SB 145-REEMPLOYMENT OF RETIRED TEACHERS  CHAIR FRED DYSON announced SB 145 to be up for consideration. SENATOR GARY STEVENS, sponsor, said Alaska is facing a shortage of qualified teachers and this bill would allow the rehiring of early retired teachers. The Retirement Incentive Program (RIP) was a big disincentive for people to return to work, as they would have to pay back 110 percent of the benefits they received. There is no actuarial impact to the districts, but they would be required to certify that they are experiencing a shortage. This would not guarantee tenure and salaries would be negotiable. It does not require districts to hire RIP teachers, but gives them that option in times of need. It will not cost the state money because it has already been taken care of through the retirement system and it will help the shortage of teachers in our state. TAPE 03-26, SIDE B    SENATOR GARY WILKEN asked how he envisioned certification being done. SENATOR STEVENS replied certification would be a notification to the Department of Education that a district is experiencing a shortage of teachers. Otherwise, he didn't know any of the specifics of the procedure. SENATOR WILKEN asked if certification adds to the bureaucracy and what does it do to help in the scheme of things. Does anyone look at the certification or does it put someone on notice? SENATOR STEVENS replied that he thought it would just require the district to look at it carefully to make sure they weren't using it because they had a RIP teacher available, and that there was, in fact, a shortage. He would be more comfortable having the department comment on the specifics. SENATOR WILKEN asked if he envisioned that the teachers coming back would be included or excluded from the NEA bargaining unit. SENATOR STEVENS answered that they would not be receiving retirement or benefits from the union because the district negotiates the contract and is separate from the union. He thought they would be outside the purview of the union. CHAIR DYSON wanted clarification on page 3, section 4, on receiving benefits during the period of reemployment. An earlier page indicates they may within 30 days of reemployment elect to continue receiving benefits during the period by filing a waiver of coverage. MS. JANET PARKER, Division of Retirement and Benefits, explained that when coming back to work the employee has the option to continue receiving their benefits or to waive their retirement benefit and continue to receive retirement credit. But if they want, and it's certainly to their advantage if you're eligible to retire with a full retirement benefit of 20 years or longer, then you can actually work and receive both your paycheck and your retirement check. She said that dozens of retirees had been brought back that way. CHAIR DYSON said this is just giving RIP'd employees the same options as existing retired employees have. MS. PARKER said that was correct. CHAIR DYSON asked if a retired teacher is hired back at any level their new employer chooses. SENATOR STEVENS answered that he thought that was negotiable. MS. PARKER said she thought someone from the school board could best answer that question. She didn't know about the different contracts. It's possible that they could collectively bargain to reduce their salary off the normal salary schedule they have. CHAIR DYSON said he was confused and asked again if there was any language in the bill that would require the district to hire someone in at the level they were when they retired or can they hire someone back at any level that is mutually acceptable to them. SENATOR STEVENS replied that he thought the later was the case. The district is not forced to hire anyone back at the level they retired from. CHAIR DYSON said he may have asked the question poorly and asked again: If they came back and chose not to get their retirement benefits while they were working, I read the bill to say that they would accumulate additional retirement benefits to be collected at a future date after they retired a second time. MS. PARKER said that is correct. CHAIR DYSON asked further if they chose the later course, are they accruing their additional retirement benefits based upon their new salary in the new job that they have negotiated or is it at the level it was when they retired the first time. MS. PARKER replied they would receive a benefit based upon their new segment of employment, however long and at that salary. SENATOR STEVENS said the bill had two things that could happen. One, you can be a RIP teacher and decide to go back into teaching and pay back 110 percent of everything you have received - back into the system as you were before retiring. "All sins are forgiven" - and you're a tenured teacher at whatever level you were. The second choice is you can say you are going to keep your retirement. CHAIR DYSON interrupted saying there is a difference between keeping your retirement and keeping RIP benefits. "Those are two different things." MS. PARKER said that he was correct about that. "If I decide to come back and I was a RIP retiree and if I don't accept the waiver, then I have to pay the penalties - for teachers it's 110 percent of the benefits received, which would be pretty..." CHAIR DYSON asked what happened if you do accept the waiver. MS. PARKER replied if you accept the waiver, you forego the penalty, you don't have to pay anything back. You continue to get your benefit and whatever salary agreement you have made with the school district. CHAIR DYSON asked, "So, somebody that got a RIP and comes back under the waiver that would be authorized under this bill cannot accumulate any more retirement benefits?" MS. PARKER said that was correct. SENATOR STEVENS agreed with that. CHAIR DYSON asked where in the bill it made that clear. SENATOR WILKEN asked why someone would choose not to continue to receive his benefits. SENATOR STEVENS responded that he thought it was unlikely that anyone would choose to pay back 110 percent. He thought they are really dealing with the other scenario of someone who chooses to keep their retirement and receive some pay for the work they do. SENATOR WILKEN speculated if he is getting his retirement pay, he might come back at half of what he made before. SENATOR GREEN said there is a provision currently in statute that allows, if you establish a special circumstance in your area and you have to have someone on staff, you can get a waiver from PERS or TRS and go through a process that is somewhat similar to this. MS. PARKER explained that is the section of law that they are amending with SB 145. Before, it applied only to the normal retiree. SENATOR GREEN said she was concerned that the block of money that was paid back went into the system, not back to the district. SENATOR WILKEN asked if this was a slippery slope they were starting down and what other groups would be asking to do this in the future if teachers get it today. SENATOR STEVENS said they already started on that slippery slope when they approved the commissioner to do this. SENATOR WILKEN asked if the state grader operators were in a different system. MS. PARKER replied that this law only applies to the TRS. There is a provision similar to this in the PERS and if you are a RIP retiree, you cannot come back without paying the penalties. MR. KEVIN SWEENEY, Legislative Liaison, Department of Education and Early Development (DEED), said he might be able to shed some light on their questions. The way to certify teacher shortages is under current statute, which allows someone who didn't take the RIP to return. It's the same process. The board has to adopt a policy that shows there is a shortage. They report to the administrator of their retirement system. Adding the RIP'd teachers wouldn't affect the department at all. Regarding the two choices when a teacher comes back, they are only talking about choice number two with this bill, because choice number one is already available to them - that is coming back, paying back the RIP and continuing to get their benefits. This bill gives them choice two, which is to come back and not pay back the RIP, not get any new benefits and continue to get the retirement benefits. MR. SWEENEY explained for background information that in 2001 when the original bill was passed allowing school districts and REAAs to hire non-RIP'd teachers, because of an oversight, the DEED was left out, despite the fact that they operate a couple of schools in the state and have the teaching learning support division. For the most part those are certified employees who require certification. The division has had a serious problem with turnover and shortages. The turnover averages 45-55 percent. Some positions have gone unfilled for years at a time. This bill also clarifies that the department is able to use the hire of non-RIP'd teachers in addition to letting them take advantage of the new RIP'd policy, if that is what the Legislature decides. MR. TIM STEELE, Vice President, Anchorage School Board, said he supported this legislation saying in Anchorage, they are having a tough time in finding teachers for certain specialties. Alaska does not prepare enough teachers to hire within the state. The (NCLB) standard requires highly qualified instructors for all courses. He said that Anchorage teachers did not participate in the state RIP program and he didn't anticipate that they would use this program very much, but it is one more option for recruiting. SENATOR WILKEN asked if it was correct that people hired back under SB 145 would not be represented by a bargaining unit. MR. STEELE replied that is his understanding. SENATOR WILKEN asked if he would not expect negotiations that take place between him and the bargaining unit to include a class of people called RIP'd rehires. MR. STEELE replied that he would not and said again that their numbers would be very small. MR. BRUCE JOHNSON, Association of Alaska School Boards, said they supported CSSB 145, although it's not a full answer to the teacher shortage issue. He informed the committee that recruitment that is currently going on outside the state is very expensive. Recently, a several state study suggested that it costs about 20% of whomever you hire for recruitment costs. He also submitted that it's another way of keeping people in our state and contributing to the economy who otherwise might leave, because they are fairly youthful and want to continue in their pursuit of teaching elsewhere. "Why not keep that talent and that service here in Alaska?" SENATOR LYDA GREEN commented: I'm sorry Bruce, I didn't want to say this, but why wouldn't we expect people who teach to work like the rest of people who have a lifespan of work that goes far beyond the age of 43? I think it's a bizarre circumstance. We can take the blame for it; we can take the credit for it. I think it's a strange system that anyone is encouraged to retire. MR. JOHNSON said that debate would probably occur. He is 55 and still working. He wished he was one of those 43 year olds and not working, but he's not. He said that most people are working far beyond their mid-40s; it's just if they participated in a RIP, which was an opportunity for them, have chosen to leave our state and are providing service elsewhere. Let's keep more of those people here who may have rested for two or three years and done some other things and decided teaching is really their calling more long-term than they originally thought. SENATOR WILKEN asked Senator Gary Stevens if he would object to a five-year sunset. SENATOR GARY STEVENS replied that a 2005 sunset was already in there on page 4, line 28. SENATOR WILKEN moved to pass CSSB 145(STA) from committee with individual recommendations and zero fiscal note. There were no objections and it was so ordered.