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Retirement rewrite bill may get final vote on Wednesday

Majority rushes to OK financial analysis

Posted: Tuesday, May 03, 2005

Democrats attempted Monday to set back a controversial bill that would create private retirement accounts for future public employees and teachers.

During the floor debate, House Minority Leader Ethan Berkowitz, D-Anchorage, brought up a rule requiring a long- and short-term analysis of any changes made to the state retirement system.

Speaker of the House John Harris, R-Valdez, sent the bill back to the House Finance Committee, where it was approved the day before.

A delay of action last week prompted the Senate to suspend its meetings until the finance committee approved Senate Bill 141.

Stating that this is the most important bill of the session, the Senate also has made the passing of a school funding bill contingent on the House voting in favor of the new retirement system.

The plan creates a new tier of workers who would switch from a "defined-benefit" to a "defined-contribution" system, similar to 401(k) accounts offered by private companies.

House leaders hustled throughout Monday to produce something that would pass as a fiscal plan.

Melanie Millhorn of the Alaska Department of Administration's Division of Retirement Benefits presented a six-year forecast for the operating costs to manage the new retirement accounts.

Millhorn also had copies of graphs showing employers contribution rates through 2029, the year when rates are believed to significantly drop.

"I would argue there is no impact, no change from the current program," said Rep. Mike Kelly, R-Fairbanks, a supporter of the bill who believes fiscal documents are not necessary.

Another committee member, Rep. Eric Croft, D-Anchorage, was not satisfied with the report: "This is the biggest change to our retirement system and we literally do not know what we are talking about."

Millhorn did not know the dollar amount or where the funding would come from to give future employees death and disability benefits.

During another floor session Monday night, Berkowitz criticized the financial report as a "fig leaf" because "it doesn't cover very much."

Democrats attempted to replace the fiscal analysis with a study done by the Michigan-based Actuarial Service Co., which recommended a hybrid system. The motion failed with a vote of 15-25.

House Finance Chairman Rep. Kevin Meyer, R-Anchorage, said the bill will be heard for amendments on the House floor as early as today and could go to a final vote on Wednesday.

• Andrew Petty can be reached at andrew.petty@juneauempire.com



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