Legislature(2003 - 2004)
02/19/2004 08:02 AM STA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HB 329-RETIREMENT INCENTIVE PROGRAM Number 0536 CHAIR WEYHRAUCH announced that the last order of business was HOUSE BILL NO. 329, "An Act relating to retirement incentive programs for the public employees' retirement system, the judicial retirement system, and the teachers' retirement system; relating to separation incentives for certain state employees; and providing for an effective date." [Before the committee was the proposed committee substitute (CS) for HB 329, Version 23-LS1109\H, Craver, 1/28/04, adopted as a work draft on 1/29/04.] [The committee took an at-ease from 9:38 a.m. to 9:42 a.m.] Number 0623 CHAIR WEYHRAUCH moved to adopt Amendment 1, a handwritten amendment that read as follows [original punctuation provided, with some formatting changed]: Pg 8. Delete Sec. 8 & renumber accordingly Amend title to delete "the judicial retirement system," REPRESENTATIVE HOLM objected [for discussion purposes]. CHAIR WEYHRAUCH stated that there was previous testimony [at a prior hearing] that "the judiciary was put in because it was based on a previous version of the bill." He said, "There was no testimony before the committee that that was necessary. It seemed to adjust one person, and I'm not sure if the sponsor objected to deleting that one person. It just dealt with the administrative director of the court system." Number 0690 REPRESENTATIVE LESIL McGUIRE, Alaska State Legislature, as sponsor of HB 329, stated that she has no objection. CHAIR WEYHRAUCH noted that "that" would also require that the title be changed to delete the judicial retirement system, because that would no longer be affected by the Retirement Incentive Plan (RIP) bill. MS. McGUIRE answered correct. Number 0695 REPRESENTATIVE HOLM removed his objection. CHAIR WEYHRAUCH asked if there was any further objection to Amendment 1. There being none, Amendment 1 was adopted. In response to a question from Representative Seaton, he clarified the adopted Amendment 1. Number 0740 CHAIR WEYHRAUCH moved to adopt Amendment 2, a handwritten amendment that read as follows [original punctuation provided, with some formatting changed]: Pg 2 line 16 after system, "and" line 18 after section, "and" CHAIR WEYHRAUCH noted that during the last hearing on HB 329, there was testimony that [paragraphs (1), (2), and (3), in subsection (b), page 2] were to be cumulative as opposed to alternative requirements. Amendment 2 would make that change. Number 0770 REPRESENTATIVE BERKOWITZ stated that he wants to make certain that [Amendment 2] comports with the legislative style manual. CHAIR WEYHRAUCH replied, "To the extent that it needs to be tinkered with by legislative drafting, they have my permission." Number 0800 CHAIR WEYHRAUCH asked if there was further objection to Amendment 2. Hearing no objection, he announced that Amendment 2 was adopted. Number 0850 CHAIR WEYHRAUCH moved to adopt Amendment 3, a handwritten amendment that read as follows [original punctuation provided, with some formatting changed]: Add New Sec. 13 & renumber accordingly. 13. Implementation of this RIP shall not impair any existing beneficiary of PERS or TERS [sic], nor diminish any benefit any current beneficiary of PERS and TERS [sic] expects to receive as a beneficiary. Number 0859 REPRESENTATIVE HOLM objected. CHAIR WEYHRAUCH noted that Amendment 3 addresses the concern that those who are presently in the system wouldn't have their benefits diminished if a RIP bill is adopted. Number 0929 REPRESENTATIVE GRUENBERG [moved to adopt] a conceptual amendment to Amendment 3, which read as follows, [original punctuation provided]: The boards of the public employees retirement system and the teachers retirement system shall have the authority to suspend further enrollment in the retirement incentive programs authorized by this act upon a determination that further enrollment would have a significant negative effect on the actuarial soundness of the system. REPRESENTATIVE GRUENBERG mentioned he wants to ensure the integrity of the existing [Public Employees' Retirement System (PERS)] and [Teachers' Retirement System (TRS)], and also the university [retirement system]. CHAIR WEYHRAUCH objected for discussion purposes. Number 0958 REPRESENTATIVE GRUENBERG said he would like to add a couple of words to the conceptual amendment to Amendment 3 as follows: After the words "public employees retirement system" Insert ", university retirement system," Number 1062 REPRESENTATIVE McGUIRE stated that she is not aware of a separate retirement system for the university. CHAIR WEYHRAUCH opined that the university is covered under "this program the board of regents adopted, beginning on Section 4, on page 5." REPRESENTATIVE McGUIRE offered her understanding that "they're covered under TRS or PERS." CHAIR WEYHRAUCH concurred. Number 1073 REPRESENTATIVE SEATON related his belief that the university does have a separate retirement system that it has adopted, which is an "opt pay" that is "paid in and paid out when they leave." He compared it to a 401(K) retirement system. The employees have one month after employment to opt in to the PERS system or to the university retirement system. He clarified that it's a defined contribution program, rather than a defined benefit program. Number 1109 REPRESENTATIVE BERKOWITZ stated, "It seems to me if you're going do this, then you need to make a ... conforming title amendment." REPRESENTATIVE GRUENBERG said, "Absolutely. He suggested that could be "a second amendment to the amendment." Number 1142 CHAIR WEYHRAUCH asked if there was any objection to [Representative Gruenberg's amendment to the conceptual amendment to Amendment 3, adding the university retirement system]. There being no objection, it was so ordered. Number 1168 CHAIR WEYHRAUCH asked if there was any objection to the conforming conceptual title amendment [suggested by Representative Berkowitz]. There being none, it was so ordered. Number 1185 REPRESENTATIVE SEATON commented that the committee is running fast. He said, "A defined contribution program does not have any of the actuarial significance that a defined benefit program has, and so, including this in here is going to be confusing, because they don't apply." He requested that that be removed. Number 1213 REPRESENTATIVE GRUENBERG [moved] to rescind the action to include the university retirement system. There being no objection, it was so ordered. REPRESENTATIVE BERKOWITZ indicated that the conforming title amendment be stricken, because [it's no longer necessary]. REPRESENTATIVE GRUENBERG [moved] to rescind the committee's action [in adopting the conforming title]. CHAIR WEYHRAUCH said, "So rescinded." Number 1232 REPRESENTATIVE GRUENBERG [renewed his motion] to adopt his conceptual amendment [to Amendment 3, text provided previously]. Number 1249 CHAIR WEYHRAUCH asked, "If I removed my objection to the amendment to the amendment, is there further objection?" [No objection was stated, and the conceptual amendment to Amendment 3 was treated as adopted.] Number 1270 REPRESENTATIVE HOLM removed his objection to Amendment 3 [as amended]. CHAIR WEYHRAUCH asked if there was any further objection to Amendment 3, as amended. There being none, Amendment 3 [as amended] was adopted. Number 1300 CHAIR WEYHRAUCH moved to adopt Amendment 4, a handwritten amendment that read as follows [original punctuation provided, with some formatting changed]: Page 2, line 4 After "appropriate" add "and subject to the requirements of section 13," Number 1315 REPRESENTATIVE HOLM objected. CHAIR WEYHRAUCH explained that Amendment 4 refers to the adopted Amendment 3. He said it "brings it back into the beginning of the bill." REPRESENTATIVE HOLM offered his recollection that the word "should" was used at one time. Number 1399 REPRESENTATIVE GRUENBERG proffered that that was "something that Fate Putman suggested," but it was not actually amended. He said he would be prepared to address that after finishing with Amendment 4. Number 1421 REPRESENTATIVE HOLM removed his objection to Amendment 4. Number 1430 CHAIR WEYHRAUCH asked if there was any further objection to Amendment 4. There being none, Amendment 4 was adopted. Number 1500 REPRESENTATIVE GRUENBERG turned to the amendment to which Representative Holm had previously referred. As suggested by Mr. Putman during a previous hearing of the bill, Representative Gruenberg offered Amendment 5 as follows: On page 2, line 5 After "employer" Delete "need not" Insert "should" On page 2, line 6 Between "would" and "be" Delete "otherwise" Number 1545 CHAIR WEYHRAUCH objected. Number 1553 REPRESENTATIVE HOLM asked if there would be a fiscal impact. He stated, "I'm concerned that we take an employer - in this case the school districts and whatever - and we say they should extend the incentive plan without knowing what the impact of that's going to be." Number 1560 REPRESENTATIVE BERKOWITZ opined that the decision that the House State Affairs Standing Committee has to make is whether it believes that Representative Gruenberg's proposal is better policy; the House Finance Committee will determine whether [the state] can afford that better policy. Number 1580 REPRESENTATIVE SEATON said he thinks [Amendment 5] would significantly change the character of the bill. He indicated that it would be a change from gaining efficiencies for the system by allowing some rehires, for example, to almost a legislative mandate to [extend the incentive plan] to all employees, by using the word "should". He said he thinks it would created legal challenges because of the uncertain interpretation of the word "should". He stated his opposition to Amendment 5. Number 1666 REPRESENTATIVE McGUIRE said she also opposes [Amendment 5] for many of the reasons that Representative Seaton just stated. She emphasized that one of the important aspects of crafting [the bill] was in ensuring that the RIP would be completely voluntary and could be used as a managerial tool to help save money where appropriate. She reminded the committee that "any plan ultimately has to go through the Department of Administration." If the plan doesn't meet savings criteria, it will never go through, she warned. She said, "In point of fact, I've maintained from the beginning [that] this ought to be a zero fiscal note, especially with your amendments now." Number 1720 REPRESENTATIVE BERKOWITZ stated that "it's just all ... instructive language, so we're arguing about nothing." He encouraged the committee to bring the bill to a vote. Number 1773 A roll call vote was taken. Representatives Berkowitz and Gruenberg voted in favor of Amendment 5. Representatives Lynn, Holm, Seaton, Coghill, and Weyhrauch voted against it. Therefore, Amendment 5 failed by a vote of 2-5. Number 1800 REPRESENTATIVE GRUENBERG moved to report [CSHB 329, as amended, out of committee with individual recommendations and the accompanying fiscal notes]. There being no objection, CSHB 329(STA) was reported out of the House State Affairs Standing Committee.