Wednesday, February 5, 2014

SOL Reform, Virtual School Disaster, Bipartisan Redistricting, Degradation of Hybrid Plan


On a day that was not all good news, the progress on SOL reform is good news indeed.  Delegate Greason’s HB 930 reported from the House Education Committee today on a unanimous vote.  This bill will reduce the number of SOL tests given in grades 3-8 from 22 to 17.  Authentic assessment will be used to assess content no longer assessed with SOL tests.  The bill establishes a Standards of Learning Innovation Committee to address ongoing SOL reform.  This committee includes a representative from VEA.
Here is the meat of the bill as it relates to the reduction of tests:

The Standards of Learning assessments administered to students in grades three through eight shall not exceed (a) reading and mathematics in grades three and four; (b) reading, mathematics, and science in grade five; (c) reading and mathematics in grades six and seven; (d) reading, writing, mathematics, and science in grade eight; and (e) Virginia Studies and Civics and Economics once each at the grade levels deemed appropriate by each local school board.

Each school board shall annually certify that it has provided instruction and administered an alternative assessment, consistent with Board guidelines, to students in grades three through eight in each Standards of Learning subject area in which a Standards of Learning assessment was not administered during the school year. Such guidelines shall (1) incorporate options for age-appropriate, authentic performance assessments and portfolios with rubrics and other methodologies designed to ensure that students are making adequate academic progress in the subject area and that the Standards of Learning content is being taught; (2) permit and encourage integrated assessments that include multiple subject areas; and (3) emphasize collaboration between teachers to administer and substantiate the assessments and the professional development of teachers to enable them to make the best use of alternative assessments.

Delegates Greason and Krupicka worked tirelessly on this bill, and VEA thanks them for involving us at every step of the way.  
Delegate Dickie Bell’s virtual school bill, HB324, reported on a 12-10 vote.  This bill creates a stand-alone virtual school students can enroll in instead of coming to the public school in their locality.  It provides both state and local funds to the virtual school, and it exempts the contracts with private vendors from the Virginia Public Procurement Act.  We will have to work hard to kill this bill when it gets to the Senate.

Senator Miller’s SB 158, which provides for a November 2014 advisory referendum on the question of whether a bipartisan advisory commission should be created to propose redistricting plans for the House of Delegates, state Senate, and congressional districts, passed the Senate 36-4.
Finally, the Senate Finance Committee reported Senator Watkins’ SB 422, despite our protestations, on a 15-2 vote.  This bill applies to the Virginia Retirement System (VRS) Hybrid Plan, which is for employees who were hired on or after January 1, 2014 or who chose to opt in to the plan.  The Hybrid plan is part defined-benefit (with a 1% multiplier rather than the 1.7% multiplier enjoyed by Plan 1 and 2 members), and part defined-contribution (you can contribute up to 5% of your salary, and your employer provides up to a 3.5% match).

When the Hybrid Plan was created in 2012, VEA pushed to have both the defined benefit (DB) and defined contribution (DC) managed by VRS, rather than allowing private vendors (VALIC, Horace Mann, ING, Lincoln and others) to administer the DC.  Having VRS administer the DC ensures low administrative costs, low fees, and returns that are historically better that those gained by the private vendors.
SB 422, and the House companion carried by Delegate Jones, HB 877, will allow your local school board to opt out of the VRS DC plan, and contract with a private vendor to provide that portion of your retirement.  It will be their choice and not yours.

These bills put the economic interests of the financial services corporations ahead of the financial interests of school employees.
Some points to take into consideration are:

·         The use of school division plans rather than the VRS plan will result in higher administrative costs and higher fees for employees as the pool of investors will be smaller. 

·         The use of a division-specific plan will put additional administrative costs on the school division to ensure compliance with various legal provisions. 

·         Employees will not be able to get consolidated information from VRS about their retirement in opt-out localities, adding complexity to the employee’s retirement planning. 

·         School divisions not only choose who the vendor will be, they can change vendors leaving employees with multiple accounts.

·         Employees already in the hybrid plan were promised the defined contribution plan from VRS.  These bills change that provision.

·         Employees who were already in VRS Plan 1 or 2 may have already chosen the hybrid plan with the understanding that the defined contribution portion would be managed by VRS.  This could change in January 2015, past the point where employees could reconsider their decision to go into the hybrid plan.  

·         403(b) plans will likely have higher administrative costs and higher fees than the VRS administered 457.  This will reduce retirement benefits.
School board employees hired after January 1, 2014, already have a reduced retirement benefit as compared to their more senior colleagues.  These bills further degrade this benefit, and they benefit no one but the investment companies.

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