Senate Bill 432 – Amends The State Teachers’ Retirement System Related To The Publishing Of Resources And The Reliance Of Those Resources That Result In Errors

CATEGORY: Public Education Matters
CLIENT TYPE: Public Education
DATE: Dec 06, 2023

Existing law establishes various requirements for the State Teachers’ Retirement System (STRS).  STRS is required to provide resources annually that interpret and clarify the applicability of creditable compensation and service pursuant to its laws and regulations.  Employers are required to ensure compliance with STRS rules.

SB 432 requires STRS to make resources available on its website.  The bill requires the resources to be relied upon for purposes of audits and other actions related to compliance by the employers unless the resources are revoked or suspended.

The bill amends existing law prohibiting the retroactive application of new or different interpretations of the law related to creditable compensation and services.  The bill revises this provision to provide that the prohibition on retroactive application applies to different interpretations of the law including those that differ from the STRS resources, except if the retroactive applicability is a result of state or federal law, executive order of the Governor, or final court order.

SB 432 amends existing law related to recovery of overpayments.  The bill provides that if an overpayment is a result of the application of a STRS rule that STRS misinterpreted in its resources, the error is deemed an error by STRS and subject to the STRS recovery process.  The bill requires STRS make a written determination of the error and identify the amount of the overpayment to the person responsible for the overpayment.  STRS must include additional information in the required written notice.

The bill deletes the prohibition that changes in interpretation cannot be applied before the next July 1, unless the changes are due to changes in state or federal law, an executive order of the governor, an advisory letter, or programs require application or revision of the creditability of compensation on an earlier basis.

Existing law provides that overpayments that occur due to an employer’s reliance on an advisory letter that is later determined to be incorrect due to change in the law are errors of STRS.  SB 432 deletes these provisions to provide that if an error occurs following changes in any resources, including by a final court order, the overpayment is an error by STRS.  The bill makes additional conforming changes to specify that advisory letters related to specific compensation language apply only to the employer identified in the advisory letter.

Finally, the bill amends existing provisions regarding recovery of an overpayment.  The bill provides that the recovery of an overpayment due to inaccurate information, untimely submission, or non-submission of information by or on behalf of a recipient, is limited to no more than 15% of the overpayment.

(SB 432 amend Sections 22325, 22326, 24616.2, and 24617 of the Education Code.)

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