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Senate committee hears Alaska Work and Save auto‑IRA; staff say program would be run by Revenue, not a new board
Summary
Senate Labor and Commerce heard Senate Bill 21, the Alaska Work and Save program, which would create an auto‑IRA administered by the Department of Revenue and allow an option to direct Permanent Fund Dividend (PFD) checks to retirement. The committee adopted a committee substitute as the working document and set the bill aside for future action.
Senate Labor and Commerce members discussed Senate Bill 21, the Alaska Work and Save program, which would establish an automatic individual retirement account (auto‑IRA) for eligible Alaska employees and permit participants to direct some or all of their Permanent Fund Dividend toward retirement savings.
Maxine LaBerge, staff to the bill sponsor, told the committee that under the committee substitute the program would be administered by the Department of Revenue and the commissioner or the commissioner's designee would carry out duties formerly assigned to a standalone board.
"It establishes an auto individual retirement account program for all Alaskan employees who qualify and creates an option to allow for PFD checks to go towards retirement," LaBerge said. She said employees would be auto‑enrolled upon hiring, could opt out, and could change contribution rates.
Hunter Lotzfeld, also staff to the sponsor, explained the major change in the substitute: instead of creating a separate governing board, the administration duties would be a responsibility of the Revenue commissioner or designee to reduce administrative burden.
Presenters reviewed survey and cost data: LaBerge cited AARP materials showing 99% of Alaska businesses qualify as small businesses and that 64% of small businesses do not offer retirement plans, with cost and complexity the main reasons. She also said participating employers would not be required to contribute a match under the proposal. Committee members asked about employer administrative burden; LaBerge said Colorado administrators report it took employers "less than an hour" to set up and "maybe less than 15 minutes every month" to maintain payroll transmissions.
Senator Ray Jackson and others expressed support for the bill's goal, noting rising senior poverty and workforce out‑migration; Senator Merrick asked about joining an interstate partnership to reduce asset‑management fees, and staff said joining an established multi‑state compact (like Colorado's program) could reduce fees.
The committee adopted the draft proposed committee substitute as the working document and set SB 21 aside for further consideration at a future meeting. No formal vote on final passage occurred at this session.
