Legislature(1997 - 1998)
02/12/1998 01:40 PM House FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE BILL NO. 206
"An Act relating to credit under the Public Employees'
Retirement System for service as a village public
safety officer."
JOEL LOUNDSBURY, STAFF, REPRESENTATIVE PORTER testified in
support of HB 206. He read the sponsor statement (copy on
file). House Bill 206 would allow village public safety
officers (VPSO) to obtain retirement credit for service
rendered under the VPSO program. The eligible participant
could receive credit for up to 5 years of service in the
VPSO program.
WILLIAM CHURCH, RETIREMENTS SUPERVISOR, DIVISION OF
RETIREMENT AND BENEFITS, DEPARTMENT OF ADMINISTRATION
explained that participants would be required to pay the
full actuarial costs of benefits for the period of service.
Participants would buy the employee and employer portion.
The amount would be based on the benefit at the time of the
claim and the individual's vesting years' salary.
Co-Chair Hanley referred to the fiscal note by the
Department of Administration. He observed the bill is
estimated to have an unmeasureable impact on the Public
Employee Retirement System (PERS) funding ratio. There is
an increase to the unfunded liability of approximately $450
thousand dollars, which would result in an employer
contribution increase of approximately $40 thousand dollars
a year.
Mr. Church explained that the full actuarial cost is based
on the entire population that could be eligible to claim the
service. He noted that there are some individuals that will
not claim the service.
Co-Chair Hanley summarized that other state employees will
end up paying more to allow this group to buy their
retirement. Mr. Church was uncertain if there would be a
measurable cost.
Co-Chair Hanley noted that, if the full actuarial cost is
not covered, the system would not be as sound in the future.
He observed that each state employee could have his or her
contribution reduced by $2 dollars a year.
In response to a question by Representative Davies, Mr.
Church clarified that, under retirement law, a lifetime
actuarial reduction is calculated for an individual who has
claimed service and has indebtedness owed at retirement. If
the retirement value for the service is greater than the
lifetime actuarial reduction than it is to the member's
advantage to buy back their service. He clarified that
money paid into the retirement system is paid to the
beneficiaries upon the individual's death.
Representative Davies pointed out that some individuals
would pay the money in anticipation of 25 years of benefits,
but would not receive 25 years of benefits due to death. He
questioned if the cost is over estimated.
Mr. Church noted that costs are based on the interest
assumptions of the fund and mortality rates.
In response to a question by Representative Martin, Mr.
Church clarified that village public safety officers are not
state employees. They are under contract to Native
Corporations.
Representative Martin maintained that village public safety
officers deserve to be covered as employees of the state of
Alaska. He emphasized the danger of their job.
Mr. Church clarified that in order to claim five years of
service in the VPSO program an individual must first be
vested in the state retirement system. Officers can
purchase up to five years.
Co-Chair Therriault observed that the proposal is similar to
provisions for military service. He expressed concern that
Village public safety officers be encouraged to remain in
their positions. He provided members with an amendment
requiring that applicants have a minimum of three years
service in the VPSO program (copy on file). He noted that
military service is generally for a three-year term of duty.
In response to a question by Representative Davies, Mr.
Church explained that approximately 125 village public
safety officers would be eligible. He did not know if the
assumption concluded that all 125 would take advantage of
the provision. He noted that 8 of 10 VPSO contracts provide
some form of retirement. He noted that the Legislature does
not allow double dipping for military service.
JOHN WALDRON, VILLAGE PUBLIC SAFETY OFFICER, YAKUTAT
testified via teleconference in support of HB 206. He
maintained that village public safety officers are the rural
arm of the Department of Public Safety. Village public
safety officers handle limited law enforcement, fight fires,
do search and rescue, provide alcohol and drug enforcement
training in schools and are agents for the state medical
examiner. He noted that village public safety officers are
the lowest paid law enforcement officers in the state of
Alaska. He observed that most village public safety
officers have minimal retirement programs. He noted that
there are no geographical pay differentials for village
public safety officers living in rural areas. Overtime pay
is limited. His family is not covered by his health
insurance.
JIM GRIMES, VPSO PROGRAM MANAGER, BRISTOL BAY NATIVE
ASSOCIATION testified via teleconference in support of HB
206. He added that he is a retired State Trooper. He
stressed the importance of the VPSO program as a stepping-
stone to a career in law enforcement. He observed that
village public safety officers are not well paid. He noted
that village public safety officers receive credit with the
Alaska Police Standards Council for their time as a village
public safety officer.
Co-Chair Therriault asked if Mr. Grimes would support a
restriction allowing only those that move into law
enforcement to buy their retirement. Mr. Grimes stated that
he would support limitation to law enforcement, police or
fire service.
Representative Martin questioned why village public safety
officers are not state employees. Mr. Grimes spoke in
support of making village public safety officers state
employees. He noted that they are employees of one of the
ten Native Corporations. He noted that legislative action
would be needed to allow them to participate in PERS. He
observed that the State decided that it would be less
expensive to contract public safety officers with a
nonprofit corporation where they are only paid $12.50
dollars an hour.
Representative Davies stated that village public safety
officers could be hired through municipalities. Mr. Grimes
noted that a qualified municipality could hire half of the
12 village public safety officers in his region. He
emphasized that the Department of Public Safety does not
want to negotiate individual memorandums of agreements and
contracts with every village in the state.
JOHNNY EVANS, DILLINGHAM POLICE DEPARTMENT testified via
teleconference in support of HB 206. He maintained that
village public safety officers deserve more than they are
getting. Village public safety officers are unarmed and
have no backup. He observed that village public safety
officers handle domestic violence and alcohol related
crimes. They even handle felony crimes until the state
troopers arrive. He urged passage of the legislation.
BRENT MOODY, CHIEF, DILLINGHAM POLICE DEPARTMENT testified
via teleconference in support of HB 206. He helped to run
the VPSO program for Tlingit and Haida. He asserted that
village public safety officers deserve the legislation. He
stated that the legislation should be limited to law
enforcement or fire service. He observed that he hires
village public safety officers as policemen. Out of 7
officers in Dillingham, 3 were village public safety
officers.
In response to a question by Co-Chair Therriault, Chief
Moody noted that the VPSO officers that he has employed have
had 1 to 5 years' experience. He stated that a one-year
requirement would be acceptable. He stressed that village
public safety officers are the law enforcement heroes of the
state of Alaska.
DAISY STEVENS, ADMINISTRATIVE LIASION OFFICER, TANANA CHIEFS
COUNCIL (TCC), FAIRBANKS testified in support of HB 206.
She is a former VPSO coordinator for TCC. She urged passage
of the legislation.
CRAIG PERSSON, PUBLIC SAFETY EMPLOYEES ASSOCIAITON,
FAIRBANKS testified in support of HB 206. He emphasized
that the legislation is an incentive for village public
safety officers that want to continue their law enforcement
careers. He did not object to limiting the legislation to a
police officer, fire fighter or correctional officer. He
did not object to a one-year limitation.
In response to a question by Co-Chair Therriault, Mr.
Persson stated that Village public safety officers should be
able to count years that were applied to another retirement
system for PERS credit.
Co-Chair Therriault noted that military personnel cannot buy
military service if they are already getting a retirement
from the United States government for the same five years.
GLEN GODFREY, COLONEL, ALASKA STATE TROOPERS, DEPARTMENT OF
PUBLIC SAFETY testified in support of HB 206. He was
involved in the creation of the VPSO program while he was
stationed in Bethel in 1979. He stressed that the VPSO
program is a tremendous asset to the citizens of Alaska and
the Alaska State Troopers. He acknowledged the high
turnover rate in the program. He noted a progression from
VPSO officer - to municipal police officer - to the Alaska
State Troopers. He did not object to a one-year
requirement.
Colonel Godfrey observed that the original intention of the
VPSO program was to hire people from a community to provide
law enforcement to their constituents. He acknowledged that
there are many non-native VPSO officers. Some villages have
found that it is a problem for individuals to be law
enforcement officers in their own communities. He supported
restricting the program to individuals continuing in a
public safety field. He did not support restrictions on
"double dipping".
In response to a question by Representative Martin, Colonel
Godfrey observed that of 79 Alaska State Trooper field
positions:
- 26 were VPSO officers for 5 - 18 years
- 3 were VPSO officers for 18 years,
- 1 was a VPSO officer for 17 years,
- 1 was a VPSO officer for 15 years,
- 1 was a VPSO officer for 12 years,
- 1 was a VPSO officer for 11 years,
- 4 were VPSO officers for 9 years,
- 3 were VPSO officers for 8 years,
- 1 was a VPSO officer for 7 years,
- 6 were VPSO officers for 6 years, and
- 5 were VPSO officers for 5 years.
Representative Martin questioned if the legislation would
encourage Native Corporations to drop their retirement
plans.
(Tape Change, HFC 98 - 29, Side 2)
Co-Chair Therriault explained that the intent of his
proposed amendment is to allow officers that are not vested
in their VPSO retirement system to count their time in PERS.
Officers that are vested in a VPSO retirement plan would not
be allowed to count the same years in the state system.
Representative Davis asked if the legislation would
discourage retention of VPSO officers. He noted the need to
encourage VPSO officers to remain in their positions.
Colonel Godfrey stressed that the best way to attract
officers is by providing role models. He stated that VPSO
officers cannot be expected to last on the job for 15 - 20
years. He stated that it is natural for good officers to
progress to another police department or the Alaska State
Troopers.
Co-Chair Therriault provided members with Amendment 1. He
amended Amendment 1 to reference the definition of a police
officer or fire fighter under AS 39.25.200(28).
Co-Chair Therriault MOVED to ADOPT Amendment 1.
Representative Davies OBJECTED. He clarified that five years
of an individual's vested years in PERS would have to be as
a police officer or fire fighter.
Representative Davies spoke against the amendment. He
stressed that the amendment would limit the possible career
choices of a VPSO officer. He observed that a public
official could not buy his VPSO service. He emphasized that
99 percent of the cost is paid by the individual not the
state of Alaska. He stressed that VPSO officers are under-
paid.
Representative Martin spoke against the amendment. He
observed that there is no restriction for buy back of
military service.
Representative Davis noted that teachers transfer time
within the same occupation. Private teaching service can be
transferred to the state Teachers Retirement System.
Representative Davies noted that there is no restriction on
the purchase of municipal service under PERS.
Representative Kelly pointed out that the question is
whether the intent is to create an incentive or an award.
He spoke against the amendment.
Co-Chair Therriault noted that there is a natural
progression in law enforcement. He stated that he would
like to encourage a continuation in law enforcement.
Representative Davies stressed that the intent of the
legislation is to reduce the turnover rate of VPSO officers.
He did not think that the intent was to encourage transfer
to the upper ranks. He maintained that the "primary purpose
of the bill is to look at a class of citizens that are
serving us very well and to figure out someway to add some
incentive to become a VPSO in the first place."
Representative Martin agreed that the intent is to encourage
participation in the VPSO program.
A roll call vote was taken on the motion.
IN FAVOR: Kohring, Mulder, Davis, Therriault
OPPOSED: Grussendorf, Kelly, Martin, Moses, Davies, Hanley
Representative Foster was absent from the vote.
The MOTION FAILED (4-6).
Co-Chair Therriault provided members with Amendment 2 (copy
on file). He amended Amendment 2 by changing 3 years to one
year. Amendment 2 would clarify that: "An employee is not
entitled to credited service for employment as a village
public safety officer unless the employee was employed as a
village public safety officer for at least one year."
Co-Chair Therriault MOVED to ADOPT Amendment 2. There being
NO OBJECTION, the motion was adopted. There being NO
OBJECTION, it was so ordered.
Co-Chair Therriault MOVED to ADOPT Amendment 3. Amendment 3
would add a new subsection to read: "An employee is not
entitled to credited service under this section if the
employee is entitled to receive retirement benefits from
another employer for the same service."
Representative Davies OBJECTED. Co-Chair Therriault noted
that the language is similar to restrictions of credited
military service.
Representative Davies stressed that village public safety
officers deserve the additional benefit. He noted that the
majority of the cost would be born by the officer. There is
a small cost to the state of Alaska.
Representative Davis spoke against the amendment.
A roll call vote was taken on the motion.
IN FAVOR: Kelly, Kohring, Martin, Mulder, Hanley, Therriault
OPPOSED: Moses, Davies, Davis, Grussendorf
Representative Foster absent from the vote.
The MOTION PASSED (6-4).
Co-Chair Hanley questioned the fiscal impact. He suggested
that the fiscal note should reflect the fiscal impact.
Mr. Church clarified that any cost would be born by the
employer.
Representative Davies requested that the impact of Amendment
3 be taken into account by the fiscal note. He added that
some reduction should be taken to reflect the expectation
that not everyone that is eligible would take advantage of
the program.
In response to a question by Representative Martin, Mr.
Church observed that the actuarial account is 98 percent
funded.
Co-Chair Hanley noted that the amount of the indebtedness is
equal to the full actuarial cost of providing benefits based
on the service.
Mr. Church clarified that the full actuarial cost is
determined on an individual basis based on the individual's
age and their salary in their vesting years.
Co-Chair Hanley observed that the fiscal note assumes that
the individual does not cover the full cost.
Mr. Church reiterated that the there will always be some
margin of additional cost.
Representative Davies summarized that the full actuarial
cost is based on the assumption that individuals will remain
in the system. The legislation allows employees to select
in the future. The selection will be based on the benefit
to the individual. The actuarial cost is based on
calculations further back in time. The actual cost is based
on a future self-selection.
Mr. Church stressed that the employee would be vested in
PERS. Previous VPSO service could be purchased. They would
add to their credited service. There is a lifetime
adjustment on any indebtedness owed at retirement.
Co-Chair Hanley noted that a determination is made at the
time an individual purchases their previous service. He did
not understand what would result in the additional cost
outlined in the fiscal note.
Co-Chair Therriault noted that the a new fiscal note would
be prepared to reflect adopted amendments. Representative
Davies reiterated that the fiscal note should address
Amendment 3 and the assumption of how many are expected to
take advantage of the provision.
Representative Martin MOVED to report CSHB 206(FIN) out of
Committee with the accompanying revised fiscal note.
HB 206 was REPORTED out of Committee with a "do pass"
recommendation and with a revised fiscal impact note by the
Department of Administration.
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