Legislature(1993 - 1994)

02/09/1993 08:00 AM STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
  HB 36: RETIREMENT INCENTIVE PROGRAM                                          
                                                                               
  Number 443                                                                   
                                                                               
  CHAIRMAN VEZEY spoke on the following handouts:                              
                                                                               
       "State of Alaska, Department of Revenue, Division of                    
       Treasury, Teachers Retirement Trust Fund, Financial                     
       Statements, October 31, 1992;" "State of Alaska,                        
       Department of Revenue, Division of Treasury, Public                     
       Employees Retirement Trust Fund, Financial Statements,                  
       October 31, 1992;" "State of Alaska Judicial Retirement                 
       System, Financial Statements and Supplemental                           
       Schedules, June 30, 1992 and 1991, with independent                     
       auditors' report thereon by KPMG Peat Marwick;" "State                  
       of Alaska Teachers' Retirement System, Financial                        
       Statements and Supplemental Schedules, June 30, 1992                    
       and 1991, with independent auditors' report thereon by                  
       KPMG Peat Marwick;" "State of Alaska Public Employees'                  
       Retirement System, Financial Statements and                             
       Supplemental Schedules, June 30, 1992 and 1991, with                    
       independent auditors' report thereon by KPMG Peat                       
       Marwick;" and, "ALASKA, Public Employees' Retirement                    
       System, Teachers' Retirement System, Component Unit,                    
       Annual Financial Report, Fiscal Year Ended June 30,                     
       1992, Walter J. Hickel, Governor."                                      
                                                                               
  These handouts were in the committee packet regarding                        
  financial statements and actuarial reports within the                        
  retirement funds.                                                            
                                                                               
  Number 605                                                                   
                                                                               
  VERNON MARSHALL, EXECUTIVE DIRECTOR, NEA ALASKA, spoke in                    
  support of HB 36 because of reduced personnel costs.  His                    
  written statement was included in the packet.                                
                                                                               
  TAPE 93-15, SIDE B                                                           
  Number 000                                                                   
                                                                               
  CHAIRMAN VEZEY responded to Mr. Marshall's statements                        
  regarding the savings based on teacher contribution.                         
                                                                               
  MR. MARSHALL discussed the net savings of the first and                      
  second Retirement Incentive Program (RIP), for the Anchorage                 
  School District.                                                             
                                                                               
  Number 067                                                                   
                                                                               
  CHAIRMAN VEZEY discussed the total cost of the pension                       
  system funds being a one time cost over a three year period.                 
                                                                               
  Number 075                                                                   
                                                                               
  MR. MARSHALL said the cost to employers was $6.3 million.                    
  References were made to the handout by Mr. Marshall.                         
                                                                               
  Number 110                                                                   
                                                                               
  CHAIRMAN VEZEY talked about the employer having total                        
  discretion to calculate savings.  The estimate to be saved                   
  and actual payment had a disparity in numbers.                               
                                                                               
  MR. MARSHALL discussed the disparity and costs for the                       
  school district which utilized the RIP.                                      
                                                                               
  Number 182                                                                   
                                                                               
  CHAIRMAN VEZEY said a lot of dollars were at stake and the                   
  program would continue to be looked into.                                    
                                                                               
  Number 190                                                                   
                                                                               
  ROBERT STALNAKER, DIRECTOR, DIVISION OF RETIREMENT AND                       
  BENEFITS, DEPARTMENT OF ADMINISTRATION, discussed the two                    
  past RIP costs to employees and the formula used.  The                       
  employer cost fluctuates, and the burden of utilizing the                    
  program was on the employer, he said.                                        
                                                                               
  Number 228                                                                   
                                                                               
  REPRESENTATIVE G. DAVIS asked what the unfunded balance                      
  meant.                                                                       
                                                                               
  MR. STALNAKER discussed the unfunded liability and funded                    
  liability.  The balance was calculated over 25 years and the                 
  assumptions of savings and costs were on the employer, he                    
  said.  References were made to reports within the committee.                 
                                                                               
                                                                               
  Number 282                                                                   
                                                                               
  REPRESENTATIVE G. DAVIS asked if the system had been changed                 
  over time.                                                                   
                                                                               
  MR. STALNAKER explained the history of the changes within                    
  the system relating to cost of living increases.  He also                    
  discussed cost containment.                                                  
                                                                               
  Number 351                                                                   
                                                                               
  CHAIRMAN VEZEY discussed the differences in the unfunded and                 
  funded actual amounts found within the financial reports of                  
  the teachers and public employees.                                           
                                                                               
  MR. STALNAKER discussed the components of the 1992 report                    
  titled "Alaska."  Discussion continued regarding all the                     
  reports found in the committee members packets.  The topics                  
  of discussion included fluctuations, assumptions,                            
  contribution rates, financial projections of debt, unfunded                  
  liabilities, and funding ratios.                                             
                                                                               
  TAPE 93-16, SIDE A                                                           
  Number 191                                                                   
                                                                               
  REPRESENTATIVE G. DAVIS asked if the RIP imposed employee                    
  turn over.                                                                   
                                                                               
  MR. STALNAKER replied in the affirmative.                                    
                                                                               
  Number 217                                                                   
                                                                               
  REPRESENTATIVE G. DAVIS asked what effects economy changes                   
  would make to RIP.                                                           
                                                                               
  MR. STALNAKER said any fluctuation would change the                          
  projected liability.                                                         
                                                                               
  Number 231                                                                   
                                                                               
  CHAIRMAN VEZEY asked if "what if" projections could be                       
  created, analyzed and reported back to the committee.                        
                                                                               
  Number 243                                                                   
                                                                               
  MR. STALNAKER replied in the affirmative.                                    
                                                                               
  ADJOURNMENT                                                                  
                                                                               
  Number 245                                                                   
  CHAIRMAN VEZEY adjourned the meeting at 9:55 a.m., and HB 36                 
  was held over for further consideration.                                     

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