Legislature(2017 - 2018)BARNES 124
02/17/2018 01:00 PM House LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| HB83 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| += | HB 83 | TELECONFERENCED | |
HB 83-TEACHERS & PUB EMPLOYEE RETIREMENT PLANS
1:03:46 PM
CHAIR KITO announced that the only order of business would be
HOUSE BILL NO. 83, "An Act relating to new defined benefit tiers
in the public employees' retirement system and the teachers'
retirement system; providing certain employees an opportunity to
choose between the defined benefit and defined contribution
plans of the public employees' retirement system and the
teachers' retirement system; and providing for an effective
date."
1:04:20 PM
CHAIR KITO opened public testimony on HB 83.
1:04:53 PM
TIM PARKER, National Education Association (NEA) Alaska,
testified in the hearing on HB 83. He stated the teacher
retirement plan was the worst in the country. He gave some
history of the plan. He stated most financial advisors
recommend budgeting for 70 percent of income for retirement, but
Alaska public education employees are making half of that
amount. He added large numbers [of teachers] are leaving the
state. He underlined 50 percent or more of Teachers Retirement
System (TRS) educators hired after 2006 will outlive their
retirement savings.
1:10:56 PM
JAKE METCALFE, Executive Director, Alaska State Employees
Association (ASEA) Local 52, testified in support of HB83. He
said the three reasons ASEA supports HB 83 are that it provides
security and dignity in retirement; helps recruit the best and
brightest of employees; and lessens Alaska "brain drain." He
mentioned testimony from the Department of Public Safety (DPS)
regarding difficulty in recruiting. He said those people who
Alaska needs to provide services, such as nurses, engineers, and
teachers are not staying. He gave some family background to
illustrate the difficulty of working in later life without a
pension.
1:16:54 PM
SCOTT EICKHOLT, Laborers Local 942, testified in support of HB
83. He spoke to defined benefits plans and said his
organization urged the state to ensure that their members could
retire at a reasonable age and not have to come back into the
workforce. He highlighted that the older age group staying in
work longer prevents younger folks from getting a start.
1:19:21 PM
JANICE BAPTISTE, Driver, Local 942 Transit, testified in support
of HB 83. She said she is 66 and still working and that she is
hoping to have a decent retirement. She added that many of her
colleagues have left the state. She said younger drivers know
they may not have social security. She underlined that many
could not afford to stay in the state on the current retirement
plan.
1:21:37 PM
ROBERT GROVE, Director, Retired Public Employees of Alaska,
testified in the hearing on HB 83. He said he had formerly been
involved in similar hearings on Senate Bill 88 He referred to a
state wildlife trooper who had been offered a job in North
Dakota making $30,000 more per year, not including the benefit
package. He spoke to the difficulty in Fairbanks, Alaska, in
retaining firefighters and state troopers. He said if he
weren't a Tier I employee, he would have to leave the state, and
the reality is that people are making that choice. There is a
feeling among some retirees that the state is "waiting for Tier
I retirees to die off," and the legislature will be dealing with
the problem in 10 or 20 years, he opined.
1:26:28 PM
LEON KOTSCH, 942 Transit, testified in the hearing on HB 83. He
said he thought it was discriminatory to offer different types
of retirement benefits to different groups of public employees.
He said he thought the state would retain employees if a planned
benefit program was offered. He stated he contributes to a Roth
IRA 457 deferred compensation plan in addition to his state
retirement. He said that managing his retirement funds on his
own was difficult.
1:29:02 PM
SANDY GUY, Local 942 Transit, testified in support of HB 83.
She said she is a lifelong Alaska resident and would not want to
be forced to leave the state because she cannot afford to stay.
1:30:09 PM
BOB MURPHY testified in support of HB 83. He stated he is a
Tier II employee with 28 years of service. He expressed his
concern that many hired under TRS III or PERS IV in the last ten
years have no reason to work for the state until retirement. He
added turnover is difficult and costly to the state. He stated
defined contribution employees do not have the same incentive to
stay in the state that defined benefit employees did.
1:31:45 PM
VALERIE BROOKS, Teacher, testified in support of HB 83. She
said the pension option addresses the fact that public employees
do not earn social security benefits. She added that many
public education employees have not been working beyond the
five-year vested service point.
1:34:12 PM
RICHARD SEWELL testified in the hearing on HB 83. He said he
has an MBA and works for the Department of Transportation (DOT)
in statewide aviation. He said he is a Tier I employee and he
came back to work for a PERS participating organization even
though he will have social security benefit penalized. He said
he wonders why participating in social security isn't a choice
for employees. He stated the turnover rate of state employees
is about 25 percent each year, which results in a workforce of
"newbies" that have on-the-job training and after 5 years they
leave. He wonders if there any people left in his building who
know where the light switches are. He stated DOT needs
experienced and well-trained people to deal with the state
capital budget of $800 million per year, which is "a big nut to
crack to deliver every year." He referenced a legislative
research study comparing Tier III and Tier IV costs to the
state. He said the study found that long-term costs for the
state are nearly equal, but to get a true fiscal impact
statement, the state must consider the high cost of recruitment
and training. He said those ancillary costs are significant and
must be considered.
1:37:38 PM
MR. SEWELL gave the example of a University of Alaska graduate
who taught for three years and then who had to move to Iowa
because the retirement plan was more beneficial. He pointed out
that a "difficult-to-recruit, Alaska-trained teacher is gone
forever."
1:38:53 PM
EDWARD GRAFF, Laborers Local 942, testified in support of HB 83.
He said the proposed bill would help his group with the high
turnover rate.
1:39:25 PM
TAMMY SMITH testified in the hearing on HB 83. She said she is
a teacher and officer with NEA Alaska but was testifying as an
individual. She gave some family background to illustrate the
difference between Tier I and more recent retirement offerings
for state employees. She said her daughter does not have the
same secure retirement as a state employee, and that her
daughter would find comparable retirement security outside of
Alaska.
1:43:01 PM
PAUL KELLY, Analyst Programmer II, testified in support of HB
83. He indicated he was secretary to the Alaska State Employee
Association (ASEA) but was testifying as an individual. He said
he had graduated from the University of Alaska and had decided
to stay in the state. He said he feels it is important to
attract and retain the best employees, so he asked the committee
to pass HB 83 as is.
1:45:33 PM
ALICIA HUGHES-SKANDJIS testified in support of HB 83. She said
she is Tier IV grants administrator for Department of Health and
Social Services (DHSS) and serves on the board as treasurer for
ASEA/AFSCME Local 52 but was testifying as an individual. She
highlighted the importance of security for state employees and
retirees. She gave the example of West Virginia which had
switched away from defined benefit to defined contribution
retirement plan and said that the state had returned to a
defined benefit retirement system. She described the high
turnover in her state office.
1:49:28 PM
KENNETH SOUTHERLAND, Tlingit-Haida Regional Housing Authority,
testified in support of HB 83. He stated he has 50 employees in
the PERS system, of which 14 are in Tiers I through III, and 36
are Tier IV employees. He said the company was paying about
$733 thousand per year in PERS costs, of which $450,000 was for
Tier IV employees, meaning 22 percent of Tier IV employees'
salaries was for them to participate in the state's DCR plan.
He said the organization could do a matching plan and employees
could participate in social security and the company would save
$136 thousand per year. He said $360,000 could pay for a few
houses in each of the small communities. He spoke of a letter
he had sent to the Southeast legislators requesting some relief
for Tier IV employees. He stated he would rather see a defined
benefit plan than a deferred compensation plan.
1:52:38 PM
TOM BRICE, Alaska Laborers, testified in the hearing on HB 83.
He said he had been involved in the original debate on defined
benefits and said he feels there needs to be a choice of plan.
He described his membership and explained they were not making
the highest salaries. He said they are making $25,000 to
$30,000. He said retirement experts advised 70 percent of
income for retirement and added that "70 percent of $30,000 is
not a lot."
1:55:17 PM
MR. BRICE related a story of a 55-year-old man newly hired at in
a maintenance position at Mr. Edgecombe. He said the employee
had no idea how to work with deferred compensation retirement.
He said he feels that the level of attention that employees have
to pay to investments and options created difficulty, and that
at least with defined benefits people can make elections and not
have to review it every few months.
1:58:03 PM
NANCY PETERSEN, Local 942 Transit, testified in support of HB
83. She said she was in her sixth year with Van Tran
paratransit service in the Fairbanks North Star Borough as
driver. She stated she is a lifelong Alaskan and hopes to be
able to stay in the state, but that it is difficult not to have
retirement to look forward to.
1:59:14 PM
RACHEL ALINSUNURN stated she was representing herself and a
group of Tier III and Tier IV employees testified in support of
HB 83. She stated she works for Alaska Department of Fish and
Game (DF&G) as a Tier III fisheries biologist. She said she was
testifying on behalf of herself and MEGAN FANEUF, ERIKA AYES,
MYRA SCHOLZE, and ASIA BECER, who were Tier IV employees. She
said HB 83 help with recruitment and retainment of trained
employees and would give stability and continuity to the
workforce.
2:00:48 PM
MIRANDA WESTFALL testified in support of HB 83. She stated she
was a Tier IV employee for DF&G and that she had started her
state service in her mid-30s. She said that coming in later
made her worry about her retirement.
2:01:34 PM
BRIANNA MCDRATH testified in support of HB 83. She said she was
a new Tier IV state employee and was surprised by high employee
turnover. She spoke to the effects on the economy of the lack
of security in retirement.
2:02:47 PM
MICHAEL RISINGER, Anchorage School District, testified in
support of HB 83. He said he is a member of the Anchorage
Education Association and a Tier III teacher for the Anchorage,
Alaska, school district. He said he is in support of HB 83 but
that it was just a first step. He stated that without paying
into social security at 6.2 percent, teachers in Tier III are
receiving 7 percent, so just 0.8 percent above social security.
He said it seems to be better to have social security where "you
do have that flexibility to walk away." He said Alaska,
especially given education funding cuts, was starting to be seen
as an unstable place to work. He said he hasn't seen a year yet
without cuts at his workplace.
2:05:03 PM
DANIEL TUTTLE testified in support of HB 83. He said he works
for the Anchorage, Alaska, school district. He spoke to the
brain drain in the schools and the need for defined benefits for
workers who wish to remain in the state.
2:07:16 PM
The committee took an at-ease from 2:07 p.m. to 2:26 p.m.
2:26:53 PM
NADINE LEFEBVRE testified in support of HB 83. She spoke to
recruitment and retention in the state troopers, police, and
fire fighters, engineers, and bridge and ferry operators. She
stated her view that the difficulty was due to those employees
not having a future to look forward to. She said the state
needs to be competitive to avoid losing well-trained employees
to other states or private industry. She shared her concern
that Tier IV folks are trained and then lost within five years.
2:30:13 PM
ERIC HOFFMAN testified in the hearing on HB 83. He said he was
born in Alaska, has strong ties with the state, and wants to
remain in the state. He said Alaska is experiencing a public
safety staffing crisis. He spoke to a Palm Beach, Florida, case
study showing that the city did away with pensions in favor of
401K plans and returned to pensions after four years. He said
it was not uncommon for state troopers to be trained and then
leave after two or three years. He said he hopes the
legislature sees that drastic action needs to be taken.
2:34:11 PM
REPRESENTATIVE PARISH asked about vacancies in the Juneau Police
Department.
MR. HOFFMAN answered that there are vacancies in every
department in Alaska.
REPRESENTATIVE PARISH asked how much Mr. Hoffman attributed the
vacancies to the lack of a defined benefits option.
MR. HOFFMAN referred to a study that found that 96 percent of
public employees remain in their jobs in large part for the
pension plan. He said he has recently become a five-year vested
employee and there was nothing keeping him except that he loves
his job. He said he was questioning if it is worth the risk;
friends had been murdered on the job and crime was increasing.
2:36:51 PM
The committee took an at-ease from 2:36 p.m. to 2:51 p.m.
2:51:18 PM
TENNETH KRAMER testified in support of HB 83. He said he has
been a state employee for 17 years and that he arrived [in
Alaska] with the United States Air Force in 1991. He stated
that his military experience taught him the importance of
training and retaining people. There is an enormous expense in
training. He said he is Tier III and on his "downhill slope."
He shared his concern about those in lower tiers. He stated
that he thought the most important expense saved is having
people stick around.
2:55:45 PM
The committee took an at-ease from 2:55 p.m. to 2:59 p.m.
2:59:24 PM
CHAIR KITO announced that HB 83 was held over.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB083 Letters of Support 2.15.18.pdf |
HL&C 2/17/2018 1:00:00 PM |
HB 83 |
| HB083 Letters of Support 2.16.18 packet 2.pdf |
HL&C 2/17/2018 1:00:00 PM |
HB 83 |