State legislative sessions are underway; here’s a look at what we’re tracking:
Alaska: Committee hearings explore potential pension plan.
In Alaska’s 2024 session, lawmakers came close to reestablishing a pension system for public employees following nearly two decades of inadequate retirement benefits. Currently, there are bills aimed at establishing defined benefit pensions in both chambers of the legislature: Senate Bill 28, which is sponsored by Senate Majority Leader Cathy Giessel, and House Bill 78, from the House Finance Committee. The initiative to restore pensions for public employees has garnered ample support from the public sector and the community.
The House Committee on Finance has held three hearings on HB 78, with another scheduled in late February. In her testimony to the committee on February 11, Dr. Teresa Ghilarducci, a retirement expert and professor at the New School, explained key aspects of HB 78, including cost savings, economic impact on businesses, and the effects of defined-contribution versus defined-benefit plans on retirees’ overall well-being and new hires’ perspectives.
“You affect the morale of incoming employees. When they see that there is no path for them, that there isn’t an Ecology of commitment signaled through the compensation, ” she said. “It’s a signal that you really want people to consider leaving after 5 years.”
Representative Chuck Kopp, a longtime pension supporter and House Majority Leader, has expressed that the bill is on track to move forward in the House by the end of March. SB 28 is assigned to the Senate Committee on Labor and Commerce, but has yet to make the committee’s calendar.
Despite activity from billionaire-backed groups like the Reason Foundation and Americans for Prosperity, who have been very active in the state sending flyers to legislators, placing digital ads and spreading distorted information, the Alaska Public Pension Coalition remains confident in the bill’s passage in the legislature. Governor Mike Dunleavy, himself the beneficiary of a substantial public pension, complimented the defined benefit retirement plan, acknowledging in 2009, “The system has been very good to me.” It’s still unclear if Dunleavy will sign a bill to extend the benefits he receives to today’s hard-working Alaska public servants.
Kansas: KPERS 3 improvements could be on the horizon.
A 2023 post-legislative audit of the Kansas Public Employees Retirement System (KPERS) Tier 3 determined that KPERS 3 delivers inadequate retirement benefits compared to neighboring states. As a result of that determination, several bills are in play that could improve pension benefits this season.
House Bill 2086 would make lever adjustments to KPERS 3 by changing the dividend interest credit. The dividend proposed in HB 2086 would add 0.65% in total interest over a member’s career and increase the current assumption to 6.65%. This would increase KPERS 3 members’ income replacement ratio from 33.2% to 36.5%. What would this mean in real terms? A 30-year employee making $60,000 at the end of their career would see an increase of $1,980 per year.
Last year, we interviewed public employees in Kansas in KPERS 3 to discuss their career plans and thoughts about retirement. Like many states nationwide, Kansas struggles to recruit and retain educators, school support staff, and numerous other essential public sector employees. Workers agree that improvements to the current pension system are necessary to ensure Kansans can continue to rely on public services.
Oklahoma: Threats remain despite victory over damaging bills.
Oklahoma has seen several attacks on public pension systems over the years, and the 2025 legislative session is no different. In 2014, the Oklahoma Public Employees Retirement System (OPERS) stopped offering pensions to new employees, offering the Pathfinder 401(k) program instead. The Oklahoma Teachers Retirement System (OTRS), which still provides defined benefit pensions to educators, is now facing an onslaught of potentially damaging legislation.
Last week, the Banking, Financial Services, and Pensions Committee heard several pension-related bills, including House Bill 1258. This bill would create a defined-contribution option for teachers–and incentivize them to choose the 401(k) by offering a higher pay scale to those who opt out of the defined-benefit program. HB 1258 was ultimately defeated in committee, but several shell bills in the Oklahoma legislature still leave secure retirement benefits vulnerable.
Oklahoma’s 2014 legislation spurred NPPC’s research initiative, Fiscal Responsibility and 401(k)s: Why Converting Public Employees to Defined-Contribution Retirement Plans is Wrong for Your State, which examines the devastating impacts of closing a state pension system.
Connecticut: More public workers could gain access to secure retirement in CT.
Connecticut’s labor-friendly legislature has not eliminated all threats to its pension systems, but it has created the opportunity to expand coverage to more public employees. Two bills in the Nutmeg state aim to secure pension coverage for essential employees.
House Bill 6953, which would compel municipalities to offer pensions to police and firefighters through Connecticut’s Municipal Employees Retirement System (CMERS), is in its third year of development and could see potential advancement in 2025. Returning pensions to public safety departments has been a growing trend in Connecticut as more municipalities grapple with recruitment and retention shortfalls.
The other key bill, House Bill 7010, would shore up better healthcare, pay, and retirement benefits for paraeducators in the state. Though several rounds of similar legislation have been presented to the Connecticut General Assembly in years past, lawmakers have yet to guarantee pensions for these essential support staff.
Stay tuned for more news on what’s happening in pensions across the country. Be sure to follow us on Facebook and Twitter for daily updates, and click here to join our email list.