Legislature(2021 - 2022)BELTZ 105 (TSBldg)
04/16/2021 01:30 PM Senate LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| SB6 | |
| SB123 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 6 | TELECONFERENCED | |
| += | SB 123 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
SB 6-RIP FOR PUBLIC EMPLOYEES/TEACHERS
1:30:38 PM
CHAIR COSTELLO announced the consideration of SENATE BILL NO. 6
"An Act relating to retirement incentives for members of the
defined benefit retirement plan of the teachers' retirement
system and the defined benefit retirement plan of the Public
Employees' Retirement System of Alaska; and providing for an
effective date."
1:31:01 PM
SENATOR GRAY-JACKSON moved to adopt the Committee Substitute
(CS) for SB 6, work order 32-LS0028\I, as the working document.
CHAIR COSTELLO objected for an explanation of changes.
1:31:24 PM
SENATOR REVAK joined the committee.
1:31:30 PM
MELODIE WILTERDINK, Staff, Senator Mia Costello, Alaska State
Legislature, Juneau, Alaska, paraphrased the following
explanation of changes from version A to version I of SB 6.
Page 1, Lines 14
The title is updated to include "reemployment of
persons who retire under the teachers' retirement
system."
Sec. 2 AS 14.20.136(b), Page 2, Lines 210
Is amended to update the statute under which members
(individuals who are eligible to participate in the
retirement plan and are covered by the plan) are
retired from AS 14.25.110(a) to AS 14.25.110.
1:32:26 PM
Sec. 3 AS 14.20.136(f), Page 2, Lines 1117
Is amended by adding a new subsection AS
14.20.136(f)(2) to specify that (c), (d), and (e)(1)
of this section do not apply to the rehire of a member
who is paid by the hour to mentor teachers who have
taught for fewer than four years. (c), (d), and (e)(1)
require, in other circumstances, that the school
district describe a shortage before rehiring retired
members, publicly advertise the position, make
contracts for no longer than 12 months, and provide
the administrator with related documentation.
Sec. 4 AS 14.25.043(f), Page 2, Lines 1827
Is amended to update the statute under which members
are retired from AS 14.25.110(a) to AS 14.25.110.
Sec. 5 AS 14.25.043(g), Page 2, Lines 2831, Page 3,
Lines 14
Is amended to update the statute under which members
retire.
Is amended to specify that this subsection, which
allows for retired and reemployed members to receive
group health plan coverage, does not apply to retired
members who are rehired and paid by the hour to mentor
teachers who have taught for fewer than four years.
Sec. 6 AS 14.25.070(a), Page 3, Lines 513
Is amended to clarify that each employer shall
contribute to the retirement system 12.56 percent of
all base salaries paid to active and retired members
who are eligible to receive group health plan
coverage, which does not include retired members who
are rehired and paid by the hour to mentor teachers.
[Sec. 7 - Sec. 12 have no changes.]
Sec. 13 Sec. 18, Pages 812
Are amended to update referenced section numbers.
Sec. 19 Page 12, Lines 1013
Is amended to specify that the only sections 1 and 7
17 are repealed on July 1, 2024. The teacher mentoring
provisions remain in effect.
1:35:19 PM
CHAIR COSTELLO removed her objection. Finding no further
objection, version I was adopted. She said the idea in the CS is
to allow teachers who opt for early retirement to return to
serve as mentors.
CHAIR COSTELLO asked the sponsor's staff to comment on the CS.
1:36:20 PM
JOE HAYES, Staff, Senator Scott Kawasaki, Alaska State
Legislature, Juneau, Alaska, stated that the sponsor supports
the changes.
CHAIR COSTELLO noted that her office received an email asking
why the retirement program limits participation to PERS/TRS
members who are 50 years of age and older. She asked Mr. Hayes
to talk about the reason for the age limitation.
1:37:17 PM
MR. HAYES answered that it is because of the actuarial costs;
including members younger than age 50 would be more expensive
for the retirement system.
CHAIR COSTELLO said a second email asked about the retirement
for employees who have accrued service in both PERS and TRS. She
asked the committee if they wanted to hear more about how the
bill addresses those individuals.
SENATOR STEVENS said yes and asked if the bill would limit
employees from moving from one retirement system to the other.
MR. HAYES answered no. The question was whether an individual
who had accrued 10 years in PERS and 10 years in TRS could
combine the two and retire with 20 years' service. He suggested
that Mr. Puckett was better suited to answer the question.
SENATOR STEVENS indicated he would like to hear from Mr. Puckett
to ensure that all the t's are crossed.
CHAIR COSTELLO clarified that the question was that an
individual who had accrued time as a teacher became a state
employee and then retired in the PERS system. She asked Mr.
Puckett how the state addresses retirement for these
individuals.
1:39:30 PM
JIM PUCKETT, Deputy Director, Division of Retirement and
Benefits, Department of Administration, Juneau, Alaska, stated
that in almost all cases, somebody who has 10 years in PERS and
10 years in TRS could not combine the two. They have to accrue a
retirement from each system. The exception is somebody who
retires under AS 39.35.375 with a public service benefit. It is
difficult to qualify for that specific situation and there is an
associated expense so it does not happen very often. His team
could think of just 15 examples of people qualifying under that
statute.
SENATOR STEVENS asked if there might be an advantage to the
employee in retirement to have 10 years PERS service and 10
years TRS service versus 20 years accrued service in one
retirement system or the other. "Why would they not just take 10
years in each and retire?"
MR. PUCKETT answered that the IRS restricts how Retirement and
Benefits can use time credited in each of the retirement
systems. With the exception of the public service benefit
mentioned earlier under AS 39.35.375, the retirements must be
separate.
1:42:39 PM
SENATOR STEVENS asked if an employee who retires with 10 years
in PERS and 10 years in TRS receives less in retirement than if
they had a 20-year retirement in one system or the other.
MR. PUCKETT answered that he was not sure how that calculates
and whether there would be an advantage either way.
SENATOR STEVENS said he would like an answer because it is a
crucial question.
MR. PUCKETT offered to talk to the processing teams and run
scenarios to see if there would be a disadvantage. He noted that
the contribution rate in TRS is higher than in PERS and that may
be an important consideration.
CHAIR COSTELLO said she too would like to have the information.
She wondered why it should matter if a person worked as a
teacher and then switched careers and entered the PERS system.
She asked Mr. Hayes if he had anything to add.
1:45:16 PM
MR. HAYES recalled an instance years ago when a constituent had
10 years in each retirement system and his office could not find
a solution to get the individual a retirement. His belief is
that it would require a legislative fix.
SENATOR STEVENS asked who requested this legislation.
MR. HAYES replied the requests were primarily from teachers but
municipalities and the university are looking at this as a way
of allowing senior employees to retire to make way for younger
hires who cost less, thereby helping the state financially.
SENATOR STEVENS said it is a complex situation and he could
understand why a solution has not been easy to come by.
1:47:12 PM
At ease
1:47:46 PM
CHAIR COSTELLO reconvened the meeting and solicited a motion.
1:47:53 PM
SENATOR GRAY-JACKSON moved to report the CS for SB 6, work order
32-LS0028\I, from committee with individual recommendations and
attached fiscal note(s).
1:48:11 PM
CHAIR COSTELLO found no objection and CSSB 6(L&C) moved from the
Senate Labor and Commerce Standing Committee.
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