A piece of legislation that could provide teachers with thousands of additional dollars during their retirement years has been signed into law.
The CTA-sponsored measure, AB 1207 by Assembly Member Ellen Corbett (D-San Leandro), will allow K-12 school districts, county offices of education and community college districts to offer senior teachers up to two years of additional service and age credit in the State Teachers' Retirement System.
"This is an important measure that will reward senior teachers for long years of dedicated service, help protect the jobs of newer teachers and provide an incentive for highly qualified young people to enter the teaching profession," says CTA President Barbara E. Kerr.
The two types of retirement incentives have to be bargained as part of a local contract under AB 1207, which takes effect in January.
The options are:
- Two years of service credit;
- Two years of service credit and two years of age credit (referred to as "2+2") to determine the age factor for calculating the pension amount.
|
|
|
Chapters can bargain a special 2+2 option as an incentive for qualified educators wishing to retire, says CTA President Barbara E. Kerr. Teachers taking advantage of the opportunity could get two years of service credit and two years of age credit toward calculating their pensions. |
Because the district has to reimburse STRS for all of its costs, it must be able to show a net savings as a result of offering the options. Teachers would have a specific window of opportunity, the timing for which depends on when the district passes a resolution expressing its intent to offer the options. In the case of the two years of service credit, employees must retire between 60 and 120 days after the effective date of the resolution. If the district offers 2+2, employees must retire within whatever period is designated in the resolution.
The amount a district has to pay STRS depends on the individual's salary, age and years of service.
For example, an employee at age 60 with a salary of $5,727 per month and 29.542 years of service (no career or longevity bonuses) would cost the district approximately $112,000 for a 2+2 retirement.
The cost of offering two years of service credit, but not age credit, would be approximately $36,000.
To help a district determine the total cost of offering the credit, STRS will be sending out a circular containing information on the methodology and factors necessary to calculate the cost.
To take advantage of these options, employees must be eligible to retire already -- i.e., they must be vested and older than 55, or older than 50 with at least 30 years of credited STRS service.
Employees cannot purchase years to count toward this qualification nor can they purchase service credit to count toward highest year compensation bonuses, career bonuses or longevity bonuses.
The Legislature did not intend for educators who retire under AB 1207 to return to teaching quickly. Members will forfeit the Golden Handshake benefit if they:
- Reinstate to active service;
- Return to work in a California public school or community college district within one year;
- Return to work in the school district that grants them the retirement incentive within five years.
The authorization to purchase two years of service credit does not expire, but the 2 + 2 provision sunsets on Jan. 1, 2005, unless subsequent legislation extends the authorization period.
CTA is pursuing another Golden Handshake bill, AB 212 (Maze), which would authorize bargaining for two or four years of service credit, but no age credit. The CTA-supported measure is pending in the Senate Appropriations Committee and will resume its progress through the Legislature in the next session.
For more information, visit CTA's website www.cta.org and look for the AB 1207 article in the "Quick Click" section in the upper right hand corner of the core page or in the Politics and Legislation section.
