Bill Summary – FastDemocracy

State of Alaska
                                                              Fiscal Note
                                                                                             Bill Version:                    CSHB 83(L&C)
 2018 Legislative Session
                                                                                             Fiscal Note Number:              2
                                                                                             (H) Publish Date:                2/21/2018
 Identifier:        HB083-DOA-DRB-02-09-18                                     Department:       Department of Administration
 Title:             TEACHERS & PUB EMPLOYEE RETIREMENT                         Appropriation: Centralized Administrative Services
                    PLANS                                                      Allocation:       Retirement and Benefits
 Sponsor:           KITO                                                       OMB Component Number:              64
 Requester: House Labor & Commerce
 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                       491.6                        100.1                      100.1             100.1              100.1           100.1
 Travel
 Services                                 84.3                          6.5                          6.5                6.5              6.5               6.5
 Commodities                             275.0
 Capital Outlay
 Grants & Benefits
 Miscellaneous
 Total Operating                         850.9            0.0         106.6                       106.6             106.6             106.6             106.6
 Fund Source (Operating Only)
 1004 Gen Fund (UGF)                             850.9
 1029 PERS Trust (Other)                                                         74.6              74.6              74.6              74.6              74.6
 1034 Teach Ret (Other)                                                          32.0              32.0              32.0              32.0              32.0
 Total                                           850.9            0.0           106.6             106.6             106.6             106.6             106.6
 Positions
 Full-time                                          1.0                               1.0            1.0                1.0              1.0               1.0
 Part-time
 Temporary                                          5.0
 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?                                06/30/19
 Why this fiscal note differs from previous version/comments:
 Not applicable; initial version.
 Prepared By:               Ajai Desai, Director                                                                   Phone:         (907)465-4471
 Division:                  Division of Retirement and Benefits                                                    Date:          02/09/2018 08:00 AM
 Approved By:               Leslie Ridle, Commissioner                                                             Date:          02/09/18
 Agency:                    Department of Administration
Printed 2/21/2018                                                       Page 1 of 2                                                        Control Code: FJtEj
                                                                                                             CSHB 83(L&C) - Fiscal Note 2
                                                  FISCAL NOTE ANALYSIS
STATE OF ALASKA                                                                   BILL NO. HB 83
2018 LEGISLATIVE SESSION
Analysis
   This administrative fiscal note reflects the costs to the Division of Retirement and Benefits (Division) to implement the
   education, reporting, accounting and personnel costs to respond to increased phone calls, defined benefit (DB) and
   defined contribution (DC) plan potential outcome comparisons and requests for individual counseling and group seminars.
   This bill would provide a new DB tier for employees first hired on or after July 1, 2006. New employees for the Teachers
   and Public Employees Retirement Systems would be defaulted into new DB tiers (Tier V PERS, Tier IV TRS) but would be
   able to elect participation in the DC plans if they file an election to participate within 90 days of hire. Existing DC members
   (PERS Tier IV and TRS Tier III) will be afforded an opportunity to transfer to the new DB tiers.
   Regulations regarding the manner and timing of election will need to be drafted as well as regulations regarding the
   election itself. Due to the short timeframe to the effective date, these will likely be emergency regulations. An actuarial
   analysis performed by the plan actuary will need to be completed to determine the actual costs of the bill to the plans and
   the effects on any future unfunded liability. This analysis will be included in a separate fiscal note.
   The Division will need to program an online DB/DC benefit comparison tool for new employees and employees
   contemplating conversion to use in order to meet the 20day requirement in the bill to deliver this information. The cost
   of programming the tool is estimated at $75,000. Other division systems will need to be reprogrammed and updated with
   the new tier information for contribution reporting, benefit calculation and for tracking elections. The estimated cost for
   reprogramming is $200,000.
   Additionally, all division pension and annuity publications for the PERS and TRS will need to be recreated with the new
   information as well as extensive web site changes. The cost for this change is estimated to be $58,300 for the first year
   with an ongoing cost of $3,000 per year.
   Personnel needed to implement the new plan will include: 4 nonpermanent call center RB technician I positions to
   respond to phone inquiries and produce comparison projects; 1 permanent RB Specialist II position to provide counseling
   and information regarding both plans to new employees and employees who elect to transfer from the defined
   contribution to the defined benefit plan; and 1 nonpermanent Accountant III to reconcile the contributions transferred
   and contributions due when existing DC members choose to transfer to the DB plan or new members choose to transfer to
   the DC plan after initial hire. The first year cost to set up staff is estimated to be $26,000 and ongoing cost is estimated at
   $3,500.
   (In thousands)                   FY19             FY20             FY21            FY22             FY23         FY24
   Personnel
   Permanent RBS II (1)             100.1            100.1            100.1           100.1            100.1       100.1
   LTNP RB Tech I (4)               290.0            0                0               0                0               0
   LTNP Accountant III (1)          101.5            0                0               0                0               0
   Sub Total                        491.6            100.1            100.1           100.1            100.1       100.1
   Services
   Publications                     58.3             3.0              3.0             3.0              3.0            3.0
   Cubicle                          10.0             0                0               0                0                0
   Phone                            7.0              3.5              3.5             3.5              3.5            3.5
   Computers                        9.0              0                0               0                0                0
   Sub Total                        84.3             6.5              6.5             6.5              6.5            6.5
   Contractual Services
   Comparison Calculator            75.0             0                0               0                0               0
   Other Systems                    200.0            0                0               0                0               0
   Sub Total                        275.0            0                0               0                0               0
(Revised 9/26/17 OMB/LFD)                                                                                            Page 2 of 2
HB083-DOA-DRB-02-09-18                                          Page 2 of 2                                                 Control Code: FJtEj
Statutes affected: 
HB0083A, AM HB 83, introduced 01/27/2017: 14.25.009, 14.25.220, 14.25.310, 14.25.590, 14.25.040, 14.40.661, 14.40.799, 14.25.330, 14.25.540, 14.25.050, U.S.C, 14.25.130, 14.25.168, 14.25.350, 14.25.167, 39.35.095, 39.35.680, 14.25.070, 39.35.700, 39.35.990, 39.35.600, 39.35.650, 39.35.160, 39.35.410, 39.35.535, 39.35.360, 39.35.370, 39.35.750, 39.35.530, 39.35.620, 39.35.625, 39.35.720, 39.35.940, 39.35.255, 14.25.012, 39.35.957, 39.30.150, 39.30.180, 14.25.360, 39.35.760, 14.25.010, 14.25.320, 14.25.490, 39.35.115, 39.35.678, 39.35.710, 39.35.895, 39.35.003, 14.25.003, 37.10.210
HB0083B, AM CSHB 83(L&C), introduced 02/21/2018: 14.25.009, 14.25.220, 14.25.310, 14.25.590, 14.25.040, 14.40.661, 14.40.799, 14.25.330, 14.25.540, 14.25.050, U.S.C, 14.25.130, 14.25.168, 14.25.350, 14.25.167, 39.35.095, 39.35.680, 14.25.070, 39.35.700, 39.35.990, 39.35.600, 39.35.650, 39.35.160, 39.35.410, 39.35.535, 39.35.360, 39.35.370, 39.35.750, 39.35.530, 39.35.620, 39.35.625, 39.35.720, 39.35.940, 39.35.255, 14.25.012, 39.35.957, 39.30.150, 39.30.180, 14.25.360, 39.35.760, 14.25.010, 14.25.320, 14.25.490, 39.35.115, 39.35.678, 39.35.710, 39.35.895, 39.35.003, 14.25.003, 37.10.210
HB0083C, AM CSHB 83(STA), introduced 04/06/2018: 14.20.165, 14.25.130, 14.25.009, 14.25.220, 14.25.310, 14.25.590, 14.25.040, 14.40.661, 14.40.799, 14.25.330, 14.25.540, 14.25.050, U.S.C, 14.25.168, 14.25.350, 14.25.167, 39.35.095, 39.35.680, 14.25.070, 14.25.485, 39.35.700, 39.35.990, 39.35.600, 39.35.650, 39.35.160, 39.35.400, 39.35.410, 39.35.535, 39.35.360, 39.35.370, 39.35.750, 39.35.530, 39.35.620, 39.35.625, 39.35.720, 39.35.940, 39.35.255, 39.35.890, 14.25.012, 39.35.957, 39.30.150, 39.30.180, 14.25.360, 39.35.760, 14.25.010, 14.25.320, 14.25.490, 39.35.115, 39.35.678, 39.35.710, 39.35.895, 39.35.003, 14.25.003, 37.10.210