Alaska pension reform a ‘two-year project’
This week in Alaska, Senate Majority Leader Cathy Giessel and House Majority Leader Chuck Kopp signalled that passage of a bill restoring a defined benefit pension for Alaska public employees was unlikely to pass both chambers before the 2025 legislative session ends next month.
A piece from the Anchorage Daily News noted that last year, the Senate adopted Leader Giessel’s bill only to have it get stuck in the previously conservative-controlled House. This time, Giessel stated the Senate is waiting on the House to act on the bill first.
Representative Kopp said on Tuesday that pension reform remains a priority for his caucus. However, progress on the legislation was slowed by an “unexpectedly protracted debate on the operating budget in the House Finance Committee.”
In February, Kopp said the bill would be voted on by the full House by the end of March. March came and went, and the bill remains before the House Finance Committee. On Tuesday, Kopp said he expected House Bill 78 — which would create a new defined benefit program for the public sector — to be before the full House for a vote by the first week of May.
The rest of the article provides a thorough synopsis of the issue.
Since then, Alaska has offered its teachers, police officers, firefighters, and other public sector workers access to a defined contribution plan similar to a 401(k), under which workers could contribute to an investment account but had no option for guaranteed income from the state in retirement.
That change has left many public sector workers in Alaska without enough funds to securely retire. It has also made Alaska the only state in the union to offer its teachers neither a pension nor access to Social Security.
Public sector union leaders and agency heads now say that the lack of a defined benefit option is a key driver in the state’s recruitment and retention crisis, which has led to high vacancy rates in Alaska school districts, state agencies, and law enforcement posts.
Make sure to keep up to date on legislative activities in Alaska and around the country by signing up for NPPC News Clips to receive daily pension news from across the country directly to your inbox.
Public Pension Plans Highlight Long-Term Investing Strategy Amid Market Volatility
This was the headline on Monday on Bloomberg, as individual investors and pension funds reacted to the seemingly purposeful market volatility—a result of an ever-changing tariff landscape.
Public pension funds are taking a hit amid volatile market conditions exacerbated by the White House’s rapidly changing and unpredictable tariff policies. An examination of the investment portfolios of Ohio’s five public pension funds reveals a combined loss of approximately $4 billion since January 1—a figure that fluctuates daily. According to the Guardian, the White House is facing allegations of “market manipulation after posting on social media that it was a ‘great time to buy’ just hours before he made a dramatic U-turn on his trade war that led to significant rises in stock markets around the world.
Despite recent market volatility, public pension funds are reassuring participants by emphasizing the long-term strategy behind their investment portfolios, issuing reassuring messages, highlighting the degree of portfolio diversification, and providing a perspective on market performance. Michael Trotsky, executive director and chief investment officer of the Massachusetts Pension Reserves Investment Management Board, issued a calming memo, with a reassuring tone, noting the state’s pension funds are invested in “a carefully constructed, broadly diversified portfolio” designed to “perform well in any environment.”
But for the average worker, anxiety at a time like this is understandable, considering many public employees are likely facing layoffs, and not just at the federal level. As Hank Kim of NCPERS recently pointed out, many states are replicating the DOGE playbook, which has already impacted thousands of federal government workers. “There has been an influx of anti-union activity, and at least 11 states have created DOGE-inspired committees,” Kim noted
An NPPC Steering Committee member, Kim, goes on to warn:
Additionally, widespread layoffs in the public sector may have unintended consequences for the health of public pensions and the economy. With fewer active employees contributing to plans, taxpayers may be on the hook for increased contributions needed to fulfil pension obligations. If benefits are tiered down further, this would also harm the economy in the long run.
Despite uncertainty coming from multiple directions, one bedrock element of public sector work should provide solace for government workers: The defined benefit pension. While the private sector largely abandoned pensions throughout the 1980s and 1990s, the vast majority of career firefighters, teachers, and police officers will receive a stable and secure monthly benefit in retirement, regardless of how well the markets navigate the current turbulence. That is the core promise NPPC and our network of affiliates around the nation are set up to protect.
Nevertheless, the current situation is troubling. And when pension funding levels drop, those downward arrows always bring out pension skeptics, who capitalize on the problem to repeat their never-ending ‘sky-is-falling’ mantra, which aims to destroy the benefits and social safety net hard-working Americans toiled to build.
According to the Chief Investment Officer, “between April 3 and April 8, the 25 largest public pension funds in the U.S. saw a decline of $169 billion in asset valuations, a result of the stock market losses that occurred during that week.”
Indeed, the forecast for public pensions across the board is looking volatile. The best recourse for public employees is to organize.
Please reach out to NPPC if you’d like to prepare for a potential battle in your city or state. And be sure to check back next Friday for the latest in the fight for a secure retirement! For now, sign up for NPPC News Clips to receive daily pension news from across the country directly to your inbox.