who retire after January
1, 1999.
SB 833 (Ortiz) of 1999, would have allowed members of CalSTRS
who retired in 1998 to have their retirement allowance
recalculated to reflect the benefit enhancements enacted during
1998 and currently available to members who retired after
January 1, 1999. Governor Davis vetoed this bill.
Supporters point out that, "Future estimates are that California
will need 300,000 teachers over the next decade. The pool of
fully credentialed retired educators in California represents a
valuable resource. To address the growing shortage of both
qualified teachers and principals, SB 1693 encourages pre-1999
retirees to return to staff our schools."
REGISTERED SUPPORT / OPPOSITION :
Support
Association of Retired Teachers (Co-Sponsor)
California Federation of Teachers (Co-Sponsor)
California Teachers Association (Co-Sponsor)
California Retired Teachers Association (Co-Sponsor)
Faculty Attempting to Improve Retirement (Co-Sponsor)
Association of California School Administrators
The Delta Kappa Gamma Society International
Opposition
SB 1692
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None on file.
Analysis Prepared by : Karon Green / P.E., R. & S.S. /
(916)319-3957