Legislature(2017 - 2018)SENATE FINANCE 532
04/09/2018 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB273 | |
| HB278 | |
| HB279 | |
| SB38 | |
| SB185 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 38 | TELECONFERENCED | |
| + | SB 185 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 273 | TELECONFERENCED | |
| += | HB 278 | TELECONFERENCED | |
| += | HB 279 | TELECONFERENCED | |
SENATE BILL NO. 185
"An Act relating to reemployment of persons who retire
under the teachers' retirement system."
10:01:38 AM
AT EASE
10:02:11 AM
RECONVENED
10:02:21 AM
SENATOR PETER MICCICHE, SPONSOR discussed the bill. He
stated that the bill allowed teacher's to be paid normal
retirement, while not accruing additional benefits in the
system. There would be no additional cost to school
district.
Senator Stevens thought the bill was good in many ways. He
asked about the bill provision related to the age of the
teacher.
Senator Micciche stated that the provision had to do with a
ruling of the IRS. He deferred to those who could address
the specifics of that issue.
10:06:16 AM
RACHEL HANKE, STAFF, SENATOR PETER MICCICHE, discussed the
Sectional Analysis (copy on file):
Section 1
Adds new section to AS 14.20:
AS 14.20.136(a) allows school districts to rehire
educators that have retired under the defined benefit
plan or the defined contribution plan when;
AS 14.20.136(b)(1) the retired member certifies that
there was no prearrangement of reemployment made prior
to retirement;
AS 14.20.136(b)(2) the member has been retired at
least 60 days if they are 62 years of age or older or
six months if the member is younger than 62 years of
age;
AS 14.20.136(c) the school district has adopted a
rehire policy by resolution and has publicly
advertised the position for 10 business days and is
actively recruiting to fill the position with a person
other than a retired member.
AS 14.20.136(d) reemployment contracts may not exceed
12 consecutive months.
AS 14.20.136(e) the school district that hires a
retiree must provide the administrator with a copy of
the resolution and policy required by (e) as well as a
report stating the retiree's name, description of
circumstances, and actions taken to comply with the
policy. The school district is also required to make
contributions to AS 14.25.070.
AS 14.20.136(f) certain requirements of the section
don't apply to a rehire member that's eligible for
restoration of tenure rights.
Section 2
Allows retirees who are rehired, as permitted by
section 1, to continue to receive retirement benefits
during the period of reemployment unless they become
an active member.
Sections 3
Makes retirees who are reemployed, as permitted by
section 1, ineligible to receive additional retirement
benefits based on their service and salary during the
period of reemployment.
Section 4
Clarifies that a member who is reemployed does not
become an active member, the member will continue to
receive retirement benefits, deductions under TRS will
not be made to their salary and reemployed educators
will not receive credited time for service during
reemployment. This section also ensures that a retired
and rehired teacher will be eligible to receive the
group health plan coverage that is provided to active
members employed by the school district if they so
choose.
Section 5
Inserts reference to section 1 which will require the
employer to make TRS contribution for reemployed
retirees at a rate of 12.56 percent.
Section 6
Applies the bill's provisions to contracts made on or
after the effective date.
10:09:32 AM
Co-Chair MacKinnon looked at page 2, lines 12 and 13, and
noted that the intent was twelve months. She wondered
whether a retired teacher could move between districts,
begin a new contract, and continue to accrue benefits.
Senator Micciche replied that all teachers' contracts were
for twelve months or less. Those teachers could have other
contracts, but the districts would go through the same
process. The intent was not to replace existing teachers.
He remarked that the bill was about filling a position.
Co-Chair MacKinnon wondered what would happen when a
retired teacher exited at $50,000 per year, and a new
teacher was hired at $35,000 a year. She asked whether the
new teacher that would be rehired and receiving benefits
received $35,000 or $50,000.
Senator Micciche replied that each instructor was hired on
an individual basis, so the negotiation would occur with
the districts. He stated that he had managed large
organizations, so he asserted that the position with the
smaller salary would be the first choice.
Co-Chair MacKinnon noted that there were specific
provisions in statute that would not allow to come back
with the retirement wage.
Senator Stevens felt that the negotiation was between the
district and the individual teacher; therefore the salary
could not be at a specific commitment.
Senator Micciche agreed, and stated that there would be no
additional benefit beyond the pay of the position. He
announced that there was a hope that all positions be
filled with new teachers, but districts were struggling to
fill those positions.
Co-Chair MacKinnon shared that the state paid what the
districts negotiate. She remarked that it was the
committee's job to appropriately understand the impact.
Senator Stevens understood that the state paid that bill.
He wondered why the University of Alaska was not included
in the legislation.
Co-Chair MacKinnon shared that she had not planned to bring
the university into the discussion, and encouraged Senator
Stevens to communicate with the bill sponsor.
10:16:16 AM
LISA PARADY, EXECUTIVE DIRECTOR, ALASKA COUNCIL OF SCHOOL
ADMINISTRATORS, (ACSA) spoke in support of the bill. She
felt that it was a tool to help school districts in a time
to fill vacancies with high quality staff. She felt that it
was not a "silver bullet", but could provide some relief as
a stop gap. She remarked that SB 185 would allow for the
reemployment retired educators to help districts fill
vacancies; and was a necessary tool to help meet district
personnel needs in both urban and rural districts. She
thanked Kathy Lee for work to ensure that the bill
envelopes the necessary IRS Treasury regulations and other
important issues in the bill. She felt that the legislation
was vital because of the shortage of staff in the state.
She recalled that preparing, attracting, and retaining
teachers.
Co-Chair MacKinnon wondered when the previous legislation
had concluded. Ms. Parady replied that the bill sunset was
2009.
10:24:28 AM
Co-Chair Hoffman queried the hiring provisions between 2001
and 2010, and whether those differed from the proposed
legislation. Ms. Parady responded that the bill was
structured based on the previous legislation. She furthered
that the current regulations were included by the IRS
letter ruling that included the waiting periods. She
stressed that there were sufficient requirements to greatly
reduce the likelihood that the bill would impact a current
TRS member's decision to retire, because of the bona fide
separation of employment.
10:26:12 AM
DR. KAREN GABORIK, PRESIDENT, ALASKA SUPERINTENDENTS
ASSOCIATION, spoke in support of the bill. She felt that
the bill would positively impact every public school
student in the state. She remarked that Fairbanks had
experienced teacher shortages in positions that had
previously been filled. She remarked that there were
frequently unfilled vacancies in special education
positions, and were constantly recruiting and traveling for
those positions. She stressed that, recently, there were
regular education teacher vacancies in areas such as high
school math, science, physics, calculus, music, etc. She
remarked that it was not good for students to face a
revolving door of substitute teachers to fill that gap.
Senator Stevens surmised that the rules currently
restricted the hiring of a retired Alaska school teacher.
He remarked, however, that a retired teacher could be hired
from another state. He felt that was unfair. Ms. Gaborik
replied that there were people who had taught in the
community to fill those positions.
Senator Stevens stressed that the issue was unfair. Ms.
Gaborik agreed.
10:30:06 AM
DEENA BISHOP, SUPERINTENDENT, ANCHORAGE SCHOOL DISTRICT
(via teleconference), spoke in support of the bill. She
stressed that her district had accessed the experience of
retired educators by allowing for temporary or part time
employee. Nevertheless, the efforts to access the workforce
was limited without a full-time provision of reemployment
of retirees. She assured the committee that the
reemployment of retired teachers was not intended to avoid
the hire of new teachers. She stressed that retirees filled
gaps when properly certified staff could not be hired in
those hard to fill areas.
Co-Chair MacKinnon requested a telephone conversation with
her office. Ms. Bishop agreed.
10:32:29 AM
NORM WOOTEN, EXECUTIVE DIRECTOR, ASSOCIATION OF ALASKA
SCHOOL BOARDS, testified in support of the bill. He stated
that his organization had a resolution in place to support
retire rehire of teachers and administrators since 2008,
which the previous provision was scheduled to sunset. He
stressed that there was a nationwide shortage of teachers
and administrators. He remarked that it was especially the
case with hard to fill positions.
Senator Stevens stressed that administrators were included
in the bill. Mr. Wooten agreed.
10:35:23 AM
MARK MILLER, SUPERINTENDENT, JUNEAU SCHOOL DISTRICT, spoke
in support of the legislation. He shared that he only had
two options when he had an open position: attempt to fill
that position with a substitute or fill with a new teacher.
He stated that on any given day there would be students
supervised by someone, because there was no teacher to
substitute during that period. He stated that he could also
contact a company in the lower 48 to contract to send
someone to fill services that could not be filled
internally. He stressed that the Alaskan tax dollars would
be spent outside of Alaska. He felt that it was a resource
issue.
10:38:08 AM
MARY WEGNER, SUPERINTENDENT, SITKA SCHOOL DISTRICT, spoke
in support of the bill.
10:41:01 AM
SEAN DUSEK, SUPERINTENDENT, KENAI PENINSULA BOROUGH SCHOOL
DISTRICT, testified in support of the legislation.
10:43:26 AM
BOBBY BOLEN, SUPERINTENDENT, BERING STRAIT SCHOOL DISTRICT,
spoke in support of the bill.
Senator Olson wondered what would occur when the qualified
positions were lost. Mr. Bolen replied there was much time
spent in the lower 48 looking for teachers. He stated that
there were teachers that needed to fill those empty spaces.
Senator Olson noted that Golovan had some substitute
teachers who were recently graduated, because of the
teacher shortage.
Senator von Imhof wondered how much teacher housing a
contributing factor was to hire and maintaining a
workforce. Mr. Bolen replied that there was not a current
problem of housing, because there were no teachers to fill
that housing.
10:47:45 AM
MONICA GOYETTE, SUPERINTENDENT, MATSU BOROUGH SCHOOL
DISTRICT, spoke in support of the bill.
Co-Chair MacKinnon noted that the statement of the three
year educational certification was an individual district
policy. Ms. Goyette agreed.
Co-Chair MacKinnon CLOSED public testimony.
10:49:39 AM
KATHY LEA, CHIEF PENSION OFFICER DIVISION OF RETIREMENT AND
BENEFITS, DEPARTMENT OF ADMINISTRATION, stated that she was
available for questions. She also stated that the
Department of Administration's position on the bill was
neutral.
Co-Chair MacKinnon queried the fiscal note.
10:50:17 AM
Ms. Lea explained the fiscal note.
Senator Stevens requested the point of the IRS regulation
of the difference between six months and sixty days. Ms.
Lea replied that in any plan, because of the tax qualified
plan, there must be a mark at which it would be considered
a "normal retirement" for any time of government or private
sector plan. She explained that it was because the
contributions made to the plan were made on a pre-tax
basis. The IRS would then examine when it could receive the
tax for the pre-tax contributions.
Vice-Chair Bishop requested a meeting with his office.
10:55:06 AM
Co-Chair MacKinnon asked for an explanation of the
indeterminate fiscal note. Ms. Lea replied that the fiscal
note was indeterminate, because it was not known how many
people would participate in the program, nor was it known
which group they might participate.
11:00:48 AM
Senator Stevens noted that some districts were hiring
retired teachers at 24.9 percent or less, which was
acceptable under the rules of the retirement system. Ms.
Lea replied that under the existing rules, a teacher or
administrator was mandated to be in TRS if they had at
least a 50 percent contract.
Co-Chair MacKinnon wondered whether there was additional
cost to the state, if there was not an effect on insurance.
Ms. Lea replied that she had not analyzed it, because it
occurred on an ad hoc basis.
Co-Chair MacKinnon announced that amendments were due on
Wednesday. She discussed the agenda for the afternoon
meeting.
SB 185 was HEARD and HELD in committee for further
consideration.