Senate passes a pension plan for government workers, Bjorkman says it will be ‘cost neutral’

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Sen. Jesse Bjorkman of North Kenai makes the case for a state pension plan, while a government union lobbyist keeps a close eye on proceedings.

Senate Bill 88 is the dream legislation of the government unions. It would restore a defined pension plan for state, local, and public education employees. But no one knows how much it will really cost, because there is no complete fiscal note on the bill.

SB 88 will now go to the House, where it will likely be referred to at least three committees for vetting, since it is inadequately understood by its Senate sponsors.

Usually, the saying goes in the Legislature, “If you have the votes, then vote. If you don’t have the votes, then talk.” But with the Senate gallery filled with government union representatives, pro-pension senators took up over two hours, mostly justifying why the bill should get approved.

Bill sponsor Sen. Cathy Giessel spoke at length and claimed it is not a gold-plated plan, and she promised, without evidence, that it would “turn the tide on our workforce recruitment and retention issues. We must take significant action now if we want to turn around our economy and attract the brightest in best in all industries, public and private.”

The bill only applies to public employees, however.

The 11 SB 88 sponsors believe that they can turn around the outmigration of people in Alaska by luring them into government jobs with good pension plans. The problem described by the Senate — not enough workers — is being experienced across the country.

“One primary reason that has been cited for recruitment and retention issues is the lack of a quality retirement system that public servants can depend on once they retire,” the Senate majority said in a press release.

In 2006, the state of Alaska transitioned into a defined contribution plan, similar to a 401(k)-retirement plan, as the pension plan began to show signs of crippling costs to the state.

Sen. Bert Stedman, who was one of the senators around in 2006 who pushed to get the pension plan retired and replaced with a contribution plan similar to a 401K, pointed out that there is an incomplete fiscal note with the SB 88, so he was going to be a “no” vote.

“I’m concerned about the cost neutralness of this bill. I don’t think it is cost neutral,” he said. “The normal cost is higher than some of of that calculated over at Leg. Finance.”

Stedman said that the individual retirement account has become a portable item that is used as a pooling mechanism for workers as they change employers. It’s the model across the country now. He noted that on the last pension plan, which he helped end in 2006, the state still owes $6 billion.

But Sen. Jesse Bjorkman of North Kenai, who served as a union representative for his school district, spoke at length about the benefits of pension plans, and said it was “likely cost neutral” and that the matter had been “vetted over a decade ago.”

Americans for Prosperity-Alaska, a grassroots group active in political life in Alaska, will be trying to stop the Legislature from approving this bill.

AFP-AK State Director Bethany Marcum said, “Returning to a defined benefit pension plan would be disastrous to the state’s budget and would cost Alaska upwards of $9 billion in avoidable expenses. Simply put – Alaskans can’t afford this misguided legislation.”

70 COMMENTS

  1. Sen. Jesse Bjorkman of North Kenai, …. said it was “likely cost neutral”

    Hee hee…good one. Snicker. 🙂

    “on the last pension plan…the state still owes $6 billion.” I guess the senators want to see just how high they can drive the debt.

    • They are idiots.
      Without a full fiscal note, including how many current employees would be impacted, and the fully defined benefit cost analysis is done, JUST SAY NO.
      I am a current retiree, my first full year, and as i was leaving and looking for other government jobs I found the current Tier 4 benefits to be very comebsurate.
      This is a pipe dream to get new personnell. The real issue, as I was a manager and did a lot of recruiting, is that this gen of workers wants flexible schedules and to work from home (a bad idea until they have proven themselves worthy onsite) and there are metrics in place at home for performance monitoring. This gen of workers are just lazy, deal with it, dont iverpay to our states detriment.
      .
      They job hop to keep ahead of their incompetence.

      • “Idiots”? Molly, you misunderstand the plan. It’s not about the money, it’s about buying votes. They could care less how much it costs. And when it blows up and bankrupts in 20 years….they will be gone.

    • The legislature is pulling a fast one.
      Of course it’s going to cost way more than what’s being said and it’s coming out of everybody’s PFD.

  2. Excellent choice of a picture, the lap dog state senator doing the bidding of his master the union “lobbyist” or more accurately bribe master. State government does not create or define the economy, it bleeds a healthy economy. Just as healthy wildlife can feed up to a given density of leeches in a pond. Unchecked parasite density leads to the productive host animals being bled to death. And people keep calling Alaska a “red” state!

      • Yes, Ginny, they ARE signaling with that hand gesture.
        And the signal is this:

        “We’ve got the whole PFD in our hands
        We’ve got the whole fat PFD in our hands
        We’ve got the whole PFD in our hands
        We’ve got the whole PFD in our hands.”

  3. For nearly all public defined benefit pension plans, the consultants who are hired to project costs of these plans inevitably overestimate investment returns and underestimate the cost of living adjustments built into the plans. Politicians want to understate current costs to avoid the wrath of the public who ultimately get stuck with the plan’s liabilities in the future. That’s precisely why states like California, Illinois, and others have become such fiscal disasters.

    • The future liability of this atrocious bill will kill Alaska.
      .
      Politicians are not as savvy as the groups of “consultants with their own agenda” are. Our politicians hire consultants that are only there to impose their agenda, regardless of what they are hired to do. There is a deep seated undermining of we the people going on, and our politicians are falling for this, hook line and sinker. Wake tF up already, say no to this.
      .
      Politician idiots listen to consultants that want money to help implement a very bad plan. Hey Alaska politicians, SAY NO if forced to vote. There is not a sound fiscal note with the COLA and cost analysis needed, there is a reason everyone on the planet is leaving these plans…… they want to survive and flourish.

  4. Congratulations Alaskan voters. We’re going to get $50 Amazon giftcards instead of PFDs this year. In exchange you get an even further entrenched gibsmedat voting block and public school students getting secretly taught they’re transgender at 5 years old by teachers with a guaranteed pension.

  5. Representative Ben Carpenter is running to replace Senator Bjorkman, it might be worth supporting Representative Carpenter even if you don’t live in his district.

    • Representative Carpenter not only supports a full pfd, he proposes giving families that home school a little over $7,000.00 per student. Plus he put Donna Arduin back on the payroll after Dunleavy fired her. Thanks, but no thanks .

      • Gunner,
        I don’t recall your reply last time I asked you if $7,000 is more or less than $18,000. I went to public school and I was taught that $7,000 is more than $18,000, but maybe math wasn’t your strong suit? $7,000 for homeschooling is much less than $18,000 for public schooling, but I guess for some people the cost of indoctrination is worth it.

        What you see as a negative (paying less for a superior product) others like myself see as a positive.

        • Well Steveo. Homeschooling is a superior product? Says who? Let us do the math. Take a family of 6. If Carpenter has his way, the parents will each receive $3400 dividends. Each of their 4 children will receive approximately $11,000. A little over $50,000. per family. Unearned income, so they just may qualify for benefits. At least that will accomplish something,less people will be leaving the state. In fact, people will be moving here. What is not too like? Very little taxation and free money. UTOPIA!

          • Can you show your math because a family of 6 would typically be 2 parents and 4 children.
            4 children x $7,000 = $28,000
            6 dividends x $3,400 = $20,400
            $28,000 + $20,400 = $48,400 is $48,400 more or less than $50,000?

            Now let’s do some more math:
            4 students x $18,000 = $72,000
            Is $48,400 more or less than $72,000?

            And that $72,000 assumes you’ve taken the entire dividend from that family of 6.
            Keep working on your math Gunner, you’ll get there with a few more years of public learnin’

        • Nothing wrong with my math steveo. Hb.165 said MORE than $7,000. per student. I just rounded, as I wasn’t sure of the exact number.
          Might want to let Gov. Abbot know about Carpenters free money plan. The border crossers will be lined up for a ride to the state that pays you to live in it.

  6. The Senate LOVES to spend money. It is not theirs! It’s so easy to do that. Now let’s see if the House will stand up for their constituents.

  7. What do you call a financial system that has early participants paid primarily or wholly by later investors? Like, in a triangular shaped system. Kinda like a pyramid shape.

  8. We NEED this, so people can work 25 years for the state, then leave, while we send AK money to their bank accounts for 20-25 more years. Then when they die, we can keep sending our money to their surviving “partner” (no need to be married here) until they pass.
    We NEED to do this “for the children”

    • You really think so? Wow.

      Too bad.

      Little factoid here, if you leave Alaska you’re pension is penalized.

      Look at staffing of government jobs. Much higher turnover v. private sector. Why?

      The SOA is competing against private employers who pay better upfront than the SOA, who won’t force you to live.or work in a village, and where you can advance more quickly.

      The SOA is also competing against other states for specialist occupations. Why stay as an Alaska State Trooper when you can make almost as much money somewhere else AND have a pension? Or even if they don’t have a pension, why work in Alaska when I could work in Minnesota, Washington, or Iowa and make 90% as much in a place that doesn’t get -50 and has no villages?

      Another huge factor is this. It’s an intangible but the most important.

      Pensions attract professionals who are committing to a career as opposed to a schmuck looking for a job.

      So. No SOA pension? Don’t complain about poor services or incompetent employees; not to mention the money spent on recruiting and initial training. The best candidates rarely apply for state jobs and even fewer remain.

      • Not buying it. Entitlement Propaganda. Schmucks vs. Professionals, LOL. Don’t want to get in the way of your career in Minnesota, Washington, Iowa…

        • You remember that when you’re in a car crash you didn’t cause and the Troops tell you and the other party to fill out your own reports and not bother them.

          Or when your mailbox gets run over by your constant drunk driving neighbor.

          Or if your little Suzie gets lost on her little hike and it’s a two year Troop running the SAR😅

          The Troops aren’t even a shadow of who they used to be.

          So the nice thing is, DPS keeps giving out raises to compete against other agencies in the manpower competition (which AST is losing bigtime) which benefits those few remaining Tier 3 looking for their high years.

          Retention, recruitment, eh, it’s all free. Right? Never mind it costs over $70k to replace each experienced Troop with a recruit. Do that thirty plus times every year. When it’s all said and done, you still have guys looking to leave at five years.

          Usually the guys who complain about career public employees are guys who never qualified for anything more than just a j-o-b, and not very good ones of.those either.

          • Implied threats and inrimidation for all the you need me proppaganda?

            News bulletin: Cops alrady tell you to fill out your own reports and not to bother them for a lot of accidents…

            Already had mailbox run over a long time ago-cops couldn’t/didn’t do anything. Just fixed it ourselves….

            Dom’t have a little suzie, so N/A on that one.

            Looking to leave at 5 yrs-vesting considerations? Planned 5 yr stay anyway to move around and move up?

            Wrong again about who complains about public employees and your disdain and derogatory remarks for anyone not you.

      • Penalized?
        Are Tier one, two, three & four all penalized w/ less pension money if they live in Ariz?
        Are they “penalized” or is it they have their COLA money taken away?
        Or is your observation part of the new pension plan being proposed?

        How much are SOA pensioners penalized for living out of State? 5% …. 10% ?

        There is no such thing at the MOA jobs.
        Most retire and leave, living the good life on money that should be for Alaskans ….imo.

      • Repeal- you may want to try New York, etc., too since the benefits are so much better elsewhere. You only have to put up with getting kicked in the face, stomped, beat up, things thrown at you, spit on, complaints filed, lawsuits, no support….i have heard there are lots of openings from all the cops quitting, leaving, etc. Of course they have walmart workers you have such disdain for, too.

    • They don’t all move to Florida.

      My ex-wife retired on her 60th birthday and moved to Arizona, ten years ago. She’s come back a couple of times for visits.

      She’s Tier 2, she’ll be collecting for another 20-30 years.

    • BS. You spread hate and discontent why? Because you’re jealous and have nothing but SS to tide you over when it’s your turn to retire? I worked in State of AK PUBLIC SERVICE for 25 years, didn’t get wealthy but knew that going in. My decision not to chase the slope dollars was my decision. I served the people of this state proudly and will continue to work till I die thanks to the small amount of pension and the 40% of my SS I will eventually receive because I have that tiny state retirement income. It was a trade off and personally worth it. Money isn’t everything. Service to others is. Don’t be a jerk

    • Yeah, maybe you should have applied yourself harder and your career wouldn’t have peaked at Walmart stocking supervisor.

        • Masked, the cogent point is: if you don’t agree w/ a liberal you are obviously stupid & in a low prestige, low pay job.
          That is how Liberals ACTUALLY feel about the poor, immigrants that they invite here to wait on them. They have no respect for working Americans.

          (could have sworn there were 2 n’s in congent) …. I’m learning.

      • Falling back on personal put downs so soon, are you out of ammo already Repeal?
        That was quick.
        Please tell us the % of money SOA retires give up if they move.
        Tier 1 -2 -3 & 4 retires? Or new ones under this plan?
        Actual benefit reductions or COLA reductions?
        I want to learn.

  9. The young politician (read liar) is lying. Imagine that.

    Please stand up so our beautiful state is not looted by these thieves.

    • Maybe Biden could revitalize AK by sending up another batch of colonists to give Native land to, like their icon FDR.
      Did you know FDR’s plan to stack AK w/ white Democrat voters was such a piece of welfare that colonists stood around, while others built the houses for them?
      And the Feds didn’t hire Alaskan’s to do the building, they shipped up crews from outside.
      Dems had a Federal “lock” on this state, until oil & people who work hard showed up.
      Well that’s over.

  10. Hmmm…. Last years estimates were at least $1.2 Billion a year…. Which to observant Alaskans is basically what was left of our PFD.
    Guaranteed I’m breaking out the dusty old check book and sending a contribution to Rep. Ben Carpenter, Jesse’s non bought off challenger for Jesse’s Union owned Senate seat.

  11. The term “North Kenai” is NEVER used here anymore, and for decades. Perhaps Bjorkman has chosen to use it for his own purposes, and it the gets repeated? Use “Nikiski”, which took over back in 1988, when the high school opened. Lastly, the state’s fiscal crisis will NEVER be solved unless and until we call out the federal gov’t for locking up our resources. Even Dunleavy sees it, while he talks out of both sides of his mouth. The legislature needs to become defiant — like Hickel did on occasion, and like Texas is doing NOW — about unconstitutional federal properties.

    • The term north kenai is not used here for decades? Typical b.s. by uninformed readers of this blog. The city of kenai boundaries end at borgen road . Nikiski boundary starts at s. Miller loop. Everything in between is north kenai .That is how it was when I moved here almost 50 years ago and it is how it remains today.

    • Not that I’ve seen. Unless you count low cloud cover as a dome.

      But I’ll be glad to sell you one if you want.

  12. The late Rep. Mike Kelly took the lead on ridding us of the old defined benefits system, and we are still underfunded in that system by at least $6 billion dollars- and we owe almost $100 billion over the next 40 years. That the senate could pass this insanity without even having a fiscal note shows that they are not competent.

  13. In the entire history of the human race, no pension plan ever created has ever been cost neutral.
    In fact, no pension plan ever created has ever been anything but a burden on the taxpayers.
    .
    What makes them think this one is the unicorn that will somehow magically work?

    • I have 3 pension checks from construction unions (2 here, 1 outside)
      Not all pensions are Government, although it seems that way if you read the papers.

      • That’s great. My question is, if the Carpenter’s union can do that because the workers like the benefit, why not government unions? They can run whatever pension system they want paid for by the workers themselves & co-pays by the employer that already exist in defined contribution. All at no risk to the citizens of AK. My guess is the Gov union bosses don’t want the responsibility, cost & risks when all they have to do is make the state do it. How much were monthly union dues and contributions to your pension plan approximately?

      • And, those pensions from the construction unions are cost neutral?
        Please, pull the other one…
        .
        However, you do have a point. The pensions from the unions are not a direct burden on the taxpayers. They are paid via the union dues of the current members and the overhead and GA/admin fees on the various contracts.
        .
        Oh… wait… A significant amount of the work that the trade unions provide labor for is… wait for it… GOVERNMENT Contracts. Which means. Yep. Your pension is a burden on the taxpayer.

    • I’m aware of a couple smaller ones that are, but they were designed that way from conception. It’s in the bylaws x amount must always be invested in secure, low to medium growth investments.

      But they are rare.

      I imagine if the funds were invested wisely, and were required to be stock market level above board they would preform better. Not great, but better.

      • As a general rule, private pensions end up taxing the current employees to fund them. They are nothing, and never have been anything but, a Ponzi scheme.
        .
        Even if there is a large corpus to provide investment income to pay the pensions, unless it is significantly larger than needed, sooner or later, it will not provide enough income. I would be very interested to know of a single pension plan that is solvent, and has been since inception. And, the one that was set up a decade ago does not count. Give me one that has been running for a good amount of time.

  14. Let’s see what happens when there’s no one left in this state but government workers. Who is going to generate the wealth to pay all these government benefits?

    • We are almost there. Taxes of course. When the pike eat all the other species out of a lake, they start to consume their own.

    • Exactly-The Feds through endless deficit spending projects/programs & granting $$ to the state. At least until all the chickens come home to roost. Though we are technically a state, AK will really be a federal territory, economically & politically.

  15. There goes the remainder of your PFD. Wow! How fast they can work on and pass that pension bill. What about the full PFD? Still languishing? Elections are coming up. STOP voting for these people who vote for their interests and Not yours-They have plenty of gov’t employees to vote for them, vote for Your own interests. “There is no art which one government learns of another than that of draining money from the pockets of the people”.-Adam Smith

  16. In the real world, i.e. private sector … if you can’t find or retain workers, you reduce produced goods or services until you can function with the people you have. Econ 101.

  17. One item to consider is law enforcement. Is law enforcement a priority for you? We have a 5 and out system so we’re constantly recruiting and paying huge sign on bonuses. Qualified recruits and those who can meet the minimum qualifications are drying up. We’re losing officers who have become seasoned after a successful 5+ years in their career. This especially rears its ugly head in the leadership ranks as typically the 10-12 year employees are the ones assuming these positions. I guess we can equity hire for those who check the right boxes.

  18. Looks like another civil war is coming, but it will be too late. The GOVERNMENT will have the most money and power. No one will win. Sad.

  19. There goes the PFD! It could be fiscally neutral if it was modeled after private union pension plans where participants pay for their medical insurance once they retire & there are no cost of living increases unless the plan’s investment returns allow for it. Unfortunately. public pension plans have a habit of becoming dependent on the public’s checkbook. How many times has the State bailed out the PERS pension plan – at least once. that I recall, to the tune of about a billion bucks! The Devil will be in the details.

  20. ‘https://www.reuters.com/article/idUSN11145477/#:~:text=ANCHORAGE%2C%20Alaska%2FNEW%20YORK%2C,Daniel%20Sullivan%20said%20on%20Friday.

    This is why the fund is in the red, settled for pennies on the dollar.

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