Governor signs two STRS bills
The Governor signed CTA - sponsored SB 102 (Burton) and AB 1852 (Mullin) into law on Sept. 30. They will take effect on January 1, benefiting STRS members who retire from that date on.
Under CTA - sponsored AB 1102 (Knox), enacted in 1998, unused sick days for all STRS members now count towards regular retirement service credit, but not the lucrative bonuses. Subsequent CTA - sponsored legislation established boosts in STRS pensions at specified years of service:
- Career bonus (0.2% added to the age factor) at 30 years of service (AB 1102)
- "Highest year Comp" at 25 years of service (AB 821 Correa, 2000)
- Longevity incentive - $200, $300 or $400 per month at 30, 31 or 32 years of service. (AB 1933 Strom-Martin, 2000)
The average STRS retiree receives an additional $170,000 for life by qualifying for these bonuses. Unused sick days do not count in qualifying for the bonuses. The educator must have worked the days, whether within or outside of California.
Under current law, those who are below a full year of service credit for any reason may make up the additional days in a subsequent school year (Overtime work for those already working a full year does not provide service credit, because members cannot earn more than one year of service credit in the year).
SB 102 would provide an exception to the requirement that only days actually worked count towards the bonuses. It provides that 0.2% of the educator's contract days will be used in qualifying them for the bonuses. For a 180-day contact year, that would be 36 days. Assuming they have enough unused sick days, educators will not have to delay retirement and work the additional days to retire with 25, 30, 31 or 32 years of service.
Enactment of SB 102 achieves a goal CTA has pursued for three years, and which was in doubt due to the Governor's Department of Finance seeking its veto. SB 102 was co-sponsored by CalSTRS, which despite its under funded status, advised that it is able to absorb the modest cost of this bill.
AB 1852 (Mullin) makes these changes:
1. It repeals the requirement that retiring CalSTRS members who wish to take a portion of their pension in a lump sum must be over 60 years, 3 months of age.
2. It also eliminates the prohibition on school district recipients of the retirement incentive ("Golden Handshake") from accepting work in any district other than the one from which they retired within one year.
In other words, Golden Handshake recipients can work immediately in any district other than the one from which they retired. They will still be subject to the post-retirement earnings limitation of current law (now $27,000/year) unless they do not teach at all for a full year. We were unable to reduce the 5-year "sit out" requirement of current law that provides for loss of the Golden Handshake increase by those who teach even a single day in the district from which they retired.
3. AB 1852 also applies the same return to work restrictions to employees of county office and community colleges, which had been inadvertently omitted from last year's legislation.