By SUZANNE DOWNING
Feb. 8, 2026 – They’re starting to count the votes. A long-running Democratic effort to reopen the door to defined-benefit-style retirement plans for Alaska public employees is now headed to its final committee stop before a Senate floor vote.
House Bill 78, sponsored by Reps. Andy Josephson, Calvin Schrage, and Neal Foster, is scheduled for a hearing Monday, Feb. 9, in the Senate Finance Committee.
The measure would allow certain new public employees in the Public Employees’ Retirement System (PERS) and Teachers’ Retirement System (TRS) to choose between the current defined contribution system and a new “shared-risk” defined benefit option.
Sponsors argue the bill is needed to address workforce recruitment and retention challenges, particularly in education and public safety.
But it represents a costly step backward at a time when Alaska is already staring at an estimated $1.8 billion budget gap this year — and when the state is still paying off billions in unfunded liabilities from the old pension system.
Alaska closed its traditional defined benefit pension plans to new hires in 2006, shifting public employees into defined contribution-style retirement accounts.
That change came after years of escalating retirement costs and mounting long-term obligations that left the state responsible for market risk and investment shortfalls.
Even today, the state continues to carry billions in remaining pension debt from commitments made under the pre-2006 system.
HB 78 would reintroduce a pension-like model; sponsors insist the proposal is different this time. It’s “opt in.”
The sponsor statement describes the new plan as a “shared-risk defined benefit plan,” arguing it would be more sustainable than the old system that placed all risk on the employer.
They also call it a recruitment tool that is needed because Alaska must offer stronger retirement security to compete for state workers.
They point to population decline and outmigration, citing Department of Labor data showing that between 2013 and 2024, roughly 47,000 more residents left Alaska than arrived.
“A pension fosters loyalty by guaranteeing predictable, secure retirement income,” the sponsors say, adding it could reduce turnover and improve stability in essential services.
Fiscal conservatives counter that Alaska’s public-sector workforce is already among the best compensated in the state, with wages and benefits generally exceeding what most private-sector workers receive.
They warn that expanding retirement guarantees would add pressure to an already unstable fiscal picture — and could eventually require new broad-based taxes to sustain.
With Alaska facing a major budget shortfall, lawmakers in Senate Finance will tackle the question that has followed pension debates for two decades:
How can the state afford to make new long-term retirement promises when it is still paying off the last round? The bill narrowly passed the House, 21-19, making a veto override vote a tricky play for Democrats and big-government Republicans.
10 thoughts on “HB 78 heads to Senate Finance as Democrats push to revive pension-style retirement plan”
This is a back door ploy to steal the entire PFD by the state Government,(bait and switch).
If this becomes law, you can kiss your PFD goodbye.
And welcome in ever increasing taxes
The problem with socialism is that eventually you run out of other people money. (ours!)
-Margaret Thatcher
With a clear history in hindsight, it boggles the mind how truly stupid people can be. Any who might say, “We’ll get it right this time; this is different!” need only look at Venezuela for the latest collapse of a communist state. There they go, racking up failure after failure with the skill that proves history to be so repetitious.
If the government employees want defined benefits they should get them from their unions like the construction industry. The government entities can pay for the benefits to the unions and let the union carry the liabilities
That will never work because the union bosses are too busy with boondoggles to Las Vegas.
If the argument is that they need to be more competitive they should raise the pay which increases the employees take home pay and their retirement pay. Under the defined contribution program when the employee leaves state employment they and the State are settled. Under the defined contributions an uncertain obligation is put on to the grandkids credit card.
From the group that brought us budget busting Medicaid Expansion now is bringing the latest budget busting pension expansion. I admit being part of tier one, a different scenario than now when the current generations change careers more often and are more mobile. Where is the study that this high cost program can produce more effective employees over longer periods than the current program? Is it just more money like education funding increases that never bring us better performing students?
Various estimates. Between 70 million per year to vastly more than that according to multiple studies if a defined benefit plan is reinstated. Last one I heard was roughly 7 billion over 10 years I believe. The PFD is in reality already spent. The democrats and their republican allies who joined them handing left wing democrats power have given us this mess. They already added about $180 million in extra spending per year to education last year. The state already has increasing obligations of about $100 million plus every year just due to inflation and other factors like contract increases. That’s half a billion every 5 years if we did nothing. Add hundreds of millions more each year our economically illiterate legislators keep adding and the math is clear. Not only is the PFD on its deathbed but they are already salivating over taxes including our Republican governor introducing a tax.