Protecting Pensions:
CTA is working with two lawmakers to move a sponsored measure that would guarantee the State Teachers' Retirement System (STRS) repayment of $500 million in payments the state is proposing to withhold for the coming year.
AB 265, by Assembly Member Gene Mullin (D-South San Francisco) and Assembly Member Gloria Negrete McLeod (D-Chino), would require the state to repay the deferred money, with a fair rate of interest.
The first payment to make up for the deferral would be due in 2010, with the final one due in 2020.
The issue is an important one for current and future STRS retirees. The annual state payment goes to the STRS Supplemental Benefits Maintenance Account (SBMA). Funds in that account are used to underwrite the costs of the pension protection guarantee that limits the impact of inflation on STRS retirees' pensions.
In 2000, CTA won legislative approval to raise the guarantee to 80% of pensions' original purchasing power. A reduction in funding for the SBMA would not jeopardize that protection, but it would make it difficult for CTA and STRS to boost that percentage above the 80% level.
Many lawmakers who voted for a recent budget-balancing measure - SB 28x - that included the STRS payment deferral told CTA representatives they thought the bill included a guaranteed repayment plan that would make STRS whole.
Learning that the measure did not contain the "hold harmless" language, they have begun committing themselves to voting for AB 265.
CTA Members:
Ask your Assembly Member to support AB 265 (Mullin and Negrete McLeod). Then ask her or him to sign on as a co-author.