Legislature(1993 - 1994)
02/09/1993 08:00 AM STA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
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.