A bill in the Alaska Senate would allow new public employees to choose to participate in a defined benefit or defined contribution plan.
The bill calls for a new DB plan tier following backlash from 2006 legislation that made Alaska the first state to switch to an all defined contribution structure for new employees.
Employees that would opt in to the new DB plan would receive the same pension check as current pre-2006 participants, but would have to pay more for retiree health benefits, said Jesse Kiehl, legislative aide to state Sen. Dennis Egan, the bill's sponsor. Employees that are currently in the DC structure would have the option to join the new DB tier.
“I think it's going to do a lot to predict risk and provide security for longtime public servants,” Mr. Kiehl said of the bill.
The 2006 bill was passed largely as an attempt to curb the unfunded liabilities. However, the Alaska Retirement Management Board, Juneau, which oversees the combined $18.4 billion in assets for the state's retirement systems, has seen its unfunded liabilities rise to $11 billion from $5 billion in 2006. The defined contribution plan had about $3.2 billion in assets as of Sept. 30.