On a 12-8 vote, the Senate on Tuesday approved legislation to reinstate a pension system for the state’s public-sector employees, a move that backers say is a key fix to some 20 years of chronic vacancies and experience issues across the state.
The passage of House Bill 78 marks the first time that such a bill has cleared both chambers of the Legislature since lawmakers ditched dependable pensions in favor of a 401(k)-style retirement plan in 2006, a change that pension backers say has driven off younger workers and contributed to the costly and chronic turnover of experienced workers. The lack of a pension is compounded by the fact that public-sector employees in Alaska don’t accrue Social Security benefits because the state opted out of the system.
Almost everyone concedes there are, in fact, grave problems with the state’s ability to attract and retain workers just about everywhere, from classrooms and public assistance programs to permitting offices and bookkeepers. The state regularly racks up hundreds of millions of dollars in overtime to cover understaffing — including the surprise $24 million in prison overtime — and the legislative audit recently identified tens of millions of dollars in fines due to vacancies and inexperience, as well as hundreds of millions more in federal funds that were left on the table.
While some have balked at the $89 million price tag for the plan, which would be optional for both existing and new state employees, backers say it’s still smaller than the litany of costs caused by the state’s revolving door of public-sector employees.
“Those costs exist today. They are in our budget. So the real question is not, does this bill cost money?” said Anchorage Republican Sen. Cathy Giessel, who has helped spearhead the issue in the Senate. “The real question is, why are we willing to keep paying more for a system that’s not working?”
Several public-sector unions, as well as hundreds of teachers and other public-sector employees, have long advocated for a return to a pension system, with some warning that the current system leaves workers without even the safety net of Social Security to rely on later in life. While shifting liabilities from the state to individual workers is the point for some, others say it’s not a recipe for keeping people in Alaska.
“Do we really want the future generations to be exposed to the whims of the stock markets? Let’s give them some sort of stability,” said Sen. Bill Wielechowski, D-Anchorage. “Just like we hear the many businesses that appear before us about how they need we need to they need stability, they need to be competitive, or they’ll take their business dollars elsewhere. Alaska employees, troopers, teachers and firefighters are making that exact same choice.”
Meanwhile, opposition to the measure seemed to boil down to two silos: Legislators who remember the problems that led to the state’s pension system getting in trouble and find any chance above zero of that happening again unacceptable, and legislators who steadfastly seem to believe that young people (AKA, people under about 40) want to work forever.
“Think of the liability protection of the future generations. Let’s not do what our granddad’s grandparents did to us back in the 60s and give us a liability that we struggle with for 30 years,” said Senate Finance Committee co-chair Sen. Bert Stedman, whose opposition to pensions is one of the few places where he’s out of step with the bipartisan Senate Majority.
While Stedman’s hypercautious approach to the state’s financial position is at least somewhat believable and is largely consistent with his steadfast opposition to overspending from the Alaska Permanent Fund, the other side of the opposition strained credulity with claims that younger workers (people under about 40) simply aren’t interested in retiring or have already accepted that retirements will be a thing of the past by the time they’re older.
“Generation Z is growing up when these packages do not exist and therefore have been planning accordingly, or at a minimum, have no expectation of receiving such a benefit,” said North Pole Sen. Robert Myers, citing a statement from the Fairbanks Police Department union, and claiming they fixed their hiring problems by offering hiring and retention bonuses. “I question whether or not this bill is going to be as effective as we may say.”
But perhaps the most confidently wrong testimony came from Tok Republican Rep. Mike Cronk, who began his opposition by noting that his father had three retirements and that he enjoys the plush retirement that hasn’t been available to any teachers who started in working in Alaska in the last 20 years.
“I did my 25 years, and I, you know, have my teacher retirement, but things have changed, people have changed. Younger people are not into ‘Hey, I’m just going to sit here and doing something for 30 years,'” he said, adding that his main goal in the classroom was to get his. “My whole goal was to do my time. I thought I was gonna get out at 20 years, but I wasn’t Tier I, and I needed to do 25 for the medical, so I did my 25.”
Without a hint of irony, Cronk — a guy who essentially just bragged about working as a teacher precisely as long as he needed to maximize his retirement benefits from the state — continued to say the state’s recruitment and retention problems have nothing to do with retirement benefits… even though it worked for him.
Instead, Cronk blamed poor leadership for the recruitment problems that seemed to be felt in nearly every corner of the state.
“The number one reason we couldn’t keep a teacher was because of bad administration. When you have bad leadership, people leave,” said Cronk, who, it should be noted, was also on his local school board before becoming one of the state’s 60 legislators — so, you know, part of leadership.
But the mental gymnastics it takes to get to “It was great for me, but, gee, you guys wouldn’t want any of this. Defined benefits and medical coverage, YUCK!” weren’t shared by every legislator who already has theirs.
Some Tier I retirees, like Anchorage Democratic Sen. Elvi Gray-Jackson, don’t want to pull up the ladder on younger Alaskans (AKA people under 40).
“I began my public service calling under a top-tier retirement plan, and for that, I am so grateful. But throughout this debate over the past several years, I felt a deep sense of responsibility, knowing that my own retirement is way more secure than what many Alaskans have today,” she said. “These Alaskans, they’re our constituents.”
“Our hard-working men and women deserve better,” she said. “They’re doing a really great job for us and our constituents, and they need something to look forward to, like a paycheck every month when their time is up.”
What’s next and why it matters
The updated measure still needs to clear the House before it can be sent to notoriously anti-union Republican Gov. Mike Dunleavy. The Alaska Supreme Court previously found his administration had acted with ‘abundant evidence of anti-union animus,’ so it’d be surprising if he doesn’t ultimately veto the measure.
If that’s the case, legislators won’t have the votes to override his veto, but it’s still a major milestone in the decades-long fight to reinstate a pension system for public-sector employees. Not only does it prove that passing a pension bill is possible, but it also helps push the issue to the center stage of the race for governor.
A change in leadership to a progressive or labor-friendly moderate (for example, the candidates who are set to attend tonight’s Alaska Medicaid Coalition gubernatorial forum in Anchorage) would make pensions — and frankly, a whole load of other issues that have languished in the eight years that Dunleavy has been governor — a near certainty for 2027.
Matt Acuña Buxton is a long-time political reporter who has written for the Fairbanks Daily News-Miner and The Midnight Sun political blog. He also authors the daily politics newsletter, The Alaska Memo, and can frequently be found live-tweeting public meetings on Bluesky.
