Pension changes in House Bill 22 and Senate Bill 35 threaten Alaska’s budgets

In Politics by Michael Rae

Alaska House Bill 22 and Senate Bill 35 would re-open a defunct pension plan for public safety workers and allow police and firefighters hired after 2005 to use their defined contribution (DC) benefits to buy their way in. Despite claims that the change would be cost-neutral, this move could realistically add close to $1 billion in additional costs to future state budgets and reintroduce the state to significant pension risk—the same risk that generated over $5 billion in pension debt and spurred the 2005 reform that closed the defined-benefit pension plan to new hires.

HB 22/SB 35 costs are dependent on