Legislature(1999 - 2000)
03/29/2000 12:16 PM Senate RLS
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
SENATE RULES COMMITTEE
March 29, 2000
12:16 p.m.
MEMBERS PRESENT
Senator Tim Kelly, Chair
Senator Loren Leman, Vice Chair
Senator Mike Miller
Senator Drue Pearce
Senator Johnny Ellis
MEMBERS ABSENT
All Members Present
COMMITTEE CALENDAR
SENATE CS FOR HOUSE BILL NO. 112(FIN)
"An Act establishing the Alaska public building fund; and providing
for an effective date."
-MOVED OUT OF COMMITTEE
CS FOR SENATE BILL NO. 85(FIN)
"An Act relating to credited service in the public employees'
retirement system for temporary employment; and creating a public
service benefit in the public employees' retirement system."
-MOVED OUT OF COMMITTEE
PREVIOUS SENATE COMMITTEE ACTION
HB 112 - No previous Senate action
SB 85 - See Labor and Commerce minutes dated 3/9/99 and Rules
minutes dated 3/9/00.
WITNESS REGISTER
Mr. Bill Church
Retirement Supervisor
Division of Retirement & Benefits
Department of Administration
P.O. Box 110203
Juneau, AK 99811-0203
POSITION STATEMENT: Commented on CS for SB 85.
ACTION NARRATIVE
TAPE 00-06, SIDE A
CHAIRMAN KELLY called the Senate Rules Committee meeting to order
at 12:16 a.m. Present were Senators T. Kelly, Leman, Miller,
Pearce, and Ellis. The first order of business to come before the
Rules Committee was SCS for HB 112.
HB 112-ESTABLISH ALASKA PUBLIC BUILDING FUND
SENATOR LEMAN moved HB 112 with individual recommendations and
accompanying fiscal notes for calendaring at the Chairman's
discretion. Without objection, the motion carried.
SB 85-CREDITED SERVICE FOR TEMP EMPLOYEES:PERS
CHAIRMAN KELLY stated the committee has received a request to amend
the bill to include pre-1979 employees.
MR. BILL CHURCH, Retirement Supervisor for Division of Retirement
& Benefits, stated CS for SB 85 will allow current or former
legislative session employees to claim the time they worked as
session employees prior to July 1, 1979. Mr. Church referred to AS
39.35.360 Section (G), which allowed these people to claim this
service before July 1, 1980 by repaying their contributions. Once
that sunseted there was no mechanism, except to claim it under the
provisions of temporary service which requires an individual to be
vested (5 paid years) in the PERS system. CS for SB 85 will allow
individuals to claim this pre-1979 legislative session time to
qualify to receive a benefit without bing vested. Employees would
be required to pay the entire actuarial cost of providing benefits
for that service.
CHAIRMAN KELLY asked about how many people worked in 1977 and if
they had already claimed that time.
MR. CHURCH stated that depends on how much time those people
accrued. If someone continued to work past 1980, they would have
accrued the five years required under AS 36.35.345, the temporary
service claim. The group of people who have not claimed those
years of work is very small. The employees that didn't make the
claim for working before July 1, 1980 are no longer in State or
earned enough credit to become vested.
CHAIRMAN KELLY asked if an employee worked one session, how much
credit that employee accrued.
MR. CHURCH stated if an employee works one session that person
acquires five months of credit.
CHAIRMAN KELLY asked about vestment of a session-only employee.
MR. CHURCH replied if they were a session only employee it would
count toward one year of the five years for eligibility for
retirement benefits.
CHAIRMAN KELLY stated they would need to put another four years in
before they were vested.
SENATOR LEMAN asked if that was including the interim as well.
MR. CHURCH answered for session only employees under the statutes,
if that person works five legislative sessions that person will
receive a year of eligibility toward retirement benefits. The
benefit is calculated on the credited service they earned.
CHAIRMAN KELLY stated a person could use five sessions to qualify
for medical benefits. Five months a year, for five years would
only give that person 25 months of credit toward a pension.
MR. CHURCH replied yes.
CHAIRMAN KELLY asked whether this bill will affect a small group of
people and if those people need to pay actuarial costs themselves.
MR. CHURCH answered yes.
CHAIRMAN KELLY asked if there is any cost to the employers.
MR. CHURCH replied no.
SENATOR LEMAN asked about adequate protection for the adverse
selection phenomenon.
MR. CHURCH said yes.
CHAIRMAN KELLY asked what the adverse selection phenomenon is.
MR. CHURCH replied only those who would take advantage of this
would be those who would be advantaged by it. The cost will be
calculated over a broad spectrum of the group, and the actuary
builds in an additional cost to cover the adverse selection.
CHAIRMAN KELLY asked if someone had already retired, whether they
can claim this credit for a larger retirement.
MR. CHURCH answered yes.
CHAIRMAN KELLY asked if those people would theoretically need to
pay the money back.
MR. CHURCH stated at retirement or when a service benefit becomes
available for a person to claim, the actuary will calculate the
cost and spread that cost over their lifetime. That is called an
actuarial adjustment.
SENATOR LEMAN moved amendment number one. Without objection, the
motion carried so a Rules Committee substitute was adopted.
SENATOR LEMAN moved all versions of SB 85 with individual
recommendations and accompanying fiscal notes for calendaring at
the Chairman's discretion. Without objection, the motion carried.
There being no further business to come before the committee
CHAIRMAN KELLY adjourned the meeting at 12:45 p.m.
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