Alabama Legislature

House Passes Teacher Retirement Bill; Fate Uncertain in the Senate

Debate in the state House of Representatives (Source: Abby Driggers, Alabama Daily News)

MONTGOMERY — A bill that would create a new tier of improved retirement benefits for education employees passed the Alabama House unanimously on Tuesday, but some lawmakers still wonder if the change should apply only to K-12 classroom teachers.

A bill from Rep. Alan Baker, R-Brewton, would create a “Tier III” level of benefits that would increase the multiplier, which determines how much retirees earn, from Tier II’s current 1.65% to 2%. His bill applies to all education employees, including support staff and administrators.

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.

“With Tier III this is attempting, somewhat, to get as close back to Tier I as possible but without the cost that Tier I did incur,” Baker said during a committee meeting last week. “I would say that a very strong point is to be made that in implementing the Tier III, this would cost less than a 1% pay increase for teachers.”

Neah Scott, the legislative counsel for the Retirement Systems of Alabama, also spoke at the committee meeting and said creating Tier III is a sustainable option for the state.

“We’re not going all the way back to Tier I,” Scott said. “This would still save over $2 billion over 30 years when compared to if we would have kept Tier I.”

Under Tier II, teachers must be 62 years old before they collect benefits, rather than being able to retire at any age after 25 years of employment, as the original Tier I allowed.

Under the proposed Tier III, an employee must either have 30 years of creditable service or reach the age of 62 to obtain benefits.

The bill also allows teachers to accrue unused sick days and apply them toward their retirement, something Tier II employees can’t now do.

Scott explained the only difference in this year’s bill and last year’s is the added language that allows for split service calculations if a Teachers’ Retirement Systems member does time in different tiers.

The state’s teacher shortage, which some educators have called crisis level, has been documented in the past year:

  • Since 2010, there’s been a 40% decrease in students entering teacher education programs;
  • 8% of teachers leave the profession each year, only about one-third of those departures are due to retirement;
  • 30% of Alabama classrooms are taught by “out of field” teachers with no background in the subject they’re teaching.

Under Baker’s bill, Tier III would be available not just to teachers, but anyone who’s employer participates in the Teachers’ Retirement System. And that’s what killed the bill in the 2019 session. It was approved in the House but was amended in the Senate to apply only to K-12 certified teachers, not any other school staff. The amended bill was sent back to the House, where it died on the last day of the session.

Scott said during the committee meeting that tracking only active classroom teachers would be logistically hard for the RSA and is not a common practice in other states.

“We’ve talked to the National Association of State Retirement Administrators. There is not a pension in the country that has a different level of benefits for active classroom teachers,” Scott said.

Senate Pro Tem Del Marsh, R-Anniston, didn’t say yet whether he would support Baker’s bill as it is currently written.

“I’ve not seen, it but … I can tell you that what passed the Senate last year was kind of where we were,” Marsh said recently.

Rep. Neil Rafferty, D-Birmingham, supports Baker’s bill and thinks it’s important for maintaining a good sense of school community.

“Everyone in the school works hard, so you want to make sure everyone is taken care of for their long career and service to the school,” Rafferty said.

Rep. Danny Garrett, R-Trussville, said he supports Baker’s bill but thinks more still needs to be done to support teachers in the classroom.

“We need to do some things to help teachers be able to teach opposed to dealing with behavioral issues, mental health issues and issues that involve some of the societal and behavioral concerns,” Garrett said.

Alabama Daily News reporters Mary Sell, Devin Pavlou and Abby Driggers contributed to this report.