03/31/2025 01:30 PM Senate LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| SB137 | |
| SB21 | |
| SB28 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 137 | TELECONFERENCED | |
| *+ | SB 21 | TELECONFERENCED | |
| += | SB 28 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
SENATE LABOR AND COMMERCE STANDING COMMITTEE
March 31, 2025
1:33 p.m.
MEMBERS PRESENT
Senator Jesse Bjorkman, Chair
Senator Kelly Merrick, Vice Chair
Senator Elvi Gray-Jackson
Senator Forrest Dunbar
Senator Robert Yundt
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
SENATE BILL NO. 137
"An Act extending the termination date of the Board of Certified
Direct-Entry Midwives; extending the termination date of the
Board of Nursing; extending the termination date of the Board of
Parole; and providing for an effective date."
- MOVED SB 137 OUT OF COMMITTEE
SENATE BILL NO. 21
"An Act establishing the Alaska Work and Save Program;
establishing the Alaska Retirement Savings Board; and providing
for an effective date."
- HEARD & HELD
SENATE BILL NO. 28
"An Act relating to the Public Employees' Retirement System of
Alaska and the teachers' retirement system; providing certain
employees an opportunity to choose between the defined benefit
and defined contribution plans of the Public Employees'
Retirement System of Alaska and the teachers' retirement system;
and providing for an effective date."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: SB 137
SHORT TITLE: EXTEND BOARDS: MIDWIVES, NURSING, PAROLE
SPONSOR(s): SENATOR(s) BJORKMAN
03/19/25 (S) READ THE FIRST TIME - REFERRALS
03/19/25 (S) L&C, FIN
03/24/25 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
03/24/25 (S) Heard & Held
03/24/25 (S) MINUTE(L&C)
03/31/25 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
BILL: SB 21
SHORT TITLE: AK WORK & SAVE PROGRM; RETIRE. SAVINGS BD
SPONSOR(s): SENATOR(s) WIELECHOWSKI
01/10/25 (S) PREFILE RELEASED 1/10/25
01/22/25 (S) READ THE FIRST TIME - REFERRALS
01/22/25 (S) L&C, FIN
03/31/25 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
BILL: SB 28
SHORT TITLE: RETIREMENT SYSTEMS; DEFINED BENEFIT OPT.
SPONSOR(s): SENATOR(s) GIESSEL
01/10/25 (S) PREFILE RELEASED 1/10/25
01/22/25 (S) READ THE FIRST TIME - REFERRALS
01/22/25 (S) L&C, FIN
03/21/25 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
03/21/25 (S) Heard & Held
03/21/25 (S) MINUTE(L&C)
03/31/25 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
WITNESS REGISTER
MATT CHURCHILL, Staff
Senator Jesse Bjorkman
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented a brief recap of SB 137.
MICHAEL GARVEY, Policy Director, Alaska Civil Liberties Union
(ACLU) of Alaska
Anchorage, Alaska
POSITION STATEMENT: Testified with concerns on SB 137.
MAXINE LABERGE, Staff
Senator Bill Wielechowski
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented SB 21.
HUNTER LOTTSFELDT, Staff
Senator Bill Wielechowski
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented the explanation of changes from
version A to version N of SB 21.
SENATOR CATHY GIESSEL, District E
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Sponsor of SB 28.
KEITH BRAINARD, Research Director
National Association of State Retirement Administrators (NASRA)
Georgetown, Texas
POSITION STATEMENT: Testified by invitation on SB 28.
DOUGLAS SCHRAGE, Chief
Anchorage Fire Department
Anchorage, Alaska
POSITION STATEMENT: Testified by invitation on SB 28.
SEAN CASE, Chief
Anchorage Police Department
Anchorage, Alaska
POSITION STATEMENT: Testified by invitation on SB 28.
BILL MEERS, Business Representative
Public Employees Local 71
Anchorage, Alaska
POSITION STATEMENT: Testified by invitation on SB 28.
LON GARRISON, Executive Director
Association of Alaska School Boards
Juneau, Alaska
POSITION STATEMENT: Testified by invitation on SB 28.
ACTION NARRATIVE
1:33:45 PM
CHAIR BJORKMAN called the Senate Labor and Commerce Standing
Committee meeting to order at 1:33 p.m. Present at the call to
order were Senators Merrick, Gray-Jackson, Dunbar, Yundt and
Chair Bjorkman.
SB 137-EXTEND BOARDS: MIDWIVES, NURSING, PAROLE
1:34:55 PM
CHAIR BJORKMAN announced the consideration of SENATE BILL NO.
137 "An Act extending the termination date of the Board of
Certified Direct-Entry Midwives; extending the termination date
of the Board of Nursing; extending the termination date of the
Board of Parole; and providing for an effective date."
1:35:43 PM
MATT CHURCHILL, Staff, Senator Jesse Bjorkman, Alaska State
Legislature, Juneau, Alaska, presented a brief recap of SB 137,
on behalf of the sponsor:
[Original punctuation provided.]
This Bill extends the sunset dates of three
professional boards (Direct-Entry Midwifery, Nursing,
and Parole) and follows the recommended six-year
extension for each of the Boards of Midwifery and
Nursing to June 30, 2031 and the recommended four-year
extension of the Board of Parole to June 30, 2029.
1:37:13 PM
CHAIR BJORKMAN opened public testimony on SB 137.
1:37:41 PM
MICHAEL GARVEY, Policy Director, Alaska Civil Liberties Union
(ACLU) of Alaska, Anchorage, Alaska, testified with concerns on
SB 137. He focused on Section 3, which would extend the Alaska
Board of Parole until 2029. The audit report recommended renewal
but highlighted the need for stronger legislative oversight due
to an unexplained decline in parole approval rates. He said the
ACLU disagrees with a statement by the board's chair that it is
inaccurate to compare yearly overall discretionary parole
approval rates since comparing aggregate data is a routine
practice in criminal justice. He urges lawmakers to require the
board to provide more detailed reporting on how statutory and
regulatory criteria apply in its decisions. Greater transparency
would allow the legislature to ensure fairness, consistency, and
accountability in parole decisions. He said SB 137 would also
help policymakers identify barriers to reentry, such as limited
behavioral health treatment, and consider solutions. Since
incarceration costs the state over $200 per day compared to $13
for probation, better data from the board would support more
effective use of public funds while fulfilling the intent of
renewing the parole board.
1:40:23 PM
CHAIR BJORKMAN closed public testimony on SB 137.
1:40:34 PM
CHAIR BJORKMAN solicited the will of the committee.
1:40:36 PM
SENATOR MERRICK moved to report SB 137, work order 34-LS0732\A,
from committee with individual recommendations and attached
fiscal note(s).
1:40:51 PM
CHAIR BJORKMAN found no objection and SB 137 was reported from
the Senate Labor and Commerce Standing Committee.
1:41:05 PM
At ease.
SB 21-AK WORK & SAVE PROGRM; RETIRE. SAVINGS BD
1:43:21 PM
CHAIR BJORKMAN reconvened the meeting and announced the
consideration of SENATE BILL NO. 21 "An Act establishing the
Alaska Work and Save Program; establishing the Alaska Retirement
Savings Board; and providing for an effective date."
1:43:46 PM
CHAIR BJORKMAN solicited a motion.
1:43:48 PM
SENATOR MERRICK moved to adopt the committee substitute (CS) for
SB 21, work order 34-LS0254\N, as the working document.
1:43:56 PM
CHAIR BJORKMAN objected for purposes of discussion.
1:44:21 PM
MAXINE LABERGE, Staff, Senator Bill Wielechowski, Alaska State
Legislature, Juneau, Alaska, presented SB 21 on behalf of the
sponsor and moved to slide 2, What is Alaska Work and Save:
[Original punctuation provided.]
• Establishes an auto-IRA program for all Alaskan
employees who qualify.
• Creates an option to allow PFD checks to go
toward retirement.
SB 21 would be established in the Department of
Revenue
• The Commissioner, or designee, would be
responsible for establishing, executing and
creating appropriate rules for program
• Allows discretion to partner with other states to
lower costs even more for participants
1:45:17 PM
CHAIR BJORKMAN asked for and explanation of the difference
between the committee substitute and the current legislation.
1:427 PM
HUNTER LOTTSFELDT, Staff, Senator Bill Wielechowski, Alaska
State Legislature, Juneau, Alaska, presented the explanation of
changes from version A to version N of SB 21:
[Original punctuation provided.]
Sec. 4 Amending AS 44.25
AS 44.25.400 Changes the administration of the Alaska
Work and Save program from a board to the commissioner
of revenue or their designee.
AS 44.25.410 Defines the purpose of the program
instead of establishing the Alaska Retirement Savings
Board
AS 44.25.420 Defines the powers and duties of the
program administrator instead of the powers and duties
of the board
AS 44.25.430 Outlines the confidentiality of
information for program participants in place of the
assigned the attorney general as legal council for the
board.
AS 44.25.440 Outlines the complaint process for the
program in place of compensation for trustee.
AS 44.25.450-470 are deleted.
AS 44.25.490 adjusts the definitions to comport with
the change from a board structure to an administrator
structure.
Sec. 5 is changed from uncodified law setting the
initial appointment for the board to setting the
effective date.
Sec. 6 is deleted.
1:46:17 PM
CHAIR BJORKMAN removed his objection.
1:46:22 PM
CHAIR BJORKMAN found no further objection and CSSB 21 was
adopted as the working document.
1:46:34 PM
MS. LABERGE continued with slide 2:
[Original punctuation provided.]
-Establishes an auto-IRA program for all Alaskan
employees who qualify.
Program Participants
• Would be enrolled automatically upon hiring
• Can decide to opt-out or adjust rate
• May contribute PFD towards their retirement
1:47:03 PM
MS. LABERGE moved to slide 3, Why Does Alaska Need an Auto IRA
program:
[Original punctuation provided.]
• 54 percent of households have no retirement savings
• Alaskans aged 60+ account for 20 percent of the
population and growing
• Median retirement savings for ages 65-74 is $200,000,
age 75+ is $130,000
MS. LABERGE said that Alaska needs an Auto IRA program
because it helps strengthen small businesses, provides for
Alaska's aging population, makes jobs more appealing to
applicants, and growing evidence shows it saves money in
the long run.
1:47:45 PM
MS. LABERGE moved to slide 4, Survey of Alaska Small Businesses:
[Original punctuation provided.]
A recent survey of small businesses in Alaska shows:
• 64 percent don't offer retirement of any kind, with
cost being the biggest factor
• 70 percent support an Alaskan retirement savings
option
Current Cost of an IRA program for businesses:
A survey of 121 plans with less than $2 million in
assets found that:
• provider fees could vary from $4,800 to
$17,000per year (this figure does not include
investment fees)
MS. LABERGE stated that a small business is considered a
business with less than 500 employees and in Alaska 99 percent
of the businesses are considered small businesses.
1:48:43 PM
MS. LABERGE moved to slide 5, SB 21 Supports Small Businesses:
[Original punctuation provided.]
• 12th year of out-migration of working aged Alaskans
• Work and Save eliminates the high costs and
bureaucracy for businesses
• Allows small businesses to:
Better recruit and retain employees
Stay competitive with larger businesses
1:49:04 PM
MS. LABERGE moved to slide 6, Other States Have Already Started:
[Original punctuation provided.]
• As of this year, 17 other states have enacted
their own auto-IRA programs
-Of those 17 states, 7 of them have entered
partnership agreements.
-Colorado Partnership for a Dignified
Retirement (PDR): Colorado, Maine, Delaware, Vermont,
Nevada
-MyCTSavingsProgram: Connecticut and Rhode
Island
• Interstate partnerships allow for faster enaction
and possibly lower fees.
• Similar federal legislation has recently been
proposed
1:49:55 PM
MS. LABERGE moved to slide 7, Summary:
[Original punctuation provided.]
SB 21 will create a system like other states,
providing small business a mechanism for their
employees to save for retirement. This will allow for
competition between big and small businesses for
quality talent. SB 21 will help Alaskans better
prepare for their future, improving their quality of
life.
1:50:22 PM
SENATOR GRAY-JACKSON expressed concern about seniors living in
poverty, noting that since 2010 the rate has doubled from 5
percent to 10 percent.
1:51:08 PM
CHAIR BJORKMAN asked for an example of how an employee would
experience the Auto IRA program, from being hired, completing
initial paperwork, to how the employee would encounter and
interact with the program in practice.
1:51:29 PM
MS. LABERGE responded that it's her belief the program would be
included in new-hire paperwork for jobs without other retirement
options. Employees would be automatically enrolled to contribute
a portion of each paycheck but may choose to opt out during
onboarding.
1:52:06 PM
CHAIR BJORKMAN asked whether the program requires additional
administration for employers or requires employers to contribute
more money into their plan.
1:52:20 PM
MS. LABERGE replied that the program doesn't require employer
contributions. Employees fund it through paycheck deductions,
and in Colorado, employers report it takes under an hour to set
up and less than 15 minutes per month to maintain.
1:53:07 PM
SENATOR MERRICK asked if Alaska has considered joining any of
the partnership agreements listed in slide 6.
1:53:18 PM
MR. LOTTSFELDT opined that joining Colorado's program is
advantageous because combining small states lowers asset
management feesColorado's is just 0.23 percent, paid by
participants at no cost to the state. She said creating a
separate program in Alaska would likely result in higher fees
due to the smaller participant base.
1:54:39 PM
CHAIR BJORKMAN held SB 21 in committee.
1:54:44 PM
At ease.
SB 28-RETIREMENT SYSTEMS; DEFINED BENEFIT OPT.
2:00:23 PM
CHAIR BJORKMAN reconvened the meeting and announced the
consideration of SENATE BILL NO. 28 "An Act relating to the
Public Employees' Retirement System of Alaska and the teachers'
retirement system; providing certain employees an opportunity to
choose between the defined benefit and defined contribution
plans of the Public Employees' Retirement System of Alaska and
the teachers' retirement system; and providing for an effective
date."
2:00:56 PM
SENATOR CATHY GIESSEL, District E, Alaska State Legislature,
Juneau, Alaska, sponsor of SB 28. She stated that the sectional
analysis is in a chart form and explained the chart defines how
[SB 28] would affect public safety employees, non-public safety
employees, and teachers. The other columns describe the
rationale for the policy choice and lists which section and page
to find specific policy language. [This chart can be found on
the Alaska State Legislature website under SB 28, in the
documents section].
SENATOR GIESSEL moved to page 1 and referenced the benefit
categories on the left column of the cart as Employee
Contribution, Employer Contribution and Employer Fee for Late
Payments Reduced to Normal Interest. She said all the entities,
public safety, non-public employees and teachers, used to pay
1.5 times the interest rate on late payments. SB 28 reduced late
payments to just interest.
2:03:40 PM
SENATOR GIESSEL continued with page 2 and explained the benefits
on the left column of the chart that vesting rules are the same
across all three groups, while retirement qualifications differ
for public safety, versus non-public safety and teachers. The
chart also outlines each group's benefit calculation formula,
with the last row, final average salary based on the five
highest non-consecutive payroll years.
2:04:19 PM
SENATOR GIESSEL moved to page 3 and explained the benefits on
the left column of the chart and said that SB 28 removes the
cost-of-living adjustment (COLA) for all entities but provides
post-retirement inflation protection for all employees.
Retirement medical coverage remains consistent with PERS Tier IV
and TRS Tier III.
2:05:09 PM
SENATOR GIESSEL moved to page 4 and explained the benefits on
the left column of the chart:
The columns on the left describe disability and death
benefits and the requirement of separate accounting.
So, these are going to have some new accounts,
separate from the Legacy Define Benefit, separate from
the Defined Contribution that we have right now. We
require these accounts to be accounted for separately.
2:05:36 PM
SENATOR GIESSEL moved to page 5, and addressed the benefit
categories on the left column of the chart:
The subject addressed on this page are requirements
for the sub-trusts, keeping these monies clearly
transparent. Teacher retirement members that have
Public Retirement Service may add that public service
compensation to their Teachers Retirement Service for
benefit calculations. So, it just shows a teacher,
during the summer, [working] part-time goes and counts
salmon at a weir, they're earning Public Employee
Retirement System (PERS) time. They can combine that
with their Teacher Retirement System, which is what
they do the rest of the year. Then the question at the
bottom of page five of seven, What happens to current
Defined Contribution employees hired after June 30,
2006 (that's when the defined benefit went away) if
this becomes law The chart answers that question for
each of those three employee entities.
2:06:40 PM
SENATOR GIESSEL moved to page 6, and referred to the column on
the [left] of the chart:
What happens to a Defined Contribution employees who
convert to the new Defined Benefit plan if their
Defined Benefit service time credit is different than
their service time under Defined Contribution So,
this describes the process that those employees can
use to move into a Defined Benefit. If they don't have
enough in their defined contribution to buy the amount
of time they can possibly pay for it themselves, they
can decide to have a deduction taken out of future
payrolls or maybe they just are fine with lesser
credit in a defined benefit than they would have had.
There's choices there. What it really boils down to is
working closely with the Division of Retirement and
Benefits individually. The last box on page, 6 of 7,
is hat happens to new employees, hired after the
bill goes into effect, if this became law The answer
for all three entities is the new employees would
automatically be enrolled in a Defined Benefit
retirement plan.
2:07:55 PM
SENATOR GIESSEL moved to page 7, and addressed the benefit
categories in the left column of the chart:
What happens to former Defined Contribution employees
who left their Defined Contribution accounts active
who are re-employed in service if this bill became
law? Well, they could reactivate that plan and again
use the hours in their Defined Contribution to
purchase time in Defined Benefit. Then the last [box
on the page]. hat happens to former Defined
Contribution employees who did not leave their Defined
Contribution accounts active who are re-employed in
service if the bill became law In that case
employees would not have kept their account open and
they could opt to convert to their [Defined
Contribution] plan into a new Defined Benefits plan.
2:09:12 PM
SENATOR YUNDT referenced page 1, Employee Contribution and that
contributions are adjustable between 8 and 12 percent, which is
good because it shares the risk. However, regarding the post-
retirement section on page 3, with inflation protection in place
but retirees no longer contributing. He asked if inflation were
to spike significantly, would the responsibility fall on current
employees to increase contributions above 8 percent to maintain
fund balance, or is there a mechanism for retirees to help cover
the shortfall when inflation exceeds returns.
2:10:04 PM
SENATOR GIESSEL replied that there is no provision for retirees
to contribute if inflation spikes above normal. Retirees who
leave Alaska receive only 50 percent of the inflation adjustment
to encourage staying in-state, meaning the fund's earnings must
cover any unusually high inflation.
2:11:09 PM
CHAIR BJORKMAN announced invited testimony on SB 28.
2:11:25 PM
KEITH BRAINARD, Research Director, National Association of State
Retirement Administrators (NASRA), Georgetown, Texas, testified
by invitation on SB 28:
[Original punctuation provided.]
NASRA members are the directors and administrators of
roughly 90 state and local public retirement systems.
In Alaska, our member is Kathy Lea, who is the
director of the division of retirement and benefits.
My opinions do not necessarily reflect those of Ms.
Lea or her office.
2:12:00 PM
MR. BRAINARD continued with his testimony:
Rather than speak to the particular details of this
bill, I want to focus my remarks on retirement plan
design in general. My overarching message is that it
is possible to design and implement a retirement
benefit for public employees in Alaska that meets the
legitimate needs of all stakeholder groups: public
employees, public employers, and taxpayers.
I have been in my present role since 2002, and I
remember when Alaska closed its defined benefit plans
to new hires. Since that closure, some in Alaska have
pointed to defined benefit plans as fundamentally and
irredeemably flawed. Critics of traditional pensions
have contended that defined benefit plans are, by
definition, unsustainable and inevitably will lead to
fiscal ruin for the plan sponsor. I have seen and
heard that message repeated countless times in Alaska,
that DB plans are inherently defective and
unaffordable and will surely lead the state and its
political subdivisions to a fiscal crisis.
I am here to tell you that that notion is simply
false. If the Alaska Legislature wishes to avoid
unfunded liabilities and to ensure retirement plan
costs remain stable, those objectives are reasonable
and attainable. There are retirement plans sponsored
by states and cities across the country that have
achieved these objectives, and that continue to do so
year in and year out.
Traditional pension plans remain the predominant type
of retirement plan for the nation's millions of
employees of state and local government. Most of these
plans are in actuarial and fiscal condition that
ranges from manageable to excellent, and overall, that
condition has been improving in recent years.
My organization annually measures the amount that
states and local governments spend on pension benefits
for their employees. Based on the latest available
data, for fiscal year 22 and projected for FY 23,
states and local governments will spend just above
five percent of everything they spend on pension
benefits for their employees. This number is higher
for some states and lower for others, but for the
nation as a whole, this rate of spending has remained
remarkably stable and helps to illustrate that public
pension costs can remain stable.
2:14:28 PM
MR. BRAINARD continued with his testimony:
NASRA does not endorse any one type of retirement
plan, such as a defined benefit or a defined
contribution plan. What NASRA does support is a
retirement plan that contains features that are known
to achieve key objectives for all plan stakeholders:
employers, employees, and taxpayers.
These key stakeholder objectives include that
employers need to attract and retain qualified
employees who are needed to perform essential public
services, such as teaching in schools, protecting the
public, building and maintaining roads and
infrastructure, and performing the range of services
we rely on government go provide. Employees want a
competitive compensation package that includes a
decent retirement benefit. And taxpayers want public
services provided at a cost that is reasonable and
predictable.
Before I describe the elements of retirement plan
design that are known to facilitate a mutual
attainment of stakeholder objectives, I will point out
to you three examples of retirement plans sponsored by
states that have stable costs and unfunded liabilities
that are either nonexistent or negligible and entirely
manageable.
• The South Dakota Retirement System operates with
fixed contribution rates for employees and
employers: six percent of pay paid by both
employees and employers; eight percent each for
public safety officers. The retirement system has
a funding policy that keeping those required
costs and maintaining a fully funded pension plan
are essential. And the retirement plan has done
so for years. The SDRS is a traditional defined
benefit plan.
• The Wisconsin Retirement System is similar: their
required contribution rates are comparatively low
and stable, and the plan has remained fully
funded or nearly so for many years. The Wisconsin
Retirement System also is a traditional defined
benefit plan.
• The Nebraska state and county retirement plans
are cash balance plans, which are similar to a
traditional defined benefit plan, with the
primary differences being that retirement
benefits are affected by the plan's investment
performance and by the participant's age at
retirement. Together these plans provide
retirement benefits for nearly all non-teacher
public employees in the state. The plans are
overfunded, meaning they have an actuarial
surplus, and their costs are modest and stable,
at around 7.5 percent of payroll.
2:16:57 PM
MR. BRAINARD continued with his testimony:
There are other examples of public retirement plans
that feature stable costs and minimal unfunded
liabilities, but you get the idea. The overarching
message I want to convey is that a good retirement
plan is defined not by its labeldefined benefit,
defined contribution, hybridbut rather by the way the
plan is designed. To institute long-term
sustainability into the plan, building flexibility
into the way the plan is designed is key.
Some of the characteristics of retirement plan design
found to facilitate key stakeholder objectives are:
• Cost sharing between employers and employees.
That means that employers and employees alike
contribute to the cost of the plan.
• Assets that are pooled and professionally
managed, an arrangement that earns a higher
return for the pool at a lower level of
investment risk.
• Lifetime benefit payouts, meaning that once an
employee qualifies for a retirement benefit and
elects to retire, that employee should be able to
receive a benefit they cannot outlive.
These core features of retirement plan design are
known to promote employees' retirement security, to
reduce expenses, and to enhance the ability of
employers to attract and retain employees.
2:18:38 PM
CHAIR BJORKMAN asked where does the design of SB 28 fall in
comparison to retirement plan models in South Dakota, Wisconsin,
and Nebraska regarding cost and value.
2:19:21 PM
MR. BRAINARD replied that he will get back to the committee with
an answer after he analyzes the legislation.
2:19:56 PM
DOUGLAS SCHRAGE, Chief, Anchorage Fire Department, Anchorage,
Alaska, testified by invitation on SB 28 and stated that
Alaska's lack of a defined benefit pension for public safety
creates major retention issues, costing taxpayers millions in
recruitment and training. While Anchorage can recruit new
firefighters, experienced journeyman firefighters leave after
five years for other states that offer defined benefit pensions
and lucrative signing bonuses. He said this has forced Alaska
fire departments to recruit only in-state and invest heavily in
paramedic training, costing over $100,000 per trainee. Smaller
rural departments are disproportionately affected, and as Tier 3
employees retire, turnover and long-term costs are expected to
further rise.
2:26:02 PM
SEAN CASE, Chief, Anchorage Police Department, Anchorage,
Alaska, testified by invitation on SB 28 and emphasized that a
defined benefit retirement system for Alaska police officers
would benefit both officers and the state by:
-Ensuring financial security through a stable, predictable
pension.
-Attracting and retaining talent, making Alaska more competitive
and reducing turnover.
-Promoting community stability by keeping experienced officers
who build trust and local knowledge.
-Providing financial sustainability and predictability,
shielding officers from market risks.
-Upholding the state's commitment to officers who risk their
lives for public safety.
He urged the committee to pass SB 28, stressing it honors
officers' service while strengthening communities.
2:29:00 PM
BILL MEERS, Business Representative, Public Employees Local 71,
Anchorage, Alaska, testified by invitation on SB 28 and stated
that eliminating defined benefit pensions and replacing them
with Tier IV defined contribution plans has made recruitment and
retention in Alaska's public sector far more difficult, turning
many jobs into a revolving door. He said in the past, solid
retirement and benefits offset lower wages, but now employees
leave Alaska after five years for better-paying jobs. To keep
workers, the union has offered advanced step placement just to
attract candidates. He urged lawmakers to support SB 28, arguing
that restoring a defined benefit system is essential for
stabilizing the workforce, retaining staff, and recognizing
employees' value.
2:33:22 PM
LON GARRISON, Executive Director, Association of Alaska School
Boards, Juneau, Alaska, testified by invitation on SB 28. He
read the following testimony:
[Original punctuation provided.]
Chair Bjorkman and members of the Senate Labor &
Commerce Committee. My name is Lon Garrison. I serve
as the Executive Director of the Association of Alaska
School Boards. We are a nonprofit association
established in 1954, serving 52 of Alaska's school
districts. I am pleased to offer my testimony in
support of SB 28.
AASB's Board of Directors has adopted three
legislative priorities for the year. One of those
priorities is the retention and recruitment of
teachers, administrators, and staff
2:33:58 PM
MR. GARRISON continued with his testimony:
Our legislative priorities, along with the supporting
resolutions and beliefs of the AASB membership,
are attached to my written testimony.
AASB has consistently advocated for a defined benefit
program as the best choice for staff retirement
investments. In 2005, the AASB membership passed the
following resolution and has continued to strongly
support reinstating a defined benefit option:
AASB supports re-establishment of a defined benefit
retirement program that improves the
hiring and retention of highly qualified and effective
staff.
School districts are grappling with a persistent
crisis in retaining qualified teachers and staff due
to inadequate funding, challenging working and living
conditions, and benefits that are often not
competitive with those in other states. This situation
undermines our capacity to deliver quality education
to Alaskan students and complicates the efforts of
school boards to fulfill the state's obligation to
public education each day.
One of the most critical factors in a student's
success is the quality of the educator working with
them. While effective learning depends on having a
high-quality teacher, it is essential for the entire
school system to support this vital interaction
between teacher and student. This requires assistance
from various school staff to enhance the learning
experience. Thus, moving to a defined benefit program
will impact a wide variety of staff.
School boards across the state face unprecedented
challenges in allocating rapidly dwindling resources.
The shortage of applicants, coupled with inadequate
funding, results in staff shortages that exacerbate
the situation. The lack of a defined benefit
retirement option undermines Alaska's ability to
attract and retain essential public service employees.
In recent years, numerous districts have turned to J-1
or H-1B visa programs to address teacher shortages by
hiring international staff. These programs serve as
temporary solutions to fill vacancies with qualified
professionals. However, more districts are
increasingly relying on them. With the Trump
administration's intensified focus on immigration,
even these short-term solutions may be at risk of
disappearing. Relying on such programs should not be
necessary. Alaska needs competitive salaries and
benefits to attract new staff and retain current
employees.
2:36:48 PM
MR. GARRISON continued with his testimony:
SB 28 seeks to establish a new retirement system that
motivates educational professionals to commit to
careers in Alaska. It incorporates past lessons,
distributes risks among participants, and sets
retirement age and qualification criteria that are
more aligned with contemporary needs. Furthermore, SB
28 retains the existing contribution rates for PERS
and TRS from school districts, which is a positive
advancement. It's essential to acknowledge the
persistent challenges faced by school districts,
municipalities, and boroughs, as they struggle to make
these contributions due to the unpredictability and
inadequacy of state and federal funding.
A couple of years ago, during a meeting facilitated by
AASB between school board members and their
legislators, a legislator asked, "What is the
difference between spending and investment?" School
board members often refer to investment in staff and
students. A board member replied, "Investment implies
an expectation of a beneficial dividend or outcome,
while spending is merely a response to an expense."
In our view, a competitive and attractive defined
benefit program is an investment in recruiting and
retaining quality staff, which leads to improved
student outcomes.
AASB calls on the Legislature to address this urgent
need. This is one of the resources we have to enhance
Alaska's competitiveness in the public sector job
market. Investing in this initiative benefits our
students, communities, and the entire state.
2:39:17 PM
CHAIR BJORKMAN held SB 28 in committee.
2:39:50 PM
There being no further business to come before the committee,
Chair Bjorkman adjourned the Senate Labor and Commerce Standing
Committee meeting at 2:39 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB21 ver A.pdf |
SL&C 3/31/2025 1:30:00 PM |
SB 21 |
| SB21 Sponsor Statement.pdf |
SL&C 3/31/2025 1:30:00 PM |
SB 21 |
| SB21 Sectional Analysis.pdf |
SL&C 3/31/2025 1:30:00 PM |
SB 21 |
| SB21 Fiscal Note-DOR-PFD 03.28.25.pdf |
SL&C 3/31/2025 1:30:00 PM |
SB 21 |
| SB21 Fiscal Note-DOR-TRS 03.28.25.pdf |
SL&C 3/31/2025 1:30:00 PM |
SB 21 |
| SB21 Draft Proposed CS ver N.pdf |
SL&C 3/31/2025 1:30:00 PM |
SB 21 |
| SB21 Explanation of Changes ver A to N.pdf |
SL&C 3/31/2025 1:30:00 PM |
SB 21 |
| SB21 Presentation to SLAC-revised 03.31.25.pdf |
SL&C 3/31/2025 1:30:00 PM |
SB 21 |
| SB21 Supporting Document-Research-AARP Alaska Study 2023.pdf |
SL&C 3/31/2025 1:30:00 PM |
SB 21 |
| SB21 Public Testimony-Letter-ACLI 02.20.25.pdf |
SL&C 3/31/2025 1:30:00 PM |
SB 21 |
| SB28 Supporting Documents-Bill Summary Table.pdf |
SL&C 3/31/2025 1:30:00 PM |
SB 28 |
| SB28 Updated Summary Table-ver A 03.31.25 rev. 1.pdf |
SL&C 3/31/2025 1:30:00 PM |
SB 28 |