Legislature(2015 - 2016)SENATE FINANCE 532
04/17/2015 01:30 PM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB123 | |
| HB135 | |
| HB176 | |
| HB123 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| = | HB 123 | ||
| = | HB 135 | ||
| + | TELECONFERENCED | ||
| += | SB 50 | TELECONFERENCED | |
| += | HB 105 | TELECONFERENCED | |
| += | HB 176 | TELECONFERENCED | |
HOUSE BILL NO. 135
"An Act establishing a Roth contribution program for
the public employees' deferred compensation program;
and providing for an effective date."
2:22:10 PM
ANDY MILLS, LEGISLATIVE LIAISON, DEPARTMENT OF
ADMINISTRATION, explained that the legislation would allow
for a Roth 457 contribution option for state employees. He
relayed that state employees could currently pay into
deferred compensation, which allowed them to save
additional money, for dispersement at the time of
retirement. The deferred compensation option was a pre-tax
option, with taxes being paid at the time of distribution.
He said that the Roth 457 would allow for a post-tax
option, giving the employee the ability to not be taxed at
pay out. He stated that the option would allowed for
diversification in retirement choices and was optional. He
explained that in January of 2011 the federal government
began offering the option. He added that the option would
be useful given the uncertainty of future taxation rates
due to the federal deficit.
2:25:06 PM
KATHY LEA, CHIEF PENSION OFFICER, DIVISION OF RETIREMENT
AND BENEFITS, DEPARTMENT OF ADMINISTRATION, reviewed the
sectional analysis (copy on file):
Section 1. AS 39.45.050 is repealed and reenacted to
provide for a post-tax Roth investment option in the
public employees' deferred compensation plan and
clarifies that state and federal income tax is not
deferred under this option. The section establishes if
no positive election is made for a Roth investment,
contributions will be deemed to be on a pre-tax basis.
This allows the pre-tax target date options to
continue as the default option for the plan if the
member makes no investment election. The section
establishes dollar limitations in accordance with
Internal Revenue Code rules and allows the
Administrator of the plan to establish rules and
procedures governing the election process by
participating employees.
Section 2. AS 39.45.060 adds a definition of "Roth"
contributions to have the meaning under 26 U.S.C.
402A(c)
Section 3. Establishes an effective date of July 1,
2015.
2:26:10 PM
Senator Bishop asked for more information on how the plan
would be taxed.
Mr. Mills explained that the bill would allow the
investment to be taxed now; at the time of retirement the
money set aside, plus earnings, would be tax free.
2:26:56 PM
Senator Dunleavy understood that the bill would not limit
the investment tools that could be used, such as investing
in high risk stocks.
Mr. Mills replied that all of the options currently offered
by the state would be available to the plan.
2:27:39 PM
Co-Chair MacKinnon OPENED public testimony.
Co-Chair MacKinnon CLOSED public testimony.
2:28:34 PM
AT EASE
2:29:56 PM
RECONVENED
Co-Chair MacKinnon discussed housekeeping and the suggested
a break in the meeting to discuss the course of action
pertaining to the legislation on the agenda.
2:31:08 PM
RECESSED
3:13:15 PM
RECONVENED
HOUSE BILL NO. 135
"An Act establishing a Roth contribution program for
the public employees' deferred compensation program;
and providing for an effective date."
3:13:40 PM
Vice-Chair Micciche discussed the fiscal note.
Vice-Chair Micciche MOVED to report HB 135 out of Committee
with individual recommendations and the accompanying fiscal
note. There being NO OBJECTION, it was so ordered.
HB 135 was REPORTED out of committee with a "do pass"
recommendation and with one previously published zero
fiscal note: FN 1(ADM).
3:14:51 PM
AT EASE.
3:16:14 PM
RECONVENED