More Info. on STRS Rates

2012 PENSION LEGISLATION AND
ITS IMPACT ON CALSTRS BENEFIT PROGRAMS pdf

Faculty Colleagues in CalSTRS,
In response to the budget update I sent out several of you have inquired about the differences in benefits between pre-2013 and post-2013 CalSTRS members.  In short, the biggest difference is in the age multiplier factor.  Pre-2013 CalSTRS members receive a 2% multiplier at age 60, while post-2013 CalSTRS members receive the 2% factor at age 62.  Generally speaking, if you joined CalSTRS after January 1, 2013 you will need to be two years older than the pre-2013 members to receive the same multiplier.  Here is a table that illustrates this:
These changes were all part of AB 340, the so-called “Pension Reform Act” which was passed in 2012 and became effective January 1, 2013.  For more detailed information, please see the attached document or visit CalSTRS.com.
Please let me know if you have any other questions.
Jim
Begin forwarded message:
From: Jim Mahler <aftjim@mac.com>
Subject: State Budget Finalization/STRS Rate Increases
Date: June 26, 2014 at 12:55:07 PM PDT
Faculty Colleagues,
By now you have probably read many messages concerning the finalization of the state budget.  Essentially there were no changes in addition to my earlier communication dated June 11 below.  The final changes to the STRS contribution rates are delineated in the table below.  Bottom line:  effective July 1, 2014, all faculty who are members of CalSTRS will see their contribution rate increased from the current 8.00% to 8.15%.  In subsequent years, the employee contribution rate increase will vary depending on when you first became a member of CalSTRS.
STRS Contribution Rates
Adopted Budget
Employer
Employee (pre-2013 STRS member)
Employee (post-2013 STRS member)
State
2013-14 8.25% 8.00% 8.00%
3.04%
2014-15 8.63% 8.15%
8.15%
3.45%
2015-16 10.48% 9.20%
8.56%
4.89%
2016-17 12.33% 10.25% 9.205%
6.33%
2017-18 14.18% 10.25% 9.205%
6.33%
2018-19 16.03% 10.25% 9.205%
6.33%
2019-20 17.88% 10.25% 9.205%
6.33%
2020-21 18.85% 10.25% 9.205%
6.33%

You don’t need any advanced math skills to figure out that the 0.15% STRS contribution rate increase coupled with the 0.85% final approved COLA means a fairly lean year ahead.  We need to hope that we are able to capture a significant percentage of growth funds if we hope to see much of an increase in compensation in the coming year.
If you’re not happy with this state of affairs, the best thing you can do is to write to the Governor and express your displeasure.  We had a solid budget package get all the way through the legislature (see my email message dated May 22 below).  It was the negotiation with the Governor that killed the deal.  The best way to ensure your message is heard is to fax your comments to 916-558-3160 or US mail to:
Governor Jerry Brown
c/o State Capitol, Suite 1173
Sacramento, CA 95814
Please don’t hesitate to contact me if you have any questions.
Jim
From: Jim Mahler <aftjim@mac.com>
Subject: Fwd: 2014-15 Budget Update: Conference Committee Agreement
Date: June 11, 2014 at 10:07:40 PM PDT
Colleagues,
Below please find the latest 2014-15 State budget update from CCC Vice-Chancellor Dan Troy.
Unfortunately, the Governor prevailed once again in the budget deliberations by not recognizing any of the additional $246 million in revenues being projected by the Legislative Analyst’s Office.  That means no additional monies for: 1) an increase in the COLA, 2) new full-time hires, or 3) adjunct office hours as had been approved by both houses in the legislature.
Bottom line:  COLA from the State = 0.85%.  Growth = 2.75% (this year’s code word for growth: “access”).  Still waiting on final STRS increase percentages.
Once the dust settles and we see how many dollars these Statewide percentages actually translate into for each District, we will apply our RAF calculations and know exactly what we are left with for employees.  This will probably be known by September/October.
More to come when the budget is finally signed…
Jim
From: Troy, Dan [mailto:dtroy@CCCCO.EDU]
Sent: Wednesday, June 11, 2014 9:34 PM
Subject: Budget Update: Conference Committee Agreement
Colleagues,
Earlier this evening, the joint Budget Conference Committee met and approved the major provisions of the 2014-15 budget for the California Community Colleges and other areas of the budget.
While subcommittees of both houses had previously voted to augment the CCCs by $246M by assuming the higher budget year revenue that has been estimated by the Legislative Analyst’s Office (my message from May 23rd described those increases), similar to last year, the Governor held fast to the level of spending proposed in the May Revision.  Ultimately, Governor Brown has prevailed.
A key adjustment made to K14 Proposition 98 spending is that it is will no longer be the case that deferrals will completely eliminated as of the 2014-15 fiscal year.  Some of this funding will be diverted within the minimum guarantee to fund legislative priorities such preschool/child care, another round of funding for the Career Pathways Trust competitive grant program ($250M, similar to the current year), and funding for prior mandate claims.
To that end, the Conference budget looks very similar to the Governor’s May Revision, with a few notable changes:
·         Funding for Student Equity Plans will be reduced from $100M to $70M
·         $30M augmentation for DSPS
·         $49.5M for reimbursement of previous mandate claims
·         A reduction of $94.465M in the paydown of deferrals
·         Districts will have flexibility to determine the split of expenditures between maintenance and instructional equipment ($148M)
·         Cal Grant B awards will increase to $1,648
Further, the final budget will include a positive trigger: If the Department of Finance determines as of the 2015 May Revision that the Proposition 98 guarantee is higher than what is estimated at the time of the budget agreement, additional expenditures will occur.  The first priority would be to paydown the remaining K14 deferrals ($94.465M for the CCCs).
Otherwise, the provisions of the Conference agreement are very similar to the Governor’s May Revision (2.75% increased access, 0.85% COLA, $50M increase for EWD, etc.).  My message of May 13th covers the May Revision proposal in detail.
The current expectation is that the Conference budget will be voted on by each house over the weekend (probably Sunday), so the Legislature will meet the June 15th deadline.
Until the budget is final and signed by the Governor, changes are always possible.  Further, in some cases there can be changes made to the budget bill language or included in trailer bills that have affect us of which we may not yet be fully aware.  I will try to keep you updated as new information emerges.
Regards,
Dan Troy
Vice Chancellor, College Finance and Facilities Planning
California Community Colleges Chancellor’s Office
********************************************************************
From: Jim Mahler <aftjim@mac.com>
Subject: UPDATE: State Budget Update-Assembly Ed.Committee Acts
Date: May 22, 2014 at 6:58:02 PM PDT

UPDATE:  More good news!  The Assembly Budget Subcommittee on Education Finance met this morning and passed a package identical to the Senate package detailed below.  These sub-committee packages will now go to the overall budget committees in each house next week for final approval (which is expected).  Then the fun begins with the Governor.  The struggle will be to get the Governor to acknowledge the additional State revenue which has been recognized by each house.

Stay tuned for more details as they emerge over the next couple of weeks…

Jim

—————————————————

From: Jim Mahler <aftjim@mac.com>
Subject: State Budget Update-Senate Ed.Committee Acts
Date: May 21, 2014 at 4:53:11 PM PDT
Faculty Colleagues,

We have excellent news to report from the State Senate.  The Senate Budget Subcommittee on Education Finance chaired by Senator Marty Block finalized their higher education budget yesterday.  Thanks to higher revenue projections from the Legislative Analyst’s Office above what the Governor had based his May revise proposal on, the Senate is proposing increases in several key areas:

1) A doubling of the COLA proposed by the Governor, up from 0.85% to 1.7%.  Still not a windfall, but definitely an improvement.

2) $25 million to hire additional full-time faculty.  That equates to approximately 715 new full-time faculty hires statewide, over and above current faculty obligation number (FON) mandates.

3) An increase of $6.5 million in the part-time faculty office hour fund.  This is nearly three times the current funding level, and 40% higher than pre-recession peak funding.

I am pleased to say that all three of these items have been top priorities for the CFT and it’s very rewarding to see us make progress in all three of these categories.

Our remaining advocacy efforts on how to cover the proposed CalSTRS funding increase will probably be decided by tomorrow.  It is our understanding that the Assembly will be finalizing its education budget tomorrow as well, so stay tuned as those details emerge.

Although there is still a long path ahead for all of these items to be signed by the Governor, at least things are moving in the right direction.  It wouldn’t hurt to send an email of thanks to Marty Block <marty.block@sen.ca.gov> for understanding, valuing, and advocating for the community colleges.

Please do not hesitate to contact me if you have any questions or would like more information.

In Unity,

Jim