State Teachers' Retirement System: funding.

Existing law, the Teachers' Retirement Law, establishes the State Teachers' Retirement System 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. The Defined Benefit Program is funded by employer and employee contributions, investment returns, and state appropriations, which are deposited or credited to the Teachers' Retirement Fund. Existing law prescribes methods for calculating the amounts of employer and employee contributions as well as state appropriations for support of the system. For the 2017–18 fiscal year, and each fiscal year thereafter, existing law requires the board to increase or decrease certain percentages relating to the state appropriation to reflect the contribution required to eliminate the unfunded actuarial obligation of the system. Existing law prohibits these requirements from being construed as applicable to any unfunded actuarial obligation resulting from any benefit increase or change in member or employer contribution rate under this part that occurs after July 1, 1990. This bill would qualify this prohibition to clarify that specified state contributions made in this regard be allocated to reduce any unfunded actuarial obligation resulting from the benefits and contribution rates in effect as of July 1, 1990.