STAFF SUMMARY OF MEETING
COMMITTEE ON JOINT EDUCATION
|Time:||07:38 AM to 08:51 AM|
|This Meeting was called to order by|
|This Report was prepared by|
X = Present, E = Excused, A = Absent, * = Present after roll call
|Bills Addressed: ||Action Taken:|
|Colorado Association of Libraries|
K-12 Pension Reform
07:38 AM -- Colorado Association of Librarians
Dr. Jody Howard, President of the Colorado Association of Libraries, came to the table to tell the committee about school libraries. She provided two handouts, a research paper entitled "School Libraries Work!" and a packet called "Standards for the 21st-Century Learner" (Attachments A and B).
Dr. Howard talked about the functions of school librarians, speaking specifically to their qualifications, and talking about the importance of highly qualified school librarians.
Dr. Howard discussed school librarian training programs and how those programs work to ready students to be school librarians. She talked about training for librarians related to technology. Dr. Howard described a study of the Colorado Student Assessment Program (CSAP) scores of students who are educated in a school that has a professionally trained school librarian. She said elementary schools have the fewest professionally trained librarians.
Dr. Howard talked about difficulties in getting professionally trained librarians into schools, mentioning that professionally trained librarians often have master's degrees and do not come in at the bottom of the salary scale. She also described challenges around finding professionally trained librarians to work in rural schools. Dr. Howard talked about the importance of teaching students to synthesize information, as well as the importance of supporting students' technology skills, particularly students who do not have access to a computer at home.
Dr. Howard concluded, talking about the importance of critical thinking skills and the role of school librarians in helping students build such skills. She said school librarians are an essential part of a student's education.
Dr. Howard responded to committee questions and comments.
07:57 AM -- K-12 Pension Reform
Tony Lewis, Executive Director of the Donnell-Kay Foundation, made introductory remarks. Mr. Lewis explained the Donnell-Kay Foundation's interest in funding the paper that would be presented to the committee: "Deferred Retirement Compensation for K-12 Employees: Understanding the Need for Pension Reform." He highlighted the fact, as stated in the paper, that defined benefit plans promise workers a defined pension amount based on age and years of service, regardless of contributions and earnings generated from investment of contributions. Mr. Lewis talked about the importance of keeping good teachers in teaching positions. The committee members were provided two handouts, including a copy of the paper and the PowerPoint presentation (Attachments C and D).
Ben DeGrow, Policy Analyst at the Independence Institute, introduced himself, and introduced Dr. Michael Mannino, the author of the paper.
Dr. Mannino explained that he would talk about two studies he has conducted regarding deferred compensation plans. He said the paper before the committee is part of a larger study that is still in progress. Dr. Mannino talked about his goals in completing the study.
Dr. Mannino talked about measuring retirement compensation and provided information comparing retirement compensation of the Public Employee Retirement Association (PERA) and the private sector, talking about the findings of a survey conducted by the Colorado Division of Human Resources.
Dr. Mannino explained the items he looked at in his study, including present value of retirement benefits, account balance, and the amount of retirement benefits in excess of account balance. He talked about the elements of deferred compensation, referring to "withheld value" versus "extra value." Dr. Mannino discussed measures of deferred compensation, including lump sum deferred compensation, deferred compensation ratio, and supplemental contribution ratio.
Dr. Mannino talked about the data he assembled in conducing the study, including samples of retiree characteristics and salary histories, samples of interest rates in the Single Premium Immediate Annuity market, and mortality tables from the Denver Public Schools Retirement System (DPSRS) and PERA. He highlighted some of the data he collected in conducting the study, including the value of retirement benefits of three employee groups: administrators, teachers, and non-professional employees. He also shared information on supplemental contribution rates, discussing the median value.
Dr. Mannino next talked about DPSRS outliers, speaking to highest average salary and salary increases, as well as retirement age. He noted that the average retirement age in his study was 57 years.
Dr. Mannino concluded, talking about policy implications of his study. He said the compensation structure is poorly designed, as it is heavily backloaded, results in the loss of employees during peak years, and places an emphasis on pension spiking practices. He stated that the employer contribution rate is a poor measure of retirement compensation, and talked about the gap between public and private retirement compensation. He clarified that the study does not reflect the current state of the PERA portfolio.
Dr. Mannino highlighted his policy recommendations, saying a defined contribution plan option should be provided to all employees, administrators should be moved to a defined contribution plan, early retirement subsidies for other groups should be reduced, and pension spiking practices should be reformed.
Dr. Mannino responded to committee questions and comments. Representative Merrifield and Dr. Mannino discussed pension spiking practices. They also discussed the final paragraph of the paper.
Dr. Mannino responded to a question from Senator King about whether the study looked at the management of moneys by PERA.
08:38 AM -- PERA
Meredith Williams, Executive Director of PERA, came to the table to address the committee. Mr. Williams said he has read Dr. Mannino's paper several times, and he commented on it. He said PERA's pension economist would review the paper and provide written comments to the committee. He said the vast majority of public employees do not have Social Security benefits. Mr. Williams talked about the measures used by Dr. Mannino in his study, commenting that he had not heard of a number of the measures.
Mr. Williams talked about single premium annuities and the risks to investors. He noted that some higher education faculty and administrators do receive Social Security benefits. He discussed difficulties around comparing public and private sector retirement plans. Mr. Williams commented on the salary spiking issues raised by Dr. Mannino. He said risk is one of the factors that will be on the table as changes to PERA are considered.
Mr. Williams responded to committee comments.
The committee adjourned.