Legislature(1993 - 1994)
02/10/1994 08:00 AM House STA
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 395 - COURT ADMINISTRATIVE DIRECTOR IN PERS Number 314 CHAIR VEZEY recognized himself as the sponsor of HB 395, and turned the gavel over to VICE CHAIRMAN PETE KOTT. REPRESENTATIVE VEZEY began with, "This bill says that in the future when the court system hires an administrative director, if that person is hired after the effective date of this legislation, that person will not have the option of participating in the judicial retirement system." He explained the reason the bill is so lengthy is to keep the clarification in the statutes that there is indeed, or has been in the past, an administrator of the Alaska Court System that has been in the Judicial Retirement System. Therefore, when the administration changes, there would be continuity in the administration of the benefits. REPRESENTATIVE VEZEY said the Judicial Retirement System is certainly the most generous retirement system, with the state of Alaska paying 50.2 percent of an employees' salary, on an annual basis, toward retirement benefits. He stated the administrator of the Alaska Court System is the only public employee of the state of Alaska, other than a judge or a justice, who is allowed to participate in this system. He explained that benefactors in this system receive a five percent per year credit toward the retirement of their salary, with a maximum of 15 years or 75 percent. This retirement benefit is adjusted for every pay increase that future employees in that position receive, with inflation adjusted. He compared this with an employee in the PERS system, who would receive after 30 years, approximately 66 percent of their salary retirement. He stated there were a lot of inequities between the way this employee is treated and other employees in the court system and the state of Alaska. He felt this was an issue of equity and treating our state employees in an equitable manner and was not the kind of statute we should have especially, when the state is in a budget cutting mode. Number 377 REPRESENTATIVE HARLEY OLBERG inquired why REPRESENTATIVE VEZEY restrained from changing the entire system, and asked if he intended to do so in the future. Number 387 REPRESENTATIVE VEZEY replied the Senate currently has a bill which evaluates the state's retirement system and that is probably the primary reason why he has not worked on proposing an overhaul of the state's retirement system. He said the Judicial Retirement System, compared to the Public Employees Retirement System and the Teachers Retirement System, is a modestly small program. He suggested if revisions are made to pension programs, that it be done as a total package. REPRESENTATIVE VEZEY recognized there are reasons for having a special retirement program for the Judiciary. At one time, members of our Judiciary were members of the Public Employees Retirement System. Number 410 REPRESENTATIVE JERRY SANDERS liked the idea of HB 395, but wondered if it was not scrutinizing one individual for a cut and if there was a benefit to the state. Number 415 REPRESENTATIVE VEZEY reiterated that HB 395 did not single out one individual, because under the current interpretation of Alaska's Constitution, a person's retirement system cannot be changed once they're employed. REPRESENTATIVE VEZEY pointed out there is some legal argument to that, but that is the legal guideline the state is operating under. HB 395 says that future employees in this position would not be brought into this program. REPRESENTATIVE SANDERS reaffirmed HB 395 only applies to one position. Number 427 REPRESENTATIVE VEZEY emphasized there may be severe constitutionality questions if HB 395 applied to one person, but at this time, the consensus is that since it applies to a position and more than one person could fill that position, it is constitutional. REPRESENTATIVE OLBERG asked REPRESENTATIVE VEZEY if it has been deemed unconstitutional to change a person's retirement benefits after being employed. Number 438 REPRESENTATIVE VEZEY replied that was the definition of a couple of court decisions he had read. Number 444 VICE CHAIRMAN KOTT introduced BOB STALNAKER as the next witness. Number 445 BOB STALNAKER, DIRECTOR, DIVISION OF RETIREMENT & BENEFITS, DEPARTMENT OF ADMINISTRATION, stated his department has a neutral opinion of HB 395. Number 450 VICE CHAIRMAN KOTT asked for further questions. Number 468 REPRESENTATIVE B. DAVIS asked, if a new person is hired as administrator for the court system, would that person be hired under the Supervisors PERS System? Number 473 REPRESENTATIVE VEZEY stated HB 395 would eliminate the current administrative director's option to opt out of PERS and go into the Judicial Retirement System. Number 479 REPRESENTATIVE OLBERG moved that HB 395 be moved out of committee with individual recommendations and unanimous consent. Number 481 VICE CHAIRMAN KOTT recognized REPRESENTATIVE OLBERG's motion and moved HB 395 out of the House State Affairs Committee with individual recommendations. Number 498
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