EIC96-6 Volume 12 Issue 6
Proposed Legislation (AB1068): Exemption from Post-Retirement Earnings Limit for Class Size Reduction Program

Information Circular

The State Teachers’ Retirement System (STRS) is working with the Legislature and the Department of Education in pursuing emergency legislation that would allow STRS to waive the earnings limitation for members who retired for service and are hired to fill vacancies created by the Class Size Reduction Program. The effective period for this legislation would be from July 1, 1996 through July 1, 1999.

An Administrative Directive will be issued upon passage of the legislation to provide detailed information regarding implementation and the eligibility criteria. STRS will not approve waivers until the new legislation has been enacted.

The Teachers’ Retirement Law currently provides a limitation on the amount that a retired member may earn in a school/fiscal year. The passage of the proposed statute would expand the options available for school districts to employ retired STRS members to reduce class sizes.

The proposed legislation would allow school districts to employ members retired for service if the following eligibility criteria are met:

  • The member retired for service with an effective date on or before July 1, 1996.
  • The retired member is employed by a school district to provide direct instruction to students in grades Kindergarten through 12.
  • The employment is necessary to meet the objective of the Class Size Reduction Program set forth in the California Education Code commencing with Section 52120 (as enacted by Chapter 163, Statutes of 1996).

The school district would be required to submit documentation to substantiate the eligibility of the employment of a member retired for service for the exemption from Education Code 24214 (d), (e) and (f). STRS would also require that the documentation be signed by an authorized representative of the school district. The format of this documentation is currently in development and will soon be available from STRS.

The following conditions would apply to the proposed exemption:

  • All members retired for service whose employment with a school district meets the specified conditions shall be treated as a distinct class of temporary employees within the existing bargaining unit.
  • The rate of pay for service performed shall be the rate established in accordance with subdivision (b) of Education Code Section 24214 and agreed to in the collective bargaining agreement between the employer and the exclusive representative for employees of the school district.
  • The school district that employs a member retired for service shall maintain accurate records of the retired member’s earnings and shall report those earnings monthly to STRS regardless of the method of payment or the source of funds from which the earnings are paid.

The proposed legislation would allow a member who retired for service with an effective date on or before July 1, 1996, and who, between July 1, 1996 and 60 days following the effective date of the legislation, terminated his or her service retirement allowance and returned to employment that qualifies for the exemption to cancel his or her reinstatement and return to status as a member retired for service as if the service retirement allowance had not been terminated.

STRS’ goal is to preclude any impact of the waiver of the excess earnings limitation on the Monthly Report of Contributions (F-496) process. Accordingly, post retired earnings are to be reported for all retired STRS members as is now the practice.

Inquiries should be submitted to Sheba Lamba, (916) 229-3588 or Marlene Wilgus, (916) 229-4664, at P.O. Box 15275, Mail Station #70, Sacramento, CA 95851-0275.

Employer Information Circulars [EIC] are sent to school district and community college employers as informal guidance that provides immediate information on a single topic.

For an accessible version of this circular, contact ADACoordinator@CalSTRS.com.