01/31/2008 02:00 PM Senate LABOR & COMMERCE

         SB 153-PEACE OFFICERS/FIRE FIGHTER RETIREMENT                                                                      
                                                                                                                                
2:49:25 PM                                                                                                                    
CHAIR ELLIS announced SB 153 to be up for consideration.                                                                        
                                                                                                                                
SENATOR FRENCH, sponsor of SB 153, read his sponsor statement:                                                                  
                                                                                                                                
     Current law allows a police  officer or firefighter who                                                                    
     has  also served  in  the armed  forces  to count  five                                                                    
     years   of  military   service  towards   their  Public                                                                    
     Employees Retirement  System retirement,  provided that                                                                    
     two conditions  are met. First,  the employee  must not                                                                    
     be  eligible  for  a  federal  retirement  benefit  and                                                                    
     second, the employee must  "buy" those military service                                                                    
     years by paying for them.                                                                                                  
                                                                                                                                
     The  shortcoming with  the current  system is  that the                                                                    
     military years purchased towards  a state retirement do                                                                    
     not  count  towards   qualifying  for  retiree  medical                                                                    
     benefits.  Moreover, many  of those  who are  buying in                                                                    
     presume that they are getting  just that coverage. Thus                                                                    
     the  need for  SB 153.  This legislation  corrects what                                                                    
     many   with  former   military   service  assume   when                                                                    
     purchasing military time: that  the time purchased will                                                                    
     be credited to their medical  benefits as well as their                                                                    
     retirement.                                                                                                                
                                                                                                                                
     This bill simply allows for  the same purchase of years                                                                    
     to count towards retirement and medical benefits.                                                                          
                                                                                                                                
     The bill does not allow  any double dipping because the                                                                    
     potential  state  retiree  must  not  be  eligible  for                                                                    
     federal military  benefits in order to  qualify for the                                                                    
     purchase in the first place.                                                                                               
                                                                                                                                
     SB  153  recognizes  the contribution  made  by  police                                                                    
     officers  and fire  fighters who  have both  served our                                                                    
     country through the military and  now pursue careers to                                                                    
     protect and defend our state and communities.                                                                              
                                                                                                                                
2:51:11 PM                                                                                                                    
SENATOR  FRENCH  asked the  committee  to  remember there  is  no                                                               
double-dipping. If you  have served 20 years in  the military and                                                               
you  are eligible  for a  military pension,  you cannot  buy into                                                               
this  program. You  have to  be eligible  for either  one or  the                                                               
other.                                                                                                                          
                                                                                                                                
He explained  that as the  program stands  now you can  buy those                                                               
five  years  of  retirement  time,  but  you  don't  get  medical                                                               
benefits. So the idea is to  just complete the step that was made                                                               
when  the  program  was  first extended  to  the  state's  police                                                               
officers and firefighters and to  let it be applied evenly across                                                               
the board.                                                                                                                      
                                                                                                                                
2:51:57 PM                                                                                                                    
SENATOR BUNDE asked if this would  apply to people who worked for                                                               
a fairly  short time for  the state,  because if they  had worked                                                               
for  an   extended  period  of   10  or  15  years,   they  would                                                               
automatically qualify for the health benefit through vesting.                                                                   
                                                                                                                                
SENATOR  FRENCH replied  you first  have to  get to  20 years  of                                                               
service with  the state. You can't  buy your 25 years  in essence                                                               
by having served only 10 years. You  have to have the 20 years in                                                               
in order to buy the last 5 - and you can only buy 5.                                                                            
                                                                                                                                
SENATOR BUNDE asked how much it  would cost the individual to buy                                                               
the health benefit.                                                                                                             
                                                                                                                                
SENATOR  FRENCH  replied that  it  would  cost  the same  as  was                                                               
indicated on the PERS chart.                                                                                                    
                                                                                                                                
SENATOR  BUNDE  clarified that  his  concern  was on  the  fiscal                                                               
impact to the health care system.                                                                                               
                                                                                                                                
SENATOR  FRENCH replied  that SB  153 has  two department  fiscal                                                               
notes; a  zero fiscal note  from the Department of  Public Safety                                                               
(DPS)  and two  from  the Department  of  Administration (DOA)  -                                                               
first a  small one and then  a much bigger one  arrived today. He                                                               
said  communication is  going on  with  the administration  about                                                               
what the problem was with its assumptions.                                                                                      
                                                                                                                                
CHAIR ELLIS  said he  wanted a  well-reasoned fiscal  note before                                                               
the committee before the bill would be considered again.                                                                        
                                                                                                                                
SENATOR  FRENCH said  the  most recent  fiscal  note he  received                                                               
walked into his office an hour ago.                                                                                             
                                                                                                                                
2:55:27 PM                                                                                                                    
COLONEL   AUDIE  HOLLOWAY,   Director,  Alaska   State  Troopers,                                                               
Department of  Public Safety (DPS),  supported the concept  of SB
  because it  would  help with  recruiting  and keeping  older                                                               
troopers. He had some concerns,  however, and for one didn't want                                                               
to  make the  PERS liability  worse. He  could testify  much more                                                               
confidently with a more definite fiscal note.                                                                                   
                                                                                                                                
CHAIR ELLIS  said that he  would hold  the bill until  they could                                                               
pin the numbers down.