>Friday’s 24-16 reconsideration vote on Senate Bill 141 came a day after the House had rejected the measure by a six-vote margin (see Alaska Pension Reform Measure Hits Legislative Snag ). Seven representatives changed their votes on the bill Friday after an amendment was added on a 21-19 vote to give incoming public employees and teachers the option of converting to a proposed new 401(k)-style retirement plan, according to the Fairbanks News-Miner. Under the amended House version, new employees would have the choice to stay with the defined benefit pension system provided to current public workers and teachers.
>The bill, which is seen as a linchpin to passage of other major bills, will likely head to a conference committee of House and Senate members, who then would have to move quickly to get a bill ready for approval by each chamber before the scheduled adjournment at midnight Tuesday.
>The House version also contains a sunset provision that will cause the bill to be repealed by September 2006 unless the Legislature acts to address the predicted long-term debt facing the Public Employees’ Retirement and Teachers’ Retirement systems (see Little Known Statute Delays Alaska Pension Reform Bill ).
>The Senate postponed its floor session Friday so members could monitor events. The two chambers have been at odds over the retirement bill for much of the session, beginning with the Senate’s decision to make some education funding contingent on passage of pension reform, according to the News-Miner. The Senate shows no outward sign of softening its position, and Senate Majority Leader Gary Stevens, R-Kodiak, is reported as saying that Senate GOP members oppose both giving employees a choice of retirement plan options and the sunset provision.
>SB 141, which Senate Republicans were able to push through with little trouble, has had a tumultuous ride in the House the last couple of weeks. The optional provision added Friday proved to be the compromise the measure needed to finally make it out of the House.
>Supporters of the bill say it will help the PERS and TRS, which currently face a projected long-term shortfall of some $5.7 billion, from falling further into debt. Critics counter that the bill does nothing to address the debt – and that it ultimately will hurt the retirement security for newly hired workers by offering them no guarantee that they will have enough money to retire on and pay their medical expenses.