Members of the Alaska Senate are making another run at restoring the state’s pension system for public employees, one year after inaction by the Alaska House killed a prior effort.
Senate Bill 28, filed Jan. 10 by Anchorage Sen. Cathy Giessel, would create a system slightly modified from the one eliminated by state lawmakers in 2006.
Its early introduction is a sign that returning to a defined-benefit retirement plan — based on years of service — for state, municipal and school district employees will garner significant attention in the 34th Alaska State Legislature.
The pension bill was among 76 bills and five constitutional amendments prefiled last week, ahead of the Legislature’s scheduled Jan. 21 start date.
In addition to the pension proposal, there was a bill to ban foam food containers, and one that would generally prohibit students from using cellphones in schools.
Few proposed bills become law in Alaska. In the 33rd Legislature, which ran from 2023 through 2024, legislators and the governor introduced 665 bills. Only 89 became law, a passage rate of 13.4%. The 89 enacted bills were the second-fewest of any Legislature since statehood. Only the 31st Legislature, which was shortened by the COVID-19 pandemic, enacted fewer bills.
Prefiling a bill allows legislators and the public more time to consider a proposal and can help it stand out from the hundreds of bills typically introduced when the Legislature convenes. A second round of prefiled bills will be released Friday, Jan. 17.
Several lawmakers said they expect the pension issue to be a top priority.
Giessel, who has championed the issue in the Senate, has argued that because Alaska lacks a public employees pension system, it’s at a hiring disadvantage with state and local governments that do. Only Alaska and North Dakota lack a public pension system for new employees.
Public employee unions, particularly those representing police and firefighters, have repeatedly testified that new employees frequently arrive in Alaska, get trained, then move away because other states offer more stability and benefits.
The cost of hiring and training new employees is prohibitive, they have argued in testimony before the Legislature.
Opponents of the revived pension idea point to the state’s now-closed retirement plan, which has a multibillion-dollar unfunded liability, in part because actuaries had underestimated the cost of pensions. The state treasury is now liable for those costs, and skeptics worry about a repeat.
Last year, the state Senate passed a pension-revival bill intended to meet those concerns by reducing health care benefits and increasing the employees’ required contribution rate. If an unfunded gap develops, a special panel is permitted to further boost the required contribution rate.
Despite the changes, the pension bill was referred to a subcommittee in the House and failed to advance from that three-person panel after a single hearing that was held without public notice.
The prior House was controlled by a predominantly Republican coalition that opposed the pension bill. This year’s House is expected to be controlled by a predominantly Democratic coalition that also includes a Republican who has been a passionate advocate of a pension revival.
In the Senate, all 11 senators who voted to advance the pension bill last time are still members, as is Anchorage Sen. Matt Claman, who is a member of the majority but was absent from the prior vote.
The first stop in the Senate for the pension bill will be the Senate Labor and Commerce Committee, headed by Nikiski Sen. Jesse Bjorkman, a supporter of the prior bill.
If the pension bill were to advance through the Legislature, proponents’ biggest hurdle may be convincing the governor. Giessel said she hasn’t yet talked with him about the issue.
“I think the data is pretty overwhelming, that we are in a crisis situation,” she said.
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