Legislature(2005 - 2006)
04/14/2005 04:36 PM House HES
| Audio | Topic |
|---|---|
| Start | |
| HB161 | |
| HB13 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 161-REEMPLOYMENT OF RETIREES CHAIR WILSON announced that the first order of business was HOUSE BILL NO. 161, "An Act relating to reemployment of and benefits for retired teachers and public employees and to teachers or employees who participated in retirement incentive programs and are subsequently reemployed as a commissioner; repealing secs. 5, 7, and 9, ch. 58, SLA 2001; providing for an effective date by amending the delayed effective date for secs. 3, 5, 9, and 12, ch. 57, SLA 2001, and repealing sec. 13, ch. 58, SLA 2001, which is the delayed effective date for secs. 5, 7, and 9, ch. 58, SLA 2001; and providing for an effective date." 4:37:45 PM REPRESENTATIVE SEATON moved to adopt the committee substitute (CS) for HB 161, Version 24-LS0645\F, Craver, 4/14/05, as a work draft. There being no objection, Version F was before the committee. 4:38:23 PM MIKE TIBBLES, Deputy Commissioner, Office of the Commissioner, Department of Administration, explained the changes to HB 161, section by section. He said Section 2 is a new section that would require employers of TRS to provide retired teachers the same health benefits that they provide to other active teachers. Furthermore, it would prohibit a teacher who has been rehired from receiving health benefits from the retirement account. In other words, he explained, an individual coming back would have to receive health benefits from the active account, thereby not allowing a cost shift to the retirement account. Section 4 is a conforming amendment to Section 2 and requires that the teacher making an election to continue to receive benefit payments does not receive retirement and medical benefits during his/her reemployment. MR. TIBBLES said Section 5 would require the employer to make a contribution to the retirement system for each rehired employee. That contribution would be made to the unfunded liability of the system on behalf of the [rehired] teacher, at the rate the employer is making contributions for other teachers. With that amendment, he explained, there will be no cost to the system. MR. TIBBLES said Section 6 mirrors Section 2, but applies to PERS. Section 7 inserts several new subsections. Subsections (f) and (g) would require that a municipality adopt a policy similar to what is required for the TRS employers. He continued: This policy here, as it's laid out in the statute, requires that the employees are separated from service for at least 30 days. The policy has to describe the circumstances that constitute the shortage, and the copy of that resolution and policy needs to be submitted to the administrator of the program - that would be the director of [the Division of] Retirement & Benefits - prior to authorizing an individual to come back from retirement. MR. TIBBLES, in response to a question from Chair Wilson, confirmed that both TRS and PERS employers will have to adopt a policy that they have a recruitment problem prior to bringing somebody back from retirement. MR. TIBBLES reviewed that Subsection 8 specifies the length of the recruitment; it would require an initial recruitment of 15 days, and if there's fewer than 5 qualified, eligible, and available applicants, then another 15 days of recruitment must take place before it would be allowable to bring someone back from retirement. CHAIR WILSON said there have been reports that some retirees don't even clean out their desk, but rather just go on vacation for a month, because they know that they will be hired back. She asked, "Would this prevent that?" MR. TIBBLES replied that the individual retiring would run a risk [of not getting hired back], because if the recruitment period lasts a total of 30 days and the employer finds a qualified applicant pool, the retired individual would not be hired back. MR. TIBBLES drew attention to subsection (h) and said it applies solely to the [executive branch of state government]; however, he stated his belief from working with the committee that the intent was "to apply that to all PERS members, so that municipalities would have a minimum level of recruitment." He said that would be easy to alter with an amendment. 4:43:41 PM REPRESENTATIVE GARDNER moved Conceptual Amendment [1] to change Section 7, subsection (h), to include PERS employers. 4:44:05 PM REPRESENTATIVE SEATON suggested inserting "and all other PERS employers" on page 4, line 29, after "state government". MIKE TIBBLES said he believes that for the sake of consistency, a bill drafter in Legislative Legal and Research Services would probably insert "political subdivisions or public organizations". CHAIR WILSON asked if there was any objection to Conceptual Amendment 1. There being no objection, Conceptual Amendment 1 was adopted. In response to Representative Kohring, she confirmed that Conceptual Amendment 1 would be in the sponsor's best interest. 4:44:59 PM MR. TIBBLES turned to Section 8, which he said would "require PERS employers to make contributions to the unfunded liability on behalf of the retired member at the rate that that employer is making contributions for that employer's other members." He specified that that is different than the section for TRS, which specifies "that the rate has to be for that employer's other members." CHAIR WILSON predicted that would help in regard to employee morale. MR. TIBBLES referred to Section 9, which he said would extend the waiver option until 2008. Section 10, he noted, is in regard to the report to the legislature. He said, "Here I also note that there was an omission in the draft that I believe was requested by the chair's office, and that is [that] the report, as we discussed it, would include not only ... TRS ..., but ... PERS ..., and in addition, it would require the administration to detail what actions we're taking to address those hard to recruit areas." 4:46:36 PM REPRESENTATIVE SEATON offered his understanding that the sponsor of the bill had prepared language. He mentioned page 5, line 24 and said the amendment should add PERS into the language. 4:47:53 PM CHAIR WILSON indicated that she would like to take care of the language conceptually. She said: So, rather than having this [be] specific, ... [Conceptual Amendment 2] will basically say: "The administrator of the Public Employees' Retirement System and the PERS and TRS system shall include information in a report regarding the effects of employers in the executive branch to address their recruitment difficulties in job classes in which retired members have been rehired." CHAIR WILSON asked if there was any objection to [Conceptual Amendment 2]. There being no objection, it was so ordered. REPRESENTATIVE SEATON clarified that [Conceptual Amendment 2] added "the public employees' retirement and" before "teachers' retirement" and made "system" plural, to read "systems", as well as added the appropriate language after line 24. CHAIR WILSON answered yes. MR. TIBBLES said that the only other change is the conforming extension of the program to 2008, in Section 14. 4:49:34 PM CHAIR WILSON said the legislature won't see a difference in one year. 4:50:08 PM REPRESENTATIVE SEATON said that is a three-year extension, which would "take it into the next election season." He suggested it may be better to make it be a two-year extension. CHAIR WILSON said she thinks three years is a reasonable amount of time. 4:50:52 PM REPRESENTATIVE GARDNER offered her understanding that the intent is to "allow for employers to fill their needs with retired people, while eliminating an adverse impact to ... PERS and TRS ...." She asked, "If we extend this and the terms somewhat change, what happens to people who are currently retired/rehired employees? Do their employers start paying into ... PERS and TRS ... at the end of the original sunset date?" MR. TIBBLES responded that several provisions will take effect with the effective date, including the health provisions and the contributions to the past service rate, and the sunset extension would allow those individuals to continue on the program until the end of that period. REPRESENTATIVE GARDNER said, "So, their terms change, somewhat." CHAIR WILSON responded in the affirmative. 4:52:06 PM CHAIR WILSON indicated that the legislature does not want abuses to the system, but rather wants "people to be looking in areas and seeing if they can start doing things that will make a difference, so that there are people that could fill this area." REPRESENTATIVE GARDNER suggested that the legislature has reduced the incentive to the employer. She explained, "They could rehire somebody and not have to pay into PERS and TRS - it could be a cost savings for them - and we've taken that element away, while allowing the waiver for real need." CHAIR WILSON said the legislature cannot keep doing things that will make the retirement system worse. 4:53:05 PM REPRESENTATIVE SEATON pointed out that the employers would be saving the normal retirement rate contribution that they would be making. He offered further details. He stated for the record, "We haven't eliminated all the economic incentive for employers of hiring..." REPRESENTATIVE GARDNER asked, "Why shouldn't we do that?" 4:54:07 PM CHAIR WILSON said one reason is "they're not getting any more benefits from the retirement system, and so we cannot force them to do something when they're not getting extra benefits." REPRESENTATIVE SEATON said Chair Wilson is talking about the contribution of the employee, and he clarified that he and Representative Gardner were talking about the employer saving "the normal cost rate contribution into the retirement plan." He noted that the bill would be heard next in the House State Affairs Standing Committee, and he suggested that this issue be taken up there. 4:54:59 PM REPRESENTATIVE SEATON asked if there is any possibility that employees will think that they are grandfathered into the program if the sunset date is left open. MR. TIBBLES said that the Division of Retirement & Benefits sent out a letter notifying all individuals on the program that they would stop receiving their pension benefits on the sunset date of the employees, thus the issue is clear to those involved. He said it would be all right to make it clearer in statute; however, he said he thinks the division has done a sufficient job in notifying all the employers and employees involved. 4:56:54 PM REPRESENTATIVE SEATON moved to report CSHB 161, Version 24- LS0645\F, Craver, 4/14/05, as amended, out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, CSHB 161(HES) was reported out of committee.
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