Senate Passes Leyva Bill Improving Retirement Security for Charter School Teachers

SB 1343 Requires New Charter Schools to Participate in CalSTRS / CalPERS

SACRAMENTO – On Wednesday, legislation authored by Senator Connie M. Leyva (D-Chino) to ensure that every teacher in California has the retirement security offered by our state pension systems passed from the California State Senate.

Sponsored by the California Federation of Teachers and supported by the California Labor Federation, California School Employees Association, California State Teachers’ Retirement System and California Teachers Association, SB 1343 will specifically require newly created charter schools to participate in the California State Teachers’ Retirement System (CalSTRS) and/or the California Public Employees’ Retirement System (CalPERS). This measure also puts safeguards in place for retirement payments when a charter school falls behind or shuts its doors completely.

SB 1343 creates an automatic payment stream, requiring a County Office of Education to send payment to CalSTRS and CalPERS for charters in their geographical boundaries when a charter’s education funding dollars are disbursed from the state.

“SB 1343 will ensure that employees at newly created charter schools—which are funded with public dollars—have access to the same retirement opportunities as other employees. Regardless of where they may teach, all teachers should be able to access a defined benefit system to improve their quality of life when they retire,” Senator Leyva said. “Without access to CalSTRS or CalPERS, many charter school teachers are unfortunately left with retirement options that can depend far too much on the stock market—and the risk primarily on themselves and their loved ones. California teachers guide and educate our next generation of leaders, so it is vital that we give them access to a secure retirement after so many years of public service. I thank my Senate colleagues for supporting this important measure that will uplift teachers across California and help to safeguard their economic future.”

Unlike a traditional public school, a charter school can select whether to allow its employees to join the state’s public pension system or offer an alternative retirement benefit, such as Social Security or a 401(k).

Since the enactment of the 2014 CalSTRS Funding Plan, an increasing number of charter schools are choosing alternative retirement benefit options. Before the 2014 CalSTRS Funding Plan was adopted, only about 10 percent of newly created charter schools each year chose not to participate in CalSTRS. Since the Funding Plan’s enactment, however, nearly 33 percent of newly created charter schools each year choose not to allow their employees to participate in CalSTRS.

Following the approval by the California State Senate, SB 1343 will now move to the California State Assembly for consideration.

Per the Bill:

LEGISLATIVE COUNSEL’S DIGEST

SB 1343, as amended, Leyva. Public employees’ retirement: charter schools.

(1) The Teachers’ Retirement Law establishes the State Teachers’ Retirement System (STRS) 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. Existing law also establishes the Cash Balance Benefit Program for the purpose of providing a retirement plan for specified teachers whose service is less than 50% of the full-time equivalent for the person’s position or who are employed on a temporary basis or as a substitute, as specified. The Cash Balance Benefit Program and STRS are administered by the Teachers’ Retirement Board. The Public Employees’ Retirement Law establishes the Public Employees’ Retirement System (PERS), which provides defined benefits to members of the system based on final compensation, credited service, and age at retirement, subject to certain variations. PERS is administered by its board of administration. The California Constitution grants plenary authority for the administration of a public pension or retirement system to its retirement board, as specified, and provides that the assets of a retirement system are trust funds, as specified.

Existing law creates the Teachers’ Retirement Fund, which is continuously appropriated, and into which are deposited employer, state, and employee contributions, as well as funds connected with the Cash Balance Benefit Program. Existing law creates the Public Employees’ Retirement Fund, which is also continuously appropriated, and into which, among other assets, employer and employee contributions are deposited.

The Charter Schools Act of 1992 authorizes the establishment and operation of charter schools. Existing law authorizes charter schools to elect to make STRS, PERS, or both available to qualifying employees.

This bill would require charter schools authorized on and after January 1, 2023, to participate in STRS or PERS, or both. The bill would specify that this provision does not apply to an employee of a charter school if, prior to January 1, 2023, the employee was not already a member of STRS or PERS, unless the employee requests to become a member of STRS or PERS when the charter school is reauthorized on and after January 1, 2023. charter schools seeking a renewal authorization on or after January 1, 2023. The bill would generally require STRS, the Cash Balance Benefit Program, and PERS to apply to charter schools in the same manner as the systems and program apply to other public schools. For The bill would require the chartering authority to provide notice to STRS or PERS, as applicable, of the occurrence of specified events, including approval of a charter school petition, within 30 days of the event’s occurrence, on a form prescribed by the system.

For the purpose of paying contributions on behalf of a charter school, the bill would require a county superintendent, district superintendent, or other employing agency that reports directly to STRS, upon state apportionment to a charter school, to draw requisitions against the funds of the charter school in amounts equal to the estimated contributions required to be paid by the charter school to STRS, as specified, and pay them to the system. The bill would prohibit these requisitions from exceeding an estimated 3 months of contributions to be paid by the charter school. The bill would also require a county superintendent, district superintendent, or other employing agency that reports directly to the retirement system to use any unencumbered funds, otherwise legally available for this purpose, to pay for any amounts due to the system that remain unpaid. The bill would require the estimated amount to be determined by the county superintendent, district superintendent, or other employing agency. The bill would create similar requirements and prohibitions for purposes of requisitions related to the Cash Balance Benefit Program and PERS. By depositing additional moneys in continuously appropriated funds, this bill would make appropriations. an appropriation.

(2) Existing law requires a county superintendent, district superintendent, chancellor of a community college district, or other employing agency that reports directly to the STRS to draw requisitions for contributions required pursuant to specified provisions in favor of the system. Existing law requires employers participating in STRS to contribute monthly a specified percentage of the creditable contribution upon which member contributions are based in connection with funding the liability for benefits related to accumulated and unused sick leave.

This bill would require that the monthly contributions for benefits related to accumulated and unused sick leave be subject to the above-described requisition process.

2 comments

Tough Love May 26, 2022 - 7:45 pm

What a joke ! Defined Benefit pensions …. long gone form the Private Sector due to their VERY high cost ……. shouldn’t be expanded for new or existing workers. In fact, FAIRNESS to CA’s Taxpayers would call for an immediate freeze towards ANY further accruals in these Plans for EXISTING as well as new workers.

But of course we know that CA’s politicians not only won’t do what right, just, and FAIR, but will continue to expand such benefits and abuse their States Taxpayers because they simply can’t resist the block-voting and campaign contributions of the Teachers (and all other PUBLIC Sector) Unions that they please with all the give-aways.

And please enlighten me …………… almost NOBODY in the Private Sector gets employer-sponsored (and often free or very heavily subsidized) retiree healthcare benefits any longer …….. so why shouldn’t such benefits immediately END for Public Sector workers?

Tough Love May 26, 2022 - 7:49 pm

Did you notice these words …. “This measure also puts safeguards in place for retirement payments when a charter school falls behind or shuts its doors completely.”

“Safeguard” my foot ! Translation ……….. if a charter school goes belly-up and there is no money or insufficient money to pay the pensions ………….. they’ll stick the Taxpayers with the bill.

Comments are closed.

Senate Passes Leyva Bill Improving Retirement Security for Charter School Teachers

Press Release

LEGISLATIVE COUNSEL’S DIGEST

CHP Investigating Fatal Crash on Highway 4 near Bailey Road Off-Ramp

Senate Approves Wine, Spirits Bottle Recycling Bill Clears

You may also like

2 comments