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Tier II change legislation clears House, moves to Senate

By MARY SELL and CAROLINE BECK, Alabama Daily News

MONTGOMERY, Ala. – The Alabama House on Thursday approved a bill to modify retirement benefits for newer teachers in the state. Advocates say more attractive benefits, including the ability to roll over sick leave and collect retirement after 30 years, will help with the state’s teacher shortage.

The bill is a scaled-back version of legislation that has previously passed the House and died in the Senate.

Rep. Alan Baker, R-Brewton, told Alabama Daily News that House Bill 93 will reduce disparity between the older Tier I and newer Tier II retirement tracks and help keep young teachers in the state.

“I truly believe that many educators enter the field as a calling, not because of pay or benefits,” Baker said. “But where they land as an educator is greatly influenced by their pay and benefits.” 

Baker’s bill cleared the House 100-to-1.

Tier II retirement benefits went into effect for new teachers in 2013 in an effort to save the state money on retirement costs. Teachers who were already in the classroom at that time got to stay in the more generous Tier I.

Co-sponsors on the bill include Reps. David Wheeler, R-Vestavia Hills, Proncey Robertson, R- Mt. Hope, Terri Collins, R-Decatur, and Parker Moore, R-Decatur.

Robertson, who represents portions of Franklin, Lawrence County and Morgan counties, said the creation of the Tier II was meant to bring some stability to the retirement system.

“We’ve been able to stabilize it and now we’re obviously seeing some issues out there — not all of them directly related to retirement, but a portion — obtaining new teachers and keeping our good teachers in the state,” Robertson said.

Recent statistics from state education leaders have shown:

  • Since 2010, there’s been a 40% decrease in students entering teacher education programs;
  • Eight percent of teachers leave the profession each year, only about one-third of those departures are due to retirement;
  • Thirty percent of Alabama classrooms are taught by “out of field” teachers with no background in the subject they’re teaching.

Rep. Barbra Boyd, D-Anniston, a retired educator of more than 45 years, said she thinks the bill is needed to help the state recover from losses incurred by the pandemic.

“Any benefits or anything we can do to help educators because of the pandemic is something I support,” Boyd said. “We also need to be looking to the future to encourage more educators to come to Alabama.”

The bill will now go to Sen. Arthur Orr’s Senate education budget committee. Sen. Donnie Chasteen, R-Geneva, is sponsoring it there.

Orr, R-Decatur, told Alabama Daily News that he and Senate General Fund budget committee chair Greg Albritton, R-Range, want to look at both teacher and state employee pay and benefits.

“I’m working with Sen. Albritton on a plan to address the compensation concerns across the board,” Orr said.

Orr said Alabama has some teacher benefits that are better in than neighboring states. According to a dashboard created by the Southern Regional Education Board, Alabama’s average starting salary is higher than any of its surrounding states. Georgia passes Alabama in average overall and average top salaries.

Also, educators’ health insurance is less expensive in Alabama than it is in Georgia and Tennessee.

Rep. Bill Poole, R-Tuscaloosa, who has previously approved Tier II change legislation in his education budget committee, spoke in favor of the bill Wednesday, as did Rep. Tracy Estes, R-Winfield, a former school board member.

“We have a teacher shortage and we have to be competitive with states around us,” Poole said. “We know this won’t solve the teacher shortage issue, but we know we have to recruit and retain.”

Estes is a former Winfield Board of Education member and another co-sponsor on the bill.

“I’ve sat around that table and watched how difficult it is to find teachers when you can’t compete with neighboring states,” Estes said. “And what’s sad is some of those states, we used to look down on. Now, we’re looking up at them.”

As originally written, Baker’s bill would have also changed the death benefits of all retirement-eligible teachers, allowing the beneficiary to receive 100% of the teacher’s retirement should he or she die. Currently, beneficiaries receive 50% if the teacher is still working. They can get 100% if the teacher is retired.

Retirement Systems of Alabama chief David Bronner had advocated for the change, saying moving the death benefit to 100% would keep more retirement-eligible teachers in the classroom if they aren’t worried their families would be more financially hurt by their sudden deaths.

But Baker moved to strike the death benefit change in committee, saying it was too expensive.

House Bill 93 would also allow Tier II teachers to collect their retirement after 30 years of service, as opposed to waiting until age 62 under current rules, and allow them to roll over unused leave each year, which isn’t currently allowed under Tier II but is under the older Tier I.

Unlike his previous bills, HB93 does not increase the 1.65 multiplier, which determines how much retirees earn. The legislation does increase teachers’ contributions to their retirement from 6% to 6.75%.

Alabama Daily News previously reported that, if Baker’s bill becomes law, the 30-year retirement and sick leave conversion portions in the first year would represent a cost increase of about $5 million, about $3 million of that coming from the Education Trust Fund. The beneficiary change would have increased costs by about $12.9 million in the first year, with about $7.9 million coming from the ETF.

The Alabama Education Association favors Baker’s bill.

“(The association’s) predictions about the impact of Tier II have been proven correct,” President Sherry Tucker said in a written statement. “It is increasingly difficult to recruit new educators with the reduced benefits currently available under Tier II. Tier II employees are under a ‘use it or lose it’ sick leave policy resulting in educators using it and causing absentee issues for local school systems.

“We are hopeful the Legislature will correct these problems early in the session so reforms will be in place in time to hire new educators, and retain those early in their career, before the academic year ends this spring.”

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