Child Care Providers Celebrate As Governor Newsom Signs Budget Trailer Bill, Makes Historic Investment In California Children And Child Care Providers

Child Care Providers United (CCPU), California’s union representing 40,000 family child care providers, today celebrated Governor Newsom’s signature on AB 131 – legislation that cements into law funding for the historic agreement the women-led union forged with the Administration in June, along with previously agreed upon COVID-19 investments. The bill also funds investments providers have spent decades advocating for, including a sizable increase in subsidized child care slots.

CCPU released the following statement from Miren Algorri, a San Diego child care provider and member of the CCPU negotiations team, who has spent the past year negotiating on these issues with the state, on behalf of California’s child care providers:

“As a second-generation child care provider, I am elated that our decades-long fight has made a meaningful difference for providers, the children in our care, and the families who count on us. Today’s gathering means not only that funding for our tentative agreement was signed into law, but that care will become more accessible to working parents, and more children will have the opportunity to start school ready to learn. We know that access to affordable, quality child care will be essential to the economic recovery from COVID-19, and we applaud Governor Newsom and state legislators for making sure California has funding to support making our child care system the best in the country.

“I also want to thank the legislators who stood by us throughout our fight for union recognition, our first contract, and the most recent battle to invest in the care our youngest learners need, along with the families who count on us. Assembly Speaker Rendon, Senate President Pro tem Atkins; and child care champions, Senators Limón, Skinner, and Leyva, and Assemblymember Reyes lifted our voices and the voices of California children to ensure that our state budget left no one behind. We are grateful to have these strong leaders in our corner and in the corner of California’s early learners.”

By signing AB 131, the Governor has ratified the state’s tentative agreement with CCPU. The results of providers’ votes for ratification will be made public when voting closes on Monday, July 26.

WHAT – What benefits does the Retirement Fund expect to offer providers?

Expand the Retirement Fund Benefits Table to see benefits.

 

 Plan Rules
Eligible participants*

You are eligible to participate in the Retirement Plan for a 2024 contribution if you are:

  • A licensed child care provider
  • Who has been paid 6 or more months of child subsidy in the 2023 calendar year (can be non-consecutive months).
Eligibility for benefit credit for contributions in 2024*

You will earn your full service credits for 2023 if you were paid for ten or more months of child subsidy in 2023.

If you were paid for 6 or more months of child subsidy, you will receive 60% of your service credits, 70% for 7 months, 80% for 8 months and 90% for 9 months. You will not earn any service credit if you were paid for less than 6 months.

ContributionsThe only contributions to the Retirement Plan will be paid by the State. The Plan does not accept contributions from you.
Amount of annual employer contributions for 2023 service allocable to participants in 2024*

The amount of the State contribution on your behalf in 2024 will be based on two factors:

(1)  the number of years and months that you held a license as of 12/31/23; AND

(2)  the number of months that you were paid for a subsidized child in 2023.

  • If you were paid for ten or more months, you will receive your full contribution.
  • If you were paid for 6 to 9 months, you will receive a pro-rated contribution.
  • If you were paid for less than 6 months, you will not receive a contribution in 2024.
Amount of annual employer contributions for 2024 service allocable to participants in 2025*You will earn one full service credit for the State contribution on your behalf in 2025 if you were paid for ten or more months of child subsidy in 2024. If you were paid for 6 to 9 months in 2024, you will receive a pro-rated service credit. You will not earn any service credit if you were paid for less than 6 months in 2024.
VestingYou are “vested” in any contribution correctly made to your account. You do not need to work a minimum number of years before 2024 to be entitled to a benefit.
Distribution events

You can elect to receive your account when:

  • You stop all work as a licensed provider for 9 consecutive months at any age (“terminate from service”);
  • You stop all work as a licensed provider for 3 consecutive months at age 60 or older (“retirement”); or
  • You attain age 73, which is the age you are required to start receiving payments, unless you are still working.
Forms of distributions

If you are age 60 or older and stop all work as a licensed provider for 3 consecutive months and elect to retire, you can choose to receive your account balance as:

  • One lump-sum payment
  • Approximately equal monthly payments for 5 years
  • Approximately equal monthly payments for 10 years

If you are younger than age 60 and stop all work as a licensed provider for 9 consecutive months, you can only elect to receive your account as one lump-sum payment.

Death benefitsSince your account is 100% vested, you can designate a beneficiary (or multiple beneficiaries) to receive your account balance if you die before you receive it.
InvestmentsThe Board of Trustees will manage how the Retirement Plan is invested on your behalf, with the assistance of investment professionals.

*Special rules apply to providers where more than one provider is on the payment record.

who

Who is eligible for the Retirement Fund benefits?

State contributions to the Retirement Plan are tied to the child care subsidy program. To be eligible for retirement benefits in 2024, you must be a licensed provider who has have been paid for work with a subsidized child in at least 6 months in 2023-these months do not need to be consecutive. License exempt providers are not eligible; however, if you become licensed in a year, your work in that year may count for eligibility.

when

When will the benefits be available?

State contributions to the Retirement Plan are tied to the child care subsidy program. To be eligible for retirement benefits in 2024, you must be a licensed provider who has have been paid for work with a subsidized child in at least 6 months in 2023-these months do not need to be consecutive. License exempt providers are not eligible; however, if you become licensed in a year, your work in that year may count for eligibility.

how

How can I get help enrolling?

The Plan will automatically enroll you based on the information it has but you should immediately complete the form that the Plan will send you to be sure that the Plan has all of your current information and that you receive credit for your years of licensed work.