Legislature(2017 - 2018)GRUENBERG 120
04/18/2017 03:00 PM House STATE AFFAIRS
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| Audio | Topic |
|---|---|
| Start | |
| HB235 | |
| HB125 | |
| HB224 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 235 | TELECONFERENCED | |
| + | HB 125 | TELECONFERENCED | |
| *+ | HB 224 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 224-REEMPLOYMENT OF RETIRED TEACHERS & ADMIN
4:06:58 PM
CHAIR KREISS-TOMKINS announced that the final order of business
would be HOUSE BILL NO. 224, "An Act relating to reemployment of
persons who retire under the teachers' retirement system."
4:07:40 PM
REPRESENTATIVE JENNIFER JOHNSTON, Alaska State Legislature, as
prime sponsor of HB 224, stated that Alaska has many budget
challenges and has challenges in recruiting and retaining
qualified teachers in the rural areas. She said that even with
the University of Alaska Anchorage (UAA) graduating qualified
teachers, there is still a teacher shortage; and districts are
struggling every year to fill the positions.
REPRESENTATIVE JOHNSTON relayed that HB 224 would allow school
districts to rehire retired educators to work as contractors,
which would offer savings to the district. Under HB 224,
educators younger than age 62 may be rehired after one year of
retirement; educators age 62 and older may be rehired after
three months of retirement. If the school district uses this
tool, it must contribute [12.6] percent salary base rate toward
paying down the unfunded liability of the pension fund of the
Teachers' Retirement System (TRS) but won't be required to
contribute other costs beyond the salary.
REPRESENTATIVE JOHNSTON maintained that the two benefits of the
proposed legislation are cost savings and expanding the pool of
qualified teachers. She added that it also might provide some
mentorship within school districts.
4:09:18 PM
ROBERT ERVINE, Staff, Representative Jennifer Johnston, Alaska
State Legislature, on behalf of Representative Johnston, prime
sponsor of HB 224, stated that Section 1 of HB 224 would modify
the terms of the teacher employment and tenure to allow school
districts to rehire educators who have retired under the defined
benefit plan or the defined contribution plan - Tier II or Tier
III. Section 1 clarifies that if an educator is younger than
age 62, he/she must be retired for a year before being rehired,
or if age 62 or older, must be retired for three months before
being rehired. Section 1 also would require employers to
contribute to TRS for reemployed educators.
MR. ERVINE relayed that Section 2 would allow for retirees who
are rehired, as permitted by Section 1, to continue to receive
their retirement benefits during the period of reemployment.
MR. ERVINE said that Section 3 would ensure that retired
teachers who are rehired don't accrue more benefits. He relayed
that Section 4 would clarify in the TRS statutes that members
will continue to receive benefits, and deductions for TRS will
not come from their salaries but from the school district in a
separate payment. Section 4 also states that reemployed
educators will not receive credited time during their
reemployment.
MR. ERVINE stated that Section 5 would further clarify that
school districts will have to contribute to TRS. He said that
Section 6 would apply the provision of HB 224 to the contracts
that are made.
4:11:12 PM
REPRESENTATIVE WOOL summarized: a retired teacher goes back to
work; he/she still collects retirement; and the school district
pays into the TRS fund, but the rehired teacher does not. He
asked if normally a teacher pays into the fund.
REPRESENTATIVE JOHNSTON responded that with both TRS and the
Public Employees' Retirement System (PERS), the public agency
employer pays an assessed fee. The fee for teachers is [12.6]
percent of the salary base, which is both defined contributions
and contributing contributions. She said that the rehired
teacher would be part of that salary base. The fee for PERS
employees is 22 percent of the salary base.
REPRESENTATIVE WOOL asked if there would be any difference
between the contribution levels of the rehired retired teacher
and the regular teacher. He stated that he would like to know
what the difference would be between the two teachers as far as
TRS is concerned.
MR. ERVINE answered that there would be no difference; it would
be the same contribution level.
4:12:57 PM
REPRESENTATIVE LEDOUX referred to the "cost savings" mentioned
in the sponsor statement [included in the committee packet].
She asked, if the contributions are at the same level, "where
are the cost savings coming from?"
REPRESENTATIVE JOHNSTON replied that the retired employee would
continue to receive health care and other benefits from the
retirement system. She maintained that the school district
might not have to pay as much to hire the retired teacher as it
would a teacher without health care benefits or other retirement
benefits.
REPRESENTATIVE LEDOUX asked if the school district would have to
pay into TRS for the rehired retired teacher.
REPRESENTATIVE JOHNSTON explained that when PERS and TRS were
changed in 2008, the whole base salary for the hiring entity,
such as a municipality or a school district, was assessed for
the amount that the entity must pay towards the retirement
system - 22 percent [for PERS, 12.6 percent for TRS]. The
rehired retired teacher would be part of that salary base;
therefore, the entity would be paying for the teacher's salary
as it's "prorated out towards the pension."
REPRESENTATIVE LEDOUX asked for the source of savings if the
school district is paying into the retirement system. She
conceded that savings are not necessarily needed for the
proposed legislation to make sense.
REPRESENTATIVE JOHNSTON responded that the principle savings
would be derived from the teacher not requiring the health care
benefits that other teachers would require. She agreed that
satisfying the need for teachers may be more important than
saving money under the proposed legislation. She maintained
that the intent of HB 224 is to enlarge the pool of teachers.
REPRESENTATIVE LEDOUX offered a scenario: Two teachers are
being considered for hire; each would be paid $50,000 per year.
One teacher is a retired teacher wanting to be rehired; the
other teacher is a new teacher. Representative LeDoux asked,
"Can you explain to me how it would work for each one?"
REPRESENTATIVE JOHNSTON replied that for the new hire, there
would be encumbered costs - a health care plan, payments into
the retirement system, and continuing education incentives.
4:17:20 PM
REPRESENTATIVE LEDOUX asked what Representative Johnston means
by "encumbered costs."
REPRESENTATIVE JOHNSTON replied that the benefits that a person
receives along with his/her salary is what she is referring to
as encumbered costs.
REPRESENTATIVE JOHNSTON explained that the rehired teacher would
not necessarily need the health care benefits or the continuing
education incentives; the only additional expense would be the
salary base formula going into the pension fund.
REPRESENTATIVE LEDOUX summarized by saying the rehire doesn't
have as many encumbered costs.
REPRESENTATIVE JOHNSTON concurred, but reminded the committee
that the most important aspect of the proposed legislation is
not cost savings but addressing the teacher shortage by allowing
school districts access to a larger teacher pool.
4:19:26 PM
LISA PARADY, PhD, Executive Director, Alaska Council of School
Administrators (ACSA), testified that she is representing
superintendents, secondary and elementary school principals,
school business officials, and other school district
administrators. In response to Representative LeDoux, she
stated that the proposed legislation is focused on "supply and
demand" - trying to increase the teacher pool. She relayed that
the retiree would be rehired in an "at-will" situation. She
maintained that one can be retired from any state in the
country, come to Alaska, and be employed as an educator;
Alaska's own retired teachers are prohibited from doing so.
DR. PARADY maintained that the intent of HB 224 is to allow
retired teachers to be employed under an at-will contract
without impacting their retirement benefits. She stated that in
a compromise with the Department of Administration (DOA),
included in the proposed legislation is the requirement that the
districts pay the 12.6 percent employer contribution to TRS, as
they would with a non-retired employee. She relayed that the
rehired retiree would be under contract with the school
district, and the legislature would not be involved with that
contract.
DR. PARADY suggested there may be cost savings if a school
district negotiated a lower salary with the employee than he/she
received before retirement. She reiterated that the employee
would not be availing themselves of the benefits offered through
the school district, because his/her [retirement] benefits would
be intact. She offered that the school district would be
willing to pay the additional amount to TRS because it needed
the employee; the employee would not pay into TRS because they
would be an independent at-will employee under contract with the
district. She added that the district might decide to pay a
greater salary for a "high need" position - such as a special
education teacher - but less for a teacher in a position that
the school district decided was of lesser value to them. She
reiterated that the intent of the proposed legislation is not
cost savings but the teacher shortage crisis.
REPRESENTATIVE LEDOUX asked why a teacher would retire, then go
back to work.
4:23:42 PM
DR. PARADY replied that the proposed legislation does not
address the retiree's intent. HB 224 would allow a school
district to avail itself of the services of a retired person if,
in fact, there is someone available who is willing to work;
currently a retired teacher is prohibited from doing so. She
maintained that the proposed legislation would provide an
additional tool to school districts; it is not about
incentivizing someone to retire or not to retire. If a
community has retired educators and the school district has
trouble filling a teaching position, HB 224 would allow the
school district to hire a retired educator who is familiar with
both Alaska students and the state and is willing to teach.
DR. PARADY reviewed for the committee the history of the
provision under the proposed legislation. Previous legislation
with this provision was in existence starting in 2001 and
sunsetting in 2009. At the point of sunset, the teacher
shortage was reaching a crisis level. She relayed that DOA
reported that 325 retired teachers were rehired from 2001 to
2010, and because the teachers were counted each year, the
actual number of teachers rehired may have been much lower. She
relayed that the average period of reemployment was 18.7 months;
the shortest period 3 months; and the longest period 46 months.
The employer employing the largest number of retired teachers
was the Lower Kuskokwim School District (LKSD); and the most
employed in one year was 181. She reported that the position
with the highest number of rehires was "teacher" at 149; 18
superintendents; 22 principals; 45 special education teachers;
and 12 psychologists.
DR. PARADY referred to Slide 3 of the ACSA PowerPoint
presentation handout and relayed that Alaska is "working against
a backdrop of a teacher shortage nationally." She offered that
the Alaska Teacher Placement (ATP) center [University of Alaska
Fairbanks (UAF)] currently lists 602 openings; there were about
700 vacancies at the start of the year. At last year's ATP job
fair, 35 school districts participated with 185 school district
personnel in attendance, and there were 265 candidates; this
year there were 212 candidates at the job fair. She said that
historically the ATP job fair attracts hundreds of people from
all over the country, but now the applicant pools are shrinking.
She mentioned that currently there are 250 teaching jobs listed
and given that school districts have been actively recruiting
for the past three months, the number of vacancies is
staggeringly high for Alaska. She stated that in Alaska, many
of the school districts have started the school year unstaffed
and remain so. She added that this is common in rural school
districts where the turnover is high but historically has not
been common in the urban school districts.
DR. PARADY relayed that there are about 100 positions that were
not filled, which means they are being filled with anyone -
substitutes and paraprofessionals - just to fill the gaps. She
referred to Slide 4 and mentioned that the University of Alaska
[UA] pipelines teachers into Alaska teaching positions, but
there are not enough teachers to fill the void. She said that
the UA Colleges and Schools of Education produce about 200 to
250 new teachers per year, which is not enough to fill the
existing gap. She relayed that UA President [Jim] Johnsen has a
goal of UA preparing 90 percent of the annual hired teachers by
2025. It is an ambitious goal which ACSA supports, but she
maintained that the shortage needs to be addressed now, and the
proposed legislation may help to alleviate the gap until the UA
Strategic Pathways initiative produces results.
4:29:56 PM
REPRESENTATIVE LEDOUX asked what the rationale was for not
allowing the school districts to hire retired teachers.
DR. PARADY responded that she did not know the specific reasons;
she conjectured it was related to the state not wanting to
interfere with the retirement system. She maintained that under
the current staffing crisis, putting Alaska's retired teachers
on equal footing with all other retired teachers in the country
and allowing Alaska's retired teachers to be in the pool of
applicants balances out that concern. She maintained that there
are safeguards included in the proposed legislation: the delay
period before rehiring and the age consideration. She referred
to Slide 12, which states that rural and remote schools have the
highest turnover rate of principals and teachers. The slide
illustrates the urban rural comparisons: urban principal
turnover is 21 percent; urban teacher turnover is 14 percent;
rural remote principal turnover is 32 percent; and rural remote
teacher turnover is 31 percent. She said that student
achievement depends on hiring high quality teachers.
4:33:40 PM
REPRESENTATIVE WOOL asked how long an educator must work and
what age an educator must be to retire with benefits. He
relayed that Alaska is having a hard time filling trooper and
Village Public Safety Officer (VPSA) positions, and Alaska has
the highest unemployment rate in the country. He asked, "What
gives?" He asked if it is just in salary and benefits that
Alaska is unable to compete with other states. He mentioned
that Alaska historically "outperformed" other states in the
salary and benefits it offered.
DR. PARADY answered, "That absolutely is a consideration. She
related that there is a national shortage of teachers because
people are not choosing education as a profession. Alaska has
lost competitiveness; it used to lead the country with its
salary and benefit package; and it has lost that momentum.
4:35:41 PM
NORM WOOTEN, Executive Director, Alaska Association of School
Boards (AASB), stated that the previous retire rehire bill
[House Bill 161, passed into law during the Twenty-Fourth Alaska
State Legislature, 2005-2006] was for employees working under a
waiver for hard to fill positions, which included special
education teachers and secondary education mathematics and
science teachers. Generally elementary positions are easier to
fill because there are more elementary teachers.
MR. WOOTEN maintained that when the sunset clause of House Bill
161 went into effect in 2009, AASB adopted a resolution in
support of continuing the program and continues to support
retire rehire to this day. He relayed that the retire rehire
program was initiated for good reasons, and the primary reason
was to fill the positions that are difficult to fill. The
conditions of teacher shortage in Alaska still exist despite the
arbitrary deadline of the sunset clause.
MR. WOOTEN testified that the irony of Alaska's prohibition is
that a teacher can retire in any other state, come to Alaska,
and be hired as a teacher; however, Alaska retired teachers
wanting to teach again in Alaska cannot do so. Some people
"fail" at retirement; and he is an example of that. He
maintained that many people go back to work after retirement,
because they feel like they made a mistake by retiring. He
reiterated that Alaska school districts need the services of
these retired teachers.
REPRESENTATIVE LEDOUX pointed out that the provisions under
House Bill 161 expired in 2009, and it is now 2017. She asked
if there have been efforts made in previous legislatures to
reinstitute the retire rehire program.
MR. WOOTEN responded yes. The AASB has worked hard to get this
accomplished, and "this is the first time we've gotten it this
far ...."
4:38:53 PM
REPRESENTATIVE WOOL presented a scenario: A teacher retires at
the time he/she is eligible to retire; the teacher decides
he/she wants to go back to teaching after being retired six
months; he/she negotiates a contract with the school district
possibly at a lower pay level; he/she receives a teacher salary
and a retirement check, therefore, makes more money than another
teacher. He asked if that would be a problem and if the
additional teaching time would increase the retirement payments
when the teacher retires fully.
MR. WOOTEN replied that the decision to retire is a personal
choice. He maintained that when he retired from his first job,
he was hired back as a contractor; therefore, he was getting two
salaries - a contractor salary and a retirement salary - and
other workers were not getting two salaries. He maintained that
it is a decision that everyone faces - to stay at his/her job or
retire.
REPRESENTATIVE WOOL conceded that as a contractor, one is not
getting all the benefits that employees receive.
MR. WOOTEN answered, that's correct. He said that he received
no benefits when he returned to work as a contractor.
REPRESENTATIVE WOOL asked if a returning teacher would get
benefits, since he/she would come back as an employee. He also
asked if that additional work would enhance his/her retirement
amount.
MR. WOODEN expressed that he is not qualified to answer that
question.
4:42:13 PM
REPRESENTATIVE TUCK pointed out that a returning retiree would
be exempt from any collective bargaining agreements. Someone
coming from another state would not be exempt but would be under
a collective bargaining agreement. He asked if there is any
reason Alaska would not want employees working under collective
bargaining agreements.
MR. WOOTEN responded that when school districts have a choice,
they prefer long-term employees; the current proposed
legislation is a stopgap measure to employ people in hard to
fill positions. He said a school district is not going to staff
its entire school with contracted retired teachers, because
these teachers are temporary; they are not permanent employees
with long-term teaching aspirations.
REPRESENTATIVE TUCK suggested that it is "cheaper" for the
school district to hire the temporary employee than a long-term
employee receiving benefits under collective bargaining. He
suggested that it is illogical to hire temporary employees if
the school district wants long-term employees.
REPRESENTATIVE TUCK stated that with the Senate's cuts to
education, there will be an estimated 700 teachers terminated.
He maintained if that occurs, Alaska may have teachers to fill
the shortage.
4:44:56 PM
REPRESENTATIVE LEDOUX referred to the statement: Some people
realize after retirement that they want to go back to work. She
asked if there is a way that a person could re-enter the school
system, not take retirement benefits, and become a regular
employee again, or if once the person has retired, "there's no
going back."
MR. WOOTEN answered that a retired teacher can come off
retirement and go back into the system.
REPRESENTATIVE LEDOUX maintained if that is the case, the
proposed legislation is unnecessary.
MR. WOOTEN stated that the magnitude of the problem of being
unable to fill positions is great. He relayed his experience at
Kodiak: when he served on the school board 30 years ago, school
administrators were able to fill every position from the job
fair in Anchorage; when he got off the school board 25 years
later, the administrators needed to attend eight to ten job
fairs across the country to find teachers. He maintained that
the teacher shortage in Alaska is huge, and it is a nationwide
shortage as well. He said that he doubts very seriously that a
retired teacher receiving retirement pay would be willing to
give up the retirement pay to re-enter the system if he/she had
the opportunity to draw both retirement and a contracted salary.
REPRESENTATIVE LEDOUX maintained that was the point she was
making. The proposed legislation would incentivize retirement,
because the teacher could retire, take some time off, and come
back and receive both a salary and retirement. She said without
HB 224, the teacher would need to decide to stay or not stay.
[HB 224 was held over.]