For more stories like this, sign up for the PLANSPONSOR NEWSDash daily newsletter.
Compliance August 11, 2003
Bill Gives Back $500 Million To CalSTRS
August 11, 2003 (PLANSPONSOR.com) - The California
State Teachers' Retirement System (CalSTRS) will be getting
back $500 million it is owed under a recently passed state
Assembly bill.
Reported by Eric Hazard
By a vote of 80-0, the state Assembly approved AB 265 that requires the state to restore to the pension system the 2003-04 payment of $500 million – plus interest – that the state has withheld from CalSTRS in order to fill a budget deficit, according to a California Educator report.
>The deferred payment comes from the CalSTRS Supplemental Benefits Maintenance Account, which underwrites the cost of protecting teachers’ pensions against inflation. The funds are used to adjust CalSTRS retirees’ pensions so that the amount paid each month has at least 80% of the buying power of the retiree’s original pension. Without the repayment, CalSTRS will find it harder to raise the guarantee above 80% in future years.
To become law, AB 265 still needs the approval of the state Senate and the governor’s signature.