HB 116-PERS CREDIT FOR MILITARY SERVICE  4:19:58 PM CHAIR OLSON announced that the next order of business would be HOUSE BILL NO. 116 "An Act relating to the use of credited military service by retired peace officers and firefighters to meet certain requirements for major medical insurance coverage; and providing for an effective date." 4:20:06 PM REPRESENTATIVE MILLETT, speaking as sponsor of HB 116, said this bill is a way to honor members of the military that have served in the military and worked with the state as peace officers. She explained that military members often take jobs in civilian life they previously held in the military, such as firefighters and police officers. The aforementioned professions are jobs that are difficult, cause great wear and tear on the body, and for which the potential for injury is high. Therefore, HB 116 provides a cost savings that could help fire and police members by allowing them to purchase five years of Public Employees' Retirement System (PERS) service for medical benefits and retirement. She highlighted that the bill has a zero fiscal note since members would repay the cost through an actuary formula for up to five years of military service time. She highlighted that this would recognize the military service of the police officers and firefighters as well as the increased possibility of injury or need for more time off as these people age. This bill would allow for an earlier retirement for those who chose to do so at no cost to the state and potentially save the state some money. 4:23:03 PM VASILIOS GIALOPSOS, Staff, Representative Charisse Millett, Alaska State Legislature, on behalf of Representative Charisse Millett, provided a sectional analysis of the bill. He stated that Section 1 is a conforming section such that it would conform AS 39.35.340 to Section 2 of the bill, which would allow peace officers and firefighters, vested under PERS Tier 2 or Tier 3, to obtain medical coverage under AS 39.35.535 (c). The proposed retiree would confer with the state's Division of Retirement and Benefits and the actuarial indebtedness would be calculated. Since the bill is permissive, the employee would be able to choose to purchase up to five years of service time. 4:24:23 PM REPRESENTATIVE SADDLER asked whether the purchase would be limited to Tiers 2 and 3. He then asked whether the benefit would be available for Tier 1. MR. GIALOPSOS responded that in a technical sense, Tier 1 could apply. However, since the officers in question are eligible to purchase the credit between their 20th and 25th work year, Tier 1 employees would already encompass this timeframe. 4:25:09 PM REPRESENTATIVE JOSEPHSON asked whether this could save the state money since the incoming police and fire employees would be a lower classification. MR. GIALOPSOS responded that there is a strong argument that it would save money. He stated 240 employees are peace officers and firefighters, working in some of the most hazardous work environments. He characterized the jobs as being for younger people. Thus entry-level positions would be coming in at lower cost. Additionally, the cost of injuries could affect workers' compensation or result in a disability. REPRESENTATIVE JOSEPHSON understood the bill is permissive so a person could shop for coverage. MR. GIALOPSOS answered yes. 4:27:04 PM JIM PUCKETT, Director, Central Office, Division of Retirement & Benefits (DRB), Department of Administration (DOA), introduced himself. KATHY LEA, Deputy Director, Central Office, Division of Retirement and Benefits (DRB), Department of Administration (DOA), introduced herself. 4:28:18 PM MR. PUCKETT related there is a minor issue regarding changing language in the bill so that it can be administered as intended. CHAIR OLSON asked whether the department supports the bill. MR. PUCKETT responded that the DOA is neutral on the bill. 4:28:46 PM REPRESENTATIVE SADDLER asked how the process would work. MS. LEA answered that currently PERS Tier 2 and Tier 3 peace officers and firefighters of any age can retire after 20 years of service; however, they cannot access medical coverage until they reach 25 years of service. Therefore, those employees who retire after 20 years of service must wait until age 60 before they are eligible [to receive medical coverage]. Ms. Lea related a scenario in which an employee wishes to buy service time. The department would estimate the cost to purchase the military service for health eligibility in the year the person is retiring. She explained this limit is due to the actuarial calculation, which is based on the employee's age, the current earnings in the fund, as well as the present value of the additional benefits. Thus, the amount owed for each year of eligibility up to five years would be calculated. The additional retirement time could be paid in full or in part prior to retirement if any remaining time can be taken as a lifetime actuarial reduction to the retirement or benefit. She said the person could do a plan-to-plan transfer into PERS from another qualified plan such as the Alaska Supplemental Annuity Plan or the Alaska Deferred Compensation Plan to pay for this. 4:31:37 PM REPRESENTATIVE SADDLER asked whether there is a penalty for transferring from plan-to-plan. MS. LEA answered no; that it would be a direct plan-to-plan transfer. 4:31:50 PM REPRESENTATIVE SADDLER asked whether people who have served as firefighters and police officers but now serve in the military could buy service time, in other words would it be reciprocal. MS. LEA answered that she did not know. 4:32:14 PM JAKE METCALFE, Executive Director, Public Safety Employees Association Local 803 (PSEA), said that PSEA represents police officers in Ketchikan, Sitka, Juneau, Fairbanks, Soldotna, Unalaska, and Dillingham as well as the Alaska State Troopers (AST), airport police, and firefighters in Fairbanks and Anchorage. He related that approximately 750-800 police, fire, and police department employees are represented by the PSEA. He said the PSEA very much supports HB 116 and he asked the committee to support the bill. He referred to the sponsor's statement and read, "They have made a career providing public safety and rescue in one of the most hazardous working environments to be found." He also referred to charts in members' packets which identify the type of injuries that police officers and firefighters have suffered over time. MR. METCALFE highlighted the tragedy that happened this week involving Thomas Madole, a Village Public Safety Officer (VPSO) who was killed in Southwest Alaska. He said this demonstrates the type of hazards that police and fire employees face every day when they go to work. He characterized public safety jobs as being very difficult ones. He said, "Our hearts go out to his family and we wish them the best dealing with this tragedy." In conclusion, he urged members to support the bill. 4:35:19 PM CHAIR OLSON asked how many of the 750 employees would be eligible for the buyback provisions in HB 116. MR. METCALFE answered the total number was 238 last year, although the total number has been reduced since some people have subsequently retired. In further response to a question, Mr. Metcalfe answered that 238 State of Alaska PSEA employees would be eligible to the provisions in HB 116. CHAIR OLSON said it isn't a huge number. MR. METCALFE acknowledged that the PSEA does not represent all police and public safety employees of the state. 4:36:07 PM REPRESENTATIVE SADDLER asked whether the restrictions are in place for those not honorably discharged from the military service. MR. METCALFE said he did not know. REPRESENTATIVE SADDLER then asked the sponsor for clarification. 4:36:44 PM MR. GIALOPSOS referred to AS 39.35.340(a), which read: A vested employee is entitled to credited service for active military service in the armed forces of the United States, either by enlistment or induction, if the employee received a discharge under honorable conditions and is not entitled to receive retirement benefits from the United States government for the same service. MR. GIALOPSOS explained this refers to a narrowly defined description of the eligible public safety employees. 4:37:21 PM REPRESENTATIVE SADDLER asked whether "under honorable conditions" also includes a general discharge. MR. GIALOPSOS answered yes. REPRESENTATIVE MILLETT expressed her desire not to offend any of the older police officers. MR. METCALFE responded she did not. 4:38:21 PM JAMES W. SEARS, Alaska State Trooper (AST), Department of Public Safety (DPS); Vice President, Public Safety Employees Association (PSEA), stated he was born and raised in Alaska and is currently an Alaska State Trooper (AST) stationed in Nome. He has performed most of his career in rural Alaska and has been in law enforcement since 1985. He highlighted that his job duties are demanding and offered that were it necessary to rescue Representative Millett he could have carried to safety during his earlier years but now he would likely drag her to safety. He reported that he is a disabled U.S. Army veteran. He advised that his job duties are very physically demanding, including carrying an extra 28 pounds of gear each day; the gear includes his vest, duty weapon and other gear. Furthermore, he travels throughout the state in airplanes, four-wheel all- terrain vehicles, boats, and on foot. In fact, he related that he just returned from a 400-mile snowmachine patrol and is a little sore. He explained that carrying 28 pounds of gear is physically hard on bodies. MR. SEARS related that it is more difficult to wrestle bad guys who do not want to cooperate than it was during his younger years. He highlighted that HB 116 would give veterans an opportunity to retire with 20 years if they also have five years of military service. This bill would allow the officers to purchase their military time and military medical time. In the long run, he predicted this would save the state a lot of money since senior AST's salaries are higher. He surmised that the bill would also reduce the costs of injuries for older officers. In fact, the PSEA's employees are not asking for a handout since these members are willing to pay for the military service. He asked for support for HB 116 for military veterans that have served their country and currently serve their state. He also expressed condolences for VPSO Madole who gave the ultimate sacrifice. 4:42:46 PM CHAIR OLSON asked whether this would open up advancement possibilities, too, for other officers. MR. SEARS confirmed that is correct. He explained that the seasoned officers would trickle out of the PSEA. For example, he has four more years before he would be eligible to retire and take advantage of the option HB 116 provides. CHAIR OLSON did not think the retirements would overwhelm the system. 4:43:27 PM CHRISTOPHER BURKE, Sergeant, Juneau Police Department (JPD), City and Borough of Juneau, stated that this bill would benefit him as well as others. He said he has worked in law enforcement most of his adult life. He has purchased his military credit. He said he has been with JPD in active law enforcement for 17 years. Thus far, the CBJ has not taken a position on the bill. He served in the U.S. Coast Guard (USCG) on two separate patrol boats whose mission was law enforcement and search and rescue operations. He also served in the first Gulf War and worked on anti-terrorist patrols. He was born and raised in Alaska and returned to Alaska since it was a lifelong dream to work in the community in which he grew up. Further, the bill does not have a fiscal impact since the cost would be placed on members wishing to purchase the military time. Without HB 116, he would otherwise need to work an additional five years to retire with full benefits. One optional benefit to the state is the cost savings since currently the state would pay for his benefits during the additional five years of service prior to eligibility. He suggested this would cost more since he is currently at the top of his pay scale. He also agreed with Chair Olson, that the bill would also allow younger officers an opportunity for promotion. He, too, acknowledged the job becomes more physically demanding as he grows older although he has been lucky he has not been injured. He said he is a working street patrol sergeant, which he plans to remain doing for his remaining time. He also said he works with younger officers who shoulder some of the demanding enforcement. 4:47:15 PM SERGEANT BURKE acknowledged that the people who will use the program would do so in a tiered affect. He said under HB 116 he would purchase his time and leave the state with 25 years of service. Additionally, he would pay for the medical premiums instead of the CBJ or the state paying them. He concluded that he served his country, the state and the CBJ for 26 years. He asked members to support this bill since it will be a cost savings to the state and is also a means to thank veterans who have dedicated their lives to help people through public service. CHAIR OLSON indicated at least one veteran serves on the committee. 4:48:44 PM JAMES BAISDEN, Fire Chief, Nikiski Fire Department; 1st Vice President, Alaska Fire Chiefs Association, speaking as Fire Chief, thanked the committee and Representative Millett for bringing this bill forward. He said that he is one of five veterans working for the department and believes about 10 firefighters could be affected by HB 116. He has held conversations with the Anchorage Fire Department personnel who indicate 23 fire department members would be eligible. He served his country honorably for nine years in the U.S. Air Force (USAF) and three years in Alaska Air National Guard (AANG) as a firefighter. In 2007, he refinanced his home to purchase five years of PERS service at a cost of $39,000. In September 2014, he will have 20 years as a Tier 2 employee as an Alaska firefighter. Even though he is eligible for PERS retirement, he is not eligible for medical coverage. Military veterans, firefighters, and police officer put themselves at risk helping others throughout their careers. They will be exposed to many types of hazardous situations during this time to protect Alaskans and their loved ones. Please help honor Alaska's military veterans with public safety members by passing HB 116. 4:51:18 PM CHAIR OLSON asked how many Central Emergency Services (CES) personnel would be affected. MR. BAISEN answered that his survey included two CES members, five members in Nikiski, two in Bear Creek, two in Homer, and two in Kodiak. Even if the bill were currently in effect, he noted that some may not be able to take advantage of the program. Thus far he is the only one to have paid for his military service, he said. 4:52:20 PM JOHN BROWN, Sergeant, Division of Alaska State Troopers (AST), Department of Public Safety (DPS), stated he has been working nearly 17 years as a sergeant with the AST during which he has been stationed in many areas of the state. Prior to his AST service, he served in the USAF as a law enforcement officer for four years. Even though he would not be eligible under HB 116 for another three years he knows this bill will mean a lot to his family. 4:53:40 PM SEAN MARTINES, Sergeant, Fairbanks International Airport Police and Fire (FIAPF), Fairbanks International Airport (FIA), Department of Transportation & Public Facilities (DOT&PF), first thanked Representative Millet for sponsoring the bill. He stated he has 15 years of service as an airport police and fire officer. He previously served for seven years on U.S. Coast Guard Cutter Sedge based out of Homer. He subsequently attended aviation school and was stationed in Kodiak for four years at their air station. He has served Alaskans for most of his career. His department has 23 PSEA members, 10 are Tier 3 employees, and three are eligible to buy back military time. He related he will be returning from back surgery on April 1 and the department has six recruits starting on May 1. Fully geared up with fire gear, he weighs 340 pounds. He hopes to finish out his career strong. He characterized the officers as incredible, with a tremendous zest for life and passing the bill would honor the three members who would be eligible. He said the committee's support for HB 116 will mean a lot to the officers. 4:56:32 PM MARC CLOWARD, Sergeant, Division of Alaska Wildlife Troopers (AWT), Department of Public Safety (DPS), said that he has worked as an Alaska Wildlife Trooper but he is also a veteran. He thanked the sponsor for introducing the bill for all veterans. The routine nature of his work as a Trooper is physically demanding. In the normal course of the day he might fly a super cub or a Cessna 185, operate a four-wheeler, snowmachine, or some type of marine vessel. Often times his routine patrols require boarding vessels in rough waters or hike distances to access remote camps for inspections. The chance for injury is considerable and he has had several injuries in last the 15 years, which he indicated is proportional to his age. He said he is now 47 and is not invincible. He anticipated the physical demands will become more challenging over time. This bill would give him the option to retire at 20 years and would allow him to purchase medical coverage to coincide with the five years of credited military service he has already purchased. He said this would give him 25 years of accredited service with medical benefits. He said that without this option he would need to work an additional 10 years to obtain the same benefit; however under this scenario, the state would also be obligated to a 30-year pension based on an even higher earning rate. He offered his belief that HB 116 is a fiscally viable option which would allow him, as a veteran, to retire after 20 years of service with full benefits while simultaneously relieving the state of additional financial burden of funding a 30-year retirement. He urged members to support HB 116. He viewed this bill as a critical component to recognize those who have served their country and now serve the state. 4:59:04 PM REPRESENTATIVE JOSEPHSON said he did not want to seem overly sentimental, but he has been so impressed by the public workers - whether in the exempt class or the non-exempt class. He said, "I really believe without these folks the wheels of the state would come off. The private sector is vital, but he wished everyone - all my constituents - knew about all these people and what they are doing. It's hard to tell it all, but I'm impressed." CHAIR OLSON related the only time the public will know this is when they need [the police and firefighters.] 4:59:43 PM REPRESENTATIVE MILLETT passed on her condolences to the family of VPSO Madole in Manokotak. She asked the officers to pass on to his family that the legislators are thinking of him. She said it was very tragic. [HB 116 was held over.]