State's working retirees face uncertain future

Posted: Wednesday, November 17, 2004

For more than 250 state of Alaska workers, retirement is just another word for getting both their pension and a new state job.

Wayne Regelin, deputy commissioner for wildlife at the Department of Fish and Game, is one of the beneficiaries of the state's retire-rehire program, created in 2001 to retain experienced workers.

But he and other participants will stop receiving their pension checks in July unless the program is reauthorized by the Alaska Legislature in its upcoming January-May session.

The program is set to expire June 30.

"It would certainly reduce my income," said Regelin. "Probably some people would go ahead and retire (again) to pursue other job opportunities."

At 56, Regelin enjoyed a brief four months of retirement from Fish and Game. The department used a juicy carrot - the retire-rehire program - to woo him back.

Regelin, along with other eligible city, school and state employees throughout Alaska, can retire at 55 or older, then get rehired and receive a state salary and their pension at the same time.

While it may sound like a sweetheart deal, the retire-rehire program was created to plug the severe brain drain of baby boom-aged employees from Alaska agencies and school districts.

At this time, participants in the program do not have to pay into the state's retirement system. But if legislators decide not to reauthorize it, they and their employers will begin contributing again to the system.

Regelin is one of 32 Fish and Game employees who participate in the program, which has kept many state biologists from fleeing to federal resource agencies - such as the U.S. Fish and Wildlife Service - that provide better benefits and 30 percent higher salaries, Regelin said.

Some employers, including the city of Juneau, praise the program because it eliminates their contribution to the state's retirement systems - poised to skyrocket to 30 percent of salary over the next 25 years- for those employees.

Juneau Personnel Director Joan Wilkerson said the city has rehired seven employees - albeit at lower pay scales. All told, the program saves the city about 14.5 percent or 15 percent of the cost of regular employment for those jobs, Wilkerson said.

The retire-rehire program has been criticized by others as an impediment to the progression of younger workers up the ranks.

State Rep. Beth Kerttula, D-Juneau, said she is worried about that. But she is more concerned that the program enables Alaska to avoid dealing with a fundamental problem - the non-competitive salaries that cause employees to flee to federal agencies and the private sector.

"The state pays less, and therein lies a problem. We should be paying as well as the feds and we should be treating our employees as well. If this (program) is just a way to get around that - that's a problem," Kerttula said.

Other legislators are staunchly behind the program, though they said they would need to review a detailed financial accounting before they reauthorize it.

House Majority Leader John Coghill, R-North Pole, said, "At this point, it looks like reauthorization is probably going to be in the works. I have heard only favorable things about it."

The Department of Administration is discussing a bill that, if nothing else, would allow current participants in the program to continue to receive their pensions along with their salary, said Kevin Brooks, the department's commissioner.

"If there's interest in (reauthorizing) House Bill 242, that would be an easy amendment in the new bill," Brooks said.

Brooks noted that some recent actuary reports show the program does cause "minor costs" to the state's two retirement programs. Combined, the retirement funds for teachers and public employees are nearly $5 billion in debt due to the escalating cost of health care and poor stock market performance. The "minor" costs to the funds could increase if the program grows substantially, Brooks said.

The costs mean that the carrot offered to retirees by public employers could get somewhat less juicy.

Brooks said the state's teacher and public employee retirement funds must be "held harmless" from increasing costs. That could mean a revision requiring participants to contribute at some level to the retirement system, he said.

Lured by the salary-pension combination, 81 experienced teachers have returned to 23 Alaska school districts, state officials said.

According to August records: The Department of Transportation had 25 participants; the Department of Health and Social Services had 14; the Department of Corrections had 10; the Department of Administration had six; and other departments rehired two to four employees using the program.

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