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24th Alaska State Legislature
The 24th Alaska State Legislature
Sen. Bert Stedman
Sen. Bert Stedman

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50 Front Street
Ketchikan, AK 99901-6442
Phone: (907) 225-8088
Fax: (907) 225-0713

Public Employee Pension Reform Signed into Law
First Step to Solving $5.7 Billion Dollar Deficit Taken
Alaska State Legislature
Alaska State Legislature
Attachments Attachments

 
Released:
July 27, 2005

Jeff Turner
Press Secretary
465-3803(Jan-May)

"I believe this will be remembered as the most significant bill to come out of the 24th Legislature. Alaskans expect us to keep our fiscal house in order and SB 141 achieves that while at the same time creates a strong retirement plan that meets the needs of future teachers and state employees."
- Sen. Stedman

 

(ANCHORAGE) Today Governor Frank Murkowski signed the public employee pension reform bill (SB 141) into law during a bill signing ceremony in Anchorage. The landmark legislation creates a modern and secure retirement plan for future public employees and it takes the first and most important step to addressing the state's projected $5.7 billion dollar deficit under the existing pension plan.

The legislation originated in the Senate Finance Committee and was spearheaded by Sen. Bert Stedman (R - Sitka). "I believe this will be remembered as the most significant bill to come out of the 24th Legislature. Alaskans expect us to keep our fiscal house in order and SB 141 achieves that while at the same time creates a strong retirement plan that meets the needs of future teachers and state employees."

SB 141 eliminates the outdated pension system and replaces it with a 401-K type retirement account for public employees and teachers hired after July 1, 2006. The state and each employee will make a joint contribution of 13 percent based on the employee's salary every month into the retirement account. Public school teachers and their employers will contribute 15 percent.

"Anyone working in the private sector with a 401-K savings plan will probably look at those contribution rates and say that's a great retirement plan - and it is. SB 141 strikes a great balance between protecting the state from the financial pitfalls inherent with a traditional pension plan and provides future public workers with a substantial retirement they can count on," said finance committee co-chair Sen. Lyda Green (R - Wasilla).

The legislation includes a progressive solution for helping future public employees and teachers cover their health care costs after retirement. The Health Reimbursement Arrangement (HRA) is an employer funded medical savings account. When an employee or teacher retires he or she can withdraw the funds to pay medical expenses and/or health insurance premiums for themselves, their spouse or dependent children. The withdrawals are also tax-free.

Senate President Ben Stevens (R - Anchorage) says reforming the PERS/TRS plans was the Senate Majority's main goal this year. "Traditional pension plans are sinking some of the country's biggest corporations and are threatening the fiscal stability of other states. I'm proud with how lawmakers and Governor Murkowski put their heads together to create a win-win situation for public employees and the state."

Next session the legislature will take up more solutions to addressing the $5.7 billion dollar deficit in the PERS/TRS systems.

# # #

"SB 141 strikes a great balance between protecting the state from the financial pitfalls inherent with a traditional pension plan and provides future public workers with a substantial retirement they can count on."
- Sen. Green

 
Attachments:
 
·
Print Text Version
· Acrobat PDF Version [PDF - 2 pages - 32 KB]
· Fact Sheet [PDF - 109 KB]
· Sponsor Statement
· SB 141 Overview [PDF - 95 KB]
· SB 141 White Paper [PDF - 180 KB]
· AK Retirement Boards Comparison [PDF - 87 KB]
· SB 141 - Walkthrough [PDF - 79 KB]
· Actuarial Valuation 101 [PDF - 45 KB]
· Benefit Changes - Cost Comparison [PDF - 9 KB]
· Slide Presentation - Part 1 [PDF - 322 KB]
· Slide Presentation - Part 2 [PDF - 295 KB]
· (S) FIN Discussion Topics 03/29 - 04/03 [PDF - 54 KB]
· Board Restructuring Slide Presentation [PDF - 77 KB]
· Contribution Rate of Existing Employees Slide Presentation [PDF - 185 KB]
· Slide Presentation - Medical Benefits Program for DC Plan Members [PDF - 95 KB]
· Slide Presentation - Contribution Rates for New Defined Contribution Plan [PDF - 184 KB]
· Slide Presentation - Health Reimbursement Arrangement [PDF - 106 KB]
· Slide Presentation - Conversion Option from DB to DC [PDF - 61 KB]
· Slide Presentation - SB 141 vs. CS SB 141 (FIN) Comparision [PDF - 12 KB]
· Complete Bill Text for SB 141

Audio Comments:
 

07-27-05 : Sen. Bert Stedman talks about how the new pension plan is better for new employees, especially in their 20's and 30's.
Requires An MP3 Player = Bert Stedman
129 KB
Requires Real Audio Player = Bert Stedman
16 KB

07-27-05 : Sen. Stedman talks about how the state, local governments and school districts were facing the possibility of paying an amount equal to 50 percent of their employees salary to the pers/trs system to make up for the unfunded liability of 5.7 billion dollars.
Requires An MP3 Player = Bert Stedman
208 KB
Requires Real Audio Player = Bert Stedman
26 KB



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