Legislature(1999 - 2000)
04/20/2000 09:10 AM Senate FIN
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
CS FOR HOUSE BILL NO. 335(STA)
"An Act relating to information contained in
retirement system records; relating to retirement
boards; relating to procedures and hearings under
state retirement systems; relating to benefits for
reemployed retired members of retirement systems;
relating to eligibility for normal retirement for
members of the teachers' retirement system who have
Alaska BIA credited service; relating to disability
benefits for members of state retirement systems;
relating to deduction of premiums from retirement
benefits; relating to protection of, and assignment
and transfer of, amounts held in retirement systems;
relating to retirement benefits for certain employees
earning high salaries; relating to qualified domestic
relations orders in state retirement systems; relating
to the definition of 'retirement fund' in the
teachers' retirement system; relating to membership of
state employees in the teachers' retirement system;
relating to refund of contributions made to the
judicial retirement system or to the former elected
public officers retirement system and repayment of
refunded contributions in those systems; relating to
self-insurance and excess loss insurance for persons
receiving benefits from a state retirement system;
relating to participation of elected officials in the
public employees' retirement system; relating to the
level income option benefit under the public
employees' retirement system; relating to
participation of employees of political subdivisions
and public organizations in the public employees'
retirement system; relating to crimes for defrauding a
state retirement system; relating to the definition of
'pension fund' in the public employees' retirement
system; relating to calculation of years of service
and of benefits under the public employees' retirement
system for noncertificated employees of certain
educational employers; and relating to individual
accounts maintained for members of the former elected
public officers retirement system."
MELINDA HOFSTAD, Staff to Representative Bill Hudson,
explained that this legislation was a retirement and
benefits cleanup effort and it was introduced at the
request of Division of Retirement and Benefits. She noted
that this legislation would bring the State of Alaska in
compliance with federal laws, court settlements and other
technical issues addressed in updated laws. She added that
efficiency measures requested by the various retirement
boards, was also included. She declared that there was
nothing in this legislation that enhances or diminishes
retirement benefits currently available to any state
employees or retirees.
Senator Phillips asked if the word "interpret" was included
in this legislation, with regard to allowing the
Administration the authority to make arbitrary
interpretations of the statutes.
GUY BELL, Director, Division of Retirement & Benefits,
Department of Administration stated that he did not think
that this word was included anywhere in the bill. He
reiterated that this bill outlined technical clean up to
existing statutes. He noted that this legislation
clarifies the hearing process available to members, which
usually center around disability appeals. He advised that
this legislation addressed confidentiality of member
records and more specifically it makes needed changes to a
law enacted last session, SB 9, based on a settlement with
National Education Association (NEA) Alaska. He specified
that it addresses physician board member appointments and
reporting issues. He continued that this bill separates
the Public Employees Retirement (PERS) Board from the
Personnel Board. He added that currently three of the five
members on the PERS Board serve by virtue of being
appointed to the Personnel Board. He asserted that because
of the volume of work involved for each of these boards, it
was decided that these board appointments should be made
separate. He then outlined general changes to related
board election rules.
Mr. Bell outlined technical issues relating to the ability
to roll member contributions directly into individual
retirement accounts. He noted that this specifically
addressed previous problems regarding the division of these
accounts under qualified domestic relation orders. He
addressed the small, related fiscal note for $29,000, which
allows for a $150 honorarium for members who serve on the
PERS Board.
Senator Phillips referred to Sections 58 and 59. He asked
for an explanation regarding each. He wondered if these
sections were in place before the bill passed out of the
House.
Mr. Bell responded that, yes, they were. He pointed out
that the Elected Public Officers Retirement System (EPORS)
language was added to the Public Employees and Teachers
Retirement Statute for simple and technical clarification
related to payment of indebtedness. He noted that this
language would only affect 62 individuals eligible for
EPORS benefits and of this, quite a number of them are
still living and not receiving retirement benefits.
Senator Phillips pointed out that these individuals
withdrew their money, and they are now given the ability to
opt back into the system. He then referred to lines 21 -
23, on page 29. He read the following language: ".who has
withdrawn the balance of the officer's individual account,
who returns to service as the governor, lieutenant
governor, or as a member of the legislature." He commented
that this was a very exclusive group of people and pointed
out that this measure was repealed by the voters in 1976.
He pointed out that if someone has withdrawn his or her
money, this should be a final decision.
Mr. Bell responded that the idea of this clause supports an
individual who has chosen to withdraw their membership
contribution accounts. He continued that if this same
individual needs to return to work, they must pay this
refund back, the employers contribution has already been
made to the system for this individual. He noted that this
clause would create a consistency situation with all other
state public employees.
Senator Phillips responded that these particular
individuals are elected, this being the main difference,
and he wondered if these individuals were really state
employees.
Mr. Bell countered that from the perspective of the Public
Employees Retirement System, yes.
Senator Phillips stated that he had a problem with this
provision.
SHEILA DICKMAN, President, Matsu Classified Employees
Association testified via teleconference from Matsu. She
explained that she was speaking on the behalf of the Matsu
School District employees. She stated that this
legislation makes many changes to the retirement system,
more specifically Sections 37 through 40. She added that
there are a number of employees in Matsu with work hours
reduced from 12 months to 10 or 11 months beginning in
August of 2000. She noted that these employees have two
options under current law, they can do nothing and receive
a partial year's credit for the rest of their work life or
they can participate in the alternative option under SB 9.
She advised that if they choose the latter, they must pay
for the year 1999-2000 even though they will not receive
any benefit for this school year. She pointed out this was
an oversight, which occurred in SB 9, and HB 335 will fix
this problem. She added that this change would also allow
for members who are paying for this service to revoke their
choice under some very strict guidelines if their job
status changes in the future.
Ms. Dickman read a written statement by an employee named
Gloria Lee as follows: "Public Employee's Retirement system
confirms that if HB 335 does not pass, all current
employees must choose to participate in alternative
retirements or they will not be eligible next year. That
means current twelve-month employees will be required to
pay for the 1999-2000 school year, even though they do not
receive any benefits. PERS states that the division has no
choice due to the way the bill was drafted last year. I
thank Senator Green for her assistance on this bill and I
support to move this bill from the Committee for the
benefit of classified employees."
Amendment #2: This conceptual amendment removes Sections 58
& 59 from page 29, line 14 through page 31, line 21 of HB
335.
Senator Adams objected. He stated that these state
employees should be treated fairly. He continued that
these 62 individuals have completed their public service to
the state.
Senator Phillips countered that this was a special
arrangement passed a previous legislature, which changed
from a two percent to a five percent standing per year up
to 15 years or 75 percent of a person's salary. He added
that after this action was taken, in 1976, voters repealed
this section. He commented that at this same time, if an
employee withdrew their money from EPORS and then wanted to
come back into the system, the employee [indiscernible.]
A roll call was taken on the motion.
IN FAVOR: Senator Leman, Senator Donley, Senator Phillips,
Co-Chair Torgerson.
OPPOSED: Senator Adams, Senator Wilken, Senator P. Kelly.
PASS: Senator Green.
The roll was voided to allow Senator Green to amend her
nonvoting status.
BILL CHURCH, Retirement Supervisor, Division of Retirement
& Benefits, Department of Administration clarified the
issue raised by Senator Phillips regarding repayment of
refunded contributions as noted in Section 58. He detailed
the way in which this legislation presently reads. He
continued that someone who has withdrawn his or her
contribution and returns to work, has the opportunity to
reinstate their credited service and repay the indebtedness
of the reinstatement cost including interest within one
year of the date of re-employment. He continued that this
section treats this group of individuals like any other
under various state retirement systems.
Senator Phillips agreed with this illustration that most
state employees are presently at two percent for the first
ten years, but he pointed out that a special piece of
legislation passed in 1975, set these 62 employees at a
five- percent benefits advantage and to that he objected.
Senator Donley stated that he agreed with Senator Phillips.
He stated that these individuals are receiving an added
benefit that no state employee has gotten since. He noted
that going back retroactively in this instance, would not
be the same thing.
Mr. Bell referred to Section 59, which does not deal with
indebtedness payments, but deals with distribution of
member accounts under qualified domestic relation orders in
the event of divorces. He pointed out that this section
would bring the State of Alaska in compliance with federal
law.
Senator P. Kelly asked if these individuals would
repurchase time under the old system or under the present
two percent system.
Mr. Bell responded that these individuals would repurchase
as EPORS members at five percent.
Senator Leman made a motion to move to divide the question
between Section 58 and Section 59.
Co-Chair Torgerson stated that Amendment #2A would be to
delete Section 58 and Amendment #2B would be to delete
Section 59.
Senator Adams objected for discussion purposes. He asked
how many of the 62 individuals would actually buy back
their service time. He wondered how old these individuals
were as well.
Mr. Church responded that the majority of these individuals
were between 40 to 60 years old. He added that he did not
have the exact numbers of how many of them would
participate, but that it would probably be a minority.
A roll call vote was taken on the motion to adopt Amendment
IN FAVOR: Senator P. Kelly, Senator Green, Senator
Phillips, Senator Donley, Senator Leman, Co-Chair
Torgerson.
OPPOSED: Senator Wilken, Senator Adams.
The MOTION PASSED (6-2)
Senator Phillips made a motion to WITHDRAW Amendment #2B.
Amendment #1: This amendment adds new and deletes old
language as follow:
The governor shall fill a [A] vacancy in an unexpired
elective term [SHALL BE FILLED] by [ELECTION FOR A NEW
SIX-YEAR] appointment for the remainder of the term.
Senator Wilken made a motion to adopt Amendment #1, and
referred to page 15, line 18 and 19, by reading the
following language: "A vacancy and an unexpired elected
term shall be filled by elections for a new year term." He
explained that during the subcommittee budget process, this
exact situation happened and the department was required to
conduct an election, which cost $100,000. He then read the
pertinent language of Amendment #1 as noted above.
Co-Chair Torgerson asked if the terms of office were six
years.
Senator Wilken responded affirmatively and that they were
six-year staggered terms.
Co-Chair Torgerson suggested a conceptual change to fill
the term until the next election.
Senator Leman asked if Senator Wilken had considered
another way to fill these vacancies, such as having the
existing board fill this vacancy rather than the governor.
Senator Wilken explained that the governor appoints three
of these members and that two are elected.
Senator Green suggested the addition of language, "by
appointment until the next regularly scheduled election."
Mr. Bell responded that this would create a situation where
there are no longer any staggered terms. He added that
this was not necessarily a bad thing, but there could
potentially be new people re-instated every six years.
Co-Chair Torgerson disagreed and pointed out that
municipalities do this type of thing all the time. He used
the example of appointing someone to take a position until
the next election, remaining in this capacity for the
remainder of this term.
Co-Chair Torgerson called an at ease at 10:05 AM and
reconvened at 10:08 AM.
Senator Wilken made a conceptual amendment that would
essentially allow the Governor to fill a vacancy in an
unexpired elected term for a new six-year term until the
next regularly scheduled election, while giving the
Department of Legal Services the ability to conform the
language accordingly.
Hearing no objection, the amendment to the amendment was
adopted and Amendment #1 was AMENDED.
Hearing no objection, Amendment #1 as amended, was ADOPTED.
Tape: SFC - 00 #101, Side B, 9:59 AM
Senator Wilken made a motion to move HB 335, version 1-
LS1217\M as amended from committee with individual
recommendations and a $29,200 fiscal note from the
Department of Administration. Hearing no objection HB 335
was MOVED FROM COMMITTEE.
| Document Name | Date/Time | Subjects |
|---|