Amid concerns about double-dipping by state employees on their salary and pension funds, an Alaska Senate committee Monday held over a bill that would extend the state's retire-rehire program until 2009.
The program, a tool to retain experienced employees, is set to expire on July 1.
Unless the Alaska Legislature reauthorizes it, 335 retired teachers and state employees who have been wooed back to their jobs, in many cases at a lower pay scale, will no longer be able to collect a pension check while they work for the state.
Sen. Gary Stevens, R-Kodiak, has proposed a bill to extend the retire-rehire program until 2009 and make employers pay for any unfunded liability that could result to the state's pension funds.
"It remains cost-neutral," Stevens said.
Sen. Kim Elton, D-Juneau, withdrew a similar bill on Monday afternoon.
Stevens' bill attracted heavy debate and divergent testimony from unions, state employers and individual state employees.
Committee members Lyda Green and Gary Wilken, both Republicans, said they have strong reservations about continuing the program.
Green, of Wasilla, said she believes some employees may have abused the program. When it was created in 2001 by the Legislature, it was intended as "a very short-term program," she said.
The original intent to limit the program appears to have been diluted, she said.
Some employers, including school districts and the state court system, told the Senate Health, Education and Social Services Committee on Monday that the program fills an essential role by stemming the brain drain caused by high turnover in state jobs.
Many employers like the program because they do not have to pay into the state's retirement system for those workers. The city of Juneau saves about 14 percent to 15 percent on the cost of regular employment for its seven "rehired" workers.
Some state workers told the committee they feel betrayed after receiving assurances from the State Division of Retirement and Benefits that they could maintain their "rehire" status even if the program expired. The division withdrew that assurance in September when the Department of Law determined that current workers could not maintain their status.
If the program ends, the rehired workers would not collect their pension checks until they retired for good.
"This is a fairness issue, and a deal was made with these understandings," said Larry Simmons, finance director with the city of Kenai, which has six employees under the program. "There is a budgetary impact to the city of Kenai if this program sunsets. ... I'm kind of wondering what the fiscal note is to the state of Alaska if nothing is done."
One state employee said Monday that some workers are abusing the program.
Jeff Jicha, a state Transportation Department worker in Sterling, testified that he has witnessed several employees who have come back to their jobs and prevented others from advancing up the career ladder.
"There are employees who do take advantage of the retirement system and bragged (about it), Jicha said.
"We may have a real dilemma," said committee chairman Fred Dyson, R-Eagle River. On the one hand, Dyson said he is worried about the state's possible legal liability to "misled employees" who would no longer receive their pension checks.
On the other hand, Dyson said he is worried about potential abuse in the program.
State officials said Monday that they are working on revisions that would address possible abuses.
Elizabeth Bluemink can be reached at firstname.lastname@example.org.
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