Legislature(2013 - 2014)

2014-04-10 House Journal

Full Journal pdf

2014-04-10                     House Journal                      Page 2341
HB 385                                                                                                                        
HOUSE BILL NO. 385 by the House Rules Committee by request of                                                                   
the Governor, entitled:                                                                                                         
     "An Act relating to additional state contributions to the teachers'                                                        
     defined benefit retirement plan and the public employees' defined                                                          
     benefit retirement plan; and providing for an effective date."                                                             
was read the first time and referred to the Finance Committee.                                                                  

2014-04-10                     House Journal                      Page 2342
The following fiscal note(s) apply:                                                                                             
1.  Fiscal, Office of the Governor                                                                                              
2.  Fiscal, Office of the Governor                                                                                              
The Governor's transmittal letter dated April 10, 2014, follows:                                                                
"Dear Speaker Chenault:                                                                                                         
Under the authority of Article III, Section 18 of the Alaska                                                                    
Constitution, I am transmitting a bill that will implement a fixed                                                              
annual contribution to pay down the past service liability of the Public                                                        
Employees' Retirement System and Teachers' Retirement System.                                                                   
Enactment of this legislation is contingent upon approval of a $3                                                               
billion transfer from the Constitutional Budget Reserve fund into the                                                           
Retirement System Trust Fund.                                                                                                   
The annual pension contributions represent the single largest cost                                                              
driver in the State's operating budget. Current projections estimate that                                                       
the Public Employees' Retirement System (PERS) and Teachers'                                                                    
Retirement System (TRS) have a combined unfunded liability of $11.9                                                             
billion. A $3 billion deposit into the retirement trust funds in the FY                                                         
2015 budget will enable the annual State pension contribution to drop                                                           
to $500 million a year and will increase the funded status of the PERS                                                          
and TRS systems by 10 percent almost immediately. This deposit will                                                             
also reflect positively on local government balance sheets.                                                                     
I urge your prompt and favorable action on this measure.                                                                        
Sean Parnell