AD97-04 Issued 5-14-97 Creditable Service
All County Superintendents of Schools,
District Superintendents of Schools,
Community College Districts, and
Other Employing Agencies
Administrative Directive 97-04
The purpose of this Directive is to inform employers of the enactment of Assembly Bill 1298 (Chapter 592, Statues of 1995). This legislation added Section 22119.5 to the Education Code to define “creditable service” under the State Teachers’ Retirement System (STRS) Defined Benefit (DB) Plan. This Directive also informs employers of the amendments to Section 22119.5 pursuant to Assembly Bill 2673 (Chapter 608, Statutes of 1996), which became operative on July 1, 1996.
This Directive applies to all school district, community college districts, county superintendents of schools and other employing agencies that employ persons to perform creditable service under the STRS DB Plan.
Assembly Bill 1298 added Section 22119.5 to Part 13 of Division 1 of the Education Code to provide a definition of “creditable service” under the STRS DB Plan. The definition specifies various activities that are considered creditable service under the plan. This legislation also repealed several sections of Part 13 of Division 1 of the Education Code that addressed membership in the STRS DB Plan and incorporated pertinent provisions of the repealed sections into the definition of creditable service.
Assembly Bill 2673 (Chapter 608, Statutes of 1996) amended the definition of “creditable service” as set forth in Section 22119.5. The provisions of AB 2673 became operative on July 1, 1996, the effective date of the definition of “creditable service.” Therefore, the information provided in this Directive refers to the definition of “creditable service” as amended under the provisions of AB 2673.
Qualification for membership and the crediting of service in the STRS DB Plan are dependent upon the performance of “creditable service.” When determining whether or not a particular payment by an employer to a member constitutes creditable compensation under the plan, it is first necessary to determine if the payment was made for the performance of “creditable service” as defined in Section 22119.5.
Section 22119.5, as amended by Chapter 608, Statutes of 1996, states, in part:
22119.5. (a) “Creditable service” means any of the following activities performed for an employer in a position requiring a credential, certificate, or permit pursuant to this code or under the appropriate minimum standards adopted by the Board of Governors of the California Community Colleges or under the provisions of an approved charter for the operation of a charter school for which the employer is eligible to receive state apportionment or pursuant to a contract between a community college district and the United States Department of Defense to provide vocational training…”
Creditable service under the STRS DB Plan is limited to employment in California public schools for a school district, community college district, county superintendent of schools or other STRS employing agency. If a person is employed in pre-kindergarten through grade 12, the position in which he or she is employed must require that person to have the appropriate credential, certificate or permit issued pursuant to the Education Code to perform service in that position. If a person is employed in a charter school, membership in the DB Plan is governed by the retirement plan specified in the Charter as provided in Education Code Section 47611 and the provisions of the approved charter for operation of the school. If a person is employed in a community college, the position in which he or she is employed must require the individual to meet appropriate minimum standards adopted by the Board of Governors of the California Community Colleges.
The program or position in which the person is employed must be eligible to receive state apportionment. Due to the limitations of state funding, it is not necessary that state apportionment actually be received. The one exception to the requirement that the program or position be eligible for state apportionment is service performed pursuant to a contract between the community college by which the person is employed and the United States Department of Defense to provide vocational training.
The following activities are specifically identified as creditable service under subdivision (a) of Section 22119.5:
- The work of teachers, instructors, district interns and academic employees who are employed in the instructional program for pupils in California public schools. The instructional program for pupils includes special programs such as adult education, regional occupation programs, child care centers, and prekindergarten programs established pursuant to the provisions of Education Code Section 22161.
Service as a teacher or instructor in “community service, ” “fee-split” or “not-for-credit” classes is not included in the definition of creditable service. A person employed to provide instruction in these types of classes would not usually be required to have a credential, certificate or permit; nor, if employed in a community college, to meet the appropriate minimum standards adopted by the Board of Governors of the California Community Colleges. The program or position in which the person is employed would not be eligible for state apportionment. This type of employment constitutes “classified service,” which is not creditable and should not be reported to STRS.
Some employers have previously reported compensation for this classified service as creditable if the instructor was already a member of the STRS DB Plan. In order to maintain continuity in retirement benefits for these members, Section 22712.5 was added to the Education Code by Senate Bill 2041 (Chapter 634, Statutes of 1996). Under the provisions of Section 22712.5, a member who received service credit for instruction in community service, fee-split, or not-for-credit classes during the 1995/96 school year, may continue to have compensation for that service reported as creditable provided the member remains continuously employed to perform that service. A member who did not receive service credit for instruction in community service, fee-split, or not-for-credit classes during the 1995/96 school year may not have compensation reported to STRS for such service performed after June 30, 1996.
- Education or vocational counseling, guidance and placement services for pupils in California public schools.
- The work of directors, coordinators and assistant administrators who plan courses of study to be used in California public schools, or who perform research connected with the evaluation or efficiency of the instructional program.
- The selection, collection, preparation, classification, demonstration or evaluation of instructional materials of any course of study for use in the development of the instructional program in California public schools, or other services related to public school curriculum.
- The examination, selection, in-service training or assignment of teachers, principals or other similar personnel involved in the instructional program in California public schools.
- School activities related to, and an outgrowth of, the instructional and guidance program of the school when performed in addition to other activities described in this section within the hours considered normal for service by full-time employees within that class of employees.
- The work of nurses, physicians, speech therapists, psychologists, audiometrists, audiologists and other school health professionals.
- Services performed as a school librarian.
- The work of employees who are responsible for the supervision of persons who perform the activities described in paragraphs (1) through (8) of subdivision (a) of Section 22119.5, or who are responsible for administration of the activities described in paragraphs (1) through (8) of subdivision (a).
Subdivision (b) of Section 22119.5 provides that “creditable service” also means the work of superintendents of California public schools. The service performed by a county or district superintendent of schools is therefore creditable service whether or not the person has a credential, certificate or permit issued pursuant to the Education Code to perform that service.
Subdivision © grants final authority to the Teachers’ Retirement Board to determine if activities that are not specified in Section 22119.5 are creditable service under the STRS DB Plan. This allows for a timely decision concerning any activities that were not previously identified or anticipated.
Employers must determine creditable service in accordance with the provisions of the Teachers’ Retirement Law and this Administrative Directive for the purpose of deciding when an employee is eligible for membership in the STRS DB Plan and for reporting an employee’s service and compensation to STRS. All STRS creditable service must be reported to STRS, whether or not the compensation for that service is determined to be creditable compensation. Employer questions regarding this Administrative Directive should be directed to your assigned STRS Reporting Section Technician or Analyst.
JAMES D. MOSMAN
Chief Executive Officer