Alabama Teachers Fight Proposed Revision of Pension Plan

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Montgomery, Ala--Gov. Forrest H. (Fob) James is trying for a third time to revise the state teachers' and employees' retirement systems--and, for a third time, teachers and employees are opposing the changes.

Governor James, who in two regular sessions and one special session of the legislature has had lawmakers introduce slightly different bills to reduce employee payments and benefits, is calling another special session on June 21 to ask for changes in the retirement systems, an enlargement of the state textbook committee, and a strengthening of the state's criminal code.

The Alabama Education Association (AEA) and the Alabama State Employees Association are opposing any changes in the state pension plans.

AEA's executive secretary, Paul Hubbert, in a letter to members that was printed on the front page of the Alabama School Journal, the AEA newspaper, asked members to get ready to lobby against the bill.

In addition to the letter, a pamphlet outlining 17 reasons why teachers and other school employees should oppose the measure was inserted in the newspaper.

Currently, the employees' and teachers' retirement systems are governed by separate boards of directors.

However, contributions, retirement formulas, and benefits, as well as administrative offices and officers, are the same in both systems.

In calling for the changes to hold down the cost of pensions to the state, Governor James said the state's payments into the retirement system have increased from $9 million in 1960 to $225 million in 1982. He maintained that Alabama could save $40 million next year if the pension changes are made.

He said the state uses 15 percent of its total revenue to pay retirement and Social Security benefits for teachers and other state employees and should be spending only about 10 percent of that revenue.

The governor said his plan will give current employees the option of remaining under the present pension plan or changing to the new one. People employed after Oct. 1, 1982, would join the new plan.

Currently, employees pay 5 percent of their annual salary into the retirement plan. Benefits are calculated by multiplying the person's years of service by a factor of 2.0125 percent and multiplying that number by the average of his last three years' salaries.

Governor James wants to reduce the employees' contribution rate to 3.5 percent of salary and reduce the formula factor to 1.4 percent.

Current employees would have three options. They could remain in the current plan, agree to change plans and receive one half of their contribution plus interest, or agree to change plans and receive a refund of all contributions plus interest on contributions made before Oct. 1.

Retirement is "the one area that throws the cost of state government totally out of line and can only be remedied by the state legislature," the Governor said.

He is calling the session at the same time that most legislators are qualifiying to run for re-election.

Both Mr. Hubbert and Governor James view the proposed changes as a campaign issue. While the employees' and teachers' organizations are urging candidates to oppose the measure, Governor James is traveling the state urging candidates and the public to support it.

If legislators are more interested in campaigning and adjourn before giving the bill a hearing, the Governor said he will call them back "again and again" until they act on the bill.

Mr. Hubbert, who is the chairman of the Teachers' Retirement System board, counters the Governor's view of the situation by arguing that the expense of operating the current plan is beginning to decrease.

The state's allocation to teacher retirement decreased by $7.2 million for the 1982-1983 year, he said, while the percentage of the payroll going to retirement has dropped from 15.5 percent to 11.98 percent.

Enlargement of Textbook Committee

In another move that has generated dissent within the education community, Governor James said he will try again to enlarge the state's Textbook Committee. His earlier bill died during the regular session.

The Governor wants to appoint 14 laymen to the committee, who would be confirmed by the state Senate, and to allow the state board of education to appoint 14 educators. Currently, the state board appoints 14 educators and the governor appoints two laymen.

aea and the state department of education are opposing the bill. State Superintendent of Education Wayne Teague says that the textbook-selection process is working well and that the Governor does not need to enlarge the committee to get more public involvement.

Last year, the state board began placing copies of proposed textbooks in several locations around the state. The textbook committee also held public hearings in four cities before making their final selections, Mr. Teague said.

Vol. 01, Issue 38

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