04/12/2000 01:35 PM Senate HES

              HB 236-CREDITED PART-TIME SERVICE TRS                                                                         
                                                                                                                                
MS. PATTI  SWENSON, staff to  Representative Bunde, sponsor  of HB
, gave the  following description of the measure.   HB 236 will                                                              
correct  an inequity  in the  Teachers'  Retirement System  (TRS).                                                              
Under the  current system, teachers  working more than  50 percent                                                              
of the time but less than full time  receive only one-half service                                                              
credit for  time worked.  Teachers  in this group  contribute more                                                              
retirement dollars and  do not receive the same  benefit back when                                                              
they  retire.    HB  236 will  correct  this  inequity  by  giving                                                              
teachers  who work more  than 50  percent of  the time  retirement                                                              
service credit based on time worked.                                                                                            
                                                                                                                                
CHAIRMAN MILLER took public testimony.                                                                                          
                                                                                                                                
MR.  STAN FISCHER,  a  part-time  teacher from  Anchorage,  stated                                                              
support for  HB 236 because  it corrects a fundamental  unfairness                                                              
in credited service in the TRS for  part-time teachers.  This bill                                                              
retroactively amends AS 14.25.243  to allow part-time teachers who                                                              
work more  than 50 percent  but less  than 100 percent  to receive                                                              
credit for teacher retirement service  based on actual time worked                                                              
and   actual  contributions   made  rather   than  the   arbitrary                                                              
statutorily imposed formula of 50  percent.  Presently he works 80                                                              
percent of  the time and  pays 8.65 percent  of his  salary toward                                                              
retirement,  like  full-time  teachers.     The  Anchorage  School                                                              
District makes  a 12 percent  contribution toward  his retirement,                                                              
as it  does for  full-time employees.   State  law, however,  only                                                              
permits him to  receive a 50 percent retirement credit  for his 80                                                              
percent service.  He does not believe  it can be reasonably argued                                                              
that  part-time  teachers  should   forfeit  a  portion  of  their                                                              
salaries.     The   cumulative   effect  of   this   law  is   not                                                              
insignificant.   He has  worked at 80  percent for five  years and                                                              
because of the state law will lose  one year of retirement credit.                                                              
                                                                                                                                
MR. JOHN CYR,  President of NEA-Alaska, stated support  for HB 236                                                              
and  thanked  the sponsor  for  his hard  work.   This  bill  will                                                              
correct an inequity in the system.                                                                                              
                                                                                                                                
SENATOR WILKEN  asked Mr.  Cyr to address  the argument  that this                                                              
change could be made in the negotiating process.                                                                                
                                                                                                                                
MR. CYR said it cannot.  He explained  the TRS is statewide so the                                                              
way teachers  pay into that  system and  draw from that  system is                                                              
not  a  subject of  negotiation.    The  change  must be  made  in                                                              
statute.                                                                                                                        
                                                                                                                                
MS. KATHLEEN  BRACKEN from Petersburg  stated support for  HB 236.                                                              
During three  years as a 4/5  time kindergarten teacher,  both she                                                              
and the  school district  contributed to TRS.   Passage of  HB 236                                                              
will compensate teachers  fairly for the time and  money they have                                                              
contributed to the retirement system.   She added that inequitable                                                              
part-time credit  is a  major issue  causing teachers to  transfer                                                              
out of  part-time teaching.   Young  learners and programs  suffer                                                              
when a  high turnover rate  occurs.   Alaska ranks 50th  among the                                                              
states in recruitment for part-time employment.                                                                                 
                                                                                                                                
MR.  BILL  CHURCH,  Retirement  Supervisor  for  the  Division  of                                                              
Retirement  and   Benefits,  provided  the   following  statistics                                                              
regarding  part-time  teachers  who  participate  in TRS.    Three                                                              
percent  of the  total TRS  membership is  comprised of  part-time                                                              
employees.  Of  that three percent, approximately  57 percent work                                                              
contracts in  excess of  50 percent.   The Division of  Retirement                                                              
and Benefits believes  this bill will have no  financial impact on                                                              
TRS.                                                                                                                            
                                                                                                                                
SENATOR WILKEN asked if Section 2 is the retroactivity clause.                                                                  
                                                                                                                                
MR. CHURCH said that is correct.                                                                                                
                                                                                                                                
SENATOR  WILKEN  asked if  the  Division estimated  the  financial                                                              
impact of Section 2 on TRS.                                                                                                     
                                                                                                                                
MR.  CHURCH  replied the  Division's  actuary  was asked  to  look                                                              
specifically at past service liability  questions when he analyzed                                                              
the  bill.    The  actuary  indicated   there  were  no  liability                                                              
questions so the  zero fiscal note takes the  retroactivity clause                                                              
into consideration.                                                                                                             
                                                                                                                                
SENATOR  WILKEN  moved  HB  236  from  committee  with  individual                                                              
recommendations and  its attached zero  fiscal note.   There being                                                              
no objection, CHAIRMAN MILLER noted it was so ordered.