Legislature(2015 - 2016)BUTROVICH 205
04/07/2015 03:30 PM Senate EDUCATION
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| Audio | Topic |
|---|---|
| Start | |
| SB79 | |
| SB89 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 79 | TELECONFERENCED | |
| += | SB 89 | TELECONFERENCED | |
| += | SB 37 | TELECONFERENCED | |
SB 79-REEMPLOYMENT OF RETIRED TEACHERS & ADMIN
3:33:42 PM
CHAIR DUNLEAVY announced the consideration of SB 79. The bill
will allow school districts to hire retired educators. He said
this is the third hearing and a committee substitute (CS),
labeled 29-LS0444\E was adopted on 3/31/15.
SENATOR HUGGINS moved to adopt Amendment 1, labeled 29-
LS0444\E.1:
AMENDMENT 1
Page 1, following line 13:
Insert a new subsection to read:
"(c) A school district that reemploys a member
under this section who is retired under the defined
benefit retirement plan established in AS 14.25.009 -
14.25.220 is required to make contributions under
AS 14.25.070."
Page 3, following line 2:
Insert a new bill section to read:
"* Sec. 5. AS 14.25.070(a) is amended to read:
(a) Each employer shall contribute to the system
every payroll period an amount calculated by applying
a rate of 12.56 percent to the total of all base
salaries paid by the employer to active members of the
system and to members who are retired from the plan
and reemployed under AS 14.20.136, including any
adjustments to contributions required by
AS 14.25.173(a)."
Renumber the following bill section accordingly.
Page 3, line 6:
Delete "and"
Page 3, line 7, following "Act,":
Insert "and AS 14.25.070(a), as amended by sec. 5
of this Act,"
CHAIR DUNLEAVY objected for discussion.
SHEILA PETERSON, Staff, Senator Mike Dunleavy, Alaska State
Legislature, explained that Amendment 1 came as a result of a
discussion between the sponsor and the Department of
Administration. It requires school districts, when they hire a
retired educator, to continue to pay the 12.56 rate toward the
teacher retirement system, as if the educator was an active
employee. This will prevent a drain on the Teacher Retirement
System funds.
She noted that Amendment 1 is found in two sections in the bill:
Page 1, following line 13:
Insert a new subsection to read:
• Requires a school district that reemploys a retired
educator to contribute to the Teacher Retirement
System at a rate of 12.56 percent of the educator's
salary.
Page 3, following line 2:
Insert a new bill section to read:
• Adds to current statutory language that an employer
shall contribute to the Teacher Retirement System an
amount of 12.56 percent of a retired and re-employed
educator's salary.
• The contribution rate is the same as applied to
active members of the system.
Page 3, line 6 and Page 3, line 7:
• Conforming language
3:37:12 PM
CHAIR DUNLEAVY explained that the bill adds tools for school
districts to expand a pool of educators and save costs. The
discussion was about who pays into retirement. There was concern
about the number of teachers who might want to retire and then
get rehired under a special contract.
JOHN BOUCHER, Deputy Commissioner, Office of the Commissioner,
Department of Administration, answered questions related to SB
79. He explained that the concern was that when there is a new
large pool of retired workers who are not subject to regular
contributions, the overall contributions to the retirement
system would go down proportionately. It would end up shifting
costs to the state. He said having the districts pay 12.56
percent into retirement is a solution.
3:39:48 PM
SENATOR STEVENS requested clarification. He gave an example of a
person who retires and goes back to teaching and is no longer
drawing more from the retirement system. He suggested that
having the district pay the 12.56 percent into the retirement
fund is an additional burden for the district.
MR. BOUCHER clarified that educators who would have had covered
wages are being replaced by educators with uncovered wages. The
overall pool of retirement contributions is diminished and could
shift costs to the unfunded liability.
SENATOR STEVENS understood the situation, but saw it as unfair
to districts.
SENATOR GARDNER summarized that there is no direct impact to the
employee, nor department, nor student, but there is a cost to
the district in order to help with the underfunded liability of
the retirement system.
MR. BOUCHER agreed and added that the districts save by not
having to pay insurance benefits.
SENATOR GARDNER concluded that it also reduces the eagerness of
the district to look for retirees that they can rehire, but it
keeps open the option of hiring a qualified, experienced retired
educator at some savings.
CHAIR DUNLEAVY added that the savings is less than 12.56
percent.
3:43:12 PM
SENATOR HUGGINS spoke of the various retirement tiers that may
retire soon.
MR. BOUCHER said when you remove long-time teachers, there is
more of an impact on payroll savings.
SENATOR HUGGINS what is true today is less true every year due
to fewer Tier I and Tier II retirees.
He asked if a retiree receives any longevity benefits from being
rehired.
MR. BOUCHER said no.
SENATOR HUGGINS asked if the retirement benefits remain the same
for rehirees.
MR. BOUCHER said yes.
SENATOR HUGGINS mentioned retirement incentives and this new
program.
CHAIR DUNLEAVY provided an example of a teacher who retired and
then was offered a contract by Department of Education and Early
Development (DEED). There have been district incentives in the
past that have been offered, but there are no incentives under
SB 79.
3:48:13 PM
MR. BOUCHER confirmed that it is not a factor in this bill.
CHAIR DUNLEAVY stated that the state gets a 12.5 percent cut to
go along with this plan. It is much less expensive for districts
to hire a retiree.
SENATOR GARDNER asked if the teacher continues to receive
retirement benefits during the time they are on contract. She
asked if it makes for a larger imbalance in the unfunded
liability if they have retired sooner than planned, had the
contract not been an option.
MR. BOUCHER said it would if that becomes a trend. He opined
that the 12.5 percent will offset that situation. He said you
are replacing wages with benefits, with wages that do not
receive benefits.
3:51:58 PM
SENATOR STEVENS liked the idea behind the bill. He did not see
the plan as someone working as a full-time teacher retiring and
then working full time. He provided as an example one of his
favorite professors. He saw the plan as part-time or short-term
teaching positions. He opined that school boards lose under the
12.56 percent scenario and the "system" wins; he did not see the
equity there.
CHAIR DUNLEAVY provided an extreme example. He restated the
intent to provide a tool that does work for the district to
provide economic relief. He said the bill is a result of his
experience with the mentor project where experienced teachers
give back to education.
SENATOR GARDNER said that is a new way of looking at the bill.
She thought it was a tool to provide teachers for hard-to-fill
positions, not a cost savings measure.
CHAIR DUNLEAVY said it is for both.
SENATOR GARDNER asked if the wage scale would be the same in a
rehire contract as it would be in a regular teaching contract.
CHAIR DUNLEAVY said the mentor program had a set amount of pay
that had no relationship to a district's pay scale.
3:57:01 PM
SENATOR GARDNER asked if districts are taking up 12.5 percent of
the costs, whether they are coming out even.
CHAIR DUNLEAVY provided an example to show that a district would
save money and get the benefit of a teacher's experience, and
teachers would also benefit by teaching in a place they want to
teach.
SENATOR GARDNER asked if school districts would be commenting on
Amendment 1 to SB 79. She gave an example of a teacher who
currently teaches, retires, and continues to teach in the same
district.
CHAIR DUNLEAVY said the bill would not prohibit that.
SENATOR STEVENS stated if there was a sound retirement system,
Alaska would not have this problem. If the retirement system
would have been well-managed, this bill would not be needed.
MR. BOUCHER thought it was a reasonable statement. He said the
department is doing its best not to add to the unfunded
liability.
4:00:29 PM
SENATOR HUGGINS recalled a .49 limitation for rehires.
CHAIR DUNLEAVY explained that currently, an individual that
retires can come back and work at a .49 position and collect
retirement benefits. They can work full time on contract without
benefits.
SENATOR HUGGINS commented on the advantages proposed in SB 79.
CHAIR DUNLEAVY agreed.
CHAIR DUNLEAVY removed his objection and Amendment 1 was
adopted.
He opened public testimony.
4:02:16 PM
LISA SKILES PARADY, Executive Director, Alaska Council of School
Administrators and Alaska Superintendents Association, testified
in support of SB 79, but not Amendment 1. She commented on the
staggering shortage of teachers and administrators in Alaska.
She maintained that it would be better to have the bill with the
amendment than for the bill to not pass at all.
SENATOR GARDNER asked whether the amendment provides any cost
savings to districts. She also asked if there is any concern
about unanticipated consequences from people retiring early,
when they otherwise wouldn't have, to take advantage of this
option.
MS. SKILES PARADY said the concern for unanticipated
consequences was part of the discussion with the Department of
Administration. It is educators' perspective that retirement is
a very serious decision. Also, there is a one-year break
requirement before rehiring takes place.
Regarding cost savings, she noted that each district will be
different and have different needs. She termed the retirees "at
will employees" that do not take from, or add to, the retirement
system. She opined that the amendment would reduce cost savings
to districts.
4:08:08 PM
SENATOR STEVENS understood that the bill is a tool that appears
to be a great way for districts to save.
JACK WALSH, Superintendent, Craig School District, testified in
support of SB 79. He believed that the bill has many positive
benefits, however, he suggested that the bill would eliminate
some of the savings allowed for the .49 employees. The cost
savings for teachers would be good for districts and there are
advantages to hiring retirees. He spoke of hiring educators who
have expertise to fill gaps in the district.
4:11:54 PM
CHRIS REITAN, Superintendent, Galena City School District,
testified in support of SB 79, but not of the amendment. He
concurred with the comments by Ms. Skiles Parady. He said he
would like to see retired educators with Alaskan experience
working in schools during these challenged economic times. He
said he would rather not see the amendment, but approves the
bill as a whole.
4:14:01 PM
PATRICK MAYER, Superintendent, Wrangell Public School District,
testified in support of SB 79. He concurred with the two
previous testifiers that they would rather have the amended
version of SB 79 than no bill at all. He saw the need for the
bill due to the shortage of teachers in Alaska, especially in
rural Alaska. He said hiring from a pool of experienced staff
will be important to his district. He also saw the incentive for
the retiree to be able to continue to work.
SENATOR STEVENS referred to the disadvantages from the .49
provision previously mentioned. He asked if Wrangell has any
experience with that.
MR. MAYER said there was only one instance of that in his
district. He said he wants to encourage new teachers to come to
Wrangell. He didn't see it as being a huge deterrent, noting
it's a case by case situation.
4:18:07 PM
LINCOLN SAITO, Chief Operating Officer, North Slope Borough
School District, testified in support of SB 79. He said the bill
is less attractive with the amendment, but still attractive. Not
having to pay health insurance would save the district 25
percent of a person's salary. He said they want a larger pool to
select from because they are having trouble filling 9 positions
after going to 5 job fairs. He stressed the need for good
teachers for their students.
CHAIR DUNLEAVY closed public testimony.
He noted a fiscal note is forthcoming. He wished to move the
bill.
SENATOR HUGGINS commented that the bill has more merits than
negatives and will provide a pool of educators for Alaska.
4:21:59 PM
SENATOR HUGGINS moved to report CS for SB 79, as amended, from
committee with individual recommendations and a forthcoming
fiscal note.
CHAIR DUNLEAVY announced that without objection, CSSB 79(EDC) is
reported from the Senate Education Standing Committee.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 9. CS for SB 79 Amend re 12.56 percent.pdf |
SEDC 4/7/2015 3:30:00 PM |
SB 79 |
| 10. CS for SB 79 Explanation of Amend.pdf |
SEDC 4/7/2015 3:30:00 PM |
SB 79 |
| CS for SB 89 Amendment #1.pdf |
SEDC 4/7/2015 3:30:00 PM SEDC 4/9/2015 3:30:00 PM |
SB 89 |
| CS for SB 89 Explanation of Amend #1.pdf |
SEDC 4/7/2015 3:30:00 PM SEDC 4/9/2015 3:30:00 PM |
SB 89 |
| CS for SB 89 Explanation of Amend #2.pdf |
SEDC 4/7/2015 3:30:00 PM SEDC 4/9/2015 3:30:00 PM |
SB 89 |
| CS for SB 89 Amendment #2.pdf |
SEDC 4/7/2015 3:30:00 PM SEDC 4/9/2015 3:30:00 PM |
SB 89 |
| 14. SB 37 - School Curriculum.pdf |
SEDC 4/7/2015 3:30:00 PM SEDC 4/9/2015 3:30:00 PM |
SB 37 |
| 15. SB 37 - Anchorage Parent Information.pdf |
SEDC 4/7/2015 3:30:00 PM SEDC 4/9/2015 3:30:00 PM |
SB 37 |
| 16. SB 37 - Fairbanks Erin's Policy.pdf |
SEDC 4/7/2015 3:30:00 PM SEDC 4/9/2015 3:30:00 PM |
SB 37 |
| 17. SB 37 - OCS Child Sexual Abuse Stats FY14.pdf |
SEDC 4/7/2015 3:30:00 PM SEDC 4/9/2015 3:30:00 PM |
SB 37 |