Governor Urged to Use Mercer
Fund Pensions for Public Employees
March 02, 2010
(SitNews) - Senator Hollis French, D-Anchorage, and Senator Dennis
Egan, D-Juneau, wrote Governor Sean Parnell, asking him to help
re-establish the "defined benefits" system of retirement
for public employees.
"Alaska is the only state
in the union that doesn't offer our public employees defined
retirement benefits," said Senator French. "Our recently-enacted
'defined contributions' system is not fair to our workers, and
is bad for the economy."
Previously, public employees
who contributed to the Public Employee Retirement System (PERS)
or the Teacher Retirement System (TRS) were provided a pension
in their retirement years from those systems. This ended when
legislation passed to eliminate that benefit for all new public
employees. Under the new plan, workers now pay into retirement
accounts, and take on all the risks of managing investments.
"Retirees contribute more
than $1.5 billion a year to Alaska's economy," said Senator
Egan. "The defined benefits system encouraged employees
to stay in Alaska and retire here. That's not the case with
the new program."
Senator French said that one of the reasons given by supporters
of changes to the system was that the state was facing a large
liability in the future. He said a big piece of that liability
was created by the flawed work of Mercer, the state's former
actuarial adviser. The state filed suit against the company.
French and Egan said the potential settlement presents an opportunity
for Alaska to restore the prior defined benefits system and bring
the state in line with the rest of the nation. "It appears
there will be a large settlement in the not too distant future,"
French and Egan told the Governor in their letter. "We
urge you to use the proceeds from the Mercer lawsuit as a down
payment on a return to a secure retirement for public employees."
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