05/03/2024 01:30 PM House FINANCE

HOUSE BILL NO. 232                                                                                                            
                                                                                                                                
     "An Act relating to retirement benefits and military                                                                       
     service."                                                                                                                  
                                                                                                                                
7:25:35 PM                                                                                                                    
                                                                                                                                
Co-Chair Foster asked for a brief recap of the legislation.                                                                     
                                                                                                                                
RYAN   MCKEE,   STAFF,   REPRESENTATIVE   GEORGE   RAUSCHER,                                                                    
explained  that   the  bill  allowed   permanently  disabled                                                                    
veterans   to  access   their   accrued  Public   Employees'                                                                    
Retirement   System  (PERS)   retirement  benefits   without                                                                    
penalty. The  bill also  allowed military  service purchased                                                                    
in  accordance  with PERS  standards  to  count towards  the                                                                    
credited service requirements for normal retirement.                                                                            
                                                                                                                                
7:26:38 PM                                                                                                                    
                                                                                                                                
Co-Chair  Foster  opened  public  testimony on  HB  232.  He                                                                    
provided the email address for public testimony.                                                                                
                                                                                                                                
Co-Chair Foster CLOSED public testimony.                                                                                        
                                                                                                                                
7:27:44 PM                                                                                                                    
                                                                                                                                
Co-Chair Foster  asked for a  review of the one  fiscal note                                                                    
from  the  Department of  Administration  [he  read the  OMB                                                                    
component  number and  date, which  he  corrected after  the                                                                    
following speaker].                                                                                                             
                                                                                                                                
KEVIN WORLEY, CHIEF FINANCE  OFFICER, DIVISION OF RETIREMENT                                                                    
AND  BENEFITS, DEPARTMENT  OF  ADMINISTRATION, reviewed  the                                                                    
indeterminate fiscal  note from  the Division  of Retirement                                                                    
and Benefits. He explained that  in prior committee meetings                                                                    
there was an indication  that approximately 48 members could                                                                    
be eligible for  the benefit; however, there  was not enough                                                                    
information available  about the members and  their military                                                                    
service  to  use  in  the   calculation  for  their  pension                                                                    
benefits. If the legislation passed,  the cost in the future                                                                    
would ultimately  be included in  the past service  cost and                                                                    
would pass  on through to the  additional state contribution                                                                    
paid by  the state. The cost  would also be included  in the                                                                    
state  contribution rate  calculated  by  the actuaries  and                                                                    
adopted by the Alaska Retirement Management Board (ARMB).                                                                       
                                                                                                                                
Co-Chair  Foster  clarified  that   the  fiscal  note's  OMB                                                                    
component number was 64 and it was dated February 13, 2024.                                                                     
                                                                                                                                
Mr. Worley agreed.                                                                                                              
                                                                                                                                
Mr. McKee thanked the committee for hearing the bill.                                                                           
                                                                                                                                
Co-Chair Johnson  MOVED to  REPORT HB  232 out  of committee                                                                    
with individual recommendations  and the accompanying fiscal                                                                    
note.                                                                                                                           
                                                                                                                                
Representative  Josephson OBJECTED.  He  read  the last  two                                                                    
sentences  of the  fiscal  note:  "Implementing this  bill's                                                                    
provision  will require  an actuarial  analysis  due to  the                                                                    
impact on  the PERS defined  benefit system. DRB  submits an                                                                    
indeterminate fiscal  note until  such time as  an actuarial                                                                    
analysis  can be  completed." He  would lift  his objection,                                                                    
but  he  found  it  ironic   that  the  two  sentences  were                                                                    
essentially  cited  as  reasons to  pause  other  retirement                                                                    
benefit bills. He WITHDREW the OBJECTION.                                                                                       
                                                                                                                                
HB 232  was REPORTED  out of committee  with nine  "do pass"                                                                    
recommendations   and   with    one   previously   published                                                                    
indeterminate fiscal note: FN1 (ADM).