Copyright© 2000 by School Services of California, Inc.
Governor Signs Major Retirement Benefit
Legislation
The September 1, 2000, Update (see page 177, "Details of STRS Package Revealed") reported that an agreement had been reached between the Governor and a coalition of teacher and administrative organizations that will provide increased benefits to active and retired CALSTRS members. Shortly before his deadline (September 30) for signing and vetoing bills the Governor signed into law not only the agreed upon package of retirement bills, but also other pieces of legislation that will significantly enhance benefits to both CALSTRS and CALPERS members.
As a reminder, the package of bills that the Governor agreed to sign, include the following:
AB 429 (Correa, D-Anaheim), Chapter 1027/00: Increases the monthly allowances for specified retired members by one to six percent, depending upon year of retirement.
AB 821 (Correa, D-Anaheim), Chapter 1028/00: Bases final compensation on the highest average annual compensation earnable by a member during a consecutive 12-month period of employment rather than the highest earnable compensation during any period of three consecutive school years. In order to be eligible a member would be required to have a minimum 25 years of service.
AB 1933 (Strom-Martin, D-Duncan Mills), Chapter 1029/00: Implements a longevity bonus for members with 30 or more years of service. STRS members with 30 or more years of service prior to January 1, 2001 will be eligible to receive $200 per month for 30 years of services, $300 per month for 31 years of service and $400 per month for 32 or more years of service.
AB 2700 (Lempert, D-San Carlos), Chapter 1021/oo: Makes all compensation for creditable service also creditable for inclusion in the State Teachers' Retirement Plan. Creditable compensation would include compensation received for summer school, intercession, department chair, coaching, etc. These provisions of the bill are not effective until July 1, 2002 or July 1, 2003 depending on certification by the Superintendent of Public Instruction of a 3.5% growth in the revenue limit.
SB 1435 (Johnston, D-Stockton), Chapter 1032/00: Requires CALSTRS to pay the Medicare Part A premium if the member is not eligible for Medicare Part A coverage on a premium free basis, including any penalties applicable to enrollment in Medicare Part A or Part B for members who enroll after the age of 65.
SB 1505 (Burton, D-San Francisco), Chapter 1026/00: Includes additional retirees in the eligibility pool for the minimum pension guaranteed allowance to members who are retiring under age 55 or are inactive.
In addition to the above retirement benefits package, Governor Davis also signed the following bills:
AB 1733 (Wildman, D-Los Angeles), Chapter 896/00: Increases the earning limit for retired STRS members from the current $19,600 to $22,000 for members who have been retired from service for less than one year. Additionally, the earnings limit is eliminated until 2008 for members who have been retired from service for more than one year. These provisions apply to all STRS members (both teachers and administrators). STRS members are eligible to return to work without any penalty in terms of reduction of retirement benefits based on any additional income that is earned. This legislation does not apply to PERS members.
AB 1009 (Correa, D-Anaheim), Chapter 483/00: Increases retiree benefits for PERS members to 80% of the purchasing power, as determined by the PERS board. Increases are to be paid for by employer assets.
AB 2177 (Correa, D-Anaheim), Chapter 1030/00: Clarifies and standardizes reporting of compensation and service for school employee members of PERS and requires school employers to pay employer contributions in a timely manner.
AB 2383 (Keeley, D-Boulder Creek), Chapter 874/00: Expands eligibility under Public Employees Medical and Hospital Care Act (PEMHCA) administered by PERS to include survivors of STRS members and authorizes school employers to include STRS members who work less than half-time, for coverage under PEMHCA.
California school and community college employees were the beneficiaries of a pretty good year for retirement enhancements, particularly STRS members.
--Arnold Bray