Legislature(2025 - 2026)BELTZ 105 (TSBldg)
04/07/2025 01:30 PM Senate LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| SB83 | |
| SB21 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 21 | TELECONFERENCED | |
| + | SB 83 | TELECONFERENCED | |
SB 21-AK WORK & SAVE PROGRM; RETIRE. SAVINGS BD
1:51:38 PM
CHAIR BJORKMAN reconvened the meeting and announced the
consideration of SENATE BILL NO. 21 "An Act establishing the
Alaska Work and Save Program; establishing the Alaska Retirement
Savings Board; and providing for an effective date." CHAIR
BJORKMAN stated that a committee substitute (CS) for SB 21 was
adopted during the first hearing of the bill.
1:52:18 PM
SENATOR BILL WIELECHOWSKI, District K, Alaska State Legislature,
Juneau, Alaska, presented a recap of SB 21 and stated that the
Alaska Work and Save bill establishes an auto-IRA program for
all Alaskan employees, addressing the lack of retirement
savings, with over half of American households that do not have
a retirement, especially among small businesses, 64 percent of
which currently offer no retirement plan. He said the program
provides an affordable, simplified savings option, helping small
businesses compete for quality talent, supporting Alaskans'
financial security, and improving long-term quality of life. He
said 70 percent of small businesses would support a savings plan
if there were reasonable options. Similar programs exist in 17
other states.
1:53:58 PM
CHAIR BJORKMAN announced invited testimony on SB 21.
1:54:10 PM
MARGE STONEKING, State Advocacy Director, American Association
of Retired Persons (AARP), Anchorage, Alaska, testified by
invitation on SB 21:
[Original punctuation provided.]
AARP is the largest nonprofit, nonpartisan membership
organization in Alaska and in the country. Financial
security is a key component of our advocacy agenda for
Alaskans 50+ and that begins with saving for
retirement throughout one's working years.
AARP's mission is to empower people to choose how they
live as they age.
Retirement readiness is a big part of having choices
for how one lives in retirement, and Social Security
is not enough to live on. Retirement readiness is good
for Alaskans and for Alaska.
The less retirement income you have the more likely
you are to have to rely on public programs like
Medicaid, Senior Benefits, and SNAP to meet basic
needs.
Retirement readiness for the private sector requires a
workplace savings option for all employees.
The retirement crisis in this country is not a new
challenge but one that has persisted for several
decades. Today, over half of the nation's households
are at risk of not having enough money to maintain
their standard of living in retirement and being
unable to afford necessities such as food, utilities,
and healthcare.
Although some individuals are merely not saving
enough, a vast number are not saving at all. 20
percent of adults age 30 and older have no retirement
savings at all and 14 percent have less than $10,000
saved for retirement.
1:56:07 PM
MS. STONEKING continued with her testimony of SB 21:
A critical reason for this shortage of savings is that
a lack of access to workplace savings plans has
remained low for decades. Roughly just half of
private-sector workers have access to a way to save
from their regular paycheck at work. Employers,
particularly small business owners, often cannot
provide a retirement plan to their employees due to
their confusing, costly, and time-consuming nature.
Without access to a retirement savings plan at work,
nearly all workers fail to save. AARP Research has
found that Americans are about 15 times more likely to
save for retirement when they have can do so at work.
Work and Save is designed to address the retirement
savings gap using tools, such as payroll deduction and
automatic enrollment, that are proven to work.
Work and Save programs are changing the landscape on
retirement readiness by giving businesses an easy, no-
cost retirement program and giving workers a portable
retirement savings program allowing workers to build
the savings they need to be retirement ready.
And according to the National Institute on Retirement
Security's research on Americans' Views of State-
Facilitated Retirement Programs, the vast majority of
Americans agree that state-facilitated, privately
managed retirement savings programs are a good idea.
That support holds across party lines and across
generations. This policy has consistent bi-partisan
support in polling among the public and small-business
owners across the country and across time.
And, we know from instate polling that that across
political ideology, Alaska small businesses also
support a publicprivate retirement savings option.
Seven in ten Alaska small business owners support a
privately managed, ready-to-go retirement savings
option that would help small businesses offer
employees a way to save for retirement (Republican: 71
percent; Democrat: 70 percent; Independent: 76
percent). Additionally, most small business owners
agree that state legislators should support a bill to
make it easier for small business owners to access a
retirement savings option for their employees and
themselves, such as SB21 does.
AARP stands ready to work with the Alaska Legislature
to pass Alaska Work and Save so that generations of
Alaskans can save and become retirement ready.
2:00:13 PM
DAVE YOUNG, Treasurer, Colorado Department of Treasury, Denver,
Colorado, testified by invitation on SB 21 and stated that he
wanted to focus on page 7, line 14 of the bill which allows
through legislation the ability to enter into an agreement with
other states to provide services related to retirement age
programs. He said Colorado's Secure Savings Program, established
by legislation in 2020 and launched in 2023, is a state-run
auto-IRA program designed to expand retirement savings. He said
Colorado's IRA program created the "Partnership for a Dignified
Retirement" to help other states launch programs quickly by
leveraging Colorado's procurement work for fund managers,
program managers, and consultants. Partner states benefit from
reduced costs, shared resources, and lower fees for savers due
to negotiated price breaks based on assets under management. He
said the program has grown to 75,000 funded accounts and over
$100 million in assets, and early partner states are beginning
to be successful. The program is designed to complement, not
compete with, private sector plans, allowing businesses to
choose either option. The goal is to increase regular retirement
savings participation, providing a scalable, collaborative model
for states struggling to establish their own programs.
2:05:37 PM
CHAIR BJORKMAN asked whether participants in Colorado generally
keep their funds in their IRA accounts to let them grow long
term or do more people withdraw their money early for short-term
needs and how has that trend played out.
2:06:07 PM
MR. YOUNG replied that since launching in 2023, Colorado's
program shows growing average account balances, indicating
participants are keeping funds invested rather than withdrawing
early. As a Roth IRA, penalties discourage premature
withdrawals, and many savers are using automatic contribution
increases while retaining flexibility to adjust or opt out. He
said overall, the trend suggests people are leaving their money
in and letting it grow.
2:08:28 PM
CHAIR BJORKMAN asked what is the opt out rate in Colorado.
2:08:33 PM
MR. YOUNG replied he will need to consult with his staff on what
the opt-out rate is.
CHAIR BJORKMAN asked how have employers responded to the
program, and what level of time or effort is typically required
from employers when processing payroll.
MR. YOUNG replied that every potential saver must go through a
process called Know Your Customer (KYC), of the people that are
cleared by the KYC process, 20 percent of them opt out of the
program. He said employers report that the program is quick and
simple to use. He said the program was intentionally designed as
the "easy button" to reduce administrative burden. Small
businesses especially value being able to offer retirement
savings as part of compensation, and many employees are excited
to save for the first time. While some busy businesses find it
challenging to add new tasks, the program has generally been
well-received and easy to maintain.
2:11:56 PM
SENATOR YUNDT asked if the contributions would be on a pre-tax
basis.
2:12:13 PM
MR. YOUNG replied that the contributions would be post tax
because this program is Roth IRA.
2:12:24 PM
SENATOR YUNDT asked if the plan provides different investment
options such as low, medium, or high risk, so participants can
choose the strategy that best fits their stage of life.
2:12:41 PM
MR. YOUNG replied that his office did some research on the
different types of options to offer and found that too many
investment choices can discourage saving, as people often find
the options confusing. He said to simplify, the program provides
a default target date fund for long-term growth, while offering
limited additional options based on saver feedback to ensure the
lineup meets actual demand without overwhelming participants.
2:14:16 PM
SENATOR YUNDT asked if there was an employer match option.
2:14:30 PM
MR. YOUNG responded that the program is structured as a Roth
IRA, so employer matches aren't allowed. While Congress is
considering fixes of the SECURE 2.0 legislation through the
"saver's match", many small businesses prefer the current setup
since they aren't fiduciaries or responsible for matching
contributions. He said employers who want to offer matching can
instead choose private plans like 401(k)s. Meanwhile, Colorado's
plan offers a simple investment lineup, including capital
preservation, fixed income, domestic and international equity,
and target-date funds.
2:17:08 PM
SENATOR YUNDT asked since the fund was created, how has its
performance compared to major benchmarks like the Dow Jones or
the S&P 500.
2:17:32 PM
MR. YOUNG replied that the program is designed for long-term
sustainable performance, with fund managers guided by benchmarks
developed with investment consultants, while also being measured
against major indexes. He stated that the focus of Colorado's
retirement programs is long-term investing, not short-term
trading. By diversifying portfolios and managing risk, he aims
to provide sustainable, reliable returns that people can depend
on in retirement.
2:19:28 PM
CHAIR BJORKMAN opened public testimony on SB 21.
2:19:44 PM
JAYNE ANDREW, representing self, Douglas, Alaska, testified in
support of SB 21 and stated that she didn't start retirement
planning until her late 30s, having previously worked in small
businesses and nonprofits that offered little beyond basic
savings options. She emphasized the importance of providing
retirement opportunities, recalling how even modest savings were
valued by employees. Drawing on family history of financial
hardship and reliance on Social Security, she stressed the need
to ensure today's workers have secure retirement options as the
aging population grows.
2:21:57 PM
CHAIR BJORKMAN closed public testimony on SB 21.
2:22:10 PM
CHAIR BJORKMAN solicited the will of the committee.
2:22:13 PM
SENATOR MERRICK moved to report CSSB 21, work order 34-LS0254\N,
from committee with individual recommendations and attached
fiscal note(s).
2:22:28 PM
CHAIR BJORKMAN found no objection and CSSB 21(L&C) was reported
from the Senate Labor and Commerce Standing Committee.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB83 ver O.pdf |
SL&C 4/7/2025 1:30:00 PM |
SB 83 |
| SB83 Sponsor Statement ver O.pdf |
SL&C 4/7/2025 1:30:00 PM |
SB 83 |
| SB83 Sectional Analysis ver O.pdf |
SL&C 4/7/2025 1:30:00 PM |
SB 83 |
| SB83 Fiscal Note-DCCED-DOI 03.14.25.pdf |
SL&C 4/7/2025 1:30:00 PM |
SB 83 |
| SB83 Fiscal Note-DOA-DRB 02.04.25.pdf |
SL&C 4/7/2025 1:30:00 PM |
SB 83 |
| SB83 Supporting Document-AMA-State telehealth policy trends 11.30.23.pdf |
SL&C 4/7/2025 1:30:00 PM |
SB 83 |
| SB83 Supporting Document-AMA-Supporting equitable payment for telehealth 06.21.23.pdf |
SL&C 4/7/2025 1:30:00 PM |
SB 83 |
| SB83 Public Testimony-Combined Letters of Support 04.04.25.pdf |
SL&C 4/7/2025 1:30:00 PM |
SB 83 |