Bill Text: CA SB1353 | 2015-2016 | Regular Session | Chaptered

California Senate Bill 1353 (Prior Session Legislation)

Bill Title: State Teachers' Retirement System: funding.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Passed) 2016-09-14 - Chaptered by Secretary of State. Chapter 350, Statutes of 2016. [SB1353 Detail]

Download: California-2015-SB1353-Chaptered.html

BILL NUMBER: SB 1353	CHAPTERED
	BILL TEXT

	CHAPTER  350
	FILED WITH SECRETARY OF STATE  SEPTEMBER 14, 2016
	APPROVED BY GOVERNOR  SEPTEMBER 14, 2016
	PASSED THE SENATE  AUGUST 24, 2016
	PASSED THE ASSEMBLY  AUGUST 4, 2016
	AMENDED IN ASSEMBLY  JUNE 8, 2016
	AMENDED IN SENATE  MARCH 28, 2016

INTRODUCED BY   Senator Pan

                        FEBRUARY 19, 2016

   An act to amend Section 22955.1 of the Education Code, relating to
state teachers' retirement.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 1353, Pan. State Teachers' Retirement System: funding.
   Existing law, the Teachers' Retirement Law, establishes the State
Teachers' Retirement System and creates the Defined Benefit Program
of the State Teachers' Retirement Plan, which provides a defined
benefit to members of the program, based on final compensation,
credited service, and age at retirement, subject to certain
variations. The Defined Benefit Program is funded by employer and
employee contributions, investment returns, and state appropriations,
which are deposited or credited to the Teachers' Retirement Fund.
Existing law prescribes methods for calculating the amounts of
employer and employee contributions as well as state appropriations
for support of the system. For the 2017-18 fiscal year, and each
fiscal year thereafter, existing law requires the board to increase
or decrease certain percentages relating to the state appropriation
to reflect the contribution required to eliminate the unfunded
actuarial obligation of the system. Existing law prohibits these
requirements from being construed as applicable to any unfunded
actuarial obligation resulting from any benefit increase or change in
member or employer contribution rate under this part that occurs
after July 1, 1990.
   This bill would qualify this prohibition to clarify that specified
state contributions made in this regard be allocated to reduce any
unfunded actuarial obligation resulting from the benefits and
contribution rates in effect as of July 1, 1990.



THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 22955.1 of the Education Code is amended to
read:
   22955.1.  (a) Notwithstanding Section 13340 of the Government
Code, commencing July 1, 2003, a continuous appropriation is hereby
annually made from the General Fund to the Controller, pursuant to
this section, for transfer to the Teachers' Retirement Fund. The
total amount of the appropriation for each year shall be equal to
2.017 percent of the total of the creditable compensation of the
fiscal year ending in the immediately preceding calendar year upon
which members' contributions are based, as reported annually to the
Director of Finance, the Chairperson of the Joint Legislative Budget
Committee, and the Legislative Analyst pursuant to Section 22955.5,
and shall be divided into four equal payments. The payments shall be
made on, or the following business day after, July 1, October 1,
December 15, and April 15 of each fiscal year.
   (b) (1) Commencing July 1, 2014, the amount of the appropriation
required under subdivision (a) shall increase by the following
percentages of the creditable compensation upon which that
appropriation is based:
   (A) On July 1, 2014, by 1.437 percent.
   (B) On July 1, 2015, by 2.874 percent.
   (C) On July 1, 2016, by 4.311 percent.
   (2) For fiscal year 2017-18 and each fiscal year thereafter, the
board shall increase or decrease the percentage specified in this
subdivision from the percentage paid during the prior fiscal year to
reflect the contribution required to eliminate the remaining unfunded
actuarial obligation, as determined by the board based upon a
recommendation from its actuary. If a rate increase is required, the
adjustment may be for no more than 0.50 percent per year of the total
of the creditable compensation of the fiscal year ending in the
immediately preceding calendar year upon which members' contributions
are based. At any time when there is not an unfunded actuarial
obligation as determined by the board, the percentage specified in
this subdivision shall be reduced to zero.
   (c) Pursuant to Section 22001 and case law, members are entitled
to a financially sound retirement system. It is the intent of the
Legislature that this section shall provide the retirement fund
stable and full funding over the long term.
   (d) This section continues in effect but in a somewhat different
form, fully performs, and does not in any way unreasonably impair,
the contractual obligations determined by the court in California
Teachers' Association v. Cory, 155 Cal.App.3d 494.
   (e) Subdivision (b) shall not be construed to be applicable to any
unfunded actuarial obligation resulting from any benefit increase or
change in contribution rate under this part that occurs after July
1, 1990, except that state contributions made pursuant to subdivision
(b) shall be allocated to reduce the unfunded actuarial obligation
resulting from the benefits and contribution rates in effect as of
July 1, 1990.
   (f) The provisions of this section shall be construed and
implemented to be in conformity with the judicial intent expressed by
the court in California Teachers' Association v. Cory, 155
Cal.App.3d 494.
   (g) (1)  Except as described in paragraph (2), this section shall
become inoperative on July 1, 2046, and as of January 1, 2047, is
repealed.
   (2) Notwithstanding paragraph (1), on July 1 of the first fiscal
year after a 30-day notice has been sent to the Joint Legislative
Budget Committee and the Controller in compliance with subdivision
(d) of Section 22957, this section shall become inoperative and, as
of the following January 1, is repealed.