One of the recurring issues the Alaska Legislature has been faced with this past decade has been the cost of retired and retiring employees. The state went from a defined benefit plan, which guaranteed retirement checks and healthcare for life, to more of a self-directed 401-K-style plan. Then came the news a few years ago that the actuary the state employed to guide its retirement investments miscalculated to the tune of about $10-billion.
Senate President Gary Stevens of Kodiak says that it’s one of the pressing issues he’d like to see addressed in the coming legislative session.
— (PERS 1 :35 "You know, we have a lot … the state is paying for that.")
Even with over $40-billion in various savings accounts, Stevens says the state can’t pay the entire unfunded liability all at once:
— (PERS 2 28 sec "I would like to see us … we can begin to address it.")
Stevens says ever since the state switched from defined benefits to defined contributions, he’s heard from those who would like to see it changed back:
— (PERS 3 34 sec "When I talk to people … system that has gone away.")
One state department that has especially felt the sting of departing employees is Fish and Game. Every year, more are hired away by the federal government, which can offer them higher pay and better retirement benefits:
— (PERS 4 27 sec "Well, that’s true. … government on that level.")
Stevens says the federal government is at an advantage because it may borrow and spend, which he says it does freely, while the State of Alaska is required by its constitution to have a balanced budget, even if it means dipping into its savings accounts.