Legislature(2023 - 2024)BELTZ 105 (TSBldg)
02/14/2024 01:30 PM Senate LABOR & COMMERCE
Note: the audio ![]()
and video ![]()
recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.
| Audio | Topic |
|---|---|
| Start | |
| SB147 | |
| SB206 | |
| SB135 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 147 | TELECONFERENCED | |
| *+ | SB 206 | TELECONFERENCED | |
| *+ | SB 135 | TELECONFERENCED | |
SB 135-AK WORK & SAVE PROGRM; RETIRE. SAVINGS BD
2:24:47 PM
Chair Bjorkman reconvened the meeting and announced the
consideration of SENATE BILL NO. 135 "An Act establishing the
Alaska Work and Save Program; establishing the Alaska Retirement
Savings Board; and providing for an effective date."
2:25:11 PM
SENATOR BILL WIELECHOWSKI, District K, Alaska State Legislature,
Juneau, Alaska, spoke as the sponsor of SB 135. He said that SB
135 seeks to address the retirement crisis. He explained that a
large percentage of people have no retirement savings and others
who are at retirement age do not have enough retirement savings.
He noted that recruitment and retention are issues. He said SB
135 is aimed at small businesses with fewer than 500 employees,
which make up 99 percent of Alaskan businesses. He pointed out
that more than 52 percent of Alaskans work for small businesses
and 64 percent of small businesses do not offer a retirement
plan. He said that 16 states have passed similar legislation.
SENATOR WIELECHOWSKI shared his belief that many small
businesses would like to offer retirement plans to their
employees; however, the process is complex. He explained that
other states have addressed this by creating a retirement
savings board and having small businesses administer a savings
program. He opined that this removes the roadblocks for small
businesses and sets up a state board to administer the process.
He said that, while some states do things differently, the
programs have been effective.
2:27:56 PM
HUNTER LOTTSFELDT, Staff, Senator Bill Wielechowski, Alaska
State Legislature, Juneau, Alaska, gave a presentation on SB
135. He reviewed slide 2:
[Original punctuation provided.]
What is Alaska Work & Save
• Establishes an auto-IRA program for all Alaskan
employees who qualify.
• Establishes a state board to administrate the
program.
• Creates an option to allow PFD checks to go
toward retirement.
2:28:59 PM
MR. LOTTSFELDT reviewed slide 3:
[Original punctuation provided.]
Retirement in Alaska
• 54 percent of households have no retirement
savings (4)
• Alaskans aged 60+ account for 20 percent of the
population and growing (3)
• Median retirement savings for ages 65-74 is
$200,000, age 75+ is $130,000 (5)
2:29:30 PM
MR. LOTTSFELDT reviewed slide 4:
[Original punctuation provided.]
Survey of Alaska Small Businesses
A recent survey of small businesses in Alaska shows:
• 64 percent don't offer retirement of any kind,
with cost being the biggest factor
• 70 percent support an Alaskan retirement savings
option
2:29:47 PM
MR. LOTTSFELDT REVIEWED slide 5:
[Original punctuation provided.]
What would SB 135 do?
SB 135 would create a board
• This board would be responsible for establishing
and running the program
• The board would work to create the appropriate
rules and investments to offer employees
• The board has the discretion to partner with
other states to lower costs even more for
participants
Program Participants
• Would be enrolled automatically upon hiring
• Can decide to opt-out or adjust rate
• May contribute PFD towards their retirement
2:30:46 PM
MR. LOTTSFELDT reviewed slide 6:
[Original punctuation provided.]
Current Costs for a 401k Plan
A survey of 121 plans with less than $2 million in
assets(2) found that:
• provider fees could vary from $4,800 to $17,000
per year (this figure does not include investment
fees)
2:31:25 PM
MR. LOTTSFELDT reviewed slide 7:
[Original punctuation provided.]
Setting up a retirement plan presently
• Adopt a written plan
• Create and distribute the rules for 401k plan to
all participants
• Arrange a trust fund for the plan's assets
• Acting as a fiduciary, a designated trustee will
handle contributions, investments, and
distributions
• Develop a recordkeeping system
• Records of the plan must be kept, and an annual
report and tax documents must be prepared
• Provide plan information to participants
• Employer must provide a plan summary to existing
and new participants, along with updates
2:33:06 PM
MR. LOTTSFELDT reviewed slide 8:
[Original punctuation provided.]
SB 135 Supports Small Businesses
• 11th year of out-migration of working aged
Alaskans (1)
• Work and Save eliminates the high costs and
bureaucracy for businesses
• Allows small businesses to:
• Better recruit and retain employees
• Stay competitive with larger businesses
2:33:43 PM
MR. LOTTSFELDT reviewed slide 9:
[Original punctuation provided.]
Other States have already started
• As of this year, 16 other states have enacted
their own auto-IRA programs
• Similar federal legislation has recently been
proposed
• Interstate partnerships allow for faster enaction
and possibly lower fees
2:34:30 PM
SENATOR GRAY-JACKSON asked if SB 135 creates a program for small
businesses that is similar to a deferred compensation program.
2:34:56 PM
SENATOR WIELECHOWSKI answered that the program created would
only apply to businesses that do not currently offer retirement
plans. He acknowledged that SB 135 would create a mandate;
however, the state is providing the infrastructure, fiduciary
responsibilities, and paying the costs. The employer simply
gives employees a form to fill out that enrolls them in the
program. He explained that a percentage would be deducted from
the employee's paycheck - there is no employer contribution. He
emphasized that this program would not cost the employer. He
said there are a variety of ways the program could be set up,
including a 401k, taxable or non-taxable - and added that this
would be determined by the board. He explained that employees
can opt out at any time - or can contribute more to their
savings fund. He said that SB 135 makes it easier for employers
to set up and offer retirement savings plans.
2:36:49 PM
SENATOR GRAY-JACKSON expressed gratitude and said that she is
now clear on what SB 135 would do.
2:37:02 PM
SENATOR DUNBAR asked for clarification on whether this would
only apply to small businesses. With respect to multi-state
pooling efforts, he asked if Alaska could join another state
without passing SB 135. He shared his understanding that the
board would decide if Alaska would join with another state and
asked if this is correct.
2:37:55 PM
SENATOR WIELECHOWSKI replied that while small businesses tend to
be the ones that do not offer retirement savings funds, HB 135
applies to all employers in the state. He pointed out that any
employer can set up a retirement plan for employees; however,
coordinating with other states to lower the associated fees
would require passage of legislation to create the necessary
structure.
2:39:15 PM
MR. LOTTSFELDT added that the interstate partnership would still
require a state board; however, the partnership would speed up
the implementation process. He said that programs in Maine and
Delaware took a year to get up and running and surmised that
joining Colorado and sharing resources would ease the burden on
the State of Alaska.
2:40:04 PM
CHAIR BJORKMAN opened invited testimony on SB 135.
2:40:17 PM
JENNIFER SAUER, Senior Research Advisor, Financial Resilience
Research, American Association of Retired Persons (AARP),
Washington, D.C., gave a presentation on SB 135 titled "Saving
for Retirement at Work: A Survey of Alaska Small Business
Owners." She reviewed slide 2, which showed a demographic
profile of small business owners surveyed. She explained that
the survey was conducted via phone, with the option of
completing the survey online. She said the survey's margin of
error was 4.85 percent.
2:41:27 PM
MS. SAUER reviewed slide 4 and said that over half of Alaska
small businesses are very concerned or somewhat concerned that
their employees will not have enough money to cover expenses
through retirement. She said that one in four respondents said
they were "very concerned" and one in four said they were "not
at all concerned."
2:41:51 PM
MS. SAUER reviewed slide 5 and explained that 3 out of 4 small
business owners are concerned that employees may turn to state
funded assistance programs if they are not able to save enough
for retirement. She noted that 4 in 10 say they are "very
concerned."
2:42:08 PM
MS. SAUER reviewed slide 6 and said that 75 percent of small
business owners believe more should be done to help Alaskans
save for retirement. 50 percent of respondents said "a lot more
needs to be done."
2:42:25 PM
MS. SAUER reviewed slides 8 and 9, showing the importance of
workplace retirement savings plans to small business owners in
Alaska. She explained that the survey showed that 1 in 3 small
businesses offer a retirement savings plan. She said that when
asked why they offer a retirement savings plan to employees, the
top reasons were attracting and retaining quality employees and
the belief that it is the right thing to do.
2:43:14 PM
MS. SAUER reviewed slide 10 and explained nearly two-thirds of
Alaska small business owners do not offer a retirement savings
plan. 71 percent of these businesses said it is "too costly"
followed by "too complicated" (38 percent) and "too time
consuming" (29 percent).
2:43:42 PM
MS. SAUER reviewed slide 11 and explained that, while the
majority of survey respondents do not offer retirement plans, 78
percent of respondents did agree that offering a retirement plan
helps business hire and retain quality employees and remain
competitive.
2:44:05 PM
MS. SAUER reviewed slides 12-14. She explained that 70 percent
of business owners support a public-private partnership to
develop an easy, no-cost retirement savings program for small
businesses. She said that, after learning the details of this
option - such as no employer fees, no employer match, and no
employer fiduciary responsibility - support increased to 79
percent.
2:44:51 PM
MS. SAUER reviewed slide 15 and stated that the research shows a
strong interest among small business owners for state
legislators to act. She noted that nearly 8 in 10 business
owners agree that Alaska legislators should support a bill to
make it easier for small business owners to access a retirement
savings option for their employees.
2:45:34 PM
HUNTER RAILEY, Director, Colorado Secure Savings Program,
Colorado Department of the Treasury, Denver, Colorado, testified
by invitation on SB 135. He highlighted some of the benefits of
state auto IRA programs similar to what is proposed by SB 135.
He explained that, as director of the Colorado Secure Savings
Program, his job is to ensure that Colorado employees achieve a
dignified and sustainable retirement. He noted that it is
difficult for employees to access retirement plans at work - and
retirement plans lead to better employee retention. He explained
that in Colorado, nearly 1 million employees lacked access to
workplace retirement. He said that retirement plans like the
Secure Savings Program make it possible for small businesses to
offer retirement benefits, thereby making them more competitive
against other, larger businesses. In addition, retirement
benefits improve employee wellbeing. He stated that prior to
passing the secure savings program, a study was conducted to
determine the impact of the retirement savings gap. He explained
that the study showed that doing nothing to address the gap
would cost taxpayers an estimated $18 billion over the next 15
years. He noted that federal studies have estimated the cost to
be $1.3 trillion. He stated that the biggest barriers to
offering retirement savings programs are cost and administrative
complexities and the Colorado program was designed to meet these
needs. He explained that the onboarding process for employers
takes around 15 minutes and the ongoing admin requirements are
around five minutes per month. He added that there is no cost
for this program. He opined that this design allows the program
to be an asset rather than a burden for employers.
2:47:38 PM
MR. RAILEY stated that nationally, employees in these retirement
savings programs have accumulated close to $1.5 billion in
assets in six states. In Colorado, more than 14 thousand
employers have helped their employees save nearly $40 million on
the first year of operation. He highlighted the ways that
savings programs support private actors in this market. In
addition, Colorado has created access to a multi-state
partnership model - making the program more accessible to states
with smaller populations, reducing expenses and shortening the
timeline for implementation. He noted that Colorado is currently
the only state offering a multi-state partnership. He emphasized
that this program model prioritizes collaboration in the economy
of partner states to meet saver needs.
2:49:43 PM
CHAIR BJORKMAN noted that the Department of Revenue (DOR) has
delivered indeterminant fiscal note for SB 135 and asked if
joining a system of other states would impact the fiscal note
from DOR.
2:50:25 PM
PAM LEARY, Director, Treasury Division, Department of Revenue
(DOR), Juneau, Alaska, replied yes. She explained that it was
difficult to identify what the costs might be for a program of
this kind. She said she is familiar with several different types
of programs and listed these. She detailed several ways programs
have deferred costs. She commented that these programs give an
idea of the ways a retirement savings program could be
implemented - and what the associated costs would be. She stated
that the actual cost would depend on how the program was
structured and implemented.
2:52:47 PM
CHAIR BJORKMAN asked if DOR could provide an estimated cost for
a program like the one in Colorado.
2:53:07 PM
MS. LEARY replied that she would reach out to Colorado and
provide the committee with this information.
2:53:21 PM
CHAIR BJORKMAN concluded invited testimony and opened public
testimony on SB 135.
2:53:36 PM
LOUIS THEISS, representing self, Girdwood, Alaska, testified in
support of SB 135. He said he has been retired for 11 years and
has decades of liquidity ahead of him thanks to automatic
payroll deductions, social security, a pension, and a 401k. He
noted that during his career, he had two employers. However,
times have changed and some of these options are no longer
available. He said that his son works in tourism and has
multiple W-2s each year. In the decade that he has been working,
no one has offered him retirement savings. He shared his belief
that Work and Save would be perfect for his son. He acknowledged
that there is concern about making this mandatory; however, he
shared his understanding that for those who have multiple
employers, the mandate is necessary. He opined that Work and
Save has the most important elements for successful retirement
savings: portability and payroll deduction. He stated that most
retirement advice emphasizes the importance of regular savings
and shared his belief that SB 135 achieves this.
2:55:21 PM
SENATOR MERRICK joined the meeting.
2:55:38 PM
MARGE STONEKING, American Association of Retired Persons (AARP),
Anchorage, Alaska, testified in support of SB 135. She said she
is the Director of Advocacy for AARP Alaska. She explained the
purpose of AARP and noted that retirement readiness is a big
part of being able to choose how retirement years are spent.
However, she stated that nearly 60 percent of American
households have no assets saved for retirement. She said that
protecting social security is a critical piece of the puzzle;
however, it does not ensure retirement readiness on its own. She
explained that people are 15 times more likely to save for
retirement if they are offered a plan through their employer and
20 times more likely to save if they are automatically enrolled.
She said that many Alaskan workers do not have access to
retirement savings plans through their employer. She noted that
small businesses are less likely to offer these plans due to the
hurdles. She said that SB 135 could change the landscape of
retirement readiness in Alaska by giving businesses an easy, no-
cost retirement option for employees. She briefly detailed the
way the program would be run and emphasized how simple it would
be for employers. She pointed out that these savings programs
would follow employees when they change jobs and are optional.
She said that a work and save program would help small
businesses compete with larger employers' benefits packages
while allowing employees to become financially self-sufficient
in retirement.
2:59:38 PM
CHAIR BJORKMAN noted that Senator Merrick joined the meeting at
2:55 pm.
2:59:52 PM
CHAIR BJORKMAN asked for clarification that all W-2 employees
would be eligible for the retirement plan - and this is part of
the mandate - but they would receive a form to opt out if they
choose to.
SENATOR WIELECHOWSKI replied yes.
CHAIR BJORKMAN noted that there are several options for
implementation and asked if one is more preferrable.
SENATOR WIELECHOWSKI replied that he would like to see it be low
to no cost for the State. He explained that, ideally, the State
would evaluate the costs of running the plan and charge a fee to
cover the cost. He shared his understanding that these fees vary
by state. He said that if the program is run in partnership with
another state, these costs will be lowered. He opined that
working in partnership with another state would be the most
beneficial.
CHAIR BJORKMAN asked if Alaska would need its own board if the
program was run in partnership with another state.
SENATOR WIELECHOWSKI answered that, while the details could be
set by the legislature, having a board would allow these details
to be worked out by professionals. He commented that he would
like to keep the program as small and low-cost to government as
possible.
3:02:28 PM
CHAIR BJORKMAN held SB 135 in committee.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB147 ver A.PDF |
SL&C 2/14/2024 1:30:00 PM |
SB 147 |
| SB147 Sponsor Statement Version A 1.24.24.pdf |
SL&C 2/14/2024 1:30:00 PM |
SB 147 |
| SB147 Sectional Analysis Version A 1.24.24.pdf |
SL&C 2/14/2024 1:30:00 PM |
SB 147 |
| SB147 Fiscal Note-DOLWD-WC-01.04.24.pdf |
SL&C 2/14/2024 1:30:00 PM |
SB 147 |
| SB206 ver A.pdf |
SL&C 2/14/2024 1:30:00 PM |
SB 206 |
| SB206 Sponsor Statement.pdf |
SFIN 3/20/2024 9:00:00 AM SL&C 2/14/2024 1:30:00 PM |
SB 206 |
| SB206 Sectional Analysis.pdf |
SFIN 3/20/2024 9:00:00 AM SL&C 2/14/2024 1:30:00 PM |
SB 206 |
| SB206 Fiscal Note-DOLWD-WC-02.09.24.pdf |
SL&C 2/14/2024 1:30:00 PM |
SB 206 |
| SB206 Supporting Document-Stay at Work_Return to Work _ U.S. Dept of Labor.pdf |
SFIN 3/20/2024 9:00:00 AM SL&C 2/14/2024 1:30:00 PM |
SB 206 |
| SB135 ver S.pdf |
SL&C 2/14/2024 1:30:00 PM |
SB 135 |
| SB135 Sponsor Statement 01.31.24.pdf |
SL&C 2/14/2024 1:30:00 PM |
SB 135 |
| SB135 Sectional Anaylsis 01.31.24.pdf |
SL&C 2/14/2024 1:30:00 PM |
SB 135 |
| SB135 Fiscal Note-DOR-TRS-01.18.24.pdf |
SL&C 2/14/2024 1:30:00 PM |
SB 135 |
| SB135 Fiscal Note-DOR-PFD-01.18.24.pdf |
SL&C 2/14/2024 1:30:00 PM |
SB 135 |
| SB135 Public Testimony-Lanet Spence_NAIFA 02.12.24.pdf |
SL&C 2/14/2024 1:30:00 PM |
SB 135 |
| SB135 Supporting Documents-AARP Research-Executive Summary 01.25.24.pdf |
SFIN 5/10/2024 9:00:00 AM SL&C 2/14/2024 1:30:00 PM |
SB 135 |
| SB135 Supporting Documents-AARP Research 01.25.24.pdf |
SL&C 2/14/2024 1:30:00 PM |
SB 135 |
| SB135 Supporting Documents-Sponsor Presentation 02.14.24.pdf |
SL&C 2/14/2024 1:30:00 PM |
SB 135 |
| SB147 Presentation 2.14.24.pdf |
SL&C 2/14/2024 1:30:00 PM |
SB 147 |