Legislature(2007 - 2008)HOUSE FINANCE 519
05/10/2007 08:30 AM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB125 | |
| SB84 |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 22 | TELECONFERENCED | |
| += | SB 125 | TELECONFERENCED | |
| + | SB 84 | TELECONFERENCED | |
| + | TELECONFERENCED |
CS FOR SENATE BILL NO. 125(FIN)
"An Act relating to the accounting and payment of
contributions under the retirement plans of the Public
Employees' Retirement System of Alaska and the
Teachers' Retirement System, to calculations of
contributions under those retirement plans, and to
participation in, and termination of and amendments to
participation in, the defined benefit plans of those
systems; relating to employer contributions to the
health reimbursement arrangement plan; making
conforming amendments; and providing for an effective
date."
Co-Chair Meyer MOVED to ADOPT Amendment #1:
Page 1, line 6, following "plan;"
Insert "relating to participation in the public
employees' defined contribution retirement plan by
certain elected officials;"
Page 14, following line 1:
Insert a new bill section to read:
"* Sec. 22. The uncodified law of the State of
Alaska is amended by adding a new section to read:
PARTICIPATION IN THE DEFINED CONTRIBUTION PLAN OF
THE PUBLIC EMPLOYEES' RETIREMENT SYSTEM BY CERTAIN
ELECTED OFFICIALS. (a) If HCS CSSB 123(FIN), passed by
the first session of the Twenty-Fifth Alaska State
Legislature, is enacted into law, contributions must be
deducted under AS 39.35.730 and contributions must be
made under AS 39.35.750 by the
(1) state on behalf of an Alaska State Legislator who
becomes a member of the Public Employees' Retirement
System defined contribution plan established by
AS 39.35.700 - 39.35.990 as a result of the enactment
of the amendment to AS 39.35.990(16) by sec. 111 of HCS
CSSB 123(FIN); contributions must be based on the
compensation paid by the state to the member from the
date that the member was sworn into office as an
elected official until the effective date of this Act;
(2) political subdivision on behalf of the political
subdivision's elected official who becomes eligible for
membership in the Public Employees' Retirement System
defined contribution plan established by AS 39.35.700 -
39.35.990 as a result of the enactment of AS 39.35.725
made by sec. 83 of HCS CSSB 123(FIN), and who has not
filed a waiver of participation in that plan or a
waiver of participation under AS 39.35.125(a) for
service as an elected official of the political
subdivision; contributions must be based on the
compensation paid by the political subdivision to the
elected official for service as an elected official
from the date that the elected official was sworn into
office until the effective date of this Act.
(b) The period of time covered by contributions
made under (a) of this section constitutes membership
service for the purposes of determining eligibility for
medical benefits under AS 39.35.300 - 39.30.495 and
AS 39.36.700 - 39.35.990.
(c) In this section, "compensation" has the
meaning given in AS 39.35.990. "
Vice Chair Stoltze OBJECTED.
PAT SHIER, DIRECTOR, DIVISION OF RETIREMENT AND BENEFITS,
DEPARTMENT OF ADMINISTRATION, explained that the amendment
rectifies an issue regarding certain elected officials who,
because they were not previously members of PERS, were left
out of the new defined contribution (DC) retirement plan.
There is no fiscal note accompanying the amendment. Those
individuals would have to make up past service cost, as
well.
Co-Chair Meyer asked how many people were affected. Mr.
Shier said four.
8:58:44 AM
Representative Hawker questioned what the amendment would do
for state legislators.
VIRGINIA RAGLE, ASSISTANT ATTORNEY GENERAL, LABOR AND STATE
AFFAIRS, DEPARTMENT OF LAW, reported that a couple new
legislators were not covered by the DC plan under SB 123.
Representative Hawker concluded that SB 125 would benefit
seated legislators. Representative Hawker asked if SB 123
has provisions for future legislators and elected officials
to participate in the DC plan. Ms. Ragle replied that is
correct. Representative Hawker asked if this is uncodified
law. Ms. Ragle said yes.
9:01:57 AM
KEVIN BROOKS, DEPUTY COMMISSIONER, DEPARTMENT OF
ADMINISTRATION, added that HB 141 inadvertently omitted
several categories. Two individuals will benefit, but will
have to catch up "out of pocket".
Representative Gara asked if anyone else has been
inadvertently excluded. Mr. Brooks explained that only a
small group of people were affected.
Vice Chair Stoltze WITHDREW his objection. There being NO
OBJECTION, it was so ordered.
Co-Chair Meyer asked if Amendment #2, which will come up at
a later time, would impact the fiscal note. Mr. Brooks said
it would not.
9:04:46 AM
Mr. Brooks addressed fiscal note #2 by the Department of
Administration. He explained that $193,113.2 is the total
appropriation for FY 08. There is currently $180 million in
HB 95, which would require an additional appropriation of
$13.1 million. The bill provides a "hold harmless"
provision for PERS employers currently paying below the 22
percent level, which comes to $5.4 million. The bill also
provides a "rebate" provision for employers who have made
additional contributions, which totals $7.2 million. Those
two combined equal $12.6 million, and the actuarially
determined rate at 22 percent, required $180.5 million.
There is $180 million in the appropriation bill, so the
differential of $500,000 with the other two pieces, brings
it up to $13.1 million. It contemplates a rate of 32.5
percent, which the Alaska Retirement Management Board (ARM)
supports. If the legislation passes, there will always be a
blended rate for PERS employers.
9:07:41 AM
Co-Chair Meyer asked if fiscal note #1 is dated 3/16 and
fiscal note #2 is dated 5/3. Mr. Brooks said yes.
Mr. Brooks explained that fiscal note #1 shows no cost to
the Division of Retirement and Benefits; however, an
appropriation would be required to comply with the cost
share provisions of the bill.
Co-Chair Meyer noted that fiscal note #2 does not show the
$180 million already in the operating budget. Mr. Brooks
pointed to the information on page 2 of the fiscal note that
addresses that amount.
Co-Chair Meyer requested an explanation of Amendment #2. Mr.
Shier explained that Amendment #2 would prevent prejudicing
of possible recovery in a suit about the previous actuary.
There is language that states any contributions of the state
should not be considered as an offset for any future
recovery. The purpose is to protect the state's interest.
Representative Crawford asked for clarification. Mr. Shier
explained that if there is a court action and one party
recovers from another party, but they have also "recovered"
from another source, that can diminish the court award. The
amendment would prevent that from happening.
Co-Chair Meyer set CSSB 125 (FIN) aside.
CSSB 125 (FIN) was heard and HELD in Committee for further
consideration.
9:11:23 AM
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