Legislature(1993 - 1994)

01/27/1994 09:03 AM Senate CRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
              SENATE COMMUNITY & REGIONAL AFFAIRS                              
                        January 27, 1994                                       
                           9:03 a.m.                                           
                                                                               
                                                                               
  MEMBERS PRESENT                                                              
                                                                               
 Senator Randy Phillips, Chairman                                              
 Senator Loren Leman                                                           
                                                                               
  MEMBERS ABSENT                                                               
                                                                               
 Senator Robin Taylor, Vice Chairman                                           
 Senator Al Adams                                                              
 Senator Fred Zharoff                                                          
                                                                               
 COMMITTEE CALENDAR                                                            
                                                                               
 SENATE BILL NO. 39                                                            
 "An Act relating to credited service and retirement benefits."                
                                                                               
 SENATE BILL NO. 2                                                             
 "An Act requiring pay equity for certain public employees and                 
 requiring the compensation of certain public employees based on the           
 value of work performed."                                                     
                                                                               
  PREVIOUS SENATE COMMITTEE ACTION                                             
                                                                               
 SB 39 - No previous action to record.                                         
                                                                               
 SB  2 - See Community & Regional Affairs minutes dated                        
         11/3/93, 1/11/94, 1/18/94, 1/20/94.                                   
                                                                               
  WITNESS REGISTER                                                             
                                                                               
 Senator Jim Duncan                                                            
 State Capitol                                                                 
 Juneau, AK 99801-1182                                                         
  POSITION STATEMENT:   Prime Sponsor of SB 39                                 
                                                                               
 Al Kimker                                                                     
 P.O. Box 4303                                                                 
 Homer, AK 99603                                                               
  POSITION STATEMENT:   Supports SB 39                                         
                                                                               
 Pete Velsco                                                                   
 Box 1205                                                                      
 Nome, AK 99762                                                                
  POSITION STATEMENT:   Supports SB 39                                         
                                                                               
 Mike Ward                                                                     
 Dutch Harbor, AK                                                              
  POSITION STATEMENT:   Supports SB 39                                         
                                                                               
 Bob Zorich                                                                    
 Box 1311                                                                      
 Petersburg, AK 99833                                                          
  POSITION STATEMENT:   Supports SB 39                                         
                                                                               
 Barry Bracken                                                                 
 Box 1201                                                                      
 Petersburg, AK 99833                                                          
  POSITION STATEMENT:   Supports SB 39                                         
                                                                               
 Charles Lean                                                                  
 Box 1716                                                                      
 Nome, AK 99762                                                                
  POSITION STATEMENT:   Supports SB 39                                         
                                                                               
 Earl Clark                                                                    
 9163 Parkwood Drive                                                           
 Juneau, AK 99801                                                              
  POSITION STATEMENT:   Supports SB 39                                         
                                                                               
 Ken Griffin                                                                   
 Juneau, AK                                                                    
  POSITION STATEMENT:   Supports SB 39                                         
                                                                               
 Mary Lou Spartz                                                               
 Juneau, AK                                                                    
  POSITION STATEMENT:   Supports SB 39                                         
                                                                               
 Dr. Clark Damon                                                               
 1101 First St.                                                                
 Douglas, AK                                                                   
  POSITION STATEMENT:   Supports SB 39                                         
                                                                               
 Mike Dean                                                                     
 4318 Connifer Lane                                                            
 Juneau, AK                                                                    
  POSITION STATEMENT:   Supports SB 39                                         
                                                                               
 Karen Crandall                                                                
 11466 N. Douglas Highway                                                      
 Juneau, AK                                                                    
  POSITION STATEMENT:   Supports SB 39                                         
                                                                               
 Bob Stalnaker, Director                                                       
 Division of Retirement & Benefits                                             
 Department of Administration                                                  
 P.O. Box 110203                                                               
 Juneau, AK 99811-0203                                                         
  POSITION STATEMENT:   Offered information on SB 39                           
                                                                               
 Mike McMullen, Manager, System Services                                       
 Division of Personnel/EEO                                                     
 Department of Administration                                                  
 P.O. Box 110201                                                               
 Juneau, AK 99811-0201                                                         
  POSITION STATEMENT:   Present to respond to questions                        
                      on SB 2                                                  
                                                                               
  ACTION NARRATIVE                                                             
                                                                               
 TAPE 94-7, SIDE A                                                             
 Number 001                                                                    
 The Senate Community & Regional Affairs Committee was called to               
 order by Chairman Randy Phillips at 9:03 a.m.  Due to the lack of             
 a quorum, it was stated that only action to be taken on the                   
 legislation to be considered would be the taking of public                    
 testimony.                                                                    
                                                                               
 SENATOR RANDY PHILLIPS introduced SB 39 (RETIREMENT CREDITED                  
 SERVICE & BENEFITS) as the first order of business.                           
                                                                               
 Number 023                                                                    
                                                                               
 SENATOR JIM DUNCAN, prime sponsor of SB 39, explained the                     
 legislation amends a number of different sections in the retirement           
 statutes.                                                                     
                                                                               
 Sections 1 and 6 create a Public Service Benefits, which will allow           
 individuals with service in both public retirement systems who do             
 not have enough service to vest in either to consolidate their                
 public service in PERS and receive a limited benefit.                         
                                                                               
 Sections 2, 3 and 7 allow a vested member of PERS to claim credited           
 service for active duty in a unit of the National Guard or National           
 Guard Reserve.                                                                
                                                                               
 Sections 4 and 8 allow an individual with temporary service credit            
 to choose whether to claim that service as years of service credit            
 towards "twenty and out" or "thirty and out" retirement or only for           
 calculating benefits as is currently allowed.                                 
                                                                               
 Section 5  allows individuals with service as temporary legislative           
 employees to claim that service at any time provided the individual           
 pays the full actuarial cost of the service claimed.  It also                 
 allows former employees of the Alaska State Development Corporation           
 to claim service credit under PERS provided they pay the full                 
 actuarial cost of claiming that service.                                      
                                                                               
 Senator Duncan said the legislation was designed to address several           
 very specific problems which he thinks will provide fairer                    
 treatment to current and former employees.                                    
                                                                               
 Number 125                                                                    
                                                                               
 SENATOR RANDY PHILLIPS stated the committee would begin taking                
 testimony over the teleconference network.                                    
                                                                               
 AL KIMKER, an Alaska Department of Fish and Game employee for over            
 18 years and testifying from Homer, said the legislation will allow           
 state employees with temporary service to buy the time and apply it           
 to their credited retirement service years.  He said old-time                 
 temporary employees simply fell through the cracks and whatever               
 ancillary costs there may be, they would be willing to help reduce            
 those costs or reduce those costs entirely themselves.  They are              
 asking for fair and equitable treatment and support for the bill.             
                                                                               
 Number 160                                                                    
                                                                               
 PETE VELSKO, an Alaska Department of Fish and Game employee                   
 testifying from Nome, stated he has over a year of temporary time             
 and 16 years of full-time employment.  He believes that as a                  
 fairness issue this time should be credited to the older employees            
 who have earned this temporary time because it will equalize them             
 with everybody else in the retirement system.                                 
                                                                               
 Number 180                                                                    
                                                                               
 MIKE WARD, an Alaska Department of Fish and Game employee                     
 testifying from Dutch Harbor, echoed the comments made by the two             
 previous speakers.  He said it will provide a benefit to a group of           
 people that they will pay for themselves.                                     
                                                                               
 Number 195                                                                    
                                                                               
 BOB ZORICH, an Alaska Department of Fish and Game employee for 17             
 years testifying from Petersburg in support of SB 39, stated he has           
 two years of temporary time, and if he could get credit for those             
 two years, he would be eligible for retirement in about eight                 
 months.                                                                       
                                                                               
 Number 210                                                                    
                                                                               
 BARRY BRACKEN, an Alaska Department of Fish and Game biologist                
 testifying from Petersburg, said he feels that the people that                
 supported the department in its early years should be credited for            
 their temporary service at that time.  He pointed out that the                
 people who worked for the Territorial department prior to statehood           
 were given credit for their service, but the people who worked as             
 temporary employees for the department after statehood did not.               
                                                                               
 Number 228                                                                    
                                                                               
 CHARLES LEAN, an Alaska Department of Fish and Game biologist                 
 testifying from Nome, said they are all career biologists and they            
 are planning to retire in the state.  Crediting the temporary                 
 service would accelerate the retirement of some long-time employees           
 who are more costly than short-time employees.                                
                                                                               
 Number 260                                                                    
                                                                               
 EARL CLARK, Southeast Alaska Independent Living Center, testifying            
 in Juneau, stated he has over years five years service with the               
 University of Alaska, Southeast, as well as over two years with the           
 state.  He said he has accrued service in both the TERS and PERS,             
 but does not have enough time in either system to be vested.                  
 Passage of SB 39 would allow him to consolidate his public service            
 in PERS and receive a limited benefit.                                        
                                                                               
 Number 307                                                                    
                                                                               
 KEN GRIFFIN, an Alaska Department of Fish and Game employee                   
 testifying in Juneau, said temporary employees, such as himself,              
 that worked for the state prior to 1980 received none of the                  
 benefits currently enjoyed by seasonal or nonpermanent employees              
 hired after 1980.  He said that with no fiscal impact to the state            
 associated with this legislation, there is an opportunity to                  
 correct the inequity created between the pre and post 1980                    
 temporary/nonpermanent employees.                                             
                                                                               
 Number 368                                                                    
                                                                               
 MARY LOU SPARTZ of Juneau urged the committee's support for SB 39.            
 Ms. Spartz was an employee of the Legislature in 1978, but was not            
 aware that there was a deadline for claiming that service and                 
 therefore has been unable to claim that temporary time.                       
                                                                               
 Number 385                                                                    
                                                                               
 DR. CLARK DAMON of Juneau also spoke in support of SB 39.  He, too,           
 has time in the TERS and PERS, but not enough in either system to             
 be vested.  He has paid into both systems and passage of SB 39                
 would help to rectify his situation.                                          
                                                                               
 Number 415                                                                    
                                                                               
 MIKE DEAN, an Alaska Department of Fish and Game employee                     
 testifying in Juneau said of his 17 years of total credited                   
 service, he has approximately two years of temporary time that he             
 has bought back.  Passage of SB 39 would provide him the option to            
 use that claimed temporary service towards the 20 years and out               
 program.                                                                      
                                                                               
 Number 431                                                                    
                                                                               
 KAREN CRANDALL, an Alaska Department of Fish and Game Employee                
 testifying in Juneau, started working for the department in 1974.             
 From 1974 through 1977, she worked in field camps along side people           
 who were at the same risk she was at, who were receiving benefits             
 and are now closer to retirement than she is.  She believes it is             
 only fair that the time be credited towards her retirement service.           
                                                                               
 Number 450                                                                    
                                                                               
 BOB STALNAKER, Director, Division of Retirement & Benefits,                   
 Department of Administration, said there has been testimony by the            
 Fish & Game people for service that they had in the seventies until           
 the change in law that made them nonpermanent employees.  He said             
 he is not aware of any disparity; they can claim that service.                
 Anybody who worked temporary service can claim that service if they           
 are vested to increase the benefit that they receive when they                
 retire.  The other thresholds are there for permanent service                 
 served for a covered employer under the system.                               
                                                                               
 Mr. Stalnaker said there was a group of people who were                       
 grandfathered into the 20 years and out program.  New employees to            
 Fish & Game working the field, working on the boats, etc., are                
 covered under the PERS non peace officer service.                             
                                                                               
 Mr. Stalnaker said all the employees wanting to claim their                   
 temporary service are all willing to pay the cost, and the bill               
 proposes that everybody pay the full actuarial cost.  The problem             
 is that whenever there is an actuarial cost, there are people with            
 all kinds of differing circumstances, such as differing lengths of            
 service, differing salaries.  In determining an actuarial cost, the           
 actuary has to determine what the average cost would be for that              
 group of people.  Whenever dealing with an average, half of the               
 people will be benefited and half of the people will not.  The                
 people who will be disadvantaged won't take advantage of the                  
 program, therefore there will always be some residual cost to the             
 state.                                                                        
                                                                               
 Number 523                                                                    
                                                                               
 Responding to questions from Senator Leman, Mr. Stalnaker briefly             
 discussed the pros and cons of a defined benefit plan versus a                
 defined contribution plan.  With the exception of West Virginia,              
 every other state has a defined benefit plan.                                 
                                                                               
 TAPE 94-7, SIDE B                                                             
 Number 001                                                                    
                                                                               
 SENATOR RANDY PHILLIPS asked if the department has a position paper           
 on SB  39.  Mr. Stalnaker answered that the department is not                 
 supportive of expanding benefits, especially when there is a cost.            
 The department believes that the retirement plans are very generous           
 plans and serve the purpose, at this point, of attracting and                 
 retaining employees.  He said the department would provide a                  
 position paper on the legislation by the next meeting.                        
                                                                               
 Senator Randy Phillips asked what other groups other than Fish and            
 Game employees would be affected by this legislation.  Mr.                    
 Stalnaker replied that the issue of the temporary service to be               
 used for threshold qualifications is predominantly a Fish and Game            
 issue, because it was the normal practice back in those times to              
 hire people as temporaries for a number of years and then as                  
 permanent positions would open, they would move them in.  He didn't           
 think there would be many others impacted by the legislation.                 
                                                                               
 Number 040                                                                    
                                                                               
 SENATOR RANDY PHILLIPS closed the public hearing on SB 39, stating            
 that it would be back before the committee the following week.                
 Number 045                                                                    
 SENATOR RANDY PHILLIPS brought  SB 2  (PAY EQUITY BASED ON VALUE OF           
 WORK) before the committee as the final order of business.                    
                                                                               
 MIKE MCMULLEN, Division of Personnel/EEO, Department of                       
 Administration, stated he was present to respond to questions.                
                                                                               
 There being no questions and because the committee had lost its               
 quorum, SENATOR RANDY PHILLIPS said the bill would be back before             
 the committee the following week at which time he would entertain             
 a motion on the Administration's version of SB 2.                             
 There being no further business to come before the committee, the             
 meeting was adjourned at 9:55 a.m.                                            
                                                                               

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