Thursday, March 20, 2008

Alaska Public Employees Support Restoration of Pension Plan

Public employees and their union representatives showed up in force this week to tell a Senate committee that the state should never have traded in its defined benefit pension plan for a 401(k)-style defined contribution plan.

The Senate State Affairs Committee held two days of hearings before moving out a bill Wednesday that would reinstate the defined benefits retirement plan for newly hired employees.

It also would repeal the two-year-old defined contribution plan giving those hired since the new plan went into effect the choice between the two. The Legislature approved the defined contributions plan in the waning hours of the 2005 legislative session after a bitter row between the House and the Senate.

The new retirement system went into effect July 1, 2006 for newly hired teachers and public employees; those workers already in the system were allowed to keep their pensions unless they chose to switch to the new plans.

Alaska State Employees Association business manager Jim Duncan, speaking on behalf of a coalition of unions and retiree organizations, said the new plan fails to provide retirees with a secure pension and adequate medical coverage, and it does not result in a cost savings to the state.

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