Committee hears bill to create state-facilitated retirement plan for small-business employees

Senator Bill Wilakowski opened the committee's first hearing by framing SB 21 as a way to expand retirement access for workers of small businesses. "We believe there's about 100,000 Alaskans who may be eligible for a retirement savings plan under this at no cost for the employer," Wilakowski said, arguing the bill addresses set-up costs that can range from $4,000 to over $10,000 for small employers.

Maxine LaBerge, staff to Senator Wilakowski, walked members through the changes made in the Senate: the bill would exempt businesses with fewer than five employees and firms in operation for three years or less, remove fines and penalties, shift compliance responsibilities to the Department of Revenue, and direct the program administrator to monitor federal incentives such as those in the Secure Act 2.

Marj Stoneking, AARP state advocacy director, testified remotely in support, urging the committee to restore a compliance mechanism so Alaska could join an interstate partnership and give eligible workers access to retirement savings. "Restoring some compliance mechanism...so that all Alaska workers who are eligible can have the opportunity...to have a chance at a secure retirement," Stoneking said.

Committee members focused on the bill's fiscal implications. Representative Colom noted the fiscal note appeared "a little hefty," and asked whether the Department of Revenue's staffing assumptions had changed. Wilakowski said the sponsor team is working with the department to reduce projected costs and estimated a first-year fee to join the interstate compact in the range of $200,000 to $300,000. He said the long-term plan is for participant contributions and small program fees to fund the program.

The committee set an amendment deadline for SB 21 at 5 p.m. on April 30 and laid the bill aside for further consideration.