2007-04-16                     House Journal                      Page 0800
HB 206                                                                                                                        
The House Special Committee on Ways & Means considered:                                                                         
                                                                                                                                
    HOUSE BILL NO. 206                                                                                                          
    "An Act relating to the accounting and payment of contributions                                                             
    under the defined benefit plan of the Public Employees'                                                                     
    Retirement System of Alaska, to calculations of contributions                                                               
    under that defined benefit plan, and to participation in, and                                                               
    termination of and amendments to participation in, that defined                                                             
    benefit plan; making conforming amendments; and providing for                                                               
    an effective date."                                                                                                         
                                                                                                                                
and recommends it be replaced with:                                                                                             
                                                                                                                                
    CS FOR HOUSE BILL NO. 206(W&M)                                                                                              
    (same title)                                                                                                                
                                                                                                                                

2007-04-16                     House Journal                      Page 0801
The report was signed by Representative Hawker, Chair, with the                                                                 
following individual recommendations:                                                                                           
                                                                                                                                
No recommendation (5):  Fairclough, Wilson, Cissna, Gruenberg,                                                                  
Hawker                                                                                                                          
                                                                                                                                
Amend (2):  Roses, Seaton                                                                                                       
                                                                                                                                
A House Special Committee on Ways & Means letter of intent for                                                                  
CSHB 206(W&M), signed by Representative Hawker, Chair, follows:                                                                 
                                                                                                                                
"The House Special Committee on Ways and Means moved House                                                                      
Bill 206 (HB 206) out of committee in order to allow the House                                                                  
Finance Committee to consider the cost-share provisions contained                                                               
therein concurrently with other legislation regarding pension financing                                                         
and payment of the unfunded accrued actuarial liability (UAAL).                                                                 
                                                                                                                                
HB 206 changes the defined benefit plan of the Public Employees'                                                                
Retirement System of Alaska (PERS) to an employer cost-sharing                                                                  
program similar to the teachers' retirement system (TRS).  The bill                                                             
does not contain provisions to equalize allocation of the UAAL or                                                               
recognize excess contributions already made in good faith by                                                                    
employers in order to reduce their UAAL and, consequently, their                                                                
contribution rates.  For some employers, passage of HB 206 could                                                                
increase their required contribution rates and will provide a                                                                   
disincentive to remain in the PERS plan.                                                                                        
                                                                                                                                
The proposal offered in HB 206 also does not provide long-term                                                                  
assurance of a fixed maximum annual contribution rate for employers.                                                            
                                                                                                                                
While these issues and possible alternatives were discussed, the House                                                          
Special Committee on Ways and Means decided to move the plan                                                                    
offered by the administration in HB 206 along with this expression of                                                           
concern regarding that approach.  Representative Paul Seaton                                                                    
presented one approach to address these concerns which has been                                                                 
forwarded to the House Finance Committee.                                                                                       
                                                                                                                                
It is the recommendation of the committee that the House Finance                                                                
Committee seek a solution that provides parity and assurance of                                                                 
contribution rates for employers."                                                                                              

2007-04-16                     House Journal                      Page 0802
The following fiscal note(s) apply to CSHB 206(W&M):                                                                            
                                                                                                                                
1.  Indeterminate, Dept. of Administration                                                                                      
                                                                                                                                
HB 206 was referred to the Finance Committee.