Lawmakers eye changes to teacher retirement system

A proposal making its way through the Montana Legislature seeks to alleviate staffing challenges in public schools by relaxing laws governing retirees re-entering the education workforce.

One of a growing number of measures designed to address Montana’s teacher shortage, House Bill 117 would increase the amount of money retired educators employed in schools can earn without risking their retirement benefits. Rep. Marta Bertoglio, R-Clancy, said she agreed to carry the bill at the request of the Montana Teacher Retirement System in hopes of giving school officials and retirees “more flexibility” to hire for vacant positions they’ve otherwise been unable to fill.

“This is just a tool, I would say, to address the [teacher] shortage,” Bertoglio told Montana Free Press Tuesday. “But to me, that just speaks to a larger issue, right? To me, this is a Band-Aid.”

Teacher recruitment and retention has become a significant challenge across the United States, and Montana is no exception. According to the state Office of Public Instruction’s latest report on critical quality educator shortages, K-12 schools across the state were unable to fill a total of 589 teaching, specialist and administrative positions through traditional recruitment in the first half of the 2022-23 school year. The report also showed that Montana had 32 re-employed retirees working in a dozen schools across the state in 2022, all in rural areas. The count includes six retirees employed as elementary school teachers in Poplar, two employed as counselors at Shelby High School, and three employed as high school science teachers in Hays-Lodge Pole.

That report covers only 661 of Montana’s 825 schools.

HB 117 passed through the House Education Committee without opposition last week and has already received broad support from public education advocates, who referenced the state’s ongoing teacher shortage as compelling grounds for implementing the changes. Under current law, retirees who return to work can earn only one-third of their retirement benefits. The bill’s language proposes increasing that cap to 49% of benefits and reducing break-in-service requirements — the time between when an educator retires and when they can return to work — from 150 days to 120 days.

The bill would also remove language inserted into law in 2019 to once again allow retired superintendents to temporarily re-enter the workforce while continuing to draw retirement benefits. 

Dennis Parman, executive director of the Montana Rural Education Association, told MTFP that the flexibilities offered in HB 117 would largely come into play after a school has tried unsuccessfully to find a qualified applicant to fill an open position. In effect, he said, the bill would enable re-employed retirees to spend more time in front of students without crossing a line that would end the benefits they spent their careers building.

“It’s not kicking a big door wide open and we’re going to see a flood come through it,” Parman said. “But it’s moving the line to a place that makes sense, it’s reasonable, and it’s going to allow districts to pick up a few more people to be able to come in and help fill the need.”

Montana Teacher Retirement System Executive Director Shawn Graham said his agency’s primary reason for requesting the changes was to respond to concerns he heard directly from school officials. Graham attended each of the School Administrators of Montana’s regional meetings across the state last spring and, based on his interactions, understands that recruitment and retention challenges aren’t strictly a rural issue. He said districts in high-growth areas such as Gallatin and Flathead counties have had a difficult time attracting new teachers due to low salaries and increased housing costs.

“I heard pretty loud and clear from all the superintendent groups that they’re really struggling to fill vacancies in their classrooms, and any flexibility that TRS can provide would be greatly appreciated,” Graham said.

According to a fiscal note prepared by the governor’s Office of Budget and Program Planning, HB 117 is projected to increase employer contributions to the Teacher Retirement System trust fund on behalf of working retirees, resulting in an estimated $428,217 in additional revenue in fiscal year 2024. The analysis also notes that state funding for teacher salaries will likely increase an estimated $158,145 next fiscal year if HB 117 passes.

Several bill proponents, including Graham, clarified that their support for the measure is largely conditional on the current state of Montana’s educator workforce, and on a sunset clause built into HB 117 that calls for lawmakers to review the impact of the changes in 2029. Bertoglio said the sunset provision is important from a lawmaker perspective as well, enabling the Legislature to gauge the law’s effectiveness in the future. That question will likely be probed much sooner, as a related resolution introduced by Sen. Wendy McKamey, R-Great Falls, seeks to launch an interim study of Montana’s teacher and public employee retirement systems. Senate Joint Resolution 4 has also attracted broad bipartisan support this session, having already been voted out of the Senate. 

As popular as HB 117 has proven so far, Parman said the proposal is only “one slice of the pie” when it comes to recruitment strategies for public schools. In the coming weeks, lawmakers will likely be discussing a potential increase in funding for the Teach Act, a law passed in 2021 that provides financial incentives for districts to increase starting teacher pay. And Sen. Shannon O’Brien, D-Missoula, introduced a bill this month to expand eligibility for state-funded loan assistance for new teachers entering the profession. 

“We are dealing with a teacher shortage crisis,” O’Brien told fellow legislators in framing the need for Senate Bill 70. “We have fewer people going into the teaching profession, and we have fewer teachers who are applying for positions throughout our state.”

The Legislature will also be considering how and where to direct the state’s nearly $2 billion budget surplus — a point that Montana Federation of Public Employees President Amanda Curtis stressed when speaking with MTFP Monday. Her organization, which represents the bulk of the state’s public school employees, testified in support of HB 117 earlier this month, but like Parman and Bertoglio, Curtis acknowledged that the bill won’t resolve Montana’s teacher shortage on its own.

“If I was going to sum up how I feel about it, I would say I really appreciate Rep. Bertoglio’s attempt to find workable solutions for the teacher shortage,” Curtis said. “But this Legislature is sitting on a $2 billion surplus and needs to put it into education so that we can keep the teacher candidates that we’re graduating now and not lose them to states with higher pay, lower insurance costs and more respect for the profession.”

O’Brien’s proposal passed a preliminary floor vote in the Senate Tuesday with bipartisan support. HB 117, meanwhile, made it through the House Education Committee Jan. 11 and is scheduled to appear before House Appropriations this week.