Legislature(1997 - 1998)
04/07/1997 08:19 AM House CRA
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 164 - TEACHERS RETIREMENT: ELIGIB. & SICK LEAVE CHAIRMAN IVAN indicated that the committee would hear Sponsor Substitute for House Bill 164, "An Act providing that employment as a legislator or with the National Education Association is not credited service under the teachers' retirement system; prohibiting membership in the teachers' retirement system for holders of limited certificates; removing teachers holding limited certificates to teach Alaska Native language or culture from membership in the teachers' retirement system; and repealing a provision permitting members of the teachers' retirement system to count unused sick leave credit as credited service." Number 228 REPRESENTATIVE AL VEZEY, as sponsor, came forward to testify on HB 164. He pointed out that the difference between the original bill and the committee substitute is that Section 1 of the original bill was deleted and the following sections were renumbered accordingly. In the repealer section, which is now Section 2, subsection (f), which was repealed in the original bill, is now in the committee substitute. There still seems to be some confusion regarding this proposed legislation. The Division of Retirement and Benefits has stated that prior to 1988, teachers of Alaska Native Language who have limited certificates may have been covered under PERS. He pointed out that the statute affected, AS 14.25.00, begin by stating that a teacher shall participate in the TRS program. The qualifying statute that they are dealing with does not distinguish between what type of certificate a teacher holds. He thought AS 14.25.220 (21)(f) was redundant but he stated that the issue here was not preventing teachers from using TRS, the issue he was trying to address was private sector employers participating in the retirement system. He said he had no problem with taking out the repealer of the limited certificate because it's not applicable either way. REPRESENTATIVE JOE RYAN stated that he didn't understand the differences between these two versions. Number 462 REPRESENTATIVE VEZEY stated that the only difference between them was that they took out any reference to limited certificates. The rest of the bill is the same. This involved two changes, deleting Section 1 and renumbering the remainder. It also involved deleting one reference to a statute in the repealer section which is now Section 2. Representative Vezey stated that he was in support of this change. Number 576 DENNIS LODGE, Instructor, Alaska Vocational Technical Center (AVTECH), Seward, testified via teleconference from Nome on HB 164. He noted that there seemed to be some confusion regarding changes to HB 164 and stated that he would proceed with his prepared testimony. He mentioned that he had taken leave to testify and noted that he spoke on behalf of the 34 teachers who belong to the teacher's association at AVTECH in opposition to how this legislation was originally written. MR. LODGE continued that AVTECH provides accessible, technical and related training to a statewide, multi-cultural population for employment in the developing Alaskan work community. They deliver post-secondary training to Alaskans all over the state in a variety of vocational areas such as maritime fishery training, business and office technology, physical plant technology, etc. As professional educators they are committed to quality vocational education. Their staff combines people with formal education degrees up to masters and doctorates, as well as those with relevant trade experience. They deliver skills to those entering the work force. MR. LODGE noted that over half their teachers hold limited teaching certificates. They place great importance on the licenses, certificates and trade experience that create credible vocational educators. He used himself as an example by highlighting his work experience which did not require a type A teaching certificate or its equivalent. Those teaching at university level are evaluated on the basis of their abilities and teach without a credential. Many of his colleagues at AVTECH have had successful careers in industry and are now sharing this experience with their students. MR. LODGE continued that as professional educators with limited certificates they believe that the exclusion of future teachers, such as themselves, from the teachers retirement system will severely impact the quality of vocational education delivered in Alaska. He used the example of someone who wished to be taught how to cook and pointed out that they'd probably want a teacher with 20 years of experience rather than someone fresh out of college. Incentives and rewards must be maintained to attract the best teachers to Alaska's institutions. They believe that limited certificates allow the state to deliver quality education and they oppose eliminating these individuals from participating in the retirement system. MR. LODGE added that they oppose provisions of the bill that makes unused sick leave not credited as service in the TRS. Most teachers at AVTECH do the best to attend to their assigned duties and avoid the expense of substitutes whenever possible. They believe that the fractional increases to a person's retirement from unused sick leave is a definite savings to the state when compared to the additional costs of hiring substitutes. Under the latter scenario, a regular teacher gets a sick day and AVTECH pays a substitute as well. Sick leave cannot be redeemed for cash except in the sense of teachers retirement service credit. Currently, the public retirement system allows no credit for sick leave days in retirement. The use it or lose it philosophy prevails. When someone is trying to adhere to a curriculum in an established course or program it's in the best interest of the school and the students to provide continuity and oversight with a regular instructor. Number 953 REPRESENTATIVE RYAN made a motion to adopt the draft committee substitute as discussed previously. Hearing no objection it was so adopted. Number 985 MEL JONES, Diesel Instructor, AVTECH, testified via teleconference from Seward on HB 164. Mr. Jones spoke in opposition to the previous version of this legislation. Many of his colleagues hold limited certificates, including himself. He gave his very extensive college and practical experience for the committee. He holds a limited certificate and compared this to his colleagues who might have a more extensive teaching credential even though he has extensive background and experience himself. He also noted the diversity and wealth of experience combined on the teaching staff at AVTECH. This enhances the education which their students receive, as well as the potential for placement after graduation. MR. JONES pointed out that this legislation as proposed would destroy the uniqueness of vocational education in Alaska. He also noted those teachers who after years of service would be removed from the TRS system. This would make these teachers second class citizens. He also mentioned in light of sick leave those teachers who would as a general rule attend class knowing they are sick, but feel that continuity in their classrooms is important. He added that by doing so saves the state money in the long run. If a teacher misses class due to sickness they receive their wages, plus a substitute must also be paid. Accrued sick leave must not be attacked but considered a savings. Number 1180 REPRESENTATIVE VEZEY came forward to explain again the changes from the original proposed legislation. The committee substitute adopted deletes all reference to the statute regarding limited certificates. He did say that the Division of Retirement and Benefits have not straightened this situation out, but claim that prior to this statute's enactment, teachers with limited certificates participated under PERS. This is not what the statute says. The enabling statute, Title 14.25.00 says that a teacher who is an employee of a school district or other recognized public entity will be covered under TRS. This issue is not germane to the bill, or affect it one way or another. Number 1257 ROGER HOHL, Welding and Aluminum Instructor, AVTECH, testified via teleconference from Seward on HB 164. He noted that he took leave in order to testify. He mentioned the diverse staff at AVTECH and the mix of this experience that enhances the quality of education given. This in turn competently equips students for the job market. He also holds a limited certificate and gave his educational and practical experience. He added that trade experience and education should be considered equally for the benefit of the student. Practical training is vital to student learning. He was also against excluding limited certificate teachers from the retirement program. Number 1445 REPRESENTATIVE AL KOOKESH stated that public testimony was very important, but to do so in regards to something that's not germane to the bill is not productive. The provision testified to by the last three participants is no longer in the legislation. Number 1475 JOHN CYR, President, National Education Association (NEA), came forward to testify on HB 164. NEA applauded the committee for removing the section that takes away the ability for Native Language and Vocational Education Teachers to remain in the system. They are still concerned with the section that takes unused sick leave away as credited service for the retirement system. This is absolutely onerous. This sick leave is a benefit earned. To lose this provision would be punitive. The retirement system is sound. REPRESENTATIVE VEZEY stated that a mandate exists in statute for local school districts to provide this benefit for teachers. The affect of repealing this mandate is that it would then become a local issue. It would then be negotiated between the local school board and the employees. He believed as though this was a more proper way for Alaska to manage their educational programs. He didn't think that school districts would take away this benefit, but stated it should be negotiated on a local level. Number 1660 MR. CYR responded that if this ability to count used sick leave as TRS credit was rescinded then it would not be negotiable. This is a benefit provided as part of the state teachers retirement system. School districts have no ability to negotiate with their employees over this because it wouldn't be something provided for through TRS. He appreciated local control and the ability to bargain contracts, but he didn't believe that they could bargain with the school districts for a provision provided by the state. If this is repealed it's a moot point. Number 1709 CHAIRMAN IVAN proposed an amendment dealing with the issue of sick leave credit. This amendment would delete the language that disallows this credit against the retirement system. This amendment, labeled O-LSO636\K, was referred to as amendment number one and read as follows: Page 1, Line 2, following "system": Delete ",and repealing a provision permitting members of the teachers' retirement system to count unused sick leave credit as credited service" Page 1, Line 12, following "14.25.045," Delete "14.25.115 (a)," Number 1828 REPRESENTATIVE KOOKESH made a motion to adopt this amendment as noted. REPRESENTATIVE RYAN objected for discussion purposes. Number 1866 REPRESENTATIVE RYAN asked about a person who comes to retirement age and they have sick leave credited towards this retirement. He understood that as part of this system there were three particular portions: the benefit is fixed, the employee contribution is fixed and the only variable is the employer contributions. He asked if this was correct. BILL CHURCH, Retirement Supervisor, Division of Retirement and Benefits, Department of Administration, came forward to answer this and other questions regarding HB 164. He noted that Representative Ryan's understanding as outlined was correct. Number 1902 REPRESENTATIVE RYAN asked that if a person used sick leave for retirement purposes, who would pay the employee contribution portion. MR. CHURCH responded that this factor for unused sick leave is calculated in as part of the contribution rate. In other words, this is pre-funded. This is not something that would be an added burden after someone claims their unused sick leave. He believed that their actuary used six-tenths of a year of unused sick leave for each person. This is the factor built in as they build the components for the contribution rate. The employer would pay the employee portion in any excess. The total cost to be paid must be looked at, either the member or the employer, to fund these benefits. Set in statute is the amount that the employee contributes. The only variable is the amount that the employer would contribute, which could either increase or decrease. Number 1928 REPRESENTATIVE RYAN stated that he didn't see a provision in this law that would allow for the employee to cash out their sick leave at the time of retirement. MR. CHURCH responded that this was correct. It was never the intent to establish the unused sick leave credit to allow an individual to receive any type of cash benefit from the retirement system. The unused sick leave is a provision under Department of Education statute and codified through their regulations allowing transfer of unused sick leave from district to district. It wasn't until 1978 that the credit for unused sick leave was afforded as a benefit under the teachers retirement system, however, it had always been a component of teachers benefits long before it was recognized as a benefit from the teachers retirement system. This is a benefit afforded through statute. Number 2016 REPRESENTATIVE FRED DYSON stated it seemed to him that originally, sick leave and vacation were very different things. He thought that sick leave was instituted for people working regular shifts in order to encourage them, when they were sick, to get well and not contaminate the remaining work force. Over the years, folks have not used their sick leave for legitimate purposes in order to augment vacation time. He asked when they began to allow unused sick leave to be taken as vacation, as well as being credited towards retirement. MR. CHURCH responded that he didn't believe unused sick leave has ever been a vehicle for taking vacation days. This doesn't mean that some people wouldn't abuse the intent of sick leave. The main purpose of sick leave is so they don't contaminate others and to recuperate. There seems to be a balancing between recuperation and as an incentive not to use it at will, but by saving this time, a person can use it as part of a retirement benefit. Number 2129 REPRESENTATIVE DYSON stated that this seemed to imply that they need to build an incentive into the system in order to encourage people not to exploit sick leave. MR. CHURCH responded that maybe this was just the evolution of it and not part of any original intent. As a supervisor, in regards to his own staff with annual and sick leave, he finds that some people rarely take sick leave and others who take all they've accrued. Sometimes this creates problems with getting the work done. Number 2172 REPRESENTATIVE DYSON asked what happens with teacher contracts now with unused sick leave, does it lapse, is it cumulative? MR. CHURCH responded that unused sick leave is cumulative. There is statute and regulation with the Department of Education which allows it to be continuous and allows it to be transferred between the various school districts. He then gave his perspective on sick and annual leave. He's been an state employee since 1980 and always viewed this as in the event he became seriously ill and needed time, it was there for him as a benefit for the future. Number 2249 MR. CYR stated that the misuse of sick leave is in fact something a teacher could lose their certificate for. After someone is out for five days the district can ask that they see a doctor and get a certificate of wellness. They have very strict provisions for using sick leave. He imagined that someone using sick leave for vacation time is non-existent. Employees under TRS do not get annual leave. They work a set amount of days negotiated through a bargaining unit and this is what they get paid for. MR. CYR explained that the way a sick leave bank works is that most districts allow an employee to contribute a day of their sick leave a year to a bank. If someone is ill they have to use all of their own personal sick leave first and then they apply to the bank. Number 2415 REPRESENTATIVE RYAN wondered how each person's pay scale ranges affected what's contributed to the sick leave bank. He asked if a general figure would be applied. How is this time valued and how would people not lose equity if a teacher, for example, who had been teaching for twenty years with a high hourly rate was compared to a new hire. MR. CHURCH stated that as they calculate the unused sick leave benefit as part of someone's retirement benefit this is calculated based on their average base salary. The actuary determines this based on the actual experience of the fund. They take into consideration those who are on the high end of the pay scale, those who may be in the middle of the pay scale and then it is averaged out. He then went into an explanation of how these formulas worked. TAPE 97-15, SIDE B Number 000 MR. CHURCH stated that a consideration is what this benefit costs at the present rate. What is the salary of the retirees at this point in time? These are the figures they will use to calculate the value of it and also the financial impact. He pointed out that on the average there is not a disproportionate amount of people whose salaries are very high as compared to those in the average. There is not a difficulty in meeting both levels and coming up with an average. Number 081 REPRESENTATIVE DYSON asked what the arguments would be in favor of letting accumulated sick leave count as a credit towards retirement. MR. CYR responded that sick leave is an earned benefit that is part of the retirement system. To take it away when the retirement system is sound seems to be punitive. He believed that people will use a benefit. If someone has as part of their salary a certain amount of money it will used during the course of a year. If something is considered a drop dead benefit, such as 13 days of sick leave a year and someone is required to use it or loose it, he believed that people would use this benefit. This program was established to maintain a continuity so that classrooms would not be disrupted with substitutes. The more they are able to keep the teacher in the classroom, the better off the program is. MR. CYR continued that this is an economic benefit to the district. He compared this to the option offered in PERS where an employee is able to cash these hours out. He thought this would be more expensive to districts than to provide these hours as a retirement benefit. Number 181 REPRESENTATIVE DYSON asked if Mr. Cyr saw sick leave as more than just a provision for people to take care of their health, as a benefit along with the wages, insurance and retirement. MR. CYR responded that he did see this as a benefit to both the employee and the employer. Number 207 REPRESENTATIVE DYSON asked if Mr. Cyr had inferred that if they didn't allow people to accumulate sick leave, because it's a benefit they would spend it by taking sick leave days whether they were sick or not. MR. CYR responded that he believed people use sick leave when they're ill. The question to ask is how sick does someone have to be before they stay home. Number 242 REPRESENTATIVE SCOTT OGAN pointed out that earlier comments were made about punitive measures which could be taken if a teacher was found abusing their sick leave. MR. CYR responded that yes, if someone is found abusing this sick leave option, they are in danger of loosing their certificate. Number 278 REPRESENTATIVE OGAN noted that on the one hand Mr. Cyr was saying if sick leave privileges to accrue were taken away, people might use their sick leave options more, but on the other hand Mr. Cyr had pointed out that someone could loose their certificate if abuses were proven. MR. CYR responded that the word "abuse" was the wrong word. He thought people would use their sick leave. He believed that there were people teaching in Alaska today who have colds and don't feel well, but they are still in the classrooms. This is a judgment call, should they be home, should they be at work? He didn't know. He believed that people use their sick leave when they are sick. Is this a misuse? It might be an abuse to themselves if they choose to work even if they are sick, but this is by their own choice. He said that if this policy changed, they would see an increase in the use of sick leave. If people know they will loose a benefit if they don't use it, they will use it. Is this an abuse? He didn't think so. This is a legitimate use. Will the usage go up? He believed it would and stated that he could be wrong. Number 396 REPRESENTATIVE VEZEY stated that he did not support the amendment. The issue he is trying to address is a state mandate that goes to the local districts without direct appropriations to support it. The real debate is what are the options at the local school district level. He submits that there are countless case histories involving public employees in the state of Alaska where employers and employees mutually agree to put some sort of economic value to unused leave, either sick or vacation. He recommends that they remove this state mandate. REPRESENTATIVE RYAN noted that they might consider a cash out option for this sick leave accrual. Number 524 REPRESENTATIVE VEZEY responded that he hadn't had time to review this. He said that the local employers should have the maximum flexibility on how they manage their funds and how they attract and keep quality employees. CHAIRMAN IVAN asked for a roll call vote regarding amendment number one before the committee. Representative Ryan, Dyson and Ogan voted against the amendment. Representatives Kookesh and Ivan voted in favor of the amendment. Amendment number one failed to pass. Number 540 CHAIRMAN IVAN stated that he would entertain a conceptual amendment which would address the use of unused sick leave be made part of the collective bargaining process in order to bring this issue to the local control. REPRESENTATIVE VEZEY responded that he had also considered this option and stated that he had no opposition to an amendment that would change the current statute from a mandate to a local option. CHAIRMAN IVAN suggested that they hold the bill over to encourage this change.
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