Utilizing retired teachers could be an option
Rural school districts may eventually have one more tool in their toolboxes to help recruit and retain qualified teachers for rural classrooms. That tool is in the form of House Bill 17-1176, which won near-unanimous approval last Wednesday, March 15, from the House Finance Committee.
Republican Rep. Jon Becker of Fort Morgan and Democratic Rep. Barbara McLachlan of Durango are sponsoring the bill, which would allow rural school districts to hire retired teachers for the full school year, instead of the limits currently in place.
Those limits are set by the Public Employees’ Retirement Association, which allows its retired members to go back to work for employers whose pensions are provided by PERA, which includes state and local governments and school districts.
There are two PERA limits on post-retirement employment: a 110-day limit for any employment with a PERA-eligible employer; and a 140-day limit that is granted to school districts for up to 10 retirees per year. But the 140-day limit only covers about seven months of a nine-month school year, which would leave classrooms without teachers for two months of the year, or a total of about 40 additional working days.
The Becker/McLachlan bill is intended to help rural school districts with 6,500 students or less in kindergarten through 12th grade. If the school district has a critical teacher shortage, under the Becker/McLachlan bill, the district could hire a retired teacher for the entire school year.
The bill would also allow the district to hire cooks and bus drivers who are PERA retirees. Under the state definition of rural schools, about 147 of the state’s 178 school districts would be eligible to hire under the bill.
If signed into law, retirees would be limited to working for a maximum of six years, and the law would expire in 2028.
Becker told the House Finance Committee this week that when a PERA retiree wants to go back to work, they’re going to find a job, and it’s better for the school districts if that teacher goes back to work as a teacher. “Some districts have waited five years for a qualified educator to fill a position,” Becker said. “Wouldn’t you rather have quality educators back in the classroom?”
The bill drew strong opposition from PERA, which claimed the bill would increase the pension plan’s unfunded liability. For example, a retired teacher who goes back to work for a school district full time and makes about $38,000 per year would increase PERA’s unfunded liability by about $16,000 per year.
The unfunded liability is the difference between PERA’s assets and liabilities. As of June 30, 2016, PERA had liabilities (the amount needed to pay pensions for all members) of $70.9 billion and market-valued assets of $42.5 billion, for a difference of $28.4 billion. That’s the unfunded liability.
But PERA’s claim that the bill would drive up the unfunded liability is challenged by the bill’s fiscal analysis.
The analysis pointed out that if a PERA-retired teacher went to work for 140 days and then left, as current rules dictate, PERA would not get revenue from that teacher or the school district for the last 40 days of the school year, but the school would still need someone in the classroom for that 40 days. Teachers, including retirees, pay 8 percent of their salaries to PERA; school districts pay 20.15 percent.
Greg Smith, PERA’s chief executive officer, said that retirees who go back to work for the maximum allowed currently are a net win for PERA. They pay into the system, their employers pay into the system, but the retirees don’t accrue additional service time, meaning it doesn’t boost their retirement benefits.
The pension plan also claims the bill would prompt some teachers to retire early so they can go back to work and “double-dip,” where they would collect both a pension and a salary. But the fiscal analysis disputes that claim, pointing out that those who retire early would receive a reduced pension, and that’s for all of that person’s retirement, including after the retiree stops teaching.
Becker told this reporter that PERA’s problem with the bill is that while it doesn’t harm the pension plan, PERA doesn’t benefit from it, either.
The only alternative to this bill, Becker said, is for school districts to look at temporary agencies for some of these employees. “If that happens, PERA gets nothing, and the schools will save money by going to those agencies because they don’t have to pay PERA’s 20.15 percent. This is a compromise.”
The bill won strong support from the state’s major education groups, including the Colorado Education Association, the state association of school executives and school boards, Boards of Cooperative Education Services and the Rural School Alliance.
Bree Lessar, superintendent of 209-student LaVeta school district in southern Colorado, told the committee that she uses PERA retirees to keep teachers in the classrooms. Fully one-third of the district’s employees are retirees, she said, and being able to hire retirees gives her extra time to find replacements, balance her budget and keep high-quality instruction in the classroom.
But the challenge has been to work within the restrictions. The school district operates on a four-day school week for a total of 154 days, and despite the school’s high ranking among comparable schools, Lessar struggles to find teachers. Some openings go on for several years, she explained.
After passing on an 11-1 vote, the bill heads to the House Appropriations Committee.