Legislature(2023 - 2024)BELTZ 105 (TSBldg)
03/22/2023 01:30 PM Senate LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| SB88 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 88 | TELECONFERENCED | |
| + | TELECONFERENCED |
SB 88-RETIREMENT SYSTEMS; DEFINED BENEFIT OPT.
1:55:01 PM
CHAIR BJORKMAN announced the consideration of SENATE BILL NO. 88
"An Act relating to the Public Employees' Retirement System of
Alaska and the teachers' retirement system; providing certain
employees an opportunity to choose between the defined benefit
and defined contribution plans of the Public Employees'
Retirement System of Alaska and the teachers' retirement system;
and providing for an effective date.
He expressed the intention to continue with public testimony,
adding that written testimony could be submitted to
slac@akleg.gov.
1:57:02 PM
GARRET ODOM, representing self, Juneau, Alaska, testified in
support of SB 88. He is a firefighter EMT with Capital City Fire
and Rescue and worked six years in human resources for the
Department of Environmental Conservation. While there, he did
exit interviews and an overwhelming majority of the people that
he spoke to had left their jobs for better retirement benefits
in the private sector or other places down south. Capital City
Fire and Rescue answers about 5000 calls a year and each person
that calls expects perfection. The fire department is losing
people with experience, so the remaining firefighters have to
work a lot more. SB 88 would help retain experienced, skilled
employees and provide Alaskans with the best public servants.
1:58:57 PM
JASON TAURIAINEN, representing self, Nikiski, Alaska, testified
in support of SB 88. He works for the Nikiski Fire Department
and is on the school board for Kenai Peninsula Borough School
District. He feels blessed to earn a defined benefit. He said it
would take an act of God to get him to quit his job before he
earns that retirement. People with portable retirements are
leaving. Previously, the appeal of working in Alaska's public
sector was its longevity, effecting a great education system,
and quality public services in which workers stayed and honed
their professional skills over time. He said the public sector
is in crisis mode - recruiting, training, losing, and starting
the cycle over again. Implementing a defined benefit retirement
program is one essential way to attract and retain the best and
the brightest.
2:01:22 PM
PATTY WISEL, representing self, Fairbanks, Alaska, testified in
opposition to SB 88. She is a lifetime Alaskan and has raised
five children in the state. Her husband is retired after 30
years of employment at the same company. She is a nurse and was
an EMT for many years. The state still owes over $7 billion for
the defined benefit plan that was rescinded in 2005, and that
debt continues to increase. She questioned how the new defined
benefit plan would be financed, and wondered if it would be by
adding a sales tax or an income tax, or taking from the PFD. She
cited a study that found retention rates were unaffected when
the state switched from a defined benefit to a defined
contribution plan. She reiterated that Alaskan citizens cannot
afford to return to a defined benefit plan.
2:03:05 PM
GAYLE HARBO, representing self, Fairbanks, Alaska, testified in
support of SB 88. She has been a resident of Alaska since 1957.
She declared Senate Bill 141 that established the defined
contribution plan a disaster to the stability of school systems
and communities. The state is losing $100 million annually as
people with defined contribution plans leave after five years.
Alternatively, under a defined benefit plan the employer
contributions will stay in the plan when the employer
terminates. Defined contribution plans provide zero stability
for school programs and communities. In a time of economic and
environmental vulnerability, the reasons to stay are not
sufficient for defined contribution members facing an uncertain
retirement. She claimed that the current defined contribution
plan costs as much or more in TRS Tier II and PERS Tier III. She
said those that stay until retirement will need to apply for
Medicaid when their HRA is depleted. Meanwhile, retirees in the
defined benefits program are conduits for economic vitality.
Over $3 billion a year in pension benefits, health care dollars,
and other retirement income flow into Alaska each year from
these benefit payments. This is equivalent to dollars paid to
Alaska fishermen or the mineral production in the state and
comparable to the amount spent annually by tourists. More than
60 percent of retirees receiving defined benefits stay in
Alaska. The pension dollars and the health care benefits paid
out to these residents amount to more than $300 million a year.
When retirees reach age 65 and qualify for Medicare, additional
federal dollars come to the state. Since 2007, as of February
2023 there are only 247 people from the defined contribution
plan and combined PERS insurance who have retired.
2:05:51 PM
ERIC GODDEN, representing self, Anchorage, Alaska, testified in
opposition to SB 88. He is a small business owner who has lived
in Anchorage since 1987. For the last six years, there has not
been a statutory PFD, which is a regressive tax against Alaskans
who can least afford it. He expressed concern over affordability
in adding an unknown liability when both the last program and
the 2023 budget still need reconciling. He remarked that
California cities are going bankrupt under the weight of their
pension plans. Most Alaskans will miss the opportunity of a
defined benefits package. For Alaskans to all share in the
sorrows of the state, he thinks it is fair to keep the defined
contribution plan. Though it is not as stable as some would
like, it is fair and affordable. He posited that the main reason
firefighters are leaving is not retirement, but burnout from
repetitive calls for mental health and substance abuse issues.
2:08:11 PM
SANDI RYAN, President, Fairbanks Education Association,
Fairbanks, Alaska, testified in support of SB 88. She has been a
high school mathematics and computer science teacher for 36
years. She currently serves as the Fairbanks Education
Association president. In 1993, she applied for a position in
Fairbanks. She had to transport herself to Alaska, pay for the
trip, visit schools, interview, and do well on the written exam.
She was amazed to learn there were no openings. Alaska was one
of the most attractive places for education, in regard to
salary, benefits, and a secure retirement system. Unfortunately,
policies have changed and emphasis on education has died away.
In 2006, the rug was pulled out from under new public employees
and teachers when the defined benefit was eliminated. To
complicate the issue teachers do not pay into Social Security so
there is no safety net. She said the result is salaries and
benefits shrinking and evidence of the inability for districts
to attract and retain. There are now over 1,000 openings
statewide for teachers. The vast pool of applicants has
virtually dried up. She affirmed that it is time to support and
honor Alaska's public servants, and a defined benefit retirement
is a critical first step. She urged support for SB 88.
2:10:25 PM
SALLY DUNCAN, representing self, Two Rivers, Alaska, testified
in opposition to SB 88. She said SB 88 is more expensive than
her people can afford. District 34 is already paying for a bill
that has not been paid off. She said it seems to her that debts
should be paid off before incurring new ones.
2:11:30 PM
JOE BERTAGNOLI, representing self, Petersburg, Alaska, testified
in support of SB 88. He started working for the City of
Petersburg as a public employee in 1991. He opted to leave the
private sector in construction, primarily for the pension and
insurance. He recently retired after 30 years and is grateful to
have this pension for himself and his spouse as they continue
their life's journey. Being a defined benefit employee, he felt
confident in his future throughout his career; it was always an
incentive to stay with the city to serve the citizens of
Petersburg. In 2006, when the state moved to Tier IV defined
contribution, that incentive to stick around for the long haul
was gone for new employees. Over the last 15 years, he has seen
the carousel of new employees coming to work for the borough.
With diminished retirement options, they only stay long enough
for something better to come along. Then those new employees
move to a different employer within the borough, or out of town
completely taking all that training with them. This creates more
expense for the borough having to retrain new employees. This
trend can also be seen in school systems as teachers experience
similar turnover. It is a statewide story. The current system
just isn't working. It's important to recruit the best employees
possible and keep them once they're hired. SB 88 may not be the
fix-all but it's another tool in the toolbox to help employers
hire and keep good employees.
2:14:04 PM
BARBARA TYNDALL, representing self, North Pole, Alaska,
testified in opposition to SB 88. She is of the conviction that
the state does not need to go into debt. She affirmed that she
doesn't want to go into debt as an individual, nor does she want
her city or state to go into debt. She has been in Alaska since
1958. She loves the state, but it grieves her to see people
leaving. She posited that retention is not just an Alaska
problem, it is a national problem that has nothing to do with
the benefits. She would love to give everybody the best
retirement, but there are things she can't afford. The state
already sank $7.4 billion into debt with the last defined
benefit plan. She suggested that Alaska steward the funds that
it has and think outside of the box. For 20 years she taught in
a private school that was able to manage what little resources
it had, while still providing an excellent education. She urged
the committee to find better ways and turn down SB 88.
2:16:29 PM
BERT HOUGHTALING, representing self, Big Lake, Alaska, testified
in opposition to SB 88. He said he can understand how the
state can be planning to spend money via a plan that has a
proven track record of putting Alaska billions of dollars in the
hole. The state still has to pay off the current deficit.
Nowhere has it been explained where this mythical unicorn tree
of money is to appear to pay for all of this. Nowhere is there a
breakdown of what the municipality or the borough level will
have to contribute to be able to match their share. The Mat-Su
Valley district borough alone already owes $400 million to its
PERS and TRS defined benefits program. He does not see anything
in this plan that defines how Alaska's children will pay for it.
2:18:08 PM
ALEXANDER RENO, representing self, Anchorage, Alaska, testified
in opposition to SB 88. He was born and raised in Anchorage. He
has a background in finance and marketing. There is currently a
liability of about $6.1 billion. He expressed concern over
finding actuarial support for SB 88. He said the best financial
way forward is restructuring by paying off debts and then
perhaps implementing a system like SB 88. No other state is
currently regressing to a defined benefits program. California
currently has a pension plan that's nearly insolvent. People
must take responsibility, be financially literate, and not rely
on the system as much as they might want to.
2:20:41 PM
JANET JOHNSON, representing self, Palmer, Alaska, testified in
opposition to SB 88. She said she knows that the state cannot
afford this plan because she is a product of a defined benefit
retirement system. She worked and paid into the system for 28
years. Two and one half years after retiring, she had received
as much as she had paid in. She questioned who would pay for
debt incurred, as she continues to receive pension payments from
the defined benefit system is not affordable for the state.
Alaska cannot afford unfunded retirement systems.
2:22:08 PM
MARTA MUELLER, representing self, Anchorage, Alaska, testified
in support of SB 88. Recruitment and retention issues cost the
state time for training, lost productivity, and loss of
innovation. When people are coming and going, they don't learn
where to make improvements. If one wants good government, one
must keep good employees. To keep good employees, one must have
good leadership and pension benefits. She is a 19 year Tier III
state employee. She is a supervisor who has had to recruit one
range 12 position four times in the past three years. The system
is not working anymore.
2:23:34 PM
LIAM CARNAHAN, President, Statewide Supervisory Unit Local 4900
(SU), Juneau, Alaska, testified in support of SB 88. He said
that many members of the SU have dedicated years of service to
the state and have watched the decline in the state's ability to
find people willing to take jobs in public service. Many long
term members in defined benefit tiers can attest to the
incentive that a defined benefit pension creates for members to
stay in their positions. Younger members in other bargaining
units start work, stay for two to five years, and leave, taking
their employee contributions and employer match with them. To
deliver the vital services Alaska residents expect, the state
needs to attract and keep trained staff. Recruiting managers
today routinely encounter smaller pools of applicants and even
fewer applicants willing to accept job offers. The inability of
the state to successfully hire and retain employees has resulted
in many members taking on additional duties which is hard on
morale and has lowered the efficiency of state government
overall. Restoring a defined benefit option is a sound financial
decision for the state. He related a story about his son leaving
state service.
2:25:55 PM
At ease.
2:26:14 PM
CHAIR DUNBAR reconvened the meeting and resumed public
testimony.
2:26:23 PM
JERRY CLEWORTH, representing self, Fairbanks, Alaska, gave
testimony on SB 88. He said the original defined benefit plan
was a financial disaster for the State of Alaska, and SB 88 has
three major flaws that he hopes will be fixed. The discount rate
is set at 7.38 percent. The rate under the old plan was 8.25
percent, which was too optimistic, because it went into deficit.
By comparison, Kentucky is using a 5.25 percent discount rate
and that seems to work. Most of the discounts that work are
between 5 and 6 percent. SB 88 is based on the high five years
including overtime which is a major oversight because overtime
for some city firemen exceeds the base salary. He said that it
was almost impossible for the actuary or the Alaska Retirement
Management board to take that oversight into consideration by
looking at the solvency of the fund. The discount rate should be
based on the base salaries for those in five years. A fatal flaw
of the defined benefit plan is the legal promise to pay
regardless of the ability to earn. When the state goes into
deficit, the Constitution kicks in and that deficit needs to be
covered. He said that the previous day the Fairbanks City
Council heard from the fire chief that there were 40 applicants
for one position in the fire department, so there is not a
shortage of applicants. He asked legislators to address those
two problems: the discount rate including overtime, and to at
least indemnify the municipalities at the 22 cents that
currently has to be paid into the system so that would not be
increased.
2:28:54 PM
CORY CROSSETT, representing self, Juneau, Alaska, testified in
support of SB 88. He works for the Juneau school district as a
teacher and has been living in Alaska for 17 years. He expressed
his hope that implementing a defined benefit program would allow
him to continue his career in Alaska. As he ages, he is thinking
about retirement, but is questioning if retirement in Alaska is
viable. He originally intended to move here because the defined
benefit package was attractive, but life got in the way and he
didn't start teaching until 2006, a couple of months after the
system had changed. He doesn't pay into Social Security, and he
doesn't have a defined benefit retirement plan. He expressed his
desire to stay here where he raised his family, as well as his
desire to do right by them. He related a personal story about a
discussion he had with his daughter about staying in Alaska. He
reiterated that the attraction/retention side of SB 88 is key
and said that he has been on both sides of it. He expressed his
hope that SB 88 passes, with whatever changes that are needed to
make it viable.
2:30:36 PM
MATTHEW EPP, representing self, Anchorage, Alaska, testified in
opposition to SB 88. Today he learned about the previous
unfunded liability and that added to why he is opposed to it in
the future. He said that one of two things would happen in any
kind of a Ponzi scheme, which is what this would be. There would
not be enough money coming in to cover future expenditures, so
those expenditures would need to be reduced or the system that
is supposed to fund the plan would be bankrupt. He said this is
the same problem approaching with the Social Security system in
the next 15-20 years. He moved to Alaska a few years ago and has
30 years of experience in consulting engineering as an oilfield
worker. He has retirement that he brought with him, and he is
thrilled with the retirement plan that he has now because he is
already putting more away than ever before. He didn't realize
when he got here that he would not be paying Social Security
anymore. He already qualified for Social Security because of his
previous work, so he gets the best of both worlds, but he is
very much in favor of the current plan. If the state moves
forward with this defined benefit plan as opposed to the defined
contribution plan, he suggested making it available to all new
employees so they can choose whichever program they feel is
better for them. He reiterated his support for the current
defined contribution plan.
2:32:44 PM
PETER FLYNN, representing self, Juneau, Alaska, testified in
support of SB 88. He has been a firefighter for seven years, has
lived in Juneau since 2004, attended UAS, and served the
community in one capacity or another continuously for 19 years.
He feels that he is one of the model citizens that the state's
retirement program is targeting and would want to keep in the
state, have retire here, and spend dollars here. Despite all
that, his family is looking at Washington retirement and pay or
a total career switch to have a safe, healthy, secure
retirement. Many of his peers have left, leaving an enormous
institutional knowledge gap. The least experienced are training
those with no experience. This is costing the state an enormous
amount of training dollars and time optimizing firefighter
safety and it is affecting the quality of public service.
Without SB 88, his family will likely be following their peers
in the near future seeking greener pastures. With this bill his
family is likely to stay and spend their retirement serving and
spending their dollars in this state.
2:34:18 PM
EDWARD SMYERS, representing self, Eagle River, Alaska, testified
in support of SB 88. He is a small business owner, a state
employee, and a proud member of AFA Local 52. Alaska can't
retain people because of the current retirement system. It
offers little retirement security. In the Department of Health,
recruitment is difficult and has 22.8 percent of public health
nurse positions that are not filled, partially because of the
current retirement system. The department still has to provide
the same services to the public, but this cannot be achieved
without recruiting and retaining true professionals. He also
raised the concern of how to pay for a new defined benefit plan
and also pay off unfunded liability from the previous defined
benefit plan.
2:36:10 PM
DANIELLE LOGAN, representing self, Fairbanks, Alaska, testified
in support of SB 88. She said that there are groups making the
case that switching to a defined contribution system was a smart
decision, but as a Fairbanks educator, she has seen that change
has been overwhelmingly negative. Working in the school district
used to be a career, people stayed because they were also
earning a pension. Now many leave for better wages in the
private sector and have no incentive to stay and help students
succeed. Over the past three years, support staff has had more
turnover than ever before. There have been many vacant positions
like tutors, special education aides, and classroom aides. The
custodial staff is shorthanded or nonexistent. This results in
less student learning and fewer ready-to-learn spaces with
untrained staff doing jobs outside of their duties. SB 88 is a
shared risk proposal that will save the State of Alaska and
school districts in the long run and provide public servants
with much needed retirement security. Senator Giessel has said,
This is not your grandma's pension. It is a modest proposal
that has robust risk-sharing measures to protect the state from
fiscal impacts. Educators support SB 88; it will make a
difference in the lives of education support staff,
professionals, and students will benefit from the reduced
turnover.
2:38:17 PM
PAUL SEATON, representing self, Homer, Alaska, testified that he
was chair of the House State Affairs Committee in 2005 when the
committee addressed three retirement issues under Tier II and
Tier III defined benefits: recruitment, retention, and $300-$500
million per year in unfunded liability. Recruitment was lagging
under that system; the state had gone from paying among the
highest salaries to less than average by 2005. Secondly,
retirement wasn't a concern for most entering employees in terms
of pay. Third, the retirement system gave no state contribution
until TRS employees had vested with eight years of service and
PERS employees had vested with 10 years of service. For
retention, the average in TRS was 9.5 years and the average in
PERS was 11 years. For vesting purposes, approximately half of
the workers received none of the money that the state had paid
into the system on their behalf. The employees who vested
received $25 per month per year of service. This amounts to $250
per month for 10 years of service, which is equivalent to the
benefit for the neediest seniors. The unfunded liability added
$300-$500 million to all future budgets, which was problematic.
Acknowledging that there was a difference, he said the state
currently is paying an actuarially calculated 31.1 percent rate
and that's nothing near what is being discussed in SB 88. He
suggested the committee compare the 2005 documents for
recruitment and retention under PERS to the documents for this
bill to ensure that returning to a defined benefit system
provides a solution to the problem. He opined that everybody
knows that the real problem is pay.
2:41:02 PM
RON JOHNSON, representing self, Butte, Alaska, testified in
opposition to SB 88. He said he couldn't believe that some
candidates in the last election supported switching to a defined
benefit. In 2005-2006, the legislature saw that the state was
heading for a trainwreck and discontinued the defined benefit
program. He retired from the building industry and he never saw
a defined benefit plan. The building industry had the foresight
to switch to a defined contribution plan when they saw that
defined benefit was not sustainable. He mentioned his wife's
testimony that she received more from her defined benefit
pension in 2.5 years than she had paid into the system. She's
going to be retired for 25-30 years and Alaskans will be paying
the bill. That defined benefit plan is over $6 billion in
deficit. It aggravates him to leave his grandchildren with the
bill. If the state returns to the defined benefit plan, it is
projected to incur an additional $9 billion in deficit in the
next 30 years. He reiterated his opposition to SB 88.
2:43:13 PM
BRITTANY STILLIE, representing self, Fairbanks, Alaska,
testified in support of SB 88 which would provide a choice
between defined contributions and a defined benefit pension
retirement plan. She has worked for the Division of Forestry and
Fire Protection as a wildland firefighter since 2012. As someone
who has dedicated their life to this profession, she can attest
to the fact that this change would greatly benefit recruitment
and retention efforts and improve public safety and protection
from wildland fires. She has witnessed the loss of a
considerable amount of highly trained and experienced
firefighters because their pay and benefits that are not
competitive with other agencies or the private sector. This has
resulted in significant loss of skills and knowledge that are
critical for combating wildland fires and protecting the public.
SB 88 would address the benefit side of the issue, creating more
stability and security for firefighters. This would be an
excellent investment for the State of Alaska, making the
firefighting profession more attractive to potential recruits
and encouraging experienced firefighters to stay in the program.
About 70 percent of money spent on Alaska wildfires last year
went to outside resources, which are much more expensive and the
firefighters are unfamiliar with unique Alaska firefighting
tactics. Having a more experienced and stable wildland
firefighting staff would save the state money in the long run
and help protect the people of Alaska.
2:45:09 PM
VICKI HEWITT, representing self, Mat-Su, Alaska, testified in
support of SB 88. She was born and raised in Alaska, and this is
her 24th year in education. She has recently heard many
educators talk about leaving the profession and the state
because when they learn about the details of TRS Tier III, they
are shocked, stunned and worried about their future and that of
their families. Independent projections have shown that public
employees are highly likely to run out of money during their
retirement years after working a 30-year career. SB 88 also
restores the modest death and disability benefits that Americans
usually get from Social Security. She relayed a story about a
school counselor from Delta to illustrate how important this
benefit can be. That counselor is paralyzed and destitute, in
part due to her choice to become a teacher in Alaska, where
teachers are not covered by Social Security. Another unintended
consequence of our current system is the vulnerability of
children who unexpectedly lose their parents. When a child loses
a parent in this way, they lose a lifetime of income that would
have supported them as they grew into adulthood. Social Security
built in a safety net by providing a modest monthly support that
keeps them out of poverty, but this is not available to Alaska
public employees who were hired after 2006. Fortunately, SB 88
restores this benefit.
2:47:12 PM
JUSTIN MACK, Secretary Treasurer, Alaska Professional Fire
Fighter's Association, Anchorage, Alaska, testified in support
of SB 88. He has been a captain with the Anchorage Fire
Department for 12 years. There is widespread support for SB 88
among professional firefighters and EMS personnel across the
state. They have advocated for a shared-risk solution where
employees, employers, retirees and the state share
responsibility in addressing recruitment and retention and
giving Alaska workers dignified retirement. The legislature is
right to be concerned about entering a defined benefit system
but it can be done right. This is not the old system. It pays
for itself and saves local communities millions through
recruitment and retention. He believes that retirement is the
cornerstone of Alaska's future. There is a need throughout the
state to attract and keep skilled workers.
2:49:55 PM
GRETA WADE, representing self, Sand Lake, Alaska, testified in
support of SB 88. She is a registered nurse and a fourth
generation Alaskan. She was a public health nurse at a time when
a lot of time and energy was invested in nurse training. She
loved being a public health nurse, but knew she could earn more
in the private sector. She was okay with less pay, but she
couldn't earn less and have no promise of retirement with
dignity. She urged the committee to consider the big picture.
She said Alaskans can't afford not to support SB 88. Alaska
needs a strong middle class.
2:51:32 PM
LAURA LUND, representing self, Fairbanks, Alaska, testified in
support of SB 88. She has been a wildland firefighter with the
Division of Forestry and Fire Protection for eight years. During
her tenure she has seen the majority of her colleagues - into
whom the state invested years of training - resign to work for
other agencies or in other professions. Within the last year, 14
of 22 firefighters have resigned and decades of cumulative
experience and qualifications were lost. This isn't just
turnover; the majority of these positions have not been filled.
Qualified professionals are finding jobs with other agencies
with more appealing benefits and wages. The state's inability to
recruit and retain qualified people for critical jobs has
massive and dire consequences for the remaining employees and
the community they serve. She said the real problem is that
wages and benefits are not competitive with other agencies in
this profession. She said giving state employees a choice
between a defined contribution and a defined benefit pension
retirement plan would be a keystone measure towards improving
recruitment and retention in this and other public service
professions.
2:53:37 PM
BERNADETTE WILSON, State Director, Americans for Prosperity
Alaska (AFP AK), Anchorage, Alaska, stated that AFP AK
represents thousands of grassroots advocates across the state.
She pointed out that the State of Alaska still owes $6.1 billion
on its previous defined benefit plan, and the plan SB 88
proposes is estimated to cost $9 billion moving forward.
Alaskans have been told the state can't afford a full permanent
fund dividend and some in the legislature are talking about an
income tax, so the question is who will pay for this new plan.
She mentioned the heartbreaking stories from teachers and
offered to provide data to show that they would bear the burden.
She reported that 86 percent of police departments with defined
benefit plans still have problems with retention. It's a
nationwide problem across all professions. She said AFP Alaska
isn't saying that nothing should be done, but legislators should
not be given false choices between not supporting a defined
benefit or not supporting police and fire. Other things can be
done and AFP AK would like to see a survey that shows that SB 88
will help retention.
2:56:13 PM
ELIZABETH REEVES-RAMOS, representing self, Fairbanks, Alaska,
testified in support of SB 88. She has been a state employee for
8.5 years and has started to think about retirement. This
includes looking at options outside of state employment because
of the lack of a secure monthly retirement. She described the
revolving door of new and leaving employees at the Division of
Public Assistance, the backlog this has created in processing
Medicaid and food stamp re-certifications and applications, and
the costly overtime the department is paying to try to resolve
the problem. She opined that the people who are staying in state
employment are PERS Tier II and Tier III employees who will
receive a defined retirement. The people who are leaving are all
Tier IV and they aren't staying because they won't get that
retirement.
2:58:52 PM
MARIAN NELSON, representing self, Anchorage, Alaska, testified
in opposition to SB 88 as a concerned citizen, mother and small
business owner. She said the state cannot afford this plan; it
still owes on a previous defined benefit plan. As a small
business owner, she has to take personal responsibility to plan,
prepare and save for herself and her family's future. She lives
within her means, sets aside money in an IRA or a 401(k), and
makes cutbacks. It is a fair approach. Her small business also
deals with employee retention problems, so they offer better
quality of life opportunities such as more leave time. She said
expecting others to pay for her future is unrealistic and
unethical. It seems highly discriminatory to offer this
extensive retirement plan to only a select field. She asked,
"What about all the others? What about all the small private
sector business owners? What about the mom and pop shops? They
won't see a dime of this but they're going to contribute. She
reminded the committee that they work for all Alaskans. The only
other reasonable and fair option is for both parties to pay into
this. There are times when one has to say no and live within
one's means. She urged opposition to SB 88.
3:01:28 PM
BRIAN LASHINSKI, representing self, Fairbanks, Alaska, expressed
uncertainty about SB 88. He was born and raised in the North
Pole. He is a mechanic working for the Department of
Transportation and Public Facilities in Fairbanks (DOTPF). The
department has had five openings for nearly a year and some for
much longer. Recruitment has been challenging. One applicant may
have been under the influence of alcohol and another seemed
unaware of standard prerequisites such as having a current
driver's license. He opined that DOTPF can't get qualified
applicants for the wages and benefits that are being offered.
The State of Alaska is not competitive in attracting or
retaining employees. Employees are leaving for the private
sector for higher wages and similar if not better benefits. He
is unsure if he is for or against SB 88. At least one can
control their own 401(k). A pension would possibly be
underfunded. At least a 401(k) can be willed to one's children,
whereas one must take a reduction in a pension to will it to
one's spouse. If SB 88 passes, the problem potentially will not
be fixed until there are competitive wages.
3:04:12 PM
DOUG TANSY, International Brotherhood of Electrical Workers
(IBEW) Local 1547, Fairbanks, Alaska, IBEW stated support for SB
88 on behalf of their 4500 members. He is a co-chair trustee of
the $2 billion pension plan, nearly 100 percent funded. It is a
huge anchor that keeps members with the program. It also allows
members to retire on time. What the membership expects from the
state is a quality education for their kids in classes that are
not oversized and expect the police and fire/emergency services
that respond in a timely manner. The IBEW membership expects the
state to fund these things adequately. These are stabilizers for
the IBEW organization, and this is a huge stabilizer for the
State of Alaska. He reiterated that he and IBEW support SB 88,
even though IBEW has their own private pension plan.
3:06:34 PM
ROXANNE ABAJIAN, representing self, Ketchikan, Alaska, testified
in support of SB 88. She moved to Alaska in 1979 and is a
retired teacher with a Tier I pension plan. She was told that
dignified pensions for public employees were a traditional
tradeoff for the lower pay in service jobs like firefighters,
police officers, and teachers. She knew that despite the lower
income, she would have a reliable stable pension. Because of
this, she is able to contribute to Alaska's economy and the
economy of the community of Ketchikan. Pension plans support
economic activity, jobs, and incomes. She said her son is a
teacher who cannot return to Alaska because there is no pension.
She has watched many younger teachers remain in their districts
for approximately five years and then leave. She said Alaska has
a severe recruitment and retention problem. Defined benefit
pensions provide incentives to attract and retain employees. She
promoted the research findings of the National Institute on
Retirement Security.
3:09:13 PM
MATT CRUICKSHANK, representing self, Wasilla, Alaska, testified
in support of SB 88. He was also speaking as President of Public
Employees Local 71 which represents operators and mechanics
across the state. He is in an elected position and does not work
for the state. He has over 16 years of experience in Alaska and
has worked side-by-side with talented journeymen. These workers
are there for retirement and benefits. The state is not
competitive with the private industry. As a Republican, he can
stand by the importance of being fiscally conservative at times
of need, but now the state needs to be able to recruit because
this is a state benefit. He reiterated support for SB 88.
3:11:42 PM
DAVID JONES, representing self, Juneau, Alaska, testified in
support of SB 88. He is an engineer working for the state of
Alaska. His wife is a teacher in the Juneau school district.
They are in their 30s. They have been working for almost eight
years and have a strong desire to serve the public, but don't
know if it is realistic to stay in public service because of the
current retirement system. Neither he nor his wife pays into
Social Security, so they are relying on a retirement system that
if left unchanged will be woefully inadequate to have any sort
of meaningful retirement. Teaching is a hard profession, and he
sees his wife come home many days completely exasperated with
the lack of staff and resources available to them. He grew up
with a teacher as a stepmom and saw how a pension gave her the
incentive to push through the hard days and complete a full
career teaching in Alaska. These days there's no such incentive
and school districts across the state are struggling to hire and
retain teachers, as they're burning out at a seemingly ever
faster rate. He heard a few testifiers today, mostly from the
older generations, talking about not being able to afford this
change to a pension system. He would counter that he doesn't
know if the state can afford not to make this change as folks
from his generation are not going to choose to stick around and
raise their kids in Alaska. He expressed his hope that
legislators will act to bring back a pension system for first
responders, teachers, as well as other public employees to help
secure their financial future and make public service a viable
option for work in the state which in the end will help all
Alaskans thrive.
3:13:33 PM
KATIE HODAPP, representing self, Juneau, Alaska, testified in
support of SB 88. She is a physical therapist who used to work
full time employee at Bartlett Regional Hospital. She left
because she could get a pension and higher pay down south.
People do leave and they'll continue to leave because benefits
in Alaska just don't stack up and neither does the pay.
3:14:41 PM
LEAH MAGID, representing self, Waterford, Michigan, testified in
support of SB 88. She worked as a teacher in the Anchorage
School District for eight years. She left the beautiful state of
Alaska in part and primarily because of the lack of a
sustainable retirement and she misses Alaska every single day.
The students that she had were incredible, resilient, and loving
children and she misses her teaching partners. What she doesn't
miss is having an unsure future through the combination of no
viable retirement system and no Social Security. She had to
leave to be able to support her family. It is the same for
firefighters and other state employees who don't have a defined
contribution plan and no Social Security.
3:17:26 PM
ZACH YOUNG, President, Anchorage Young Republicans, Chair,
Alaska Association, Anchorage, Alaska, testified in opposition
to SB 88. He said the problem is that Alaska simply can't afford
SB 88 and doesn't have a plan on how to fund it. Every private
citizen and taxpayer knows that if they spend more than they
take in over a long period of time, they're eventually going to
bankrupt themselves. This is the same situation with defined
benefit packages as they are written now. The estimates that he
has seen have been near $8.6 billion dollars over 30 years,
which comes to nearly $300 million a year in additional costs
for the state of Alaska. He questioned where that money would
come from. That's nearly $1,000 per household and that money is
going to have to come from residents. He thinks the country is
in a retirement crisis but it's not worth going into financial
crisis over a situation that is unfortunate but not necessary in
order to actually have employees and state workers.
3:19:59 PM
CRYSTAL HOFFMAN, representing self, Anchorage, Alaska, testified
in opposition to SB 88. She said SB 88 will end up being funded
by people like her. And if people like her cannot continue to
afford all of the extras, then they will leave this state and
then it is unknown who will fund the plan. It concerns her to
hear that the reason for SB 88 is retention because there are
more issues to be concerned about. If she doesn't feel safe and
her children aren't being educated, she doesn't want to stay. If
her family cannot afford their taxes or their mortgage, then
they're not going to stay. She said those testifying in support
of SB 88 want their occupation to be funded, but no one is
funding her occupation or her retirement. That kind of security
is a personal responsibility. She said all citizens should be
considered, not just the people who are asking for this defined
benefit.
3:21:53 PM
JOHN KING, representing self, Juneau, Alaska, testified in
support of SB 88. He has been a state employee since 2015 and is
a PERS Tier IV member. Alaska is in a recruitment and retention
crisis for public employees. The private sector pays more and
offers bonuses that aren't available to public employees, but
supporting a defined benefit retirement system is one thing
legislators can do for them. PERS Tier IV members are leaving
state service for employment with the federal government and
private sector. Most public employees in Alaska do not receive
Social Security benefits. Without a defined benefit pension,
state workers don't have any retirement security. A defined
benefit pension plan will help with recruitment and retention of
a strong public workforce for Alaska. He reiterated support for
SB 88.
3:23:00 PM
CHAIR BJORKMAN said this concludes the public testimony time for
today. He thanked those who testified. He said the committee
will notice additional opportunities to testify and written
testimony may be sent to slac@akleg.gov.
[SB 88 was held in committee.]
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 88 Public Testimony-Received 03.19-21.23.pdf |
SL&C 3/22/2023 1:30:00 PM |
SB 88 |
| SB 88 Letters of Support - Received as of 3.20-21.23.pdf |
SL&C 3/22/2023 1:30:00 PM |
SB 88 |
| SB 88 Letters of Support-Received 3.18-20.23.pdf |
SL&C 3/20/2023 1:30:00 PM SL&C 3/22/2023 1:30:00 PM |
SB 88 |
| SB 88 Public Testimony-Letters of Support-received as of 03.11-15.23.pdf |
SL&C 3/17/2023 1:30:00 PM SL&C 3/20/2023 1:30:00 PM SL&C 3/22/2023 1:30:00 PM |
SB 88 |
| SB 88 Research ARMB vs Mercer Lawsuit 03.16.23.pdf |
SL&C 3/17/2023 1:30:00 PM SL&C 3/20/2023 1:30:00 PM SL&C 3/22/2023 1:30:00 PM |
SB 88 |
| SB 88 Supporting Documents-News Article_NY Times_Mercer's Little Alaska Problem.pdf |
SL&C 3/17/2023 1:30:00 PM SL&C 3/20/2023 1:30:00 PM SL&C 3/22/2023 1:30:00 PM |
SB 88 |
| SB 88 Research DOA Funded Ratio Combined PERS TRS 03.16.23.pdf |
SL&C 3/17/2023 1:30:00 PM SL&C 3/20/2023 1:30:00 PM SL&C 3/22/2023 1:30:00 PM |
SB 88 |
| SB 88 Supporting Documents-ACSA Presentation to SL&C-Work Force Challenges 03.15.23.pdf |
SL&C 3/15/2023 1:30:00 PM SL&C 3/17/2023 1:30:00 PM SL&C 3/20/2023 1:30:00 PM SL&C 3/22/2023 1:30:00 PM |
SB 88 |
| SB 88 Suporting Documents-Edward Siedle - bio and articles.pdf |
SL&C 3/15/2023 1:30:00 PM SL&C 3/17/2023 1:30:00 PM SL&C 3/20/2023 1:30:00 PM SL&C 3/22/2023 1:30:00 PM |
SB 88 |
| SB 88 Supporting Documents-ACSA 2023 Joint Positions Statement.pdf |
SL&C 3/15/2023 1:30:00 PM SL&C 3/17/2023 1:30:00 PM SL&C 3/20/2023 1:30:00 PM SL&C 3/22/2023 1:30:00 PM |
SB 88 |
| SB 88 Supporting Documents-ACSA Presentation to SL&C-Work Force Challenges 03.15.23.pdf |
SL&C 3/15/2023 1:30:00 PM SL&C 3/17/2023 1:30:00 PM SL&C 3/20/2023 1:30:00 PM SL&C 3/22/2023 1:30:00 PM |
SB 88 |
| SB 88 ver B.PDF |
SL&C 3/13/2023 1:30:00 PM SL&C 3/15/2023 1:30:00 PM SL&C 3/17/2023 1:30:00 PM SL&C 3/20/2023 1:30:00 PM SL&C 3/22/2023 1:30:00 PM |
SB 88 |
| SB 88 Sponsor Statement ver B.pdf |
SL&C 3/13/2023 1:30:00 PM SL&C 3/15/2023 1:30:00 PM SL&C 3/17/2023 1:30:00 PM SL&C 3/20/2023 1:30:00 PM SL&C 3/22/2023 1:30:00 PM |
SB 88 |
| SB 88 Sectional Analysis ver B 3.10.23.pdf |
SL&C 3/13/2023 1:30:00 PM SL&C 3/15/2023 1:30:00 PM SL&C 3/17/2023 1:30:00 PM SL&C 3/20/2023 1:30:00 PM SL&C 3/22/2023 1:30:00 PM |
SB 88 |
| SB 88 Presentation to SL&C 3.13.23.pdf |
SL&C 3/13/2023 1:30:00 PM SL&C 3/15/2023 1:30:00 PM SL&C 3/17/2023 1:30:00 PM SL&C 3/20/2023 1:30:00 PM SL&C 3/22/2023 1:30:00 PM |
SB 88 |
| SB 88 Letters of Opposition - Received as of 3.7.23.pdf |
SL&C 3/13/2023 1:30:00 PM SL&C 3/15/2023 1:30:00 PM SL&C 3/17/2023 1:30:00 PM SL&C 3/20/2023 1:30:00 PM SL&C 3/22/2023 1:30:00 PM |
SB 88 |
| SB 88 Letters of Support - Received as of 3.10.23.pdf |
SL&C 3/13/2023 1:30:00 PM SL&C 3/15/2023 1:30:00 PM SL&C 3/17/2023 1:30:00 PM SL&C 3/20/2023 1:30:00 PM SL&C 3/22/2023 1:30:00 PM |
SB 88 |
| SB 88 Repealed Sections ver B.pdf |
SL&C 3/13/2023 1:30:00 PM SL&C 3/15/2023 1:30:00 PM SL&C 3/17/2023 1:30:00 PM SL&C 3/20/2023 1:30:00 PM SL&C 3/22/2023 1:30:00 PM |
SB 88 |
| SB 88 Research AK Educator Turnover Infographic 3.10.23.pdf |
SL&C 3/13/2023 1:30:00 PM SL&C 3/15/2023 1:30:00 PM SL&C 3/17/2023 1:30:00 PM SL&C 3/20/2023 1:30:00 PM SL&C 3/22/2023 1:30:00 PM |
SB 88 |
| SB 88 Research 2017 ISER cost of teacher turnover 3.10.23.pdf |
SL&C 3/13/2023 1:30:00 PM SL&C 3/15/2023 1:30:00 PM SL&C 3/17/2023 1:30:00 PM SL&C 3/20/2023 1:30:00 PM SL&C 3/22/2023 1:30:00 PM |
SB 88 |
| SB 88 Research APFO Recruitment and Retention Report 3.10.23.pdf |
SL&C 3/13/2023 1:30:00 PM SL&C 3/15/2023 1:30:00 PM SL&C 3/17/2023 1:30:00 PM SL&C 3/20/2023 1:30:00 PM SL&C 3/22/2023 1:30:00 PM |
SB 88 |
| SB 88 Research DB v DC comparison DOA presentation to Sen Fin 3.10.23.pdf |
SL&C 3/13/2023 1:30:00 PM SL&C 3/15/2023 1:30:00 PM SL&C 3/17/2023 1:30:00 PM SL&C 3/20/2023 1:30:00 PM SL&C 3/22/2023 1:30:00 PM |
SB 88 |
| SB 88 Research DPS - Cost to Replace a State Trooper - 3.10.23.pdf |
SL&C 3/13/2023 1:30:00 PM SL&C 3/15/2023 1:30:00 PM SL&C 3/17/2023 1:30:00 PM SL&C 3/20/2023 1:30:00 PM SL&C 3/22/2023 1:30:00 PM |
SB 88 |
| SB 88 Research DPS Employee Engagement Survey Results 3.10.23.pdf |
SL&C 3/13/2023 1:30:00 PM SL&C 3/15/2023 1:30:00 PM SL&C 3/17/2023 1:30:00 PM SL&C 3/20/2023 1:30:00 PM SL&C 3/22/2023 1:30:00 PM |
SB 88 |
| SB 88 Research DPS Recruitment-Retention Plan Overview 3.10.23.pdf |
SL&C 3/13/2023 1:30:00 PM SL&C 3/15/2023 1:30:00 PM SL&C 3/17/2023 1:30:00 PM SL&C 3/20/2023 1:30:00 PM SL&C 3/22/2023 1:30:00 PM |
SB 88 |
| SB 88 Research FFD Cost of hiring from Scott Raygor Fire Chief Fairbanks 3.10.23.pdf |
SL&C 3/13/2023 1:30:00 PM SL&C 3/15/2023 1:30:00 PM SL&C 3/17/2023 1:30:00 PM SL&C 3/20/2023 1:30:00 PM SL&C 3/22/2023 1:30:00 PM |
SB 88 |
| SB 88 Research Legislative Finance Division Research Report on Retirement System 3.10.23.pdf |
SL&C 3/13/2023 1:30:00 PM SL&C 3/15/2023 1:30:00 PM SL&C 3/17/2023 1:30:00 PM SL&C 3/20/2023 1:30:00 PM SL&C 3/22/2023 1:30:00 PM |
SB 88 |
| SB 88 Research NIRS Teacher Retirement Plan Offerings March 2022 3.10.23.pdf |
SL&C 3/13/2023 1:30:00 PM SL&C 3/15/2023 1:30:00 PM SL&C 3/17/2023 1:30:00 PM SL&C 3/20/2023 1:30:00 PM SL&C 3/22/2023 1:30:00 PM |
SB 88 |
| SB 88 Research PERS Tier chart 3.10.23.pdf |
SL&C 3/13/2023 1:30:00 PM SL&C 3/15/2023 1:30:00 PM SL&C 3/17/2023 1:30:00 PM SL&C 3/20/2023 1:30:00 PM SL&C 3/22/2023 1:30:00 PM |
SB 88 |
| SB 88 Research Returning Alaska State Employees to Social Security 3.10.23.pdf |
SL&C 3/13/2023 1:30:00 PM SL&C 3/15/2023 1:30:00 PM SL&C 3/17/2023 1:30:00 PM SL&C 3/20/2023 1:30:00 PM SL&C 3/22/2023 1:30:00 PM |
SB 88 |
| SB 88 Research Risk Sharing in Public Retirement Plans NASRA 3.10.23.pdf |
SL&C 3/13/2023 1:30:00 PM SL&C 3/15/2023 1:30:00 PM SL&C 3/17/2023 1:30:00 PM SL&C 3/20/2023 1:30:00 PM SL&C 3/22/2023 1:30:00 PM |
SB 88 |
| SB 88 Research TRS Tier chart 3.10.23.pdf |
SL&C 3/13/2023 1:30:00 PM SL&C 3/15/2023 1:30:00 PM SL&C 3/17/2023 1:30:00 PM SL&C 3/20/2023 1:30:00 PM SL&C 3/22/2023 1:30:00 PM |
SB 88 |
| SB 88 Summary Table Version B 3.10.23.pdf |
SL&C 3/13/2023 1:30:00 PM SL&C 3/15/2023 1:30:00 PM SL&C 3/17/2023 1:30:00 PM SL&C 3/20/2023 1:30:00 PM SL&C 3/22/2023 1:30:00 PM |
SB 88 |
| SB 88 News Articles 3.10.23.pdf |
SL&C 3/13/2023 1:30:00 PM SL&C 3/15/2023 1:30:00 PM SL&C 3/17/2023 1:30:00 PM SL&C 3/20/2023 1:30:00 PM SL&C 3/22/2023 1:30:00 PM |
SB 88 |
| SB 88 Research Alaska Public Pension Coalition White Paper 2010 3.10.23.pdf |
SL&C 3/13/2023 1:30:00 PM SL&C 3/15/2023 1:30:00 PM SL&C 3/17/2023 1:30:00 PM SL&C 3/20/2023 1:30:00 PM SL&C 3/22/2023 1:30:00 PM |
SB 88 |
| SB 88 Fiscal Note-DOA-DRB-03.03.23.pdf |
SL&C 3/13/2023 1:30:00 PM SL&C 3/15/2023 1:30:00 PM SL&C 3/17/2023 1:30:00 PM SL&C 3/20/2023 1:30:00 PM SL&C 3/22/2023 1:30:00 PM |
SB 88 |
| SB 88 REVISED_ Presentation to SL&C 3.13.23.pdf |
SL&C 3/13/2023 1:30:00 PM SL&C 3/15/2023 1:30:00 PM SL&C 3/17/2023 1:30:00 PM SL&C 3/20/2023 1:30:00 PM SL&C 3/22/2023 1:30:00 PM |
SB 88 |
| SB 88 Research Dept of Law Recruitment and Retention.pdf |
SL&C 3/13/2023 1:30:00 PM SL&C 3/15/2023 1:30:00 PM SL&C 3/17/2023 1:30:00 PM SL&C 3/20/2023 1:30:00 PM SL&C 3/22/2023 1:30:00 PM |
SB 88 |
| SB 88 Research (pg 5) Defined Benefit Total Funded Status DOA to SFIN 2.14.23.pdf |
SL&C 3/13/2023 1:30:00 PM SL&C 3/15/2023 1:30:00 PM SL&C 3/17/2023 1:30:00 PM SL&C 3/20/2023 1:30:00 PM SL&C 3/22/2023 1:30:00 PM |
SB 88 |
| SB 88 Research OCS Staff Departure 2.23.23.pdf |
SL&C 3/13/2023 1:30:00 PM SL&C 3/15/2023 1:30:00 PM SL&C 3/17/2023 1:30:00 PM SL&C 3/20/2023 1:30:00 PM SL&C 3/22/2023 1:30:00 PM |
SB 88 |
| SB 88 REVISED_Summary Table Ver B 3.12.23.pdf |
SL&C 3/13/2023 1:30:00 PM SL&C 3/15/2023 1:30:00 PM SL&C 3/17/2023 1:30:00 PM SL&C 3/20/2023 1:30:00 PM SL&C 3/22/2023 1:30:00 PM |
SB 88 |
| SB 88 Research Actuarial Report from HB 55 (plus all other public employees) 01.18.21.pdf |
SL&C 3/13/2023 1:30:00 PM SL&C 3/15/2023 1:30:00 PM SL&C 3/17/2023 1:30:00 PM SL&C 3/20/2023 1:30:00 PM SL&C 3/22/2023 1:30:00 PM |
HB 55 SB 88 |