SENIOR SENATE PROPOSAL NO. 19

INTRODUCED BY SENIOR SENATOR FAUSTMAN

LEGISLATIVE COUNSEL'S DIGEST

SP 19:  TEACHERS' RETIREMENT BENEFITS.

EXISTING LAW REQUIRES THE LEGISLATURE TO APPROPRIATE MONEYS TO ENSURE THE FUNDING OF SUPPLEMENTAL BENEFITS TO PROTECT THE PURCHASING POWER OF RETIREMENT ALLOWANCES PAID TO-RETIRED MEMBERS OF THE DEFINED BENEFIT PROGRAM OF THE TEACHERS' RETIREMENT PLAN.  IN THE 2003-04 FISCAL YEAR, THAT APPROPRIATION WAS DECREASED BY $500,000,000.

THIS MEASURE WOULD MEMORIALIZE THE LEGISLATURE AND THE GOVERNOR TO ENACT LEGISLATION THAT WOULD REPAY THAT $500,000,000, PLUS INTEREST, TO THE TEACHERS' RETIREMENT FUND AND GUARANTEE THAT THOSE SUPPLEMENTAL BENEFITS THAT PROTECT THE PURCHASING POWER OF THOSE RETIREMENT ALLOWANCES ARE FULLY VESTED AND PAID.

VOTE: MAJORITY.

SP 19: RELATING TO TEACHERS' RETIREMENT BENEFITS

WHEREAS, EXISTING LAW REQUIRES THE STATE TO MAKE CONTRIBUTIONS TO THE SUPPLEMENTAL BENEFIT MAINTENANCE ACCOUNT IN THE TEACHERS' RETIREMENT FUND EQUAL TO 2.5 PERCENT OF CREDITABLE COMPENSATION FOR THE FISCAL YEAR; AND

WHEREAS, IN THE 2003-04 FISCAL YEAR, THAT APPROPRIATION WAS DECREASED BY $500,000,000; AND

WHEREAS, SUPPLEMENTAL BENEFITS PAID TO RETIRED TEACHERS AND OTHER MEMBERS OF THE DEFINED BENEFIT PROGRAM OF THE TEACHERS' RETIREMENT PLAN ARE VESTED ONLY TO THE EXTENT OF AVAILABLE FUNDING AND, THEREFORE, ARE JEOPARDIZED WHEN THE LEGISLATURE FAILS TO PROVIDE ADEQUATE FUNDING FOR THE PAYMENT OF THOSE BENEFITS; AND

WHEREAS, THE EROSION IN PURCHASING POWER THAT RESULTS FROM THE REDUCTION OR NONPAYMENT OP SUPPLEMENTAL BENEFITS MAY CAUSE EXTREME HARDSHIP FOR THOSE WHO HAVE WORKED IN GOOD FAITH FOR THE STATE EDUCATION SYSTEM FOR MANY YEARS; NOW, THEREFORE, BE IT

RESOLVED, BY THE SENIOR SENATE AND THE SENIOR ASSEMBLY JOINTLY, THAT THE SENIOR LEGISLATURE OF THE STATE OF CALIFORNIA AT ITS 2004 REGULAR SESSION, A MAJORITY OF THE MEMBERS VOTING THEREFOR, HEREBY PROPOSES THAT THE LEGISLATURE SHALL REPAY, OVER A REASONABLE PERIOD OF TIME, TO THE SUPPLEMENTAL BENEFIT MAINTENANCE ACCOUNT OF THE TEACHERS' RETIREMENT FUND THE $500,000,000, PLUS ACCRUED INTEREST, THAT IT FAILED TO APPROPRIATE IN THE 2003-04 FISCAL YEAR; AND BE IT FURTHER

RESOLVED THAT THE LEGISLATURE SHALL GUARANTEE THAT SUPPLEMENTAL BENEFITS THAT PROTECT THE PURCHASING POWER OF RETIRED TEACHERS' SHALL BE FULLY VESTED AND PAID AS PROMISED; AND BE IT FURTHER

RESOLVED, THAT THE SENIOR LEGISLATURE OF THE  STATE OF CALIFORNIA RESPECTFULLY MEMORIALIZES THE LEGISLATURE AND THE GOVERNOR OF THE STATE OF CALIFORNIA TO ENACT APPROPRIATE LEGISLATION THAT WOULD ADDRESS THE CONCERNS SET FORTH IN THIS MEASURE; AND BE IT FURTHER RESOLVED, 

THAT A COPY OF THIS MEASURE BE TRANSMITTED TO THE SPEAKER OF THE ASSEMBLY, THE PRESIDENT PRO TEMPORE OF THE SENATE, AND THE GOVERNOR OF THE STATE OF CALIFORNIA.