Juneau legislators are leading an effort in the last days of the Legislative session to renew efforts to return the state to a defined-benefit pension plan.
Sen. Dennis Egan, D-Juneau, last week introduced Senate Bill 121, a defined benefit pension plan, which is scheduled for a hearing today in the Senate State Affairs Committee.
Wednesday, Rep. Bob Lynn, R-Anchorage, introduced a similar bill in the House of Representatives, with Juneau Reps. Beth Kerttula and Cathy Muñoz as co-sponsors.
In 2005, Alaska switched from a traditional pension system, known as a defined-benefit plan, to a 401(k)-style defined contribution plan for new hires.
That was done in the face of a rising future costs in state Public Employee Retirement System and Teacher Retirement System plans, but those plans’ unfunded liability has continued to rise and now nears $10 billion.
Egan’s bill would allow employees to choose between plan types.
“The teachers who educate our children, the police and firefighters who protect our families, and the public employees who serve our state and cities will be able to choose the benefit that best fits their service,” Egan said in a sponsor statement.
Since 2005, the state has beefed up its pension oversight to see that problems that led to the unfunded liability can’t be repeated, and Egan said those reforms would remain in place.
At a press conference Wednesday, Kerttula said passing the pension bill is one of her goals for this session, but she later acknowledged doing so was not realistic this late in the year.
Introducing the bill this year was still a good idea, she said.
“This will give us a chance to work on it this summer and work out any kinks and come back real strong next year,” she said.
The bills in each house were referred to the respective State Affairs Committees, each of which is chaired by a sponsor, Lynn in the House and Sen Bill Wielechowski, D-Anchorage, in the Senate. It faces an uncertain future beyond that, where it is likely to face some powerful enemies as well.
It is not clear the bill will face a more promising future than did previous attempts to return to a defined-benefit plan. Previous tries faltered in the Senate Finance Committee after opposition from Sen. Bert Stedman, R-Sitka, the co-chairman of that committee.
Kerttula said she’ll use the intervening time to lobby her colleagues on the bill
“We can talk about it in the interim and get support built,” she said.
• Contact reporter Pat Forgey at 586-4816 or at firstname.lastname@example.org.