This year the Legislature approved and the Governor signed the following bills that affect CalSTRS members.
These new laws are summarized below. For more in-depth information please visit the
Legislation pages.
Unless otherwise stated, new laws take effect on January 1, 2007.
Sponsored by CalSTRS and Signed Into Law:
Assembly Bill 2462 (Mullin)
Chapter 780, Statutes of 2006
Specifies key components of due diligence that school employers must perform during their selection
of a third party administrator for their deferred compensation plans, including CalSTRS.
Also authorizes CalSTRS to supply, or contract to supply, fiduciary, recordkeeping and administrative
services for school employer-sponsored deferred compensation plans (403(b) and 457 plans) to districts
that elect to contract with CalSTRS for those services. Because of IRS regulations that will take effect
next year, employers who provide deferred compensation plans will have increased involvement in the
administration of their plans. Many employers, often small or rural ones, don't have the expertise to
perform the required tasks. Under this legislation, CalSTRS will establish a program to provide those
services for school districts.
Senate Bill 1207 (Alarcon)
Chapter 871, Statutes of 2006
Allows the use of majority voting to elect a member of the board of directors of a publicly-traded,
California corporation in an uncontested election. SB 1207 furthers the Board's goal of promoting
best corporate governance practices and help ensure that shareholders have a meaningful vote when
nominees who do not represent the interests and philosophy of shareholders run uncontested in
corporate board elections.
Senate Bill 1465 (Soto)
Chapter 654, Statutes of 2006
Establishes a threshold for the payment and collection of benefit adjustments,
adjusts benefit calculations for some
community college instructors part-time and community college adult education instructors
and provides a monthly benefit to dependent children under the Coverage B Survivor Benefits
Program when there is no surviving spouse or partner at the time of the active member's death;
changes service credit purchase and benefit calculation provisions, including time served in
the Peace Corps; eliminates two redundant Legislative reports.
Senate Bill 1466 (Public Employment & Retirement Committee)
Chapter 655, Statutes of 2006
Makes a variety of technical and conforming changes to the Teachers' Retirement Law to
facilitate efficient administration of the System, as well as provides for the new joint
and survivor options and annuities provided by the Teachers' Retirement Plan.
Also Signed Into Law:
Assembly Bill 2941 (Koretz)
Chapter 442, Statutes of 2006
Prohibits CalSTRS and CalPERS from investing in a company with business operations in Sudan and establishes
statutory criteria for determining whether a company has business operations in Sudan. Indemnifies from the
General Fund all past, present and future board members, officers, employees and investment managers from
liability sustained by reason of any decision not to invest in companies with business operations in Sudan.
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