Alaska lawmakers aim for last-minute review of public pension reform

Amid high vacancies and turnover in the ranks of public employees, some lawmakers are hoping that a major overhaul of Alaska’s public retirement system could be adopted in the final days of the legislative session.

It’s a tall order. Alaska’s public workers have been without a guaranteed pension since 2006, when lawmakers did away with the defined benefit system that was plagued by underfunding. Since then, labor groups representing teachers, public safety workers and other public-sector employees have increasingly raised alarm about the long-term impacts of the move, which meant fewer employees were incentivized to remain in Alaska for the duration of their careers, and many were lured to other states where benefits were more generous.

Reinstating some form of a guaranteed public pension has been one of the bipartisan Senate majority’s key priorities for over a year, but opposition from some Republican House members has stalled the progress of a bill that the Senate adopted last year.

The policy change has received limited attention this year as lawmakers had their eyes on addressing education- and energy-related legislation. But a last-minute effort could push the plan to the finish line before lawmakers’ May 15 deadline to end the current session.

Senate Bill 88 would offer public workers a new model: a return to defined benefits — meaning a guaranteed pension — with key differences from the pre-2006 plan that are meant to spread the risk between the state and its employees, and ensure the state does not risk unfunded liabilities as it did in the 2000s.

The Republican-led House majority has slow-rolled its consideration. In an unusual move, the bill last year was relegated to a newly formed subcommittee of the House State Affairs Committee, which has met only once since the current session began in January.

In late April, House Minority Leader Calvin Schrage, an Anchorage independent, attempted on the House floor to discharge the Senate bill from the State Affairs Committee. The procedural move would have relinquished control over the fate of the bill from that subcommittee, sending it instead to the House Labor and Commerce Committee — which appears to view action on pension plans more favorably.

The discharge attempts failed twice in the same week, with all House majority Republicans opposing the move. But the split was narrow. In the second attempt, 19 out of 40 House members voted in favor of the move.

House Republicans who opposed the discharge vote said they were still waiting on new actuarial analysis requested by Senate members earlier this year. Those analyses were available as of the end of April.

Sen. Cathy Giessel, an Anchorage Republican sponsoring the bill, said she shared a packet of information with House members after the discharge attempts that she said would “encourage” them to view the bill as “an answer to the current statewide recruitment and retention crisis.” She met with House majority leadership members on Tuesday, asking for them to schedule the bill for a hearing.

In a letter to House members, Giessel wrote that “the cost of the status quo is quite literally, killing our state.”

In response, the House State Affairs Subcommittee, led by Rep. Craig Johnson, an Anchorage Republican, scheduled a hearing on the bill on Tuesday at 6 p.m. — just over a week before the scheduled end of the session. Johnson said Friday that he’s “not crazy” about the bill but that the intention would be to transfer its review to the full State Affairs Committee.

“We’re just going to try to get everything out on the table and filter out as much as we can and kick it back to the committee and see what the rule of the body is,” said Johnson.

Even if the committee passed the bill, its final adoption this year would require several additional hearings before reaching a vote on the House floor, including in the House Labor and Commerce and House Finance committees. Both Johnson and Schrage said it was potentially still possible, as lawmakers ramp up their work pace in the final days of the session.

“One of the recurring themes of this Legislature is that there are many proposals that have a majority of legislators supporting them and we cannot get those proposals to the floor for a vote,” Schrage said Friday. “I think if you put a defined pension plan on the floor, it passes today.”

‘Only Alaska took up the challenge’

In 2005, amid contentious debates over an underfunded pension system, and a national push to overhaul retirement benefits, Alaska lawmakers narrowly agreed to do away with the defined benefits that guarantee a regular pension, replacing them with a 401(k)-style…