Legislature(2017 - 2018)BUTROVICH 205

02/26/2018 08:00 AM EDUCATION

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Audio Topic
07:59:37 AM Start
07:59:57 AM SB185
09:15:20 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ SB 185 REEMPLOYMENT OF RETIRED TEACHERS & ADMIN TELECONFERENCED
Heard & Held
-- Testimony <Invited and Public> --
**Streamed live on AKL.tv**
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
              SENATE EDUCATION STANDING COMMITTEE                                                                             
                       February 26, 2018                                                                                        
                           7:59 a.m.                                                                                            
                                                                                                                                
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Gary Stevens, Chair                                                                                                     
Senator Cathy Giessel                                                                                                           
Senator John Coghill                                                                                                            
Senator Tom Begich                                                                                                              
Senator Shelley Hughes                                                                                                          
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
SENATE BILL NO. 185                                                                                                             
"An Act relating to reemployment of persons who retire under the                                                                
teachers' retirement system."                                                                                                   
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: SB 185                                                                                                                  
SHORT TITLE: REEMPLOYMENT OF RETIRED TEACHERS & ADMIN                                                                           
SPONSOR(s): SENATOR(s) MICCICHE                                                                                                 
                                                                                                                                
02/16/18       (S)       READ THE FIRST TIME - REFERRALS                                                                        
02/16/18       (S)       EDC, FIN                                                                                               
02/26/18       (S)       EDC AT 8:00 AM BUTROVICH 205                                                                           
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
SENATOR PETER MICCICHE                                                                                                          
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Sponsor of SB 185.                                                                                        
                                                                                                                                
RACHEL HANKE, Staff                                                                                                             
SENATOR MICCICHE                                                                                                                
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Presented the sectional on SB 185 on behalf                                                               
of the sponsor.                                                                                                                 
                                                                                                                                
LISA SKILES PARADY, Ph.D., Executive Director                                                                                   
Alaska Council of School Administrators                                                                                         
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Provided information and answered questions                                                               
on SB 185.                                                                                                                      
                                                                                                                                
KATHY LEA, Deputy Director/Chief Pension Officer                                                                                
Division of Retirement and Benefits                                                                                             
Department of Administration (DOA)                                                                                              
Juneau, Alaska,                                                                                                                 
POSITION STATEMENT: Answered questions on SB 185.                                                                             
                                                                                                                                
NORM WOOTEN, Executive Director                                                                                                 
Association of Alaska School Boards (AASB)                                                                                      
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Supported SB 185.                                                                                         
                                                                                                                                
MARK MILLER, Ph.D., Superintendent                                                                                              
Juneau School District                                                                                                          
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Supported SB 185.                                                                                         
                                                                                                                                
PETE HOEPFNER, Member                                                                                                           
Cordova School Board                                                                                                            
Cordova, Alaska                                                                                                                 
POSITION STATEMENT: Supported SB 185.                                                                                         
                                                                                                                                
DEENA BISHOP, Ph.D., Superintendent                                                                                             
Anchorage School District                                                                                                       
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Supported SB 185.                                                                                         
                                                                                                                                
JACK WALSH, Superintendent                                                                                                      
Craig School District                                                                                                           
Craig, Alaska                                                                                                                   
POSITION STATEMENT: Supported SB 185.                                                                                         
                                                                                                                                
KATHERINE GARDNER, Executive Director Human Resources                                                                           
Matanuska-Susitna School District                                                                                               
Palmer, Alaska                                                                                                                  
POSITION STATEMENT: Supported SB 185.                                                                                         
                                                                                                                                
SHAWN ARNOLD, Superintendent                                                                                                    
Nome Public Schools                                                                                                             
Nome, Alaska                                                                                                                    
POSITION STATEMENT: Supported SB 185.                                                                                         
                                                                                                                                
SEAN DUSEK, Superintendent                                                                                                      
Kenai Peninsula School District                                                                                                 
Soldotna, Alaska                                                                                                                
POSITION STATEMENT: Supported SB 185.                                                                                         
                                                                                                                                
PATRICK MAYER, Superintendent                                                                                                   
Wrangell Public Schools                                                                                                         
Wrangell, Alaska                                                                                                                
POSITION STATEMENT: Supported SB 185.                                                                                         
                                                                                                                                
KAREN GABORIK, Ph.D., Superintendent                                                                                            
Fairbanks School District                                                                                                       
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT: Supported SB 185.                                                                                         
                                                                                                                                
KERRY BOYD, Superintendent                                                                                                      
Yukon Koyukuk School District                                                                                                   
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT: Supported SB 185.                                                                                         
                                                                                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                              
7:59:37 AM                                                                                                                    
                                                                                                                                
CHAIR  GARY   STEVENS  called   the  Senate   Education  Standing                                                             
Committee meeting  to order at 7:59  a.m. Present at the  call to                                                               
order were Senators Giessel, Coghill,  Begich, and Chair Stevens.                                                               
Senator Hughes arrived shortly thereafter.                                                                                      
                                                                                                                                
        SB 185-REEMPLOYMENT OF RETIRED TEACHERS & ADMIN                                                                     
                                                                                                                                
7:59:57 AM                                                                                                                    
CHAIR  STEVENS announced  the  consideration of  SB  185 and  his                                                               
intent to hear and hold the bill.                                                                                               
                                                                                                                                
8:00:36 AM                                                                                                                    
SENATOR PETER  MICCICHE, , Alaska  State Legislature,  sponsor of                                                               
SB  185  said  the  bill  will  reinstitute  the  retiree  rehire                                                               
provision that was  adopted in 2005 through HB 161  with a sunset                                                               
date  of  2009.  Alaska  is experiencing  a  severe  shortage  of                                                               
teachers, particularly  in rural Alaska, but  also of specialists                                                               
throughout  the  state.  Attracting and  retaining  teachers  has                                                               
become  a  critical  issue  for school  districts.  He  has  seen                                                               
advertisements calling for  high school graduates to  take a prep                                                               
course  to fill  a  classroom.  He asked  if  the  state wants  a                                                               
lifetime of experience  filling a position temporarily  or a high                                                               
school  graduate.  The bill  gives  flexibility  to hire  retired                                                               
teachers  to temporarily  fill positions.  This  bill is  another                                                               
tool in the  short term while a long-term solution  is worked on.                                                               
House  Finance has  requested an  actuarial, but  the reality  is                                                               
that any other teacher filling that  slot would have the same TRS                                                               
[Teacher   Retirement  System]   impact.  The   fiscal  note   is                                                               
indeterminate at the moment.                                                                                                    
                                                                                                                                
8:03:06 AM                                                                                                                    
CHAIR  STEVENS asked  what  impact  the bill  might  have on  the                                                               
retirement or medical system.                                                                                                   
                                                                                                                                
8:03:17 AM                                                                                                                    
RACHEL HANKE, Staff, Senator  Micciche, Alaska State Legislature,                                                               
presented the sectional  on SB 185 on behalf of  the sponsor. She                                                               
said some of those questions  might be answered by the sectional,                                                               
but  Lisa Parady  [Executive Director  of the  Alaska Council  of                                                               
School Administrators] would also be presenting on the bill.                                                                    
                                                                                                                                
     Section 1: Allows school  districts to rehire educators                                                                  
     that  have retired  under the  defined benefit  plan or                                                                    
     the defined contribution plan.  Before a retired member                                                                    
     can  be  considered  to fill  a  position,  the  school                                                                    
     district must  publicly advertise  the position  for 10                                                                    
     business days  and actively recruit  to fill it  with a                                                                    
     person other than  a retired member. A  teacher whom is                                                                    
     retired from  the defined benefit or  contribution plan                                                                    
     must  be retired  for six  months or  more if  they are                                                                    
     younger than  62 or  60 days  if they  are 62  or older                                                                    
     before they  are considered for  a rehire.  The retired                                                                    
     member   must   also   certify  that   there   was   no                                                                    
     prearrangement   of   reemployment    made   prior   to                                                                    
     retirement.                                                                                                                
                                                                                                                                
8:04:12 AM                                                                                                                    
     Section 2: Would allow for  retirees who are rehired as                                                                  
     permitted  by   section  1,  to  continue   to  receive                                                                    
     retirement benefits during the period of reemployment.                                                                     
                                                                                                                                
8:04:21 AM                                                                                                                    
     Section  3: Will  make retirees  who are  reemployed as                                                                  
     permitted  by  section 1  of  this  bill ineligible  to                                                                    
     receive additional  retirement benefits based  on their                                                                    
     service and salary during the period of reemployment.                                                                      
                                                                                                                                
8:04:30 AM                                                                                                                    
     Section 4:  Clarifies that a  member who  is reemployed                                                                  
     does  not become  an active  member,  will continue  to                                                                    
     receive retirement benefits,  deductions under TRS will                                                                    
     not be  made to  their salary and  reemployed educators                                                                    
     will  not  receive  credited time  for  service  during                                                                    
     reemployment. This section also  ensures that a retired                                                                    
     and  rehired teacher  will be  eligible to  receive the                                                                    
     group health  plan coverage that is  provided to active                                                                    
     members employed by the school district.                                                                                   
                                                                                                                                
8:04:55 AM                                                                                                                    
     Section  5:   Conforms  that  an  employer   must  make                                                                  
     contributions to  the defined  benefit plan of  the TRS                                                                    
     system  as proposed  by section  1.  This section  also                                                                    
     requires  employers to  make contributions  to TRS  for                                                                    
     reemployed educators.                                                                                                      
                                                                                                                                
8:05:10 AM                                                                                                                    
     Section  6:   Would  apply  the  bill's   provision  to                                                                  
     contracts  that  are  made   on  or  after  the  bill's                                                                    
     effective date.                                                                                                            
                                                                                                                                
8:05:25 AM                                                                                                                    
CHAIR  STEVENS noted  that a  retired person  would be  receiving                                                               
medical  benefits. He  asked  why they  would  receive the  group                                                               
health plan coverage.                                                                                                           
                                                                                                                                
8:05:47 AM                                                                                                                    
SENATOR MICCICHE said  they are carrying the  bill for educators,                                                               
and Lisa Parady might be best suited to answer that question.                                                                   
                                                                                                                                
8:06:03 AM                                                                                                                    
SENATOR  HUGHES  said  she  was  glad they  are  coming  up  with                                                               
solutions  for  the teacher  solution.  She  asked why  the  bill                                                               
specifies  a different  amount of  time someone  must be  retired                                                               
before rehire,  six months if  under 62 or 60  days if age  62 or                                                               
older.                                                                                                                          
                                                                                                                                
8:07:52 AM                                                                                                                    
LISA SKILES PARADY, Ph.D., Executive  Director, Alaska Council of                                                               
School  Administrators, said  the  language  incorporates an  IRS                                                               
ruling requiring  bona fide separation  of employment.  She noted                                                               
that  Kathy  Lea  [Chief  Pension Officer  for  the  Division  of                                                               
Retirement  and Benefits],  an expert  on the  retirement system,                                                               
was present to answer questions.                                                                                                
                                                                                                                                
8:09:25 AM                                                                                                                    
DR.  PARADY said  her organization  is in  strong support  of the                                                               
bill. It  is another tool  at a  time when school  districts need                                                               
immediate  assistance. A  huge crisis  in staffing  exists across                                                               
the state.  SB 185 is not  a silver bullet, but  it provides some                                                               
relief.  It  is  necessary  for   both  urban  and  rural  school                                                               
districts.  The rural  districts  have never  seen such  turnover                                                               
rates.                                                                                                                          
                                                                                                                                
8:10:32 AM                                                                                                                    
DR. PARADY said  SB 185, which is  a companion to HB  224, is the                                                               
first  bill in  her tenure  with support  from all  of education.                                                               
They have partnered  with school boards, which is  common, but it                                                               
is less  common for  them to  work with  NEA-Alaska. The  bill is                                                               
addressing something everyone in education  sees as a crisis. The                                                               
bill incorporates  suggestions from  NEA-Alaska that  would allow                                                               
contracts to  be just for  one year at  a time and  the districts                                                               
must show they  have gone through the hiring  process. Of course,                                                               
that  is the  reason they  are  here. Districts  are posting  and                                                               
advertising and not finding anyone.                                                                                             
                                                                                                                                
8:11:40 AM                                                                                                                    
DR. PARADY  said this  is a supply-and-demand  issue. One  of the                                                               
highest  priorities   in  their   joint  position   statement  is                                                               
training, attracting,  and retaining qualified educators.  In the                                                               
past thousands of  people would be at job fairs  in Anchorage. In                                                               
2017, 211 candidates and 36 districts  were at the job fair. Many                                                               
of  those candidates  were moving  around  Alaska. Sometimes  the                                                               
reasons they  are moving from  another district are  not positive                                                               
for the state's  kids. Sometimes they want to move  onto the road                                                               
system, but 211 candidates are not meeting the state's need.                                                                    
                                                                                                                                
8:13:08 AM                                                                                                                    
DR. PARADY  said they are  supportive of President  Jim Johnson's                                                               
[President of the  University of Alaska] focus  on increasing the                                                               
number  of teachers  prepared by  the University  of Alaska.  The                                                               
goal is  to produce 90 percent  of Alaskan teachers by  2025, but                                                               
they need  assistance now. This  is a  stop gap while  working on                                                               
other  strategies.  From  2001-2010, when  the  previous  retiree                                                               
rehire law was in effect, the  total use was 325 people, which is                                                               
not an  outrageous number of  people, but  325 people would  go a                                                               
long  way toward  filling some  of these  vacancies. The  average                                                               
time reemployed  was 18.7 months;  the shortest period  was three                                                               
months  and the  longest 46  months. The  Lower Kuskokwim  School                                                               
District was  the largest employer.  The largest  number employed                                                               
in one  year was  181. The  majority of  those positions  was for                                                               
teachers, including  45 special education teachers.  The turnover                                                               
rate in Alaska for superintendents  has been about 60 percent, 26                                                               
percent for  principals. Statewide, the teacher  turnover rate is                                                               
about  22  percent,  but  remote, isolated  villages  have  a  57                                                               
percent retention rate.                                                                                                         
                                                                                                                                
8:16:06 AM                                                                                                                    
SENATOR GIESSEL  said the sponsor statement  states retirees will                                                               
continue  to receive  retirement  benefits during  the period  of                                                               
reemployment, but  section 2 of  SB 185 states  "benefit payments                                                               
may not be made during the period of reemployment."                                                                             
                                                                                                                                
DR. PARADY  said except as provided  in section f, and  section f                                                               
outlines this bill.                                                                                                             
                                                                                                                                
8:17:04 AM                                                                                                                    
DR.  PARADY  said it  is  an  at-will,  one year,  no  additional                                                               
benefits contract. Employers must pay  12.6 percent to offset the                                                               
unfunded  pension  liability,  which  is a  compromise  with  the                                                               
Department  of  Administration  and the  retirement  system.  The                                                               
school  district  continues  to  pay  for  the  unfunded  pension                                                               
liability, which  they pay for  every employee. Other  than that,                                                               
it  is  a  salary  contract.   The  employer  must  offer  health                                                               
insurance as an option for the employee.                                                                                        
                                                                                                                                
8:18:17 AM                                                                                                                    
SENATOR  GIESSEL  said  she  will keep  listening  but  is  still                                                               
thinking. It's double dipping.                                                                                                  
                                                                                                                                
8:18:25 AM                                                                                                                    
SENATOR   HUGHES  asked   whether   the  bill   would  apply   to                                                               
administrators.                                                                                                                 
                                                                                                                                
8:18:53 AM                                                                                                                    
DR. PARADY  said it  is open  to educators,  so it  could include                                                               
principals or superintendents.                                                                                                  
                                                                                                                                
8:19:05 AM                                                                                                                    
CHAIR STEVENS asked if any administrators are not in TRS.                                                                       
                                                                                                                                
8:19:12 AM                                                                                                                    
DR. PARADY said the  law allows a CEO of a  school district to be                                                               
in  PERS [Public  Employee Retirement  System], but  the bill  is                                                               
specific to TRS.                                                                                                                
                                                                                                                                
8:19:29 AM                                                                                                                    
SENATOR  HUGHES said,  to  clarify, the  employer  puts into  TRS                                                               
while a  retired person is  employed. The employee is  not paying                                                               
into TRS, but they are receiving their retirement check.                                                                        
                                                                                                                                
8:19:59 AM                                                                                                                    
DR.  PARADY said  the employee  continues to  receive retirement.                                                               
Any retiree  from the lower  48 can work  in Alaska and  not have                                                               
their retirement affected, but Alaskan  retirees cannot come back                                                               
on  contract without  a penalty.  With  this bill  they can  come                                                               
back, not at the level they  retired at, but on a salary contract                                                               
for a one-year period to fill a classroom vacancy.                                                                              
                                                                                                                                
8:21:07 AM                                                                                                                    
SENATOR HUGHES said she wanted  to clarify that just the employer                                                               
would be paying into TRS, and not the employee.                                                                                 
                                                                                                                                
8:21:27 AM                                                                                                                    
DR.  PARADY said  the  employer, the  school  district, would  be                                                               
paying 12.6  percent, not the  employee. The employee  would only                                                               
have a salary relationship with district.                                                                                       
                                                                                                                                
8:21:57 AM                                                                                                                    
SENATOR HUGHES  said the health  care for the  reemployed retiree                                                               
comes from  the active employment  health care plan, not  the TRS                                                               
system. She  asked if it is  cheaper to get health  care that way                                                               
than  through the  TRS  system.  She also  asked  if  it is  cost                                                               
neutral for  the employer to  pay 12.6 percent when  the employee                                                               
is not.                                                                                                                         
                                                                                                                                
8:22:44 AM                                                                                                                    
DR.  PARADY said  efforts  were made  to be  as  cost neutral  as                                                               
possible. They were  not trying to impact  the retirement system.                                                               
They worked on this for two  years. Part of the compromise was to                                                               
address  the unfunded  pension liability.  Also,  the state  does                                                               
want  school  districts to  continue  to  try to  find  long-term                                                               
classroom teachers,  principals, superintendents.  But this  is a                                                               
better  alternative to  other ways  of filling  vacancies or  not                                                               
filling those vacancies. Only 385 people used this previously.                                                                  
                                                                                                                                
8:24:31 AM                                                                                                                    
SENATOR  HUGHES said  she would  not want  to increase  the state                                                               
pension liability  if the employee  is not paying into  the plan.                                                               
It may  be a  lower cost to  TRS if an  employee uses  the active                                                               
health care plan.                                                                                                               
                                                                                                                                
8:24:57 AM                                                                                                                    
CHAIR STEVENS said it is  an interesting point that teachers from                                                               
out  of state  can  come and  be hired,  but  not retired  Alaska                                                               
teachers.                                                                                                                       
                                                                                                                                
8:25:12 AM                                                                                                                    
SENATOR BEGICH asked if the  reemployed educator could opt out of                                                               
the medical plan.                                                                                                               
                                                                                                                                
8:25:32 AM                                                                                                                    
DR. PARADY said yes.                                                                                                            
                                                                                                                                
8:25:35 AM                                                                                                                    
SENATOR  BEGICH  said  the  employee   is  not  paying  into  the                                                               
retirement  system   because  they   are  not  adding   to  their                                                               
retirement.                                                                                                                     
                                                                                                                                
8:25:55 AM                                                                                                                    
DR. PARADY said that is correct.                                                                                                
                                                                                                                                
8:26:04 AM                                                                                                                    
CHAIR STEVENS said they need  to better understand this clause: A                                                               
teacher whom is retired from  the defined benefit or contribution                                                               
plan must be  retired for six months or more  if they are younger                                                               
than  62 or  60 days  if they  are 62  or older  before they  are                                                               
considered for a rehire.                                                                                                        
                                                                                                                                
8:26:29 AM                                                                                                                    
DR.  PARADY  said that  language  is  specifically from  the  IRS                                                               
letter ruling that requires a  bona fide separation of employment                                                               
to be reemployed  in a retirement system. They  worked with their                                                               
attorney  general at  the Department  of Administration  who took                                                               
the language of the IRS ruling and  embedded it in the bill to be                                                               
in compliance.                                                                                                                  
                                                                                                                                
8:27:25 AM                                                                                                                    
KATHY  LEA, Deputy  Director/Chief Pension  Officer, Division  of                                                               
Retirement  and  Benefits,  Department of  Administration  (DOA),                                                               
introduced herself and offered to answer questions on SB 185.                                                                   
                                                                                                                                
8:27:56 AM                                                                                                                    
CHAIR STEVENS said  that he recalled teachers in  Kodiak who went                                                               
back into  teaching after  retirement and had  to pay  money back                                                               
into the  retirement system. He asked  if that were true  and why                                                               
would teachers currently not be allowed back in the system.                                                                     
                                                                                                                                
8:28:20 AM                                                                                                                    
MS. LEA  said the  current rules  prohibit retired  teachers from                                                               
coming  back  into  full-time,   active  teaching.  If  they  are                                                               
reemployed  for a  school  year,  they would  have  to repay  the                                                               
retirement benefits for the school year they are employed.                                                                      
                                                                                                                                
8:29:05 AM                                                                                                                    
MS. LEA  said when retired  teachers reemploy now, they  must pay                                                               
their  employee  contribution  and   they  do  accrue  additional                                                               
retirement credit. That  is why their retirement  benefit must be                                                               
stopped.                                                                                                                        
                                                                                                                                
CHAIR STEVENS  asked her  to address  the IRS  issue of  over and                                                               
under 62.                                                                                                                       
                                                                                                                                
8:29:33 AM                                                                                                                    
MS.  LEA said  in-service  distribution occurs  when members  are                                                               
still  active   in  their  retirement  plan   but  are  receiving                                                               
benefits. Some  types of plan allow  in-service distribution. The                                                               
state plans  do not.  To avoid  an in-service  distribution plan,                                                               
one must look  to the IRS for the normal  retirement age. The IRS                                                               
rules for  normal retirement age  as set  by IRS is  strictly for                                                               
tax  purposes.  Age 62  is  the  normal  retirement age  for  all                                                               
private sector retirement  plans since 2007. No age  has been set                                                               
yet  for government  plans. The  IRS  has signaled  that it  will                                                               
continue to  review plans with  62 as the normal  retirement age.                                                               
The  difference is  when a  person is  eligible for  a retirement                                                               
plan and when  they are not. Age 62 is  the normal retirement age                                                               
and to  make sure there is  a bona fide separation  of service, a                                                               
person  who is  62 or  older  must only  have a  60-day break  in                                                               
service to reemploy with the same employer.                                                                                     
                                                                                                                                
8:31:41 AM                                                                                                                    
MS. LEA said  a person under 62 is in  the early retirement stage                                                               
and must have a longer break from service.                                                                                      
                                                                                                                                
8:32:08 AM                                                                                                                    
SENATOR BEGICH asked  whether someone who retires  from the Lower                                                               
Kuskokwim School District cannot  apply with the Anchorage School                                                               
District unless the rehire bill in this provision exists.                                                                       
                                                                                                                                
8:32:27 AM                                                                                                                    
MS. LEA  said a retired  teacher from any school  district cannot                                                               
reemploy  with any  school district  without stopping  retirement                                                               
and  becoming an  active  member  in TRS  with  the exception  of                                                               
substitute teaching and short-term contracts.                                                                                   
                                                                                                                                
8:32:53 AM                                                                                                                    
SENATOR BEGICH asked what a short-term contract is.                                                                             
                                                                                                                                
MS. LEA said short-term is 60 to 90 days.                                                                                       
                                                                                                                                
8:33:07 AM                                                                                                                    
CHAIR  STEVENS asked  what  happens if  a  school district  hires                                                               
someone  on a  one-year contract  and keeps  doing it  year after                                                               
year.                                                                                                                           
                                                                                                                                
8:33:15 AM                                                                                                                    
MS.  LEA  said  state  auditors  would  question  whether  it  is                                                               
temporary. Under  the IRS rules,  a temporary contract can  be no                                                               
longer than two  years. If it is not temporary,  the members will                                                               
be  penalized because  they  will have  to  repay all  retirement                                                               
collected during that period.                                                                                                   
                                                                                                                                
8:33:51 AM                                                                                                                    
CHAIR STEVENS asked about full- or part-time positions.                                                                         
                                                                                                                                
8:34:03 AM                                                                                                                    
MS. LEA said any  service in TRS that is 50 percent  or more of a                                                               
normal work week must participate in TRS.                                                                                       
                                                                                                                                
8:34:20 AM                                                                                                                    
SENATOR  HUGHES asked  for clarification  about the  12.6 percent                                                               
that would be paid by the employer.                                                                                             
                                                                                                                                
8:35:00 AM                                                                                                                    
MS.  LEA said  under this  bill the  retiree can  come back  into                                                               
service  without   suspending  benefits  and  would   not  accrue                                                               
additional service,  and so does  not need  to pay into  TRS. The                                                               
12.6 contribution from the employer  is needed to keep the system                                                               
whole.                                                                                                                          
                                                                                                                                
8:35:39 AM                                                                                                                    
SENATOR  HUGHES  asked whether  it  would  help a  district  with                                                               
health  care costs  because a  reemployed retired  teacher 65  or                                                               
older  would  be covered  by  Medicare,  even  if they  are  also                                                               
covered by the active health care plan.                                                                                         
                                                                                                                                
8:36:11 AM                                                                                                                    
MS.  LEA said  an active  employee insurance  is always  primary,                                                               
either to Medicare or the retiree health care plan.                                                                             
                                                                                                                                
8:36:38 AM                                                                                                                    
SENATOR HUGHES asked if Medicare is  the first payer if a teacher                                                               
is not reemployed.                                                                                                              
                                                                                                                                
8:36:58 AM                                                                                                                    
MS. LEA said for a retired person, Medicare is primary.                                                                         
                                                                                                                                
8:37:06 AM                                                                                                                    
CHAIR  STEVENS said  the University  of Alaska  opted out  of the                                                               
social security system. He asked  whether that was true of public                                                               
school teachers.                                                                                                                
                                                                                                                                
8:37:21 AM                                                                                                                    
MS. LEA said  in 1945, when Social Security was  first offered to                                                               
public   and  government   employees,  teachers   voted  not   to                                                               
participate at  that time, which  is why  they are not  in social                                                               
security today.                                                                                                                 
                                                                                                                                
8:38:13 AM                                                                                                                    
SENATOR  HUGHES  asked  whether this  impacts  all  state  public                                                               
employees. They cannot be rehired and collect retirement.                                                                       
                                                                                                                                
8:38:46 AM                                                                                                                    
MS. LEA  said that is  a standard provision in  Alaska retirement                                                               
plans. Someone  cannot be  a member  of a  plan while  a retiree.                                                               
They must stop benefits before  participating in a part- or full-                                                               
time permanent position.                                                                                                        
                                                                                                                                
8:39:09 AM                                                                                                                    
CHAIR STEVENS  said he  and Senator  Coghill remembered  the days                                                               
from years  ago when Fish  and Game  employees would do  the same                                                               
job and draw  retirement and a salary. He  asked for confirmation                                                               
that this bill would not do the same thing.                                                                                     
                                                                                                                                
8:39:24 AM                                                                                                                    
MS.  LEA said  no,  the bill  does  not do  that.  It requires  a                                                               
recruitment period, evidence of a  recruitment period, and only a                                                               
one-year contract.                                                                                                              
                                                                                                                                
8:40:06 AM                                                                                                                    
NORM  WOOTEN, Executive  Director, Association  of Alaska  School                                                               
Boards (AASB), testified  in support of SB 185. He  said two AASB                                                               
resolutions support SB 185. Alaska  is competing with every other                                                               
state for the  same pool of decreasing applicants.  The rehire of                                                               
retired teachers and administrators is  not the final solution to                                                               
the teacher shortage, but it  is a temporary solution that allows                                                               
districts to  find teachers for hard-to-fill  positions, which is                                                               
a problem for all of the state.                                                                                                 
                                                                                                                                
8:41:25 AM                                                                                                                    
CHAIR STEVENS asked if people  are teaching longer than they used                                                               
to.                                                                                                                             
                                                                                                                                
8:41:37 AM                                                                                                                    
MR.  WOOTEN said  he has  only anecdotal  information. Some  keep                                                               
working and enjoy it and others not so much.                                                                                    
                                                                                                                                
8:42:13 AM                                                                                                                    
MARK  MILLER,  Ph.D.,  Superintendent,  Juneau  School  District,                                                               
supported SB 185. He  said he is in favor of  the bill because it                                                               
deepens a shallow  talent pool. While he was lying  bed at 2 a.m.                                                               
thinking about  how to close  a $3 million deficit  and wondering                                                               
whether the  bus barn would  call in for  a snow day,  he thought                                                               
that if he decided to retire  tomorrow and work at Home Depot, he                                                               
could receive  retirement benefits. But  if he wanted to  use his                                                               
education to  help young  students, he  is prohibited  from doing                                                               
that  in the  state of  Alaska while  retired. Alaska's  greatest                                                               
resource is Alaskans  and in tough times, the  most important job                                                               
is to  leverage resources for the  maximum good of the  state and                                                               
students. This bill does that.                                                                                                  
                                                                                                                                
8:44:43 AM                                                                                                                    
PETE HOEPFNER,  Member, Cordova School  Board, supported  SB 185.                                                               
He said schools  throughout Alaska have positions  they unable to                                                               
fill, especially for  special education and high  school math and                                                               
science. The number  of teachers at Alaska teacher  job fairs has                                                               
dropped  dramatically. In  the past,  1,500  to 2,000  candidates                                                               
came. In 2014, 250 candidates  came. In 2017, 211 candidates came                                                               
for 850-900 positions, which included  janitors and nurses. Today                                                               
people come to  Alaska to teach only for  the Alaskan experience.                                                               
The  pay and  retirement are  not  there. In  Texas teachers  can                                                               
start at  $56,000 with a  bachelor's degree and  zero experience.                                                               
Most Alaskan districts cannot afford  that. It is another tool to                                                               
have a  teacher in every  classroom. All districts are  trying to                                                               
fill  these positions.  This bill  is  supported by  AASB by  two                                                               
resolutions. The revised fiscal note  shows minimal impact to the                                                               
state.                                                                                                                          
                                                                                                                                
8:47:51 AM                                                                                                                    
DEENA BISHOP,  Ph.D., Superintendent, Anchorage  School District,                                                               
supported SB  185. She  said as  superintendent of  the Anchorage                                                               
School District  (ASD), she is in  strong support of SB  185. For                                                               
many  years  ASD  has  accessed   the  extensive  experience  and                                                               
expertise of  retired educators by  allowing temporary  and part-                                                               
term  employment, but  this  has been  very  limited without  the                                                               
provisions  in  SB  185.  Districts   could  enter  into  at-will                                                               
employment  agreements  with  retired educators  without  current                                                               
protections  and  benefits  such   as  tenure,  sick  leave,  and                                                               
retirement. She would support  having these explicit restrictions                                                               
in  the  bill. She  would  also  like  to  see the  bill  include                                                               
retirees  under the  defined contribution  plan. The  state would                                                               
benefit  because  districts pay  12.6  percent  for the  unfunded                                                               
pension  liability. It  is a  win/win.  The ASD  does not  pursue                                                               
hiring retired  teachers to avoid  hiring new  teachers. Retirees                                                               
fill gaps  when properly  certified staff  cannot be  found. They                                                               
provide temporary  or short-term expertise for  special projects,                                                               
and  they give  needed support  during high-demand  times of  the                                                               
year, such  as summer months, the  start of the school  year, and                                                               
assessment periods.  ASD wants to rehire  retired teachers rather                                                               
than use  contract agencies. Districts  could save  money because                                                               
of  costs not  directed  to employees.  The  ASD appreciates  the                                                               
legislature offering  increased flexibility  and discretion  in a                                                               
time of  constricting resources. The ASD  embraces innovation and                                                               
supports creative  solutions. SB 185  has the potential  of great                                                               
benefits to the ASD and the state.                                                                                              
                                                                                                                                
8:51:26 AM                                                                                                                    
JACK WALSH,  Superintendent, Craig School District,  supported SB
185. He said this is his  23rd year as an administrator in Alaska                                                               
and 23 years  at job fairs and filling  classrooms and leadership                                                               
needs, mostly in  rural Alaska. This plan has worked  in the past                                                               
and offers  a real option for  people. It is another  tool to put                                                               
the best quality teachers in  front of students. They have worked                                                               
to address all  the issues around retirement  with the Department                                                               
of Administration.  Districts need  this tool and  resource. They                                                               
regularly  deal with  illnesses,  with  family emergencies.  They                                                               
need  people  to come  in  on  a  short-  or long-term  basis  to                                                               
maintain  quality of  services. This  has some  money going  into                                                               
retirement system.  It is a critical  piece of how the  future of                                                               
the Alaskan schools can be improved.                                                                                            
                                                                                                                                
8:55:07 AM                                                                                                                    
SENATOR HUGHES asked  why SB 185 has no sunset  when the previous                                                               
bill did.                                                                                                                       
                                                                                                                                
8:55:29 AM                                                                                                                    
DR. PARADY said with the  gravity of the current teacher shortage                                                               
situation, they do  not have a sense of when  they can shift this                                                               
tide. They  do not know  how to identify  when a sunset  would be                                                               
appropriate,  so  they did  not  suggest  one.  The state  is  in                                                               
trouble. Their  foundation is cracking  because they  cannot find                                                               
qualified staff to  fill vacancies. Everyone is  working on this,                                                               
the   Department  of   Education  and   Early  Development,   the                                                               
university, groups like hers, the  school board association. They                                                               
are thinking  of how to solve  this issue of students  having the                                                               
best  people in  front of  them. Alaska  is not  alone with  this                                                               
problem.  It is  worse for  Alaska because  it gets  its teachers                                                               
from the lower 48. Most teachers  come from Oregon, and Oregon is                                                               
doing emergency  waivers to  get as many  teachers in  place. The                                                               
state that  Alaska gets most  of its  teachers from is  in crisis                                                               
also.                                                                                                                           
                                                                                                                                
8:58:36 AM                                                                                                                    
SENATOR HUGHES  said she has heard  there is no magic  date about                                                               
when the national  teacher shortage will end. If  this truly will                                                               
help  the retirement  liability  as well  as  help districts,  it                                                               
makes her want to think  about expanding it for other situations,                                                               
such as the trooper situation.                                                                                                  
                                                                                                                                
8:59:52 AM                                                                                                                    
KATHERINE   GARDNER,   Executive    Director   Human   Resources,                                                               
Matanuska-Susitna  School District,  supported SB  185. She  said                                                               
that   in  Mat-Su   the  need   to  hire   retired  teachers   or                                                               
administrators is  very limited, but  this would be a  relief for                                                               
emergencies. Their  recruitment challenges  are not  as difficult                                                               
as in other parts of the  state, but there are certain situations                                                               
where flexibility is  needed. Usually their preference  is not to                                                               
hire retired person,  but that is not always  reality. She echoed                                                               
Dr. Bishop's comment about the  need for explicit restrictions on                                                               
employment.  She   said  the  bill  should   be  implemented  for                                                               
individuals  working at  least  half  time so  as  not to  impact                                                               
school districts that employee retired  teachers for very limited                                                               
part-time positions that are not retirement eligible.                                                                           
                                                                                                                                
9:02:08 AM                                                                                                                    
SHAWN ARNOLD,  Superintendent, Nome Public Schools,  supported SB
185. He  said SB 185  is a tool  to help school  districts around                                                               
the state.  In Nome they  have had increasing  difficulty filling                                                               
the   specialist  positions,   school   counselors  and   special                                                               
education. They need to find  the best teachers for students with                                                               
the greatest needs, but it is  harder and harder every year. Many                                                               
teachers  remain  in  the community  and  some  are  hard-to-find                                                               
specialists.  They are  hesitant  to work  again  because of  the                                                               
retirement impact. This wouldn't be  the only solution, but it is                                                               
definitely legislation moving in right direction.                                                                               
                                                                                                                                
9:04:41 AM                                                                                                                    
SEAN  DUSEK,  Superintendent,  Kenai Peninsula  School  District,                                                               
supported  SB  185.  He   said  the  Superintendents  Association                                                               
supports  this bill.  Until the  University of  Alaska meets  its                                                               
goal  of  producing  enough  teachers,  this  is  a  bridge.  The                                                               
benefits of  the bill outweigh  possible complexities.  Each year                                                               
in the  Kenai Peninsula they  have open positions that  this bill                                                               
could  fill. They  always work  hard  to fill  positions, but  at                                                               
times they  need retired  teachers for gaps  at the  beginning of                                                               
the year. Students would benefit  from experienced leadership and                                                               
educators working  with new teachers  to achieve  a comprehensive                                                               
learning program for all students.                                                                                              
                                                                                                                                
9:06:42 AM                                                                                                                    
PATRICK   MAYER,   Superintendent,   Wrangell   Public   Schools,                                                               
supported SB 185. He noted that  he is the president-elect of the                                                               
Alaska Superintendents Association.  He said that in  a few weeks                                                               
will be at the  job fair in Anchorage. He will  no longer have to                                                               
worry about  the stampede of  teacher candidates in  the ballroom                                                               
of the  Captain Cook. SB 185  is a mechanism for  immediate help.                                                               
It is vital  because of the critical shortage of  educators and a                                                               
high turnover  rate. The joint  position statement of  the Alaska                                                               
Council of  School Administrators shows  retiree rehire as  a top                                                               
priority.  The flexibility  of  SB 185  allows  options best  for                                                               
students. Students  will benefit  from the experience  of retired                                                               
teachers.                                                                                                                       
                                                                                                                                
9:09:15 AM                                                                                                                    
KAREN GABORIK, Ph.D.,  Superintendent, Fairbanks School District,                                                               
supported SB 185. She said Fairbanks  for the first time has felt                                                               
the  pain  of teacher  shortages.  They  have almost  always  had                                                               
unfilled special  education positions, but now  they have regular                                                               
education positions unfilled  for music and high  school math and                                                               
science teachers.  The ability  to rehire  retired teachers  on a                                                               
temporary basis  would make a  huge difference for  students. Now                                                               
students  have a  revolving door  of  unqualified substitutes  in                                                               
that content area.  It equates to real time and  learning lost in                                                               
critical  content  areas.  It also  requires  other  teachers  to                                                               
support these classrooms. The priority  will be always to recruit                                                               
for  long-term basis,  but more  and more  they are  experiencing                                                               
gaps in  hiring. Many communities  have retired  teachers willing                                                               
to  assist, including  some  urban retired  teachers  who may  be                                                               
willing to go to rural areas on a short-term basis.                                                                             
                                                                                                                                
9:12:08 AM                                                                                                                    
KERRY  BOYD,  Superintendent,   Yukon  Koyukuk  School  District,                                                               
supported SB 185.  She noted that she is secretary  of the Alaska                                                               
Superintendents Association.  She said  that as  a superintendent                                                               
of a district that employs  teachers in very rural, remote fly-in                                                               
areas,  and also  in Fairbanks,  Anchorage, Juneau,  and Wasilla,                                                               
this bill could be very beneficial.  Over the years they have had                                                               
to fill in positions at the  last minute and retired teachers are                                                               
reluctant to do so because of  the impact on their benefits. This                                                               
would help  the state over  all. Her staff  is in support  of the                                                               
bill,  and some  said  they  may consider  staying  in Alaska  to                                                               
utilize their strength as educators.                                                                                            
                                                                                                                                
9:13:56 AM                                                                                                                    
ACTING  CHAIR  COGHILL  said  in  the  Interior,  retired  state,                                                               
federal,  and  military workers  make  up  a  huge chunk  of  his                                                               
working population.  He reflected  on the interesting  dynamic of                                                               
their contributions to the economy.                                                                                             
                                                                                                                                
9:14:54 AM                                                                                                                    
SENATOR BEGICH said most of the  letters speak to HB 224. He said                                                               
it would be good to have letters that refer to SB 185.                                                                          
                                                                                                                                
ACTING CHAIR COGHILL held SB 185 in committee.                                                                                  
                                                                                                                                
9:15:20 AM                                                                                                                    
There being  no further  business to  come before  the committee,                                                               
Acting  Chair Coghill  adjourned  the  Senate Education  Standing                                                               
Committee at 9:15 a.m.                                                                                                          
                                                                                                                                

Document Name Date/Time Subjects
001_SB185_RetireTeacherRehire_Sponsor Statement.pdf SEDC 2/26/2018 8:00:00 AM
SB 185
002_SB185_RetireTeacherRehire_BillText_VersionA.PDF SEDC 2/26/2018 8:00:00 AM
SB 185
003_SB185_RetireTeacherRehire_Sectional Analysis_VersionA.pdf SEDC 2/26/2018 8:00:00 AM
SB 185
004_SB185_RetireTeacherRehire_FN1_Admin.pdf SEDC 2/26/2018 8:00:00 AM
SB 185
009_SB185_RetireTeacherRehire_Support Letters_19Feb2018.pdf SEDC 2/26/2018 8:00:00 AM
SB 185