State of Alaska
Fiscal Note
Bill Version: CSSB 185(EDC)
2018 Legislative Session
Fiscal Note Number: 2
(S) Publish Date: 4/12/2018
Identifier: SB185-DOA-DRB-04-5-18 Department: Department of Administration
Title: REEMPLOYMENT OF RETIRED TEACHERS & Appropriation: Centralized Administrative Services
ADMIN Allocation: Retirement and Benefits
Sponsor: MICCICHE OMB Component Number: 64
Requester: Senate Finance
Expenditures/Revenues
Note: Amounts do not include inflation unless otherwise noted below. (Thousands of Dollars)
Included in
FY2019 Governor's
Appropriation FY2019 Out-Year Cost Estimates
Requested Request
OPERATING EXPENDITURES FY 2019 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024
Personal Services *** *** *** *** *** ***
Travel
Services
Commodities
Capital Outlay
Grants & Benefits
Miscellaneous
Total Operating *** 0.0 *** *** *** *** ***
Fund Source (Operating Only)
None
Total *** 0.0 *** *** *** *** ***
Positions
Full-time
Part-time
Temporary
Change in Revenues
None
Total 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Estimated SUPPLEMENTAL (FY2018) cost: 0.0 (separate supplemental appropriation required)
(discuss reasons and fund source(s) in analysis section)
Estimated CAPITAL (FY2019) cost: 0.0 (separate capital appropriation required)
(discuss reasons and fund source(s) in analysis section)
ASSOCIATED REGULATIONS
Does the bill direct, or will the bill result in, regulation changes adopted by your agency? YES
If yes, by what date are the regulations to be adopted, amended or repealed? 07/01/18
Why this fiscal note differs from previous version/comments:
Updated to reflect actuarial analysis of the effects on the Teachers' Retirement System (TRS).
Prepared By: Ajai Desai, Director Phone: (907)465-4471
Division: Division of Retirement and Benefits
REPORT Date: 04/05/2018 05:45 PM
ED
SFC 04/1 OUT OF
Approved By: Leslie Ridle, Commissioner Date: 04/05/18
Agency: Department of Administration
2/2018
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 CSSB 185(EDC) - Fiscal Note 2
FISCAL NOTE ANALYSIS
STATE OF ALASKA BILL NO. SB 185
2018 LEGISLATIVE SESSION
Analysis
This bill will allow teachers who retired with a normal retirement benefit to return to participating positions in the
Teachers' Retirement System (TRS) to work full or parttime and still receive their TRS benefit. Retired teachers must have
a bona fide termination of employment. Retirees age 62 or older are required to separate from employment for a
minimum of 60 days and retirees under age 62 are required to separate from employment for 6 months before rehire.
The net impact of the bill will depend on whether 1) the rehired teacher is currently actively employed and retires after
the effective date of this bill, or 2) if the retired teacher is a current retiree on or after the effective date of the bill, and 3)
total utilization of the retired population.
Current active members who retire after the effective date of the bill in anticipation of rehire will create an increase in the
actuarial accrued liability of the system. The system experience shows active members retire four (4) years after reaching
normal retirement eligibility. This bill provides an incentive to retire earlier than anticipated by the plan actuaries and
therefore generates a cost. Current retired members covered under the AlaskaCare Retiree Health Plan who return to
employment under this bill will generate a cost savings as their retiree health insurance will become secondary to the
active insurance received upon reemployment, reducing healthcare claim expense.
A key assumption for calculating the impact of this bill rests with utilization. It is not possible to predict who will elect to
return to employment. For this reason, the estimates below show the impact to liabilities in a range of possible outcomes.
This also is true for the analysis of the effect on the projected State Assistance contributions. The net increase (or
decrease) in the TRS Actuarial Accrued Liability under HB 224, based on utilization, would be:
Amounts are in millions
% rehired from current
retired population 200 Rehired Retirees 400 Rehired Retirees
100% $(2.2) $(4.3)
67% $8.7 $17.4
50% $14.3 $28.7
33% $19.9 $39.9
0% $30.8 $61.7
The bill will have an impact on the State assistance contributions to the TRS, increasing (or decreasing) the payments as
follows:
% rehired from current
retired population FY 21 FY 22 FY 23 FY 24 FY 25 5yr Total
200 Retirees
100% $(0.2) $(0.2) $(0.2) $(0.2) $(0.2) $(1.0)
67% $0.0 $0.2 $0.5 $0.7 $0.8 $2.2
50% $0.1 $0.4 $0.8 $1.1 $1.3 $3.7
33% $0.1 $0.6 $1.2 $1.6 $1.9 $5.4
0% $0.3 $1.0 $1.9 $2.5 $2.9 $8.6
400 Retirees
100% $(0.4) $(0.4) $(0.4) $(0.5) $(0.5) $(2.2)
67% $(0.1) $0.4 $1.0 $1.3 $1.6 $4.2
50% $0.1 $0.8 $1.7 $2.2 $2.7 $7.5
33% $0.3 $1.1 $2.4 $3.1 $3.7 $10.6
0% $0.6 $1.9 $3.7 $4.9 $5.8 $16.9
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 CSSB 185(EDC) - Fiscal Note 2
FISCAL NOTE ANALYSIS
STATE OF ALASKA BILL NO. SB 185
2018 LEGISLATIVE SESSION
Analysis
The current projected State Assistance contributions for TRS based on the June 30, 2017, draft actuarial valuation without
HB 224 are:
Amounts are in millions
FY 21: $148.5
FY 22: $147.0
FY 23: $151.5
FY 24: $156.4
FY 25 $161.5
The complete analysis by the plan actuary, Conduent Human Resources Services, will be submitted with this fiscal note.
(Revised 9/26/17 OMB/LFD) Page 3 of 3
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Statutes affected:
SB0185A, AM SB 185, introduced 02/16/2018: 14.25.009, 14.25.220, 14.25.310, 14.25.590, 14.30.350, 14.25.110, 14.25.070, 14.20.165, 14.25.043, 14.25.050, 14.20.136, 14.25.173
SB0185B, AM CSSB 185(EDC), introduced 03/14/2018, passed House 05/10/2018, passed Senate 04/14/2018: 14.25.009, 14.25.220, 14.25.310, 14.25.590, 14.30.350, 14.25.110, 14.25.070, 14.20.165, 14.25.043, 14.25.050, 14.20.136, 14.25.173
SB0185Z, AM Enrolled SB 185, introduced 05/10/2018: 14.25.009, 14.25.220, 14.25.310, 14.25.590, 14.30.350, 14.25.110, 14.25.070, 14.20.165, 14.25.043, 14.25.050, 14.20.136, 14.25.173