HB 83-TEACHERS & PUB EMPLOYEE RETIREMENT PLANS    3:25:06 PM CHAIR KREISS-TOMKINS announced that the next order of business would be CS FOR HOUSE BILL NO. 83(L&C), "An Act relating to new defined benefit tiers in the public employees' retirement system and the teachers' retirement system; providing certain employees an opportunity to choose between the defined benefit and defined contribution plans of the public employees' retirement system and the teachers' retirement system; and providing for an effective date." [Before the committee was CSHB 83, Version T.] 3:26:33 PM REPRESENTATIVE BIRCH noted that he does not support this legislation and voiced his concern about the cost and financial impact this will cause downstream, and the state already has a $7 billion to $8 billion or more liability under the PERS/TERS program from the last defined benefit (DB) program. He pointed out that a fiscal note had yet to be offered even though the committee was advised that, at some point in time, there would be a follow-up fiscal note. REPRESENTATIVE TUCK offered his appreciation for this legislation because "we're just not getting the bang for our buck for investing into training, investing in our employees, letting them have careers here in the State of Alaska on behalf of the people of Alaska." State employees are not eligible to pay into social security, there is virtually no retirement in defined contribution (DC). It is well known there are many fees, hidden fees, and transactions that take place without a person's knowledge and they are charged for that. He pointed out the importance of providing something stable, something that is secure, and people can rely on, is very important in building a good solid workforce in Alaska. In response to Representative Birch, advised that the fiscal note "to do something like this" will require an expensive actuarial report so it is appropriate to wait until the legislation is before the House Finance Committee before that exercise takes place. REPRESENTATIVE KNOPP said that he joins Representative Tuck because "we're all a little scared about defined benefits due to where the state ended up with the last one we had." When looking at the employees who do not have SBS programs and social security, he opined that it is a valid argument because he never wants the state to return to the situation "where we were at." The actuarial must be performed in order to know whether it should move forward. He opined that the state has learned from history, he wants to be sure the program is sustainable, and he supports moving the bill out of committee. 3:29:40 PM REPRESENTATIVE WOOL opined that by removing benefits from the retirement package, the results are that it is hard to recruit and retain. Similarly, prohibition did not work, and potentially putting the benefits back in is a step in the right direction, he pointed out. Many people testified that it is hard for teachers, fire fighters, and so forth, and that recruitment and retention is a big problem in Alaska currently, he remarked. 3:30:32 PM REPRESENTATIVE BIRCH referred to the previous testimonies from a union business agent and from the folks within the system advancing the DB program and noted that the question was asked whether there are any private sector employers moving toward a DB program. The answer, he recalled, was that no private sector employers are moving toward a DB program and he is not aware that this is at all commonplace. While, he said, he understands the issues of recruiting and retention, but putting a package together that the state cannot afford is not reasonable. Also, he pointed out, it is not reasonable for the committee to vote on something with an undetermined cost and without a fiscal note. 3:31:49 PM REPRESENTATIVE LEDOUX noted that with respect to private employers, there is a good chance their employee is earning at least a slightly bit more money than a state employee earns. Even more importantly, she stressed, a person working for a private employer has the ability to pay into social security and they own that certainty at retirement. Those individuals working for the State of Alaska do not receive a social security benefit, she pointed out. 3:32:32 PM REPRESENTATIVE TUCK advised that he is part of a multi-employer DB plan with the International Brotherhood of Electrical Workers (IBEW), which means every time the union signs up a new contractor, the contractor is actually entering into a DB plan. The contractor can see and realize the benefit of the collective effort of everyone pooling their money together and being able to offer benefits that by itself would not be able to offer, and that is just one example of why people are entering into multi- employer plans. Also, he expressed, a downward spiral is taking place all over America wherein less and less people have retirement programs they can rely upon, thereby, becoming a burden on everyone else. In the event the legislature is willing to sustain livelihoods and allow people to retire with dignity without being a burden on society, it is imperative that it take place as a collective effort. Representative Tuck put forth that for all of the teachers, fire fighters, police officers, Department of Fish & Game (DF&G) employees, and so forth, it would be nice to have collective security for these employees. 3:34:03 PM REPRESENTATIVE TUCK moved to report CSHB 83(L&C), labeled 30- LS0315\T, out of committee with individual recommendations and the accompanying fiscal notes. REPRESENTATIVE BIRCH objected. 3:34:22 PM A roll call vote was taken. Representatives Tuck, Knopp, Wool, LeDoux, and Kreiss-Tomkins voted in favor of passing CSHB 83 out of committee. Representative Birch voted against it. Therefore, CSHB 83(STA) was reported out of the House State Affairs Standing Committee by a vote of 5-1.