Alaska State Capitol to Revamp Retirement Options for Public Sector Workers
The Alaska State Capitol building in Juneau is working on revamping retirement options for public sector workers in the state with a two-year project aimed at adopting a new pension bill. Despite being a top priority for the Senate and House coalitions, a new defined benefit plan has faced challenges in the legislative process.
Senate Majority Leader Cathy Giessel has been advocating for a new pension plan that would guarantee income to retirees in Alaska’s public sector for the first time since 2006. However, progress has been slow as the bill remains before the House Finance Committee.
House Majority Leader Chuck Kopp has expressed that although pension reform remains a priority for his caucus, various factors have slowed down the legislative process. The bill is expected to go before the full House for a vote by early May after facing delays.
The lack of a defined benefit option has been identified as a key factor in the state’s recruitment and retention crisis in public sector jobs. A new actuarial analysis suggested the bill could cost up to $580 million over 14 years, but Kopp believes that the cost will be balanced out in the long run by savings in reduced hiring and training costs.
While past efforts to reintroduce a pension plan have stalled, public support for the cause has been growing. The proposed new plan would have Alaska workers share the burden if the retirement plan is underfunded and do not offer health insurance or cost-of-living adjustments for retirees who choose to stay in Alaska. Concerns have been raised about the lack of medical benefits in the new pension plan proposal.
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