Panel can't agree to retirement trade-off

Legislature to select new panel for redraft

Posted: Tuesday, May 10, 2005

On their third day of negotiations and after seven hours of talk Monday, members of the Alaska House and Senate still could not compromise on passing a new state-wide retirement system.

Because no agreement was reached, uniform rules of the Legislature allow the committee to disband and lawmakers to form another panel that will have more freedom to rewrite Senate Bill 141.

Legislators are gridlocked on two main issues of the bill, which aims to privatize retirement accounts for all new state and local government employees.

The House wants to give future employees a choice between the proposed "defined-contribution" plan or the current system - known as a "defined-benefit" system - giving retirees monthly pension checks.

The House also is fighting to make the new system in effect for only one year so the Legislature would be forced to improve the proposed plan.

Rep. Bruce Weyhrauch, R-Juneau, offered a compromise that would have made the defined-contribution plan remain in effect after two years if the Legislature could examine more laws to improve the retirement system. If not, then employees could pick which plan they wanted.

Senators rejected the idea. Committee chairwoman Lyda Green, R-Wasilla, said Weyhrauch's idea was not fleshed out and needed to say exactly what the Legislature should do to improve the retirement system.

Lawmakers are calling for reform now because forecasters say the state, cities and school districts will have to pay $5.7 billion more to keep the current retirement system alive.

A defined-contribution system would help control the costs, but not pay towards the debt. Weyhrauch and other critics of the bill want retirement reform that pays toward the unfunded liability.

Another opponent of the defined-contribution system in the committee, Sen. Donny Olson, D-Nome, said the battle is also about giving employees the freedom to choose their own plan.

"I think that every time you have an option, it gives the person a fair handle, or a better idea and just a better morale booster that he can say which kind of plan he wants," Olson said.

The Senate majority is firm that the two systems cannot coexist.

"I don't know how it could ever be funded," Green said.

With the regular session officially ending today, the Legislature no longer has to worry about time running out. Gov. Frank Murkowski called for a special session starting Wednesday especially for more debate on the public employee and teachers retirement systems, or PERS and TRS, as well as the capital budget, school funding and workers' compensation reform.

As with the last panel, each body selected negotiators that evenly represent the sentiment of the House and Senate: supporters of the bill, opponents and people undecided.

Representing the Senate will be Sen. Bert Stedman, R-Sitka, Gary Wilken, R-Fairbanks, and Kim Elton, D-Juneau. The House has yet to name its delegation.

The previous committee agreed on several technical points of the bill and two minor parts involving universities and death and disability benefits.

For workers in the new tier, employers would pay an extra 0.4 percent for peace officers and firefighters and 0.3 percent for all other employees for an occupational death and disability fund.

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



CONTACT US

  • Switchboard: 907-586-3740
  • Circulation and Delivery: 907-586-3740
  • Newsroom Fax: 907-586-3028
  • Business Fax: 907-586-9097
  • Accounts Receivable: 907-523-2230
  • View the Staff Directory
  • or Send feedback

ADVERTISING

SUBSCRIBER SERVICES

SOCIAL NETWORKING