Copyright© 2000 by School Services of California, Inc.
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STRS Earning Cap Limitations
Q. I am a Human Resource officer for a local district, under the provisions of AB 141 I was able to employ several retired administrators on a short-term basis to fill administrative positions. These positions have been advertised and in some cases have been difficult to fill. It is my understanding that the provisions of AB 141, which authorized districts to employ retired administrators without a negative impact on their retirement benefits, will expire on December 31, 2000. I recently became aware of AB 1733 which lifts the cap on the amount of earning a retired STRS member can earn; does AB 1733 take the place of AB 141 and give districts the flexibility to hire retired administrators to help in an emergency or employ temporarily in hard to fill position?
A. You are correct. AB 141 does "sunset" on December 31, 2000. However, AB 1733, by Assembly Member Wildman (D-Los Angeles), which becomes effective January 1, 2001 does not provide the identical authorization that AB 141 provided. AB 1733 contains two major provisions: (1) it raises the earnings cap to $22,500 for STRS members for the first year of retirement; and, (2) lifts the earnings cap entirely for retired STRS members who have not been employed for 12 consecutive months.
The second provision of AB 1733 should be a benefit to districts wishing to hire a retired administrator because there is no cap on the amount of salary that can be paid as long as the individual has not been employed for 12 consecutive months. Retired administrators currently employed by a district or having been employed within the past 12 months would not be eligible to benefit from the "lifting of the cap." However, they would be able to benefit from the increase in the earnings cap to $22,500.
--Arnold Bray