The International Association of Fire Fighters (IAFF) has reported that Alaska fire fighters are urging lawmakers to reinstate a defined benefit pension system to address recruitment and retention challenges in the state.
Alaska is currently the only U.S. state without a defined benefit pension for public safety employees.
This change followed the closure of the state’s Public Employees Retirement System (PERS) and Teachers Retirement System (TRS) defined benefit plans in 2005.
Since the switch to a 401(k)-style plan, employee turnover has increased, with some leaving the profession after only a few years.
Fire fighters, dispatchers, and other emergency personnel have raised concerns about their financial future and the strain the current system places on departments across the state.
Alaska Professional Fire Fighters Association (AKPFFA) President Dominic Lozano said many fire fighters are unable to build sufficient retirement savings under the current system.
Lozano said: “We’ve been able to convince key legislators to advocate for us, including House Majority Leader Chuck Kopp, who’s been a longtime supporter of returning to a defined benefit.”
Fairbanks Local 1324 President Nick Clark said financial uncertainty is driving some families to consider leaving Alaska.
Clark said: “It’s about financial security, and Fairbanks is a great place to raise kids. But if we can’t make this work, we’ve talked about leaving.”
IAFF General President Edward Kelly said: “Pensions guarantee that fire fighters and emergency medical workers have financial security in retirement.”
Two bills are currently under consideration in the Alaska Legislature.
House Bill 78 and Senate Bill 28 would allow public employees to choose between the existing defined contribution plan and a new defined benefit pension.
Senator Cathy Giessel and the House Finance Committee introduced the proposals.
Lozano said: “This bill proposes a standard defined benefit pension plan with a 2.5 percent multiplier. To minimize risk, we’ve incorporated elements from successful state pension plans.”
Kopp said the legislation offers a long-term solution: “The pension system is a stair-step that gets you through time. You’ll never outlive your pension.”
House Minority Leader Mia Costello expressed concerns about the cost but acknowledged difficulties in recruiting and retaining staff.
Supporters of the bills point to economic benefits from defined benefit plans.
Kendal Killian, Executive Director of the National Public Pension Coalition, cited research from the National Institute on Retirement Security showing that pension spending supports job growth and contributes to rural economies.
Killian said: “For every $1 in taxpayer contributions to Alaska’s previous pension plans, $3.31 in total economic output is produced.”
Alaska Fire Chiefs Association President Forrest Kuiper said retention has become more difficult.
Kuiper said: “Firefighting is demanding both physically and mentally. For our younger fire fighters to not have an end goal, like a defined benefit pension, makes it very challenging for them to stay in the profession.”
Matt Carlson of Local 1264 said: “We’re losing skilled employees. A lot of money is leaving our state for other states with a more dignified retirement.”
Alaska public safety employees, led by the Alaska Professional Fire Fighters Association and supported by the International Association of Fire Fighters, are advocating for a return to a defined benefit pension system.
Alaska ended its defined benefit system in 2005, moving to a 401(k)-style plan. Since then, turnover among fire fighters and other public sector workers has increased.
House Bill 78 and Senate Bill 28 propose allowing employees to choose between a defined benefit and defined contribution plan.
Lawmakers and union leaders argue that reinstating a defined benefit option would help improve recruitment and retention.
Economic data provided by the National Public Pension Coalition suggests that defined benefit pension spending supports local economies. The legislation is currently under review by the Alaska Legislature.
