Senate Bill 55 aims to enhance Alaska teachers' retirement options through Social Security enrollment

The Alaska Senate Finance Committee convened on April 14, 2025, to discuss Senate Bill 55, which addresses the contribution rates for the Teachers Retirement System (TRS) and the inclusion of teachers in the Supplemental Benefit System (SBS). This meeting marked a reintroduction of the bill, which had previously been discussed without public testimony.

Rose Foley, staff to Senator Stedman, provided an overview of the bill, emphasizing its aim to create a more equitable retirement system for state employees, particularly teachers. Currently, teachers are not enrolled in Social Security or SBS, which leaves them at a disadvantage compared to other state workers who contribute a higher percentage of their salaries towards retirement. Senator Stedman highlighted the disparity, noting that while the average state worker contributes about 25% of their salary to retirement, teachers contribute only 15%. This difference raises concerns about the adequacy of retirement benefits for teachers.

The discussion underscored the importance of enhancing teacher employment and retention through improved retirement options. Senator Stedman acknowledged that the bill is still a work in progress and indicated that further changes may be forthcoming based on feedback from stakeholders.

Public testimony was then heard, starting with Nils Andreasen, Executive Director of the Alaska Municipal League. He supported the bill, pointing out the historical devaluation of the Public Employees Retirement System (PERS) and TRS. Andreasen emphasized the need for a retirement system that adequately supports employees, particularly in light of the significant costs associated with retirement plans.

Heather Levin, Director of Benefits and Compensation at the University of Alaska, expressed concerns regarding the financial implications of the bill for the university. She noted that the university already spends a substantial amount on its pension plan and that adopting the provisions of SB 55 would require an additional $8 million, which was not budgeted. Levin suggested that the university might need to be carved out of the bill to avoid imposing a financial burden on employees.

In closing remarks, Senator Stedman agreed with Levin's suggestion to consider carving out the university from the bill. He reiterated the need for equity in retirement benefits, advocating for a system that includes all employees in Social Security or an equivalent plan. Stedman acknowledged the financial challenges associated with implementing the bill, suggesting that any changes might need to be phased in over several years to allow for adjustments.

The committee's discussions highlighted the ongoing challenges in addressing retirement equity for teachers and the complexities involved in reforming the state's retirement systems. Further deliberations and adjustments to the bill are anticipated as stakeholders continue to provide input.