|
The final session of the 28th Legislature in Juneau gaveled in this January and with opening business came the introduction of House Bill 247 (HB247) "Peace Officer and Firefighter Retirement" by Representative Lindsey Holmes. This bill outlines a variable benefit system that will afford our Tier IV members in public safety a sustainable benefit for retirement and medical. Here is an overview of the plan:
In 2005 Alaska switched away from a defined benefit program to a defined contribution retirement system for all employees hired after 1 July 2006. Under the new system, employers would incur a cost of 22% of compensation for each PERS employee. Employees in the DC plan were allocated a 5% match to a 401A (teachers receive 7%), and a 3% of the average PERS salary to a health retirement account. The remaining percentage of roughly 14% was allocated toward the unfunded liability of the pre-existing defined benefit system. It should also be noted that in creating the defined contribution system the legislature did not mandate participation in social security or SBS. (Many of Alaska’s police and firefighters do not receive social security or get SBS.) The new system also tied all participants to the unfunded liability with the 22% employee contribution.
The Alaska Professional Fire Fighters believe defined benefit systems have many advantages over defined contribution systems. Professional money management, lower fees, pooled risk and long term investment strategies are some of these advantages. The AKPFFA also recognizes the risk employers carry if investment returns fall short or actuarial experience is adverse to prediction. Taking both of these points of view into account the AKPFFA has developed the Variable Benefit Retirement System.
Our stated goal is to fund a retirement system through employee and employer contributions that will provide for individuals in retirement and ensure they remain independent and self-sufficient. At the same time this plan must protect employers and taxpayers and ensure they cannot be held liable for adverse experience. The variable benefit retirement system meets these requirements.
What we need now is letters of support from our members. Please feel free to contact your area Vice President regarding questions or a template to follow.
Download:
|
