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SB 868 – Increases The Payments Provided From The Supplemental Benefit Maintenance Account Beginning July 1, 2023, And Every Year Thereafter
The Teachers’ Retirement Law establishes the State Teachers’ Retirement System (STRS) and creates the Defined Benefit Program of the State Teachers’ Retirement Plan, which provides a defined benefit to members of the program, based on final compensation, credited service, and age at retirement, subject to certain variations. STRS is administered by the Teachers’ Retirement Board. Existing law creates the Teachers’ Retirement Fund and establishes within that fund a segregated account named the Supplemental Benefit Maintenance Account. Existing law continuously appropriates funds in the Supplemental Benefit Maintenance Account for expenditure for the purpose of restoring the purchasing power of the allowances of retired members and nonmember spouses, disabled members, and beneficiaries, and prescribes various schedules pursuant to which these allowances are augmented.
SB 868 requires the payment of additional benefits on a quarterly basis from the Supplemental Benefit Maintenance Account beginning July 1, 2023, to retired members and nonmember spouses, disabled members, and beneficiaries pursuant to the specified schedule. The bill requires the amount of these increases shall be determined by July 1, 2023, and shall increase by two percent each year thereafter commencing on July 1, 2024. The increase shall not be compounded.
The bill further specifies that the increases are not part of the base allowance and are payable only to the extent that funds are available from the Supplemental Benefit Maintenance Account. The bill provides that the increases provided are vested only up to the amount payable as a result of the annual appropriation made and the adjustments made by the board.
(SB 868 amends Sections 24415 and 24417 of, and adds Section 24410.8 to, the Education Code.)