Juneau lawmaker makes another attempt to restore a public pension system

A Juneau lawmaker is once again pushing to revive a pension system for state and local government workers, including teachers in Alaska. 

On Friday, Sen. Jesse Kiehl, a Juneau Democrat, pre-filed Senate Bill 27 – a proposal to reinstate a pension-style retirement system that was nixed by the Alaska Legislature in 2006 in favor of the current 401(k)-like program. 

“This is an important thing that we got wrong 20 years ago, and we need to get right,” he said. “It’s very clear that this doesn’t just benefit employees, it also benefits the state and it also benefits cities and local taxpayers.”

Kiehl said that lawmakers’ decision nearly two decades ago backfired. That’s because state and local agencies and school districts are struggling to recruit and retain enough employees. 

There’s been a bipartisan effort to try and reverse course in hopes of encouraging hiring. Kiehl pointed to a 2023 analysis of the current system which showed employees earned drastically less in retirement savings under it than the previous system.

The effort to revive the pension system has faced skepticism from some lawmakers about whether it would actually help with hiring and save the state money. Some lawmakers fear it could the state significantly more than projected. 

Kiehl’s bill is similar to one introduced last session by Sen. Cathy Giessel, an Anchorage Republican. Her bill was passed by the Senate but failed to advance in the House.  House lawmakers at the time argued they didn’t have a full financial picture.

Lawmakers also briefly tried a last-ditch effort to piggyback the proposal onto a separate Senate bill to attract and retain more teachers. That attempt failed as well.

Giessel filed a pension bill again this session. Kiehl’s bill would give new employees a choice between the two retirement systems, while Giessel’s would allow current employees to choose but enroll every new employee in the defined benefit program. Kiehl said he thinks Giessel’s bill will be more popular and he would support it.

Both bills will start from scratch and must move through the committee process because a new Legislature is convening. Kiehl said he’s optimistic that restoring state pensions will get the governor’s support. 

“The goal here will be to get the governor to engage and have something that he will let pass into law when it hits his desk,” he said. 

Just last session Gov. Mike Dunleavy said he was skeptical that a pension plan would actually move the needle in recruiting and retaining staff. 

Lawmakers from around the state are already arriving in Juneau. The first session of the 34th Alaska Legislature is set to begin next Tuesday.

Correction: A previous version of this story misidentified Kiehl’s bill as House Bill 27.