Must Read Alaska | Center Square
The Alaska State Senate passed Senate Bill 88. The bill would restore the pension system, which was abolished by the Legislature in 2006 when it became clear that the pension system was unsustainable with the state budget. New hires to civil service jobs enrolled in 401(k) contribution plans that built up retirement accounts for their later years.
SB 88 is sponsored by Sens. Kathy Giesel, Crick Bishop, Gary Stevens, Jesse Keel, Scott Kawasaki, Loki Tobin, and Bill Wielechowski. Big government Democrats and nominal Republicans include Congressmen Elvi Gray-Jackson, Forrest Dunbar, Matt Claman, and Donnie Olson. They have the backing of the state’s largest labor unions, including ASEA and the AFL-CIO.
The House sponsors are Ashley Carrick, Cal Schrage, Andy Josephson, Jenny Armstrong, Alice Galvin, Rebecca Himschut, Andrew Gray, and Cliff Groh. All are either big government Democrats or “independents” who use the independent label on their covers. .
The bill was introduced in the House of Representatives on February 2 and is currently being considered by the House State Affairs Committee.
Meanwhile, Illinois is a harbinger of what awaits other states as they seek to deepen their pension systems. With Illinois’ state pension system already on the brink of insolvency, the proposed changes to Tier 2 pensions could cost taxpayers billions of dollars at a time.
by Illinois Policy Institute, Pensions that are less than 60% funded are in serious trouble, and pension plans that are less than 40% funded may have reached a point of no return.
With a funding rate of 44%, Illinois faces the nation’s worst pension crisis, with Chicago alone facing more pension obligations than 44 states. And why? Much of this is due to rapid pay increases for civil servants.
State Rep. Blaine Wilhour (R-Beecher City) told Center Square that early discussions are focused on moving beyond Tier 2 to ensure that employees are not hurt by “safe harbor” rules that some public employees are required to meet. He said it was to be corrected. They have to pay into Social Security because they are covered by a pension plan that is equivalent to Social Security benefits.
“At the time I had doubts [the conversation] That would translate into massive pension increases that taxpayers simply cannot afford,” Wilhour told Center Square. “We have passed several bills through the pension committee that will cost taxpayers billions of dollars at a time when property taxes are already spiraling out of control. Let’s be honest: are we looking to fix the Tier 2 system or are we looking to do a massive pension expansion?”
Wilhour said no one has been able to show lawmakers where a single pensioner falls below the safe harbor. State Rep. Stephanie Kifowit, an Oswego Democrat, said there was expert testimony last summer.
“We held public hearings last summer on the broad subject of safe harbors, and there were examples of individuals from both the Teachers Retirement System and the State University Retirement System that triggered safe harbors,” Kifowit told Center Square. Told. “So, his [Wilhour’s] This statement is technically incorrect. I don’t know on what basis he says that. There was expert testimony that safe harbor provisions would be triggered for individuals retiring as early as this year or next. ”
Illinois has an unfunded pension liability of $143 billion. Just two years ago it was $120 billion.
By comparison, Alaska’s unfunded pension liability is $6.7 billion, compared to $4.48 billion two years ago. Even after a pension scheme was abolished more than 15 years ago, obligations to pensioners who were members of the scheme continue. In the early days of Alaska’s Tier 1 pension, a worker could retire at age 50 and begin receiving a pension. Some pensioners received large pensions for almost half their lives.
But that is not the pension plan that SB 88 is proposing. Although this is a modified pension scheme, it still contains the financial risks of other established pension schemes. SB 88 would amend the Alaska Public Employees’ Retirement System and the Teachers’ Retirement System to give certain employees the option of choosing between defined benefit and defined contribution plans for these retirement plans. The bill proposes increased benefits for some members who are disabled or over the age of 60.
“We need to reduce constant employee turnover and restore efficiency to state government,” said Senate Majority Leader Kathy Giesel, R-Anchorage, the bill’s lead sponsor. She believes a return to defined benefits will keep more employees in government jobs, thereby increasing government efficiency.
Another Alaska bill seeking changes to state employee retirement benefits is House Bill 302, which would improve the defined contribution benefits currently provided to the state’s teachers, police and firefighters.
HB 302 would increase state contributions to defined contribution accounts for public safety employees and give public school teachers access to supplemental benefits and pension plans available to other government employees in the state.
However, both SB 88 and HB 302 are in the House State Affairs Committee, and if Sunday, April 14th is the 90th day of this year’s legislative session, the Speaker of the House and the President of the Senate must resign on the 121st day. There’s only one month left until that happens. , unfinished work will be completed or taken up in a special session.
This news article features contributions from both Must Read Alaska and The Center Square.
