Legislature(2025 - 2026)
04/08/2025 09:01 AM Senate FIN
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATE FINANCE COMMITTEE
April 8, 2025
9:01 a.m.
9:01:10 AM
CALL TO ORDER
Co-Chair Hoffman called the Senate Finance Committee
meeting to order at 9:01 a.m.
MEMBERS PRESENT
Senator Lyman Hoffman, Co-Chair
Senator Donny Olson, Co-Chair
Senator Bert Stedman, Co-Chair
Senator Mike Cronk
Senator James Kaufman
Senator Jesse Kiehl
Senator Kelly Merrick
MEMBERS ABSENT
None
ALSO PRESENT
Senator Cathy Giessel.
PRESENT VIA TELECONFERENCE
Eric DeMoulin, Acting Director, Administrative Services
Division, Department of Administration, Juneau.
SUMMARY
SB 55 TRS CONTR RATE; PERS/TRS SOC SECUR OR SBS
SB 55 was HEARD and HELD in committee for further
consideration.
9:02:11 AM
AT EASE
9:02:30 AM
RECONVENED
9:02:42 AM
SENATOR BERT STEDMAN, SPONSOR, introduced the legislation.
He highlighted some pertinent points of the bill.
9:08:59 AM
Co-Chair Stedman discussed the presentation titled, "SB 55
Supplemental Employee Benefits" (copy on file). She pointed
to slide 2, "Teachers' Retirement System (TRS) Basics":
The Teachers' Retirement System (TRS) was the first
Alaska retirement system, developed by the Territory
of Alaska in the 1940s to encourage teachers to live
and work in Alaska
Tiers I and II are defined benefit plans that closed
to new employees 6/30/2006
Tier III is a defined contribution plan, and is the
plan offered to employees hired after 6/30/2006
TRS employees participate in neither SBS nor Social
Security
Co-Chair Stedman addressed slide 3, "History of Social
Security in Alaska":
1935
Social Security established by the federal government,
available to federal employees only
1940s
Teachers' Retirement System (TRS) created in the
Territory of Alaska
1950s
A series of amendments to the Social Security Act
allowed states and local governments to enroll
employees in Social Security by enacting "Section 218
agreements"
1961
The Public Employees' Retirement System (PERS)
established for State of Alaska employees, all of whom
were also enrolled in Social Security
1980
The State of Alaska created the SBS system and
terminated its Section 218 agreement, moving all state
(PERS) employees from Social Security into the SBS
program
9:09:54 AM
Co-Chair Stedman recalled efforts of the state in the
territorial days through the 1980s to attract employees by
offering competitive salaries and benefits.
9:12:52 AM
AT EASE
9:13:32 AM
RECONVENED
9:13:36 AM
Co-Chair Hoffman wondered how the Bureau of Indian
Education (BIE) teachers were involved in the system.
Co-Chair Stedman agreed to provide that information.
Co-Chair Stedman continued to address slide 3.
Co-Chair Stedman addressed slide 4, "Employee DC Retirement
Savings Comparison: PERS v. TRS":
PERS TIER IV (WITH SBS)
Employee Contribution: 8 percent
Employer Contribution: 5 percent
SBS Employee Contribution: 6.13 percent
SBS Employer Contribution: 6.13 percent
Total Retirement Savings: 25.26 percent
TRS TIER III
Employee Contribution: 8 percent
Employer Contribution: 7 percent
SBS Employee Contribution: --
SBS Employer Contribution:--
Total Retirement Savings: 15.0 percent
PERS employees who participate in the SBS system are
automatically saving over 10 percent more of their
salary than TRS and non-SBS PERS employees.
9:18:18 AM
Co-Chair Stedman highlighted slide 5:
How can we improve retirement for Alaska's teachers
and other non-state PERS employees?
Co-Chair Stedman displayed slide 6, "SB 55 Key Provisions":
GOAL: Equalize retirement savings between State
employees and non-state PERS and TRS employees
Require PERS and TRS Employers Provide a Supplemental
Annuity Plan
Requires participation in SBS if the employer is not
currently a member of Social Security
Opens the SBS statute to allow TRS employers to
participate in the program alongside PERS employers
Amendment in Senate Labor and Commerce
Committee
Establishes a phased in approach to implementing SBS
participation for members of TRS, with the Department
of Administration providing employee and employer
contributions as follows:
* FY27 FY29: 100 percent
* FY30 FY33: 66.6 percent
* FY34 FY37: 33.3 percent
Co-Chair Stedman pointed to slide 7, "SB 55 provides an
option to improve retirement savings equitywithout
implementing an entirely new system":
Participation in SBS
Could provide additional retirement savings of
12.26 percent
Contributions are made equally by employer and
employee, following the phase in when the
department covers a portion of the costs
Does not expose the state to increases in
unfunded liability
9:28:31 AM
Co-Chair Hoffman stated that the committee would forego the
Sectional Analysis.
Senator Kiehl wondered whether there was a forthcoming
fiscal note for the most recent version of the bill.
9:29:31 AM
ERIC DEMOULIN, ACTING DIRECTOR, ADMINISTRATIVE SERVICES
DIVISION, DEPARTMENT OF ADMINISTRATION, JUNEAU (via
teleconference), agreed to provide that information.
Senator Kiehl wondered how many Alaska school districts had
403 accounts with and employer match available for their
employees.
Co-Chair Stedman agreed to provide that information, but
gave a high level answer.
Senator Kiehl recalled that there were some school
districts with mandatory participation in 403Bs, but he did
not know whether there were matching funds available. He
wanted to know the next most valuable step in addressing
the retention problem.
9:34:02 AM
Co-Chair Stedman replied that it was unfortunate that there
was a timing issue with regards to the discussion about
defined benefits versus defined contributions.
Senator Kiehl reviewed the fiscal notes.
SB 55 was HEARD and HELD in committee for further
consideration.
ADJOURNMENT
9:38:37 AM
The meeting was adjourned at 9:38 a.m.
| Document Name | Date/Time | Subjects |
|---|