Legislature(2005 - 2006)CAPITOL 106
04/14/2005 08:00 AM House STATE AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| Alaska Air National Guard - Brigadier General | |
| HB167 | |
| HB160 | |
| HB238 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| + | SB 141 | TELECONFERENCED | |
| += | HB 238 | TELECONFERENCED | |
| += | HB 167 | TELECONFERENCED | |
| += | HB 160 | TELECONFERENCED | |
HB 238-PUBLIC EMPLOYEE/TEACHER RETIREMENT 9:44:37 AM CHAIR SEATON announced that the last order of business was HOUSE BILL NO. 238, "An Act relating to contribution rates for employers and members in the defined benefit plans of the teachers' retirement system and the public employees' retirement system and to the ad-hoc post-retirement pension adjustment in the teachers' retirement system; requiring insurance plans provided to members of the teachers' retirement system, the judicial retirement system, the public employees' retirement system, and the former elected public officials retirement system to provide a list of preferred drugs; relating to defined contribution plans for members of the teachers' retirement system and the public employees' retirement system; and providing for an effective date." CHAIR SEATON noted that the committee had discussed several changes to Version L and those changes are shown in a handout with color-coded type [included in the committee packet]. He announced he would give the committee three minutes to review the handout before proceeding with the bill hearing. The committee took an at-ease from 9:45:19 AM to 9:48:06 AM. 9:48:14 AM REPRESENTATIVE ELKINS noted that the committee members had received a facsimile that mornings from AARP advising the committee to take HB 238 slowly. He said he thinks that is good advice. 9:48:31 AM CHAIR SEATON agreed that the matter before the committee is "extremely serious." He returned to the subject of the color- coded handout and explained that it contained all the ideas for amendments that the committee had discussed at its prior meeting. He stated his intent for the committee to adopt all the changes in the handout as a unit rather than adopting individual amendments. 9:50:01 AM KATHERINE SHOWS, Staff to Representative Paul Seaton, Alaska State Legislature, on behalf of Representative Seaton, chair of the House State Affairs Standing Committee, sponsor, reviewed the color-coded handout. She said the changes would be to the following categories: changing "health reimburse account" to "health reimbursement arrangement"; adding definitions where needed; making changes in semantics; clarifying the part of the bill that addresses cost sharing as it relates to the increasing health care costs; addressing the committee's concerns regarding a retiree's acquiring dependents after retirement; and eliminating the language that spoke to the issue of generic drugs and changing it to intent language for the Division of Retirement & Benefits. She said there would be no change of the intent of the bill. 9:52:38 AM MS. SHOWS, in response to a question from Representative Gruenberg, explained that the red type shows the changes that she made, while the blue type shows the language changes by Brad Lawson of Mercer Human Resource Consulting. 9:52:52 AM REPRESENTATIVE GRUENBERG asked if the intent language would be in the form of a letter of intent or an intent section in the bill. 9:53:15 AM CHAIR SEATON said he believes that would be an intent section in the bill. MS. SHOWS said she expects that the bill drafter will put that into more formal language. 9:53:45 AM REPRESENTATIVE GRUENBERG stated his assumption that there will be a new committee substitute (CS) that contains the changes in the handout. CHAIR SEATON answered yes. He added that he didn't want to create a CS without first displaying the changes in writing that the committee spoke of previously. REPRESENTATIVE GRUENBERG said he is not familiar with the word "arrangement" as a legal term of art. He also recommended that the phrase "must retire directly" is the most accurate term to use. 9:54:41 AM MS. SHOWS said the actual language in the Internal Revenue Service (IRS) code is "arrangement," although "account" is the more well-known term. 9:55:18 AM REPRESENTATIVE GRUENBERG observed that there appear to be typographical errors in the color-coded handout and urged Ms. Shows to clear those before giving it to the bill drafter. 9:56:04 AM CHAIR SEATON asked the committee members if there was any objection to adopting the language in the handout into a new committee substitute. There being no objection, it was so ordered. 9:57:05 AM CHAIR SEATON referred to a handout included in the committee packet showing the "Projected Values for Health Reimbursement Accounts," [with various scenarios, including early or late hire, with spouse, PERS "other," PERS police/fire, and TRS]. He reviewed that the early hire provision is when someone works for 30 years and, in the example provided, retires at 55. In that example, the employee would probably not be able to make the medical payments necessary. He said the question is whether to choose a 30-years-and-out retirement provision or to set retirement at age 60. At age 60 and with an HRA provision of 2 percent, the tables show that there would probably be adequate funding to allow people to transition between early retirement at age 60 and Medicare eligibility. Another option for the committee to consider is whether to just have a big warning: "If you retire before age 60 and are required to have medical insurance bridging that coverage, our projections are that if you don't have ... another job with medical coverage [or] medical coverage with spouse that you can identify, the plan will not provide you sufficient money to bridge [the gap] and you will lose your post-Medicare eligible contribution." He summarized that the question is whether to go with a conservative approach or to just issue a warning. He said another option would be to decide to increase to a 3 percent HRA, or some other mechanism to fund the early retiree. He stated, "That is the philosophical problem that we have to address." 9:59:58 AM REPRESENTATIVE GRUENBERG said he would like to hear various groups testify regarding this issue to find out what they want. 10:00:32 AM CHAIR SEATON said he wants to put these questions out to be addressed at the succeeding hearings on HB 238. [HB 238 was heard and held.]
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