Home
| Membership | About FACCC | Publications | Join FACCC | Contact Us | Join an E-mail Listserve

AB 1207 (Corbett): FREQUENTLY ASKED QUESTIONS

Text of bill: HTML | PDF | | CalSTRS analysis (PDF) | Employer Information Circular (Word) |
Employer Directive for New CalSTRS Retirement Incentive Programs (PDF)

Gov. Davis recently signed into law AB 1207 (Corbett), legislation enacting two “golden handshake” options. AB 1207 allows participants in the CalSTRS Defined Benefit program to receive an additional two years service credit and two years age factor under specified conditions.

Responding to the growing number of inquiries about AB 1207, FACCC has created a “frequently asked questions” page.If you have questions regarding AB 1207 that are not answered, please contact FACCC at (916) 447-8555 or info@faccc.org. FACCC will continue to update this page as more questions arise.

What does AB 1207 accomplish?

AB 1207 permanently extends the option currently in statute (but not operative because it has sunset) that permits CalSTRS members to receive an additional two years of service credit, under certain conditions, at the option of the school employer.

AB 1207 also creates a new option that allows employers to offer CalSTRS members an early retirement incentive of an additional two years of service credit and two years of age ("2 + 2") if, prior to January 2005, a specified determination is made by the employer pursuant to the terms of a memorandum of understanding and if other conditions are met.

Are districts required to give this "golden handshake"?

No. They are only able to provide the retirement incentives if they are able to demonstrate to the county superintendent, State Superintendent of Public Instruction and the Community Colleges Board of Governors that offering the incentive will result in a cost savings, AND if the district pays the Present Value cost of the benefit (and administrative costs) to CalSTRS.

Can districts offer a portion of the "golden handshake" ( eg., two years of service credit and one year of age)?

No. They can only offer 2+0 or 2+2.

How long do districts have to repay CalSTRS?

Immediately, or over eight years in annual payments. There is an additional fee for the installment option, and regular interest is charged on the remaining balance.

Does age count toward the retirement percentage a faculty member receives?

Yes, it increases the age factor part of the retirement benefit calculation. However, the additional age cannot be used by the member to reach the age necessary to qualify for retirement, nor may the additional service credit be used to qualify for other CalSTRS benefit enhancements such as final-year comp, the career bonus or longevity bonus.

To use the age factor, do you have to have 25 years of service credit?

No. A member must already be eligible to retire to receive the golden handshake, meaning: 1) Over age 55 with five years of service; 2) Over age 50 with 30 years of service; or 3) Eligible to retire under concurrent retirement with another system.

What is the formula districts must use to calculate the "golden handshake"?

CalSTRS is currently revising the final formula, which should be available soon. A preliminary formula has been provided by CalSTRS (click on "CalSTRS analysis" at the top of this page).

If a district does not take action to offer the “golden handshake” are faculty ineligible?

Yes. The district must take formal action by approving a resolution offering the benefit to all its eligible employees (2+0 or 2+2), or, additionally in the case of 2+2, approving a Memorandum of Understanding for a unit of represented employees, at some time during 2004.

What limitations are there on post-retirement earnings for someone who takes the "golden handshake?"

All the existing earnings limitations on post-retirement employment still apply. In addition, a member that has received either retirement incentive must forfeit the ongoing benefit provided by the additional service credit and/or age if they reinstate to active service, or, if they receive unemployment benefits within one year of being granted the CalSTRS retirement incentive benefit.

Members will also forfeit the benefit if they work for any California school district within one year of being granted the CalSTRS retirement incentive benefit, or, if they return to work for the granting school district within five years of being granted the CalSTRS retirement incentive benefit.

If someone takes the additional 2 years service credit, can they retroactively take the 2+2?

No, they cannot.

PLEASE NOTE: Retired CalSTRS members cannot perform classified service.


© Faculty Association of California Community Colleges | 1823 11th Street | Sacramento, CA 95811 | 916.447.8555 | Fax 916.447.0726 | info@faccc.org | e-mail the webmaster