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House puts an end to battle on retirement bill

Legislators say they expect special session could end by Wednesday

Posted: Tuesday, May 24, 2005

The Alaska House of Representatives on Monday night passed a Senate-approved bill creating private retirement accounts for new public employees.

The action ended weeks of stalemate on one of the sticking points of the Legislature's continuing special session. With agreements on other bills still before the chambers, legislators say they are expecting the session will end as early as Wednesday.

Senate Bill 141 had failed twice in the House during the special session with Republicans and Democrats outspoken about the plan's inability to provide the same benefits as the current system and pay for a predicted $5.7 billion debt.

The bill passed 21-18 on Monday as three lawmakers switched their votes from the last time. House Speaker John Harris, R-Valdez, said he sacrificed his personal feelings on the bill for the good of his caucus.

"I want to go home. I see no way we can get out of here in a reasonable period of time because the leverage we had against us," Harris said.

Legislators are entering the 14th day of the special session, which has been a headache for many lawmakers with needs back home.

"My own personal feeling is I would have liked to have voted 'no' because I believe the bill has flaws," he added.

Harris said the House worked with the Senate for a tradeoff. The Senate will agree to a capital budget reduced by $200 million in exchange for the House floor voting on two Senate bills: SB 141 and the bill to revamp regulations on workers' compensation, Senate Bill 130, which passed Sunday.

Instead of receiving monthly pension checks upon retiring under a "defined-benefit" system, future employees will receive a lump-sum amount under the "defined-contribution" plan.

The current system was considered too expensive for employers as medical costs have risen and more workers are retiring in Alaska.

Many lawmakers agree the system needs to be reformed, but say they think the bill offered no "fixes" to the problems.

The last conference committee amended the bill so that it goes into effect for teachers and public workers July 1, 2006, one year later than the original draft intended - giving the Legislature time to change the plan next session.

For teachers, another amendment passed to raise the amount school districts contribute into the account from 5 percent to 7 percent. This detail was significant enough for Rep. Carl Gatto, R-Palmer, to switch his vote, Gatto said. Rep. Jim Elkins, R-Ketchikan, was the other legislator who changed his vote and endorsed the private retirement accounts.

Shortly after the increase was made for teachers, the president of the National Education Association-Alaska circulated a letter that said the union still opposed the plan.

Rep. Eric Croft, D-Anchorage, introduced a bill immediately after SB 141 was passed to allow unions to choose their own kind of retirement plan. But the bill may not be heard before the special session ends, Croft said.

Passage of SB 141 will free up a student-based school funding bill, which was contingent on the House passing the retirement plan. House Bill 1 increases per-student funding $70 million from last year.

The governor also pressured the Legislature by threatening to veto construction projects in the capital budget if the House did not pass the bill.

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



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