The Joint Legislative Committee on Public Employee Pensions released its final report last week, keeping ACSA representatives busy at press time analyzing its provisions to determine how, exactly, current and future educators would be impacted.
Released Aug. 28, the report was outlined in Assembly Bill 340, Furutani, D-Long Beach, which was scheduled to be voted upon by both houses of the Legislature Aug. 31, after EdCal went to press. It then goes to the governor for his signature or veto and, if signed, goes into effect Jan. 1, 2013.
Details and thorough analysis will be posted at www.acsa.org/advocacy.
ACSA’s main concerns with the pension changes outlined in the Conference Committee’s report primarily affect new hires, including an annual cap on creditable compensation; calculating final compensation using a three-year average; increasing the retirement age; and requiring employees to cover at least half the normal cost of their benefit.
For members of the California State Teachers Retirement System, the cap on creditable compensation would be $132,120. The new STRS retirement formula would be 2 percent of final compensation per year of service at age 62, instead of age 60, with a maximum 2.4 percent at 65. A preliminary analysis of contribution rates suggests there would be only a slight increase to employees.
Although the bulk of the Conference Committee’s report does not apply to current ACSA members, who are primarily members of CalSTRS, there are concerns that the changes will have a negative impact on the profession of school leadership as a whole. Research has repeatedly shown that quality leaders are key to successful schools, and sweeping changes will make it difficult to recruit educators to the profession.
“ACSA fears the reduction in retirement benefits will discourage skilled, talented teachers from pursuing a career in school leadership,” said ACSA Interim Executive Director Karen Stapf Walters. “Research has shown that current incentives have been effective in recruiting and retaining quality school leaders.”
In addition, CalSTRS members do not receive Social Security benefits. Coupled with pay cuts, this means they are taking a double hit when they retire.
“ACSA believes every educator deserves an adequate retirement,” Walters said. “These reforms further diminish the financial security of our state’s dedicated educators.”
Among the changes expected for current hires are elimination of the ability to purchase service credit, known as airtime, and forfeiture of benefits if a felony is committed in the course of performing official duties.
The pension reform bill would extend by one year the provisions of AB 178, Gorell, R-Westlake Village, which eliminates the waiting period for retirees who reinstate to active service and changes the post-retirement earnings limits to just above $41,000 annually. These provisions would now sunset June 30, 2014.
The bill would make conforming changes to provisions of the Education Code administered by CalSTRS.