The late night vote against the bill – with 23 members against and 17 in favor – will throw a major hitch into the fate of other legislation and funding that the Senate GOP has connected to the retirement overhaul if the House move isn’t overturned on reconsideration, according to a news report in the Fairbanks News Miner.
The bill proposes switching incoming employees in the Public Employees Retirement and Teachers’ Retirement Systems from a traditional pension plan to a 401(k) plan.
According to the news report, Senate Republicans have been pressuring the House to pass the overhaul bill by not forwarding the hefty capital budget under consideration until the retirement legislation is passed and leveraging other bills against the measure. Earlier in the session, the Senate GOP made $38 million of education funding dependent on passage of the individual investment accounts provision in SB 141. The bill has already passed the Senate.
The motion to have a reconsideration vote was made by Representative Mike Kelly, (R-Fairbanks), a staunch supporter of the bill and its proposed conversion to the 401(k)-like defined contribution plans for new hires. The reconsideration could take place as soon as Friday.
The debate before Thursday’s vote pitted representatives who said the Legislature must prevent the PERS and TRS from falling further into debt against those who countered that the bill’s changes would leave future teachers and public employees with uncertainty about whether they’ll have enough money to live during retirement.
The PERS and TRS face a projected long-term debt of about $5.7 billion, and employers, such as school districts and municipalities, have been required to pay more into the system every year because of the projected shortfall.
The reform measure has also hit other legislative bumps in the road along the way (See Little Known Statute Delays Alaska Pension Reform Bill ).
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