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HB 78

An Act relating to the public employees' retirement system and the teachers' retirement system; and providing certain employees an opportunity to choose between the defined benefit and defined contribution plans of the public employees' retirement system and the teachers' retirement system.

34th Legislature (2025-2026)

Alaska bill allows public employees and teachers to switch from guaranteed pension plans to self-directed retirement accounts, shifting investment risk from government to workers.

(S) JOINT SESSION at 01:00 PM HOUSE CHAMBER
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Bill Summary · HB 78

Legislative bill overview

HB 78 allows certain Alaska public employees and teachers to switch between their current defined benefit retirement plans and defined contribution plans within the Public Employees' Retirement System (PERS) and Teachers' Retirement System (TRS). The bill creates a one-time or periodic election opportunity for eligible workers to change their retirement structure.

Why is this important

Retirement plan choice significantly affects workers' financial security in retirement and shifts investment risk between employers and employees. Defined benefit plans guarantee fixed payouts regardless of market performance, while defined contribution plans depend on individual account growth—meaning workers bear market risk but gain flexibility and portability. This change could substantially impact the long-term liabilities of Alaska's pension systems and individual retirement outcomes.

Potential points of contention

  • Fiscal impact on state budget: Allowing switches to defined contribution plans could reduce long-term pension liabilities but may create short-term costs and accounting complications for the state
  • Fairness and equity concerns: Employees who switch may receive different retirement security than those staying in traditional pensions; timing of switches could create disparities based on market conditions
  • Risk transfer: Moving workers to defined contribution shifts investment and longevity risk from the state onto individual employees, potentially disadvantaging those with less financial literacy or shorter time horizons

Compiled from official sources — confirm details with the bill’s official record.

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