Legislature(2023 - 2024)GRUENBERG 120
02/08/2024 01:00 PM House MILITARY & VETERANS' AFFAIRS
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| Audio | Topic |
|---|---|
| Start | |
| HB232 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 232 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
HB 232-DISABLED VETERANS: RETIREMENT BENEFITS
1:02:23 PM
CHAIR WRIGHT announced that the only order of business would be
HOUSE BILL NO. 232, "An Act relating to retirement benefits and
military service."
1:03:02 PM
REPRESENTATIVE RAUSCHER, as prime sponsor, read the sponsor
statement for HB 232 [included in committee packet], which read
as follows [original punctuation provided]:
House Bill 232 allows Veterans who are totally and
permanently disabled to access their accrued PERS
retirement benefits without penalty. HB 232 also
allows military service, which has been purchased in
accordance with the PERS standards to count towards
the credited service requirements for normal
retirement.
Veterans who are totally and permanently disabled
struggle to work and keep gainful employment due to
their service-connected disabilities. As such, this
class of veterans often struggles with income
stability. If HB 232 becomes law, it will provide
disabled veterans with access to their PERS retirement
benefits at a time when they need it most.
HB 232 does not provide any additional benefits beyond
those rightfully earned by veterans through their
dedicated public service.
By passing HB 232, the Legislature will help provide
stability to our disabled veterans when they need it
most.
1:04:34 PM
RYAN MCKEE, Staff, Representative George Rauscher, Alaska State
Legislature, on behalf of Representative Rauscher, prime
sponsor, read the sectional analysis of HB 232 [included in
committee packet], which read as follows [original punctuation
provided]:
Section 1: AS 39.35.370(a)
This section amends AS 39.35.370(a) to add additional
language related to eligibility requirements when a
terminated employee is eligible for a normal
retirement benefit. Specifically adding new
subsections, A and B to section 1, lines 7 through 10.
Section 2:
Repeals three statutes.
1:05:46 PM
MARK WHISENHUNT, as invited testifier, explained that disabled
veterans face challenges like limited employment opportunities,
difficulties in accessing quality healthcare, and higher rates
of mental health issues. He said the transition to civilian
life can also be challenging; many downplay the physical and
mental impact of their service, and for some, these impacts
cannot be ignored. He pointed out that there are totally and
permanently disabled veterans, who face a greater struggle to
work and struggle with income stability. He shared that he is a
five-year veteran who is permanently disabled. He reported that
approximately 27 percent of veterans have some form of service-
related disability and less than 3 percent have been deemed
totally and permanently disabled. He said HB 232 can serve a
role in addressing the needs of veterans in state and local
government services. The bill would provide the means for
totally and permanently disabled veterans to access retirement
benefits. He urged members to approve HB 232.
1:09:24 PM
CHAIR WRIGHT opened public testimony on HB 232.
1:09:49 PM
RICK DEMBROSKI, representing self, urged members to help
service-connected disabled veterans, such as himself, by
supporting HB 232. He said there are many obstacles and exams
that disabled veterans undergo to be designated 100 percent
totally and permanently disabled. He said that, under the bill,
there would be the cost savings in Tier I, II, and III employees
who are totally and permanently disabled, as those employees
would no longer be accruing public employees' retirement system
(PERS) time because they are retirees; their healthcare expenses
are provided for by the Veterans Administration (VA). For Tier
IV employees, there is no extra cost to the state.
1:13:51 PM
CHAIR WRIGHT, after ascertaining that no one else wished to
testify, closed public testimony on HB 232.
1:14:03 PM
REPRESENTATIVE SADDLER asked Ms. Lea to explain how military
service is factored in retirement.
1:14:53 PM
KATHY LEA, Chief Pension Officer, Division of Retirement and
Benefits, Department of Administration, responded that HB 232
affects only defined benefit members, not defined contribution
members. She explained that defined contribution members can
remove their contribution upon termination. She said the cost
calculation of allowing people to use military service towards
their eligibility is missing from the bill; the cost is borne
from the increased valuation of the employer's contribution, and
if a person is retiring at any age with just five years of
service, that would be a new category that has not been valued.
She said the cost would be applied to the state because the
employer costs are fixed at 22 percent, and the employees are
also fixed, so the state pays any costs over that. She stated
that the fiscal note is indeterminate because the division does
not have information as to who is a veteran and who is not.
REPRESENTATIVE SADDLER asked how military service can factor
into a person's retirement calculation.
MS. LEA answered that military service can be claimed as
additional service time in the calculation of benefits, but
there is a cost that they pay in full or in an actuarial
reduction to their benefit. She said the service they claim is
not eligible towards meeting eligibility requirements to retire,
except for police/fire officers.
REPRESENTATIVE SADDLER sought confirmation that military service
members can use up to five years of their service towards
qualifying for a pension.
MS. LEA replied, "Yes and no." She explained that police and
fire can claim their military service towards retirement, as
they can retire at any age with 20 years of service. She said
if the person is in any of the other categories besides police
and fire, they can retire at any age with 30 years of service
but cannot use military service to meet the service requirement.
All members can retire with five years of service at age 60. In
response to a follow-up questions, she said the terms
"eligibility" and "service requirement" are the same because the
required number of years of service meets the eligibility
requirement. She reiterated the retirement requirements.
1:21:22 PM
MR. MCKEE clarified that HB 232 would make it so that military
service can count towards the retirement requirements. A
person, after 25 years of service, could buy out the five years
of credit.
1:22:05 PM
REPRESENTATIVE GRAY asked whether there is a limit to how many
military years a fire fighter could use towards retirement.
MS. LEA answered that they can currently claim up to five years.
REPRESENTATIVE GRAY inquired how many totally disabled veterans
are working and are currently title Tier I, II, and III who
would benefit from the bill.
MS. LEA answered that there is no data on that.
1:23:32 PM
MR. MCKEE explained that of the military soldiers who have taken
leave in 2023, there are two Tier II military employees, two in
Tier III, and 104 in Tier IV. He said this data is from the
Department of Administration, and since the department does not
track veteran information, it is difficult to get accurate
numbers.
REPRESENTATIVE GRAY asked whether passing the bill would mean
that those who haven't recently worked for the state can come
back, buy their military time, and achieve the retirement that
they wouldn't have been able to before. In clarifying, he
illustrated a hypothetical where a person has 25 years of
service, is a totally disabled veteran, and is not collecting a
retirement because they don't have 30 years of service. He
asked if this person could buy back the five years to meet the
30 year requirement.
MR. MCKEE confirmed that's correct.
1:25:54 PM
REPRESENTATIVE SHAW asked whether they would be eligible for the
five years if the person is vested, does not have 20 years of
service, and retires at 60.
MS. LEA answered yes, they could claim that time if they are
totally disabled from a service-related condition.
1:26:39 PM
REPRESENTATIVE SADDLER asked for the definition of a "terminated
employee" in the context of the bill.
MS. LEA answered that the definition is someone who has
separated from service.
1:27:21 PM
REPRESENTATIVE GRAY stated that they might be addressing a small
number because being assigned "totally disabled" is rare. He
requested an example of a typical person that would benefit from
the bill.
MR. MCKEE explained that it would be a veteran who has become
totally disabled, and with HB 232, the person can count 5 years
of military service towards the retirement.
1:29:20 PM
CHAIR WRIGHT commented that he can see the benefit of HB 232.
1:29:44 PM
REPRESENTATIVE SADDLER asked whether, if someone does their time
in uniform and works at the state and then their body breaks
down, there is a disability check at the VA when they are not in
uniform and working for the state.
MS. LEA responded that she is not sure about a person returning
to the VA for additional disability benefits. She said if the
person has at least five years of service, they are eligible to
apply for a disability benefit from PERS itself.
1:30:49 PM
REPRESENTATIVE CARPENTER said there is a process that a veteran
would go through to determine whether their medical issue
qualifies them for totally disabled designation.
1:31:27 PM
REPRESENTATIVE SADDLER surmised that the answer is that it is
possible for a person to get a rating of totally disabled years
after their uniformed service.
CHAIR WRIGHT confirmed that it is possible.
1:32:01 PM
CHAIR WRIGHT announced that HB 232 was held over.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB232 Version A.pdf |
HMLV 2/8/2024 1:00:00 PM |
HB 232 |
| HB232 Sponsor Statement.pdf |
HMLV 2/8/2024 1:00:00 PM |
HB 232 |
| HB232 Sectional Analysis.pdf |
HMLV 2/8/2024 1:00:00 PM |
HB 232 |
| HB232 Supporting Document - PERS Military Service Credit.pdf |
HMLV 2/8/2024 1:00:00 PM |
HB 232 |