04/19/2000 09:53 PM Senate FIN

     COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 277(FIN)                                                                           
     "An Act relating to payment  of retirement benefits for                                                                    
     certain subsequently reemployed  retired members of the                                                                    
     teachers'  retirement  system;  and  providing  for  an                                                                    
     effective date."                                                                                                           
                                                                                                                                
                                                                                                                                
JOHNATHON LACK, staff to Representative Andrew Halcro,                                                                          
presented the bill.                                                                                                             
                                                                                                                                
Mr. Lack referred to the sponsor statement, which reads as                                                                      
follows.                                                                                                                        
                                                                                                                                
          The pool of qualified teachers in Alaska is                                                                           
     shrinking dramatically.  The situation  is particularly                                                                    
     dire in the area of  special education. To address this                                                                    
     shortage I have sponsored HB 277.                                                                                          
          This legislation would allow teachers who have                                                                        
     retired  to return  to teaching  in the  public schools                                                                    
     without forfeiting  their retirement  benefits. Retired                                                                    
     teachers would  be able to  be re-employed by  a school                                                                    
     district.   They  would   continue  to   receive  their                                                                    
     retirement benefits,  thus reducing the cost  to school                                                                    
     districts,   but   compensating  experienced   teachers                                                                    
     through a combination of pay and benefits.                                                                                 
          Presently, teachers, once retired, may only work                                                                      
     40% of full-time in a  school district without forgoing                                                                    
     their benefits.  HB 277 would provide  school districts                                                                    
     with the opportunity to  rehire experienced teachers at                                                                    
     a lower cost to the public.                                                                                                
                                                                                                                                
JOHN SEER, National Education Association (NEA)-Alaska,                                                                         
testified in support of the bill.                                                                                               
                                                                                                                                
CATHY GILLESPIE, Anchorage School Board, commented on                                                                           
concerns she had with the bill. She requested a delay in                                                                        
implementing such a program.                                                                                                    
                                                                                                                                
Senator Adams stressed the teacher shortage in rural                                                                            
Alaska.                                                                                                                         
                                                                                                                                
GUY BELL, Director, Division of Retirement and Benefits,                                                                        
Department of Administration testified on the following                                                                         
points.                                                                                                                         
                                                                                                                                
     ΠSpeaking from the perspective of the Teacher's                                                                           
        Retirement Fund (TRS).                                                                                                  
     ΠThe division submitted a fiscal note with an                                                                             
        indeterminate fiscal impact, because the cost to the                                                                    
        retirement system will  depend on how  many retirees                                                                    
        are rehired under the provision of HB 277.                                                                              
     ΠApproximately 1,200 of 9,400 active Alaska teachers                                                                      
        have 20 or more years of TRS service.                                                                                   
     ΠIf a significant number of these people retire and                                                                       
        are rehired under  the provisions  of HB  277, there                                                                    
        will be  a  material  cost  to  the TRS  fund.  Cost                                                                    
        increases  to  the  TRS  fund  result  in  increased                                                                    
        employer rates.                                                                                                         
     ΠOn the other hand, if school districts make a                                                                            
        determination of  shortage  for  only a  handful  of                                                                    
        teacher positions and, therefore, only  rehire a few                                                                    
        retirees, the  fiscal  impact  on  the TRS  will  be                                                                    
        immaterial.                                                                                                             
                                                                                                                                
Co-Chair Torgerson ordered the bill HELD in Committee.                                                                          
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ADJOURNED                                                                                                                   
                                                                                                                                
Senator Torgerson adjourned the meeting at 10:58 PM.