A bill proposing a defined benefits pension plan for certain State workers has been assigned to the House State Affairs Committee, where it has been met with a subcommittee led by Rep. Craig Johnson to further research the long-range cost implications of the bill.
HB 22, sponsored by Democrat lawyer Rep. Andy Josephson, is a priority for Democrats, while the Senate version, SB 88, is a priority for the Senate bipartisan majority, which is controlled by pro-spending, mainly Democrat legislators.
Opponents of the bill are concerned that the old defined pensions are still weighing on the state budget, with a liability of $6.7 billion as of 2021 for the Alaska Public Employees’ Retirement System (PERS) and the Teachers’ Retirement System (TRS). Many pensioners are expected to draw set pensions for decades to come.
As a result of this existing unfunded liability, Committee Chairman Rep. Laddie Shaw has signaled that both the House and Senate versions will also need to be carefully examined.
Other members of the subcommittee are Rep. Ben Carpenter and Rep. Andi Story.
The House State Affairs Subcommittee on House Bill 22 and Senate Bill 88 will be on pause until the committee gets SB 88, which is still in the Senate, since the two bills will need to be evaluated and compared.
The bill is contentious, with Democrats and union members pushing for the return to defined pensions, while opponents argue that the current matching retirement savings plan, such as a 401(k), is a more sustainable option. Observers suggest that SB 88 is likely to be the final vehicle for this legislation in the Senate.
Although HB 22 had been fast-tracked through its first House committee of referral, Community and Regional Affairs, with the majority of the committee voting the bill out without a fiscal note, further analysis is needed before it can move forward, the State Affairs Committee appears to believe.
T”he House State Affairs Committee has quite a large roster of bill referrals, I think I’m up to about 25. While this bill and the matter of recruitment and retention in general require a higher level of attention,” said Rep. Shaw, “the work of this committee must nonetheless continue apace. In that spirit, and pursuant to Uniform Rule 20B, I’m establishing a subcommittee which shall be called the House State Affairs Subcommittee on House Bill 22 and Senate Bill 88.”
