On February 26, 2015, Assembly Member Susan Bonilla introduced Assembly Bill 963.  The bill addresses concerns regarding membership in the California State Teachers’ Retirement System (“STRS”) that originally arose out of STRS’ audit of the San Francisco Community College District (SFCCD) in August 2012.  In its audit, STRS found that positions SFCCD had designated as Educational Administrators were not eligible for STRS membership.  These positions included the Director of Human Resources, Chief Financial Officer, and Chief Information Technology Officer, among others.  STRS found that the administrators did not perform “creditable service” as defined in Education Code section 22119.5.  As we have previously reported, STRS removed SFCCD employees and retirees from the system that it determined were not eligible for membership.  In addition, these administrators had to be retroactively enrolled in membership with the California Public Employees’ Retirement System (“CalPERS”).

STRS issued a Circular Letter in August 2012 regarding positions that are not eligible for STRS membership.  STRS wrote that in order for a position to be creditable to STRS, the primary functions of the position must be that of an academic or certificated employee as defined under the Education Code, including instruction, curriculum or material development, school health professionals, counselors, or librarians.  Additionally, positions responsible for supervising the positions listed above are academic positions eligible for STRS membership (e.g. dean of instruction).  An employee of a community college or K-12 school district who does not perform STRS-creditable service, should instead be a member of CalPERS.

In November 2013, STRS created a one-time 180-day window for employees performing duties not creditable to STRS, but who had previously been a member of STRS from prior academic or certificated employment, to exercise an option to have his or her otherwise CalPERS-creditable service credited to STRS.  However, this did not address concerns regarding employees and retirees that did not perform STRS creditable service in a prior position.

In addition to clarifying the definition of creditable service, Assembly Bill 963 addresses these concerns by proposing the addition of Education Code section 22119.6.  Section 22119.6 would provide that creditable service includes activities that do not meet the definition of creditable service under Section 22119.5, but were performed by an employee of a community college or K-12 school district on or before December 31, 2015, and were reported as creditable service to STRS.  This amendment would allow employees whose membership in STRS is now uncertain to remain in STRS.  Employees hired on or after January 1, 2016 would remain subject to the definition of creditable service set out in Section 22119.5.

We will keep you updated on any developments regarding Assembly Bill 963.