Urgent! Legislative Coordinators:
Urge Lawmakers to Okay CalSTRS Restoration Bill
CTA has been leading the fight to win back $500 million in state funds withheld from the State Teachers' Retirement System (CalSTRS) during 2003.
The funds should have gone to CalSTRS's Supplemental Benefits Maintenance Account (SBMA). That fund underwrites a pension purchasing power guarantee for long-retired STRS members.
The guarantee helps protect them against the long-term ravages of inflation. Without this adjustment, inflation would hit their pocketbooks very hard.
The Assembly is now considering key CTA sponsored legislation, AB 55 by Assembly Member Gene Mullin (D-South San Francisco), which would restore the funds to CalSTRS.
The Mullin measure cleared the Assembly Public Employees, Retirement, and Social Security Committee on Wednesday, March 16 on a bipartisan vote.
The bill is now headed to the Assembly Appropriations Committee for its next consideration, but Legislative Coordinators should direct their communications to all members of the Legislature.
To clear the Assembly, the bill will need a two-thirds vote.
Background
The total -- $500 million -- was withheld from CalSTRS in 2003.
There was an implicit promise that the funds would be paid back - as have prior borrowings from employee retirement funds. To date, no legislation has been approved that will restore the funds or will make that promise explicit.
Ultimately, all CalSTRS members could be hurt directly by this funding shortfall.
Over time, current and future CalSTRS members would benefit from the fund because it provides an inflation adjustment that boosts their monthly pension payments to help preserve their buying power.
Those retirees who are currently receiving the quarterly "purchasing power" adjustment checks are mostly retired women teachers in their eighties. Virtually all retired years ago on modest salaries.
Make These Points to Lawmakers
- During 2003, the state withheld $500 million from CalSTRS that should be helping protect a group of elderly retirees against the ravages of inflation.
- As a result of an already approved CTA-backed bill, these moneys are fully vested. The state has both a moral and legal obligation to restore these funds.
- Providing the funding will help send the message that California values its teachers and is willing to protect their stable retirement.
Here's What Coordinators Should Do
Because the bill needs a two-thirds' legislative majority, Coordinators should encourage all CTA members and other CalSTRS members to write to their own Assembly Member and state Senators, c/o The State Capitol, Sacramento, CA 95814, in support of AB 55 (Mullin).
For more information, contact CTA Legislative Advocate Bill Collins or GR Communications Consultant Len Feldman at 916.325.1500.