By SUZANNE DOWNING
May 19, 2026 – The Alaska Legislature convened in joint session Tuesday to attempt an override of Gov. Mike Dunleavy’s veto of House Bill 78, the sweeping pension measure that would reopen a defined benefit retirement option for public employees and teachers in Alaska.
The override effort was widely expected to fail, underscoring the collapse of one of the Legislature’s biggest bargaining chips during the final days of the 2026 session. Dunleavy vetoed the bill late Tuesday night, his last day to take action or have the bill go into law.
The Legislature needed 40 override votes to reverse the governor’s veto. The final vote was 33 to override, 27 to sustain the veto.
HB 78 would fundamentally restructure Alaska’s retirement landscape by allowing certain public employees and teachers to choose between the current defined contribution system and a revived pension-style defined benefit plan. The legislation applies to both the Public Employees’ Retirement System and the Teachers’ Retirement System, reopening a debate that has dominated Alaska politics for years over recruitment, retention, and long-term state liabilities.
Gov. Dunleavy argued the bill would expose the state to massive future financial risk and undo reforms enacted in 2006, when Alaska shifted new hires into a defined contribution system to limit unfunded pension liabilities. More than $6 billion is still owed by the state to pensioners who are still alive and receiving benefits, some of them who have been on pensions since they were 50 years old, which was the date for early retirement under the old plan. In some families, two generations were receiving retirement benefits at the same time.
The override vote came just hours after another dramatic collapse at the Capitol: the failure of the House to advance the Alaska LNG tax and financing legislation that legislative leaders had spent weeks negotiating.
By the end of session, the pension bill and the gasline legislation had effectively become politically intertwined, with the Democrat-held legislature threatening to not pass the LNG bill unless the new pension plan went into law and going so far as to make the LNG bill contingent upon the pension plan being allowed to go into statute.
The Democrat-led bipartisan majority coalition in the House and Senate had kept HB 78 alive until the final hours as leverage in negotiations surrounding the Alaska LNG package. Legislative maneuvering over the gasline bills consumed much of the closing days of the session, with amendment fights, procedural delays, and caucus infighting eventually stalling the LNG legislation in the House before midnight adjournment.
The failure of the gasline package stripped away much of the political rationale for preserving the pension bill coalition, leaving HB 78 exposed to Dunleavy’s veto pen with little remaining path forward. Some Democrats and their Republican allies argued that the gasline would mean more state workers would be required. But then, they killed the gasline in the House.
The override attempt also highlights the increasingly fractured atmosphere inside the Capitol, where lawmakers spent the final week engaged in legislative brinkmanship while several major policy priorities died in the closing hours.
The Big Government advocates for HB 78 said the bill was essential to solving Alaska’s ongoing recruitment and retention problems in education, public safety, and state government.
Others, such as Sen. Bert Stedman, countered that the bill would recreate long-term pension obligations that once saddled Alaska with billions in unfunded liabilities and expose future generations to escalating costs during economic downturns. They pointed out that municipal debt on these pensions would be shifted to the state and relieve municipalities of their obligations. These pension obligations would be considered contracts and protected by the Alaska Constitution.
The pension fight now joins the Alaska LNG collapse as one more casualty of a legislative session that ended with high drama and few major victories, other than naming cabbage as the state vegetable.
6 thoughts on “Legislature fails to override governor’s veto of state worker pension bill”
The pension bill was typical Alaska legislation: Make a law that cannot be afforded. Having watch the legislature since statehood, all I can say is they haven’t changed their habitual incompetence. .
In the persuasion world, the most powerful word is “yes.” Given that the entire world is moving toward portability in pensions / health care, perhaps a signature on the defined benefit pension in return for a clean gasline bill would be a better choice with the following caveats:
– There is actual choice. Any employee can choose a 401k model (Tier IV) with completely portable health care option at any time. Defined benefit plan requires the standard 10 year vesting period. You have one choice to opt in to either.
– In return, the governor gets a clean gasline bill modeled after that passed to support TAPS in 1973.
Both Cathy Tilton and Kevin McCabe have spoken about the golden handcuffs of defined benefit over the last week on Amy’s morning show on KENI. Cheers-
Governors veto will make gaining legislatures support for an LNG line very difficult after the failed override of the defined benefits bill plus delisted middleman Glenfarne has not the investors to build an LNG line on top of that.
Summarize; Truck , rail and LNG tankers with ice breakers at certain times of the year are our only hope to get LNG off the slope.
Between adjournment and start of the special session, idiot legislators can go home and make sauerkraut. And the REALLY dumb ones like Giessel can make kim chee. I hope Suzanne captures a few more photos of the contortions on Giessel’s face a few hours after her feast.
Oh what a relief!
I guess big Labor will now have to go to work to purchase the souls of more legislators. The existing strategy of running their apparatchiks as “Republicans” is working well but just needs a bit more effort. There seems to be a near endless supply of folks willing to serve in this way. Chuckie Schumer is undoubtedly proud. The disturbing part is that the electorate is so stupid to buy it. Next task: Elect one of their own – “Click” Bishop.
Bishop has early on dementia. It will be a Joe Biden kind of campaign this fall. From “where’s my running mate?”….to “who’s my running mate?”
🤣🤣
His campaign will be run from the old folks home.