Alaska Public Pension Coalition

Actuary Support for Traditional Pension Plan

The push for returning to a traditional pension plan continues in Alaska. A hearing regarding Senator Dennis Egan's Senate bill 121, which would allow public employees to return to a defined-benefit plan, took place on Thursday, September 15th. Those in favor of bill 121 still face strong opposition from the Parnell administration. A consulting actuary was brought into strengthen the argument for the bill. Flick Fornia, the actuary, testified that the change back to a defined-benefit plan would be no more costly than the current plan and would end up providing a more secure retirement for many workers.

To read a full news report from the Juneau Empire, click here.

(Full news article by Pat Forgey of the Juneau Empire, article appeared on September 16th, 2011)

Social Security Payroll Tax on Incomes over $250,000 Proposed

Excerpted from the Alliance for Retired Americans:

Currently, active workers and their employers each owe a payroll tax on a worker’s wages up to $106,800 for Social Security. Congressional liberals have proposed raising the payroll tax to include income above $250,000 a year for individuals. This legislation is designed to keep Social Security solvent for the next 75 years, by putting an additional $6.5 trillion into the Social Security trust fund over that period. The sponsor of the House bill, Rep. Peter DeFazio (D-OR), believes that it is time to stop discussing raising the retirement age, cutting benefits, and privatization. Sponsors in the Senate include Bernie Sanders (I-VT), Barbara Boxer (D-CA), and Sheldon Whitehouse (D-RI). During President’s Obama’s 2008 presidential campaign, he proposed the same type of payroll tax increase. “The concern lies in getting this bill past the Republicans, because they have made it their stance to oppose any increase in taxes,” said Ruben Burks, Secretary-Treasurer of the Alliance. Recently Obama, in an effort to stimulate the economy, has proposed paring the planned 6.2 percent payroll tax on employees next year to 3.1 percent, and cutting the payroll tax to employers as well. He wants to replace the revenue that would be lost to Social Security with money from the government’s overall budget.

Oppose Cuts to Medicare, Medicaid, and Social Security Cosponsor H. Con. Res. 72

Clearly state that any legislative language approved by the Joint Select Committee on Deficit Reduction should not reduce benefits for Social Security, Medicare, and Medicaid recipients.

 Current Cosponsors (38):  Grijalva, Lee, Johnson (GA), Thompson, Al Green, Towns, Jackson-Lee, Woolsey, Schakowsky, Jackson, Clarke (NY), Richardson, Christensen, Honda, Waters, Davis (IL), Butterfield, Fudge, Lewis (GA), Cummings, Gonzalez, Kucinich, Filner, Wilson (FL), Bass, Stark, Hinchey, Clarke (MI), Cleaver, Bordallo, Frank, Gutierrez, Courtney, Nadler, Reyes, Olver, Cohen, Rush    

Dear Colleague:

As you know, the debt ceiling package that was recently signed into law by President Obama creates a Joint Select Committee on Deficit Reduction.  This committee is tasked with improving the short-term and long-term fiscal imbalance of the Federal Government by identifying at least $1.5 billion in additional cuts.

The creation of the Joint Select Committee on Deficit Reduction makes three of our country’s most vital safety net programs - Medicare, Medicaid, and Social Security - targets for cuts.  Such cuts would be highly unpopular with the public and would weaken the health of our social insurance programs at a moment when the economy is reeling.  

Congress needs to go on the record and state its intent to preserve America’s safety net and social insurance programs.  The Super Committee needs to prioritize the preservation of Medicare, Medicaid, and Social Security and focus on finding a means of balancing the budget that doesn’t harm working families. 

If you would like to cosponsor H. Con. Res. 72, please contact Michael Darner in my office at michael.darner@mail.house.gov.

Sincerely,

John Conyers, Jr.

MEMBER OF CONGRESS

[Concurrent Resolution under the cut.]

Sen. Bernie Sanders Moves to Protect Social Security from Budget Slashers

Sen. Bernie Sanders (I-Vt.) said last week that he will introduce legislation that would expand the reach of the payroll tax, as part of an effort to give further support to Social Security. According to The Hill, Sanders is proposing to make individual income higher than $250,000 per year subject to the payroll tax — an idea he says he is lifting from President Obama’s 2008 campaign for the White House. As it stands, the payroll tax, which funds Social Security, applies to the first $106,800 of annual income; the Sanders bill would not impose the payroll tax on income between that level and $250,000. In a recent news release, the senator said he was also worried that the new Super Committee tasked with finding additional ways to reduce the deficit will try to find savings through cuts to Social Security. One method that has already been discussed would involve switching to the so-called “chained CPI,” an alternate form of inflation that would lead to a slower increase in Social Security benefits.  “Social Security did not cause federal budget deficits, and should not be part of the Super Committee’s solution to the debt problem,” said Barbara J. Easterling, President of the Alliance. According to Sanders’ office, the chief actuary for Social Security says the senator’s proposal to make the payroll tax applicable at higher income levels would create enough new revenue to keep the program solvent for the next 75 years.

[Excerpted from the Friday Alert from the Alliance for Retired Americans]

Senate Bill 121: "Alaska Pensions"

Senator Dennis Egan

SB 121 - Alaska Pensions

Sponsor Statement

SB 121 lets teachers, Troopers, firefighters and other public employees choose one of two state retirement systems: an individual defined contribution retirement account, or earning a defined benefit pension.

A defined benefit pension takes time to earn, but rewards a record of public service by paying a guaranteed monthly benefit and, for long-term employees, health insurance. An individual defined contribution account is portable from one employer to another, and flexible in how it can be used, but makes no guarantees. SB 121 will let newly hired public servants in Alaska choose the one that fits best.

SB 121 creates a new more stable, more predictable defined benefit pension tier for teachers and public employees. A few years ago, Alaska beefed up oversight of the pension system. Now we have two actuaries analyzing the health of the pension trusts, there are more frequent experience studies and the law bars the practice of sometimes paying less than the cost of benefits. SB 121 keeps these smart reforms, making Alaska pensions stronger than ever.

And the defined benefit pensions for new employees under SB 121 will cost employers less than the pension tiers that came before, saving money for schools, cities, and the State of Alaska.

Alaska teachers and public employees don't earn Social Security, and many even lose Social Security benefits they earned in past jobs. So for most, a defined benefit pension makes sense. Other employees will choose individual defined contribution accounts because they prefer flexibility, portability, and control, or because their plans do not include long-term service in the public sector. SB 121 maintains their option to choose an individual account.

The teachers who educate our children, the police and firefighters who protect our families, and the public employees who serve our state and cities will be able to choose the benefit that best fits their service.

View Sponsor Statement for SB 121 at aksenate.org

An update on APPC's legislative efforts

With the legislative session about to end on April 19, it looks like the Alaska Public Pension Coalition needs to prepare for Round Two next legislative session (January 2010). We will need your continued support and your voice.

HB30, introduced by Representatives Harris, Hawker, and Munoz, is co-sponsored by Representatives Kawasaki, Guttenberg, Gara, Lynn, Dahlstrom, Kerttula, Herron, Tuck, Edgmon, Gruenberg, Buch, Gardner, Crawford and Petersen. As of April 10, 2009, the legislation is stuck in House Labor & Commerce.

HB54, introduced by Representatives Tuck, Crawford, Buch, Cissna, Gara, Holmes, and Peterson, is co-sponsored by Representatives Kerttula, Gruenberg, Harris, Dahlstrom and Gardner. The legislation never moved out of House Labor & Commerce after it was assigned to that committee on January 20, 2009.

SB23, introduced by former Sen. Kim Elton, is co-sponsored by Senators Ellis, French, Wielechowski, Menard, Paskvan, McGuire, Thomas and Davis. The bill made it through both Labor & Commerce and State Affairs but has been stuck in Finance since March 25, 2009.

We encourage you to check back as we post updates on forums to be scheduled throughout the state this fall and winter.  We will continue to work to collect testimony from individuals who want to share their story about how the change in the state's retirement system has affected their lives and their careers. We want to return to Juneau in January 2010 and get this legislation PASSED!

Legislative update - March 10, 2009

Senator Kim Elton introduced SB 23 which would reverse action taken by the Legislature in 2005 under SB 141. Prior to SB 141, Alaska’s teachers and municipal and state employees participated in a defined benefit pension plan. Since most of Alaska’s public employees do not participate in Social Security, it was critical that they have a defined benefit that could not be outlived. SB 141 changed the system to a defined contribution plan. It is possible to outlive your contributions and, without Social Security, some retirees would find themselves with no income. NEA, the AFL-CIO, and all the public employee unions and municipal police and firefighter organizations are backing SB 23 to return to the defined benefit program of Tier III under PERS and Tier II under TRS. AARP, the Alaska Retired Educators Association, and the Retired Public Employees Association are all supporting SB 23. At this time, 8 additional Senators have signed on as co-sponsors, 6 Democrats and 2 Republicans (Ellis, French, Wielechowski, Menard, Paskvan, McGuire, Thomas, and Davis). On February 26, SB 23 passed out of L&C and was been referred to State Affairs. No hearing has been scheduled at this time. Senators Paskvan, Thomas, Davis, and Meyer all voted "yes" on Senator Bunde voted "no recommendation." The bill has been amended to allow an individual to choose either the defined benefit or defined contribution plan.
 
Members of the Senate State Affairs Committee are:
Linda Menard, Chair 1-877-465-6601 Senator_Linda_Menard@legis.state.ak.us
Kevin Meyer, Vice-Chair 1-888-465-4945 Senator_Kevin_Meyer@legis.state.ak.us
Hollis French 1-866-465-3892 Senator_Hollis_French@legis.state.ak.us
Albert Kookesh 1-888-288-3473 Senator_Albert_Kookesh@legis.state.ak.us
Joe Paskvan 1-907-465-3709 Senator_Joe_Paskvan@legis.state.ak.us

Three of the five members of the State Affairs Committee are co-sponsors of the bill.  They should be contacted and thanked.

Neither Senator Meyer nor Senator Kookesh has signed on as a co-sponsor, although Senator Meyer did vote “do pass” on the Labor and Commerce Committee.  Senator Meyer should be contacted and encouraged to support the bill again when it is before the State Affairs Committee and thanked for his vote in Labor and Commerce. He should also be encouraged to co-sponsor the bill. Senator Kookesh should be contacted and encouraged to vote for the bill and also to become a co-sponsor.

There are two companion bills to SB 23 that have been introduced in the House.  HB 30, co-authored by Representatives John Harris, Mike Hawker, and Cathy Munoz, is the vehicle we expect to move through the committees since it is co-authored by three majority Republicans.  It is co-sponsored by 8 Democrats and 2 Republicans (Kawasaki, Guttenberg, Gara, Lynn, Dahlstrom, Kerttula, Herron, Tuck, Edgmon, and Gruenberg).  It will be heard first in House Labor and Commerce.  A hearing has been requested but no date has been set yet.

Members of the House Labor and Commerce Committee are:
Kurt Olson, Chair 1-800-463-2693 Representative_Kurt_Olson@legis.state.ak.us
Mark Neuman V-Chair 1-800-505-2678Representative_Mark_Neuman@legis.state.ak.us
Mike Chenault 1-800-469-3779 Representative_Mike_Chenault@legis.state.ak.us
John Coghill 1-877-465-3719 Representative_John_Coghill@legis.state.ak.us
Bob Lynn 1-800-870-4931 Representative_Bob_Lynn@legis.state.ak.us
Bob Buch 1-800-773-4968 Representative_Bob_Buch@legis.state.ak..us
Lindsey Holmes 1-888-465-4919 Representative_Lindsey_Holmes@legis.state.ak.us

At this time, we know that Representatives Lynn, Buch, and Holmes are all in support.Representatives Olson, Neuman, Chenault and Coghill should all be contacted and encouraged to support the bill when it is scheduled before their Committee.  Chairman Olson should be encouraged to schedule the hearing as soon as possible.

Another bill, HB 54, was also pre-filed.  It is identical to HB 30.  It is co-authored by 7 Democratic members of the House (Tuck, Crawford, Buch, Cissna, Gara, Holmes, and Peterson).  Co-sponsors include 2 Republicans and 2 Democrats (Harris, Dahlstrom, Kerttula, and Gruenberg).  We do not expect it to be the bill that moves.  We presume that these legislators will sign on to HB 30 (five already are).

Senator Kim Elton introduced SB 23 which would reverse action taken by the Legislature in 2005 under SB 141. Prior to SB 141, Alaska’s teachers and municipal and state employees participated in a defined benefit pension plan. Since most of Alaska’s public employees do not participate in Social Security, it was critical that they have a defined benefit that could not be outlived. SB 141 changed the system to a defined contribution plan. It is possible to outlive your contributions and, without Social Security, some retirees would find themselves with no income. NEA, the AFL-CIO, and all the public employee unions and municipal police and firefighter organizations are backing SB 23 to return to the defined benefit program of Tier III under PERS and Tier II under TRS. AARP, the Alaska Retired Educators Association, and the Retired Public Employees Association are all supporting SB 23. At this time, 8 additional Senators have signed on as co-sponsors, 6 Democrats and 2 Republicans (Ellis, French, Wielechowski, Menard, Paskvan, McGuire, Thomas, and Davis). On February 26, SB 23 passed out of L&C and was been referred to State Affairs. No hearing has been scheduled at this time. Senators Paskvan, Thomas, Davis, and Meyer all voted "yes" on Senator Bunde voted "no recommendation." The bill has been amended to allow an individual to choose either the defined benefit or defined contribution plan.
 
Members of the Senate State Affairs Committee are:
Linda Menard, Chair 1-877-465-6601 Senator_Linda_Menard@legis.state.ak.us
Kevin Meyer, Vice-Chair 1-888-465-4945 Senator_Kevin_Meyer@legis.state.ak.us
Hollis French 1-866-465-3892 Senator_Hollis_French@legis.state.ak.us
Albert Kookesh 1-888-288-3473 Senator_Albert_Kookesh@legis.state.ak.us
Joe Paskvan 1-907-465-3709 Senator_Joe_Paskvan@legis.state.ak.us

Three of the five members of the State Affairs Committee are co-sponsors of the bill.  They should be contacted and thanked.

Neither Senator Meyer nor Senator Kookesh has signed on as a co-sponsor, although Senator Meyer did vote “do pass” on the Labor and Commerce Committee.  Senator Meyer should be contacted and encouraged to support the bill again when it is before the State Affairs Committee and thanked for his vote in Labor and Commerce. He should also be encouraged to co-sponsor the bill. Senator Kookesh should be contacted and encouraged to vote for the bill and also to become a co-sponsor.

There are two companion bills to SB 23 that have been introduced in the House.  HB 30, co-authored by Representatives John Harris, Mike Hawker, and Cathy Munoz, is the vehicle we expect to move through the committees since it is co-authored by three majority Republicans.  It is co-sponsored by 8 Democrats and 2 Republicans (Kawasaki, Guttenberg, Gara, Lynn, Dahlstrom, Kerttula, Herron, Tuck, Edgmon, and Gruenberg).  It will be heard first in House Labor and Commerce.  A hearing has been requested but no date has been set yet.

Members of the House Labor and Commerce Committee are:
Kurt Olson, Chair 1-800-463-2693 Representative_Kurt_Olson@legis.state.ak.us
Mark Neuman V-Chair 1-800-505-2678Representative_Mark_Neuman@legis.state.ak.us
Mike Chenault 1-800-469-3779 Representative_Mike_Chenault@legis.state.ak.us
John Coghill 1-877-465-3719 Representative_John_Coghill@legis.state.ak.us
Bob Lynn 1-800-870-4931 Representative_Bob_Lynn@legis.state.ak.us
Bob Buch 1-800-773-4968 Representative_Bob_Buch@legis.state.ak..us
Lindsey Holmes 1-888-465-4919 Representative_Lindsey_Holmes@legis.state.ak.us

At this time, we know that Representatives Lynn, Buch, and Holmes are all in support.Representatives Olson, Neuman, Chenault and Coghill should all be contacted and encouraged to support the bill when it is scheduled before their Committee.  Chairman Olson should be encouraged to schedule the hearing as soon as possible.

Another bill, HB 54, was also pre-filed.  It is identical to HB 30.  It is co-authored by 7 Democratic members of the House (Tuck, Crawford, Buch, Cissna, Gara, Holmes, and Peterson).  Co-sponsors include 2 Republicans and 2 Democrats (Harris, Dahlstrom, Kerttula, and Gruenberg).  We do not expect it to be the bill that moves.  We presume that these legislators will sign on to HB 30 (five already are).