Senate panel approves bill giving employees pension option

Associated PressApril 13, 2012 

The Senate Finance Committee has moved a bill that would let public employees opt-in to a traditional pension program.

The Parnell administration has voiced opposition to SB121, though sponsor Dennis Egan has said the goal was to make the bill cost-neutral.

Deputy Commissioner of Administration Mike Barnhill has said no defined benefit bill can guarantee it won't have creeping unfunded liabilities.

Alaska moved from a defined benefit, or pension, program to a defined contribution, or 401(k)-style, benefit in 2005. Union leaders have said this hurt employee retention.

Alaska faces $11 billion in unfunded pension liabilities due to things like actuarial mistakes, a stock market dive, health care costs and longer-living retirees.

If SB121 passes the Senate, it would go to the House next. The Legislature is scheduled to adjourn Sunday.

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