Compliance May 2, 2005

Alaska DC Bill Survives House Committee Challenges

May 2, 2005 (PLANSPONSOR.com) - The Alaska Legislature's House Finance Committee has given its stamp of approval to a retirement reform bill that would provide defined contribution accounts for the state's teachers and other public employees.

Reported by

Fred Schneyer

The House Finance Committee on Sunday passed the bill to overhaul the public employees and teachers retirement systems, according to the Associated Press, after turning aside two attempts to remove the most strongly disputed part of the measure creating the DC accounts (See Alaskan Pension Overhaul Bill Seeing Final Changes Before House Vote ).

According to the AP report, Representative Mike Hawker, (R-Anchorage), made the first attempt to remove the defined contribution plan, saying more time was needed to examine the retirement systems and discuss alternatives. Hawker also disagreed that creating a defined contribution plan was a solid fix to the systems’ $5.7 billion shortfall. “It doesn’t just stop the bleeding, it cuts off the flow of blood to our existing plan,” Hawker said, according to the AP.

The bill has been a key piece of legislation for the Senate this session and its leaders have put pressure on the House to pass it.

Earlier, the Senate tied a $70 million school spending increase to successful passage of a defined contribution system, over the protest of many House members.

The bill now heads to the House floor, where the split is likely to be as close as it was in committee. House Speaker John Harris, (R-Valdez), said even if it passes, he may not transmit the bill until the Senate approves a capital budget.