Lozano Smith has continued to coordinate with ACSA, CASBO and other administrative associations for K-12 and community college administrators regarding the steps that school districts and community colleges should take in response to the August 29, 2012 CalSTRS Circular Letter raising questions about the creditable service of employees in certain administrative positions.
CalSTRS publication of a second Circular Letter on November 25, 2013 provided useful guidance regarding how employers could assist affected certificated employees with filing a Retirement System Election
form (ES 372) to ensure that CalSTRS members receive proper credit for service in positions that CalSTRS might determine to be classified and included in CalPERS.
Typically, the Retirement System Election
form must be filed within 60 days from the date the employee started in the position requiring membership in another public retirement system. (Ed. Code § 22508.) However, as specified in the November 25, 2013 Circular, CalSTRS is currently allowing employers to use the employer correction statute (Ed. Code § 22308) to file an election form with a retroactive effective date for any employee who was eligible to make such an election in the past but failed to do so because the employer did not provide the employee with the necessary information regarding his or her election rights. Election
forms must be mailed to CalSTRS within 180 days of the November 25, 2013 Circular Letter. We recommend that CalSTRS receive all Justification Letters and election forms prior to May 23, 2014.
Following the November 25, 2013 Circular Letter, several questions have arisen regarding procedures for filing the election form, who should file the form, and the required content of the Justification Letter. After communicating with CalSTRS and coordinating with various associations, the following answers represent our guidance to several frequently asked questions:
- Who should submit the ES 372 Form and Justification Letter?
The Justification Letter must come from the current employer and the completed ES 372 Form should be submitted with the Justification Letter as an enclosure.
- What is the role of the County Offices of Education?
Typically, the ES 372 Form is routed through the county offices. We recommend collaborating with your county office regarding procedures for securing appropriate county signatures on the form. Districts should factor in additional time to work with their respective county office and obtain the necessary signatures in time to submit the form prior to the deadline.
- Should an ES 372 Form and Justification Letter be completed for retirees?
CalSTRS has indicated that forms and Justification Letters for retirees are not necessary at this time. However, to the extent practical, we recommend that districts consider identifying all current and retired employees hired July 1, 1996 or later who may be affected, and prepare ES 372 Forms and Justification Letters for each. Neither the law nor CalSTRS provide clear direction on this issue. Therefore, each district should balance the burden of submitting forms for retirees with the potential future liability of not submitting forms on behalf of retirees.
- What is the proper effective date to be listed on the ES 372 Form?
The retroactive effective date should be the first day in the first administrative position where service credit may be questioned even if that date is with a prior employer, not the current employer. In most instances, this will be the first date the employee entered a position at the district-office level.
- How much work history should be included in the Justification Letter?
The work history provided in the Justification Letter should begin with the current position and list all positions the employee held with all employers going back to the last schoolsite level position (i.e., the last position clearly providing creditable service).
- What about employees who worked for more than one employer in a questionable position?
The current employer should submit one ES 372 Form and Justification Letter for each affected employee, even if the employee held a questionable position with more than one employer.
- What type of statement regarding the reason for the employee's late election should be included in the Justification Letter?
The statement in the Justification Letter explaining the circumstances of the employee's late election does not need to be elaborate. Some districts have expressed concern that using an employer error correction procedure to file a retroactive election form could be viewed as an admission of liability that could be used against it later if the employee initiated litigation. To address this concern and keep the statement simple, we recommend using a statement similar to the following:
"Without admitting any fault or liability, the District certifies that the member was not offered the opportunity to timely complete the election form because the District believed that the member was performing creditable service in a certificated position and therefore the member was not provided the opportunity to complete a Form ES 372 at the time he/she changed positions."
- Can the documents be faxed or emailed to CalSTRS?
The completed ES 372 Forms and Justification Letter cannot be faxed or emailed to CalSTRS. The original documents must be mailed to the P.O. Box specified by CalSTRS in the November 25, 2013 Circular.
A copy of the CalSTRS Circular can be found here. The required election form (ES372) can be found here. Also see CASBO's advisory, which can be found here.
If you have any questions about whether your position is performing creditable service work or questions about how to complete the election form, you may contact the CalSTRS Employer Services Helpline at (877) 277-5778 or feel free to contact one of our eight offices located statewide. You can also visit our website, follow us on Facebook or Twitter, or download our Client News Brief App.