Legislature(2005 - 2006)BUTROVICH 205
03/14/2005 01:30 PM Senate HEALTH, EDUCATION & SOCIAL SERVICES
| Audio | Topic |
|---|---|
| Start | |
| SB4 | |
| SB24 | |
| SB125 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 4 | TELECONFERENCED | |
| += | SB 24 | TELECONFERENCED | |
| *+ | SB 125 | TELECONFERENCED | |
SB 24-REEMPLOYMENT OF RETIREES
1:54:25 PM.
CHAIR DYSON announced SB 24 to be up for consideration.
MIKE TIBBLES, Deputy Commissioner of the Department of
Administration (DOA), addressed some concerns raised during the
last meeting. While the concerns address issues that are very
serious for the department, there are also serious recruitment
problems in various organizations throughout the state. He was
aware of cases in which organizations have had recruitment
failure for as long as six months. SB 24 could be a valuable
tool for assisting such organizations when other recruitment
efforts have been exhausted.
MR. TIBBLES said he would like to walk through an administrative
order signed by the Governor on March 8, 2005. The department
believes the order addresses some of the issues raised. He said:
1:57:00 PM
This administrative order, signed by the Governor,
will require all agencies to go through a thorough
recruitment process before an employee is eligible to
come back under a 242 waiver. A recruitment notice
must be placed on Workplace Alaska for a minimum of 15
days. The agency must consider all applicants and if a
retiree is selected, that applicant must separate from
service for a minimum of 30 days.
In addition, the recruitment must result in fewer than
five qualified applicants. The hiring authority must
demonstrate why no other individual has the knowledge,
skills, and abilities to perform the duties. The
Division of Personnel, Department of Administration,
must sign off on the hire of the 242 to insure that
all of these policies and procedures have been met.
MR. TIBBLES said even these requirements are not enough; they
are simply some requirements that must be followed by the
division and other agencies. Since 242 hires and waivers are, in
the department's opinion, a short-term solution to a long term
problem, the department wants to be very proactive in working
with other state agencies to develop workforce plans to deal
with these shortages so that the state is not in this situation
in the future.
The department would like to require the hiring authorities
utilizing 242 waivers to work with the Department of
Administration to understand why recruitment efforts failed and
to develop a plan to transfer the knowledge required in these
positions to other employees. The administrative order clearly
indicates that all of the personnel rules and statutes shall
apply as far as advance step placements. The department also
encourages agencies to develop a strategic view of human
resource needs so they can anticipate and proactively address
future shortages. His department is confident the procedures
established in the administrative order will prevent abuses in
the program and the original intention of the bill will be met.
2:00:24 PM
SENATOR ELTON asked whether the administrative order would apply
only to state agencies.
MR. TIBBLES responded the administrative order would only apply
to state agencies and not other PERS employees.
SENATOR ELTON asked whether the administrative order would allow
municipalities to set their own standards.
MR. TIBBLES responded his department would encourage
municipalities to adopt standards that are similar to those of
the state, but the main issue with PERS employers is to make
sure they don't accrue additional liability to the system.
SENATOR ELTON asked whether the administrative order creates
regulations or if it stands in the place of regulations.
MR. TIBBLES responded:
It would be in the place of regulation. We would have
policies, I believe through the administration manual,
to implement. I know that those are being developed
and sent out to all departments. We will have policies
that must be followed to implement this administrative
order.
SENATOR ELTON remarked Section 2A of the administrative order
says the recruitment must be conducted from an applicant pool of
less than five qualified eligible and available applicants. He
asked whether employers are having problems getting desirable
applicants or if they are having problems simply getting
applicants. Employers are reluctant to hire people who have
graduated at the bottom ten percent of their class.
MR. TIBBLES responded the state government develops job class
specifications for every position in state government. Within
these job classifications there are minimum qualifications (MQs)
that must be met before someone is eligible for consideration.
The department, to ensure they meet the MQs for their
prospective positions, reviews all of the applicants.
2:04:39 PM
SENATOR ELTON asked whether the administrative order would
require an employer to give preference to a less qualified
recent graduate over a more qualified retired applicant.
MR. TIBBLES responded:
We did not require, for the reason that you are
pointing out, if one had a qualified non-retired
applicant, one would have to hire that applicant. We
required that one must demonstrate recruitment
difficulty resulting in fewer than five qualified
applicants. There still would be an applicant pool
and the candidates would have to be considered prior
to considering the retired employee.
SENATOR OLSON said 15 days might not be an adequate length of
time for employers to post their positions on the Workplace
Alaska Website. He asked the normal length of time for jobs to
be posted for normal recruitment.
MR. TIBBLES responded the standard is a minimum of ten days and
a maximum of 30 days.
CHAIR DYSON asked the liability the state has for retirees who
have already been rehired and led to believe their participation
in the program would not be terminated at the sunset of the
program.
MR. TIBBLES could not answer the question at the present time.
CHAIR DYSON remarked he is open to the possibility of delaying
an inquiry into the matter given the concern that lawsuits may
be developing.
SENATOR ELTON remembered the last committee meeting where Mr.
Tibbles mentioned he would prefer not to put the sideboards into
state law. He asked how the administration felt about adopting
the elements of the administrative order into law.
MR. TIBBLES responded:
Mr. Chairman, Senator Elton, I believe that we made
our best effort to try and determine what the policy
should be if this program were to continue. In fact,
this was effective immediately March 8. It will be in
place now and I want to point out that it has been
effective. We had a department already request an
individual to return for rehiring and we asked how
many applicants that they had received in their
recruitment and the number was 15, so we denied it. So
it is in place now and will be until the sunset of the
original program, if it is not extended.
Going forward, I believed that we developed what we
thought would be the 'right recipe' as you termed it.
We may find out that it is something different. We may
find that the time requirement should be more or less.
We may find out that we should consider all
applicants, which may require recruiting out of state.
So there may be modifications needed and I believe
that it would be nice to have the flexibility to amend
without having to come back to the legislature and
seek a statutory change for a small thing that might
otherwise be more helpful and efficient to do
administratively.
2:09:57 PM
ALEX VITTERIE, retired state employee, said he supports the
concept that the most qualified, most productive people should
be allowed to work for the state, but questioned whether it is
possible given the administrative order's five applicant rule.
He said the bill violates the principle of the retirement
program in which one gets what one put into it. He would support
the retire-rehire program provided that it doesn't cause the
retirement system a greater deficit by allowing retirees to
enter a higher retirement category than the one that they
retired under. He suggested the state place a cap on the length
of time that rehired-retirees should be allowed to work. He
commended the state for its efforts to promote mentorship.
2:13:54 PM
SENATOR OLSON asked Mr. Vitterie whether or not he was in favor
of SB 24.
MR. VITTERIE said he would favor the bill if it was modified,
but he opposed SB 24 as is.
2:15:20 PM
ROBERT MCHATTIE, Fairbanks, said:
Rehiring will set the system right for abuse, in my
opinion. Keep in mind that most of the rehires are
brought back to their old jobs because of someone's
determination that they simply couldn't be replaced.
After returning to hold down their old position,
rehires don't pay another red cent to help support
PERS or TRS. They are draining, but they're not
putting anything back in and they are often holding a
high position. I want to give you a couple of examples
of abuse that have come up lately.
In Fairbanks, eight Fairbanks police officers were
involved in a just-failed lawsuit against the City of
Fairbanks. The police rehires were collecting job
paychecks plus retirement paychecks plus other
retirement benefits plus additional city payment into
social security or whatever their equivalent system
is. They were suing to make the city fund an
additional retirement plan for when they re-retire.
The police can try again in a higher court and if the
police eventually prevail, it can set a precedent for
all other PERS-TRS rehires to sue towards a second
retirement.
Now, I will talk about a more subtle form of abuse.
With all due respect to the DOA, I think this has to
do with the DOA not really knowing the law and not
setting rehiring rules until they sent the
administrative order of March 8, four years after the
program was initiated. They sat there with essentially
no rules. The DOA expresses concerns about lawsuits
from rehires, which are about 350 strong and growing,
who claim the right to simultaneously collect a job
paycheck plus a retirement paycheck plus other
retirement benefits from government coffers forever.
The DOA concern harkens to the fact that all of the
hiring agencies were darned well responsible for
knowing and divulging to rehires that HB 242 sunsets
in 2005 and there was no provision for grandfathering.
That was obvious. The DOA has no business attempting
to prevent the HB 242 sunset based on the premise that
nobody could properly interpret the law. The DOA did
not even bother to get an attorney general's opinion
on the meaning of the 2005 sunset until about November
2004. The DOA knows that it has created a monster and
now it is worried that the monster is hungry.
Does the state really do itself a favor by forming a
cadre of older super-experienced employees? Well
maybe, but consider that each year of reemployment
means one less year of experience that could have been
gained by a replacement. Even the most valuable rehire
is finally gone after a few years; they just don't
stay there forever.
2:19:42 PM
JACK KAREN opposed SB 24. He said HB 242 has not been
administered in a fair equitable manner. The state has adopted
no credible procedures to define when a workforce shortage exits
and it is common for upper level managers to be hired by their
peers while others are denied opportunities for advancement.
SCOTT WALDREN, former program member, testified in support of SB
24. He said by implementing the bill, the state could answer its
concerns about employees that were lead to believe they would be
able to remain in the program after its sunset date.
CHAIR DYSON asked Mr. Waldren whether he would have retired if
he had known he would not be allowed to participate in the
program after the sunset date.
MR. WALDEN advised he would have retired.
2:23:47 PM
KAREN DORCUS, program member, testified in support of SB 24. She
said her decision to retire was based on her understanding that
she would be allowed to remain in the program after the sunset.
2:26:04 PM
CHAIR DYSON asked Ms. Dorcus whether the university saved money
by her retirement and subsequent rehire.
MS. DORCUS responded the university saved about $25,000.
JOE BEEDLE, Vice President of the University of Alaska
Fairbanks, supported SB 24. He said:
We find ourselves in the United States, and in Alaska,
near full employment status, especially with regards
to specific areas of employment and expertise. As far
as the state in general, having a good benefit
program, one that encourages retirement, we probably
are a little less favorably perceived in terms of just
salary alone. It is my observation that we probably
over-incent people to retire. Looking forward to some
of these new tiers, which are yet a new bill, I think
they will probably provide some relief.
Having said that, we are stuck with the current
program that encourages retirement and doesn't retain
the expertise that otherwise cannot be replaced. I
speak in favor of keeping this tool available for the
university, for the departments and for employers in
the state so that we have that expertise that is so
precious for us. I would just ask for your
consideration in doing so.
2:28:59 PM
SENATOR ELTON asked whether the program allows the university to
rehire professors at a lower salary than they had at retirement.
MR. BEEDLE responded the university certainly enjoys the
flexibility that the bill allows it in its hiring practices. The
university is blessed with an outstanding adjunct faculty and
unlike the K-12 school system; it has been quite successful at
attracting people on an adjunct basis.
2:31:09 PM
RICHARD ROBERTS, resident, said the Alaska State Troopers in the
Mat-Su Valley are so badly understaffed they are sending
individual state troopers to respond to calls for which the
Anchorage Police Department would send five or six police. The
troopers have had several members participate in the retire-
rehire program to enter positions for which there were no other
applicants.
CHAIR DYSON held SB 24 in committee.
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