02/10/2011 01:30 PM Senate LABOR & COMMERCE

           SB  38-POLICE & FIREFIGHTER DEATH BENEFITS                                                                       
                                                                                                                                
1:31:15 PM                                                                                                                    
CHAIR DENNIS EGAN announced SB 38 to be up for consideration.                                                                   
                                                                                                                                
SENATOR  KEVIN  MEYER,  sponsor  of  SB  38,  said  this  measure                                                               
provides a  one-time payment of  $100,000 for a  surviving spouse                                                               
or dependent  children of the  peace officer or fire  fighter who                                                               
dies  in the  line of  duty. The  benefit would  come out  of the                                                               
pension fund  that that  members already pay  into. No  new state                                                               
dollars are  anticipated to fund this  program. The beneficiaries                                                               
would  be  the  fire  fighters, police  officers  and  others  in                                                               
similar positions that pay into the  PERS program. This is a one-                                                               
time  benefit that  would  help  families who  must  deal with  a                                                               
substantial loss  of income, expenses (including  funeral costs),                                                               
travel  and the  aftermath of  a tragedy.  Fortunately, not  many                                                               
police officers or fire fighters die  in the line of duty, but it                                                               
does happen.                                                                                                                    
                                                                                                                                
1:32:46 PM                                                                                                                    
SENATOR DAVIS joined the committee.                                                                                             
                                                                                                                                
BRIAN PARTCH, Alaska  Professional Firefighters Association, said                                                               
he was available to answer questions.                                                                                           
                                                                                                                                
MIKE BARNHILL, Deputy  Commissioner, Department of Administration                                                               
(DOA), reviewed  the fiscal note  for SB  38. A letter  from Buck                                                               
Consultants,  the state's  actuary,  was  attached. He  explained                                                               
that AS 42.08.036  requires getting an actuarial  analysis when a                                                               
bill  impacts the  state's retirement  system. Because  this bill                                                               
would offer  members of PERS  with both defined benefit  (DB) and                                                               
defined  contribution (DC)  plans  a new  retirement benefit,  it                                                               
creates  a  modest fiscal  note.  Buck  Consultants indicates  an                                                               
additional $140,000 for the FY13  DB plan that increases modestly                                                               
going forward and  an additional cost of $35,000 for  the DC plan                                                               
that also increase  slightly going forward. The  two figures were                                                               
added for purposes of the fiscal note.                                                                                          
                                                                                                                                
1:36:41 PM                                                                                                                    
SENATOR PASKVAN  asked what the  actuarial death rate is  and how                                                               
those affect the base rate.                                                                                                     
                                                                                                                                
MR. BARNHILL responded  that he is not an  actuary, but generally                                                               
he thought  the actuary  looks at the  historical payment  of the                                                               
plan had it been  in place for a number of  years and projects it                                                               
forward.  That suggests  to him  that this  benefit would  tapped                                                               
about once  a year in  the DB plan, but  he was not  certain that                                                               
had been the actual experience. It  would be less for the DC plan                                                               
because the  membership at  this time  is smaller.  These numbers                                                               
might have some element of caution in them.                                                                                     
                                                                                                                                
SENATOR  PASKVAN asked  if the  fiscal impact  of this  change is                                                               
miniscule compared to the whole plan.                                                                                           
                                                                                                                                
MR.  BARNHILL answered  $100,000 is  a small  amount when  the DB                                                               
plan has $11 billion in assets.                                                                                                 
                                                                                                                                
CHAIR EGAN said hopefully it wouldn't be utilized.                                                                              
                                                                                                                                
1:39:06 PM                                                                                                                    
CHAIR EGAN closed public testimony and held SB 38.