Legislature(1993 - 1994)
04/16/1993 09:05 AM STA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SENATOR LEMAN announced SB 118 (PERS CREDIT FOR PUBLIC HEALTH SERVICE OFF) to be up for consideration. RICK WHITBECK, Legislative Aide for Senator Leman, briefly commented on SB 118. He said it would allow a vested member of PERS to receive credit for service with the U.S. Public Health Service by purchasing up to 5 years of benefits via retroactive contributions. ART RONIMUS, Anchorage, said he was a licensed engineer. He said he was not eligible to contribute to Keogh or IRA plans while in the military. And the only way he could contribute to a military plan was to make a 20 year commitment. He supported this legislation, because it would allow him to buy up to 5 years of Public Health Service (PHS) time and credit it to his PERS longevity. SENATOR LEMAN asked if he was partially or fully vested with the PHS when he retired. Did he get a cash value or was there something he could roll over into another retirement plan. MR. RONIMOUS said the military plan is, if you leave before 20 years, you receive no benefits. Number 200 TOM WOLF said he joined the Public Health Service for 6 1/2 years. Subsequently he worked with the Municipality of Anchorage and became vested in PERS. He wanted the opportunity to participate in the Service Credit Program like other officers of the federal government. DR. MIKE BELLER, Division of Public Health, Department of Social Services, fully supported this bill which would provide former commissioned officers the same privileges with respect to the state retirement system as other veterans now have. He said it is extremely difficult for the state of Alaska to attract highly qualified experienced physicians to work in public health. Their pay is lower than doctors in private practice or even in other state agencies. He said he served for 2 years with the Public Health Service. Number 293 JIM PATTERSON, former PHS officer, supported SB 118. STEVE BAINBRIDGE said he was commissioned by the U.S. Public Health Service in 1972 and would appreciate the opportunity to buy back 5 years of his public health service time which will be lost otherwise. Number 362 BOB STALNAKER, Director, Division of Retirement and Benefits, said the administration did not support expanding the systems or expanding credit granted under the systems. He explained the complications involved with residual charges for a benefit. SENATOR LEMAN asked him to explain why this bill would increase the unfunded liabilities of the PERS by approximately $30,000. MR. STALNAKER replied that the $30,000 is the cost of the adverse selection. The actuary calculates if there are 15 people who have an average of 5 years to claim, this amount of liability would be added to the system. It is discounted by the amount the person would have to pay. The $30,000 is the residual cost remaining. MR. STALNAKER said the average funding level for state plans is around 75% and we are well funded compared to that - in the 90% range. The 75% is just for the pension benefit obligation. He said they want to target up to 100%, not over, because they do not want to overcharge the employer. Number 499 SENATOR MILLER asked what the employer contribution was now. MR. STALNAKER said it was 14.6% from employers and 6.7% from employees for non-police officers and 8.5% for police officers. Number 515 SENATOR LEMAN asked if this legislation would open the door to people with other claims. MR. STALNAKER said that is an effect they see quite frequently. SENATOR MILLER asked if they could claim prior service. MR. STALNAKER said they could claim prior service only if the employer participated. Number 563 STEVE BAINBRIDGE, Anchorage, said he appreciated Mr. Stalnaker's testimony, but said the key issue here is one of consistency, because they are recognized under various state programs currently. He asked for equitable treatment of all military veterans under the PERS statute. Number 578 SENATOR MILLER moved to pass SB 118 from committee with individual recommendations. There were no objections and it was so ordered.