Opinion: First responder retirement reforms will help Alaska retain talent, save money

  • Source: Anchorage Daily News - Metered Site
  • Published: 05/13/2022 12:00 AM

The Alaska State Legislature changed to the current retirement system in 2005 in response to an alleged $5 billion gap between what the state was collecting and what it needed to pay for the state’s pension fund. The state’s actuary had miscalculated how much money would be needed, then hid the miscalculation from the state. The state sued the actuary, but that didn’t solve the issue with pensions. Rather than adjust pension payments to cover the gap, the Legislature ended the pension program and created a new “defined-contribution” system, similar to a 401(k). We still paid benefits to people who had already earned them, but starting July 1, 2006, new state employees were put into the new defined-contribution system. Many Alaskans warned that the new retirement system would make recruitment more difficult — and unfortunately, they were right. Recruitment and retention issues plague state agencies, including police, fire and emergency medical services.



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