Pat Wellington, an elected Public Employees' Retirement System board member who devoted 50 years of public service in Alaska, is right: Senate Bill 141 made the PERS-Teachers' Retirement System situation worse.
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Rep. Paul Seaton, House State Affairs Committee chairman and author of an Oct. 25 My Turn critical of Mr. Wellington, spent months trying to pass this legislation. Yet the bill - now signed into law - was so riddled with problems it required a second piece of legislation and emergency regulations to attempt to correct the errors. Look for yet more legislation next year to fix the funding authority for TRS' occupational death and disability benefits, among other problems.
The biggest problem facing our communities brought on by Senate Bill 141 is the removal of the "Payroll Growth Assumption," meaning that new employees no longer contribute money into PERS/TRS to be pooled and re-invested. As a result, the amounts of money local governments and school districts must now pay into the fund will increase year after year.
This bill doesn't include what, if any, tax liabilities and penalties the Internal Revenue Service may leverage against the state, because the IRS has not approved the new plan, nor is it clear who must pay.
The fact remains that the governor and the majority in the Legislature passed expensive legislation by one vote in a special session under questionable circumstances and never appropriated any money to resolve the problem, a problem, according to Murkowski's own administrators, that did not exist at the end of the Knowles' administration and for nearly the first two years of this administration.
What is the real political agenda here?
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