HB 306-PERS/TERS DISTRIBUTIONS    4:40:44 PM CHAIR KITO announced that the final order of business would be HOUSE BILL NO. 306, "An Act relating to disbursement options under the Public Employees' Retirement System of Alaska and the Teachers' Retirement System of Alaska for participants in the defined contribution plan; and providing for an effective date." 4:40:58 PM SYLVAN ROBB, Deputy Commissioner, Department of Administration (DOA), testified in the hearing on HB 306. She reminded that HB 306 moves to take the disbursement options for retirees from statute to regulations, so the department can be more nimble as more options for disbursements come out. She added that this process will allow for public comment in the process. 4:41:45 PM REPRESENTATIVE BIRCH asked about the net effect of the proposed bill. MS. ROBB answered that HB 306 would allow the department to respond more quickly to retirees and to change things more quickly. REPRESENTATIVE BIRCH asked for a concrete example. 4:43:15 PM KATHY LEA, Deputy Director, Division of Retirement and Benefits, Department of Administration (DOA), answered questions in the hearing on HB 306. She answered that one of the options the Alaska Retirement Management Board (ARMB) is looking at is a guaranteed lifetime withdrawal option. She explained the employee can go into the plan about ten years before they retire and can pay an insurance premium to ensure their balance. In this way, the highest balance that they receive will be what the monthly benefit payment will be based on. She added that this allows retirees to enjoy the upside of the market but protects them from the downside. She explained that this is a very important consideration when preparing participants for retirement readiness. She added the option was not currently included in the options in stature so could not be added to the PERS/TERS defined contribution plans. She described the qualified lifetime annuity contract. She said it had a specific definition with the Internal Revenue Service (IRS) and defers the annuity until age 80. 4:45:32 PM REPRESENTATIVE KNOPP asked who else in the private or governmental sector was offering similar benefits. MS. LEA replied that she could not list the states but that many states were doing the same. She added many corporations in the private sector are also offering similar retirement plans to their employees. 4:46:28 PM CHAIR KITO said public testimony was still open from a previous hearing. Upon ascertaining the no one was available to testify, he closed public testimony on HB 306. 4:46:49 PM REPRESENTATIVE WOOL moved to report HB 306 out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, it was so ordered.