Police and firefighter pension bill, long sought by unions, is revived in Alaska House

A bill that would recreate a state pension plan for firefighters and police officers has been revived in the Alaska House of Representatives.

On Tuesday, Rep. Andy Josephson, D-Anchorage, introduced House Bill 22 to the House Committee on Community and Regional Affairs, bringing back an idea sought by public employee unions but which has failed to pass the Legislature in the past nine years.

Alaska offered a pension-style retirement program, known as a “defined benefit” program, to new employees from statehood through 2006, when it switched to a 401(k)-style retirement program in which benefit amounts aren’t guaranteed.

Nationally, 94% of public employees have access to a defined benefit system, according to figures published by the Urban Institute, and Alaska’s lack of one has been cited as a possible reason for the state’s struggle to hire and retain new employees.

Those struggles, Josephson said, “are way beyond anecdotal. I call it the great hollowing out.”

Cost concerns caused the state to cancel its pension program in 2006, and to limit costs in this new revival, Josephson limited the new pension plan to police and firefighters.

A different bill in the Senate from Sen. Jesse Kiehl, D-Juneau, would cover all state employees, including teachers.

Josephson’s ‘pension-lite’ proposal garnered support in 2021, passing the state House by a 25-15 vote, but it failed to pass the state Senate before the 32nd Legislature expired.

Bills start over from scratch when a new Legislature convenes, and now that the 33rd Legislature has been seated, Josephson is starting anew in the House, where his bill has been referred to four different committees, signifying a long and difficult process.

In Monday’s hearing, Reps. Kevin McCabe, R-Big Lake, and Tom McKay, R-Anchorage, said they were concerned about the possible cost if teachers and other public employees — whether through an amended version of the bill or through legal action — were able to transfer into the new pension system.

“That is a big concern with folks I’ve talked to about a bill like this,” McKay said. “That you’re opening the door for a tremendous financial burden on the state by allowing thousands of public workers to demand this program.”

Josephson said teachers are already demanding it, “so in that respect, nothing changes.”

Personally, he said, he hopes they get those pensions, but right now, he’s not calling for them.

“There’s only 2,358 first responders. That’s another reason why this is a conservative bill,” Josephson said. “You’re talking about first responders, who are often called our heroes, and you’re talking about 7½% of all public employees.”

Rep. CJ McCormick, D-Bethel and the committee chair, said public testimony will be taken on the bill Tuesday or Thursday next week.