Egan reintroduces public employee retirement choice bill
Juneau Senator Dennis Egan has reintroduced a bill giving public employees a choice of retirement plans.
Senate Bill 30 would allow state and local government workers to choose either a traditional defined benefit pension or a 401(k)-style defined contribution plan.
Egan has argued that a guaranteed pension makes more sense for career public employees, while others may prefer the flexibility of an investment account.
In 2005, lawmakers voted to do away with the defined benefit plan for all newly hired public employees starting in July 2006. At the time, the Alaska Public Employees Retirement System was facing a projected unfunded liability of nearly $6 billion. Today it’s more than $11 billion.
Under Egan’s bill, workers who choose a defined benefit would contribute more of their own money to the system to keep the unfunded liability in check. Most employees would have to be Medicare eligible before the system helps pay for retiree health care, and even then they would be required to pay a portion of their premiums.
A nearly identical bill passed the Senate at the end of last year’s legislative session, but there wasn’t time for it to be taken up in the House.
The Parnell administration fought that bill, saying it didn’t do enough to reduce the state’s future debts.