According to the bipartisan bill sponsors that reintroducing a pension will help the state fix its recruitment problems.
Alaska Senators Propose A Pension Plan for State Workers (PHOTO: Juneau Empire)
Pension Plan for State Workers
A proposed overhaul of Alaska‘s public retirement system would supply a new pension plan for state workers and is seen by supporters as a way to address concerns with recruiting and retaining workers. Half of the 20 members of the Alaska Senate announced their support Wednesday for new legislation intended to reinstate a pension for all state employees, and more are expected to back the idea. Coalition members said a 2006 action from a pension plan to a 401(k)-style plan has donated to difficulties in recruiting state employees. Lawmakers have attended about worker shortage results and how a revamped retirement offering could improve Alaska’s competitiveness in seeking workers, the Anchorage Daily News reported
Alaska is the only state where all recently hired public workers have only a 401(k)-style “defined contribution” plan as their primary retirement benefit, according to Keith Brainard, research director with the National Association of State Retirement Administrators. Those skeptical of a return to pensions note the billions in unfunded liabilities for the prior plans the state is paying off. Supporters of the new plan say it has provisions suggested to prevent the state from taking on greater obligations than it can afford.
Here Are Some Of The Requirements For The Pension Plan for State Workers
- Public employees would be needed to pay more than they did under the old system, and that amount could rise if state retirement experts say it’s required.
- Unlike the old system, no health insurance is included, though there would be a small health saving account to cover the time between retirement and the minimum age for Medicare.
- Current state employees would be allowed to switch from the state’s existing 401(k)-style retirement system to the new system, and all new employees would be required to use the new system.
- Police, firefighters, and other public safety workers would be able to retire at age 50 with 25 years of service (or at age 55 with 20 years), while teachers and other public workers would be authorized to retire at age 60 or with 30 years of service.
- Retirement payments would be based on an employee’s highest five straight years of salary, and benefits wouldn’t be available for anyone who works less than five years.
- There would be no cost of living bonus for retirees who reside in Alaska, and the state’s supplemental benefit system which allows employees to sock away an additional (matched by the state) 6.12% of their earnings would remain untouched.
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