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Senator Stedman presents options to address retirement gap for teachers; committee discussion but no vote
Summary
Senate Bill 55 prompted detailed discussion about a retirement gap for teachers who lack Social Security or the state's Supplemental Benefit System; the committee held questions but did not vote on the bill on Feb. 12.
Senate Bill 55, sponsored by Senator Bert Stedman, drew extended discussion on Feb. 12 in the Senate Labor and Commerce Committee about a long-standing retirement gap for teachers who are not enrolled in Social Security or the state's Supplemental Benefit System (SBS). The committee did not record a motion or vote on SB 55 during the hearing.
"We're looking at multiple options throughout the legislature," Senator Bert Stedman said in opening remarks. He explained the historical origin of the teachers' retirement system (TERS), noting teachers who did not opt into Social Security decades ago now lack the roughly 6.12% foundation provided by Social Security or SBS. Stedman described the gap in retirement contributions between typical state employees (roughly 25% of pay into retirement when combined employer/employee and SBS contributions are counted) and teachers (about 15% combined employer/employee contributions under TERS), calling the difference "a 10% spread" that leaves teachers at a disadvantage over a career.
Stedman laid out two discrete options in the bill: increase the state's employer contribution to teachers' retirement by 2 percentage points (from 7% to 9% in his example) or provide a pathway for teachers to enroll in the Supplemental Benefit System (SBS) or Social Security. He emphasized the bill is written to present options for consideration and said the final legislation would include only one option, not both.
Senator Yount asked about the scale of the increase and whether models show teachers would be better off over a 20–30 year career; Stedman said the change would likely get teachers "pretty close" when compounded over time. Committee members sought clarity on who would bear the cost. Stedman and staff explained that local school districts would pay the increased employer cost, which would then be billed back to the state through the normal budgeting process and the Bureau of Public School (BSA) mechanisms; "we end up paying the fiddler," Stedman said, referencing statewide responsibility for the liability.
Rose Foley, staff to Senator Stedman, clarified a drafting detail: "This bill doesn't contemplate a reduction in the employer contribution rate to TERS DC plans if they enrolled in SBS or Social Security. I think that is a good question and a good conversation point going forward... The bill as it's currently written does not include a provision to reduce the employer contribution rate." The committee had several follow-up questions about whether the two options would be combined (Stedman said they would not) and how final design choices would be handled in subsequent drafting.
No public testimony was recorded on SB 55 in the transcript, and the committee adjourned without taking formal action on the bill at that meeting.
