Legislature(1997 - 1998)
04/09/1997 08:06 AM House CRA
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 164 - TEACHERS RETIREMENT: ELIGIB. & SICK LEAVE Number 2445 CHAIRMAN IVAN indicated that the committee would hear HB 164, "An Act providing that employment as a legislator or with the National Education Association is not credited service under the teachers' retirement system; prohibiting membership in the teachers' retirement system for holders of limited certificates; removing teachers holding limited certificates to teach Alaska Native language or culture from membership in the teachers' retirement system; and repealing a provision permitting members of the teachers' retirement system to count unused sick leave credit as credited service." CHAIRMAN IVAN noted that the committee still needed to adopt the committee substitute before them labeled 0-LS0636\L and the committee would also consider the "amendment to address the, as the original bill was replacing the sick leave credit with this committee substitute, I believe before you." This allows the school districts to determine how sick leave is to be used as a bargaining point for the school districts. TAPE 97-16, SIDE B Number 000 REPRESENTATIVE KOOKESH made a motion to move the CS before the committee as previously outlined. Hearing no objection it was so ordered. Number 021 REPRESENTATIVE AL VEZEY came forward to respond to changes made to HB 164. He stated that he didn't endorse this new version of the legislation. He also stated that he didn't endorse the amendment although he didn't think it was a bad policy at all. He thought that the amendment exchanged one type of state mandate for another and the purpose of the legislation is to revert the policy of benefits that public employees receive; in this case, teachers to a local school district decision making process. This amendment simply changes the nature of this state mandate without referring it to the local school districts to be negotiated. CHAIRMAN IVAN noted that it has always been his policy to give as much flexibility to the school districts to determine policy and in this case this would be the sick leave situation. He thought this new CS would facilitate such a concept. Number 083 REPRESENTATIVE RYAN stated, "in the CS a, the school district or the university or whom ever, after the effective date of this act, is, people can use the sick leave on a day to day basis and so forth, but a teacher contribution may not be required for credited unused sick leave." He noted that this places an unnecessary financial burden upon the local school district since time accumulated for retirement involves a fixed benefit. There's a fixed contribution from the employee and the variable is the employer. If the employee doesn't contribute then the employer has to bear both sides, both percentages, employee and employer. To allow sick leave as credit for retirement, he had no problem with, but they shouldn't add the extra burden and extra cost on to the employer. The employee should make the contribution whatever the percentage is normally for retirement. Number 121 REPRESENTATIVE RYAN continued that an individual makes an employee contribution, along with an employer contribution, and a benefit is set up, something he intended to address in this amendment. In part one of the CS this issue is not addressed, in fact, the employee's contribution is prohibited and he quoted, "Teacher contributions may not be required for credited, unused sick leave." On the proposed amendment he has offered an option. The employee can use the sick leave which by statute is a benefit. Once a benefit has been determined it cannot be taken away unless through a negotiating process. Number 208 CHAIRMAN IVAN called an at ease at 8:58 a.m. The committee hearing came back on record at 9:00 a.m. Number 244 REPRESENTATIVE RYAN reiterated what he attempted to do with this amendment as drafted. This amendment was labeled "L" version, dated April 7, 1997. On page 1, line 3, following the word "credit" insert "or compensation." A new Section 1 was added on page 1, line 5, which says "Compensation for unused sick leave" and he paraphrased, except for a teacher who receives credited service for accrued sick leave, a school district shall compensate a teacher who first began employment as a teacher with the district on or after the effective date of this Act. He explained that it's not retroactive. They can't go back and "mess" with anybody who has already earned something. He paraphrased again, ... who terminates employment with the school district, either by retirement or otherwise, for accrued sick leave for which the teacher does not elect to receive credited service, which means they don't want to use this for retirement. "The amount of compensation shall be figured using the teacher's average base salary at the time the teacher ended employment." This is basically a cash out which is not offered right now. REPRESENTATIVE RYAN continued to explain the second half of the amendment. A person who has joined a school district after an effective date, they may apply unused sick leave credit by computing the total number of years of credited service. They can keep this policy going except for sick leave earned while participating in an optional university retirement program. This is a different program under a different statute. Again, he paraphrased, a teacher must apply to the administrator no later than one year after appointment to retirement ... shall be credited on a day-for-day basis in accordance with the table for service. A person who elects to receive credited service is indebted to the system. This establishes that there must be a contribution the same as it would be if someone wanted to buy into military time, etc. "The amount of the indebtedness is equal to 8.65 percent of the teacher's base salary at the time the teacher retired multiplied by the credited service the teacher will receive for unused sick leave." He stated that this was a fixed rate contribution that employees make for retirement. This says that a teacher can "keep this up" and they can use it, but they're going to have to make their contribution just like everyone else does. REPRESENTATIVE RYAN summarized that this amendment gave individuals two options. To maintain using sick leave as credited service for purposes of retirement, while making a contribution or, if someone decides to relocate and quit their job, they can cash out their sick leave. Representative Ryan's amendment in it's entirety is as follows: Page 1, line 3, following "credit": Insert "or compensation" Page 1, following line 5: Insert a new bill section to read: "*Section 1. AS 14.20 is amended by adding a new section to read: Sec. 14.20.225. Compensation for unused sick leave. Except for a teacher who receives credited service for accrued sick leave under AS 14.25.115, a school district shall compensate a teacher who first began employment as a teacher with the district on or after the effective date of this Act and who terminates employment with the school district, either by retirement or otherwise, for accrued sick leave for which the teacher does not elect to receive credited service under AS 14.25.115. The amount of the compensation shall be figured using the teacher's average base salary at the time the teacher ended employment with the district." Page 1, line 6: Delete "Section 1" Insert "Sec. 2" Renumber the following bill sections accordingly. Page 2, lines 4 - 12: Delete all material and insert: "(d) A teacher who first joins the system on or after the effective date of this Act may elect to apply unused sick leave credit in computing the total number of years of credited service under AS 14.25.110(d) except for sick leave earned while participating in the optional university retirement program under AS 14.40.661 - 14.40.799. To obtain service credit for unused sick leave, a teacher must apply to the administrator no later than one year after appointment to retirement. Unused sick leave shall be credited on a day-for-day basis in accordance with the table for service on or after July 1, 1969, contained in AS 14.25.220(43). A teacher who elects to receive credited service under this subsection is indebted to the system. The amount of the indebtedness is equal to 8.65 percent of the teacher's base salary at the time the teacher retired multiplied by the credited service the teacher will receive for unused sick leave." Page 2, line 21: Delete "2 - 4" Insert "1 and 3 - 5" CHAIRMAN IVAN asked if there were any objections to the amendment. Number 418 REPRESENTATIVE DYSON objected for discussion purposes. He stated that he was having a hard time understanding this amendment. He asked if this amendment requires the individual teacher to make a choice and then a contribution to his/her sick leave if he/she are going to cash it out or use it as credit toward retirement. REPRESENTATIVE RYAN responded that if they were going to cash it out there was no contribution. If they planned to use the sick leave as credited services for purposes of retirement they would make a contribution of 8.65 percent of their base salary, multiplied by the credited service. He noted that this was in conformity with all the other retirement plans that the state of Alaska offers. Number 563 REPRESENTATIVE DYSON asked if the result of this program is that they would get credit for another four months toward a higher level. He also asked what public policy would incline them to treat sick leave any more than providing for people to take time off when they're sick without loosing money. Why should this have a cash value to accentuate the retirement. REPRESENTATIVE RYAN responded that by statute this is a benefit. A benefit cannot be taken away from someone who's earned this without compensating them for it. Number 603 REPRESENTATIVE DYSON asked if there was anything prohibiting them from having sick leave just be sick leave for all new employees after an effective date. REPRESENTATIVE RYAN stated that he didn't know and thought this was a question for someone involved in labor relations. Number 627 CHAIRMAN IVAN noted that this was a substantial amendment and he wished to hear from Retirement and Benefits. He stated that he would hold the bill to afford this opportunity. REPRESENTATIVE KOOKESH agreed with this suggestion. He understood the intent of this legislation, but he was concerned that if someone earned sick leave, then it disappears somehow, then they make a contribution payment, it sounds like an individual gets hit twice. He wished to read this amendment further to understand it better.
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