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We’re hemorrhaging teachers: How Alaska’s broken retirement system is harming students

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Teacher exodus

Alaska is losing teachers, and the impact of the exodus is big — especially on students. Metro Creative

I became a teacher in August 2006. It was my first “career” job, and I went to my first local education association orientation meeting with hope and curiosity. Then they told me about my retirement plan.

The facilitator explained that in July 2006, Alaska’s Legislature had created a Tier III of retirement for Alaska’s teachers. This tier was exclusively based on defined contributions, with no defined benefits. Furthermore, I learned that because Alaska’s Tier I and II teachers have pensions, Alaska is exempt from contributing to Social Security for any of its teachers. Finally, I learned that all Social Security benefits that Tier III teachers had accrued in previous jobs would be deeply reduced because of the Windfall Elimination Provision (WEP), which states that “if you work for an employer who doesn’t withhold Social Security taxes from your salary ... any retirement or disability pension you get from that work can reduce your Social Security benefits.”

However, Alaska’s Tier III teachers don’t get any “retirement or disability pension,” we don’t have access to Social Security, and we lose the Social Security that we have already paid into because our Tier I and Tier II colleagues receive a pension from the state. Another irony is that the WEP contains a provision that “the law protects you if you get a low pension.” However, if you’re a Tier III Alaskan teacher who gets no pension at all, the law crushes you under the weight of its apathy.

Or is it antipathy? These policies seemed designed specifically to punish young teachers in Alaska, who are leaving in droves.

In a 2017 study, researchers at the Center for Alaska Education Policy Research at the Institute of Social and Economic Research (ISER) found that high teacher turnover plays a significant role in decreasing the achievement of our Alaska students. This is due to a couple of factors. First, teacher turnover negatively impacts instructional quality because younger teachers are choosing to leave Alaska, or to leave teaching, just as they learn to become effective teachers. Another factor that negatively impacts our students’ achievement is that, as teachers leave communities, it interrupts students’ access to the curriculum — because it takes the replacement teachers time to learn how to teach a new subject or grade level.

It’s not just students that pay the price for Alaska’s inability to retain teachers. ISER calculated that when a teacher leaves Alaska, it costs about $20,000 to recruit and train their replacement. This adds up to approximately $20 million dollars per year lost to teacher turnover in Alaska.

Last year, the state of Alaska hired data consultant Barbara Adams to convene a working group to investigate the causes and potential solutions of the teacher turnover crisis. The working group distributed a survey to Alaska’s teachers, and found that salary-related issues — keeping up with the cost of living and competitiveness of compensation — were the respondents’ top two solutions for teacher retention. The return to a defined benefit retirement system was third on the list. However, as a respondent to the survey, I was asked to make choices about whether I would be more inclined to continue teaching in Alaska if, for example, the “state goes back to a defined benefit retirement system” or if I could begin “contributing into social security.” This is a false dichotomy — I would be grateful for any option that gave me more retirement security than I currently have. Further confusing the issue, respondents were asked to pit “state moves to a hybrid retirement with personal and state investments” against “control of my retirement savings.” With four different ways to express the importance of retirement security, stacked in opposition to each other, it is unlikely that teachers’ true feelings about their retirement opportunities are reflected in the No. 3 ranking.

The data about the teacher respondents’ priorities of competitive salaries and retirement security were apparently not enough for the state; in an October article for the Anchorage Daily News, Claire Stremple reported that Alaska’s “education department is investing in someone to lead the state toward a solution to the broader problem of attracting and keeping teachers.” The contract is worth $300,000. DEED posted the request for proposal for the project director position on Sept. 30 and closed it on Oct. 15. When Stremple interviewed DEED, they “refused to say how many applicants submitted a proposal,” but when I emailed them last week to inquire about the position, they told me that Barbara Adams — the same person who led the initial research about why Alaska’s teachers are leaving — has been hired again, to answer the same question.

Adams’ second cycle of research should begin with the 2019 Anchorage Daily News article “Why Teach in Alaska?” wherein Alaska’s most celebrated teachers collaborate to ask, “Why should a valued professional teach in a state that is dead last in the quality of teacher retirement?” Alaska’s teacher-leaders go on to explain the options that wrack Alaska’s most competent Tier III teachers: should they continue to teach Alaska’s students, at significant long-term financial detriment to themselves and their families, or should they leave the state, community, and students that they love in order to attempt a secure retirement elsewhere? Alaska’s strongest teachers conclude by answering their own question: “Why should I continue to teach in Alaska?” is starting to look like, “Maybe I shouldn’t.”

Adams would also do well to examine the 2019 Target Fund Simulation Exercise prepared by Bob Mitchell, the former chief investment officer of the Alaska Retirement Management Board. Mitchell defines the success of a retirement fund by the probability of “retirement assets surviving 30 years into retirement,” and finds that 69% of teachers in the Tier III retirement system have a probability of “failing” — or running out of money — before 30 years of retirement. The numbers are even more damning upon closer inspection; 50% of Tier III retirees will run out of money after only 20 years of retirement.

To stop the brain drain — or, more to the point, the brain hemorrhage — of Alaska’s quality teachers, the Alaska Legislature must take action to reform Alaska’s broken retirement system. Rep Grier Hopkins has recently introduced HB 220, which proposes a defined retirement benefit to Alaska’s Tier III teachers. If HB 220 doesn’t pass, this will be a clear signal that Alaska’s leaders do not value educators. It will also be a definitive call for the exodus of many of Alaska’s best teachers.

Sarah Dimmick is a lifelong Alaskan and a teacher in Fairbanks since 2006.

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