Legislature(1993 - 1994)
01/27/1994 09:03 AM Senate CRA
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
SENATE COMMUNITY & REGIONAL AFFAIRS
January 27, 1994
9:03 a.m.
MEMBERS PRESENT
Senator Randy Phillips, Chairman
Senator Loren Leman
MEMBERS ABSENT
Senator Robin Taylor, Vice Chairman
Senator Al Adams
Senator Fred Zharoff
COMMITTEE CALENDAR
SENATE BILL NO. 39
"An Act relating to credited service and retirement benefits."
SENATE BILL NO. 2
"An Act requiring pay equity for certain public employees and
requiring the compensation of certain public employees based on the
value of work performed."
PREVIOUS SENATE COMMITTEE ACTION
SB 39 - No previous action to record.
SB 2 - See Community & Regional Affairs minutes dated
11/3/93, 1/11/94, 1/18/94, 1/20/94.
WITNESS REGISTER
Senator Jim Duncan
State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Prime Sponsor of SB 39
Al Kimker
P.O. Box 4303
Homer, AK 99603
POSITION STATEMENT: Supports SB 39
Pete Velsco
Box 1205
Nome, AK 99762
POSITION STATEMENT: Supports SB 39
Mike Ward
Dutch Harbor, AK
POSITION STATEMENT: Supports SB 39
Bob Zorich
Box 1311
Petersburg, AK 99833
POSITION STATEMENT: Supports SB 39
Barry Bracken
Box 1201
Petersburg, AK 99833
POSITION STATEMENT: Supports SB 39
Charles Lean
Box 1716
Nome, AK 99762
POSITION STATEMENT: Supports SB 39
Earl Clark
9163 Parkwood Drive
Juneau, AK 99801
POSITION STATEMENT: Supports SB 39
Ken Griffin
Juneau, AK
POSITION STATEMENT: Supports SB 39
Mary Lou Spartz
Juneau, AK
POSITION STATEMENT: Supports SB 39
Dr. Clark Damon
1101 First St.
Douglas, AK
POSITION STATEMENT: Supports SB 39
Mike Dean
4318 Connifer Lane
Juneau, AK
POSITION STATEMENT: Supports SB 39
Karen Crandall
11466 N. Douglas Highway
Juneau, AK
POSITION STATEMENT: Supports SB 39
Bob Stalnaker, Director
Division of Retirement & Benefits
Department of Administration
P.O. Box 110203
Juneau, AK 99811-0203
POSITION STATEMENT: Offered information on SB 39
Mike McMullen, Manager, System Services
Division of Personnel/EEO
Department of Administration
P.O. Box 110201
Juneau, AK 99811-0201
POSITION STATEMENT: Present to respond to questions
on SB 2
ACTION NARRATIVE
TAPE 94-7, SIDE A
Number 001
The Senate Community & Regional Affairs Committee was called to
order by Chairman Randy Phillips at 9:03 a.m. Due to the lack of
a quorum, it was stated that only action to be taken on the
legislation to be considered would be the taking of public
testimony.
SENATOR RANDY PHILLIPS introduced SB 39 (RETIREMENT CREDITED
SERVICE & BENEFITS) as the first order of business.
Number 023
SENATOR JIM DUNCAN, prime sponsor of SB 39, explained the
legislation amends a number of different sections in the retirement
statutes.
Sections 1 and 6 create a Public Service Benefits, which will allow
individuals with service in both public retirement systems who do
not have enough service to vest in either to consolidate their
public service in PERS and receive a limited benefit.
Sections 2, 3 and 7 allow a vested member of PERS to claim credited
service for active duty in a unit of the National Guard or National
Guard Reserve.
Sections 4 and 8 allow an individual with temporary service credit
to choose whether to claim that service as years of service credit
towards "twenty and out" or "thirty and out" retirement or only for
calculating benefits as is currently allowed.
Section 5 allows individuals with service as temporary legislative
employees to claim that service at any time provided the individual
pays the full actuarial cost of the service claimed. It also
allows former employees of the Alaska State Development Corporation
to claim service credit under PERS provided they pay the full
actuarial cost of claiming that service.
Senator Duncan said the legislation was designed to address several
very specific problems which he thinks will provide fairer
treatment to current and former employees.
Number 125
SENATOR RANDY PHILLIPS stated the committee would begin taking
testimony over the teleconference network.
AL KIMKER, an Alaska Department of Fish and Game employee for over
18 years and testifying from Homer, said the legislation will allow
state employees with temporary service to buy the time and apply it
to their credited retirement service years. He said old-time
temporary employees simply fell through the cracks and whatever
ancillary costs there may be, they would be willing to help reduce
those costs or reduce those costs entirely themselves. They are
asking for fair and equitable treatment and support for the bill.
Number 160
PETE VELSKO, an Alaska Department of Fish and Game employee
testifying from Nome, stated he has over a year of temporary time
and 16 years of full-time employment. He believes that as a
fairness issue this time should be credited to the older employees
who have earned this temporary time because it will equalize them
with everybody else in the retirement system.
Number 180
MIKE WARD, an Alaska Department of Fish and Game employee
testifying from Dutch Harbor, echoed the comments made by the two
previous speakers. He said it will provide a benefit to a group of
people that they will pay for themselves.
Number 195
BOB ZORICH, an Alaska Department of Fish and Game employee for 17
years testifying from Petersburg in support of SB 39, stated he has
two years of temporary time, and if he could get credit for those
two years, he would be eligible for retirement in about eight
months.
Number 210
BARRY BRACKEN, an Alaska Department of Fish and Game biologist
testifying from Petersburg, said he feels that the people that
supported the department in its early years should be credited for
their temporary service at that time. He pointed out that the
people who worked for the Territorial department prior to statehood
were given credit for their service, but the people who worked as
temporary employees for the department after statehood did not.
Number 228
CHARLES LEAN, an Alaska Department of Fish and Game biologist
testifying from Nome, said they are all career biologists and they
are planning to retire in the state. Crediting the temporary
service would accelerate the retirement of some long-time employees
who are more costly than short-time employees.
Number 260
EARL CLARK, Southeast Alaska Independent Living Center, testifying
in Juneau, stated he has over years five years service with the
University of Alaska, Southeast, as well as over two years with the
state. He said he has accrued service in both the TERS and PERS,
but does not have enough time in either system to be vested.
Passage of SB 39 would allow him to consolidate his public service
in PERS and receive a limited benefit.
Number 307
KEN GRIFFIN, an Alaska Department of Fish and Game employee
testifying in Juneau, said temporary employees, such as himself,
that worked for the state prior to 1980 received none of the
benefits currently enjoyed by seasonal or nonpermanent employees
hired after 1980. He said that with no fiscal impact to the state
associated with this legislation, there is an opportunity to
correct the inequity created between the pre and post 1980
temporary/nonpermanent employees.
Number 368
MARY LOU SPARTZ of Juneau urged the committee's support for SB 39.
Ms. Spartz was an employee of the Legislature in 1978, but was not
aware that there was a deadline for claiming that service and
therefore has been unable to claim that temporary time.
Number 385
DR. CLARK DAMON of Juneau also spoke in support of SB 39. He, too,
has time in the TERS and PERS, but not enough in either system to
be vested. He has paid into both systems and passage of SB 39
would help to rectify his situation.
Number 415
MIKE DEAN, an Alaska Department of Fish and Game employee
testifying in Juneau said of his 17 years of total credited
service, he has approximately two years of temporary time that he
has bought back. Passage of SB 39 would provide him the option to
use that claimed temporary service towards the 20 years and out
program.
Number 431
KAREN CRANDALL, an Alaska Department of Fish and Game Employee
testifying in Juneau, started working for the department in 1974.
From 1974 through 1977, she worked in field camps along side people
who were at the same risk she was at, who were receiving benefits
and are now closer to retirement than she is. She believes it is
only fair that the time be credited towards her retirement service.
Number 450
BOB STALNAKER, Director, Division of Retirement & Benefits,
Department of Administration, said there has been testimony by the
Fish & Game people for service that they had in the seventies until
the change in law that made them nonpermanent employees. He said
he is not aware of any disparity; they can claim that service.
Anybody who worked temporary service can claim that service if they
are vested to increase the benefit that they receive when they
retire. The other thresholds are there for permanent service
served for a covered employer under the system.
Mr. Stalnaker said there was a group of people who were
grandfathered into the 20 years and out program. New employees to
Fish & Game working the field, working on the boats, etc., are
covered under the PERS non peace officer service.
Mr. Stalnaker said all the employees wanting to claim their
temporary service are all willing to pay the cost, and the bill
proposes that everybody pay the full actuarial cost. The problem
is that whenever there is an actuarial cost, there are people with
all kinds of differing circumstances, such as differing lengths of
service, differing salaries. In determining an actuarial cost, the
actuary has to determine what the average cost would be for that
group of people. Whenever dealing with an average, half of the
people will be benefited and half of the people will not. The
people who will be disadvantaged won't take advantage of the
program, therefore there will always be some residual cost to the
state.
Number 523
Responding to questions from Senator Leman, Mr. Stalnaker briefly
discussed the pros and cons of a defined benefit plan versus a
defined contribution plan. With the exception of West Virginia,
every other state has a defined benefit plan.
TAPE 94-7, SIDE B
Number 001
SENATOR RANDY PHILLIPS asked if the department has a position paper
on SB 39. Mr. Stalnaker answered that the department is not
supportive of expanding benefits, especially when there is a cost.
The department believes that the retirement plans are very generous
plans and serve the purpose, at this point, of attracting and
retaining employees. He said the department would provide a
position paper on the legislation by the next meeting.
Senator Randy Phillips asked what other groups other than Fish and
Game employees would be affected by this legislation. Mr.
Stalnaker replied that the issue of the temporary service to be
used for threshold qualifications is predominantly a Fish and Game
issue, because it was the normal practice back in those times to
hire people as temporaries for a number of years and then as
permanent positions would open, they would move them in. He didn't
think there would be many others impacted by the legislation.
Number 040
SENATOR RANDY PHILLIPS closed the public hearing on SB 39, stating
that it would be back before the committee the following week.
Number 045
SENATOR RANDY PHILLIPS brought SB 2 (PAY EQUITY BASED ON VALUE OF
WORK) before the committee as the final order of business.
MIKE MCMULLEN, Division of Personnel/EEO, Department of
Administration, stated he was present to respond to questions.
There being no questions and because the committee had lost its
quorum, SENATOR RANDY PHILLIPS said the bill would be back before
the committee the following week at which time he would entertain
a motion on the Administration's version of SB 2.
There being no further business to come before the committee, the
meeting was adjourned at 9:55 a.m.
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