Public Retirement & Social Security Programs-Joint

All right members guest if you all would find your way to chairs we see a quorum and we'll go ahead and get started if the. Members in the audience can find a place. Good start by recognizing the cochair was worn represent Les Warren for a comments represent one. Thank you Mr chair. I think up probably most of you have had some kind of contact on house bill thirteen twenty five. We have a encountered a couple of issues on that so we're going to pass over that bill today Senator hammer and I are going to meet with the director should be to the systems immediately following our meeting today to see if we can come up with an acceptable amendment for that it actually went to committee last time and then before I was going to present on the house floor we realize there might be a situation that would not be good if we went forth with running it so we're trying to work that out so we will pass over it today and hopefully bring it back at our next meeting so just want you to understand proper passing over that thank you Mr chair. All right members. It was there was an item that was on the agenda and somehow another it had fallen off of the agenda is not on the stage and on the website but it was there at one point this weekend it's the actuary consultant service agreement we would like to go ahead and put that up for discussion but I need to get a motion without objection or I just wanna be very technical on this I'd like to get a motion and second without objection that we would go ahead and take that up for discussion today got a motion by Senator sample can I get second by a representative rye motion second is to take up the actuary consultant service agreement have discussion about it and move it forward a discussion to the motion second. All favor say aye. A post. No opposition noted Jody would you come to the table please Sir and you should have a copy of this it's the actuary consultant service agreement. Technically the chairs could just passes out here it would go to policy making on the nineteenth of may two full A. L. C. on the twenty first of may but the chair's believe the Committee ought to have the option to weigh in on any questions or discussion will make it a a vote of the committee to refer it out here for consideration by policy making in Nailsea Jody would you state your name there do so for the record please. Jody Carreiro and Osborn Carreiro and associates actuary for this committee okay before us is the recommendation do you have any comment you want share with the committee. and and a non other than thanks for the opportunity to serve and and you know during this session we've we've already written for the about forty different reports for you and and I have a few more to do I guess and and you know we've we've participated in discussions along the way to hopefully be here and be help make things better and I think we've been able to do that to a great extent. J. the opportunity to continue to serve. Memory see the right chart on the back of the Proposal does do any members have any questions. The members have any questions. My board working. Hang on one second members we. For some reason ESPN's pulled up on the screen I got to get this game off here hang on a second. All right to it represents who who down there Perry did you have your hand I want to push a button and see if it you let's try this out C.. Good. You might. My name is. This is fifty all right represent very line hold on while we let by Senator George go ahead put Senator Elliot well I my question is for the general I got a message when right in the middle but discussion this is here and I was just wondering is there any substantial difference between this contract and the last one then I might have missed that you said so. Jody wanna answer. The the with the wording of the contracts exactly the same our fee schedule is. Of. About fifty four percent more than last time. And that that really was the only child that's the only change okay. All right and and that four percent is in keeping with the cost of living north yes yes ma'am all right thank you so much thanks Mister chair thank you what was your previous that did you have a raise from last contracted this one or was it flat. the last time it was. I don't remember it was either flat or or very small increase again okay all right. John I haven't. Okay it was flat last time is ten thousand more this time the maximum extent Act one this time yes okay all right represent pair gonna give you try here see if your mind goes thank you Mr chairman that was actually my question because it had the Max a one seventy hours won't know what the Max was last last time the city was one sixty one sixty yeah okay yes Sir number nine maybe I'm missing something what what does it have to do with the boycott of Israel. Okay. Are you asking me are you asking you know that I'm asking Jody Bester remember or you won't talk to the junior of. Love the boycott the I did that and that's something that's in every contract that I believe that said bill are does okay that's why they ask us to have that or is also guaranteed we passed piece of legislation I think was last time maybe time for that stipulated that anybody did business with state that boycotted Israel was not allowed to do or something along that line so result piece of legislation okay. All right thank you Jill down to the table also to in like this just a little bit. Gylfi would name and title for the record once in place. Shall there be of Legislative Research and represent Perry that language is required by law to be included in any state contract that's of over one thousand dollars so we have to include that and all of them. And you let me ask you a question of other potential bidders for this I remember right back when there is pretty narrow market as far as people and what's the what's the power is Porsche's being able to continue to contract instead of put it back out for bid. Yes Sir this was last put out and we did a request for proposals in twenty fifteen and that was more Carreiro submitted a proposal a received only two others and both of those are out of state and their prices were higher and they were not gonna be is available to this committee as you needed and we've that was the second time I think we put it out for bed so the determination that shares the last two times it's been to just continue with this act group okay and to your knowledge is there any other in state vendors right now that the perform this other than Jodie Jodie and I'm not sure I would have to do a search but we haven't been approached by anyone okay maybe can do a search before LC meeting just to confirm that please okay any other questions from members. The other questions. Okay Jody anything else washer. No Sir. Okay always clear. What you get a motion recommendation to is somebody so chooses to do so to refer this to Policymaking LC with recommendation to continued contract I get that motion. Got a motion for samples a second. I got up from such a representative Coleman motion second to refer this to A. L. C. a discussion to the motion. If you want to discuss your need to raise your hand because the board is not working so just like an flag okay anybody else all favor say aye. Any opposed okay. Thank you. Okay. I don't. All right members usual run do we got to take a five minute recess so they can reboot the system it's evidently gone down and they're going to reboot it so we're a tech five minute recess while we let them reboot all right thank you. Ma'am. Time. House. Yeah. Thank you. Yes my. The news. When you saying that yeah. Yes Sir I got one for you okay if you've got time to the or get to the beach to the house they would it would if such protection okay. Okay that's when you're running on you look for something on the senator okay let me take a look at okay man okay you know I your truck you okay. You're saying aye you know okay. Or even. You know. Yeah Coverdell Coverdell. All right members were ready to go. Represents all it would you go to the table to present house bill eleven sixty nine and a budget you want to have go with you please. The group college she here yeah. All right give we're back in the saddle again Representante would you. State your name title the district you represent please and the bill number you're going to present and you have anybody join have come testify with you are you shall I'm I'm so so okay very good all right we'll go ahead present Sir I'm David Tollett representative district twelve this is house bill eleven sixty nine also known as the public school employees heroes act. I would like to start off by thanking the chair in the committee and also like to thank Clint Rhoden for helping me to amend this bill from its original form. Today committee is an honor to present the public school employees heroes act for your consideration. Since following this bill I've heard from hundreds of public school employees who have reached out to me who have told me different stories about how this bill would help their life. This bill is a straightforward bill that would reduce the penalty from ten percent to five percent for early retirement twenty seven years for all public school employees who work through the twenty twenty one school year just to be clear this is for the next twenty seven years for every employee public school employee who worked this year they would be eligible for this this includes janitors aides cafeteria workers secretaries teachers administrators and more this would create a one time unfunded actuarial liability of up to ten million dollars and add up to three months to the amortization period taking it for twenty seven years to up to twenty seven point two five years. This would be to retirement system that gained over one billion dollars from July to December thanks to the great leadership at the Arkansas teacher retirement system. Around this time just one year ago governor Hutchinson announces schools were shuttering in the wake of a worldwide pandemic overnight public school employees were called on to provide educational services remotely while continuing operations as a part of their dedicate the dedication to educating kids. Even at great personal risk to themselves from the day corona virus they hero Klay answer that call. Over the summer teacher sheltered in place teaching themselves new technologies in anticipation of what was to come next well administrator's work tirelessly inventing a two option education system and reading their campuses for safety against the virus that threatens the very lives of their employees and students filing on July the eighth under immense scrutiny governor Hutchinson announced that schools would reopen despite many states keeping their schools closed he called on educators to fight for the future of our students. And an army of sixty seven thousand public school employees answer the call. This army public school employees whose fault on the front line this entire year trying to run tool education systems while providing as much normalcy for students as possible this front line battle for Arkansas's future is come with a price. Many public school employees have had their pay docked for being required quarantine multiple times some have been hospitalized even placed on ventilation and racked up tremendous medical bills. Filing. As of March fifteenth. Thirty nine public school employees have had their lives cut short due to this deadly virus fighting the fight to educate Arkansas students. These employees are bus drivers custodians cafeteria workers teachers principals. And the superintendent friend of mine. These are the true heroes of education. As you can imagine in any war zone public school employees are tired road at an all time low. And some are just simply trying to survive. Which brings me to the reason for this bill. Number one it would improve the morale public school employees just knowing that someone sees their sacrifices and cares about them. Number two it would allow the employees who have lasting health issues who will be forced to retire early to due to this virus and have incurred huge medical bills to keep around a hundred fifty dollars a month of less penalty to be able to pay them off. And number three faced with a great educator shortage before the crown of ours it will incentivize public school employees to stay in the fight with this and not walk away from education at the end of this year. So what is a frontline employees life worth. On April sixteenth twenty twenty governor Hutchinson announced fifty five million dollars of Medicaid funds to be used to pay frontline nursing home and long care employees up to five hundred dollars additionally each week in addition eighty million dollars were appropriated from the corona virus response funds to provide frontline healthcare professionals additional paid. These professionals are heroes for their front line work and were rewarded with a hundred thirty five million dollars of funding as they should have been today I'm asking you for up to ten million. It is a shame that there is a cost to this bill. But I ask you what will be the greater cost to public school employees retirement when employees simply walk away at the end of this year. I know this bill is up to ten million and I wish there with this new round of federal aid this spent expense could be covered where there would be no cost to Arkansas teacher retirement. Committee in a normal year I would not even ask for this for educators but this is not a normal year. On behalf of our frontline and public school employee heroes I humbly ask for your consideration of this bill and with that I will be glad to take any questions that you may have. All right thank you a representative warned. Thank you Mr chair the. Representative you and I have had some conversations on this and I've got a wife who just retired from the teacher retirement system so it and I've served on school board for ten years so I have a lot of respect for the the the school systems. my big concern here is the cost to the system we have worked so hard here to reduce the unfunded liability for systems and here we are increasing it by ten million which I know is the Max. Our goal has been to reduce that so that we can have a better sure it's that we. Can pay teachers their retirement for as long as they are retired. So I guess my question for you is. How do we increase the unfunded liability. And continue to improve the system. Good question I would it I guess answer that by by saying two things and and I want to commend this committee and Arkansas teacher retirement for reducing that the actuarial an amortization table and I'm definitely not the person to speak and all of that because as you can tell I'm not well versed in retirement or insurance But I would answer that with two things number one what will be the affected teacher retirement. When people just simply walk away after this incredibly different code here and then the second A. S. I would make an appeal. That in the next round of funding that we are receiving from the federal government that this costs be covered for Arkansas teacher retirement where this benefit can be provided for teachers and Arkansas teacher retirement would not be hit with this cost. Thank you. Okay centre Chesterfield. Thank you. Mister Allen thank you so much for thinking of those. Frontline educators. I'm over here I see it. Having been one thousand thirty years I truly appreciate what you're trying to do I'm I'm wondering though you. You had considered making this an appropriation bill so that we could consider taking it out of care is money that is supposed to come into the state and I say that because I want these folks to get whatever is coming to them and they deserve a great line but I also want to maintain the integrity of the system but those who are here now and those will come later so is there any way you would consider you know perhaps amending a bill to make an appropriation so that we could consider that a member's own in the budget hearing I would definitely be open to that consideration I just I would need some help being able to correct. But I would suggest that you get with Kevin or some of the staff and perhaps we can find a bill that has already been filed because I think we're done with the appropriation bills now that's correct we're done with the appropriation bills perhaps we can find a bill and then put that in that bill amend that so that we can try to accomplish what is it you're trying to do because I think it is in the noble. Yes the education bill may still be open. Okay well let's try to work with you and the staff that's what I would suggest and let's see what we can do because I think senator bond last year pushed very hard for our teachers and support professionals to get something because they were frontline workers and I don't think that they were appreciated quite as much by this body as they needed to be so I'm happy to work with you and and do whatever we can to try to find a bill that will allow that to happen thank you. Represent let me ask you when you when you wait all year decision making which nobody's arguing the tent is certainly commendable did you take into consideration the money I think was like twenty million that was set aside for teachers that it contracted covid and we're able to tap into that money so as not to lose any there I think was the cation time did you throw that makes things when you're trying to arrive at a a good idea well we certainly that helps cover some of the losses but that was only for ten days to teachers and some teachers have had to quarantine much much longer than that and so I think every school district is really tried hard to cover any losses that teachers may have over that but But I mean it is simply that it just was not enough money to cover all the losses okay and on this proposed legislation would actually benefit every teacher would there be a population the teachers that would not be able to take advantage of this proposed legislation right so according to this man and in the statement out of the sixty seven thousand public school employees I believe fifteen hundred or not on track to see twenty seven years and then fifty five hundred or pass the time twenty five years these are teachers who have benefited differently from or educators or public school employees who have been it fitted differently than the the employees that are coming behind them because of the the better to drop in the three year average on their salaries as opposed to their five year average okay all right of center only. Morning represented talent I'm right here now. I have a few funds it Chesterfield and now I can't be. I I just want to clarify because we keep using teachers and public employees interchangeably but with that we are talking about all public employees will become and and educational system is that correct yes ma'am it is all public school employees not just teachers yes and that's a good thing to know because it's really important for us to remember without bus drivers there would be kids at school without the cafeteria workers we might not get to eat and certainly you want to be able to walk into those of restaurant. And we know what that means and having people there and of course there are others as well so I just want to appreciate that you are inclusive with what you're trying to do and I think it's quite admirable thank you so much thank you. All right any other members. If not Clint would you mind come the table for a couple of questions in just a. Representante your keep C. website for social distancing purposes please Sir. And if you would a name title for a record please. Yes Clint Rhoden Executive Director Arkansas teacher retirement system okay can you speak to the actuary impact please or just the impact to the system yes certainly so of representative Tollette you know this certainly it and nobody's questioning that this is a a a good bill as far as this the sentiment and you know trying to do something for undisputedly are public school employees who they're all heroes but anytime you take when you know the actuarial is aimed impact on the retirement system when you look at a cohort that's this large of over sixty thousand employees even the smallest benefit adds up really quickly and this benefit was estimated by the actuaries to be a roughly ten million dollar addition to are unfunded liabilities yes we're currently said no on a about a three billion dollar increase from last year to this year but I would remind the committee that that has to be said for years moved out we will not receive credit for three billion dollars this year will only get a fourth of that and also that offsets two years of where we have not met our actuarial rate of return so it you know yes we had a good year this year and thank goodness we had a good year because it offsets a couple bad years so keep that in mind that you know if this would be a different story we were a hundred percent funded but we're not and that is the goal is to always be a hundred percent funded and state and make strides every year year in and year out to get towards a hundred percent funded this takes us just a little bit in the wrong direction and and that's our old that's the A. terraces on the opposition to this. Is this a this a one time ten million dollars it is not a every year two million dollars that is correct that is a present value value for the DYS benefit so in other words somebody wrote the teacher retirement system a ten million dollar check it would not affect the teacher retirement system at all and how far out would that extend are unfunded liabilities the it's about three it's about a three months extension so you know we're somewhere around twenty eight years you know just had another quarter year to that so it's not a huge impact but it's just in the wrong direction that's that's my only contention to that and even if we had a what if we had another bumper crop of return on investment in the next year would that have any neutralizer neutralizing affected or would it still always continue to be a three month extension of the unfunded liability yeah that's assuming that we have a seven and a half percent return next year You know that's all we can assume for the future because that's are expected rate of return on our investments okay if if obviously if we went we know at another fifteen percent year of that that would be a great thing but it's not anything that we actually count on a representative right. Yes Sir so thank you Mr chairman of Clint question for you Sir. If something of by chance happen in this didn't pass what is. The damage that this would do to folks coming can you kind of put us where we need to beta of knowing where we're at with these people that come and let us know who they are what. Right there positions are in the school system sucks so if this doesn't pass the individuals that have twenty seven years of service we already have an early retirement program for them but back in two thousand seventeen in order to help us get more better you know better funded we there's a penalty for that early retirement and right now that title tease ten percent so this bill reduces it down to five percent for this cohort so that's that's the difference so they would still be a retired a twenty seven years but it would just be a little slightly higher penalty it would be like a ten percent ten percent there is a one year I have planned and instead of this would be five percent right thank you thank you thank you Mr. All right any other members have any other questions. All right would you like to close for your bill represent all. Yes. Committee members on behalf of our public school heroes across the great state of Arkansas who given their lives health and income to fight the good fight for students. here in Arkansas I want to thank you for your consideration of this bill and I humbly request the chance for this bill to be decided by the full membership thank you for your time. Thank you for your presentation do I have a motion to pass. Motion to pass by Senator Teague is our second. Their second. Got a second by representative Deffenbaugh eighty. Members my apology. Back up you mind holding that motion for second. You might hold a second. Okay thank you anybody here speak against the bill. And may hear speak for the bill. All right now we share speak against nobody's here speak for Senator Teague you're motion still stand. Represent W. second still stand motion second on the floor to prove House Bill. Whatever it is Levin sixty nine all favor say aye. It opposed hello motion fails congrats thank you for presenting a great bill and we understand the sentiment behind it thank you for our thank you. All right rendezvous a House bill twelve eighty one. Representante I'd suggest you might get with the DFA and the powers that be and see about the suggestions that were made about trying to grab some money coming down see if we work that out okay. All right represent warn your representative you're recognized to present the next three bills the first one is going to be house bill twelve eighty one and do you have anybody that you want to have come present with you not at this time Mister. Get the cherry motion. Got a motion do pass or second. Got a second any discussion. And I speak for the bill. You may speak against the bill. And discussion on the bill. All in favor say aye hi the post. Congratulations did say word your bill passed its best presentation of Riverhead well we'll find out let's go all right house bill twelve eighty two. Got a motion. I have a second. Got a second for representative Maddox. Represents or anything else about your bill thank you okay if I want to speak against the bill. Anybody for the bill. Motion second. A passage of house bill twelve eighty two all in favor say aye hi the post. Congratulations your bill passed. House Bill twelve eighty three representative warned. Yes Sir thank you Mr chairman. House bill twelve eighty three is a bill to add four new board members apers. Retirement board after the two thousand nineteen General session Senator sample and I work on a plan to go out across the state and connect with members of the various retirement system's one common theme at every city we visited was apers members feeling as though they did not have representation or a good way to ascertain information or get questions answered. The more we talked the more legislators talked and this idea was born. The four new members will cover a wide cross section of papers members. For appointments are as follows. Number one one retired former state employee appointed by the executive director of the Arkansas state employees association number two one retired former county employee appointed by the executive director of the Arkansas of the association of Arkansas counties number three one retired former municipal employee appointed by the executive director of the Arkansas Municipal League. And number four one retired certified law enforcement officers appointed by the President Pro tem of the Senate and the Speaker of the house of representatives there's no direct cost to the system durable to board composition and therefore due to the passage of this bill. Hi motion from center Chesterfield second from represent of rye. Anybody here speak for the bill. You may speak against the bill. A discussion on the motion and second. All favor say aye all right posed. Graduations you've passed your bill. In about. For half minutes all three. Members we have no other business on the agenda we will not meet that correct center Hickey. Senator Hickey. We will not will not be meeting next Monday is that correct. All right we will not be meeting next Monday our next meeting will be two weeks from today I think we're down somewhere around five bills represent Wardlaw talk about that yes a that will be April fifth that should be our last meeting if you have anything to percent make sure you get with the staff or senator Hammer myself and make sure that you are ready to go on the fifth we planned it in the committee on that day. All right no other business for the committee thank you for being here so early we're Jr.