Copyright© 2000 by School Services of California, Inc.
Ask SSC . . .
More on Retirement Legislation
Q. AB 2700 was one of several STRS reform
bills recently signed by Governor Davis. I have two questions related to
this piece of legislation.
While the law appears to be quite clear regarding the implementation date (January 1, 2001) for AB 821 (highest 12 consecutive months of creditable compensation) and for AB 1933 (longevity bonus), I am not exactly clear as to the implementation date or the definition of academic-related service associated with AB 2700.
I would appreciate it if you could clarify this for me. We've had some employees this year who absorbed extra teaching assignments because they're contemplating retirement and the teachers' association told them that this "extra teaching" period would be attached to their final year compensation effective January 1, 2001. I suspect that this may be misleading.
A. You are correct about the effective date of AB 2700. It will go into effect January 1, 2002 if the statewide COLA is 3.5% or greater. If the COLA is less than 3.5% in 2002, the bill will not become effective until 2003. The 2003 date has no strings attached. So, in answer to your first question, you are correct in stating that those teachers performing these "new creditable service" activities now will not have them included in their final 12-month compensation period anytime prior to January 1, 2002, at the earliest.
Your second question is less clearly defined in the statute and in related and referenced Education Code Sections. We do know for sure that the activities outlined in Education Code Section 22119.5 will be included whenever this law goes into effect (2002 or 2003). This section defines "creditable service" in nine items. Items 1, 2, 3, 4, 5, 7, 8, and 9 are all defined positions that require credentials for service (such as nurses, teachers, librarians, curriculum specialists, and even superintendents) with the exception only that child care centers and pre-kindergarten programs are included.
Item 6 states: "School activities related to, and an outgrowth of, the instructional and guidance program of the school when performed in addition to other activities described in this section within the hours considered normal on a full-time basis for full-time employees of the employer."
This definition would seem to take care of the department chair who receives a stipend for taking on the position, who teaches three periods, and who is department chair as well. I cannot find anything in the law that would allow us to count coaching stipends for creditable service.
One interpretation of what will be allowed as creditable service is found in the Senate Appropriation Committee analysis, which states: "Under AB 2700, all compensation will be creditable and all contributions for service in excess of one year of service shall be placed in the Defined Benefit Supplement Program." A second interpretation is found in the Assembly Committee on Public Employees, Retirement and Social Security analysis:
"Makes all compensation received by a member of the State Teachers' Retirement System (CalSTRS) creditable . . . Specifically, this bill revises and recasts the definition of creditable compensation to include all money paid by an employer to a CalSTRS member for creditable service including overtime, summer school and intercession."
Our opinion is that the CalPERS Board will have to provide regulations that define whether or not there are paid activities outside of the regular school day that will be allowed to count for "creditable service." Will activities like club sponsorship, drill team, and coaching count? The language in the bill is, at least to this reader, unclear at best.
--Carol Berg