Possible IRS rule change alarms charter schools

Instructors wouldn't be a part of state's retirement system
2012-02-03T00:00:00Z 2014-07-02T08:40:41Z Possible IRS rule change alarms charter schoolsAlexis Huicochea Arizona Daily Star Arizona Daily Star
February 03, 2012 12:00 am  • 

Thousands of charter-school teachers are at risk of being pushed out of Arizona's retirement system as the IRS considers a proposed regulation change.

Since 1994, when Arizona enacted a law allowing charter-school teachers the option to participate in the state retirement system, 12,000 current and former charter teachers have chosen to do so, according to the Arizona Charter Schools Association.

Across the country, it is estimated that more than 95,000 charter-school teachers participate in their state retirement plans.

The regulation change would force those teachers who are currently contributing to their state retirement plans to quit their charter-school jobs or lose the money that has been contributed to their accounts by the state. Teachers can keep what they've put in to the account, but anything the state has put in would be gone.

At Rose Academies, which runs four charter schools in the Tucson area, the primary concern is the impact on students, said Amy Schlessman who is in charge of research innovation and outreach.

"The primary effort in our schools is improving student achievement, so we want to offer students the very best quality teachers we can," Schlessman said. "If a quality teacher wants to be in the state retirement system, we wouldn't be able to offer that option."

Schlessman recognizes that such a change would have a devastating impact on not only charter teachers, but their families as well.

"It's an alarming situation at all levels - for student and family choice about quality education, and for the impact on employees and their families in Tucson, across the state, and across the country."

The proposal specifically applies to the definition of "governmental plan." For any state to be a government-sponsored pension plan, they have to follow the definition in place.

The definition being proposed contains criteria that must be met to be considered an agency of the state, much of which charter schools cannot satisfy, according to the National Alliance for Public Charter Schools.

Adopting the regulation change would significantly interfere with charter schools' ability to achieve their educational goals and could ultimately result in the closure of charter schools, according to the national alliance.

The proposed regulation will not be subject to a vote by Congress and is not legislation. Instead, the IRS is simply required to use its expertise and experience to come up with the best policies.

However, the public can comment on the proposed rule through Monday, and a hearing on the rule will be held in June.

It's not clear when the regulation would go into effect if it is approved because the state would need to go through a legislative process to change the law currently in place.

Your comments

To submit a comment about the IRS proposal, go to the National Alliance for Public Charter Schools' website: www.publiccharters.org/Additional-Pages/IRS-Proposed-Regulations.aspx

Contact reporter Alexis Huicochea at ahuicochea@azstarnet.com or 573-4175.

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