Legislature(2011 - 2012)BELTZ 105 (TSBldg)
03/27/2012 01:30 PM Senate LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| Confirmations: | |
| SB211 | |
| SB143 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 211 | TELECONFERENCED | |
| *+ | SB 143 | TELECONFERENCED | |
| + | TELECONFERENCED |
SB 211-PERS CREDIT FOR MILITARY SERVICE
1:34:36 PM
CHAIR EGAN announced consideration of SB 211.
MICHAEL PAWLOWSKI, staff to Senator Lesil McGuire, sponsor of SB
211, said he would first like to explain the intent behind the
bill and then answer questions. He said that Senator McGuire had
worked with members of the peace officer and firefighter
community and recognizes that these are individuals that come to
the state to provide service to it in what are often very
dangerous jobs, and that the state looks to them to protect
life, health and safety.
He said it is a natural transition from military service to
public safety fields and under current Alaska statute a member
who is a peace officer or a firefighter is able to purchase up
to five years of credit towards retirement for their previous
military service. The problem in current law is that the
purchase of that credit doesn't include the medical benefits
that are available to someone that retires between the point of
their retirement and their Medicare eligibility. So the intent
of the legislation is to allow a purchaser to use those up to
five years' credit toward satisfying the requirement for medical
benefits under AS 39.35.535.
MR. PAWLOWSKI explained that section 1 of the current version of
the bill provides an exception to the normal prohibition under
this current purchase of retirement (that says subject to (j) of
this section, the credited service created under this section
may not be used to satisfy the credited service requirements for
normal retirement). That essentially means that you can purchase
the credit, but the credit does not apply to medical benefits
because they are in a separate part of the statute.
1:36:51 PM
The attempt in the original version, in section 2, was to
provide an exemption for this. However in working with the
department, they found this creates a significant financial
unfunded liability to the state and that was not the intent of
the sponsor or the people who brought the bill to the sponsor's
attention. The intent is for the person purchasing the service
to bear that extra cost. The goal is to get a fair deal for the
purchaser while not putting an undue burden on the state.
SENATOR GIESSEL asked him to clarify the age of retirement.
MR. PAWLOWSKI answered that the age varies and someone from the
Public Service Employees Association (PSEA) might be able to
answer that better. The sponsor's intent was the issue in AS
39.35.535(c), specifically where it says 25 years of credited
service as a peace officer, and passing this would allow a
person to apply five years of previous military service making
that 20 years. The rationale is benefiting someone who has gone
through the physically demanding work of serving their country
and then takes a physically demanding position to serve their
state. Recognizing the unique situation they are under within
the system, the sponsor wanted to create a win/win for both them
and the state.
SENATOR GIESSEL asked if this 25 years is also applicable to
firefighters.
MR. PAWLOWSKI replied he understood that the definition of peace
officer includes firefighter.
1:40:13 PM
SENATOR MENARD moved to adopt CSSB 211( ), version 27-LS1398\M.
CHAIR EGAN objected for discussion purposes.
MR. PAWLOWSKI explained that the CS refines the problem he
talked about. Section 1 amends AS 39.35.340, the regular
purchasing section, which the original bill was attempting to
change by breaking it into two sections recognizing first the
existing purchase of credit under 340, but adding a new
subsection in section 2 that provides a different methodology
for calculating the additional indebtedness that an employee
would be accruing. Language on page 2, lines 2-22, indicates
that it's an amount based on the increase, if any, in the
present value of future benefits for that year as determined by
the department.
Here he explained that everyone is well used to the fact that
the state's unfunded liabilities are a moving target and the
goal for this language was to allow the department to capture
the changing unfunded liability to keep it representative of the
cost the state is incurring and limiting it to the medical
benefit in AS 39.35.435(c).
1:43:20 PM
JAMES SEARS, Western Vice President, Public Service Employees
Association (PSEA), Nome, Alaska, said he had served in law
th
enforcement since 1985 and currently is serving his 14 year as
an Alaska State Trooper; he also served in the U.S. Army. He
supported the CS and explained that it will allow Tier 2 and
Tier 3 law enforcement employees to purchase their medical time
in conjunction with the military time that they are already
allowed to purchase. He said they are not asking for any
handouts and are willing to pay their fair share.
He said this would save the state money and reasoned that law
enforcement is a young man's game. Many law enforcement officers
are the highest paid in the state but also most prone for injury
when approaching 40 or 50 years of age needing the medical
benefits. He said this bill would also increase morale, possibly
enhance recruitment and provide an optional benefit for
veterans.
SENATOR MENARD said she looked forward to this bill being
passed.
SENATOR GIESSEL asked if multiplying the determined product by 6
percent on page 2, lines 3 and 4, was to cover the cost of the
medical insurance.
MR. PAWLOWSKI answered that is the calculation in existing
statute for the existing military service purchase that is
allowed (that does not qualify towards the medical benefit). The
base level of military purchase that the employee is responsible
for has not been modified, but if you want to purchase the
medical benefit, there is a separate indebtedness that has to be
calculated on top of it. And rather than going back and trying
to fiddle with the base number - because individuals might elect
to purchase their military credit as they do today, but not
decide to purchase the medical benefit - the goal of the CS is
to set up a choice to give employees as much flexibility as
possible. It would be 6 percent plus interest, plus whatever the
extra indebtedness would be as calculated by the department for
the medical.
CHAIR EGAN said he intended to hold SB 211 until the next
meeting.