Legislature(2021 - 2022)GRUENBERG 120

03/13/2021 01:00 PM STATE AFFAIRS

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01:04:06 PM Start
01:04:34 PM HB55
02:28:08 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Please Note Time Change --
*+ HB 55 PEACE OFFICER/FIREFIGHTER RETIRE BENEFITS TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
**Streamed live on AKL.tv**
        HB  55-PEACE OFFICER/FIREFIGHTER RETIRE BENEFITS                                                                    
                                                                                                                                
1:04:34 PM                                                                                                                    
                                                                                                                                
CHAIR KREISS-TOMKINS  announced that  the only order  of business                                                               
would be HOUSE BILL NO. 55,  "An Act relating to participation of                                                               
certain peace  officers and firefighters  in the  defined benefit                                                               
and  defined   contribution  plans   of  the   Public  Employees'                                                               
Retirement  System of  Alaska; relating  to eligibility  of peace                                                               
officers  and firefighters  for  medical,  disability, and  death                                                               
benefits;  relating   to  liability  of  the   Public  Employees'                                                               
Retirement  System  of Alaska;  and  providing  for an  effective                                                               
date."                                                                                                                          
                                                                                                                                
1:05:31 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  ANDY JOSEPHSON,  Alaska State  Legislature, prime                                                               
sponsor,  introduced  HB   55.    He  recalled   2006,  when  the                                                               
legislature ended the  defined benefit plan for  any person hired                                                               
after  the effective  date of  the legislation.   He  pointed out                                                               
that   [defined   benefits]   are   subject   to   constitutional                                                               
protection,  which  is the  cause  of  some anxiety  should  that                                                               
option be returned  to.  Nonetheless, he expressed  his desire to                                                               
"fully  assuage" those  concerns.   He explained  that since  the                                                               
defined benefit plan  was eliminated in 2006,  new employees have                                                               
received a  defined contribution  [plan], also  referred to  as a                                                               
401K, 401A, or  403, which are all variations of  the same model.                                                               
He  described a  defined contribution  as "portable,"  indicating                                                               
that employees can take the  employer share along with their own.                                                               
He  added  that based  on  actuarial  assessments of  anticipated                                                               
coverage,  the replacement  of  income is  in  the low  thirtieth                                                               
percentile; however,  under a  defined benefit  plan, individuals                                                               
could receive  closer to  50 percent.   He stated  that HB  55 is                                                               
essentially identical  to what was  proposed under House  Bill 79                                                               
in the  Thirty-First Alaska  State Legislature.   The  bill would                                                               
create a  retirement plan  option for  state and  municipal peace                                                               
officers and firefighters.   He noted that this  cohort of public                                                               
safety  employees is  made  up  of 1,400  individuals.   To  stay                                                               
solvent,  the  proposed  option  may  need  to  make  a  variable                                                               
contribution that  would be no  less than 8 percent,  which could                                                               
rise to 10 percent.  He  explained that a person who chooses this                                                               
plan  could  see some  diminishment  in  his/her paycheck  during                                                               
active service, which  was designed to be implemented  if the ARM                                                               
[Alaska   Retirement   Management]   Board  declares   that   the                                                               
investment is less than 90 percent solvent.                                                                                     
                                                                                                                                
1:11:32 PM                                                                                                                    
                                                                                                                                
CHAIR KREISS-TOMKINS  surmised that Representative  Josephson had                                                               
stated that  in response  to the threat  of an  emerging unfunded                                                               
liability there  would be an  increased employee  contribution to                                                               
"autocorrect" [the solvency].                                                                                                   
                                                                                                                                
REPRESENTATIVE   JOSEPHSON  confirmed.     He   added  that   the                                                               
"autocorrect"   would  presumably   cease  if   [the  investment]                                                               
returned to 100 percent for some  period of time.  He resumed his                                                               
introduction  of   HB  55  by   highlighting  a   provision  that                                                               
stipulates  a minimum  retirement  age  of 55  with  20 years  of                                                               
service.   He noted that the  proposed plan is modeled,  in part,                                                               
after Washington's  defined benefit [plan], which  is overfunded.                                                               
The  proposal  includes   additional  provisions  to  effectively                                                               
[safeguard and] moderate  the plan, such as  the constructing the                                                               
final  calculation   on  five  years  of   salary  versus  three,                                                               
mechanisms  to  prevent  pension  spiking,  and  the  ability  to                                                               
withhold Post  Retirement Pension Adjustments (PRPAs)  should the                                                               
plan's funding drop below 90 percent.   Lastly, he said, to avoid                                                               
burdening  state  and  local   government,  the  proposed  option                                                               
creates a health retirement account  similar to Tier IV, which is                                                               
three percent  of a PERS salary,  that can be used  to pay doctor                                                               
fees  or   purchase  premiums.     He  pointed  out   that  after                                                               
identifying multiple  tools that  make the bill  more affordable,                                                               
one  might  wonder  whether  it   is  "so  affordable  that  it's                                                               
unattractive."  He  stated that the answer is  no, because people                                                               
of a  certain age group are  being persuaded to leave  Alaska for                                                               
other states  that offer more  generous plans.  He  further noted                                                               
that current retention rates are  problematic, as the cost of DPS                                                               
[Department of Public  Safety] training in towns,  such as Sitka,                                                               
is upwards of $100,000 per recruit.                                                                                             
                                                                                                                                
1:18:27 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE STORY sought verification  that the new tier would                                                               
not be optional for new recruits.                                                                                               
                                                                                                                                
1:18:51 PM                                                                                                                    
                                                                                                                                
ELISE  SORUM-BIRK, Staff,  Representative Andy  Josephson, Alaska                                                               
State Legislature,  on behalf of Representative  Josephson, prime                                                               
sponsor, confirmed.   She added  that if  the bill were  to pass,                                                               
individuals under Tier IV would be  given the option to buy in to                                                               
the new  tier's defined  benefit plan.   She reiterated  that any                                                               
employee hired after  the bill's effective date would  be part of                                                               
the new tier.                                                                                                                   
                                                                                                                                
1:19:44 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE EASTMAN asked how  the proposed option compares to                                                               
the current option in regard to high inflation.                                                                                 
                                                                                                                                
MS. SORUM-BIRK deferred to Mr. Puckett.                                                                                         
                                                                                                                                
1:20:38 PM                                                                                                                    
                                                                                                                                
JIM  PUCKETT,   Deputy  Director,  Division  of   Retirement  and                                                               
Benefits, explained that  Tiers I, II, and III have  a PRPA based                                                               
on  the  CPI  [Consumer  Price  Index]  for  the  urban  area  of                                                               
Anchorage per the statutory formula.   He noted that Tier IV does                                                               
not have a PRPA whereas the  proposed plan includes a PRPA, which                                                               
is why  the new tier would  be attractive to young  public safety                                                               
workers.   He  added that  [the proposed  plan] does  not contain                                                               
total inflation proofing, "but it's  a good percentage of it, and                                                               
it is very beneficial to the retirees."                                                                                         
                                                                                                                                
REPRESENTATIVE   EASTMAN  shared   his  understanding   that  the                                                               
proposed  plan includes  an option  to set  aside or  suspend the                                                               
PRPA.   He questioned how the  new tier would compare  to Tier IV                                                               
if that option were enacted and the PRPA withheld.                                                                              
                                                                                                                                
MR.  PUCKETT  reiterated  that  Tier  IV does  not  have  a  PRPA                                                               
provision.   He explained  that with  the implementation  of this                                                               
bill,  the ARM  Board would  have  the ability  to withhold  PRPA                                                               
should the cost of PRPA for  employees under the new tier make up                                                               
more than 10 percent of the  overall (indisc.), at which time the                                                               
benefit would be similar to Tier IV.                                                                                            
                                                                                                                                
REPRESENTATIVE  EASTMAN  questioned  which  plan  would  be  more                                                               
attractive if inflation were high  and the inflation proofing was                                                               
set aside.                                                                                                                      
                                                                                                                                
MR. PUCKETT  pointed out that  Tier IV is a  defined contribution                                                               
plan.  He stated  that if HB 55 were to  pass, the peace officers                                                               
and firefighters  who chose the new  tier would be placed  into a                                                               
defined  benefit pension.   He  explained  that the  appeal of  a                                                               
pension  is   that  everything  is  calculated   by  mathematical                                                               
formulas  and upon  retirement,  employees know  the amount  they                                                               
will receive monthly  for the rest of their lives.   In contrast,                                                               
under  Tier  IV,   both  the  employee  and   the  employer  make                                                               
contributions into the employee's  personal account, which can be                                                               
invested  in a  variety of  different options  and is  personally                                                               
managed by the employee in his/her  retirement years.  He went on                                                               
to explain that  if the ARM Board determined that  the new tier's                                                               
PRPA had to  be withheld, then the two plans  would be similar in                                                               
the  fact  that  they  both  would lack  any  type  of  inflation                                                               
proofing provision;  however, Tier  IV would  still be  a defined                                                               
contribution and the other a defined benefit.                                                                                   
                                                                                                                                
REPRESENTATIVE  EASTMAN asked  if an  employee would  be able  to                                                               
return to Tier IV after selecting the "hybrid" [Tier V] plan.                                                                   
                                                                                                                                
MR. PUCKETT  said joining  the new tier  would be  an irrevocable                                                               
decision.                                                                                                                       
                                                                                                                                
1:26:46 PM                                                                                                                    
                                                                                                                                
MS. SORUM-BIRK presented a sectional analysis of HB 55 [included                                                                
in the committee packet], which read [original punctuation                                                                      
provided]:                                                                                                                      
                                                                                                                                
     Section 1: Amends AS  37.10.220(a) regarding the powers                                                                
     and duties that the Alaska Retirement                                                                                      
     Management (ARM) board shall carry out including:                                                                          
     ?  Adding   new  duties  to  account   for  appropriate                                                                    
     employer  contributions  for  peace officers  and  fire                                                                    
     fighters   and   adjustments    to   these   employees'                                                                    
     contributions;                                                                                                             
     ?  Determining  the  amount  of  the  monthly  employer                                                                    
     contributions under new  subsection AS 39.35.255(i) for                                                                    
     peace  officers and  firefighters participating  in the                                                                    
     defined benefit plan after June 30, 2006.                                                                                  
                                                                                                                                
     Section 2: Amends AS  37.10.220(b) regarding the powers                                                                
     and duties  of the  Alaska Retirement  Management (ARM)                                                                    
     board,  adding   the  ability   to  adjust   the  post-                                                                    
     retirement  pension adjustment  (PRPA) amounts  and the                                                                    
     employee  contribution  rates  for peace  officers  and                                                                    
     firefighters participating in  the defined benefit plan                                                                    
     after June 30, 2006.                                                                                                       
                                                                                                                                
     Section  3:   Adds  to  the   ARM  board   statute  the                                                                
     definitions for  "peace officer" and  "firefighter" the                                                                    
     existing  in AS  39.35.680  (the  PERS defined  benefit                                                                    
     definitions section).                                                                                                      
                                                                                                                                
     Section  4: Amends  AS 39.30.090(a)  by  adding the  AS                                                                
     39.37.537  (the  new health  reimbursement  arrangement                                                                    
     (HRA)   medical   benefit   for  peace   officers   and                                                                    
     firefighters participating in  the defined benefit plan                                                                    
     after June  30, 2006 found  in section 29) to  the list                                                                    
     of   retiree   medical   benefit  programs   that   the                                                                    
     Department of  Administration has the power  to procure                                                                    
     group insurance for.                                                                                                       
                                                                                                                                
     Section  5:  Amends  AS 39.30.097(a)  regarding  Alaska                                                                
     retiree health  care trusts. Adds the  new AS 39.35.537                                                                    
     (the  peace officer/firefighter  HRA  found in  section                                                                    
     29) to  the list of  medical benefit programs  that the                                                                    
     Department    of    Administration   commissioner    is                                                                    
     authorized to prefund.                                                                                                     
                                                                                                                                
     Section  6:  Amends  AS 39.30.097(b)  regarding  Alaska                                                                
     retiree health  care trusts. Adds the  new AS 39.35.537                                                                    
     (the  peace officer/firefighter  HRA  found in  section                                                                    
     29) to  the list of  medical benefit programs  that the                                                                    
     Department    of    Administration   commissioner    is                                                                    
     authorized to prefund.                                                                                                     
                                                                                                                                
1:29:30 PM                                                                                                                    
                                                                                                                                
CHAIR KREISS-TOMKINS asked whether an HRA [health reimbursement                                                                 
arrangement] is presently part of Tier IV.                                                                                      
                                                                                                                                
MS. SORUM-BIRK confirmed.                                                                                                       
                                                                                                                                
CHAIR KREISS-TOMKINS questioned whether the HRA contemplated in                                                                 
Tier V is the same as or different than the HRA in Tier IV.                                                                     
                                                                                                                                
MS. SORUM-BIRK answered it is the same as Tier IV.                                                                              
                                                                                                                                
1:30:01 PM                                                                                                                    
                                                                                                                                
MS. SORUM-BIRK resumed the sectional analysis of HB 55, which                                                                   
read:                                                                                                                           
                                                                                                                                
     Section 7:  Makes a Revisor's type  technical change by                                                                
     using  the  new preferred  term  for  referring to  the                                                                    
     state retirement system.                                                                                                   
                                                                                                                                
     Section 8:  Amends AS 39.30.380  regarding how  the HRA                                                                
     medical benefits  are handled for  terminated employees                                                                    
     who leave  prior to retiring.  A person  who terminates                                                                    
     employment   prior    to   meeting    the   eligibility                                                                    
     requirements  under  the  new  AS  39.35.537  (proposed                                                                    
     peace officer and firefighter HRA  found in section 29)                                                                    
     lose  rights to  their  contribution to  the HRA  trust                                                                    
     fund, in line with other Tier IV HRAs.                                                                                     
                                                                                                                                
     Section  9: Amends  AS 39.30.390  regarding eligibility                                                                
     for  reimbursement  under  the  HRA. Adds  the  new  AS                                                                    
     39.35.537 (proposed  peace officer and  firefighter HRA                                                                    
     found  in section  29) as  eligible for  reimbursements                                                                    
     from the HRA.                                                                                                              
                                                                                                                                
     Section 10:  Amends AS 39.30.400(a)  regarding benefits                                                                
     payable  from  individual  HRA  accounts.  The  new  AS                                                                    
     39.35.537 (proposed  peace officer and  firefighter HRA                                                                    
     found in section 29) is added  as a plan from which the                                                                    
     administrator may deduct the cost of monthly premiums.                                                                     
                                                                                                                                
     Section  11: Amends  AS  39.30.495  which contains  the                                                                
     definitions  for  the HRA  statutes.  Adds  the new  AS                                                                    
     39.35.537 (proposed  peace officer and  firefighter HRA                                                                    
     found  in section  29) to  the definition  of "eligible                                                                    
     person" found in AS 39.30.495(5).                                                                                          
                                                                                                                                
     Section  12: Amends  AS 39.35.095  which  lays out  the                                                                
     applicability  of the  defined benefit  retirement plan                                                                    
     statutes  found in  AS  39.35.095-39.35.680 to  include                                                                    
     peace  officers and  firefighters participating  in the                                                                    
     defined benefit plan after June 30, 2006.                                                                                  
                                                                                                                                
1:31:38 PM                                                                                                                    
                                                                                                                                
CHAIR KREISS-TOMKINS surmised that in effect, the bill                                                                          
mechanically [piggybacks]" on the extant statutes pertaining to                                                                 
HRA.                                                                                                                            
                                                                                                                                
MS. SORUM-BIRK confirmed.                                                                                                       
                                                                                                                                
1:31:51 PM                                                                                                                    
                                                                                                                                
MS. SORUM-BIRK continued with the sectional analysis of HB 55,                                                                  
which read:                                                                                                                     
                                                                                                                                
     Section  13: Conforming  amendment  to AS  39.35.160(a)                                                                
     which  outlines  the  employee contribution  rates  for                                                                    
     peace officers  or firefighters  hired before  June 30,                                                                    
     2006,  excepting  the  new AS  39.35.160(e)  (found  in                                                                    
     section 14).  Deletes material on  page 9,  lines 18-25                                                                    
     that is reproduced  in a new AS  39.35.160(f) (found in                                                                    
     section 14).                                                                                                               
                                                                                                                                
     Section  14: Creates  new subsection  AS 39.35.160  (e)                                                                
     setting  the  employee   contribution  rate  for  peace                                                                    
     officers and firefighters  participating in the defined                                                                    
     benefit plan after  June 30, 2006, at 8  percent of the                                                                    
     employee's compensation.  The ARM board may  adjust the                                                                    
     contribution rate from 8 to  10 percent. Subsection (f)                                                                    
     reproduces  the deleted  material  from  page 9,  lines                                                                    
     lines 18-25  in section 13  of the bill,  ensuring that                                                                    
     contributions   conform  with   the  federal   Internal                                                                    
     Revenue Code.                                                                                                              
                                                                                                                                
     Section 15:  Amends AS 39.35.255(a)  by referring  to a                                                                
     new subsection  (i) and  by doing  so makes  clear that                                                                    
     the total  employer contribution remains 22%  for peace                                                                    
     officer and fire fighter employers.                                                                                        
                                                                                                                                
     Section 16:  Amends AS 39.35.255(d) and  is a technical                                                                
     conforming  change to  accommodate  the new  subsection                                                                    
     (i) of this statute.                                                                                                       
                                                                                                                                
     Section 17:  Amends AS 39.35.255(e) and  is a technical                                                                
     conforming  change to  accommodate  the new  subsection                                                                    
     (i) of this statute.                                                                                                       
                                                                                                                                
     Section  18: Adds  new subsections  (i) and  (j) to  AS                                                                
     39.35.255.                                                                                                                 
     ?  New  subsection  (i)  establishes  one  of  the  new                                                                    
     features  that aim  to make  this new  tier financially                                                                    
     viable. It specifies that  the employer contribution to                                                                    
     the  employee retirement  benefit will  remain constant                                                                    
     at  12%.  And,  that  the difference  between  the  12%                                                                    
     contribution  dedicated to  employee  benefits and  the                                                                    
     22% total  employer contribution will be  available for                                                                    
     the past liability of the PERS system.                                                                                     
     ?  New subsection  (j) states  that the  ARM board  may                                                                    
     increase  the  employer  contribution to  the  employee                                                                    
     retirement  benefit based  on the  board's decision  to                                                                    
     increase  employee contributions.  This is  also a  new                                                                    
     feature, or  "lever," added to  help make the  new tier                                                                    
     financially viable.                                                                                                        
                                                                                                                                
MS.  SORUM-BIRK   said  Section  18  is   noteworthy  because  it                                                               
specifies that  under the  new tier, 12  precent of  the employer                                                               
contribution  would  go the  employee  and  10 percent  would  go                                                               
toward  the unfunded  liability.   The  bill also  inserts a  new                                                               
subsection (j), which  would allow the ARM Board  to increase the                                                               
employer contribution if the employee contribution increased.                                                                   
                                                                                                                                
1:33:40 PM                                                                                                                    
                                                                                                                                
CHAIR  KREISS-TOMKINS  asked if  the  unfunded  liability that  a                                                               
portion  of the  employer contribution  would go  towards is  the                                                               
existing unfunded liability from Tiers I, II, and III.                                                                          
                                                                                                                                
MS. SORUM-BIRK confirmed.                                                                                                       
                                                                                                                                
CHAIR KREISS-TOMKINS asked whether  Tier V beneficiaries would be                                                               
disproportionately  subsidizing the  unfunded liability  compared                                                               
to DB [defined benefit] beneficiaries in previous tiers.                                                                        
                                                                                                                                
MS.  SORUM-BIRK  clarified  that  she  had  been  discussing  the                                                               
employer  contribution.     She  said  the   8  percent  employee                                                               
contribution  goes  toward  retirement, which  would  not  change                                                               
under the  new tier.   What  would change, she  said, is  how the                                                               
employer  allocates their  22 percent.   Currently,  the employer                                                               
still contributes 22 percent, but  only 5 percent goes toward the                                                               
employee.    She  indicated  that Tier  IV  employees  receive  a                                                               
smaller amount of the [employer contribution].                                                                                  
                                                                                                                                
CHAIR  KREISS-TOMKINS asked  whether  the creation  of  a Tier  V                                                               
would  benefit  the  state's   long-term  unfunded  liability  by                                                               
reducing cost to future legislators.                                                                                            
                                                                                                                                
MS.  SORUM-BIRK said  the state  would be  putting slightly  less                                                               
toward the unfunded liability [with the creation of a Tier V].                                                                  
                                                                                                                                
1:36:42 PM                                                                                                                    
                                                                                                                                
MS.   SORUM-BIRK  added   that   currently,  the   bill  has   an                                                               
indeterminate fiscal  note; however, for the  previous version of                                                               
the bill,  House Bill 79,  the state estimated that  $3.5 million                                                               
less would be paid toward the unfunded liability per year.                                                                      
                                                                                                                                
CHAIR  KREISS-TOKINS asked  if the  legislature [would  be paying                                                               
$3.5 million less per year toward the unfunded liability].                                                                      
                                                                                                                                
MS. SORUM-BIRK answered yes.                                                                                                    
                                                                                                                                
CHAIR  KREISS-TOMKINS surmised  that  in regard  to his  previous                                                               
question,   future  legislatures   would   need  to   appropriate                                                               
incrementally less if this bill were to pass.                                                                                   
                                                                                                                                
MS. SORUM-BIRK  answered no.   She explained that the  bill would                                                               
cost  the state  about $3.5  million, which  would be  less money                                                               
paid toward the unfunded liability  annually.  She added that the                                                               
amount of the unfunded liability would not decrease as fast.                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON   added  that   the  amount   would  be                                                               
marginal,  relative  to  how  much   is  spent  on  the  unfunded                                                               
liability.                                                                                                                      
                                                                                                                                
1:38:20 PM                                                                                                                    
                                                                                                                                
MR.  PUCKETT  pointed  out  that  all the  tiers  in  the  public                                                               
employees' retirement  system are valued separately  on an annual                                                               
basis by the  actuary.  The actuary then  consolidates to produce                                                               
a single  normal cost and  a single  service rate for  the entire                                                               
plan.                                                                                                                           
                                                                                                                                
1:40:22 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  TARR  asked  if  each  successive  tier  is  less                                                               
generous  in the  benefit offered,  such that  "the newest  tiers                                                               
proportionately  may   be  contributing   only  because   of  the                                                               
difference in the benefit."                                                                                                     
                                                                                                                                
MR. PUCKETT acknowledged that in an  effort to reduce the cost to                                                               
the  state  and  participating   employers,  benefits  have  been                                                               
reduced with each consecutive tier.                                                                                             
                                                                                                                                
REPRESENTATIVE  TARR  pointed  out   that  each  successive  tier                                                               
contributes  proportionally   more  to  the   unfunded  liability                                                               
because the overall benefit is lessened.                                                                                        
                                                                                                                                
CHAIR KREISS-TOMKINS  expressed his interest in  the "anatomy" of                                                               
the   unfunded  liability   and   how   much  is   proportionally                                                               
attributable to Tier I versus Tire II versus Tier III.                                                                          
                                                                                                                                
1:43:38 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  EASTMAN proposed  a scenario  in which  the state                                                               
found  a  "pot of  money"  and  paid  the unfunded  liability  to                                                               
completion.   He  asked  if that  would have  any  affect on  the                                                               
employees under Tier IV.                                                                                                        
                                                                                                                                
MR. PUCKETT  said the benefits  are locked in statute  and cannot                                                               
be  diminished due  to constitutional  protection.   He explained                                                               
that if  the state found a  pot of money  and used it to  pay off                                                               
the unfunded liability, the contribution  rate from the employers                                                               
would be reduced as there would  not be an actuarial necessity to                                                               
charge the current rate.                                                                                                        
                                                                                                                                
1:46:08 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE EASTMAN  asked how much the  unfunded liability is                                                               
now  and when  it  would be  paid to  completion  on the  current                                                               
trajectory.   Further,  he  asked for  a  comparison between  the                                                               
proposed plan's  trajectory and the current  trajectory.  Lastly,                                                               
should the  bill pass,  he asked  how much it  would cost  if the                                                               
debt were carried for a longer period of time.                                                                                  
                                                                                                                                
MS.  SORUM-BIRK   offered  to   follow  up  with   the  requested                                                               
information.                                                                                                                    
                                                                                                                                
1:47:56 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KAUFMAN  referencing the  pie chart  on page  7 of                                                               
the DPS  Commissioner Employment  Engagement Survey  [included in                                                               
the  committee  packet],  noted   that  9  percent  of  employees                                                               
indicated  that  a defined  benefit  retirement  package was  one                                                               
factor that would most improve  their employment.  He pointed out                                                               
that a higher  percentage of employers chose  other factors, such                                                               
as improve department leadership  and culture; more training; and                                                               
increased staffing.  He asked if  [HB 55] is the lever that would                                                               
improve retention and recruitment.                                                                                              
                                                                                                                                
MS.  SORUM-BIRK  said  this  is  one  lever  that  would  improve                                                               
retention   and  recruitment,   which  has   been  requested   by                                                               
individuals in  the public safety  field who are  being recruited                                                               
by states with  better retirement plans.  She  further noted that                                                               
the cost  of retention and  recruitment in Alaska is  high, which                                                               
would  be  discussed further  in  a  future presentation  by  the                                                               
Alaska  Professional Fire  Fighters  Association  (AKPFFA).   She                                                               
stated that [a defined benefit  retirement plan] might not be the                                                               
only way  to improve  retention and recruitment,  but it's  a big                                                               
part of it.                                                                                                                     
                                                                                                                                
REPRESENTATIVE  KAUFMAN  maintained   his  understanding  that  a                                                               
defined benefit  plan appeared to  be a minor lever  according to                                                               
the  DPS survey.    He  questioned what  else  could  be done  to                                                               
increase  employment   satisfaction  at  a  quicker   pace.    He                                                               
suggested that improving department  leadership and culture could                                                               
be "a  better bang for  the buck."  Additionally,  he recommended                                                               
focusing on low-cost factors, such  as alternate schedule options                                                               
and employee recognition programs to improve retention.                                                                         
                                                                                                                                
1:51:25 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON,   in  reference   to  the   pie  chart                                                               
identified on  page 7  of the  DPS survey,  pointed out  that the                                                               
separation of  opinion is not  large.   He relayed that  there is                                                               
"incredible passion"  about this issue.   However, he  noted that                                                               
the Alaska State Troopers (ASTs)  had expressed some concern that                                                               
the benefits [proposed under HB 55]  are not great enough, as the                                                               
proposed plan  would prohibit them from  drawing retirement until                                                               
age 55.   He reported that ASTs typically begin  their service at                                                               
a  younger  age;  consequently,  many  wish  they  could  collect                                                               
retirement at  age 45.  He  emphasized that the proposed  plan is                                                               
equipped with triggers  and mechanisms to maintain  solvency.  He                                                               
acknowledged the desire to return to  Tier I for groups that want                                                               
to retire earlier, but it would put the plan at risk of creating                                                                
an unfunded liability.                                                                                                          
                                                                                                                                
1:55:32 PM                                                                                                                    
                                                                                                                                
MS. SORUM-BIRK resumed the sectional analysis of HB 55, which                                                                   
read:                                                                                                                           
                                                                                                                                
     Section  19:  Amends  AS 39.35.282  regarding  employer                                                                
     contributions  for  medical benefits,  conforming  that                                                                    
     section  to   changes  in  the  bill   affecting  peace                                                                    
     officers  and firefighters  first participating  in the                                                                    
     defined benefit plan after June 30, 2006.                                                                                  
                                                                                                                                
     Section  20: Conforming  amendment  to AS  39.35.370(a)                                                                
     which  outlines the  years of  service requirements  to                                                                    
     become  eligible  for  retirement  benefits  under  the                                                                    
     defined   benefit  retirement   plan.  The   conforming                                                                    
     language    specifies   that    the   credit    service                                                                    
     requirements  in   subparagraphs  1-3  only   apply  to                                                                    
     persons  who  became  members of  the  defined  benefit                                                                    
     retirement plan prior to July 1, 2006.                                                                                     
                                                                                                                                
     Section  21:  Amends  AS  39.35.370  by  adding  a  new                                                                
     subsection (l)  detailing the service  requirements for                                                                    
     peace  officers and  firefighters participating  in the                                                                    
     defined benefit  plan after June 30,  2006. Members are                                                                    
     eligible for a normal retirement benefit:                                                                                  
     ?  At age  60  with  at least  five  years of  credited                                                                    
     service as a peace officer or firefighter, or                                                                              
     ? At age 55 with at  least 20 years of credited service                                                                    
     as a peace officer or firefighter.                                                                                         
                                                                                                                                
     Section   22:  Amends   AS  39.35.381   concerning  the                                                                
     alternative benefits for  elected public officials. The                                                                    
     new   AS   39.35.537   (proposed  peace   officer   and                                                                    
     firefighter HRA  found in section  29) is added  to the                                                                    
     list  of plans  that elected  public officials  are not                                                                    
     entitled to  under the alternative benefit  for elected                                                                    
     public officials.                                                                                                          
                                                                                                                                
     Section  23: Conforming  amendment  to AS  39.35.475(a)                                                                
     concerning   the  schedule   for   making  the   annual                                                                    
     postretirement   pension  adjustments   (PRPA),  making                                                                    
     those  payments subject  to the  exceptions in  the new                                                                    
     subsection (g) (found in section 25).                                                                                      
                                                                                                                              
     Section  24: Conforming  amendment  to AS  39.35.475(b)                                                                
     concerning    the    calculation    of    the    annual                                                                    
     postretirement   pension  adjustments   (PRPA),  making                                                                    
     those  payments  subject  to  the  new  subsection  (h)                                                                    
     (found in section 25).                                                                                                     
                                                                                                                              
     Section  25:  This  section contains  one  of  the  new                                                                
     features, or "levers," added to  help keep the new tier                                                                    
     financially viable.  The section  is intended  to allow                                                                    
     the ARM board to reduce  a benefit, the automatic post-                                                                    
     retirement  pension adjustment,  to keep  the new  tier                                                                    
     financially viable. The proposed new subsections:                                                                          
     ? Subsection (g) sets up  the adjustment feature of the                                                                    
     next subsection.                                                                                                           
     ? Subsection  (h) allows the  ARM board to  reduce PRPA                                                                    
     payments   to    peace   officers    and   firefighters                                                                    
     participating in  the defined  benefit plan  after June                                                                    
     30,  2006,  if  the  plan  has  an  unfunded  liability                                                                    
     greater than 10 percent  and clarifies that the feature                                                                    
     can be  used if the  liability to PERS  is attributable                                                                    
     to the employees of this new tier.                                                                                         
                                                                                                                                
     Section  26: Conforming  amendment  to AS  39.35.535(a)                                                                
     concerning  the medical  benefits  for employees  under                                                                    
     the  defined  benefit  retirement   plan.  Adds  a  new                                                                    
     subsection (g)  (found in section  28) as  an exception                                                                    
     to   the  defined   benefit  retirement   plan  medical                                                                    
     benefits   for   peace    officers   and   firefighters                                                                    
     participating in  the defined  benefit plan  after June                                                                    
     30, 2006.                                                                                                                  
                                                                                                                                
     Section  27: Conforming  amendment  to AS  39.35.535(c)                                                                
     concerning  the major  medical  insurance coverage  for                                                                    
     those  under the  defined benefit  retirement plan.  It                                                                    
     specifies  that  the  section  only  applies  to  those                                                                    
     members or  their surviving spouse who  joined prior to                                                                    
     July 1, 2006.                                                                                                              
                                                                                                                                
     Section  28:  Amends  AS  39.35.535  by  adding  a  new                                                                
     subsection   (g)  that   states   peace  officers   and                                                                    
     firefighters participating in  the defined benefit plan                                                                    
     after June 30, 2006, are  to receive benefits under the                                                                    
     HRA as  allowed under  the new  AS 39.25.537  (found in                                                                    
     section 29).                                                                                                               
                                                                                                                                
     Section 29:  Adds a new  section AS  39.35.537 creating                                                                
     an  HRA   medical  benefit   for  peace   officers  and                                                                    
     firefighters   first  participating   in  the   defined                                                                    
     benefit  plan   after  June   30,  2006.   The  section                                                                    
     specifies  the eligibility,  cost of  premiums for  the                                                                    
     major   medical    insurance,   and    procedures   for                                                                    
     participation.                                                                                                             
                                                                                                                                
     Section 30: Amends AS 39.35.680  (4) which contains the                                                                
     definitions  for the  defined  benefit retirement  plan                                                                    
     statutes.   Adds  a   new  paragraph   (F)  under   the                                                                    
     definition of "average monthly                                                                                             
     compensation"  that states  the  calculation for  peace                                                                    
     officers  and firefighters  first participating  in the                                                                    
     defined  benefit  plan after  June  30,  2006, will  be                                                                    
     based  on the  highest five  consecutive payroll  years                                                                    
     during the employee's career.                                                                                              
                                                                                                                                
     Section 31:  Conforming amendment to the  definition of                                                                
     "employer"  under  AS  39.35.680(18) to  include  peace                                                                    
     officers and firefighters  participating in the defined                                                                    
     benefit plan after June 30, 2006.                                                                                          
                                                                                                                                
     Section 32:  Conforming amendment to the  definition of                                                                
     "normal retirement"  under AS 39.35.680(26)  to include                                                                    
     AS 39.35.370(l) detailing  the service requirements for                                                                    
     peace  officers and  firefighters participating  in the                                                                    
     defined benefit plan after June 30, 2006.                                                                                  
                                                                                                                                
     Section  33:  Conforming   amendment  to  AS  39.35.720                                                                
     regarding  the membership  in the  defined contribution                                                                    
     retirement  system,  stating  that  all  employees  who                                                                    
     become  members on  or after  July 1,  2006, except  as                                                                    
     provided  in  AS 39.35.095,  are  part  of the  defined                                                                    
     contribution  plan, thus  excepting peace  officers and                                                                    
     firefighters participating in  the defined benefit plan                                                                    
     after June 30, 2006.                                                                                                       
                                                                                                                                
     Section  34:  Adds a  new  subsection  to AS  39.35.750                                                                
     regarding   employer  contributions   to  the   defined                                                                    
     contribution    retirement    plan,    stating    those                                                                    
     contribution  requirements   do  not  apply   to  peace                                                                    
     officers and firefighters  participating in the defined                                                                    
     benefit  plan  after  June  30,  2006,  whose  employer                                                                    
     contribution  requirements  are  found in  the  new  AS                                                                    
     39.35.255(i) (found in section 18).                                                                                        
                                                                                                                                
     Section 35:  Adds a new  section to the  uncodified law                                                                
     of  the State  of  Alaska allowing  peace officers  and                                                                    
     firefighters hired  after June 30, 2006  and before the                                                                    
     bill's effective date  to elect, within 90  days of the                                                                    
     effective  date  of  this section,  to  transfer  their                                                                    
     contributions to their  defined contribution retirement                                                                    
     plan  to the  defined  benefit  retirement plan.  Those                                                                    
     transfers  will be  used to  purchase credited  service                                                                    
     under  the  defined  benefit   retirement  plan  on  an                                                                    
     actuarially equivalent basis set by the ARM board.                                                                         
                                                                                                                                
     Section 36:  Adds a new  section to the  uncodified law                                                                
     of the State  of Alaska creating procedures  set out by                                                                    
     the  Department  of  Administration  for  employees  to                                                                    
     transition  their   contributions  under   the  defined                                                                    
     contribution  retirement plan  to  the defined  benefit                                                                    
     retirement  plan. This  section  also  states that  the                                                                    
     election  to transition  from the  defined contribution                                                                    
     to the  defined benefit  plan is irrevocable.  If there                                                                    
     is  a difference  between the  actual years  of service                                                                    
     and the  equivalent years of  service calculated  by an                                                                    
     employee's   contributions  to   the  defined   benefit                                                                    
     retirement plan, then  the Department of Administration                                                                    
     will  allow  persons  to buy  the  difference.  If  the                                                                    
     equivalent  years  of  service  are in  excess  of  the                                                                    
     actual years of service,  then the excess remains under                                                                    
     the defined contribution retirement plan.                                                                                  
                                                                                                                                
     Section 37:  Adds a new  section to the  uncodified law                                                                
     of the  State of  Alaska instructing the  Department of                                                                    
     Administration   commissioner    to   make   conforming                                                                    
     regulations.                                                                                                               
                                                                                                                                
     Section  38: States  that  section  37 takes  immediate                                                                
     effect under AS 01.10.070(c).                                                                                              
                                                                                                                                
     Section 39: Sets effective date of July 1, 2021                                                                        
                                                                                                                                
2:00:43 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE EASTMAN sought clarification on the significance                                                                 
of the [June 30,] 2006 date that is present in various sections                                                                 
of the bill.                                                                                                                    
                                                                                                                                
MS.  SORUM-BIRK said  Tier  IV went  into effect  in  2006.   She                                                               
explained  that throughout  the  bill, the  language in  question                                                               
specifies  what  applies  to individuals  who  join  the  defined                                                               
benefit after 2006.                                                                                                             
                                                                                                                                
REPRESENTATIVE EASTMAN  asked for verification that  the language                                                               
in question separates Tier IV from the other three tiers.                                                                       
                                                                                                                                
MS. SORUM-BIRK  clarified that the language  indicates that there                                                               
is a new defined benefit tier that would exist after 2006.                                                                      
                                                                                                                                
REPRESENTATIVE EASTMAN asked whether  an individual could receive                                                               
credit for previous work if he/she opts into the new plan.                                                                      
                                                                                                                                
MS. SORUM-BIRK  stated that anyone  under Tier IV could  buy into                                                               
the new tier;  however, it would be  significantly more expensive                                                               
for those  that had served longer.   She expounded that  it would                                                               
cost  more to  buy into  the new  tier for  a person  who started                                                               
his/her career  in 2006; further,  he/she may not get  credit for                                                               
every year  of service because  it's calculated by the  ARM Board                                                               
at a  certain rate, which is  outlined in Section 35  and Section                                                               
36 of  the bill.  She  conveyed that to  buy in, there is  a base                                                               
percentage and an additional annual percentage.                                                                                 
                                                                                                                                
2:03:15 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  EASTMAN considered  a scenario  in which  a full-                                                               
time, Tier IV  employee started his/her career on  June 30, 2006.                                                               
He questioned  whether all  years would  be eligible  [for credit                                                               
under the new plan] or if something else determines eligibility.                                                                
                                                                                                                                
REPRESENTATIVE  JOSEPHSON said  they  would be  eligible for  the                                                               
purpose  of  running  the calculation;  however,  the  individual                                                               
would not  receive 15 years  of service under  the new tier.   He                                                               
approximated that 11 or 12 years  of the 15 would be transferred.                                                               
He  reiterated  that  under  the  new  plan,  there  would  be  a                                                               
difference in cost, which is  mostly a reflection of factors such                                                               
as the later  age of retirement; reduction mechanisms  if the ARM                                                               
Board  does not  see  sufficient returns;  and different  medical                                                               
provisions from Tiers  I-III.  He stated  that the aforementioned                                                               
factors allow  for an attractive  plan that would keep  people in                                                               
Alaska  for  the  entirety  of  their career.    He  returned  to                                                               
Representative Kaufman's question and  noted that in reference to                                                               
the DPS survey,  23 percent of employees indicated  that a return                                                               
to a defined benefit would help retention within the department.                                                                
                                                                                                                                
2:06:42 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE TARR opined that the  minimum retirement age of 55                                                               
with 20 years  of service is sensible, but the  retirement age of                                                               
60 with 5  years of service seems overly  generous in comparison.                                                               
She asked for further clarification on that provision.                                                                          
                                                                                                                                
CHAIR  KREISS-TOMKINS echoing  Representative Tarr's  sentiments,                                                               
asked if  an individual who  became a  firefighter at age  55 and                                                               
retired at age 60 would receive a defined benefit pension.                                                                      
                                                                                                                                
MS. SORUM-BIRK explained that the  provision in question would be                                                               
for a  person "who worked  five or more  years in the  system and                                                               
was vested."  She added that  the individual would not be able to                                                               
access his/her retirement until the age of 60 rather than 55.                                                                   
                                                                                                                                
REPRESENTATIVE  TARR  surmised that  under  that  scenario, if  a                                                               
person aged  25 worked  five years and  then left  state service,                                                               
he/she would be eligible [for retirement] at age 60.                                                                            
                                                                                                                                
MS. SORUM-BIRK deferred to Mr. Miranda.                                                                                         
                                                                                                                                
2:08:29 PM                                                                                                                    
                                                                                                                                
PAUL  MIRANDA,  President,   Alaska  Professional  Fire  Fighters                                                               
Association, in  response to  Representative Tarr,  answered yes.                                                               
He  said if  someone  had five  years of  service  and then  left                                                               
his/her  public  service  job,  that  person  would  collect  two                                                               
percent  of the  final average  salary  for those  five years  of                                                               
service after age 60.  He  noted that the benefit would likely be                                                               
quite small.                                                                                                                    
                                                                                                                                
REPRESENTATIVE   EASTMAN  asked   to   be   pointed  to   further                                                               
information  on  this  provision  to compare  the  difference  in                                                               
benefit per age of retirement.                                                                                                  
                                                                                                                                
MS.  SORUM-BIRK stated  that the  calculation  referenced by  Mr.                                                               
Miranda exists under AS 39.35.370(c), which read as follows:                                                                    
                                                                                                                                
     (c) The  monthly amount of  a retirement benefit  for a                                                                    
     peace officer  or fire  fighter is  two percent  of the                                                                    
     average  monthly   compensation  times  the   years  of                                                                    
     credited service  through 10  years, plus two  and one-                                                                    
     half percent of the  average monthly compensation times                                                                    
     the  years of  service  over 10  years.  For all  other                                                                    
     employees it is                                                                                                            
                                                                                                                                
2:10:42 PM                                                                                                                    
                                                                                                                                
MS.  SORUM-BIRK  introduced  a  PowerPoint  presentation,  titled                                                               
"House Bill  55" [hard  copy included  in the  committee packet].                                                               
She began on slide 3,  which highlighted previous versions of the                                                               
bill going back to the Twenty-Eighth Alaska State Legislature.                                                                  
                                                                                                                                
CHAIR KREISS-TOMKINS  inquired about  the differences  that exist                                                               
in HB 55 compared to House  Bill 79 [proposed in the Thirty-First                                                               
Alaska State Legislature].                                                                                                      
                                                                                                                                
MS. SORUM-BIRK  said the only  difference is  that the name  of a                                                               
trust fund  was changed.  She  added that the mechanics  of HB 55                                                               
are the same as in House Bill 79.                                                                                               
                                                                                                                                
2:11:49 PM                                                                                                                    
                                                                                                                                
MS.  SORUM-BIRK  resumed  the  presentation  on  slide  4,  which                                                               
detailed Tier IV.   She explained that Tier IV is  a 401A made up                                                               
of  13 percent  payroll  -  8 percent  from  the  employee and  5                                                               
percent from the  employer.  The HRA is 3  percent of the average                                                               
PERS  salary.    The  plan  includes  Medicare  coverage  at  the                                                               
eligible  age or  with  25  years of  service  for public  safety                                                               
[workers];  further, disability  in Tier  IV is  similar to  Tier                                                               
III.   She  additionally noted  that Tier  IV employees  have the                                                               
401A  in  addition  to  SBS [Supplemental  Annuity  Plan]  -  the                                                               
state's "opt-out"  for Social Security  - offering  them slightly                                                               
more  security than  municipal employees,  many of  whom are  not                                                               
covered by  Social Security or  SBS.  She  turned to slide  5 and                                                               
reviewed   three   independent   evaluations   that   all   found                                                               
inadequacies  in  Tier  IV:  William   Fornia  of  Pension  Trust                                                               
Advisors  indicated that  Tier  IV would  replace  31 percent  of                                                               
income  after  25  years;   Department  of  Administration  (DOA)                                                               
estimated 38.5 percent of income  replacement after 30 years; and                                                               
Bob Mitchell, State  of Alaska CIO, put the probability  of a 25-                                                               
year public safety employee replacing  70 percent of income in 30                                                               
years at 6 percent and a 30-year employee at 22 percent.                                                                        
                                                                                                                                
2:14:30 PM                                                                                                                    
                                                                                                                                
MS.  SORUM-BIRK  continued  to slide  6,  which  illustrated  the                                                               
following issues  with the Tier IV  retirement plan: recruitment,                                                               
retention   costs,  workers'   compensation  costs,   operational                                                               
capabilities, and  unforeseen costs.   She noted  that unforeseen                                                               
costs include  overtime payments  caused by  understaffing, which                                                               
municipalities or the state end up  paying for.  She reviewed the                                                               
cost  containment  measures  in  HB 55  on  slide  7,  including:                                                               
significantly  reduced  benefit  from  Tier III;  plan  built  on                                                               
conservative  assumptions  with   reasonable  costs;  requires  a                                                               
steady level  of contributions from  both employee  and employer;                                                               
mechanisms for  dealing with adverse experience;  and shared risk                                                               
between employees, employers, and retirees.                                                                                     
                                                                                                                                
2:16:11 PM                                                                                                                    
                                                                                                                                
MS.  SORUM-BIRK  moved to  slide  8  and outlined  the  following                                                               
benefit reductions  in Tier  V compared to  the Tier  III defined                                                               
benefit: no pre-Medicare coverage;  elimination of the 10 percent                                                               
cost of  living allowance (COLA)  on pensions;  final calculation                                                               
based on five years as opposed  to three years; require a minimum                                                               
age of  55 with  20 years  of service  to collect  full benefits.                                                               
Slide 9 summarized  the proposed plan's best  practices: built on                                                               
a  lower expected  rate of  return; requires  steady contribution                                                               
from employees  and employers;  allows the  employee contribution                                                               
to go up to  10 percent but not fall below  8 percent; allows the                                                               
PRPA  (inflation  proofing) to  be  withheld  when funding  falls                                                               
below  90  percent;  replicates   Tier  IV  defined  contribution                                                               
medical; reasonable employer costs.                                                                                             
                                                                                                                                
2:17:43 PM                                                                                                                    
                                                                                                                                
MS.  SORUM-BIRK  continued to  slide  10,  which illustrated  the                                                               
state's  actuarial  analysis  of  the previous  version  of  this                                                               
legislation, House Bill 79, Version  G, which emphasized that the                                                               
Additional   State  Contribution   would  increase   because  the                                                               
percentage  being deposited  to the  defined benefit  trust would                                                               
decrease  from 12.2  percent to  10 percent.   She  further noted                                                               
that  the actuaries  estimated that  $3.5 million  less would  be                                                               
paid toward the defined benefit  trust annually.  Slide 12 showed                                                               
a graph that compared the  current cost of replacing employees to                                                               
House Bill 79 costs.                                                                                                            
                                                                                                                                
CHAIR  KREISS-TOMKINS,   referencing  slide  12,  asked   if  DOT                                                               
referred to Department of Transportation & Public Facilities.                                                                   
                                                                                                                                
MS. SORUM-BIRK  clarified that DOT  signified Airport  Police and                                                               
Fire.                                                                                                                           
                                                                                                                                
CHAIR KREISS-TOMKINS asked what DOC denoted.                                                                                    
                                                                                                                                
MS. SORUM-BIRK answered Department of Corrections.                                                                              
                                                                                                                                
2:19:56 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON relayed that  the turnover within DOC is                                                               
"horrendous."                                                                                                                   
                                                                                                                                
CHAIR  KREISS-TOMKINS expressed  concern with  the analysis.   He                                                               
opined that  there's rarely  a fall through  in reduction  of the                                                               
preempted  costs.   He added  that he  likes social  impact bonds                                                               
because  they codify  the relationship  of long-term  savings and                                                               
require  them to  materialize.   He  said he  is  inclined to  be                                                               
supportive of the  bill; however, he noted his  desire for budget                                                               
decrements  in DPS,  DOT, and  DOC in  five years.   Further,  he                                                               
acknowledged that there are decreased  costs that materialize but                                                               
conveyed  "little  faith"  that  the  Thirty-Fifth  Alaska  State                                                               
Legislature would have the experience if  HB 55 were to pass this                                                               
year.                                                                                                                           
                                                                                                                                
2:21:34 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  EASTMAN  sought   further  clarification  on  the                                                               
implication of slide 11.                                                                                                        
                                                                                                                                
MS.  SORUM-BIRK explained  that slide  11 estimated  how much  it                                                               
costs the state in training costs  to replace one, two, and three                                                               
percent  of the  public safety  workforce.   She  noted that  the                                                               
actual amounts are higher than one, two, or three percent.                                                                      
                                                                                                                                
2:22:54 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KAUFMAN asked if that is one percent per year.                                                                   
                                                                                                                                
MS. SORUM-BIRK confirmed [that slide 11 examined annual costs].                                                                 
                                                                                                                                
2:23:06 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE EASTMAN  asked how  Alaska compares to  the states                                                               
and localities to which [public safety] employees relocate.                                                                     
                                                                                                                                
MS.  SORUM-BIRK  said  Alaska  is  not  very  competitive.    She                                                               
deferred to Mr. Miranda for further explanation.                                                                                
                                                                                                                                
CHAIR  KREISS-TOMKINS noted  that Mr.  Miranda would  present the                                                               
authoritative  analysis on  Alaska's comparative  competitiveness                                                               
at a future hearing.                                                                                                            
                                                                                                                                
2:23:58 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE EASTMAN  inquired about  the legal liability  if a                                                               
state  employee [who  was not  a public  safety worker]  sued the                                                               
state for access to Tier V.                                                                                                     
                                                                                                                                
MS. SORUM-BIRK  stated that legally, public  safety retirement is                                                               
treated   differently.     She  explained   that  public   safety                                                               
employment  is based  on a  20-year standard;  further, different                                                               
tiers pay  different percentages and receive  different benefits,                                                               
which  other public  employees do  not receive.   She  emphasized                                                               
that public  safety employees have different  retirement benefits                                                               
in statute.                                                                                                                     
                                                                                                                                
REPRESENTATIVE JOSEPHSON  stated his understanding that  there is                                                               
no liability,  noting that [the  state] contracts  with different                                                               
bargaining units for different benefits.   He added that there is                                                               
real concern  about the  lack of  defined benefits  for teachers,                                                               
spill  prevention  response, and  other  agencies.   However,  he                                                               
expressed his desire  to first see whether  public safety workers                                                               
secure  this  benefit.    He  emphasized  that  HB  55  is  about                                                               
providing a defined benefit to  first responders, so they stay in                                                               
Alaska;  further,   to  prevent  other  states   from  recruiting                                                               
Alaska's workers and benefiting from them.                                                                                      
                                                                                                                                
2:27:22 PM                                                                                                                    
                                                                                                                                
CHAIR KREISS-TOMKINS announced HB 55 was held over.                                                                             

Document Name Date/Time Subjects
HB 55 Supporting Document- State Actuary Report Narrative prepared 2020 2.24.21.pdf HSTA 3/13/2021 1:00:00 PM
HB 55
HB 55 Supporting Documents- PERS Public Safety Plan Comparison 2.24.21.pdf HSTA 3/13/2021 1:00:00 PM
HB 55
HB 55 Additional Information DPS Recruitment-Retention Plan Overview 2.24.21.pdf HSTA 3/13/2021 1:00:00 PM
HB 55
HB55 Additional Information- DPS Commissioned Employee Engagement Survey Results Overview December 2017 2.24.21.pdf HSTA 3/13/2021 1:00:00 PM
HB 55
HB55 Hearing Request State Affairs 2.24.21.pdf HSTA 3/13/2021 1:00:00 PM
HB 55
HB55 Sponsor Statement 2.24.21.pdf HSTA 3/13/2021 1:00:00 PM
HB 55
HB55 Sectional Analysis 2.24.21.pdf HSTA 3/13/2021 1:00:00 PM
HB 55
HB55 version A.PDF HSTA 3/13/2021 1:00:00 PM
HB 55
HB 55 Supporting Document- Actuarial Update.pdf HSTA 3/13/2021 1:00:00 PM
HB 55
HB 55 Fiscal Note.pdf HSTA 3/13/2021 1:00:00 PM
HB 55
HB 55 Letter of Support 3.6.21 Crockett.pdf HSTA 3/13/2021 1:00:00 PM
HB 55
HB 55 Letter of Support 3.7.21 Cottle.pdf HSTA 3/13/2021 1:00:00 PM
HB 55
HB 55 Letter of Support 3.9.21 Kiewik.pdf HSTA 3/13/2021 1:00:00 PM
HB 55
HB 55 Letter of Support 3.9.21 Kressly.pdf HSTA 3/13/2021 1:00:00 PM
HB 55
HB 55 Letter of Support 3.9.21 Simonds.pdf HSTA 3/13/2021 1:00:00 PM
HB 55
HB55 Letter of Support 2.22.21 Lex.pdf HSTA 3/13/2021 1:00:00 PM
HB 55
HB 55 Emails of Support 2.24.21.pdf HSTA 3/13/2021 1:00:00 PM
HB 55
HB 55 Emails of Support 3.3.21.pdf HSTA 3/13/2021 1:00:00 PM
HB 55
HB 55 Letter of Support 2.19.21 Hettrick Anc Fire Dept.pdf HSTA 3/13/2021 1:00:00 PM
HB 55
HB 55 Letter of Support 2.22.21 Doll Anc Police Dept.pdf HSTA 3/13/2021 1:00:00 PM
HB 55
HB 55 Letter of Support 2.22.21 Huf.pdf HSTA 3/13/2021 1:00:00 PM
HB 55
HB 55 Letter of Support 3.4.21 Gallier.pdf HSTA 3/13/2021 1:00:00 PM
HB 55
HB 55 Letter of Support 3.5.21 Saari.pdf HSTA 3/13/2021 1:00:00 PM
HB 55
HB 55 Presentation 1- Overview- Final 3.12.21 .pdf HSTA 3/13/2021 1:00:00 PM
HB 55
HB 55 Presentation 2- Recruitment and Retention- Miranda 3.12.21.pdf HSTA 3/13/2021 1:00:00 PM
HB 55
HB55 Letter of Support 3.13.21 Pavadore.pdf HSTA 3/13/2021 1:00:00 PM
HB 55
HB 55 Emails of Support 3.13.21.pdf HSTA 3/13/2021 1:00:00 PM
HB 55