SB 1691 makes several changes impacting the administration of the Teacher Retirement System (TRS). The bill would disqualify an employee of a home-rule school district from membership in TRS, define TRS as a public entity, allow TRS to limit the amount of annual contributions that may be used for purchase of service credit, exempt TRS from Chapter 412 of Labor Code and allow TRS to acquire the services described therein in any manner that the TRS Board deems reasonable, as well as amend other sections of Government, Insurance and the Education Code. 

The TRS actuary notes that two changes proposed in SB 1691 impact the benefit and contribution provisions of the TRS pension fund, though the savings impact of these modifications can not be effectively modeled through actuarial valuations. The two provisions are: (i) requiring that members make out-of-state service purchases by paying the full actuarial cost of such purchases and (ii) requiring any employer employing a TRS retiree to pay the retirement system the member contribution and employer contribution that would have been required if the retiree were an active contributing member. The two provisions are expected to increase dollar contributions to TRS without increasing the contribution rate and to encourage TRS members to work longer than the member otherwise would have without the provisions. TRS estimates that the proposed changes will lead to an additional $20 to $23 million in contributions in each year of the next biennium if the bill is adopted.