Legislature(2021 - 2022)BARNES 124
01/19/2022 03:15 PM House LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| HB220 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 220 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
January 19, 2022
3:21 p.m.
MEMBERS PRESENT
Representative Zack Fields, Co-Chair
Representative Ivy Spohnholz, Co-Chair
Representative Calvin Schrage
Representative Liz Snyder
MEMBERS ABSENT
Representative David Nelson
Representative James Kaufman
Representative Ken McCarty
COMMITTEE CALENDAR
HOUSE BILL NO. 220
"An Act relating to the Public Employees' Retirement System of
Alaska and the teachers' retirement system; providing certain
employees an opportunity to choose between the defined benefit
and defined contribution plans of the Public Employees'
Retirement System of Alaska and the teachers' retirement system;
and providing for an effective date."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 220
SHORT TITLE: RETIREMENT SYSTEMS; DEFINED BENEFIT OPT.
SPONSOR(s): REPRESENTATIVE(s) HOPKINS
05/19/21 (H) READ THE FIRST TIME - REFERRALS
05/19/21 (H) L&C, FIN
11/08/21 (H) L&C AT 4:00 PM ANCH LIO DENALI Rm
11/08/21 (H) Heard & Held
11/08/21 (H) MINUTE(L&C)
01/19/22 (H) L&C AT 3:15 PM BARNES 124
WITNESS REGISTER
REPRESENTATIVE HOPKINS
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Introduced HB 220 as prime sponsor.
JOE BERTAGNOLI, representing self
Petersburg, Alaska
POSITION STATEMENT: Testified in support of HB 220.
AMY GALLAWAY, representing self
Fairbanks, Alaska
POSITION STATEMENT: Testified in support of HB 220.
SEAN REILLY, representing self
Palmer, Alaska
POSITION STATEMENT: Testified in support of HB 220.
SUSAN RITTER, representing self
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 220.
DAVID BRIGHTON, representing self
Kenai, Alaska
POSITION STATEMENT: Testified in support of HB 220.
KATHLEEN YERBICH, representing self
Wasilla, Alaska
POSITION STATEMENT: Testified in support of HB 220.
DR. VALERIE BROOKS, representing self
Ketchikan, Alaska
POSITION STATEMENT: Testified in support of HB 220.
SUSAN DUNHAM, representing self
Wasilla, Alaska
POSITION STATEMENT: Testified in support of HB 220.
MIKE EVANS, representing self
Palmer, Alaska
POSITION STATEMENT: Testified in support of HB 220.
LUCY ORTIZ, representing self
Ketchikan, Alaska
POSITION STATEMENT: Testified in support of HB 220.
JAKE METCALFE, Executive Director
Alaska State Employees Association(ASEA)
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 220.
CHRISTINE VILLANO, representing self
Fairbanks, Alaska
POSITION STATEMENT: Testified in support of HB 220.
TIM PARKER, representing self
Fairbanks, Alaska
POSITION STATEMENT: Testified in support of HB 220.
NATHAN ERFURTH, President
Kenai Peninsula Education Association
Kenai, Alaska
POSITION STATEMENT: Testified in support of HB 220.
PAT HIGGINS, representing self
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 220.
MARY DOOHER, representing self
Wasilla, Alaska
POSITION STATEMENT: Testified in support of HB 220.
RACHEL ETCHER, representing self
Petersburg, Alaska
POSITION STATEMENT: Testified in support of HB 220.
EMILY MOODY, representing self
Cordova, Alaska
POSITION STATEMENT: Testified in support of HB 220.
DANIELLE SPECHT, representing self
Kodiak, Alaska
POSITION STATEMENT: Testified in support of HB 220.
OLIVIA PITESA, representing self
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 220.
HEATHER BAKER, representing self
Soldotna, Alaska
POSITION STATEMENT: Testified in support of HB 220.
SHARON JOHNSON, representing self
Wasilla, Alaska
POSITION STATEMENT: Testified in support of HB 220.
JASON FOX, representing self
Kodiak, Alaska
POSITION STATEMENT: Testified in support of HB 220.
MARGARET GILMAN, representing self
Kenai, Alaska
POSITION STATEMENT: Testified in support of HB 220.
WINTER MARSHALL-ALLEN, representing self
Homer, Alaska
POSITION STATEMENT: Testified in support of HB 220.
MIKE MILLER, representing self
Eagle River, Alaska
POSITION STATEMENT: Testified in support of HB 220.
BEN WALKER, representing self
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 220.
CHELSIE HARRIS, representing self
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 220.
CORY CROSSETT, representing self
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 220.
CALLIE CONNERTON, representing self
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 220.
JAKE JACOBY, representing self
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 220.
CAROLE BOOKLESS, representing self
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 220.
JENNA WAGNER, representing self
Kodiak, Alaska
POSITION STATEMENT: Testified in support of HB 220.
ACTION NARRATIVE
3:21:52 PM
CO-CHAIR IVY SPOHNHOLZ called the House Labor and Commerce
Standing Committee meeting to order at 3:21 p.m.
Representatives Spohnholz, Fields, Schrage, and Snyder were
present at the call to order.
HB 220-RETIREMENT SYSTEMS; DEFINED BENEFIT OPT.
3:22:46 PM
CO-CHAIR SPOHNHOLZ announced that the first order of business
would be HOUSE BILL NO. 220, "An Act relating to the Public
Employees' Retirement System of Alaska and the teachers'
retirement system; providing certain employees an opportunity to
choose between the defined benefit and defined contribution
plans of the Public Employees' Retirement System of Alaska and
the teachers' retirement system; and providing for an effective
date."
3:23:07 PM
REPRESENTATIVE HOPKINS, Alaska State Legislature, introduced HB
220 as prime sponsor. He summarized the sponsor statement [hard
copy included in committee packet] which read as follows
[original punctuation provided]:
Since 2006, Alaska's new public employees have been
denied long term stability for planning their
retirement and lifelong financial goals. Today, HB 220
offers all of Alaska's public employees the choice of
a career with the portability of a Defined
Contribution System or the stability of a Defined
Benefit System.
Fifteen years of decreased recruitment and retention
of educators, public safety officials and state and
municipal employees have shown the shortfalls of a
"one-size-fits-all" Defined Contribution System:
Reduced educational aptitude, decreased long-term job
performance, high employee turnover, increased
training/recruitment costs and inefficient spending of
limited state dollars. HB 220 proposes a new option
that is a) cost neutral to the state budget, b) shares
future risk with employees, and c) does not tie the
state's hands with increased medical costs.
HB 220 is cost neutral. It does not increase the
state's contribution above the existing Defined
Contribution plan in place since 2006. It shares the
risk between the state and the employee by mandating
that employee contribution rates increase to keep the
pension fund solvent in years of poor returns.
Skyrocketing health care costs were a key driver in
Alaska choosing to cut off employee access to a
defined benefit retirement system in 2006. However, HB
220 would provide defined benefit plan employees in
the same health benefit system currently in place for
defined contribution employees. While employees would
get to choose their retirement plan, all would still
receive the same health care benefits, limiting state
exposure to increased health costs.
This plan would maximize taxpayer's return on
investment in our public employees. If passed, HB 220
would make it far more likely that 30,000 Alaskans
would have the opportunity to keep their families
instate for their career, reinvesting their salaries
and benefits in the communities they call home. By
creating a cost-neutral pension system that shares
investment risk between the state and her employees,
Alaskans will see improved outcomes and increased
efficiency in everything from public safety to
education. Pensions are safe, sustainable, and
strategic investment accounts that prepare employees
and employers alike for long term success. Under HB
220, Alaskans would know how much is being put into
the fund and how much will come out. As the old adage
says, "Failing to plan is planning to fail." HB 220
will give our state workers troopers, teachers,
technicians and every other public employee who
dedicates their career to public service the chance
to earn a retirement with dignity, and the recognition
of their years of service to their fellow Alaskans. He
said that retirement is one of the drivers for
employers leaving their professions. He noted that it
is also a difficult issue for morale, and the
financial impact. Training, etc. He noted the ways in
which the impacts have been seen throughout various
professions. He noted the changes caused by the Tier
IV system. The retirement systems are unsustainable
and hurt Alaska's budget and bottom line. The main
goal of the bill is to be cost neutral and share in
the risk with the state. Also, no impact to retirees.
Also gives an option to switch 401k. Employee
retention is also an important goal of the bill.
3:28:14 PM
REPRESENTATIVE HOPKINS offered a PowerPoint presentation
entitled, "House Bill 220," and proceeded to slide 3, "Alaska is
facing an unprecedented recruitment and retention crisis." He
explained that many local police departments, including the
department in Fairbanks, Alaska, have begun to offer $20,000
sign-on bonuses in an attempt to recruit more officers or
troopers. The department currently has a twenty percent vacancy
rate, which has been true for "years," and the department has
been unable to fill these positions.
REPRESENTATIVE HOPKINS proceeded to slide 4, which included a
quote from the Alaska Department of Public Safety Recruitment
and Retention Overview that read as follows [original
punctuation provided]:
"The department has struggled to be an employer of
choice due to internal and external perceptions of the
department being underfunded and understaffed,
combined with the lack of a competitive pay and
benefits package.
REPRESENTATIVE HOPKINS advanced to slide 5, "Turnover among
Alaska educators is dismal and at crisis levels," which included
data regarding teacher turnover. He explained that many
teachers who leave do not simply transfer to another district,
but 60 percent of teachers either leave Alaska or the
profession. He pointed towards lack of support and lack of
retirement benefits as two major reasons for teacher turnover in
Alaska. Teachers say that the defined benefit and retirement
system would help encourage them to stay
REPRESENTATIVE HOPKINS proceeded to slide 6 which included an
article detailing findings of the American Educator panel. He
read a quote from the article, which read as follows [original
punctuation provided]:
"Nationally, district leaders reported that 6 percent
of their teachers and 6 percent of their principals
retired or resigned at the end of the 2020-2021 school
year - rates they said were on par with their pre-
pandemic attrition rates."
REPRESENTATIVE HOPKINS continued to slide 7, "Turnover
among Alaska educator's is dismal and at crisis levels.
It's even worse in rural Alaska," which depicted data
detailing the level at which different types of school
districts in Alaska have lost teachers. He relayed that 36
percent of teachers turn over every year in rural
districts. Many of these districts have 15 to 20 teachers,
or even fewer, and he expressed that that turnover is
significant and impacts the ability of children to learn.
REPRESENTATIVE HOPKINS proceeded to slide 8, "Teacher
Retention and Recruitment Survey Results," which depicted
the results of a survey taken in 2021. He highlighted the
reason ranked third most important by teachers who took the
survey, which was that the state go back to a defined
benefit retirement system. He also mentioned reasons one
and two, which are locally handled issues. He noted that
the third reason is the only element that is something that
can be changed by the legislature.
3:32:40 PM
REPRESENTATIVE HOPKINS continued on slide 8 and 9, "30-Year
TRS." He explained that the current system makes it so that if
an educator doesn't have the financial capability to put
additional money into a Teachers' Retirement System (TRS)
account, that person wouldn't be able to last more than 20 years
in retirement as the amount that the state contributes is
insufficient. The slide depicted a graph that showed that 50
percent of teachers would fall into this category and would not
be able to sustain themselves for more than 20 years in
retirement, and would have to return to the workforce.
REPRESENTATIVE HOPKINS advanced to slide 11, "HB 220 restores
the option for a modest pension for Alaskans, while protecting
the state from potential unfunded liabilities." He stated that
the bill was intended to be crafted conservatively and
responsibly.
REPRESENTATIVE HOPKINS moved to slide 12, "HB 220 is Designed to
be Cost Neutral to Alaska," which read as follows [original
punctuation provided]:
HB 220 establishes a pension option using the existing
contribution amount to the Defined Contribution plan.
REPRESENTATIVE HOPKINS advanced to slide 13, "HB 220 protects
Alaska taxpayers with a variable contribution rates," which read
as follows [original punctuation provided]:
HB 220 establishes a variable contribution rate of 6%
to 8%.
If the plans funding falls below 90%, employee
contribution rates can rise from 6% all the way to 8%.
REPRESENTATIVE HOPKINS continued to slide 13, "HB 220
establishes employee choice," which read as follows [original
punctuation provided]:
TRS 3, PERS 4, and all future SOA employees would have
a choice between a Defined Contribution or a Defined
Benefit.
New hires have 90 days to decide.
Existing PERS 4 and TRS 3 employees can use their DC
accounts to buy years of service credit in the new
system.
REPRESENTATIVE HOPKINS proceeded to slide 14, "Vesting and
retirement age," which read as follows [original punctuation
provided]:
Employees are eligible for retirement after 30 years
of employment or at age 60.
REPRESENTATIVE HOPKINS explained that individuals in the TRS
system and public service employees like police officers and
firefighters would either be able to retire after 20 years of
service or at the age of 55 due to a slightly higher
contribution rate.
3:37:17 PM
REPRESENTATIVE HOPKINS continued on slide 16, "Health Care,"
which read as follows [original punctuation provided]:
HB 220 maintains the status quo for health care
benefits. It includes the same health care benefits as
PERS 4 and TRS 3.
REPRESENTATIVE HOPKINS explained that the bill would makes it so
that an individual doesn't have to retire directly out of the
state employment system. If an individual discontinued state
employment, paying monthly premiums would no longer be a
requirement, but the individual would still get access to state
healthcare coverage when they turn 65 and are eligible for
Medicare.
3:39:09 PM
CO-CHAIR SPOHNHOLZ asked Representative Hopkin whether, if
someone left state service, that person would have to continue
to pay a three percent premium to the state in order to be
eligible for health care benefits upon retirement.
REPRESENTATIVE HOPKINS responded no. He explained that,
currently, the state puts three percent of the average salary
into a health reimbursement arrangement (HRA) account for an
employee. He said that the intent of the HRA is to offset the
healthcare premiums after that person leaves state service. He
offered clarification that the HRA intends to help pay monthly
premiums until an individual turns 65 [and can qualify for
Medicare].
3:40:21 PM
REPRESENTATIVE HOPKINS continued on slides 18 and 19, "What do
Alaskans get from 220?" which read as follows [original
punctuation provided]:
-Improved recruitment and retention
-Long term expertise and career
-Efficient use of state dollars
-Improved education and public safety results
-Competitiveness with other states
REPRESENTATIVE HOPKINS added that Alaska is currently the only
state in the nation without a pension system, and that 60
percent of teachers are leaving the state or the profession.
3:42:19 PM
REPRESENTATIVE SCHRAGE shared his understanding that teachers
are feeling stuck because there is no guaranteed pension
available nor is there the ability to opt in to social security.
He asked Representative Hopkins whether the bill would give
teachers the option towards the end of their career to take
advantage of a guaranteed retirement system.
REPRESENTATIVE HOPKINS responded yes, the bill would not impact
social security, but it would allow for the option to choose the
guaranteed pension at the end of one's career. He stated that
it would mean a return to a defined benefit pension system that
has so often been touted as a missing necessity.
3:43:53 PM
REPRESENTATIVE FIELDS commented that this is the biggest issue
he's heard reported by local teachers and that he supports the
bill.
3:44:14 PM
REPRESENTATIVE SCHRAGE asked Representative Hopkins how
competitive HB 220 would make the retirement system for
teachers.
REPRESENTATIVE HOPKINS responded by sharing his understanding
that this bill would represent the answer and the return that
people are looking for, and would act as a motivator for people
to remain in Alaska. He commented that teachers are the largest
group impacted, but that it would be an option for all state
employees.
3:46:09 PM
CO-CHAIR SPOHNHOLZ opened public testimony on HB 220.
3:46:32 PM
JOE BERTAGNOLI, representing self, testified in support of HB
220. He shared that he started working as a public employee in
1991 and recently retired, which allowed him to benefit from a
guaranteed pension for himself and his spouse. He explained
that the benefits associated with being a Tier II hire acted as
an incentive to stay in the public sector. He said that when
the state moved to a Tier IV system in 2006, many of those
incentives were gone for new employees. He noted that he has
observed that new employees under Tier IV only stay in the
public sector until "something better" comes along, because the
incentives that were once in place are no longer present. This
causes a loss of longevity and experience in the workforce, he
expressed, and noted that there are many vacancies in the school
system and high turnover rates.
3:49:19 PM
AMY GALLAWAY, representing self, testified in support of HB 220.
She noted that she was the 2020 Alaska Teacher of the Year and
in the Tier II benefits category. She expressed that Alaska has
the worst retirement system in the nation for Tier III and Tier
IV educators, with no pension and no social security. She said
that the turnover rate among educators is demoralizing, and
shared that students started the [2021-2022] school year with
over 900 vacancies across the state, which she said was unheard
of in her career to this point. Teachers leave Alaska every
year to move to states with pensions and stability, she said.
She mentioned a recent experience where a student who wants to
become a teacher asked her whether teaching is worth it
considering the "bleak" state of teaching in Alaska, and she
said that the state is failing students like this. She
emphasized that a pension is one of the top incentives for
teacher retention. She said that the benefits of having a
pension have prevented her from quitting when the weight of
teaching has felt like "too much to bear," and that she would
not still be teaching in Alaska without it.
3:52:37 PM
SEAN REILLY, representing self, testified in support of HB 220.
He has been a teacher in Palmer for many years and expressed
that although he will have a pension when he retires, many
teachers in the state have neither a pension nor access to
social security benefits. He stated that Alaska is ranked
forty-seventh in the country in retirement. He said that many
teachers can only manage five years of teaching in Alaska due to
the lack of benefits, and after that teachers are able to take
their contributions to another state that has a pension plan.
He reported that a friend of his said that there was no dignity
in retirement in Alaska.
3:56:57 PM
SUSAN RITTER, representing self, testified in support of HB 220.
She shared that she currently works in a high school in special
education. She expressed her understanding that Alaska used to
have the best retirement system in the country for teachers, and
now ranks amongst the worst. She reiterated Mr. Reilly's point
that most teachers leave after five years because they can get
better benefits in other states.
4:00:47 PM
DAVID BRIGHTON, representing self, testified in support of HB
220. He voiced that Tier III is colloquially known as the
"death tier" for teachers in Alaska. He said that has been told
that he needs to invest 25 percent of his teaching salary in
order to be able to retire, and although he is currently
investing over 10 percent, he said he can't manage more than
that. He stated that it is difficult for teachers in the
classroom to deal with high turnover rates, and that the second
most senior teacher in his department has only worked there for
two years.
4:04:12 PM
KATHLEEN YERBICH, representing self, testified in support of HB
220. She said that she remembers the shock she experienced when
she discovered the state of her retirement account as a Tier III
employee. She explained that although she has paid into the
pension plan, she will only receive a small portion of it. She
added that teachers moving away from the state also means
families moving out of the state.
4:07:23 PM
VALERIE BROOKS, PhD, representing self, testified in support of
HB 220. She shared that she is a teacher and a Tier II
employee. She explained that her retirement benefits are much
more substantial than those of her Tier III and Tier IV
colleagues. She noted that there are many unfilled teaching
positions in the state due to lack of applicants. She
emphasized that in order to attract teaching talent to the
state, it is essential to provide incentives such as a
competitive retirement package. She added that the lack of a
stable teacher workforce can negatively impact student learning.
She shared that a report from April 2021 entitled, "Teacher
Retention and Recruitment Survey," prepared by the Alaska
Department of Education, which she noted was mentioned during
Representative Hopkins' presentation, showed that retirement
benefits consistently noted as essential in lists of issues that
are critical to current Alaska educators.
4:10:03 PM
SUSAN DUNHAM, representing self, testified in support of HB 220.
She said she is concerned for the students in Alaska as they are
significantly impacted by the high teacher turnover rates. She
explained that some teachers have had such overcrowded
classrooms that teachers simply don't have enough time or energy
to focus on each student. She added that teachers don't have
the extra time to dedicate to things like volunteering to coach
sports teams. She relayed that there is an employee in her
district whose only job is to recruit teachers, and the employee
was only able to recruit one teacher over the course of an
entire semester.
4:12:24 PM
MIKE EVANS, representing self, testified in support of HB 220.
He expressed that the Tier III retirement system ensures that
Alaska is not competitive with other states. He said that he
has seen many colleagues leave the state due to the perceived
insufficient benefits available for teachers in order to pursue
a better quality of life in other states.
4:13:55 PM
LUCY ORTIZ, representing self, testified in support of HB 220.
She said that, due to the state of retirement in Alaska, she
almost considered not coming back to Alaska after getting her
degree, and every year considers leaving again.
4:15:20 PM
JAKE METCALFE, Executive Director, Alaska State Employees
Association (ASEA), testified in support of HB 220. He shared
that he is both a retired public employee and a current
employer. He explained that he is "lucky enough" to be Tier 1,
and stayed in his position when he entered public service
because he knew that there was a pension, which no longer
exists. There is now a "revolving door" of employees, he said.
He highlighted law enforcement as a particular example of this,
and said that most law enforcement employees only work for five
years to be able to access the defined contribution money, then
move to another state with a defined benefit retirement program.
He stated that the state was putting in $250,000 to $300,000 in
training police officers, and that that money in addition to the
defined contribution money leaves the state when the officers
move elsewhere. He added that ASEA, his current employer, has
supported defined benefits since it was relinquished in 2006.
He said that ASEA doesn't have turnover because it provides
pensions, 401k plans, and other benefits to its employees, and
this in turn keeps money and expertise in Alaska.
4:20:28 PM
CHRISTINE VILLANO, representing self, testified in support of HB
220. She stated that she and her husband have a combined 66
years of experience in education. She reiterated that the rate
at which teachers are resigning and moving away is detrimental
to the state. She shared her understanding that HB 220 would
not cost the state anything more, but would provide a stable
retirement for educators.
4:24:01 PM
TIM PARKER, representing self, testified in support of HB 220.
He shared that he is a teacher in Fairbanks, Alaska, and served
on the Teacher Retention and Recruitment Taskforce with previous
testifier Amy Gallaway. He predicted that future employees will
be "repulsed" to discover the state of the Tier III TRS system
and it will be the "worst PR" that the state could receive. He
said that there is no other category of workers in the United
States that faces the "extreme risk" that Tier III and many Tier
IV employees face in Alaska.
4:26:30 PM
NATHAN ERFURTH, President, Kenai Peninsula Education
Association, testified in support of HB 220. He highlighted the
importance of having motivated and capable teachers in the
state, and emphasized that teachers help the children of Alaska
through "every type of situation imaginable," and that these
children are going to become tomorrow's workforce. He noted
that many teachers are leaving Alaska to find better benefits in
other states.
4:28:57 PM
PAT HIGGINS, representing self, testified in support of HB 220.
He noted that he is on the Anchorage School Board. He explained
that Alaska is being "head hunted" by other states for three
groups of employees: nurses, bus drivers, and teachers. He said
that when there's a shortage nationwide in a particular field,
the key to recruitment is retention, and Alaska will not be able
to retain its teachers without a defined benefit option. He
said that the children of Alaska will be negatively impacted if
action is not taken immediately.
4:31:25 PM
MARY DOOHER, representing self, testified in support of HB 220.
She said that she is a speech language pathologist working with
the Matanuska-Susitna Borough School District. She emphasized
the importance of recruitment and retention of related service
providers, such as speech language pathologists and school
psychologists, in addition to teachers in Alaska. She stated
that she moved to Alaska in 2010, and since she arrived, there
has been a "revolving door" of Tier III service providers
leaving the state due to lack of benefits. She said that this
forces the district to hire expensive, contract, and online
providers in order to fill positions. She shared her
understanding that Alaska used to be the premiere state for
teachers, and the students were the better for it, but that that
is no longer the reality.
4:34:09 PM
RACHEL ETCHER, representing self, testified in support of HB
220. She said that she began working in education in the year
that the state transitioned to Tier III, and she heard from the
people around her sentiments that she was unlucky to have "just
missed" the cutoff. She said that she didn't understand it at
the time, but now understands the difficulties of being a Tier
III employee. She added that she has often wondered whether she
should leave the state due to these issues.
4:36:01 PM
EMILY MOODY, representing self, testified in support of HB 220.
She shared that she is a Tier III employee. She expressed that
HB 220 would help recruit and retain teachers in the state. She
quoted from an article about financial planning for teachers in
a magazine distributed by the National Council of Social
Studies, stating, "many teachers were attracted to education in
part because of its level of job security and good benefits,
mutually including a defined benefit, state-funded pension.
Although the financial rewards are not high, the job security
and benefits, combined with a love for teaching, bring many into
the field." She said this article made her emotional because it
reminded her that teachers in Alaska are the only ones who do
not enjoy those benefits.
4:39:08 PM
DANIELLE SPECHT, representing self, testified in support of HB
220. She shared that she is Tier III and just missed the cutoff
for Tier II. She said that she doesn't feel as though she has
another choice but to consider other options for employment
outside of Alaska.
4:42:19 PM
OLIVIA PITESA, representing self, testified in support of HB
220. She said that she is from Alaska and that this is her
first year teaching in Alaska, though she has taught in other
states and internationally. She echoed the sentiments of
earlier testifiers that she was not aware of the meaning of
being a Tier III employee. She expressed that although she is
only in her first year of teaching in Alaska, she will be
planning to move unless the retirement system is fixed.
4:44:42 PM
HEATHER BAKER, representing self, testified in support of HB
220. She is a teacher and has a number of accolades and awards,
including being the 2019 Teacher of the Year. She shared that
her school system in Soldotna, Alaska had an opening from May
2021 through October 2021 without receiving a single applicant.
She explained that she is a Tier III teacher and that the lack
of defined benefits has presented her family with a "real
crisis," and the risk to her future due to the lack of defined
benefits means that her family continually looks at moving
south.
4:47:55 PM
SHARON JOHNSON, representing self, testified in support of HB
220. She shared that she found someone to take over her job
when she retires as a school counselor, but that the replacement
Ms. Johnson found is already reconsidering taking the position
because she has already been offered another position with a
defined benefit plan. She said that she has a friend who
recruits teachers, and that friend has resorted to telling
people to come to Alaska for the "five-year Alaskan experience,"
because that is all the time that many teachers can handle in
the current system.
4:50:10 PM
JASON FOX, representing self, testified in support of HB 220.
He said that he has been a school counselor in Alaska for 10
years and is invested in public education and Alaska, but that
finding creative ways to save money for retirement outside of
the retirement system has been a point of frustration throughout
his career. He added that 80 percent of teachers in the Kodiak
school system are Tier III employees. He commented that he
"doesn't love" the buy-in service time requirement in the
language of HB 220, but he is eagerly in support of the bill as
a needed improvement.
4:52:19 PM
CO-CHAIR SPOHNHOLZ asked Mr. Fox to explain which part of the
buy-in service time he does not like.
MR. FOX responded that he's not sure how much he would be
expected to put forward as a teacher with ten years of
experience. He said that he assumes that it would be "a couple
thousand dollars of year experience" that he would have to buy
into, and understands that that would come out of his personal
retirement plan that he already has with the state. He said
that he's not sure that he supports taking that money out of
individual employees' retirement accounts as funding. He added
that he doesn't know what a better option would be, which is why
he supports HB 220 in its current state.
4:53:29 PM
MARGARET GILMAN, representing self, testified in support of HB
220. She expressed that the bill would provide an incentive for
teachers at the beginning of their careers who would like to
live in Alaska.
4:55:23 PM
WINTER MARSHALL-ALLEN, representing self, testified in support
of HB 220. She explained that she worked in rural villages at
the beginning of her career, but due to legislation and finance
issues, was not able to stay in the villages. She said that
teachers are asking for stability within communities, and that
teachers are not just asking for retirement, but for the ability
to recruit additional quality teachers to the state.
4:57:58 PM
MIKE MILLER, representing self, testified in support of HB 220.
He explained that he has been a public employee for 20 years in
Alaska and has seen a lot of staff turnover. He said that many
employees work for five years and then move on to other
positions. He expressed that a pension would provide the
security that the state needs in order to retain talent.
5:00:08 PM
BEN WALKER, representing self, testified in support of HB 220.
He said that there's a real teacher shortage crisis and shared
that over 30 percent fewer students are selecting education as
their chosen field of study.
5:03:41 PM
CHELSIE HARRIS, representing self, testified in support of HB
220. She shared that she fears that her children will one day
be responsible for her well-being because her retirement will
run out. She said that for Tier III employees, there's a real
possibility of running out of savings and retirement. She noted
that the children of Alaska are also affected because many
qualified educators are leaving Alaska due to the state of
retirement and benefits. She added that the educators that stay
are handed unreasonable workloads due to gaps in employment.
5:06:16 PM
CORY CROSSETT, representing self, testified in support of HB
220. He said that HB 220 could potentially solve a "huge
problem." He noted that he originally came to Alaska because
not only did he love the state, but the benefits for teachers
were enticing. Unfortunately, he said, he didn't start teaching
until 2006 when the system was changed to Tier III. He added
that his children are in other states going to college and that
his children asked him and his wife whether they would still be
in Alaska when his children are ready to come back and raise
families in the state, and he said that he had to tell his
children, "I don't know." He expressed that this bill was a
"glimmer of hope" that made him think that he might still be
able to stay in Alaska.
5:08:23 PM
CALLIE CONNERTON, representing self, testified in support of HB
220. She said that she loves teaching in Alaska, but that she
needs a future for herself and for her future family. She noted
that teachers went through immense struggles with distance
learning during the COVID-19 pandemic. She pointed to
continuity and less turnover as a necessity for students to get
the best education possible.
5:11:27 PM
JAKE JACOBY, representing self, testified in support of HB 220.
He said that he's been teaching in Alaska for 15 years and is a
Tier III employee. He explained that if he were to teach for
thirty years with the school district, his retirement would run
out before he turns seventy. He said that in order to make his
retirement work, he would need to teach from the age of 24 when
he began his career until the age of 67, and hope to either "die
or go broke at 95." He added that Tier II employees will soon
start retiring, and that will mean a significant loss of talent
in the school district. He said that it's proven difficult to
keep Tier III employees working in the state, and that it's
become even harder to find those Tier III employees to hire. He
predicted that when Tier II employees start to retire, Tier III
employees will not be able to fill all of the holes Tier II
employees will leave behind.
5:13:46 PM
CAROLE BOOKLESS, representing self, testified in support of HB
220. She said that she is a Tier III employee working as a
Special Education teacher. She said that there are currently
six positions that have been open all year in the Juneau School
District, and for this reason she filled two teaching roles
herself. She noted that the district doesn't have a speech
language pathologists in the school, and that the teachers
filling the roles are all distance, which she said, "doesn't
work." She noted that she believes the lack of interest is due
to the benefits system. She said that this is her second career
and that she was fully vested in social security prior to
starting teaching, but that as soon as she started teaching, she
lost a significant portion of it.
5:16:27 PM
CO-CHAIR SPOHNHOLZ asked Ms. Bookless to explain why she had to
forfeit her social security from her previous employment.
MS. BOOKLESS responded that this has to do with something called
a "windfall exclusion" [Windfall Elimination Provision] that
says that, if a person is working for a government entity, that
person shouldn't be able to receive both social security and a
pension. She said that even though she fully invested in her
social security, the rules dictate that up to 50 percent of
social security will be withheld if a person has a pension as
well.
CO-CHAIR SPOHNHOLZ commented that it's important for people to
understand that there is no way for a person to "cobble
together" a retirement plan that looks similar to retirement
plans that people receive in the private sector. She expressed
that one of the challenges the legislature has faced in the past
is the "mythology" that public employees should be able to
cobble together a substantive retirement plan. She shared her
understanding that there is no way to fix this without the
legislature taking action.
MS. BOOKLESS responded that another factor that is sometimes
missed is that Tier III employees also don't have the type of
health plan that Tier I employees have, and so a large chunk of
her retirement goes to medical insurance.
5:18:55 PM
JENNA WAGNER, representing self, testified in support of HB 220.
She expressed that Alaska has the "worst retirement system" in
the United States. She noted that educators can't afford to
stay in Alaska, and Alaska can't afford to lose educators. She
said she is also concerned about the buy-back service and what
that cost will look like, particularly for new educators, but
that any improvement is greatly appreciated.
5:20:34 PM
CO-CHAIR SPOHNHOLZ, after ascertaining that no one else wished
to testify, closed public testimony on HB 220.
CO-CHAIR SPOHNHOLZ thanked everyone for providing passionate and
candid testimony. She noted that life spans are longer than
they used to be, but that retirement and benefit plans are not
set up to accommodate the growth in life expectancy. She
expressed that the most important resource in Alaska is the
people.
5:22:16 PM
CO-CHAIR SPOHNHOLZ announced that HB 220 was held over.
5:22:56 PM
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
5:23 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB220 Sectional Analysis ver. A 11.5.21.pdf |
HL&C 11/8/2021 4:00:00 PM HL&C 1/19/2022 3:15:00 PM HL&C 1/26/2022 5:15:00 PM |
HB 220 |
| HB220 Sponsor Statement 11.5.21.pdf |
HL&C 11/8/2021 4:00:00 PM HL&C 1/19/2022 3:15:00 PM HL&C 1/26/2022 5:15:00 PM |
HB 220 |
| HB 220 Fiscal Note DOA.pdf |
HL&C 1/19/2022 3:15:00 PM HL&C 1/26/2022 5:15:00 PM |
HB 220 |
| HB220 ver. A 11.5.21.PDF |
HL&C 11/8/2021 4:00:00 PM HL&C 1/19/2022 3:15:00 PM HL&C 1/26/2022 5:15:00 PM |
HB 220 |
| HB 220 Testimony - Received as of 1.18.2022.pdf |
HL&C 1/19/2022 3:15:00 PM HL&C 1/26/2022 5:15:00 PM |
HB 220 |
| HB220 Hopkins Slides Bill Overview 11.5.21.pdf |
HL&C 11/8/2021 4:00:00 PM HL&C 1/19/2022 3:15:00 PM HL&C 1/26/2022 5:15:00 PM |
HB 220 |
| HB 220 Testimony - Received as of 1.19.2022.pdf |
HL&C 1/19/2022 3:15:00 PM HL&C 1/26/2022 5:15:00 PM |
HB 220 |