SB 864 Summary

• Vests the 2 percent improvement factor as a contractually enforceable benefit for active members beginning July 1, 2014, in exchange for increased member contributions to the State Teachers' Retirement System Defined Benefit Program.

• Increases member contributions in three phases (0.15%, 1.20%, and 2.25% by July 1, 2016 for most members; lower percentages for those subject to the Public Employees' Pension Reform Act of 2013).

• Increases employer and state contributions to the Defined Benefit Program according to prescribed schedules from July 1, 2014, through July 1, 2046, or until the Director of Finance determines constitutional or mandate funding adjustments are required.

• Requires the Teachers' Retirement Board to report to the Legislature by July 1, 2019, and every five years thereafter on the fiscal health of the Defined Benefit Program and unfunded actuarial obligations, with projections through June 30, 2046.

• Makes the entire act non-severable and provides that it takes effect immediately as a budget-related appropriation bill; specifies that any legal challenge must be filed in Sacramento Superior Court within 60 days.