04/05/2018 03:30 PM Senate STATE AFFAIRS

                 SB 159-PERS/TERS DISTRIBUTIONS                                                                             
                                                                                                                                
3:31:49 PM                                                                                                                    
CHAIR MEYER  announced the consideration  of Senate Bill  159 (SB
).                                                                                                                           
                                                                                                                                
3:32:49 PM                                                                                                                    
KATHY  LEA, Chief  Pension Officer,  Division  of Retirement  and                                                               
Benefits,  Alaska Department  of Administration,  Juneau, Alaska,                                                               
announced her availability to answer questions regarding SB 159.                                                                
                                                                                                                                
SENATOR  GIESSEL asked  if SB  159 will  have any  affect on  the                                                               
state's unfunded pension liability that continues to grow.                                                                      
                                                                                                                                
MS.  LEA answered  no. She  specified  that the  bill deals  with                                                               
moving   the  distribution   options   that   are  available   to                                                               
participants at termination from  statute into regulation so that                                                               
the  plan  can  have  better  flexibility  in  offering  changing                                                               
options.  She added  that the  cost  of any  of the  distribution                                                               
options is borne by the participant.                                                                                            
                                                                                                                                
3:34:12 PM                                                                                                                    
SENATOR  GIESSEL  referenced the  bill's  fiscal  note and  noted                                                               
reference  to  authorizing  a  lump-sum  payment  of  the  entire                                                               
balance or a  periodic payment option. She inquired  if the lump-                                                               
sum  payment  would  have  a  negative  impact  on  the  unfunded                                                               
liability.                                                                                                                      
                                                                                                                                
MS.  LEA  explained  that  the  plan  is  a  defined-contribution                                                               
provision  so there  is no  tie  to the  unfunded liability.  She                                                               
explained that  the lump  sum is  the participant's  account that                                                               
contains their contribution and  the employer's contribution made                                                               
on their behalf.                                                                                                                
                                                                                                                                
SENATOR COGHILL commented that he  appreciated Ms. Lea's response                                                               
because  he believed  that distribution  methods can  change from                                                               
one generation  to another.  He asked if  Ms. Lea  could identify                                                               
the "flex points" in the plan that were immediately needed.                                                                     
                                                                                                                                
MS. LEA replied that there are  no plans in changing the existing                                                               
options; however,  the Alaska  Retirement Management  (ARM) Board                                                               
as well  as the Department  of Revenue-Treasury Division  and the                                                               
Division of  Retirement have  identified a  need for  more robust                                                               
spend-down  options  for  participants. She  disclosed  that  the                                                               
division  has reviewed  eight presentations  on different  spend-                                                               
down  options  and disclosed  that  they  did  not fit  into  the                                                               
current definitions.                                                                                                            
                                                                                                                                
3:36:54 PM                                                                                                                    
CHAIR MEYER opened and closed public testimony.                                                                                 
                                                                                                                                
He summarized that  the bill will provide the  division with more                                                               
flexibility without  having to wait  for the Legislature  to come                                                               
into session each time a change is needed.                                                                                      
                                                                                                                                
SENATOR COGHILL  disclosed that he  was in  Tier IV and  noted he                                                               
appreciated the plan's flexibility.                                                                                             
                                                                                                                                
CHAIR MEYER pointed out that the bill has a zero fiscal note.                                                                   
                                                                                                                                
3:37:53 PM                                                                                                                    
SENATOR GIESSEL moved to report  SB 159, version 30-GS2815\A from                                                               
committee  with  individual  recommendations  and  attached  zero                                                               
fiscal note.                                                                                                                    
                                                                                                                                
3:38:06 PM                                                                                                                    
CHAIR MEYER announced  that there being no  objection, the motion                                                               
carried.