JUNEAU — An Alaska senator has reintroduced legislation that would give public employees the option of a traditional pension program.
Sen. Dennis Egan, D-Juneau, said in a news release that the measure, SB30, is cost-neutral, and will give employees a choice. Alaska went from a defined benefit, or pension, program to a defined contribution, or 401(k)-style, benefit in 2005. Union leaders last year testified that this has hurt efforts to retain employees.
Egan got a similar bill passed through the Senate near the end of the regular session last year, but it died in the House.
The Parnell administration spoke in opposition to Egan’s bill last year, with Deputy Commissioner of Administration Mike Barnhill saying no defined benefit bill can guarantee it won’t face unfunded liabilities.
A stock market dive, rising health care costs and actuarial mistakes have contributed to Alaska’s current unfunded pension liability of $11 billion.
Egan’s office said it expects his bill to save the state $40 million in the first five years and be cost-neutral over the long term because it splits the risk of rising health care costs between the employer and the employee.
Egan called the proposal a “win-win.”
“The state saves money, while creating incentives for teachers, troopers, firefighters and other public servants to stay and keep their talents - and their retirement money - right here in Alaska,” he said.