Legislature(2001 - 2002)
05/04/2001 07:17 PM Senate FIN
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
CS FOR HOUSE BILL NO. 242(FIN)
"An Act relating to reemployment of and medical benefits for
retired members of the teachers' retirement system and public
employees' retirement system; relating to the inclusion of
cost-of-living differentials on compensation and benefits
under the public employees' retirement system; and providing
for an effective date."
This was the second hearing for this bill in the Senate Finance
Committee.
REPRESENTATIVE PETE KOTT testified this bill "offers an
opportunity" for retired members of the Teachers Retirement System
(TRS) and the Public Employees Retirement System (PERS) to return
to work within the system. In addition, he said, the bill provides
greater incentive for retaining these PERS and TRS members. He
stressed there is a recognized shortage of teachers in the state
and he told of the "brain drain" impact from the departure of many
state employees to the private sector. He suggested this could
either be because the private sector is paying salaries that are
too high, or that state government is paying too little. He noted
efforts other states have taken to attract teachers by providing
incentives. He gave as an example the State of California, which is
providing down payments on home purchases in addition to signing
bonuses.
Representative Kott detailed the bill as follows.
Section 1 - requires that a school district must confirm by
resolution and adopt a policy, indicating that there is a
shortage of teachers in that district.
Sections 2 & 4 - relates to the incentives for retired
teachers to return to full-time teaching for a TRS employer.
Provides that a retired teacher who returns to work collects
their earned retirement income in addition to the salary paid
for the teaching position. New retirement benefits do not
accrue for these employees.
Representative Kott qualified that teachers who retired under the
Retirement Incentive Plan (RIP) are not eligible for re-hire under
the provisions of this legislation.
Sections 3, 5, 12 & 16 - repeals the "TRS Return Initiative"
provided in this legislation effective in the year 2005.
Section 6 - addresses the TRS Tier II medical benefits
enhancement. Teachers, who continue to work in TRS an
additional five years beyond the normal retirement eligibility
of 20 years, qualify for full-system paid medical coverage at
age 60.
Representative Kott noted this enhancement is an attempt to attract
new teachers and to retain existing teachers who are currently
members of TRS in the Tier II retirement program. He stated that
currently these employees are not eligible to receive system-
provided medical coverage until the age of 60, at which time the
retirement system pays half and the retiree is responsible for the
remaining half of expenses. This, he pointed out, is regardless of
the number of years the employee worked in TRS.
Representative Kott surmised these additional benefits should
ensure there are quality teachers in Alaska's schools.
Sections 7 & 8 - provides the same incentives to PERS
retirees, although the state is not required to determine a
shortage.
Section 10 - gives incentives for public employees to remain
in TRS or PERS for 30 years.
Representative Kott pointed out that, as with TRS members, Tier II
PERS employees are current not eligible for system-provided medical
coverage until the age of 60 at which time half of the premiums are
paid by the retirement system. Under the provisions of this
Section, he informed, full benefits are paid for PERS members who
worked at least 30 years.
Representative Kott asserted, "there is very little impact,
financially on the state." He referenced the fiscal note to
demonstrate.
Section 11 - simplifies the geographical pay differential
method
Representative Kott stated this provision would allow employees
working in remote locations to know the exact amount of increased
retirement benefits.
Representative Kott indicated the changes in the committee
substitute primarily pertain to the TRS benefits. He stated the
committee substitute also changes the repeal date of this
legislation from five, to four years. He explained this change was
made based upon projections showing the effectiveness of the
program in five years.
Co-Chair Donley offered a motion to move SCS CS HB 242, 22-LS0885\L
from Committee with $91,000 fiscal note from the Department of
Administration, Division of Retirement and Benefits.
There was no objection and the bill MOVED from Committee.
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