SSDA Today - Fall/Winter 2016 - 16
Is your compensation "creditable"
New CalSTRS regulations seek to further clarify the answer
BY DERICK LENNOX, CAPITOL ADVISORS GROUP
n 2015, the California State Teachers' Retirement System (CalSTRS) approved regulations to clarify the meaning of "creditable compensation" for CalSTRS members
who were enrolled in the system before January 1, 2013. These regulations arose
from the implementation of California's most recent pension reform effort, which split
CalSTRS members into two groups: pre-reform members ("2 percent at 60") and postreform members ("2 percent at 62"). The creditable compensation regulations affect
only the former employees.
The implications are significant.
Compensation is creditable only if it
is considered "salary" or qualifies as
"remuneration in addition to salary"
under the 2015 regulations, which get
fairly specific. But fringe benefits-like
health insurance costs and car allowances-and reimbursed business
expenses are not noncreditable.
Over the past year, school employers
and CalSTRS staff have had an opportunity
SSDA TODAY | FALL/WINTER 2016
to reflect on whether the regulations offer
sufficient clarity. The Teachers' Retirement
Board now seeks to conduct another round
of regulations to integrate feedback and
new changes in state law.
CalSTRS is currently soliciting comments on its draft regulations. This is a
unique opportunity for SSDA members to
offer advice-or ask questions-on a critical issue for both employers and teachers.
Learn here how to provide your input.
USING AN LCAP TO ESTABLISH
A "CLASS OF EMPLOYEES"
Under the Teachers' Retirement Law, compensation must be paid the same throughout a "class of employees." A class is
comprised of one or more employees who
perform similar duties, are employed in
the same type or program, or share other
similarities in the work they perform. The
current regulations provide that employment in a program established pursuant
to state and federal law is a valid basis to
establish a class of employees.
Local programs established under Local
Control and Accountability Plans (LCAP),
however, have largely displaced state
categorical programs, and they are not
specifically addressed in the regulations.
The proposed regulations allow school
Table of Contents for the Digital Edition of SSDA Today - Fall/Winter 2016
Executive Director's Column
New Federal Guidance on Transgender Bathroom Access
List of Initiatives Headed to November Ballot Long and Diverse
Ballot Measure Wild Card: Gov. Jerry Brown
What Every Leader Needs to Know about Technology: Education Innovation Alliance
Is Your Compensation “Creditable” Towards Retirement? New CalSTRS Regulations Seek to Further Clarify the Answer
Super Strong: The Extraordinary Nature of Leadership Resilience
News and Notes
SSDA Today - Fall/Winter 2016