03/03/2021 01:30 PM Senate LABOR & COMMERCE

              SB 55-EMPLOYER CONTRIBUTIONS TO PERS                                                                          
                                                                                                                                
1:57:41 PM                                                                                                                    
CHAIR   COSTELLO  reconvened   the  meeting   and  announced   the                                                              
consideration  of  SENATE  BILL   NO.  55,  "An  Act  relating  to                                                              
employer  contributions   to  the  Public  Employees'   Retirement                                                              
System of Alaska; and providing for an effective date."                                                                         
                                                                                                                                
CHAIR  COSTELLO recounted  that this  was the  second hearing  and                                                              
the  intention was  to hear  invited and  public testimony  before                                                              
looking to the will of the committee.                                                                                           
                                                                                                                                
1:58:33 PM                                                                                                                    
NEIL  STEININGER,  Director,  Office  of  Management  and  Budget,                                                              
Office  of the  Governor, Juneau,  Alaska, summarized  that SB  55                                                              
provides tools  to change  how the  state finances its  retirement                                                              
obligations  to allow  cost sharing  with  the federal  government                                                              
and  other  partners.  He  clarified that  the  state  intends  to                                                              
continue  to  fully   fund  its  retirement  obligations   at  the                                                              
actuarial  cost. Furthermore,  the  state intends  to continue  to                                                              
provide  the  same  retirement  benefits  to  current  and  future                                                              
retirees.                                                                                                                       
                                                                                                                                
SENATOR  STEVENS  asked if  OMB  would  recommend that  the  state                                                              
revisit the  idea of paying down  the retirement obligation  as it                                                              
did some years ago.                                                                                                             
                                                                                                                                
MR.  STEININGER  suggested he  was  referring  to the  $3  billion                                                              
deposit in FY15.                                                                                                                
                                                                                                                                
SENATOR STEVENS agreed.                                                                                                         
                                                                                                                                
MR. STEININGER  said the  $3 billion deposit  was a good  decision                                                              
at the time  and would be  again if the resources  were available.                                                              
However,  it is not  an option  in the  state's current  financial                                                              
situation.                                                                                                                      
                                                                                                                                
SENATOR  STEVENS  responded, "You  are  not recommending  any  pay                                                              
down this year then."                                                                                                           
                                                                                                                                
MR. STEININGER  answered no; OMB's  recommendation is to  meet the                                                              
statutory  actuarial obligation  and continue  to do  so, but  not                                                              
make any lump sum deposits this year.                                                                                           
                                                                                                                                
CHAIR COSTELLO  asked if  he was  aware of  any opposition  to the                                                              
bill                                                                                                                            
                                                                                                                                
MR. STEININGER answered no.                                                                                                     
                                                                                                                                
2:01:28 PM                                                                                                                    
SENATOR  GRAY-JACKSON asked  him  to restate  that employees  will                                                              
not be required to make additional contributions.                                                                               
                                                                                                                                
MR.  STEININGER answered,  "There  is no  change  to the  employee                                                              
experience  contribution;  there  is  no  additional  contribution                                                              
that any  employee will have to  make." The bill  simply addresses                                                              
the costs on the state's side.                                                                                                  
                                                                                                                                
SENATOR  GRAY-JACKSON asked  him  to confirm  that the  retirement                                                              
contributions for the state and the employees will remain whole                                                                 
                                                                                                                                
MR. STEININGER answered that is correct.                                                                                        
                                                                                                                                
2:02:06 PM                                                                                                                    
SENATOR STEVENS  asked him  to remind the  committee of  the share                                                              
that communities pay  currently and if there was  potential that a                                                              
larger share may be required in the future.                                                                                     
                                                                                                                                
MR. STEININGER  replied that  22 percent is  the cap on  the share                                                              
from communities;  SB 55 does  not seek  to change that  and there                                                              
are no  plans to change  it going forward.  The bill  only affects                                                              
the State of Alaska portion.                                                                                                    
                                                                                                                                
2:03:01 PM                                                                                                                    
CHAIR COSTELLO  opened public  testimony on  SB 55; finding  none,                                                              
she closed  public testimony  on SB 55 and  solicited the  will of                                                              
the committee.                                                                                                                  
                                                                                                                                
2:03:31 PM                                                                                                                    
SENATOR HOLLAND moved  to report SB 55, [work  order 32-GS1684\A],                                                              
from  committee  with  individual   recommendations  and  attached                                                              
fiscal note(s).                                                                                                                 
                                                                                                                                
CHAIR COSTELLO  found  no objection  and SB 55  was reported  from                                                              
the Senate Labor and Commerce Standing Committee.