Cracking the Nest Egg: The Privatization of Alaska's Retirement System
By David Lawrence
Right-wing Alaska legislators, working in conjunction with an arrogant and mean-spirited governor, have pushed through a new, privatized retirement plan for public-sector workers such as teachers and state employees. This plan is very similar to the increasingly common 401(k) plans that have been favored in the last couple of decades by corporations looking to increase profits.
The idea is pretty simple. Take away the traditional “defined benefit” pension that paid a retired working person a guaranteed monthly payment, and replace it with a cheaper “defined contribution” plan. In a defined contribution plan, the employer and the employee regularly contribute an amount of cash into the employee’s private account for retirement – maybe.
There is a bit more to this story that needs to be told, but the bottom line is this: beginning July 2006, Alaska public employees will be less protected in their golden years than the public workers of any other state. But it will not end there. This is the just the beginning. If we do not stop it and reverse it in Alaska, this horror will be knocking on the front door of your state soon.
Right Wing Ram Through Bad Policy On May 23 the State House voted 21-18 to begin implementation of a defined contribution plan for all public employees on July 1, 2006. SB 141 was rammed through in the just-ended special legislative session called by Governor Murkowski. The 15-day special session (which cost Alaskans an estimated $450,000) was spent on legislation that should have been passed in the preceding 121-day session, but was not due to resistance by progressive legislators. The Legislature was forced by the governor to stay an extra two weeks, until enough votes could be changed to get a bill passed which would destroy the public employee pension system. The special session gave the governor and his right-wing legislative cronies time to deliver bribes in the form of extremely large capital project appropriations for the districts of some balky legislators. Other legislators were worn down, and succumbed to the need to return to family and work obligations.
The bill faced major opposition from organized labor, including police officers and firefighters from across the state. They were successful in having disability and death benefits restored in the bill. They, along with teachers from throughout the state, have also testified that recruiting young people to teach, to work in a municipality, or to work for state government will be very difficult. Although the salaries may not be competitive with other states, very often Alaska’s pension and health care benefits have helped with recruiting. SB 141 would make it very unlikely that a younger person would choose to work in the public sector, because benefits and salaries in other states will be much more attractive than what Alaska can offer.
http://www.politicalaffairs.net/article/articleview/1574/1/111/
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