House votes to make retirement rewrite temporary

Retirement board member: Funds misused for measure's research

Posted: Wednesday, May 04, 2005

A bill that would rewrite the retirement plans for future employees and teachers was limited to a one-year trial during an Alaska House floor hearing Tuesday night.

Another attempt to change Senate Bill 141 almost killed the plan for reform during the second reading, which was the lawmakers' last chance to alter it before they vote on it possibly today.

The measure would create private retirement accounts for new employees under a "defined contribution" plan. They would not get monthly pension checks but instead a lump sum at the time of retirement.

Rep. Bruce Weyhrauch, R-Juneau, succeeded Tuesday in passing an amendment that would repeal the plan after being in effect for one year.

Weyhrauch said lawmakers would be forced to examine the effectiveness of the reform, possibly look at other solutions and try to pay down the $5.7 billion shortfall in the system before approving it again.

"This bill only looks forward," said Weyhrauch. "It does not solve our problems."

One of the chief supporters of SB 141 in the House, Rep. Mike Kelly, R-Fairbanks, said it's not necessary to put that kind of pressure on the Alaska Legislature.

"I wouldn't want to bet that there would be any less of a rerun of this really difficult battle here over whether the state can continue to afford this 'Cadillac' system that has sunk us underwater," he said.

An amendment offered by Rep. Eric Croft, D-Anchorage, calling to delete the entire 120-page document, was misread by several supporters of the reform who voted in favor of the amendment 20-19.

Croft intended to replace the bill with an order to assemble a research task force to study alternate solutions to fixing the retirement system. Some legislators supported the idea of a task force but not erasing the plan for change. At Croft's suggestion, he asked for a re-vote because he didn't want people to feel "tricked."

The amendment failed the second time 17-23.

Party lines were not a factor in the amendments being approved. A handful of Democrats support the bill while a number of Republicans, such as Weyhrauch, are in favor of altering SB 141.

Today, Rep. Tom Anderson, R-Anchorage, will offer an amendment to exempt all peace officers and firefighters from the defined contribution plan and let them continue to be classified as Tier 3 under the public employees retirement system, also known as PERS.

"They risk their lives," said Anderson. "It's critical we give them adequate benefits, not only for recruitment, but for retention."

Meanwhile, an Alaska Public Employees Retirement System board member has asked the state attorney general to investigate whether trust funds were misused in researching and drafting the bill to change the state's retirement systems.

PERS board member Pat Wellington sent Attorney General David Marquez a letter dated April 21 asking that he look into whether $48,317.30 in charges paid by the Division of Retirement and Benefits, which operates mainly through the retirement trust funds, was proper.

If any money is diverted from the retirement trust fund to pay for a new defined contribution plan, the tax qualification of the retirement systems could be jeopardized, according to an April 1 memo from financial consultants Deloitte Consulting LLC.

• The Associated Press contributed to this story.

Trending this week:


© 2018. All Rights Reserved.  | Contact Us