SB 159-PERS/TERS DISTRIBUTIONS
3:31:49 PM
CHAIR MEYER announced the consideration of Senate Bill 159 (SB
159).
3:32:49 PM
KATHY LEA, Chief Pension Officer, Division of Retirement and
Benefits, Alaska Department of Administration, Juneau, Alaska,
announced her availability to answer questions regarding SB 159.
SENATOR GIESSEL asked if SB 159 will have any affect on the
state's unfunded pension liability that continues to grow.
MS. LEA answered no. She specified that the bill deals with
moving the distribution options that are available to
participants at termination from statute into regulation so that
the plan can have better flexibility in offering changing
options. She added that the cost of any of the distribution
options is borne by the participant.
3:34:12 PM
SENATOR GIESSEL referenced the bill's fiscal note and noted
reference to authorizing a lump-sum payment of the entire
balance or a periodic payment option. She inquired if the lump-
sum payment would have a negative impact on the unfunded
liability.
MS. LEA explained that the plan is a defined-contribution
provision so there is no tie to the unfunded liability. She
explained that the lump sum is the participant's account that
contains their contribution and the employer's contribution made
on their behalf.
SENATOR COGHILL commented that he appreciated Ms. Lea's response
because he believed that distribution methods can change from
one generation to another. He asked if Ms. Lea could identify
the "flex points" in the plan that were immediately needed.
MS. LEA replied that there are no plans in changing the existing
options; however, the Alaska Retirement Management (ARM) Board
as well as the Department of Revenue-Treasury Division and the
Division of Retirement have identified a need for more robust
spend-down options for participants. She disclosed that the
division has reviewed eight presentations on different spend-
down options and disclosed that they did not fit into the
current definitions.
3:36:54 PM
CHAIR MEYER opened and closed public testimony.
He summarized that the bill will provide the division with more
flexibility without having to wait for the Legislature to come
into session each time a change is needed.
SENATOR COGHILL disclosed that he was in Tier IV and noted he
appreciated the plan's flexibility.
CHAIR MEYER pointed out that the bill has a zero fiscal note.
3:37:53 PM
SENATOR GIESSEL moved to report SB 159, version 30-GS2815\A from
committee with individual recommendations and attached zero
fiscal note.
3:38:06 PM
CHAIR MEYER announced that there being no objection, the motion
carried.