Legislature(1993 - 1994)

04/16/1993 09:05 AM STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
  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.                                                              

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